Economy Of Kazakhstan

Kazakhstan’s economy stands as the largest in Central Asia, both in absolute terms and on a per capita basis, underscoring its substantial influence within the regional economic landscape. Since gaining independence following the dissolution of the Soviet Union in 1991, the country has attracted over US$370 billion in foreign investments by 2023, reflecting its growing integration into the global economy and the confidence of international investors in its development prospects. This influx of capital has been facilitated by Kazakhstan’s vast endowment of natural resources, which includes extensive oil reserves, a wide array of minerals, and metals. Remarkably, nearly every known element on the periodic table has been identified within the country’s borders, highlighting the extraordinary geological diversity that underpins its resource-based economy. Beyond its mineral wealth, Kazakhstan possesses significant agricultural potential, largely attributable to its expansive steppe regions that provide ideal conditions for livestock farming and grain cultivation. These vast grasslands have historically supported a robust agricultural sector, contributing to both domestic food security and export revenues. In the southern mountainous areas, the natural environment fosters the growth of wild apple and walnut species, which not only hold ecological importance but also represent valuable genetic resources for horticulture and biodiversity conservation. The agricultural sector, therefore, complements the extractive industries by diversifying the economic base and sustaining rural livelihoods. The industrial sector in Kazakhstan primarily revolves around the extraction and processing of natural resources, including oil, minerals, and metals. This focus on resource-based industries has shaped the country’s industrial landscape, with significant investments directed towards developing mining operations, refining capacities, and metallurgical plants. The legacy of the Soviet industrial system, which emphasized heavy industry, initially provided a foundation for these activities, although the transition to a market economy necessitated substantial restructuring. The collapse of the Soviet Union precipitated a sharp economic downturn in Kazakhstan, beginning in 1991, as demand for traditional heavy industry products declined precipitously. This contraction was most acute in 1994, when the economy experienced its most severe decline, reflecting the broader disintegration of the Soviet economic space and the challenges of transitioning to a market-oriented system. The loss of established trade links, combined with internal structural weaknesses, contributed to this economic crisis, which necessitated comprehensive reforms. In response, the Kazakh government accelerated economic reforms and privatization efforts between 1995 and 1997, aiming to stimulate growth by transferring significant assets from state ownership to the private sector. These reforms included the liberalization of prices, the establishment of a legal framework for private enterprise, and the encouragement of foreign direct investment. The privatization process was instrumental in reshaping the economy, fostering entrepreneurship, and integrating Kazakhstan more fully into the global market. Recognition of Kazakhstan’s market-oriented reforms came with the European Union granting the country “market economy country” status in 2000, followed by the United States in 2002. These designations affirmed Kazakhstan’s progress in establishing a competitive market economy and facilitated enhanced trade relations and investment flows by providing greater legal certainty and protection for foreign investors. A significant milestone in Kazakhstan’s efforts to expand its oil exports was the signing of the Caspian Pipeline Consortium (CPC) agreement in December 1996. This agreement aimed to construct a pipeline from the Tengiz Field in western Kazakhstan through Russian territory to the Black Sea, thereby opening new avenues for oil transportation and export. The CPC pipeline was expected to substantially increase Kazakhstan’s oil export capacity, enhancing its role as a regional energy supplier. However, geopolitical tensions and concerns, including those expressed by Russian President Vladimir Putin, particularly following Kazakhstan’s cautious stance after the 2022 Russian invasion of Ukraine, complicated these prospects. Putin’s public reservations highlighted the delicate balance Kazakhstan maintained in its foreign policy and economic relations amid regional conflicts, which in turn affected the stability and expansion of its oil export routes. The Kazakh economy experienced a contraction in 1998, with a 2.5% decrease in GDP largely attributable to falling oil prices and the repercussions of the August 1998 Russian financial crisis. This external shock underscored Kazakhstan’s vulnerability to regional economic disturbances and commodity price volatility. Nevertheless, the economy rebounded in 1999, driven by rising international petroleum prices, a strategic devaluation of the national currency, the tenge, and a bumper grain harvest. These factors collectively pulled Kazakhstan out of recession and laid the groundwork for renewed growth. Despite these fluctuations, the 1990s were marked by a significant decline in living standards, as GDP per capita fell by 26% over the decade. This decline reflected the broader economic hardships faced during the transition period, including inflation, unemployment, and reduced industrial output. The 2000s ushered in a period of rapid economic growth for Kazakhstan, fueled by rising global prices for oil, metals, and grain. GDP growth accelerated markedly, increasing by 9.6% in 2000, up from a modest 1.7% in 1999, and reaching 10.6% growth by 2006. This robust expansion was underpinned by strong export performance and increased foreign investment, which capitalized on Kazakhstan’s resource wealth. Trade relations with Russia, China, and other Commonwealth of Independent States (CIS) countries played a critical role in sustaining this growth, facilitating market access and regional economic integration. The positive economic trajectory also improved government finances, shifting from a cash deficit equivalent to 3.7% of GDP in 1999 to a slight surplus of 0.1% in 2000, reflecting enhanced fiscal discipline and revenue generation. However, the economy encountered a slowdown beginning in 2014, precipitated by declining oil prices and the adverse effects of the Russo-Ukrainian War. These factors exerted downward pressure on export revenues and investor confidence, leading to significant currency depreciation. The national currency, the tenge, was devalued by 19% in 2014 and further by 22% in 2015, reflecting adjustments to external shocks and efforts to maintain competitiveness. In the realm of international competitiveness, Kazakhstan was ranked 37th out of 64 countries in the International Institute for Management Development’s (IMD) World Competitiveness Ranking in 2023. This ranking assesses countries’ ability to create and sustain long-term value, indicating Kazakhstan’s moderate position relative to global peers and highlighting areas for potential improvement in economic governance and business environment. The country’s engagement with international financial institutions has also been notable. In January 2017, Cyril Muller, Vice President of the World Bank for Europe and Central Asia, visited Astana and commended Kazakhstan’s 25-year partnership with the World Bank. He highlighted the country’s improved performance in the 2017 Doing Business Report, where Kazakhstan ranked 35th out of 190 countries. This recognition reflected ongoing reforms aimed at enhancing the ease of doing business, including regulatory improvements and efforts to attract investment. Following the year 2000, Kazakhstan implemented several public sector reforms inspired by the New Public Management approach, which sought to reduce costs and improve efficiency in public service delivery. These reforms introduced principles such as performance measurement, decentralization, and customer orientation within government agencies, aiming to modernize the public administration and align it with international best practices. In terms of innovation, Kazakhstan achieved a notable regional standing by ranking third in the Central and South Asia region in the 2018 Global Innovation Index (GII), published by the World Intellectual Property Organization (WIPO). This ranking reflected the country’s progress in fostering innovation ecosystems, investing in research and development, and improving intellectual property frameworks. Within the industrial sector, the production of cotton pulp is a significant activity, with Khlopkoprom identified as the main producer in Kazakhstan. Since 2022, Khlopkoprom has supplied cotton pulp products to gunpowder manufacturers in Russia, illustrating the interconnectedness of Kazakhstan’s industrial outputs with regional defense-related industries. Despite many factories importing Kazakh pulp for explosive manufacturing being subject to US and Ukrainian sanctions, exports of cotton pulp and its derivatives to Russia increased markedly after February 24, 2022. This trade dynamic underscores the complexities of Kazakhstan’s economic relations amid geopolitical tensions. Kazakhstan’s exported components play a critical role in the manufacture of explosives and gunpowder, with established contracts securing the supply of raw materials to key Russian facilities. Notably, agreements are in place to supply materials to the Kazan Gunpowder Plant until 2026 and the Aleksinsky Chemical Plant until 2024. These contracts highlight Kazakhstan’s strategic position as a supplier of essential inputs for the production of explosives, reflecting both its industrial capabilities and its integration into regional supply chains.

Since 1973, Kazakhstan’s GDP per capita has undergone significant fluctuations that mirror the country’s broader economic transitions and growth patterns over the ensuing decades. These variations reflect the shifting dynamics of Kazakhstan’s economy as it moved from a Soviet republic to an independent nation, adapting to new market conditions and structural reforms. The economic landscape was marked by periods of contraction and expansion, influenced by both internal policy decisions and external global economic forces. In 1995, Kazakhstan’s gross domestic product (GDP) was recorded at approximately 78,014,200 million tenge. At that time, the exchange rate stood at 61.11 tenge per US dollar, reflecting the currency valuation in the early years of independence. The inflation index was notably high, at 64, indicative of the inflationary pressures the economy faced during its transition from a centrally planned system to a market-oriented one. Despite these challenges, the per capita income was estimated at 3.81% of that of the United States, highlighting the significant income disparity between Kazakhstan and developed economies. By the year 2000, Kazakhstan’s GDP had increased to approximately 102,599,902 million tenge, signaling economic growth amid ongoing reforms. However, the exchange rate had depreciated to 142.26 tenge per US dollar, reflecting currency adjustments and inflationary trends. The inflation index reached 100, representing a normalization relative to the base year, yet the per capita income slightly decreased to 3.53% of the United States level, suggesting that income growth had not kept pace with the broader economic expansion or that currency depreciation affected real income measures. The economic trajectory continued upward by 2005, with GDP further growing to 147,453,000 million tenge. During this period, the exchange rate was recorded at 132.88 tenge per US dollar, showing some stabilization compared to the previous half-decade. Inflation remained elevated, with an index of 140, indicating persistent price level increases. Notably, per capita income rose significantly to 9.01% of the United States figure, reflecting improved economic conditions and enhanced living standards as Kazakhstan capitalized on its natural resources and implemented structural reforms. In 2017, Kazakhstan’s GDP was approximately 159,406,930 million tenge, with the exchange rate at ₸344.18 per US dollar. Although specific inflation and per capita income figures for this year are not provided, the substantial increase in the exchange rate number suggests currency depreciation over the intervening years. This period was characterized by efforts to diversify the economy and stabilize macroeconomic indicators amid fluctuating global commodity prices. According to estimates from the International Monetary Fund (IMF), Kazakhstan’s gross domestic product at market prices reached 417.5 billion US dollars in 2013. The GDP per capita was estimated at 24,326 US dollars, and the economy experienced a robust growth rate of 5.9%. These figures underscored Kazakhstan’s emergence as a rapidly developing economy with significant potential driven by its energy sector and strategic reforms. In 2014, Kazakhstan’s GDP saw a slight increase to 427.5 billion US dollars, accompanied by a marginal rise in GDP per capita to 24,545 US dollars. The growth rate moderated to 4.3%, reflecting a slowing yet still positive expansion. Inflation was recorded at 6.7%, while the unemployment rate stood at 5.0%, indicating relatively stable labor market conditions despite external economic pressures and the beginning of a downturn in commodity prices. Examining economic indicators from 1980 through 2023 reveals a steady increase in Kazakhstan’s GDP in both nominal and purchasing power parity (PPP) terms, although this growth was punctuated by notable fluctuations in growth rates and inflation. These variations corresponded to periods of economic restructuring, global financial crises, and domestic policy shifts that influenced the pace and stability of economic development. In 1992, shortly after gaining independence, Kazakhstan’s GDP was estimated at 120.2 billion US dollars in PPP terms, with a GDP per capita of 7,052 US dollars. The economy experienced a growth rate of 2.9%, reflecting initial post-independence economic activity and adjustment. This period was marked by efforts to establish new economic institutions and transition to a market economy. However, in 1993, Kazakhstan’s GDP declined to 111.8 billion US dollars (PPP), with the GDP per capita falling to 6,613 US dollars. The economy contracted sharply, recording a significant GDP growth rate decrease of −9.2%, while inflation was relatively moderate at 5.2%. This downturn reflected the challenges of economic transition, including the disruption of trade links, structural imbalances, and the need for comprehensive reforms. The downward trend continued in 1994, with GDP further declining to 99.8 billion US dollars (PPP) and GDP per capita decreasing to 6,315 US dollars. The economy contracted by −12.6%, with inflation rising to 11.9%, and unemployment reaching 10.1%. These figures illustrated the depth of the economic crisis during the early transition years, as Kazakhstan struggled with hyperinflation, declining industrial output, and rising social challenges. From 1995 onward, Kazakhstan’s GDP began a gradual recovery, reaching 93.5 billion US dollars (PPP) with a GDP per capita of 5,966 US dollars. Despite this recovery, the economy still faced a contraction, with growth declining by −8.2%. Inflation was negative at −8.2%, indicating deflationary pressures, and unemployment remained high at 11.0%. This period marked the beginning of stabilization efforts and the implementation of economic reforms aimed at fostering growth. Between 2000 and 2007, Kazakhstan experienced consistent economic growth, with GDP in PPP terms rising from 114.9 billion US dollars to 269.3 billion US dollars. Correspondingly, GDP per capita increased from 7,727 to 17,293 US dollars. This era was characterized by the exploitation of natural resources, particularly oil and gas, increased foreign investment, and improvements in infrastructure, which collectively propelled Kazakhstan’s rapid economic expansion. The global financial crisis of 2008 induced a slowdown in Kazakhstan’s economic growth. GDP in PPP terms reached 283.5 billion US dollars, but the growth rate decelerated to 3.3%, reflecting the impact of reduced global demand and financial market volatility. Inflation decreased to 17.1%, a decline from previous years, as the economy adjusted to the new global economic environment. Despite the slowdown, Kazakhstan’s economy demonstrated resilience relative to many other countries affected by the crisis. Following the crisis, Kazakhstan’s economy recovered steadily. By 2011, GDP in PPP terms had increased to 344.0 billion US dollars, and by 2017 it reached 448.5 billion US dollars. GDP per capita rose correspondingly during this period, reflecting improved living standards and economic diversification efforts. The recovery was supported by rising commodity prices and government initiatives to stimulate domestic demand and investment. In 2020, the COVID-19 pandemic caused a contraction in Kazakhstan’s economy, with GDP in PPP terms estimated at approximately 501.8 billion US dollars. The growth rate declined by −2.6%, reflecting the global economic downturn and domestic disruptions. Inflation was recorded at 6.8%, as supply chain challenges and fiscal measures influenced price levels. The pandemic underscored the vulnerabilities of Kazakhstan’s economy to external shocks and the importance of economic resilience. The year 2021 saw a rebound in economic activity, with GDP in PPP terms increasing to 545.8 billion US dollars. The growth rate recovered to 4.1%, inflation rose to 8.0%, and unemployment decreased to 4.9%, indicating a gradual return to pre-pandemic economic conditions. The government’s fiscal and monetary policies, along with global economic recovery, contributed to this positive trajectory. In 2022, Kazakhstan’s GDP in PPP terms further increased to 603.3 billion US dollars, with a growth rate of 3.3%. Inflation rose sharply to 15.0%, reflecting ongoing supply-side constraints and global inflationary pressures. Unemployment remained stable at 4.9%, suggesting labor market resilience despite inflationary challenges. As of 2023, Kazakhstan’s GDP in PPP terms is approximately 654.1 billion US dollars, with a growth rate of 4.6%. Inflation remained elevated at 15.0%, while unemployment slightly decreased to 4.8%. These figures illustrate the continued expansion of Kazakhstan’s economy amid persistent inflationary pressures and relatively stable labor market conditions. Overall, Kazakhstan’s macroeconomic trend demonstrates a trajectory of growth interspersed with periods of volatility. The country’s economic performance has been influenced by global economic conditions, fluctuations in commodity prices, and internal reforms aimed at structural transformation and diversification. This complex interplay has shaped Kazakhstan’s evolving economic landscape from its Soviet past to its current status as a developing market economy.

