BUSINESS/FINANCE

Going Digital Will Make Kazakhstan Richer Than Drilling For Oil

By Wallace Kaufman

Pittsboro, NC, July 14

(The GLOBE)

I would not dare to tell my landlady in Almaty that the computer holds the key to the economic success of Kazakhstan. She is 80 and she is not going to believe that computers can enable the government to increase her pension. She has a hard enough time believing oil can do it, but that�s because she says the politicians will keep all the money for themselves and their friends. She has also seen my laptop computer and she�s not impressed by anything except the e mail that comes from her granddaughter in America. She doesn�t know a thing about that vast global web of phone lines and satellites and huge computers that we call the Internet. She only knows the mail shows up on my screen a few minutes after her granddaughter sends it from California. The paper mail takes a month or two. Envelopes are opened, stolen, soaked with rain or snow.

That�s not enough to convince my landlady that Kazakhstan should make its top priority for economic development digitalizing everything possible. She is not the only one who might think this is a fantasy. It sounds irrelevant to people at the bottom of the economy and impractical to people in power. It isn�t irrelevant. Kazakhstan has already proven it�s practical.

When I first came to Kazakhstan to live in 1993 and worked with businesses and government agencies, I rarely saw a computer. The typewriters most secretaries used were not even electric. Did businesses and ministries go from manual typewriters to electric typewriters? No, they went straight to computers. The same leap can be made in retailing, education, wholesaling, banking, health care, pension savings, publishing, and personal communications.

To understand the importance of digitalizing a society for economic and social reasons I will use myself as an example. When I am not in Kazakhstan or another SNG country, I live in the middle of an American forest, at the end of a narrow gravel road, far from stores, museums, libraries, hospitals, doctors, concerts, schools, government offices, etc. I am a developing society of one. The computer has allowed me to do what Mao never achieved in China even after killing a few million citizens�I�ve made the Great Leap Forward. I know I am not the average Kazakhstani citizen, but humor me for a moment. Look at me here in the forest.

Using nothing but my computer and the Internet I can now do the following:

1. Order food and medicines at discount prices

2. Manage my bank account�ordering deposits and payments

3. Buy and sell stocks and bonds from America, Europe, Japan and Australia

4. Examine and buy art at an auction

5. Consult a doctor and access the best medical advice in the world

6. Send letters, faxes, and pictures to any place in the world

7. Talk to other people with computers in any country, free of charge using Internet phone programs

8. Attend classes in many universities to study science, economics, or the arts and receive a degree

9. Listen to radio stations around the world

10. Order videos over the Internet and watch them using my Digital Video Drive (DVD)

11. Examine airline schedules and buy tickets

12. Go shopping for cars, compare the prices from different dealers, and buy the one I want

13. Place a �for sale� advertisement to sell my old books and the ad will reach more than a million readers (no charge to place the ad)

14. Pay my taxes

15. Look for work anywhere in the world

13. Do the editing and writing and consulting that earn my money to pay for all of the above and for my computer

Anything that must be delivered physically is brought by a delivery service, often within 48 hours. I could extend the list for another page.

Going digital is not the luxury of a rich man or a rich country. Computers make everything from car buying to education cheaper and better. That�s because it makes production, warehousing, sales, and advertising less expensive. Example: it�s nice to send a few dozen students abroad every year on Muskie or Bolashak scholarships at over $15,000 per student. A lot more would be gained by giving thousands of poor students access to the world by computer and internet for maybe $100 each.

If Kazakhstan wants students in schools, institutes and universities to have the most modern textbooks and libraries, the only way to get enough of those books in any language is to get them by computer. The only way to have them in Russian or Kazakh is to have computers print them on demand. (To print and distribute small editions of books is not worth the labor of setting type, printing on paper, warehousing, and delivering.) A good simultaneous interpreter is better than a computer translation program, but who can afford it? By computer a student or government official in Narynkoll or Aktyrau or Astana can translate 100 pages in a few minutes.

Larger Kazakhstani businesses and industries cannot hope to survive by depending on local markets. The fastest and cheapest way to reach the global market is by computer. Today industries search the globe for parts, technical information, markets, investors, and even labor. Even rug weavers and artists could now take their wares to market by computer. To get the Pavlodar tractor factory and other industries off their death beds and into world competition will take computer guided machine tools and computer generated designs.

Kazakhstan could become a digital society before the year 2030. In fact if it wants to fulfill President Nazarbayev�s dream of entering the ranks of great societies by 2030, it will have to be a digital country�digital phones, digital television, digital commerce, and digital education. That�s the only road to success for a country of 15 million people landlocked in the center of Asia speaking languages very few other people in the world care to learn.

The government can do three things to bring on digitalization.

1. It can provide the funding or get funding from foreign grants and loans

2. It can invite private phone, electric and cable companies to provide the wires or cellular links

3. It can get out of the way. The digital economy and society work best when thousands of users make their own decisions, write their own programs, teach each other, and start their own businesses.

Computers are cheaper than ever. Today at wholesale prices computers capable of good internet connections, running stereo sound with good color monitors can be bought for $300 each. Suppose Kazakhstan has 5 million families. The cost of putting a computer in every home would be $1.5 billion. Buying computers for every home is not necessary. I�m only trying to demonstrate that digitalizing Kazakhstan would cost less than building a new capital. The economic returns would be greater than the returns from a new oil pipeline and the bureaucrats couldn�t keep all the rewards. If graft and corruption, high taxes, or badly managed pension funds threatened a citizen�s hard earned savings, that citizen could electronically maintain an account in Europe, Ireland, the Caribbean or America. In fact, I know some who are already doing this. The computer gives citizens powers once enjoyed by only wayward government officials or mafia. That should not be a problem for a country that trusts its citizens and has earned their respect and loyalty.


Tractor industry has been reanimated in the republic, � The Minister Mukhtar Ablyazov

Bakhytzhan Zhumalieva

ALMATY, July 2

(THE GLOBE)

At present we may say that the tractor industry has been reanimated in the republic, the Ministry of Energy, Industry and Trade of RK announced at the press conference in Almaty. The main manufacturing shops of the JSC �Kazakhstantractor� (Pavlodar tractor plant) have been put into exploitation. The manufacturing of caterpillar tractors and other import-substitute products for the power and mining industries, railways and municipal economy was recommenced. Only for the first quarter of 1999 the value of manufactured products came to 350 million tenge. 3500 working places were saved, and it is planned to increase the number of workers up to 6000. Not only local agricultural producers are interested in Kazakhstan tractors, the Minister stated. The supply of more than two thousand of our tractors to Uzbekistan is being negotiated.

At present the Kazakhstan machine-building industry is mainly represented by enterprises manufacturing agricultural machines. According to Mukhtar Ablyazov, the main problem of this branch of the economy is insolvency of the main customer, rural enterprises. According to the statistics, from 1994 the agriculture practically did not purchase any new technique. That is why, 70% of the resource of machines and tractors have been outdated..

The Department of Industry of the Ministry has worked out the programme for development of the tractor industry and other closely-related branches of the economy. This programme proposes to settle the problem of technical rigging of the agriculture by granting money for manufacturing of tractors and further to handle out these tractors to agricultural producers (the method of indirect subsidy); to restore the tractor industry by placing orders for manufacturing spare parts at local plants. The efforts of the Ministry will be focused on the development of several basic machine-building enterprises, which are �the locomotives� of the branch of the economy, the Minister states. According to preliminary evaluations, each of these enterprises is able to provide about 50 enterprises of the branch with orders.


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