Kazakhstan is located at the Caspian Sea and neighbored by Russia in the north and China in the east. Around 15m people enjoy a great deal of space. With 2.7m square kilometers in size, the country is five times bigger than France (with a population of about 56m people). Recently, the country has gained considerable attraction from foreign investors because of its large oil and gas reserves. The high demand for oil from the Caspian Sea is also the main driver of economic growth in the country. According to the table below, GDP rose from 2.7 % in 1999 to 9.2 %in2003. For 2004, a similar growth rate is expected. GDP per capita has also risen but still lags behind neighboring countries like Russia where it amounted to USD 3,041 (in 2003). Rising macroeconomic stability is reflected by steadily declining inflation rates. From 1999 to 2003, they have decreased from 17.8 to 6.4%. In 2004, only a slight increase to 7.0% is expected. The labour market has benefited from the economic upswing. The unemployment rate has also fallen, now amounting to 8.7% in 2003.

The positive economic development has lead to rising wages, too. With an average salary of USD 194 (per 2003), Kazakhstan records the highest average wage in central Asia. However, it lags behind the central and eastern European countries where average wages amount to USD 472.2 The highest salaries are paid in the financial sector and in mining where employees earn on average USD 377.28 and USD 304.71 respectively. Due to the favorable oil-price and implemented tax reductions, a further increase in average wages and employment is expected. Since 2002, the Kazakhstani banking sector has grown rapidly, led by strong economic growth. Coupled with that, financial depth and intermediation have steadily increased. Factors responsible for financial deepening are faster and more transparent judicial procedures, more sophisticated legislation on banks as well as stronger supervision. The National Bank of Kazakhstan (NBK) envisages to achieve EU-standards in the banking sector by 2007.3 Growing confidence in the banking system has been facilitated by a deposit insurance system. Introduced in 1999 (compulsory in 2004) and the Bank Secrecy Law of 2000. GDP per capita has also risen but still lags behind neighboring countries like Russia where it amounted to USD 3,041 (in 2003). Rising macroeconomic stability is reflected by steadily declining inflation rates. From 1999 to 2003, they have decreased from 17.8 to 6.4%. In 2004, only a slight increase to 7.0% is expected.