Kazakhstan’s economy exhibited a robust growth trajectory in the first half of 2023, expanding by 5.1% according to data released by the World Bank. This growth was primarily fueled by a combination of strong export performance and targeted fiscal stimulus measures implemented by the government. The expansion in exports reflected Kazakhstan’s strategic positioning as a resource-rich country, while fiscal policies aimed at stimulating domestic demand and investment further bolstered economic activity. Building on this momentum, the country’s gross domestic product (GDP) was projected to grow by 4.5% in 2023 and in subsequent years, a forecast underpinned by the commencement of new oil production facilities coming on-stream. The increase in oil output was expected to enhance Kazakhstan’s export revenues and support broader economic expansion. Over the decade leading up to 2022, Kazakhstan sustained an average real GDP growth rate of 3.0%, outperforming the average growth rate of 2.5% recorded across Eastern Europe during the same period. This steady growth reflected Kazakhstan’s ongoing economic diversification efforts and its ability to leverage natural resource wealth while gradually expanding other sectors. In 2022 alone, the country achieved a real GDP growth of 3.3%, signaling resilience amid global economic uncertainties. The official estimate of Kazakhstan’s GDP at the end of 2022 stood at $512 billion when measured in purchasing power parity (PPP) terms, underscoring the country’s significant economic scale within the Central Asian region. However, Kazakhstan’s economic trajectory faced challenges beginning in 2014, when the government devalued the national currency, the tenge, by 19% in February of that year. This devaluation was a response to external shocks, notably the sharp decline in global oil prices and the geopolitical repercussions stemming from the 2014 Russo-Ukrainian War. These factors precipitated an economic slowdown, as Kazakhstan’s oil-dependent economy was adversely affected by lower commodity prices and reduced investor confidence. In an effort to address these challenges and promote economic diversification, the Government of Kazakhstan entered into a Framework Partnership Agreement on 1 May 2014 with the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). Under this agreement, the World Bank committed to allocating US$2.5 trillion to support Kazakhstan’s initiatives aimed at diversifying its economy and fostering sustainable development. By 2015, Kazakhstan had attained the status of an upper-middle-income country, with its GDP reaching US$170 billion according to World Bank reports. Despite this classification, the economy continued to face volatility, prompting a second devaluation of the tenge by 22% in August 2015. This further adjustment aimed to improve the competitiveness of Kazakh exports but also reflected ongoing pressures from the external economic environment. Notwithstanding these challenges, foreign direct investment (FDI) in Kazakhstan displayed notable growth in 2015, with a 30% increase in the agricultural sector and an 80% rise in the petroleum products sector. These investment inflows highlighted continued international confidence in key areas of Kazakhstan’s economy, particularly in sectors critical to its export profile and food security. The economy began to recover in 2016 from the crisis induced by low oil prices and currency devaluations. During the first nine months of 2016, GDP growth reached 0.4%, marking the initial signs of stabilization. Growth was particularly pronounced in sectors such as construction, which expanded by 6.9%, agriculture, which grew by 4.9%, and transport, which increased by 4.0%. These sectors benefited from both government investment initiatives and improving domestic demand. Despite these positive trends, Kazakhstan’s GDP per capita in current US dollars declined by approximately 40% between 2013 and 2017, reflecting the significant impact of currency depreciation and economic adjustments during this period. Kazakhstan’s business environment demonstrated marked improvements in the late 2010s. In the 2020 World Bank Doing Business report, the country was ranked 25th out of 190 countries, an advancement of three positions from its 28th place ranking the previous year. This placed Kazakhstan ahead of several developed economies, including Iceland (26th), Austria (27th), Russia (28th), and Japan (29th), highlighting the country’s efforts to enhance regulatory frameworks and ease of doing business. A key component of Kazakhstan’s economic strategy involved prioritizing the development of non-oil sectors, which contributed to 85% of the country’s economic growth in 2019. This diversification was crucial for reducing dependence on hydrocarbons and fostering more sustainable, inclusive economic development. The year 2020 saw significant growth in several industrial sectors despite the global economic disruptions caused by the COVID-19 pandemic. The automotive sector experienced a remarkable increase of 53.6%, while pharmaceuticals grew by 39.7%, reflecting increased demand and investment in health-related industries. Processed metal products expanded by 19.5%, mechanical engineering by 16.5%, and light industry by 16.4%, indicating broad-based industrial development. The service sector also registered notable growth, with construction increasing by 10.7% and the information and communications sector expanding by 8.2%. These gains underscored Kazakhstan’s ongoing structural transformation and efforts to build a more diversified and resilient economy. In 2022, the World Bank reported that Kazakhstan’s GDP growth reached 3.2%, maintaining a steady pace of expansion amid a complex global economic environment. The economy was projected to grow by 3.9% in 2023, driven mainly by the hydrocarbons sector and increased oil production. The anticipated rise in oil output was expected to enhance export revenues and fiscal capacity, supporting broader economic development objectives. This growth outlook reflected Kazakhstan’s continued reliance on its natural resource base while simultaneously advancing diversification and modernization efforts across various sectors.

Kazakhstan has established itself as the leading country globally in uranium production, contributing approximately 35% of the world’s total uranium output. This dominant position reflects the country’s strategic focus on developing its uranium mining industry, which has grown significantly since the early 2000s. The expansion of uranium production in Kazakhstan has been driven by a combination of rich mineral deposits, advanced mining technologies, and substantial investments from both domestic and international companies. The country’s uranium mining sector primarily utilizes in-situ leaching techniques, which have proven to be cost-effective and environmentally less disruptive compared to traditional mining methods, thereby enhancing Kazakhstan’s competitive edge in the global market. In addition to its production capacity, Kazakhstan holds the world’s second-largest uranium reserves, surpassed only by Australia. These extensive reserves are distributed across several key mining regions, including the Chu-Sarysu, Syrdarya, and North Kazakhstan basins, which are known for their high-quality uranium ore deposits. The presence of such vast reserves ensures Kazakhstan’s long-term potential to maintain and possibly increase its uranium output, securing its role as a critical supplier in the international nuclear fuel market. The country’s uranium reserves have attracted significant foreign investment and partnerships, further bolstering its position as a reliable source of nuclear material for energy generation worldwide. Kazakhstan’s uranium industry plays a pivotal role in the national economy, contributing to export revenues and employment while supporting the development of related sectors such as metallurgy and energy. The government has implemented policies to promote sustainable mining practices and to enhance the value chain by encouraging uranium processing and enrichment activities within the country. This strategic approach aims to maximize the economic benefits derived from Kazakhstan’s uranium resources while ensuring environmental protection and social responsibility. As global demand for nuclear energy continues to evolve, Kazakhstan’s substantial uranium reserves and production capabilities position it as a key player in meeting the future needs of the nuclear power industry.

Oil and gas have long constituted the leading sector of Kazakhstan’s economy, playing a pivotal role in shaping the country’s economic development and growth trajectory. The vast hydrocarbon resources have attracted substantial foreign investment and have been instrumental in generating export revenues, employment, and infrastructure development. The sector’s dominance is reflected in its contribution to Kazakhstan’s gross domestic product (GDP), export earnings, and government budget, underscoring its strategic importance to the nation’s economic stability and expansion. In the year 2000, Kazakhstan produced a total of 35,252,000 metric tons of oil, which translated to approximately 700,000 barrels per day. This represented a significant increase of 17.4% compared to the 1999 production figure of 30,025,000 tons. The growth in oil output during this period was driven by enhanced exploration activities, improved extraction technologies, and increased foreign participation in the oil sector. The rising production levels underscored Kazakhstan’s growing role as an emerging oil producer on the global stage, reflecting the successful transition from Soviet-era production methods to more modern, market-oriented practices. Correspondingly, oil exports in 2000 reached 28,883,000 tons, marking a remarkable 38.8% increase from the 20,813,000 tons exported in 1999. This sharp rise in exports was facilitated by the development of export infrastructure such as pipelines and terminals, as well as the establishment of new trade partnerships with countries in Europe and Asia. The expansion of export capacity allowed Kazakhstan to tap into international markets more effectively, thereby increasing foreign exchange earnings and reinforcing the oil sector’s role as the backbone of the national economy. The upward trend in oil production continued into 2001, with output growing at an approximate rate of 20%, in line with the government’s forecast to reach 40,100,000 tons of oil, or about 800,000 barrels per day. This growth was supported by ongoing investments in existing fields and the initiation of new projects aimed at boosting production capacity. The government’s optimistic projections reflected confidence in the sector’s ability to sustain rapid growth, driven by both domestic policies encouraging investment and favorable global oil market conditions. Natural gas production also experienced significant growth during this period. In 2000, Kazakhstan produced 11.5 cubic kilometers (km³) of natural gas, up from 8.2 km³ in 1999. This increase reflected the country’s efforts to diversify its energy output and capitalize on its substantial natural gas reserves. The expansion of gas production was critical not only for domestic energy consumption but also for export potential, as Kazakhstan sought to establish itself as a reliable supplier of natural gas to regional markets, including Russia, China, and Europe. Kazakhstan’s potential to become a world-class oil exporter in the medium term is underpinned by its rich hydrocarbon reserves and the influx of foreign investment. The country possesses some of the largest untapped oil and gas fields globally, which, combined with strategic partnerships with international oil companies, positions it favorably in the competitive global energy market. The government’s policies aimed at creating a conducive investment climate, including tax incentives and regulatory reforms, have further enhanced Kazakhstan’s attractiveness to foreign investors seeking to develop its vast energy resources. A landmark foreign investment project exemplifying this dynamic is the TengizChevroil joint venture. This consortium is owned 50% by ChevronTexaco, 25% by ExxonMobil, 20% by KazMunaiGas of Kazakhstan, and 5% by LukArco of Russia. TengizChevroil operates the Tengiz oil field, one of the world’s deepest and largest oil fields, located in western Kazakhstan. The project has been critical in boosting Kazakhstan’s oil production capacity and has served as a model for successful international cooperation in the country’s energy sector. The involvement of major multinational corporations has brought advanced technology, capital, and expertise, facilitating the efficient development of the field’s complex geology. Another significant development in Kazakhstan’s oil and gas sector is the Karachaganak natural gas and gas condensate field, which is under development by a consortium including BG Group, Eni (through its subsidiary Agip), ChevronTexaco, and Lukoil. The Karachaganak field is one of the largest gas condensate accumulations in the world, located in the northwest of Kazakhstan near the Russian border. Its development has been crucial in increasing Kazakhstan’s natural gas production and export capabilities. The consortium’s collaborative approach has enabled the deployment of sophisticated extraction and processing technologies, enhancing the field’s operational efficiency and environmental management. The offshore Kashagan oil field, situated in the northern Caspian Sea, was discovered by the Agip-led Offshore Kazakhstan Consortium and is regarded as potentially one of the largest oil fields in the world. The field’s development prospects are significant, given its vast reserves and strategic location. However, the Kashagan project has faced numerous technical and environmental challenges due to the field’s complex geology, harsh weather conditions, and sensitive ecosystem. Despite these difficulties, ongoing efforts to develop Kashagan reflect Kazakhstan’s ambition to expand its oil production capacity and secure its position as a major global oil supplier in the coming decades. Kazakhstan’s economic future remains heavily dependent on the development of its oil and gas sector. The growth of the country’s GDP is closely tied to fluctuations in global oil prices and the ability to discover and efficiently develop new hydrocarbon deposits. The volatility of oil markets poses risks to economic stability, underscoring the importance of diversifying the economy and investing oil revenues in sustainable development. Nonetheless, the energy sector continues to be the primary driver of Kazakhstan’s economic growth, government revenues, and foreign trade balance. In January 2022, Kazakhstan experienced widespread protests that began with thousands of people returning to the streets to oppose surging gas prices. The demonstrations lasted for four consecutive days and quickly escalated in scale and intensity. The protests were triggered by a sudden doubling of liquefied petroleum gas (LPG) prices, which disproportionately affected ordinary citizens, especially in rural areas where LPG is a primary fuel source for vehicles. The unrest reflected broader social and economic grievances, including concerns over inequality, corruption, and governance. These January 2022 protests were claimed to be the largest in decades in the oil-rich country. Protesters not only gathered in large numbers in major cities but also invaded government buildings and seized police vehicles, demonstrating a level of organization and defiance unprecedented in recent Kazakh history. The government responded by declaring a strict state of emergency and deploying security forces to restore order. Despite these measures, the scale of the protests highlighted the deep societal tensions linked to the country’s dependence on oil and gas revenues, and the challenges faced in ensuring equitable economic benefits and political stability in an energy-dependent economy.

