Jobs remain the strongest argument in economic policy. Any program tied to industry almost automatically gains support if it promises employment. It is a language people understand and a tool the state can easily use.
Right now, this argument is louder than ever. The world is turning back to industrial policy. Countries are trying to bring production closer to home, rebuild supply chains, and support selected industries. In that sense, Kazakhstan is following the same path. There is active support for industrial projects, a push for localization, and an effort to expand domestic production.
At first glance, the logic is simple. More factories, more investment, more jobs. But if you look beyond the headline numbers, a question comes up that is rarely asked in public. How much does each of these jobs actually cost?
Experience over the past decades shows that this is where the main risk lies. Industrial policy does create jobs, but it does so at a high cost. Sometimes too high for an economy that cannot afford unnecessary spending.
The reason is fairly clear. The state does not deal with economics alone. It also responds to political expectations, social stability, and regional interests. In this setting, efficiency often takes a back seat to visible results. Jobs stop being the outcome of economic activity and become the goal itself.
Once the goal is defined this way, cost stops acting as a real constraint. Support through subsidies, tax breaks, or market protection covers the gap between actual productivity and the level needed for sustainable operations. That gap is the real price of those jobs.
In large economies, these imbalances can stay hidden for a long time. Scale smooths out the effects. In Kazakhstan, the situation is different. Any shift in resources is quickly felt. Mistakes show up fast in the budget, in investment flows, and across other sectors.
There is another detail that rarely gets much attention. Industrial policy does not create jobs out of thin air. It shifts them within the economy. When the state supports one sector, it changes the balance for everyone else.
If a producer receives benefits or protection, its products may become more expensive for consumers or more competitive compared to others. This affects the entire chain. Other businesses face higher costs or lose market share. As a result, jobs are redistributed, even if what we see on the surface is growth in one sector.
In Kazakhstan, this effect is stronger because of how the economy is structured. Links between sectors are tight. Support for one segment can quickly create pressure in several others. At the same time, the political narrative tends to focus only on the visible outcome. A new factory, new jobs, rising employment figures. The indirect costs are mostly ignored.
Job quality is another part of the story. Industrial policy often targets more advanced and technology-driven sectors. These areas offer higher value added and better long-term potential. But they also require highly skilled workers.
As a result, the number of jobs created is limited and the access is restricted to a smaller group of people. This does not solve the issue of broad employment, even though that is what is often emphasized in public discussions.
The opposite situation exists in traditional sectors. There are more jobs, but lower competitiveness. Keeping those jobs requires constant support. This brings us back again to the issue of cost.
Kazakhstan finds itself between these two paths. On one side, there is a push to develop new industries. On the other, there is ongoing pressure to maintain employment in existing sectors. Together, this increases the strain on resources. At this point, it helps to step back and look at the bigger picture. Employment is not shaped by industrial policy alone. It depends on overall economic growth, demand, investment activity, and the conditions for doing business.
When the economy grows, jobs appear across many sectors. When growth slows, targeted programs cannot make up for the overall decline. They can change the structure of employment, but not its scale.
This is clear in practice. Even large industrial projects create relatively few jobs compared to the amount of money invested. Other tools, such as infrastructure development or support for small businesses, tend to have a broader impact, even if they are less visible in the short term.
There is also the question of sustainability. Jobs created through state support often depend on that support continuing. Once it is reduced, the risk of layoffs increases. This creates a form of temporary employment. Jobs exist as long as funding exists. For the economy, this means a long-term obligation rather than a lasting result.
In Kazakhstan, this becomes especially important. Resources are limited. Every tenge needs to be used efficiently. So the question needs to be framed differently. Not how many jobs are created, but how much they cost and how sustainable they are.
Answering that question changes how industrial policy is viewed. It stops being seen as a universal tool for employment and returns to its original role. A tool for solving specific problems, not the foundation of economic strategy.
This does not mean abandoning industrial policy altogether. In some cases, it can work. Especially where there is potential for exports or technological progress. But as the main tool for employment, it delivers weak results at a high cost. For Kazakhstan, this calls for a more disciplined approach. Projects should be evaluated not just by the number of jobs they create, but by their cost, their sustainability, and their impact on other sectors.
This kind of approach requires discipline. A willingness to measure, compare, and walk away from inefficient decisions.
That is where the line is drawn between policies that look good on paper and an economy that actually works.
Ruslan Sultanov, economist, President of the “PharmMedIndustry Kazakhstan” Association, specifically for www.economyKZ.org
