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Riccardian Curse of the Resource Boom: The case of Kazakhstan 2000-2008


  • Akram Esanov
  • Karlygash Khuralbayeva


This paper examines how Kazakhstan handled key decisions in resource management during the 2000-2008 period and whether resource revenues were harnessed for sustained growth. We found that the hydrocarbon sector served as an engine of strong economic growth in the country by boosting domestic demand and propelling growth in such non-tradable sectors as construction and financial sector. In addition, our analysis suggests that prudent macroeconomic policies had been pursued by the government with more than two-thirds of oil revenues being saved in the Oil Fund. Notwithstanding sound macroeconomic policies, the private sector remained under-regulated and took excessive risks by over-borrowing abroad, which led to consumption boom. The government lacked policies aimed at discouraging excessive risk taking behavior of the private sector, which greatly jeopardized the sustainability of Kazakhstan’s growth potential and the government’s prudence. We refer to this phenomenon as a Ricardian curse of the resource windfall.

Suggested Citation

  • Akram Esanov & Karlygash Khuralbayeva, 2010. "Riccardian Curse of the Resource Boom: The case of Kazakhstan 2000-2008," OxCarre Working Papers 043, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  • Handle: RePEc:oxf:oxcrwp:043

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    References listed on IDEAS

    1. Karlygash Kuralbayeva & David Vines, 2008. "Shocks to Terms of Trade and Risk-premium in an Intertemporal Model: The Dutch Disease and a Dutch Party," Open Economies Review, Springer, vol. 19(3), pages 277-303, July.
    2. Robin Boadway & Michael Keen, 2009. "Theoretical Perspectives on Resource Tax Design," Working Papers 1206, Queen's University, Department of Economics.
    3. Gaël Raballand & Ferhat Esen, 2007. "Economics and politics of cross-border oil pipelines—the case of the Caspian basin," Asia Europe Journal, Springer, vol. 5(1), pages 133-146, March.
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    Cited by:

    1. International Monetary Fund, 2013. "Republic of Kazakhstan; Selected Issues," IMF Staff Country Reports 13/291, International Monetary Fund.
    2. Gerhard Toews, 2013. "Inflated Expectations and Natural Resource Booms: Evidence from Kazakhstan," OxCarre Working Papers 109, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.

    More about this item


    Kazakhstan; Riccardian curse; resource boom; growth potential;

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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