Kazakhstan holds a prominent position in the global mining industry, being a leading producer of a diverse array of mineral commodities that contribute significantly to its economy and the international market. Among these mineral resources, Kazakhstan is recognized for its substantial output of salt, uranium, ferrochrome, titanium sponge, cadmium, potash, magnesium, rhenium, copper, bauxite, gallium, and zinc. The country’s vast and geologically rich territory encompasses numerous mineral deposits that have been developed over decades, positioning Kazakhstan as a key supplier of these critical raw materials worldwide. In 2022, Kazakhstan solidified its status as the world’s largest producer of uranium, a distinction that underscores the country’s strategic importance in the global nuclear fuel market. The uranium mining sector in Kazakhstan has expanded rapidly since the early 2000s, driven by significant investments and the adoption of advanced extraction technologies, including in-situ leaching methods. This growth enabled Kazakhstan to surpass other uranium-producing nations, such as Canada and Australia, in terms of annual output. The dominance in uranium production has not only bolstered Kazakhstan’s export revenues but also enhanced its geopolitical influence in the energy sector, as uranium remains a vital resource for nuclear power generation worldwide. Kazakhstan’s mining industry also includes substantial production of precious metals, with gold being a notable example. In 2019, the country ranked as the 10th largest producer of gold globally. This ranking reflects the development of several large-scale gold mining operations, including both open-pit and underground mines, which have contributed to steady increases in gold output over the years. The gold sector benefits from Kazakhstan’s rich mineral endowment and ongoing exploration activities, which continue to identify new deposits. The presence of gold mining also supports a range of downstream industries and provides employment opportunities in various regions of the country. Copper production is another significant component of Kazakhstan’s mineral output. In 2019, Kazakhstan was the 11th largest global producer of copper, a metal essential for electrical wiring, construction, and industrial machinery. The country’s copper mining is concentrated in several key deposits, often associated with polymetallic ores that also contain zinc, lead, and other valuable metals. The development of copper mines has been facilitated by both domestic and foreign investments, with several large mining companies operating in the sector. Copper production in Kazakhstan plays a critical role in the country’s export portfolio and supports the growth of related industries such as metallurgy and manufacturing. Chromium is a further mineral in which Kazakhstan holds a significant global position. In 2019, the country ranked as the 3rd largest producer of chromium worldwide, reflecting its rich chromite ore deposits. Chromium is a critical element used primarily in the production of stainless steel and various alloys, making Kazakhstan an important supplier to the global steel industry. The mining and processing of chromite ore have been developed extensively, with Kazakhstan’s ferrochrome production capacity supporting both domestic consumption and export markets. The country’s chromium resources contribute to its strategic industrial base and enhance its role in global mineral supply chains. Kazakhstan’s mineral wealth also includes bauxite, the principal ore of aluminum. In 2019, Kazakhstan was the 9th largest producer of bauxite globally, underscoring its capacity to supply this essential raw material for aluminum production. The bauxite deposits are primarily located in the southern and eastern regions of the country, and their exploitation supports the aluminum industry, which is important for various sectors including transportation, packaging, and construction. The development of bauxite mining in Kazakhstan has been accompanied by efforts to expand refining and smelting capacities, aiming to increase value-added production within the country. Zinc production is another area where Kazakhstan maintains a strong global presence. In 2019, the country ranked as the 9th largest producer of zinc worldwide. Zinc is widely used for galvanizing steel to prevent corrosion, as well as in the manufacture of alloys and batteries. Kazakhstan’s zinc mining operations often occur in conjunction with lead and copper mining, as these metals frequently coexist in polymetallic ore deposits. The extraction and processing of zinc contribute to Kazakhstan’s export earnings and support the metallurgical industry, which benefits from the availability of multiple base metals within the country’s mineral resource base. Antimony, a metal used in flame retardants, batteries, and alloys, is also produced in significant quantities by Kazakhstan. In 2019, the country ranked as the 10th largest producer of antimony globally. Kazakhstan’s antimony deposits are primarily located in the eastern regions, and the mining sector has developed steadily to meet both domestic demand and export opportunities. The production of antimony complements the country’s broader portfolio of non-ferrous metals and supports industrial applications that rely on this critical mineral. Iron ore is another key mineral resource in Kazakhstan’s mining sector. In 2019, the country was the 12th largest producer of iron ore worldwide, reflecting its substantial reserves and mining capacity. Iron ore is the primary raw material for steel production, and Kazakhstan’s iron ore mining supports both domestic steelmaking industries and exports. The iron ore deposits are distributed across various regions, with mining operations ranging from large-scale open-pit mines to smaller underground workings. The development of iron ore resources has been integral to Kazakhstan’s industrial growth and infrastructure development. Lead production is also significant within Kazakhstan’s mining industry. In 2019, the country ranked as the 12th largest producer of lead globally. Lead is primarily used in batteries, radiation shielding, and various alloys. Kazakhstan’s lead mining is often associated with zinc and silver extraction, as these metals commonly occur together in ore bodies. The country’s lead production supports both domestic manufacturing and export markets, contributing to the diversification of its mineral exports. Manganese, an essential element in steel production and battery technology, is another mineral produced by Kazakhstan. In 2019, the country was the 14th largest producer of manganese worldwide. Kazakhstan’s manganese deposits, though not as extensive as some other minerals, have been developed to meet industrial requirements. The mining and processing of manganese contribute to the country’s metallurgical sector and enhance its capacity to supply raw materials for steelmaking and other applications. Phosphate production, important for fertilizer manufacturing, is also part of Kazakhstan’s mining portfolio. In 2019, the country ranked as the 17th largest producer of phosphate globally. Phosphate rock mining supports Kazakhstan’s agricultural sector by providing raw materials for fertilizer production, which is crucial for enhancing crop yields. The phosphate deposits are located in several regions, and ongoing exploration and development aim to increase production capacity to meet both domestic and export demands. Kazakhstan’s production of bismuth, a metal used in pharmaceuticals, cosmetics, and alloys, was notable in 2019 when the country ranked as the 6th largest producer globally. Bismuth mining and refining operations contribute to the diversification of Kazakhstan’s non-ferrous metals sector. The availability of bismuth supports various high-tech and industrial applications, enhancing the country’s position in the global supply chain for specialty metals. Sulfur production is another important aspect of Kazakhstan’s mining industry. In 2019, the country was the 7th largest producer of sulfur worldwide. Sulfur is primarily used in the chemical industry for the production of sulfuric acid, fertilizers, and other industrial chemicals. Kazakhstan’s sulfur production is often a byproduct of oil and gas extraction, as well as from the processing of certain mineral ores. The availability of sulfur supports the country’s chemical manufacturing sector and contributes to export revenues. Collectively, these rankings and production figures illustrate Kazakhstan’s extensive and diversified mineral resource base, which underpins its status as a major player in the global mining industry. The country’s ability to produce a wide range of minerals, from precious metals to industrial and specialty metals, reflects both its geological endowment and the development of a robust mining infrastructure. Kazakhstan’s mineral production continues to play a critical role in its economic development, export strategy, and integration into global commodity markets.

In June 2014, the automotive industry in Kazakhstan marked a significant milestone with the launch of the Complete Knock-Down (CKD) assembly of the Toyota Fortuner in Kostanay. This initiative was designed to assemble vehicles locally from imported parts, enabling the production of approximately 3,000 cars annually. The establishment of this assembly line represented a strategic effort to bolster domestic automotive manufacturing capabilities, reduce reliance on fully imported vehicles, and stimulate local employment and technical expertise. The Toyota Fortuner, a popular sport utility vehicle, was chosen as a flagship model to spearhead this development, reflecting both market demand and the potential for technological transfer inherent in CKD operations. During the same period, Kazakhstan’s car industry was undergoing rapid expansion, with the sector producing goods valued at around US$2 billion annually by 2014. This growth was fueled by a combination of increasing domestic demand, government incentives, and the gradual establishment of assembly plants and component manufacturing facilities. The burgeoning industry contributed significantly to the nation’s industrial output and employment, positioning Kazakhstan as a notable player in the Central Asian automotive market. The expansion also reflected broader economic trends, including rising incomes and urbanization, which increased the demand for personal vehicles. Despite the initial optimism surrounding the industry’s growth, the sector encountered a downturn in subsequent years. By 2016, vehicle sales had declined sharply, falling to only 47,000 units. This decrease indicated challenges such as market saturation, economic fluctuations, and possibly insufficient development of a competitive domestic automotive brand. The decline underscored structural weaknesses within the industry, including limited value-added production and overreliance on imported components. It also suggested that consumer confidence and purchasing power were affected by broader economic conditions, which in turn impacted the automotive market’s vitality. In contrast to the downturn experienced in 2016, the year 2020 witnessed the most significant growth in Kazakhstan’s automotive sector to date. Despite the global challenges posed by the COVID-19 pandemic, the industry’s output increased by an impressive 53.6%. This surge was remarkable given the widespread disruptions in manufacturing and supply chains worldwide during the pandemic. The growth reflected resilience within the sector, possibly driven by pent-up consumer demand, government stimulus measures, and adaptations in production processes. It also highlighted the strategic importance of the automotive industry within Kazakhstan’s broader economic framework, as efforts to sustain and expand production continued amid global uncertainty. The Kazakh government has played a pivotal role in supporting the domestic auto industry through various policy measures, with state support primarily channeled via recycling fees. These fees, imposed on vehicle imports and sales, were intended to fund environmental initiatives and promote the recycling of automotive materials. However, the implementation of recycling fees became a contentious issue, provoking debate among industry stakeholders and the public. While the fees provided financial resources to support the automotive sector and environmental goals, critics argued that they imposed additional costs on consumers and distorted market dynamics. The controversy surrounding recycling fees reflected broader tensions between industrial policy objectives and consumer interests. Over the past two decades, Kazakhstan’s automotive industry has largely functioned as a simple assembly hub rather than evolving into a fully integrated manufacturing sector. The industry’s operations have predominantly involved importing spare parts from abroad and performing basic assembly tasks, such as fitting wheels and combining components into finished vehicles. This limited scope of activity has prevented the emergence of a genuinely Kazakh automotive brand or the development of advanced manufacturing capabilities. The reliance on imported parts and the absence of significant domestic component production have constrained the industry’s ability to move up the value chain, innovate, and compete internationally. Consequently, the sector has remained dependent on foreign suppliers and vulnerable to external market fluctuations. This constrained development model has engendered public dissatisfaction, particularly among groups such as #Нетутильсбору (No Recycling Fee), which have vocally opposed government policies perceived as favoring industry support at the expense of ordinary citizens. The #Нетутильсбору movement emerged as a reaction to the recycling fees and other forms of state intervention, arguing that these measures disproportionately burden consumers without delivering meaningful benefits. Advocates within the movement have called attention to the lack of tangible progress in the automotive industry, highlighting the disconnect between government expenditures and improvements in vehicle affordability, quality, and availability. The movement’s activism underscores a broader critique of industrial policy and social equity in Kazakhstan. One of the consequences of the current support policies has been an increase in the average age of vehicles across Kazakhstan. The recycling fees and related costs have contributed to making newer, more affordable vehicles less accessible to many consumers, who often resort to purchasing older, second-hand cars. This trend has implications for road safety, environmental standards, and consumer welfare, as older vehicles tend to be less efficient and more polluting. The aging vehicle fleet reflects structural challenges within the automotive market, including limited domestic production of competitively priced new cars and barriers to importation. It also illustrates the unintended effects of policy measures designed to support the industry but which may inadvertently restrict consumer choice. The primary demands of the #Нетутильсбору group center on the abolition of recycling fees and a redirection of government support toward addressing more urgent public needs. Members of this movement argue that eliminating these fees would reduce the financial burden on car buyers, stimulate demand for newer vehicles, and improve overall market dynamics. Furthermore, they advocate for reallocating state resources away from industry subsidies toward investments in infrastructure, social services, and environmental protection. This stance reflects a call for more balanced and equitable policymaking that prioritizes the welfare of the general population over the interests of a narrowly defined industrial sector. Critics of the current government support policies contend that continued backing effectively “mummifies” an unproductive industry, preventing the automotive sector from evolving into a dynamic and innovative field. They argue that sustained subsidies and protective measures create a dependency that stifles competition, discourages investment in technological advancement, and limits consumer access to better vehicles. This perspective suggests that the policies have led to stagnation rather than growth, with the industry trapped in a cycle of low-value assembly rather than genuine manufacturing development. The critique highlights the need for structural reforms to foster a more competitive, diversified, and consumer-responsive automotive market in Kazakhstan.

GE Transportation acquired a 50% stake in Lokomotiv Kurastyru Zauyty, a strategic move that marked a significant collaboration between an international corporation and Kazakhstan’s national railway sector. This acquisition led to the establishment of a joint venture with Temir Zholy, Kazakhstan’s state-owned railway company, which played a central role in the country’s rail infrastructure development. Lokomotiv Kurastyru Zauyty, which translates to “Locomotive Assembly Plant,” was designed to manufacture and assemble locomotives domestically, thereby enhancing Kazakhstan’s capacity to produce modern rail equipment locally. The partnership aimed to leverage GE Transportation’s advanced technology and expertise in locomotive manufacturing while utilizing Temir Zholy’s extensive knowledge of the regional rail network and market demands. By combining these strengths, the joint venture sought to modernize Kazakhstan’s rail fleet, reduce dependence on imports, and stimulate the local economy through job creation and industrial development. This collaboration also aligned with broader national goals to upgrade transport infrastructure and improve the efficiency and reliability of rail services across the country. The establishment of this joint venture represented a key step in Kazakhstan’s efforts to integrate advanced rail technologies and foster sustainable growth within its transportation sector.

On 22 December 2014, the World Bank approved a loan amounting to US$88 million to support Kazakhstan’s efforts in advancing its technological development initiatives. This financial assistance was part of a broader strategy to stimulate innovation and enhance the country’s capacity to generate commercially and socially viable technological advancements. The approval of this loan underscored the World Bank’s recognition of Kazakhstan’s potential to leverage technology as a key driver for sustainable economic growth and diversification beyond its traditional reliance on natural resources. The primary purpose of the loan was to facilitate innovation that is both commercially successful and socially beneficial, reflecting a dual objective of economic competitiveness and societal improvement. By targeting technology that could be translated into marketable products and services, the funding sought to encourage enterprises and institutions to develop innovations with practical applications. At the same time, the emphasis on social viability ensured that these technological advancements would address broader developmental challenges, such as improving quality of life, increasing access to services, and supporting inclusive growth across various regions of Kazakhstan. This substantial financial commitment was directed towards the Fostering Productive Innovation Project, a comprehensive initiative designed to strengthen Kazakhstan’s innovation ecosystem. The project aimed to build the country’s institutional and human capacity to generate, adopt, and commercialize new technologies. It sought to create an enabling environment where research and development could thrive, and where innovative ideas could be transformed into viable business ventures. By focusing on productive innovation, the project intended to bridge the gap between scientific research and market needs, thereby enhancing the overall efficiency and impact of technological development efforts within Kazakhstan. The scope of the Fostering Productive Innovation Project included targeted interventions in key sectors that were identified as having significant potential to support and accelerate technological innovation. These sectors encompassed areas such as information and communication technology, manufacturing, agriculture, and energy, which are critical to Kazakhstan’s economic diversification and modernization goals. By improving the infrastructure, regulatory frameworks, and institutional capacities within these sectors, the project aimed to foster an environment conducive to innovation-led growth. This approach was designed to contribute to Kazakhstan’s broader economic development by creating new jobs, increasing productivity, and enhancing the competitiveness of domestic industries in regional and global markets. Through the implementation of this project, Kazakhstan sought to establish a sustainable innovation ecosystem that could continuously generate technological advancements aligned with the country’s strategic priorities. The World Bank’s loan thus represented a pivotal investment in Kazakhstan’s transition towards a knowledge-based economy, supporting the development of human capital, strengthening research institutions, and promoting collaboration between the public and private sectors. By focusing on both commercial viability and social impact, the Fostering Productive Innovation Project aimed to ensure that technological progress would translate into tangible benefits for the Kazakhstani population, fostering inclusive growth and long-term economic resilience.

