# The economics of education in the republic of Kazakhstan: the analysis of the basic socioeconomic indices

Author: Sitnikova Elena, Kazakh-American Free University, Kazakhstan

Nowadays, the growth of general and professional education has become an important factor to increase the total production efficiency. The pecuniary valuation of educational potential allows estimating the series of important indices that characterize educational efficiency. One of these factors, first of all, is the index of educational found-forming activities. This is the quantity of produced gross domestic product (GDP) per country’s educational fund unit expressed in money terms. It can be calculated with the formula:

EEE = GDP/EF

(EEE — economical education efficiency

EF — educational fund)

This index is calculated in 2 variants: per educational fund unit of the whole population and of its working force.

In the first case, the country’s total produced wealth is divided by educational fund of the whole population. In the second one it is divided by that of the labor force.

As we can see the advance growth of GNP in relation to education fund per unit of the latter we can see the growth of GNP which means the increase in effectiveness of education. Another indicator which is somewhat opposite to the first one is an indicator of production’s intellectual capacity. It shows how many money units accumulated in the educational fund goes to each production unit.

This Intellectual capacity indicator (Ic) is calculated as a ratio of the Education Fund (EF) to the Gross National Product (GNP) as shown in the formula:

Ic = EF / GNP, (2)

In order to determine the effectiveness of an investment into human capital in Kazakhstan in recent years it is reasonable to calculate the efficiency of education (EE) and intellectual capacity indicator (Ic) at the macro level:

1999: EE = 1672/74,4 = 22.4

2000: EE = 1733/101,4 = 17.1

2001: EE = 2016/ 128=15.7,

2002: EE =2599\141=18.4

2003: EE = 3250/ 131,4 = 28,0

2004: EE = 3776,3/ 131,4 = 28,7

2005: EE = 4611,9/ 159,7 = 28,9

2006: EE = 5542,4/ 185,8 = 29,8

2007: EE = 7457,1/ 256,9 = 29,0

2008: EE = 9853,1/ 3216,9 = 30,6

2009: EE = 12544,1/ 4489,9 = 27,9

2010: EE = 704180/33466,8 = 21,0

2011: EE = 886775,5/43351,6 = 20,5

Consequently, in the Republic of Kazakhstan there is an increase of GNP per 1 KZT of Education Fund.

1999: Ic = 74,4/1672/ = 0.044

2000: Ic = 101,4/1733 = 0.058

2001: Ic = 128/2016=0.063,

2002: Ic =141/2599=0.054

2003: Ic = 131,4/3250 = 0.040

2004: Ic = 131,4/ 3776,3 = 0,0347

2005: Ic = 159,7/ 4611,9 = 0,0346

2006: Ic = 185,8/ 5542,4 = 0,0336

2007: Ic = 256,9/ 7457,1 = 0,0344

2008: Ic = 3216,9/ 9853,9 = 0,0324

2009: Ic = 4489,9/ 12544,9 = 0,0354

2010: Ic = 33466,8/704180,6 = 0,047

2011: Ic = 43351,6/886775,5 = 0,049

Therefore, on average Education Fund reduces per each unit of GNP. This is a negative trend for the country, because developed countries are characterized by the increase of that index in its dynamics. This shows lack of attention to the development of the educational potential of our Republic.

It is also important to consider other major socioeconomic indices of the education market in the Republic of Kazakhstan.

The Republic of Kazakhstan is recognized by the international community as a country with a market economy. For a short period of independence the country has achieved significant growth in the economy. It integrates with the world community. In this context, the role and importance of education, human resources as the criteria of social development, economic strength and national security of country is increasing.

In our changing world under conditions of increasing flow of information the fundamental subject knowledge is not the only purpose of education. It is a lot more difficult and important to impart the students the ability to extract, analyze, structure and use the information for the purpose of the maximum self-realization and useful participation in life of the society.

