Comparative advantages of Kazakhstan assessed by the Balassa Index: consistently competitive exports are limited to raw materials with low added value

Abstract

The aim of this study is to determine the competitive advantages of Kazakhstan in trading with other countries based on revealed comparative advantages, in which the interlinked commodity exchanges will be developed in the medium-term. This research applies the index of comparative advantages. The paper presents an empirical analysis of the competitive advantages of Kazakhstan export products. The Balassa Index was proposed for Kazakh six-digit HS product category level, the choice of which was due to their modest design of calculation and simplicity in interpreting the results. The main results reveal that Kazakhstan shows a comparative advantage in a number of sectors; the product groups with a strong competitive advantage show a significant variation in comparative advantage. The results can be applied to assess Kazakhstan's export competitiveness and the restructuring of its domestic trade policy.