Kazakhstan’s retail sector has experienced notable recognition in global assessments of emerging markets, reflecting its growing attractiveness to investors and multinational corporations. According to the 2015 Global Retail Development Index (GRDI) published by A.T. Kearney, an influential global management consulting firm, Kazakhstan was ranked 13th out of 30 countries. This ranking placed Kazakhstan among the more promising emerging markets for retail expansion, highlighting its potential for growth due to factors such as rising consumer incomes, urbanization trends, and increasing demand for modern retail formats. The 2015 ranking underscored Kazakhstan’s position as a country transitioning from traditional retail structures to more organized and diversified retail environments. Building on this momentum, the 2016 edition of the Global Retail Development Index saw Kazakhstan make a significant leap, ascending to the 4th position among the best developing countries for retail investments. This marked improvement in ranking reflected the country’s enhanced economic stability, regulatory reforms, and improvements in infrastructure that collectively fostered a more conducive environment for retail businesses. The elevated position in the 2016 GRDI indicated that Kazakhstan had become one of the most attractive destinations for retail investors seeking to capitalize on expanding consumer markets within Central Asia. Kazakhstan’s score on the 2016 Global Retail Development Index was 56.5 out of a possible 100 points, a figure that quantitatively represented the favorable conditions prevailing in the country for retail development. This score was derived from a comprehensive evaluation of multiple factors including market attractiveness, country risk, and retail saturation. A score above the midpoint suggested that Kazakhstan offered a balanced mix of opportunity and manageable risk, making it appealing for both domestic and international retailers aiming to establish or expand their operations. The relatively high score also reflected the government’s efforts to improve the business climate, including initiatives to simplify licensing procedures, enhance trade logistics, and promote foreign direct investment. The favorable investment climate in Kazakhstan’s retail sector attracted a number of prominent international retailers, signaling confidence in the country’s market potential. Among the most notable entrants were French retail giants Carrefour and Leroy Merlin, both of which expanded their presence in Kazakhstan during the mid-2010s. Carrefour, a global leader in hypermarket and supermarket retailing, introduced its large-format stores to cater to the growing urban middle class, offering a wide range of consumer goods under one roof. Leroy Merlin, specializing in home improvement and gardening products, capitalized on Kazakhstan’s expanding construction and real estate markets, providing consumers with access to international-quality building materials and household products. The entry of these French chains exemplified the diversification and modernization of Kazakhstan’s retail landscape, contributing to increased competition and improved consumer choice. In addition to retail chains specializing in consumer goods and home improvement, Kazakhstan’s retail sector also saw the establishment of major international food service companies, which further diversified the market and enhanced the consumer experience. Global fast-food leaders such as McDonald’s and KFC successfully entered the Kazakhstani market, introducing Western-style quick-service dining options that appealed to urban populations and younger demographics. McDonald’s, known for its standardized menu and efficient service model, opened multiple outlets in major cities, becoming a popular dining choice for both locals and expatriates. Similarly, KFC brought its signature fried chicken offerings to Kazakhstan, contributing to the growing trend of fast-food consumption and the expansion of the food service industry within the country. The presence of these multinational food service brands not only stimulated competition but also encouraged the adoption of international standards in food safety, customer service, and marketing practices. Together, these developments underscored Kazakhstan’s emergence as a dynamic and evolving retail market within the broader Central Asian region. The country’s improving rankings in the Global Retail Development Index, coupled with the influx of international retailers and food service companies, reflected a retail sector undergoing significant transformation. This transformation was driven by a combination of economic growth, demographic shifts, and policy reforms aimed at integrating Kazakhstan more fully into the global economy. As a result, Kazakhstan’s retail landscape evolved from a predominantly informal and fragmented market into one characterized by increasing organization, diversity, and international participation.

Kazakhstan, occupying the ninth position among the largest countries in the world by total area, stands out as the largest landlocked country globally. Its vast expanse spans diverse landscapes, including steppes, deserts, mountains, and lakes, which collectively offer significant potential for tourism development. Despite this geographical advantage, tourism has historically played a relatively minor role in the nation’s economy. As of 2014, the sector contributed only 0.3% to Kazakhstan’s gross domestic product (GDP), reflecting limited infrastructure, accessibility challenges, and a nascent tourism industry still in the early stages of growth. Recognizing the untapped potential of tourism, the Kazakh government set ambitious targets to expand the sector’s economic contribution. By the year 2020, authorities aimed to increase tourism’s share of GDP to 3%, a tenfold growth from the 2014 figures. This strategic objective was part of broader economic diversification efforts to reduce dependence on extractive industries such as oil and minerals. The government introduced various initiatives to stimulate tourism, including improving visa policies, investing in infrastructure, promoting cultural heritage sites, and enhancing international marketing campaigns to attract visitors. The progress toward these goals was reflected in subsequent assessments by global organizations. According to the World Economic Forum’s Travel and Tourism Competitiveness Report published in 2017, the travel and tourism industry’s GDP contribution in Kazakhstan had risen to $3.08 billion, accounting for 1.6% of the country’s total GDP. This increase indicated a positive trajectory, though the sector still represented a modest proportion of the overall economy. The report evaluated multiple dimensions of tourism competitiveness, including infrastructure quality, business environment, natural and cultural resources, and safety and security, providing a comprehensive overview of Kazakhstan’s standing in the global tourism market. In the same 2017 report, Kazakhstan’s ranking in travel and tourism competitiveness improved to 81st place worldwide, marking a four-position advancement compared to previous years. This upward movement suggested that reforms and investments made by the government and private sector were beginning to yield tangible results. Factors contributing to this improved ranking included enhanced airport infrastructure, better hotel accommodations, increased international flight connectivity, and efforts to preserve and promote cultural landmarks. Nevertheless, challenges remained, such as the need for further development of tourist services, improved marketing strategies, and addressing visa and regulatory barriers to facilitate easier access for international travelers. Tourist arrivals data further illustrated the growing interest in Kazakhstan as a destination. In 2016, the country welcomed approximately 6.5 million international tourists, a figure that underscored the increasing global awareness of Kazakhstan’s attractions. This influx was driven by a combination of business travel, cultural tourism, eco-tourism, and visits to historical sites. Among the most notable attractions is the Mausoleum of Khoja Ahmed Yasawi, a UNESCO World Heritage site located in the city of Turkestan. This mausoleum, built in the late 14th century, is an architectural masterpiece of Timurid design and serves as a significant pilgrimage site as well as a symbol of Kazakh cultural heritage. Its prominence in tourism promotion highlights the country’s focus on leveraging unique historical and cultural assets to attract visitors. Overall, Kazakhstan’s tourism sector has demonstrated measurable growth and increasing international recognition, supported by government initiatives and the country’s rich natural and cultural resources. While tourism remains a relatively small component of the national economy, ongoing efforts aim to elevate its contribution and establish Kazakhstan as a competitive destination in the global travel market.

Gambling activities in Kazakhstan trace their origins back to the era of Czarist Russia, during which lotteries were among the earliest forms of organized gambling on the territory. The formal recognition of such activities began in 1698 when Czar Peter I issued a decree permitting the organization of lotteries for the first time in Russian history. This decree marked a significant milestone, as it established a legal framework for conducting lotteries, thereby legitimizing and regulating gambling practices within the empire. The issuance of this decree reflected the growing interest of the state in controlling and benefiting from gambling revenues, which were seen as a potential source of public funds. Throughout the Soviet era, the organization and management of lotteries were centralized under the Ministry of Finance of the Union of Soviet Socialist Republics (USSR), which included Kazakhstan as one of its constituent republics. The Ministry was responsible for overseeing lottery operations, ensuring compliance with state policies, and channeling the proceeds to government coffers. During this period, gambling activities were tightly controlled and limited, consistent with the broader Soviet approach to leisure and entertainment, which emphasized state oversight and ideological conformity. Lotteries remained one of the few permitted forms of gambling, serving both as a recreational activity and a mechanism for raising funds for social programs and state initiatives. Following Kazakhstan’s independence from the Soviet Union in 1991, the country undertook efforts to establish its own regulatory framework for gambling. In 1999, the Ministry of Finance of the Republic of Kazakhstan began issuing licenses for gambling activities, marking the formal regulation of the industry within the newly sovereign state. This licensing process was designed to bring order to the burgeoning gambling sector, which had previously operated with limited oversight. By instituting a licensing regime, the government sought to promote responsible gambling practices, ensure the legality of operations, and generate tax revenues. The move also reflected Kazakhstan’s broader economic reforms aimed at fostering a market economy and attracting investment. In 2007, the Kazakh government enacted a new law that effectively banned gambling across the country, with the notable exception of two designated zones established to serve as special gambling areas. These zones were modeled after Russia’s special gambling zones, which were created to concentrate gambling activities in specific locations, thereby minimizing their social impact elsewhere. The law’s passage was motivated by concerns about the negative social consequences of gambling, including addiction and crime, as well as the desire to regulate the industry more tightly. By restricting gambling to designated zones, the government aimed to control the spread of gambling establishments and to create regulated environments that could be monitored more effectively. Under the provisions of the 2007 law, existing casinos outside the designated zones were required to either close their operations or relocate to areas where gambling was legally permitted. This mandate led to a significant restructuring of the gambling industry in Kazakhstan, as many operators were forced to cease operations or move their businesses to the newly established zones. The relocation requirement was intended to enforce the government’s policy of geographic concentration, thereby reducing the accessibility of gambling for the general population and mitigating associated social risks. This policy shift marked a departure from the previous regulatory approach, emphasizing restriction and containment over widespread licensing. The first legally recognized casino to open following the enactment of the 2007 law was Casino Flamingo, which commenced operations on 1 October 2008 in Kapchagay. Kapchagay was one of the two designated gambling zones established by the government, chosen for its geographic location and potential to attract tourists. The opening of Casino Flamingo represented a new phase in Kazakhstan’s gambling industry, characterized by concentrated, regulated gambling venues designed to operate within the legal framework established by the government. This casino became a flagship establishment within the regulated zones, setting standards for compliance and serving as a model for future developments in the sector. By 2018, the gambling industry in Kazakhstan had demonstrated notable economic growth, with total income generated by gambling companies reaching ₸19.5 billion. This figure represented a 16.1% increase compared to the previous year, 2017, when the industry’s revenue was recorded at ₸16.8 billion. The upward trend in gambling revenues indicated a strengthening sector within the country’s economy, reflecting both increased consumer participation and effective regulatory oversight within the designated zones. The growth also underscored the potential of the gambling industry as a source of government revenue and economic activity, despite the restrictions imposed by the 2007 law. This period of expansion highlighted the evolving balance between regulation, economic development, and social considerations in Kazakhstan’s approach to gambling.

As of 2016, the total housing area in Kazakhstan amounted to 342.6 million square meters (3,688 million square feet), reflecting the scale of residential infrastructure across the country. This expansive housing stock encompassed a variety of dwelling types, including urban apartments, suburban houses, and rural accommodations, illustrating the diverse living arrangements shaped by Kazakhstan’s geographic and demographic characteristics. The total housing area represented the cumulative floor space available for residential use, serving as a key indicator of the nation’s capacity to meet the housing needs of its population. In the same year, the average housing area per person in Kazakhstan was recorded at 21.4 square meters (230 square feet), a figure that provides insight into the living space allocated to individuals on average. This measurement is derived by dividing the total housing area by the total population, offering a per capita perspective on residential space availability. The average housing area per person is a critical metric for assessing the quality of living conditions and the extent to which housing supply meets demand within the country. Between 2005 and 2016, Kazakhstan experienced a notable improvement in housing space per capita, with the average housing area per person increasing by 20%. This growth reflected concerted efforts by the government and private sector to expand housing construction and improve residential infrastructure. Factors contributing to this increase included economic development, urbanization, and targeted housing policies aimed at enhancing living standards. The 20% rise over the eleven-year period indicated a positive trend in addressing housing shortages and improving the spatial conditions in which individuals reside. Despite this progress, the average housing area per person in Kazakhstan remained below the United Nations’ recommended standard of 30 square meters (320 square feet) per person as of 2016. The UN standard serves as a benchmark for adequate living space, encompassing considerations of comfort, health, and social well-being. Kazakhstan’s figure of 21.4 square meters per person, while improved, highlighted ongoing challenges in achieving optimal housing conditions for all citizens. This shortfall underscored the need for continued investment in housing development and policies aimed at increasing the availability and quality of residential space to meet international standards.

Kazakhstan’s transportation infrastructure is characterized by a network of 11 transcontinental routes that encompass both rail and road pathways, complemented by numerous oil and gas pipelines. These routes play a pivotal role in facilitating the movement of goods and energy resources across the vast expanse of the country, linking it with neighboring regions and international markets. The extensive rail and road corridors serve as critical arteries for trade, enabling the efficient transport of commodities and manufactured products, while the oil and gas pipelines underpin Kazakhstan’s status as a major energy exporter. This integrated infrastructure supports the country’s strategic position as a transit hub between East and West. The geographic location of Kazakhstan confers a significant logistical advantage by enabling the transportation of goods from China to Europe at a speed three to four times faster than alternative routes. This efficiency arises from Kazakhstan’s position along the New Silk Road or the Trans-Eurasian Land Bridge, which allows freight to bypass longer maritime routes through the Suez Canal. The overland connection reduces transit times substantially, thereby lowering costs and enhancing the competitiveness of trade flows passing through Kazakhstan. This advantage has attracted considerable international interest, positioning the country as a crucial node in Eurasian trade and supply chains. On 13 October 2006, an important step in strengthening Kazakhstan’s international economic relations was marked by the signing of an agreement in Taipei. Sherin Suzhikova, Counselor of Kazakhstan’s Chamber of Commerce and Industry, and Chao Yon-chuan, Secretary-General of the Taiwan External Trade Development Council (TAITRA), formalized a pact aimed at enhancing economic cooperation. The agreement focused on the exchange of market information and facilitating visits by trade professionals, thereby fostering closer ties between Kazakhstan and Taiwan. This initiative was part of a broader effort to diversify Kazakhstan’s trade partnerships and integrate more deeply into global markets. To support these bilateral trade relations, TAITRA established an office in Almaty, Kazakhstan’s largest city and commercial center. The presence of TAITRA in Almaty serves to promote trade development and facilitate economic cooperation between Kazakhstan and Taiwan. Through this office, TAITRA provides assistance to Taiwanese businesses seeking to enter the Kazakhstani market, while also helping Kazakhstani firms explore opportunities in Taiwan. The office acts as a conduit for information exchange, networking, and the organization of trade missions, contributing to the strengthening of economic ties between the two entities. In 2006, North Dakota’s then Lieutenant Governor Jack Dalrymple led an 18-member delegation from the North Dakota Trade Office on a mission to Kazakhstan, Ukraine, and Russia. This delegation included representatives from seven North Dakota companies and Dickinson State University, reflecting a diverse cross-section of industry and education sectors. The trip was designed to promote trade relations and explore business opportunities in these emerging markets. Such initiatives exemplify the growing interest of U.S. states and institutions in establishing commercial and educational links with Kazakhstan, recognizing its potential as a gateway to Central Asia. North Dakota’s exports to Kazakhstan have been predominantly composed of machinery, highlighting the importance of industrial equipment in bilateral trade. Kazakhstan ranked as the eighth largest destination for North Dakotan exports, underscoring its significance within the state’s international trade portfolio. The volume of machinery exports experienced a dramatic increase, rising from a modest US$22,000 in 2000 to an impressive US$25 million in 2005. This substantial growth reflects both Kazakhstan’s expanding industrial base and North Dakota’s successful penetration into the Kazakhstani market, facilitated by targeted trade promotion and business development efforts. The composition of Kazakhstan’s manufactured exports has undergone a notable transformation, with the share of high-tech exports rising from 4.46% in 1995 to 37.17% in 2014. This remarkable increase indicates substantial technological development within the country’s manufacturing sector over nearly two decades. The shift towards higher value-added products reflects Kazakhstan’s efforts to diversify its economy beyond raw materials and traditional industries, aiming to foster innovation and competitiveness in global markets. This trend is emblematic of broader structural changes as the country seeks to modernize its industrial base and integrate into the knowledge economy. A key driver behind the growth of high-tech exports was the Technology Commercialization Project, a collaborative initiative developed and implemented by the World Bank Group in partnership with the Kazakh government. This project provided funding and training to 65 Kazakh technology startups, equipping them with the resources and skills necessary to bring their innovations to market. By facilitating access to capital, mentoring, and business development services, the project helped overcome barriers that typically hinder the commercialization of new technologies. The success of this initiative contributed to the expansion of Kazakhstan’s high-tech sector and demonstrated the positive impact of international cooperation on domestic economic development. China has emerged as a major trade partner for Kazakhstan, exemplified by the significant agreements signed in late March 2015. During this period, the two countries concluded 33 agreements valued at US$23.6 billion, encompassing a wide range of industries including oil refining, automobile manufacturing, and steel production. These agreements underscored the deepening economic ties and mutual interests shared by Kazakhstan and China, particularly in sectors critical to industrial development and energy supply. The scale and diversity of these contracts highlight China’s role not only as a key market for Kazakh exports but also as a source of investment and technology transfer. Kazakhstan’s foreign trade turnover demonstrated robust growth in 2018, reaching US$93.5 billion, which represented a 19.7% increase compared to the previous year. This expansion reflected both rising global demand for Kazakh exports and the country’s efforts to enhance trade facilitation and diversify its economic partnerships. The increase in trade turnover was driven by gains in both export and import volumes, signaling a dynamic and increasingly interconnected economy. This growth trajectory positioned Kazakhstan as a significant player in regional and global trade networks. In 2018, Kazakhstan’s exports totaled US$67 billion, marking a 25.7% increase from 2017. This substantial rise was indicative of strong external demand for Kazakh goods, particularly in sectors such as energy, metals, and agricultural products. Concurrently, imports amounted to US$32.5 billion, reflecting a 9.9% increase over the previous year. The growth in imports was driven by the need to support expanding domestic industries and consumer demand. The trade balance thus remained favorable, with exports significantly outpacing imports, contributing positively to the country’s foreign exchange earnings and economic stability. To support exporters and enhance Kazakhstan’s integration into global markets, the government launched the QazTrade incubator program in September 2019. This initiative was designed to assist businesses in navigating complex bureaucratic procedures and establishing connections in foreign markets, thereby reducing barriers to international trade. QazTrade provides exporters with a range of services, including market research, training, and logistical support, aimed at increasing their competitiveness and export potential. The program reflects the government’s commitment to fostering export-led growth and diversifying the economy. The QazTrade program prioritizes several key international markets to maximize the impact of its support efforts. These markets include Germany, Turkey, the United Arab Emirates, Iran, and China, each representing significant opportunities for Kazakhstani exporters. By focusing on these countries, QazTrade seeks to leverage existing economic ties and explore new avenues for trade expansion. The targeted approach allows for tailored assistance that addresses the specific requirements and challenges associated with each market, thereby enhancing the prospects for successful export ventures.