There are 3 reasons that have a negative effect on the education management system: absence of unified system of education on the regional level, lack of experts in education departments, and constant rise in prices (see Table 1).

Table ¹1 - The price index on education services, in percentage to previous year.

 Region 2008 2009 2010 2011 The Republic of Kazakhstan 105,4 108,4 110,3 113,2 Akmola region 104,1 100,0 109,6 105,7 Aktobe region 105,3 114,3 110,3 116,2 Almaty region 109,3 108,5 107,9 117,0 Atyrau region 113,1 105,9 103,7 115,0 East Kazakhstan region 104,4 108,5 111,6 115,1 Zhambyl region 103,0 112,4 125,1 108,6 West Kazakhstan region 105,3 104,4 108,1 108,2 Karagandy region 106,9 108,4 112,4 114,5 Kostanay region 102,5 112,1 106,7 105,2 Kyzylorda region 100,8 101,4 102,4 110,0 Mangystau region 112,9 111,1 112,0 113,5 Pavlodar region 104,8 109,1 110,3 112,5 North Kazakhstan region 104,1 107,0 111,5 105,0 South Kazakhstan region 102,7 111,4 111,5 127,3 Astana 111,9 112,0 109,7 111,6 Almaty 103,2 106,4 108,7 109,9

According to the table we can see that South Kazakhstan, Almaty, Aktobe, Atyrau and East Kazakhstan regions are leaders in growing prices for education services. Price index in these regions overgrows an average index of the republic. Table 1 also shows that price index of education service in the analyzed period increases and in 2012-2015 it is expected to get the highest index, which is shown in Picture 1.

Pic 1. The price index of educational services

Total share of the educational involvement of the population at the age between 6-24 (or total involvement index) is the ratio of number of students in different educational institutions (i.e. students of comprehensive secondary, vocational and high schools, colleges and universities) to the population at the age between 6-24.

The educational level in the Republic of Kazakhstan is clearly illustrated in Table #2. According to the information presented, 78.7% of the population at the age between 6-24 is involved in education. At the same time, there is an obvious disproportion between country and urban population involvement in education: 56.5% and 99.2% of involved people respectively.

The educational index in individual regions is considerably lower than the average educational index of the whole republic. The statistics where you can see the number of Kazakhstan secondary school students are given in Table #2 below.

Table #2: Number of Students in High Schools

 Region 2009 2010 2011 The Republic of Kazakhstan 250935 336728 397631 Akmola region 10053 12440 16535 Aktobe region 17471 22613 26470 Almaty region 12856 19509 25461 Atyrau region 5522 8649 11231 East Kazakhstan region 25481 33127 35423 Zhambyl region 12918 19311 24156 West Kazakhstan region 11614 12769 13829 Karagandy region 23700 32534 36946 Kostanay region 14506 17095 18952 Kyzylorda region 9026 12944 16115 Mangystau region 8515 12450 15283 Pavlodar region 22014 25425 27367 North Kazakhstan region 10700 11899 12442 South Kazakhstan region 20351 31894 42805 Astana 14781 18904 20142 Almaty 31427 45165 54474

Table #3 – Number of Students in Institutes of Higher Education

 Region 2008/2009 2009/2010 2010/2011 The Republic of Kazakhstan 180 181 174 Akmola region 8 8 8 Aktobe region 6 7 7 Almaty region 4 4 4 Atyrau region 3 3 3 East Kazakhstan region 9 11 10 Zhambyl region 4 5 5 West Kazakhstan region 6 6 7 Karagandy region 15 15 15 Kostanay region 8 9 9 Kyzylorda region 6 6 6 Mangystau region 5 4 3 Pavlodar region 4 5 4 North Kazakhstan region 4 4 4 South Kazakhstan region 19 18 19 Astana 10 10 11 Almaty 69 66 66

Table 3 shows that the number of educational institutions in 2010 -2011 decreased both in the Republic of Kazakhstan and in almost all regions which should be regarded as a positive trend in the market of educational services.

