ANALYSIS OF THE DEGREE OF DEPENDENCE OF KAZAKHSTAN'S ECONOMIC SECTORS ON IMPORT AND ASSESSMENT OF THE POTENTIAL FOR REDUCING DEPENDENCE ON IMPORTS

Purpose of the research. This article attempts to analyze the degree of import dependence of Kazakhstan’s economic sectors and further defines product groups that import could be substituted by the local production. Methodology. Quantitative research analysis is conducted by using dataset and contemporary methodology of the United Nations Broad Economic Categories classification. Calculations of the coefficients of the Rotterdam model were made using the apparently unrelated regression method. It was assumed that the cost reduction will lead to a significant increase in the production of goods, thereby defining import substitution economic activities.

Originality / value is confirmed and justified by the lack of in-depth research to determine specific types of economic activities for which Kazakhstan can replace imports. Furthermore, the practical value of this study also concerns government reforms to identify industries that require government support measures.

Findings. Key findings of the article include selected 29 economic activities, import of which can be potentially substituted by the domestic production. For these selected industries, the coefficients of cross-elasticity of the production of domestic goods at prices for imported goods turned out to be significant. Results of the Rotterdam model suggested that an increase in prices for imported goods by 1 % leads to an increase in demand for domestic products from 0.09 to 4.99 % in these selected industries.

1. Syzdykova, A., Abubakirova, A., Kelesbayev, D., Omarova, A., Amaniyazova, G., Saubetova, B., & Anshayeva, D. (2019). The effect of exports and imports on national income in Kazakhstan: Econometric analysis. Revista Espacios, 40(35), 22-36.

2. Felipe, J., & Hidalgo, C. (2015). Economic diversification implications for Kazakhstan. In Development and Modern Industrial Policy in Practice: Issues and Country Experiences, 160-196.

3. Persky, J., Ranney, D., & Wiewel , W. (1993 ). Import substitution and local economic development. Economic Development Quarterly, 7(1), 18-29.

4. Aksenov, I., Koryakov, A., Dubovik, M., & Hajizada, S. (2023). Economic Policy of the CIS Countries: Standard Import Substitution Instruments. Public Integrity, 4(26), 379-397.

5. Isakova, A., & Plekhanov, A. (2012). Customs union and Kazakhstan's imports (No. 442). CASE Network Studies & Analyzes. 29 p.

6. Tasbulatova, D. (2019). Assessment of the condition of the processing industry in the republic of Kazakhstan. Scientific journal «Reports of the National Academy of Sciences of the Republic of Kazakhstan», (3), 214-221.

7. Zamanbekov, S. Z. (2013). Cluster development concept of Kazakhstan engineering on innovative basis. Life Science Journal, 10(4), 1030-1035.

8. Tadjiev, S., & Donze, P. Y. (2021). The Development of the Automotive Industry in Post-Soviet Countries Since 1991. Eurasian Journal of Business and Management, 9(2), 164-183.

9. Yerseitova, A., Issakova, S., Jakisheva, L., Nauryzbekova, A., & Moldasheva, A. (2018). Efficiency of using agricultural land in Kazakhstan. Entrepreneurship and Sustainability Issues, 6(2), 558-576.

10. Starostin, V. S., Chernova, V. Y., & Fedorenko, E. A. (2019). Potential of export-oriented import substitution in the Eurasian Economic Union: The case study of the agro-industrial complex. WSEAS Transactions on Business and Economics, 16, 145-152.

11. Nassyrova, A., Yessymkhanova, Z., Issayeva, B., Omarkhanova, Z., Niyazbekova, S., Berzhanova, A.,... & Kunanbayeva, K. (2020). Kazakhstan meat industry analysis: import substitution, delivery and statistics. Entrepreneurship and Sustainability Issues, 8(1), 640-655.

12. Konurbayeva, Z., Denissova, O., Rakhimberdinova, M., & Zakimova, A. (2018). Food Security as a Formation Factor of the Import Substitution Potential of the Economy. Journal of Applied Economic Sciences, 13(8), 2251-2260.

13. Elena, P., Anna, S., Zhanibek, Z., & Olefirenko, O. (2016). Towards Economic Security Through Diversification: Case Of Kazakhstan. Journal of Security & Sustainability Issues, 5(4), 509-518.

14. Aubakirova, G. M., & Isatayeva, F. M. (2021). New approaches to the construction of a diversified economy: The experience of Kazakhstan. Studies on Russian Economic Development, 32(6), 712-718.

15. The United Nations Broad Economic Categories (UN BEC) classification (2023). UN Comtrade Database source. Retrieved December 23, 2023, from https://comtradeplus.un.org/DataAvailability.

16. Export and Import Data (2023). International Trade Center: Trade Map. Retrieved December 23, 2023, from https://www.trademap.org/Index.aspx.