On September 1, 2023, President Kassym-Jomart Tokayev delivered a pivotal state-of-the-nation address in which he unveiled a comprehensive plan aimed at steering Kazakhstan onto a new economic trajectory. This ambitious blueprint centered on a series of economic reforms designed to modernize the country’s industrial base, diversify its economy, and promote sustainable development. The plan articulated a clear vision for Kazakhstan’s future economic landscape, emphasizing the need to transition from traditional resource dependency toward a more balanced and resilient economic structure. Central to this vision were initiatives targeting industrialization, economic diversification, the adoption of green energy technologies, simplification of the tax system, and the enhancement of transparency and fairness within governance frameworks. A key pillar of the reform agenda was the focus on industrial development, with particular emphasis placed on sectors deemed strategically important for Kazakhstan’s long-term growth. Among these, heavy engineering was identified as a critical industry to be revitalized, leveraging Kazakhstan’s existing industrial capabilities while integrating modern technologies to boost productivity and innovation. Additionally, uranium enrichment was highlighted as a sector with significant potential, reflecting Kazakhstan’s status as one of the world’s leading uranium producers and its ambitions to move up the value chain in the nuclear fuel cycle. The automotive components industry was also singled out for development, aiming to foster domestic manufacturing capabilities that could serve both local demand and export markets. These sectoral priorities were intended to underpin broader efforts to diversify the economy away from its heavy reliance on hydrocarbons and raw material exports. To stimulate industrial growth and attract investment, President Tokayev proposed a series of fiscal incentives targeted at both foreign and domestic investors engaged in manufacturing activities. Notably, he announced that companies operating in manufacturing would be exempt from paying taxes and other mandatory payments for the first three years of operation. This tax holiday was designed to lower the barriers to entry and reduce operational costs, thereby encouraging the establishment and expansion of manufacturing enterprises. By providing this initial financial relief, the government aimed to accelerate industrialization, create jobs, and foster a more dynamic private sector capable of driving sustained economic growth. Fiscal policy coordination was another critical component of the economic reforms outlined in the address. Tokayev called for enhanced synchronization between financial and monetary policies to achieve a stable and robust economic growth rate of 6 to 7 percent. This target reflected an ambitious but attainable growth trajectory, contingent upon prudent macroeconomic management and supportive policy frameworks. The emphasis on coordination underscored the government’s recognition that fiscal discipline and monetary stability must work in tandem to create an environment conducive to investment, consumption, and overall economic expansion. Addressing structural challenges within the financial sector, the President highlighted the importance of attracting foreign banks to Kazakhstan’s market. He argued that increasing competition among banking institutions was essential to resolving the persistent issue of insufficient corporate lending, which had constrained the growth potential of many businesses. By welcoming foreign financial institutions, the government sought to enhance the availability and diversity of credit products, reduce borrowing costs, and improve the overall efficiency of the financial system. This initiative was expected to support private sector development and contribute to a more inclusive and dynamic economy. The state-of-the-nation address also underscored the necessity of bolstering support for small and medium enterprises (SMEs), recognizing their vital role as engines of innovation, employment, and economic diversification. To this end, the government planned to accelerate privatization processes, thereby fostering a more competitive and market-oriented economic environment. Legislative reforms were slated to encourage consolidation among small businesses, enabling them to achieve economies of scale and improve their competitiveness. Concurrently, intensified efforts to demonopolize key markets aimed to dismantle entrenched monopolies and oligopolies, thereby promoting fair competition and expanding opportunities for new entrants. Kazakhstan’s commitment to sustainability and environmental protection was prominently featured in the reform agenda. The government announced plans to significantly increase renewable energy capacity as part of its broader strategy to transition toward greener energy sources. This included the development of hydrogen generation technologies, positioning Kazakhstan at the forefront of emerging clean energy innovations. These initiatives aligned with global trends toward decarbonization and reflected Kazakhstan’s aspirations to balance economic growth with environmental stewardship. In a related energy diversification effort, President Tokayev proposed holding a national referendum on the construction of a nuclear power plant. This move was intended to engage the public in decision-making on energy policy while exploring nuclear energy as a means to secure stable, low-carbon electricity generation for the future. A transformative vision for the country’s information technology sector was also articulated, with an emphasis on positioning Kazakhstan as an IT-focused economy. The President set a target to increase the export of IT services to one billion U.S. dollars by 2026, a goal to be achieved through strategic partnerships with major foreign IT companies. This initiative aimed to capitalize on Kazakhstan’s growing digital infrastructure and human capital, fostering innovation and integration into global technology markets. The development of the IT sector was viewed as a critical driver of economic modernization and diversification, capable of generating high-value jobs and enhancing the country’s competitiveness on the international stage. In the realm of transportation and logistics, the government outlined plans to establish Kazakhstan as a major transit hub within Eurasia. Key transit routes such as the Trans-Caspian corridor and the international North-South Corridor were identified as strategic arteries for facilitating regional trade and connectivity. By leveraging its geographic position, Kazakhstan aspired to become a full-fledged transport and logistics power, serving as a vital link between Europe, Asia, and neighboring regions. Achieving this vision depended heavily on maintaining constructive and good-neighborly relations with neighboring countries, including Russia, China, and nations across Central and South Asia. Such diplomatic and economic cooperation was deemed essential for ensuring seamless cross-border trade and infrastructure development. To support these ambitious infrastructure and economic initiatives, Kazakhstan was in the process of developing a national infrastructure plan aimed at ensuring high-quality project implementation by 2029. This comprehensive plan sought to coordinate investments, improve project management, and enhance the efficiency of infrastructure development across various sectors. By establishing clear priorities and standards, the government intended to create a robust foundation for sustainable economic growth and regional integration. Complementing these efforts, the government introduced new financial incentive mechanisms specifically designed to attract investment into complex oil and gas projects. Recognizing the technical and financial challenges inherent in developing advanced hydrocarbon resources, these incentives aimed to mobilize both domestic and foreign capital. By facilitating investment in sophisticated extraction and processing technologies, Kazakhstan sought to maximize the value of its natural resources while supporting broader economic diversification and technological advancement. These measures reflected a pragmatic approach to balancing traditional energy sector development with emerging priorities in sustainability and innovation.

In October 2014, Kazakhstan undertook a landmark transaction in its financial markets by issuing its first overseas dollar-denominated bonds in 14 years, signaling a notable milestone in the development of the country’s bond market. This issuance marked a return to the international debt capital markets after a prolonged absence since the year 2000, reflecting Kazakhstan’s renewed confidence and strategic intent to diversify its sources of financing. The bond offering took place on 5 October 2014 and amounted to a substantial total of $2.5 billion, structured to include two tranches with differing maturities to appeal to a broad spectrum of investors. Specifically, the issuance consisted of $1.5 billion in 10-year bonds and an additional $1 billion in 30-year bonds, thereby providing both medium-term and long-term investment options. The 10-year bonds, which comprised the larger portion of the issuance, were priced to yield 1.5 percentage points above midswaps, a benchmark widely used in the international fixed income markets to gauge the relative risk and return of bond issues. This pricing reflected Kazakhstan’s creditworthiness at the time, balancing the country’s sovereign risk profile against investor appetite for emerging market debt. The 30-year bonds, representing a longer duration commitment, were set at a yield of two percentage points over midswaps, indicating a slightly higher risk premium demanded by investors for the extended maturity period. The differentiation in yields between the two maturities underscored the market’s assessment of time-related credit risk and liquidity considerations. Investor response to the issuance was overwhelmingly positive, as evidenced by the total bids received, which amounted to an impressive $11 billion. This level of demand far exceeded the $2.5 billion offered, highlighting strong confidence in Kazakhstan’s economic prospects and fiscal management among international investors. The oversubscription ratio of more than four times the amount issued demonstrated the attractiveness of Kazakhstan’s sovereign debt in the context of global capital markets, especially amid a competitive environment where emerging market issuers vie for investor funds. The successful placement of these bonds not only provided Kazakhstan with significant capital inflows but also enhanced its reputation and visibility in the global bond market. The 2014 issuance was particularly significant as it ended a 14-year hiatus during which Kazakhstan had refrained from accessing dollar-denominated overseas bond markets. The previous issuance in 2000 had been part of the country’s early efforts to establish a sovereign presence in international financial markets following its independence in 1991. The long gap between issuances was influenced by various factors, including domestic economic conditions, global financial market volatility, and Kazakhstan’s evolving debt management strategies. By returning to the market in 2014 with a sizable and well-received bond offering, Kazakhstan demonstrated its ability to tap international capital markets effectively, diversify its funding sources, and manage its sovereign debt portfolio proactively. This bond issuance also reflected broader trends in Kazakhstan’s economic development and financial sector modernization. As the country sought to deepen its capital markets and integrate more fully with the global economy, the successful sale of dollar-denominated bonds was a critical step in establishing a benchmark yield curve for sovereign debt. This, in turn, facilitated the development of a domestic bond market by providing reference pricing and encouraging local institutional investors to participate in government securities. Moreover, the issuance underscored Kazakhstan’s commitment to maintaining fiscal discipline and transparency, which are essential factors in attracting and sustaining investor confidence over time. In summary, the October 2014 issuance of $2.5 billion in overseas dollar bonds by Kazakhstan was a pivotal event that marked the country’s re-entry into international bond markets after a 14-year absence. The offering’s structure, pricing, and strong investor demand illustrated Kazakhstan’s improved credit standing and the growing maturity of its financial markets. By successfully issuing both 10-year and 30-year bonds with yields set at 1.5 and 2 percentage points above midswaps respectively, Kazakhstan not only secured significant funding but also reinforced its position as a credible sovereign issuer on the global stage. The robust $11 billion in bids received further highlighted the international investment community’s confidence in Kazakhstan’s economic trajectory and fiscal management practices.

