Kazakhstanis Receive Less than Four Times Their Current Income – Expert

A well-known Kazakh economist and political commentator, Rakhimbek Abdrakhmanov, has published a study of the KSAP School of Applied Politics. It clearly demonstrates how much Kazakhstanis do not receive from the economic growth of the country

Rakhimbek Abdrakhmanov:

The KSAP School of Applied Policy has calculated an index that clearly demonstrates how fairly income is redistributed in the countries from the presented sample. Also, this index demonstrates the elasticity or sensitivity of citizens' incomes to economic growth. Accordingly, the higher the elasticity of income according to the economic result of the country, the more each individual citizen benefits from the economic development of his state.

The index is based on per capita GDP and average wages. The calculation showed that in countries such as Germany, the USA, Poland, Hungary, Finland, Norway, etc., the difference between the size of per capita GDP and the average wage per person is insignificant, and these values are relatively close to each other. This indicates that the income of the economy per person and the personal income of each individual in the country are quite comparable. In this case, the average deviation between the indicators does not exceed 20-30%. The elasticity of income in these countries is the highest. A large part of society benefits from economic growth.

In countries such as Uzbekistan, Romania, and Nigeria, the difference between per capita GDP and average wages per person ranged from 84 to 88%, which may indicate that every person living in these countries receives at least 50% less of their current wages. Income elasticity is reduced in these countries.

In Russia and Kyrgyzstan, based on our calculations, the average citizen on average receives more than 2.5 times less than his current income. Accordingly, the economic result of these countries has little effect on the incomes of the majority of the population.

Kazakhstan became the anti-leader of the index, where, according to our calculations, the difference between the size of per capita GDP and the average wage per person was more than 367%!!! Accordingly, it can be concluded that, on average, Kazakhstanis receive less than four times their current income, and the elasticity of income according to the economic result of the country is extremely insignificant. The economic growth of the majority of the population of Kazakhstan is practically not felt. That is, the economy is growing, but it does not affect the welfare of most citizens in any way.

The indicator calculated by us correlates well with the data of the report "Direct Investment Market in Kazakhstan" from KPMG, published in 2019. In it, with reference to Credit Suisse data, it is reported that 162 people in Kazakhstan have a fortune of over 50 million US dollars, which together make up about 50% of the total wealth of the population. It was this report that Toqayev referred to when he spoke to representatives of domestic business in January 2022.

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Original Author: Julia Yampolskaya

DISCLAIMER: This is a translated piece. Please refer to the original document for accuracy. The initial author's punctuation, source, and word choice have NOT been modified.