Despite some positive dynamics of the education market, it should be noted that the achievements of recent years point out that the Program of education has not achieved its objectives. Under conditions of deterioration of economy further deterioration of the education market can be predicted. Publications in periodicals in eager rivalry report a large number of students expelled from the institutions of higher education, undeveloped educational loans and other negative trends.

The main trends of the education market are:

- Higher education is increasingly becoming mass.

- Another important trend is the diversification of higher education in the institutional forms, levels and content.

-The trend of internationalization of human capital based on the universality of knowledge, mobilizing collective efforts of the international scientific community is rapidly gaining strength. This is manifested in the increasing role of international cooperation in national educational institutions and organizations, and the emergence of supranational organizations, programs and funds. In higher education, there is a close approximation, not to say more, of trends, challenges and goals, making you forget about national and regional differences and specificities. There is the universalization of educational content that cannot be stopped in the era of the information revolution and the existing world of universal communication systems in the form of the Internet.

The internationalization of education is an objective, dynamic process. Many researchers think the internationalization of education acquires such features of a new stage as integration, which is evidenced by the appearance of an appropriate political and legal superstructure of an integrated complex.

The most acute problem of education is an expansion of higher education. Modern society needs well-educated and mobile professionals. And that society can and should stimulate quality higher education affecting the labor market of young professionals.

Growing magnitude of higher education funding is another acute problem. Increase in the number of students is forcing many schools to reduce costs for infrastructure, library resources, international cooperation, teaching staff.

Diversification of higher education has created a problem of its adequacy to current requirement and qualitative differences in the various types of educational institutions. For Kazakhstan, this problem is reflected in qualitative differences of student and teaching staff, and, consequently, the level of training in the public and nonprofit colleges.

The internationalization of higher education to meet the growing need for cross cultural understanding caused by the global nature of modern communications and consumer markets is certainly a welcome trend. However, the mobility of students and teachers under conditions of considerable difference in economic development in different countries leads to a negative trend of "brain drain." The loss of skilled human resources by developing countries and countries in transition is caused not only by academic mobility, but also by increased international migration, and the fact that the developed countries deliberately build their migration policies, provide more favorable conditions.

International cooperation is a powerful lever for the world of higher education. It is intended to address a number of actual problems:

- Compliance with the adequacy of the content and the level of higher education to the needs of the economy, politics, social and cultural spheres of society;

- Leveling of training in various countries and regions;

- Strengthening international solidarity and partnership in the field of higher education;

- Sharing of knowledge and skills in different countries and on different continents;

- Promotion of higher education, especially in developing countries, including through funding from international foundations;

- Encouraging an overall increase in flexibility, coverage and quality of higher education that facilitates elimination of the causes of "brain drain";

- Promoting competition among science schools and educational systems in conjunction with academic solidarity and mutual assistance;

- Coordination of activities of educational institutions for the development of higher education.

Bilateral and multilateral scientific and educational partnership of universities, exchange of teachers and students, including those created with the assistance of EU supranational target programs (SOMETT, ERASMUS, LINGUA, SOCRATES) are widely developed.

The most important conditions of Kazakhstan’s entering the world educational integration processes at this stage, which are essential for competitiveness and sustainable development of the innovative economy of education, are:

- Achievement of standards equivalent to those in international education and models of quality and level of education at all levels, using for this purpose the comparable procedures, tools, and measures of control of education quality of;

- Putting the content and structure of the national education system in line with international norms and standards;

- Development of a framework for the diplomas and qualifications in vocational education to be comparable that will promote the competitiveness of the vocational education system, a significant increase in academic mobility of teachers, pupils and students;

- Creating the conditions for a significant expansion of exports and imports of technology, knowledge, and educational services;

- Equal access to the state resources for various sectors of education;

- Computerization of all levels of education, increased access to educational resources online, introduction of distance learning programs, digital and e-learning of new generation.

The study results can be used to justify the cost for human resource development.

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