Kazakhstan stands as the largest recipient of both total and annual foreign direct investment (FDI) among all Commonwealth of Independent States (CIS) countries, reflecting its prominent role as a magnet for international capital within the post-Soviet space. This leading position is underpinned by the country’s abundant natural resources, strategic location, and ongoing efforts to create a favorable investment climate. The Organization for Economic Co-operation and Development (OECD) has formally acknowledged Kazakhstan’s significant progress in opening its economy to international investment and enhancing its investment policy framework. These reforms are part of a broader governmental strategy aimed at diversifying the economy away from heavy reliance on extractive industries toward more sustainable and varied sectors, thereby fostering long-term economic resilience and growth. In recognition of these efforts, Kazakhstan was invited by the OECD in 2017 to become an Adherent to the OECD Declaration on International Investment and Multinational Enterprises. This invitation marked a milestone in Kazakhstan’s integration into the global investment community, signifying adherence to internationally recognized principles and standards that promote responsible business conduct and investment facilitation. The OECD’s endorsement also highlighted Kazakhstan’s commitment to improving transparency, investor protection, and regulatory quality, which are critical factors in attracting and retaining foreign investors. As of 30 September 2014, total foreign investment in Kazakhstan had reached a substantial US$211.5 billion, underscoring the country’s attractiveness as a destination for international capital. Within this total, net foreign direct investment accounted for US$129.3 billion, while portfolio and other investments comprised the remaining US$82.2 billion. This composition illustrates the predominance of long-term, stable investments in the form of FDI, which generally involve direct management participation and contribute more significantly to economic development compared to portfolio investments that tend to be more volatile. The growth in FDI inflows was primarily driven by increased investments in key sectors such as mining, transport, financial services, telecommunications, and energy. These sectors have historically been pillars of Kazakhstan’s economy, benefiting from the country’s rich natural resource base and strategic infrastructure development. The expansion of investments in these areas effectively offset declining inflows in other sectors like construction, metallurgy, and trade, which faced various structural and cyclical challenges during the same period. This sectoral shift reflects a gradual rebalancing of Kazakhstan’s investment landscape toward industries with higher value-added potential and greater integration into global value chains. In line with its strategic economic objectives, Kazakhstan’s Prime Minister, Alikhan Smailov, announced that the country aimed to attract approximately US$25 billion in FDI in 2023. This ambitious target underscores the government’s continued focus on enhancing the investment environment and promoting Kazakhstan as a competitive destination for foreign capital. The target also reflects the country’s efforts to sustain momentum in attracting investments despite global economic uncertainties and regional geopolitical challenges. During 2022, Kazakhstan implemented 46 projects involving international financial investments across a diverse range of sectors, including renewable energy, metallurgy, agriculture, mining, and engineering. This diversification of investment projects indicates a broadening of the economic base and a deliberate policy to stimulate growth in sectors beyond traditional extractive industries. The emphasis on renewable energy and engineering, in particular, aligns with global trends toward sustainability and technological innovation, positioning Kazakhstan to capitalize on emerging opportunities in these fields. The top ten FDI source countries in Kazakhstan in 2022 were the Netherlands, the United States, Switzerland, Belgium, Russia, South Korea, China, France, the United Kingdom, and Turkey. This diverse group of investor countries reflects Kazakhstan’s broad international engagement and the global confidence in its market potential. The Netherlands consistently ranks as the leading investor, attributable in part to its role as a conduit for international capital flows, while the presence of major economies such as the United States, China, and Russia highlights Kazakhstan’s strategic geopolitical and economic ties. A significant institutional development in Kazakhstan’s investment landscape was the establishment of the Astana International Financial Center (AIFC) in 2018. Modeled after the Dubai International Financial Center, the AIFC offers foreign investors an alternative jurisdiction characterized by a range of investor-friendly features. These include tax holidays, flexible labor regulations, a legal system based on Common Law principles, and enhanced currency transaction flexibility. The AIFC aims to provide a transparent, efficient, and internationally recognized framework to facilitate financial services, attract capital, and promote Kazakhstan as a regional financial hub. The Kazakh government actively recommends that foreign investors utilize the AIFC for contracts with Kazakh businesses, recognizing the center’s potential to streamline investment procedures and reduce legal and regulatory risks. This endorsement reflects the government’s strategy to leverage the AIFC as a catalyst for improving the overall investment climate and integrating Kazakhstan more deeply into global financial markets. Over the past five years, the leading foreign investors in Kazakhstan have been the Netherlands, with investments totaling US$33.8 billion; the United States, with US$19.4 billion; Switzerland, with US$12.5 billion; China, with US$6.2 billion; and France, with US$4.7 billion. These figures highlight the sustained commitment of these countries to Kazakhstan’s economic development and the diverse nature of their investment portfolios. The significant investment volumes from Western countries alongside China demonstrate Kazakhstan’s balanced approach to attracting capital from multiple geopolitical spheres. Approximately 60% of investment projects in Kazakhstan are related to non-extractive sectors, including manufacturing, transportation, trade, financial, and insurance services. This shift toward non-extractive industries is indicative of the country’s efforts to diversify its economic base and reduce vulnerability to commodity price fluctuations. The growth in manufacturing and services sectors contributes to job creation, technological advancement, and the development of domestic value chains, which are essential for sustainable economic growth. Agriculture remains a key sector within Kazakhstan’s economic strategy, with concerted efforts to attract foreign investment aimed at enhancing competitiveness and productivity. In 2017, KazAgro, a national holding company focused on agricultural development, successfully negotiated a €200 million loan with the European Investment Bank (EIB) for a 15-year term. This financing agreement was designed to support modernization, innovation, and expansion within the agricultural sector, reflecting the importance of agriculture in Kazakhstan’s broader economic diversification and food security objectives. Despite the global disruptions caused by the COVID-19 pandemic in 2020, Kazakhstan demonstrated resilience in attracting investment, with 13 out of its 14 regions experiencing investment growth. Notably, the construction sector saw significant expansion in the Turkestan region, Zhambyl region, and Shymkent city. This regional investment growth during a period of global economic uncertainty underscores the effectiveness of Kazakhstan’s investment policies and the underlying strength of its domestic market and infrastructure development initiatives. Gross FDI inflow in Kazakhstan reached a record-high of US$28 billion in 2022, representing a 17.7% increase from US$23.8 billion in 2021. This surge brought the inflow close to the previous peak of US$28.9 billion recorded in 2012, signaling a robust recovery and renewed investor confidence. The substantial increase in FDI inflows reflects both improved global economic conditions and Kazakhstan’s continued attractiveness as an investment destination. The Atyrau Region received the largest share of investment in 2022, amounting to US$8.3 billion, which represented a 48.3% increase compared to previous periods. This was followed by Almaty city with US$7.6 billion, accounting for 10.9% of the total investment, and Astana with US$2.2 billion, which experienced a remarkable 107.2% increase. The East Kazakhstan Region attracted US$2.2 billion (a 3.1% increase), while the Aktobe Region received US$1.2 billion, marking an 11.2% decrease. These regional investment patterns highlight the concentration of capital in resource-rich and economically strategic areas, as well as the dynamic growth of the capital cities as financial and commercial centers. Renewable energy has emerged as a major focus of investment due to Kazakhstan’s significant solar and wind potential, which is among the highest in Central Asia. The country also possesses abundant reserves of critical raw materials essential for green technologies, constituting approximately 90% of Central Asia’s total reserves. These resources position Kazakhstan as a key player in the global transition toward sustainable energy and low-carbon technologies. Critical raw materials found in Kazakhstan, which are vital for the development of green technologies, include rare earth magnets, lithium, cobalt, and polysilicon used in semiconductor manufacturing. The availability of these materials supports the development of advanced energy storage, electric vehicles, and renewable energy infrastructure, aligning with global efforts to reduce carbon emissions and promote clean energy solutions. In November 2022, the European Union formally recognized Kazakhstan’s strategic importance for the green transition by signing a partnership agreement focused on the supply of critical raw materials and green hydrogen. This agreement underscores Kazakhstan’s emerging role as a reliable supplier of essential inputs for Europe’s decarbonization efforts and reflects deepening cooperation between Kazakhstan and the EU in the areas of sustainable energy and climate change mitigation. The partnership is expected to enhance Kazakhstan’s integration into global green technology value chains and attract further investment in related sectors.

Kazakhstan’s investment environment has been notably shaped by proactive government initiatives aimed at attracting and facilitating foreign direct investment (FDI). Recognizing the critical role of FDI in economic diversification and sustainable development, the government implemented a series of measures designed to create a more investor-friendly climate. Central to these efforts was the establishment of the Kazakh Invest National Company, commonly known as Kazakh Invest, which serves as a pivotal institution in streamlining investment procedures and providing comprehensive support to both domestic and foreign investors. This entity was created to function as a one-stop shop, effectively consolidating various stages of the investment process under a single organizational umbrella. By doing so, Kazakh Invest assists investors from the initial conceptualization of projects through to their full implementation, while also offering aftercare services to ensure ongoing support and problem resolution. In 2018, Kazakh Invest played a crucial role in fostering investment activity by assisting in the development of over 70 investment proposals spanning a diverse array of industries. These sectors included metallurgy, petrochemicals, the food industry, tourism, and others, reflecting Kazakhstan’s strategic focus on broadening its economic base beyond traditional resource extraction. The support provided by Kazakh Invest during this period was multifaceted, encompassing the creation of detailed business plans that outlined operational strategies and market positioning. Additionally, the company developed financial models tailored to individual projects, enabling investors to assess profitability, cash flow, and risk factors with greater precision. To further enhance the attractiveness of investment opportunities, Kazakh Invest prepared project teasers—concise, compelling summaries designed to capture investor interest and facilitate initial engagement. As of the current reporting period, Kazakh Invest is actively engaged in 216 investment projects and initiatives, collectively valued at approximately $42.5 billion. This substantial portfolio underscores the organization’s significant role in driving Kazakhstan’s investment agenda. The projects under Kazakh Invest’s purview are expected to generate around 47,000 jobs, thereby contributing not only to economic growth but also to employment and social stability within the country. In the current year alone, four new investment projects worth a combined total of $217 million have been launched with Kazakh Invest’s support, highlighting the ongoing momentum in attracting capital inflows. Moreover, 85 projects valued at $12.3 billion are currently in the active implementation phase, demonstrating the organization’s capacity to shepherd investments from conception through to operational status. To further streamline the investment process and reduce bureaucratic obstacles, Kazakhstan introduced the online portal elicense.kz in 2020. This digital platform was designed to facilitate the conclusion of investment contracts electronically, thereby minimizing the need for physical paperwork and in-person visits to government offices. By enabling investors to complete contractual formalities online, elicense.kz has significantly expedited administrative procedures and enhanced transparency. The portal’s efficacy was exemplified by the signing of its first agreement between Kaz Solar 50, a domestic entity, and the German company Solarnet Investment GmbH. This agreement pertained to a renewable energy project valued at ₸5 billion, marking a milestone in the use of digital tools to promote sustainable investment initiatives in Kazakhstan. In addition to institutional and technological innovations, Kazakhstan has established 14 special economic zones (SEZs) as part of its broader strategy to attract foreign investors. These SEZs offer a range of preferential treatments to companies operating within their boundaries, creating an environment conducive to business development and international partnership. Firms located in these zones benefit from exemptions from several key taxes, including corporate income tax, land tax, property tax, value-added tax (VAT), and customs duties. These tax incentives are granted for periods extending up to 25 years, providing long-term fiscal advantages that enhance the competitiveness of SEZ-based enterprises. The creation of SEZs reflects Kazakhstan’s commitment to fostering industrial clusters, technological innovation, and export-oriented growth, thereby reinforcing the country’s position as an attractive destination for foreign investment.

In 2015, Kazakhstan undertook a significant legislative reform to regulate intellectual property (IP) more comprehensively, encompassing areas such as patent law and copyright protections. This new legal framework was designed to address the evolving needs of the country’s economy and to provide a more robust system for safeguarding the rights of creators and inventors. Prior to this reform, Kazakhstan’s intellectual property laws were considered somewhat outdated and insufficiently aligned with the rapidly changing global standards, which created barriers for both domestic innovation and foreign investment. The enactment of the 2015 legislation marked a deliberate effort by the Kazakh government to modernize its IP regime, thereby fostering an environment conducive to technological advancement and creative development. A central objective of the 2015 legislation was to harmonize Kazakhstan’s intellectual property laws with internationally recognized standards and treaties. This alignment was critical for the country’s integration into the global economic system, as it sought to enhance the protection of IP rights in a manner consistent with global norms. By doing so, Kazakhstan aimed to facilitate cross-border trade and cooperation, reduce legal ambiguities, and provide stronger assurances to foreign investors and multinational corporations regarding the security of their intellectual property assets. The legislation reflected a strategic approach to IP regulation, recognizing that adherence to international standards could serve as a catalyst for economic growth and innovation within the country. One of the key international frameworks that Kazakhstan sought to incorporate into its domestic legislation was the European Patent Convention (EPC), particularly its 1994 revision. The EPC is a multilateral treaty that establishes a unified procedure for granting European patents, thereby simplifying the patent application process across member states. By aligning its patent law with the EPC, Kazakhstan aimed to facilitate the recognition and enforcement of patents within its jurisdiction, making it easier for inventors and companies to protect their technological innovations. This alignment also signaled Kazakhstan’s intention to integrate more closely with European intellectual property systems, thereby enhancing cooperation and legal consistency with a major economic region. The 1994 revision of the EPC introduced important procedural and substantive changes, and Kazakhstan’s adoption of these provisions ensured that its patent framework would be compatible with contemporary European standards. In addition to the EPC, the 2015 legislation sought to harmonize Kazakhstan’s intellectual property laws with the provisions of the 2006 Singapore Treaty on the Law of Trademarks. The Singapore Treaty, administered by the World Intellectual Property Organization (WIPO), aims to streamline and modernize the registration and management of trademarks by establishing standardized procedures and requirements. By incorporating the treaty’s provisions, Kazakhstan endeavored to simplify trademark registration processes, reduce administrative burdens, and improve the overall efficiency of trademark protection within the country. This alignment also enhanced Kazakhstan’s compliance with international trademark law, thereby facilitating the protection of brand identities and commercial symbols for both domestic and foreign businesses operating in the Kazakh market. The adoption of the Singapore Treaty provisions underscored Kazakhstan’s commitment to creating a transparent and predictable legal environment for trademark owners. The comprehensive update to Kazakhstan’s intellectual property legislation in 2015 reflected broader national efforts to strengthen the country’s IP regime as a means to stimulate innovation, attract foreign direct investment, and provide greater legal certainty for rights holders. By modernizing its IP laws, Kazakhstan aimed to create a more favorable climate for research and development activities, encouraging both local inventors and international corporations to invest in new technologies and creative works. Improved IP protections were also seen as essential for fostering entrepreneurship and supporting the growth of knowledge-based industries. Furthermore, the enhanced legal framework helped to reduce the risks of infringement and counterfeiting, thereby protecting the economic interests of rights holders and contributing to the overall competitiveness of the Kazakh economy. Through these legislative reforms, Kazakhstan positioned itself as a more attractive destination for innovation-driven investment and as a country committed to upholding the rule of law in the realm of intellectual property.

In April 2025, Al Khaleej Sugar, a leading sugar manufacturing company headquartered in the United Arab Emirates, publicly announced its strategic plan to establish a new sugar production facility within Kazakhstan’s Almaty Region. This initiative marked a significant expansion of the company’s international footprint and was aimed at leveraging Kazakhstan’s agricultural potential and regional market access. The decision to move forward with the project followed a high-level meeting held on 27 April 2025 between Sheikh Jamal Al Ghurair, the managing director of Al Khaleej Sugar, and Marat Sultangaziyev, the governor of the Almaty Region. During this meeting, both parties discussed the prospective benefits of the plant, including economic development, job creation, and enhanced bilateral trade relations between the United Arab Emirates and Kazakhstan. The site selected for the sugar manufacturing plant was strategically located near the city of Konayev, a choice driven by the city’s advantageous logistical position. Konayev’s proximity to major transportation networks, including road and rail infrastructure, was considered crucial for facilitating the efficient movement of raw materials and finished products. This location was expected to optimize distribution channels not only within Kazakhstan but also to neighboring Central Asian markets, thereby enhancing the plant’s commercial viability. The logistical considerations extended beyond transportation to encompass access to essential utilities and infrastructure that would support large-scale industrial operations. A critical factor in the project’s planning was the assurance of a reliable and sustainable water supply, given the water-intensive nature of sugar manufacturing. The company undertook comprehensive assessments to identify alternative irrigation sources to supplement traditional water supplies, thereby ensuring consistent availability throughout the plant’s operational lifespan. This included exploring groundwater reserves, surface water bodies, and potential water recycling methods to mitigate risks associated with seasonal variability and climate change. The hydrological analysis conducted by Al Khaleej Sugar was detailed and data-driven, focusing on the long-term sustainability of water resources in the Almaty Region. This analysis was integral to the project’s feasibility studies and environmental impact assessments, reflecting the company’s commitment to responsible resource management. In parallel with water resource planning, the project incorporated innovative approaches to energy consumption by proposing the development of wind power plants in the vicinity of the sugar manufacturing facility. This initiative aimed to achieve energy self-sufficiency for the plant, reducing reliance on external power grids and fossil fuels. The integration of wind energy was aligned with broader global trends toward sustainable industrial practices and Kazakhstan’s national goals for renewable energy development. By harnessing wind power, the plant was expected to significantly lower its carbon footprint and operational costs associated with electricity consumption. The potential wind power installations were designed to complement the plant’s energy needs, providing a stable and clean energy source that could operate in tandem with other energy inputs. Al Khaleej Sugar’s commitment to minimizing the environmental impact of its new facility was a defining feature of the project’s design and operational philosophy. The company emphasized the use of renewable energy sources, particularly wind power, to reduce greenhouse gas emissions and promote ecological sustainability. This approach was consistent with international environmental standards and corporate social responsibility frameworks, reflecting the company’s awareness of the environmental challenges associated with industrial sugar production. Measures to mitigate pollution, manage waste, and conserve biodiversity were also integrated into the project’s environmental management plans, underscoring a holistic approach to sustainability. The company’s global market presence provided additional context for the project’s significance. Holding a 3% share of the global refined sugar market, Al Khaleej Sugar was recognized as a major player in the international sugar industry. This market position underscored the company’s capacity to undertake large-scale projects and its strategic interest in diversifying production bases to enhance supply chain resilience. The hydrological analysis and other preparatory studies conducted for the Kazakhstan plant were indicative of the company’s rigorous approach to project development, combining technical expertise with environmental stewardship. Through these efforts, Al Khaleej Sugar sought to establish a manufacturing facility that not only met commercial objectives but also adhered to principles of sustainable development and regional cooperation.

On 11 November 2014, President Nursultan Nazarbayev unveiled Kazakhstan’s new economic policy, known as “Nurly Zhol” (translated as “The Path to the Future”), during his annual address to the nation outlining the agenda for 2015. This policy marked a strategic shift aimed at revitalizing the country’s economic trajectory amid global economic uncertainties. Central to the “Nurly Zhol” initiative was a commitment to large-scale state investment in infrastructure development, designed to stimulate economic growth and modernize the nation’s physical and institutional framework over the ensuing years. By prioritizing infrastructure, the government sought to create the necessary conditions for sustained economic expansion and diversification beyond Kazakhstan’s traditional reliance on natural resources. In the immediate term, the “Nurly Zhol” program incorporated a series of anti-crisis measures intended to mitigate the adverse effects of the global economic downturn that had begun to impact Kazakhstan’s economy. These short-term interventions were crafted to stabilize the financial system, support vulnerable sectors, and maintain employment levels during a period of external shocks, including falling commodity prices and reduced foreign investment. The government’s approach combined fiscal stimulus with targeted support for key industries, reflecting an understanding that cushioning the economy against external volatility was essential for maintaining social and economic stability. Looking beyond the short-term challenges, the long-term component of the “Nurly Zhol” policy was focused on infrastructure development as the cornerstone for establishing a robust foundation for sustainable new growth. This aspect of the program emphasized the construction and modernization of transport networks, energy systems, housing, and social infrastructure, recognizing that such investments would enhance connectivity, improve productivity, and attract further domestic and foreign investment. The government envisaged that by upgrading infrastructure, Kazakhstan would not only improve the quality of life for its citizens but also position itself as a competitive hub in the Eurasian region, facilitating trade and integration with global markets. To ensure that the country remained competitive in the rapidly evolving global economic landscape, Kazakhstan identified five key priorities for the modernization of its state and economy. These priorities were aligned with the demands of the Fourth Industrial Revolution, which is characterized by the fusion of digital, physical, and biological technologies. The government’s modernization agenda included the development of human capital, technological innovation, institutional reforms, diversification of the economy, and enhancement of the business environment. By focusing on these areas, Kazakhstan aimed to transition from a resource-dependent economy to one driven by knowledge, innovation, and high value-added industries, thereby securing long-term prosperity and resilience. In terms of international assessments of Kazakhstan’s economic environment, the country achieved a ranking of 36th place in the World Bank Group’s 2018 Ease of Doing Business report. This report evaluates the regulatory environment for businesses, including the ease of starting a business, obtaining construction permits, registering property, and enforcing contracts. Kazakhstan’s position reflected significant improvements in business regulations and the protection of property rights, underscoring the government’s efforts to create a more conducive environment for entrepreneurship and investment. This ranking indicated progress in simplifying administrative procedures and strengthening legal frameworks, which are critical factors for attracting both domestic and foreign investors. Similarly, the Heritage Foundation’s 2018 Index of Economic Freedom ranked Kazakhstan 41st globally, with an overall score that increased marginally by 0.1 point compared to the previous year. This index measures economic freedom based on factors such as rule of law, government size, regulatory efficiency, and open markets. Despite the slight improvement in the overall score, Kazakhstan remained classified as only “moderately free,” highlighting ongoing challenges in achieving a fully liberalized and transparent economic system. The report noted notable progress in areas such as investment freedom, where restrictions on foreign investment were eased, and government integrity, reflecting efforts to combat corruption and improve governance. However, these positive developments were counterbalanced by significant declines in fiscal health, marked by increasing budget deficits and public debt, as well as monetary freedom, which was affected by inflationary pressures and currency volatility. In 2017, Kazakhstan pursued a strategy to stimulate economic growth by attracting private investors to participate in the development of national companies, with privatization serving as a primary mechanism to achieve this goal. The government aimed to reduce the share of public property in the economy to 15% of GDP, signaling a shift toward a more market-oriented approach. This entailed the sale of stakes in major state-owned enterprises through initial public offerings (IPOs), thereby increasing transparency, improving corporate governance, and enhancing efficiency through private sector involvement. Key enterprises targeted for privatization included Kazakhstan Railways, Samruk-Energo, Kazatomprom, Kaspost, KazMunayGas, and Air Astana, all of which played significant roles in the country’s economic infrastructure and national identity. The privatization program was designed not only to generate revenue for the state but also to foster competition and innovation within strategic sectors. Despite these reform efforts, Kazakhstan’s ranking in the IMD World Competitiveness Report experienced a decline, moving from 32nd place in 2017 to 38th place in 2018. This report assesses countries based on factors such as business efficiency, government performance, infrastructure, and the state of the domestic economy. The downward shift reflected challenges in maintaining momentum in key areas, including public finance management and the overall efficiency of the business environment. The decline suggested that while progress had been made in certain domains, structural issues and external economic pressures continued to affect Kazakhstan’s competitiveness. Factors such as fluctuating commodity prices, geopolitical uncertainties, and the need for deeper institutional reforms contributed to this assessment, underscoring the complexity of sustaining economic advancement in a dynamic global context.

In December 2015, the Government of Kazakhstan approved an extensive new privatization plan spanning the years 2016 to 2020, representing both a continuation and an expansion of earlier privatization initiatives launched in 2014. This renewed strategy sought to build upon the foundations laid by previous efforts, aiming to accelerate the transfer of state-owned assets into private hands and thereby stimulate greater efficiency and competitiveness within the national economy. The decision to formalize this plan underscored the government’s commitment to structural economic reforms designed to reduce the predominance of state ownership, which had been a defining feature of Kazakhstan’s post-Soviet economic landscape. By setting clear targets and timelines, the 2016–2020 privatization program sought to provide a transparent and systematic framework for the divestiture process. The scale of the 2016–2020 privatization program was notably ambitious, encompassing the planned privatization of 60 major state-owned enterprises. These companies represented key sectors of the economy, including energy, transportation, and industry, reflecting the government’s intent to foster a more market-driven economic environment. The inclusion of such a significant number of large enterprises indicated a decisive shift towards liberalization and a reduction of state control over strategic assets. This large-scale approach was designed not only to attract domestic and foreign investment but also to enhance corporate governance and operational efficiency by introducing private sector management practices. The program’s scope was unprecedented in Kazakhstan’s recent history, signaling a robust policy orientation toward economic diversification and sustainable growth. By 20 September 2016, the Ministry of Finance of Kazakhstan reported that privatization transactions completed during the 2014–2016 period had generated revenue totaling ₸6.99 billion, equivalent to approximately US$20.6 million, for the state budget. This inflow of funds demonstrated the tangible fiscal benefits of the privatization process, providing the government with additional resources that could be allocated towards social programs, infrastructure development, or debt reduction. While the monetary amount was modest relative to the overall size of Kazakhstan’s economy, it represented an important step in monetizing state assets and reducing the financial burden associated with managing state-owned enterprises. The proceeds also served as an indicator of market interest and investor confidence in Kazakhstan’s privatization efforts during the initial phases of the program. The overarching objective of Kazakhstan’s privatization strategy was to diminish the state’s share in the economy to approximately 15 percent, a level that aligns with the typical range observed in member countries of the Organisation for Economic Co-operation and Development (OECD). This target reflected a strategic vision to transition Kazakhstan toward a more open and competitive market economy, where private enterprise plays a dominant role in driving economic activity. Reducing the state’s footprint was seen as essential for improving economic efficiency, fostering innovation, and attracting foreign direct investment. By benchmarking against OECD standards, Kazakhstan signaled its aspiration to integrate more fully into the global economic system and to adopt internationally recognized best practices in economic governance and market regulation. In articulating the government’s commitment to this goal, Prime Minister Alikhan Smailov emphasized that the implementation of the large-scale privatization plan was intended to further decrease state involvement in the economy, with a specific target of reducing state ownership to 14 percent by the year 2025. This forward-looking projection underscored the government’s long-term commitment to economic reform and structural adjustment. The Prime Minister’s statement also highlighted the phased nature of the privatization process, recognizing that achieving such a significant reduction in state participation would require sustained effort over nearly a decade. This gradual approach was designed to balance the need for reform with considerations of economic stability and social impact, ensuring that privatization proceeded in a manner that supported sustainable development. The privatization agenda was comprehensive, encompassing a total of 675 facilities spanning both the public and quasi-public sectors. This extensive list included shares in 262 national companies, reflecting the broad scope of state ownership across various industries and sectors. The inclusion of quasi-public entities indicated the government’s intention to reform not only fully state-owned enterprises but also those with mixed ownership structures or significant state influence. By targeting such a wide array of facilities and companies, the privatization program aimed to create a more dynamic and diversified economic landscape, reducing monopolistic tendencies and encouraging competition. This broad-based approach was intended to modernize Kazakhstan’s economic infrastructure and improve the overall business environment. Many of the national companies slated for privatization were integral components of larger state-controlled holdings, such as the Samruk Kazyna Sovereign Wealth Fund, KazMunayGas, and Kazakhstan Temir Zholy. Samruk Kazyna, as the country’s sovereign wealth fund, held a portfolio of strategically important enterprises across multiple sectors, functioning as a central vehicle for state asset management. KazMunayGas represented the national oil and gas company, a critical player in Kazakhstan’s energy sector, while Kazakhstan Temir Zholy was the state railway company, essential for transportation and logistics. The privatization of shares within these conglomerates reflected the government’s strategy to reform key economic pillars by introducing private sector participation, improving transparency, and enhancing operational efficiency. This approach was expected to unlock value within these large holdings and attract investment that could support modernization and expansion efforts. Despite the broad scope of the privatization plan, certain critical sectors were explicitly excluded to safeguard essential public services. According to Alibek Kuantyrov, the Minister of National Economy, the plan deliberately omitted approximately 200 facilities deemed vital for social life support, including infrastructure related to water supply, power generation, and heat provision. These sectors were considered too strategically important and sensitive to be transferred to private ownership, as they directly impact public welfare and national security. By retaining state ownership over these critical utilities, the government aimed to ensure uninterrupted access to essential services and maintain regulatory oversight. This selective approach to privatization balanced the goals of economic liberalization with the need to protect fundamental social infrastructure and maintain public trust. Overall, the privatization program from 2016 to 2020 represented a significant phase in Kazakhstan’s ongoing economic transformation. It sought to reduce the state’s dominant role in the economy by transferring ownership of a substantial number of enterprises to private hands, thereby promoting efficiency, competitiveness, and investment. The program’s ambitious scale, clear targets, and careful exclusion of critical social infrastructure reflected a nuanced approach to reform, aimed at fostering sustainable economic growth while safeguarding essential public services. The government’s commitment to reducing state participation to levels comparable with OECD countries underscored Kazakhstan’s broader aspirations for economic modernization and integration into the global market.

A Special Economic Zone (SEZ) in Kazakhstan is a specifically designated territorial area that operates under a special legal regime and is equipped with comprehensive infrastructure to support and stimulate priority economic activities. These zones are established by the government to create favorable conditions for investment, promote industrial development, enhance export potential, and diversify the national economy. The legal framework governing SEZs provides various incentives, including tax breaks, customs privileges, simplified administrative procedures, and access to modern infrastructure, all designed to attract both domestic and foreign investors. By concentrating resources and regulatory advantages in these zones, Kazakhstan aims to accelerate economic growth, foster innovation, and integrate more deeply into global value chains. Currently, Kazakhstan hosts 14 Special Economic Zones distributed across 12 regions nationwide, each tailored to promote distinct industry orientations that align with regional strengths and national development priorities. These SEZs encompass a diverse range of sectors, including logistics, manufacturing, petrochemicals, tourism, and technology, reflecting the country’s strategic efforts to diversify its economic base beyond traditional resource extraction. The geographic spread of these zones ensures balanced regional development, with each SEZ leveraging local resources, labor markets, and infrastructure to maximize economic output. This distribution also facilitates the integration of Kazakhstan’s economy into regional and international trade networks, enhancing connectivity and competitiveness. Among the most notable SEZs is the Khorgos-Eastern Gate logistics hub, situated in the Almaty region near the border with China. This zone focuses primarily on logistics and trade, serving as a critical gateway for goods moving along the New Silk Road and other transcontinental corridors. The Khorgos-Eastern Gate has rapidly evolved into a major multimodal transport and logistics center, featuring dry ports, warehousing facilities, and customs services designed to streamline cross-border trade. Its strategic location and infrastructure have attracted significant investment and positioned Kazakhstan as a key transit country in Eurasian trade routes. Another prominent SEZ is Turkistan, which has been developed as a center of international tourism and pilgrimage, capitalizing on the region’s rich cultural heritage and religious significance. This zone aims to boost the local economy by attracting tourists and pilgrims, thereby stimulating service industries such as hospitality, retail, and cultural enterprises. The Aktau Seaport SEZ, which incorporated the ports of Aktau and Kuryk in the summer of 2023, represents a vital maritime hub on the Caspian Sea. This zone plays a crucial role in Kazakhstan’s export-import activities, particularly for oil, gas, and other bulk commodities. The integration of the two ports under a single SEZ framework has enhanced operational efficiency, expanded capacity, and improved logistics services, thereby strengthening Kazakhstan’s position as a maritime trade player in the Caspian region. The Aktau Seaport SEZ benefits from modern infrastructure, including deep-water berths, container terminals, and transport links to inland regions, facilitating seamless cargo movement and supporting the country’s broader economic diversification goals. In March 2023, Kazakhstan established the G4 City special economic zone in the Almaty Region, marking a significant development in the country’s SEZ landscape. The G4 City SEZ is designed to attract approximately 3.7 trillion tenge, equivalent to $8.1 billion, in investments through the year 2048. This ambitious investment target reflects the government’s commitment to creating a dynamic economic cluster that integrates urban development with industrial and technological advancement. Spanning an extensive area of 30,000 hectares, G4 City aims to foster the development of an integrated urban and regional infrastructure that supports a wide range of economic activities. The zone is intended to serve as a magnet for both domestic and foreign investors by offering favorable conditions such as modern utilities, transport connectivity, and streamlined regulatory processes. By focusing on sustainable urban planning and innovation-driven industries, G4 City is poised to become a model for future economic zones in Kazakhstan. The officially established SEZs in Kazakhstan come with defined expiry dates, reflecting the government’s approach to periodically assess and renew the zones’ legal status based on performance and evolving economic needs. The ‘Astana, the New City’ SEZ, located in Nur-Sultan (formerly Astana), has an expiry date set for 2027. This zone was created to support the development of the capital city’s infrastructure and to attract investments in sectors such as construction, technology, and services, contributing to the city’s modernization and economic diversification. The ‘Aktau Sea Port’ SEZ in Aktau is scheduled to expire on 1 January 2028 and continues to play a pivotal role in maritime trade and logistics on the Caspian Sea. The ‘Ontustik’ SEZ, situated in the Sairam district of the South-Kazakhstan region, has an expiry date of 1 July 2030. This zone focuses on industrial development and aims to leverage the region’s agricultural and mineral resources to boost manufacturing and processing industries. The ‘National Industrial Petrochemical Park’ SEZ in the Atyrau region, with an expiry date of 31 December 2032, is dedicated to the petrochemical sector, capitalizing on Kazakhstan’s abundant hydrocarbon reserves. This zone supports the development of petrochemical production facilities, enabling value-added processing of oil and gas resources, and fostering technological innovation in the energy sector. The ‘Park of Innovative Technologies’ SEZ, which expires on 1 January 2028, serves as a hub for research and development, information technology, and high-tech industries. It provides a platform for startups, technology companies, and scientific institutions to collaborate and commercialize innovations, thereby contributing to the country’s transition towards a knowledge-based economy. ‘Saryarka’ SEZ in the Karaganda region, with an expiry date on 1 December 2036, focuses on heavy industry, metallurgy, and manufacturing, reflecting the region’s industrial heritage and resource base. The ‘Horgos – the eastern gates’ SEZ in the Almaty region, expiring in 2035, complements the Khorgos-Eastern Gate logistics hub by promoting trade, warehousing, and light manufacturing activities. The ‘Pavlodar’ SEZ, located in Pavlodar and expiring on 1 December 2036, supports diversified industrial development, including chemical production, machinery, and energy sectors. The ‘Chemical Park Taraz’ SEZ in Taraz, with an expiry date on 1 January 2037, specializes in chemical manufacturing and related industries, leveraging regional expertise and infrastructure. The ‘International Center for Cross-Border Cooperation Horgos’ SEZ, also in the Almaty region, has an expiry date set for 1 January 2041. This zone is designed to facilitate international trade and cooperation, serving as a platform for cross-border economic activities, joint ventures, and cultural exchange between Kazakhstan and neighboring countries. Finally, the ‘Turkestan’ SEZ in the Turkestan region, with an expiry date of 1 January 2043, is oriented towards tourism, culture, and pilgrimage, aiming to harness the region’s historical and spiritual significance to drive economic growth and regional development. Collectively, these SEZs represent a strategic framework through which Kazakhstan seeks to enhance its economic diversification, attract investment, and integrate more fully into global economic networks.

In February 2015, Kazakhstan initiated a targeted program designed to bolster the development of small businesses, marking 2015 as a pilot period for this strategic effort. The program concentrated initially on three key sectors deemed vital for economic diversification and growth: agribusiness, machinery building, and the production of construction materials. These sectors were selected due to their potential to stimulate rural development, industrial modernization, and infrastructure expansion. The government articulated plans to subsequently broaden the program’s scope to include additional industries, thereby fostering a more inclusive and dynamic small business environment across the country. Shortly thereafter, in May 2015, the European Bank for Reconstruction and Development (EBRD) made a significant financial commitment to support Kazakhstan’s small and medium-sized enterprises (SMEs). The EBRD pledged €41 million specifically to fund technical cooperation projects and provide advisory services aimed at enhancing the operational capacities of SMEs. A notable component of this initiative was the implementation of a Women in Business program, which sought to empower female entrepreneurs by facilitating access to finance, training, and networking opportunities. This collaboration underscored the international community’s confidence in Kazakhstan’s SME sector as a driver of sustainable economic development. The telecommunications sector in Kazakhstan experienced notable growth during this period, with the number of telecom start-ups increasing by 10% in 2016 compared to the previous year. By 2016, approximately 9,400 small telecom companies were registered within the country, reflecting a burgeoning entrepreneurial spirit and the expanding digital economy. This rise in telecom enterprises contributed to increased competition, innovation, and the proliferation of new technologies, which in turn supported broader economic modernization efforts. The Kazakh government has consistently prioritized support for SMEs, recognizing their critical role in economic diversification and job creation. Between 2015 and 2021, the share of SMEs in Kazakhstan’s gross domestic product (GDP) increased by 7.9 percentage points, reaching 34.7%. This growth demonstrated the effectiveness of government policies and support mechanisms aimed at nurturing small and medium enterprises. Moreover, the government set an ambitious strategic target to elevate the SME contribution to GDP to 50% by 2050, highlighting the sector’s centrality to the nation’s long-term economic vision. By 2023, the SME landscape in Kazakhstan had expanded significantly, with the total number of SMEs rising by 23.4% to nearly two million enterprises. Employment within the SME sector also grew substantially, increasing by over 18% to reach 4.1 million people. This figure represented approximately 40% of total employment across the Kazakh economy, underscoring SMEs’ importance as a major source of jobs and economic activity. These trends reflected not only quantitative growth but also qualitative improvements in the sector’s capacity to absorb labor and contribute to economic stability. The economic contribution of SMEs further strengthened during this period. The share of SMEs in the overall economy increased from 33.3% to 36.5%, while the output volume of SMEs surged by 28%, reaching over 59 trillion tenge, equivalent to approximately $132.4 billion. This substantial increase in output signified enhanced productivity and competitiveness within the SME sector, driven by improved access to resources, innovation, and market opportunities. The growth in SME output played a crucial role in diversifying Kazakhstan’s economy beyond its traditional reliance on extractive industries. To facilitate the development of SMEs, Kazakhstan implemented a variety of programs aimed at improving access to finance, a historically significant barrier for small businesses. These programs included concessional lending schemes, microfinance initiatives, subsidized interest rates, loan guarantees, and direct grants. The Damu Entrepreneurship Development Fund emerged as the primary operator of these financial support mechanisms, coordinating efforts to channel resources effectively to SMEs. By providing a range of financial instruments tailored to the needs of small and medium enterprises, the Fund helped mitigate risks and reduce the cost of capital, thereby enabling SMEs to expand operations and invest in innovation. One of the cornerstone initiatives supporting SMEs was the “Business Roadmap 2025” (BRM 2025) program, which had been operational since 2010 under the management of the Ministry of National Economy. Initially, BRM 2025 focused on non-extracting and import-substituting sectors, aiming to reduce dependence on raw material exports and stimulate domestic production. Over time, the program expanded its reach to rural areas and small, single-industry towns, removing sectoral restrictions to provide more inclusive support. The program’s implementation involved a coordinated effort among central and local government authorities, the Damu Fund, the Atameken Chamber of Entrepreneurs, and commercial banks. Together, these entities delivered a comprehensive suite of support measures, including interest rate subsidies, loan guarantees, grants, training programs, and consulting services, thereby fostering an enabling environment for SME growth across diverse regions and industries. The Damu Entrepreneurship Development Fund managed multiple financing programs, drawing on its own capital as well as funding from local authorities and international organizations. The Fund offered regional loans at preferential interest rates of up to 8.0% for priority sectors, with terms tailored to the specific economic characteristics of each region. This regional customization allowed for targeted support that aligned with local development priorities. In parallel, the Fund administered international programs that provided loans on market terms without sectoral restrictions, thereby expanding SMEs’ access to capital from a broader range of sources. This dual approach enhanced the Fund’s capacity to meet the varied financing needs of Kazakhstan’s diverse SME population. By the end of 2020, the Damu Fund, in partnership with banks, leasing companies, and microfinance organizations, had financed over 55,112 projects, with total funding amounting to KZT 837,756 million. This substantial investment reflected the scale and reach of the Fund’s activities, which played a pivotal role in supporting SME development nationwide. The funded projects spanned multiple sectors and regions, contributing to job creation, technological advancement, and increased competitiveness within the SME sector. In May 2023, Prime Minister Alikhan Smailov articulated a strategic vision emphasizing the role of medium-sized businesses as the primary engine for Kazakhstan’s manufacturing sector growth. He highlighted the importance of these enterprises in developing competitive products and offering a diverse range of services, thereby driving industrial modernization and economic diversification. This policy direction underscored the government’s commitment to strengthening the SME sector as a cornerstone of sustainable economic development. To further improve the business environment, the government introduced a “regulation-from-scratch” mechanism aimed at eliminating 10,000 unwarranted regulatory requirements. This initiative sought to streamline and automate processes across all areas of state control, reducing bureaucratic burdens and enhancing the protection of entrepreneurs’ rights. By simplifying regulatory frameworks and leveraging digital technologies, the government aimed to create a more transparent, efficient, and supportive environment for SMEs, thereby fostering innovation and growth within the sector.

In 2017, Kazakhstan was ranked 54th in the Economic Freedom of the World report published by the Fraser Institute, a Canadian public policy think tank that assesses the degree to which the policies and institutions of countries are supportive of economic freedom. This ranking reflected Kazakhstan’s overall performance in areas such as the size of government, legal system and property rights, sound money, freedom to trade internationally, and regulation of credit, labor, and business. While this position placed Kazakhstan in the middle tier globally, it indicated moderate progress in creating an environment conducive to economic activity and investment. However, this ranking did not fully capture the nuances of economic participation across different demographics within the country. When the Economic Freedom of the World ranking was adjusted by the Gender Disparity Index (GDI), which measures the extent to which women have the same legal rights as men and modifies the economic freedom score accordingly, Kazakhstan’s rank dropped to 66th. This adjustment highlighted a notable disparity in the legal and economic rights afforded to women compared to men, signaling a significant disadvantage for women in the business environment. The GDI adjustment takes into account factors such as women’s rights to own property, access credit, participate in the labor market, and engage in entrepreneurship without legal restrictions or discrimination. The decline in rank after applying the GDI underscored the structural barriers that women faced in Kazakhstan’s economy, despite the country’s overall moderate economic freedom score. The Gender Disparity Index adjustment thus revealed a substantial gender gap in both legal rights and economic participation for women in Kazakhstan. This gap manifested in various forms, including limited access to financial resources, unequal property rights, and social norms that constrained women’s entrepreneurial opportunities. The presence of such disparities suggested that while Kazakhstan had made strides in improving its economic framework, the benefits of economic freedom were not equitably distributed across genders. This disparity had implications for the country’s broader economic development, as the underutilization of female talent and entrepreneurship potentially hindered growth and innovation. Efforts to address these challenges required legal reforms, policy initiatives, and cultural shifts aimed at promoting gender equality in economic participation. In recent years, Kazakhstan established a trade route with the United States that significantly impacted the global salt market. This trade connection contributed to Kazakhstan accounting for 54% of the world’s salt imports and exports by volume, with an annual total of approximately 350,000 tonnes. The development of this trade route facilitated the efficient movement of salt between the two countries and other international markets, enhancing Kazakhstan’s position as a key player in the global salt industry. Salt, being a vital commodity used in various industries including food processing, chemical production, and de-icing, represented an important export product for Kazakhstan. The establishment of this trade corridor not only boosted Kazakhstan’s export revenues but also strengthened economic ties with the United States, fostering bilateral trade relations and opening avenues for further cooperation. By 2021, Kazakhstan had expanded its export portfolio to include 14 products developed by Kazakh scientists, which were shipped to countries such as China, Russia, Turkey, Georgia, Kyrgyzstan, and the Czech Republic. These exports showcased the country’s growing capacity for scientific innovation and technological development, reflecting an emphasis on research and development within Kazakhstan’s economy. The diversity of export destinations indicated Kazakhstan’s strategic engagement with both regional neighbors and more distant markets, facilitating knowledge transfer and economic integration. The export of domestically developed products also highlighted the government’s efforts to diversify the economy beyond traditional sectors like oil and minerals, aiming to build a knowledge-based economy driven by innovation. The range of exported products encompassed various items including food and drinks based on milk whey, probiotics, an anti-fungal drug, and biological sanitation products. Food and beverage items derived from milk whey represented value-added agricultural products that leveraged local dairy resources, catering to health-conscious consumers domestically and abroad. Probiotics, known for their health benefits in supporting digestive and immune systems, illustrated Kazakhstan’s entry into the growing global market for functional foods and nutraceuticals. The anti-fungal drug indicated advancements in pharmaceutical research and development, addressing medical needs both within Kazakhstan and in export markets. Biological sanitation products reflected an environmentally friendly approach to hygiene and sanitation, aligning with global trends toward sustainable and green technologies. Together, these products demonstrated the multifaceted nature of Kazakhstan’s scientific output and its potential to contribute to economic diversification and public health. In 2021, reports indicated that the number of young female entrepreneurs in Kazakhstan had increased by 15 percent, marking a significant growth trend in female-led business initiatives. This rise suggested a gradual shift in the entrepreneurial landscape, with more young women engaging in business activities and contributing to the economy. The increase in female entrepreneurship was likely influenced by a combination of factors including government programs aimed at supporting women in business, greater access to education and training, and evolving social attitudes toward gender roles. This trend also pointed to the potential for reducing the gender gap in economic participation identified by the Gender Disparity Index, as more women took active roles in creating and managing enterprises. The growth of young female entrepreneurs contributed to job creation, innovation, and economic dynamism, reinforcing the importance of fostering inclusive economic policies that empower women.

On 11 April 2025, President Kassym-Jomart Tokayev publicly declared that Kazakhstan was prepared to confront the ongoing global economic crisis, which he described as one of the most severe downturns experienced in recent decades. This announcement came amid growing international concerns about the destabilizing effects of widespread economic disruptions that had reverberated across multiple sectors worldwide. Tokayev emphasized the gravity of the situation, noting that the crisis was marked by unprecedented challenges that required coordinated national responses to safeguard economic stability and growth. His remarks underscored the Kazakh government’s recognition of the complex and multifaceted nature of the global economic environment at that time. In outlining the principal obstacles facing Kazakhstan, President Tokayev identified several critical issues that had emerged from the broader international context. Among these, disruptions in global trade and production chains stood out as a significant impediment, as interruptions in supply routes and manufacturing processes had led to delays and shortages affecting numerous industries. Additionally, the period was characterized by increased price volatility, which introduced uncertainty into markets and complicated economic planning for both the public and private sectors. Intensified competition for investment further compounded these difficulties, as capital flows became more selective and risk-averse, challenging Kazakhstan’s ability to attract and retain foreign direct investment essential for its development objectives. These factors collectively painted a challenging economic landscape that required strategic adaptation. Despite the adverse conditions presented by the global crisis, President Tokayev affirmed Kazakhstan’s steadfast commitment to maintaining its development agenda. He reassured stakeholders that the government would continue to prioritize funding for key infrastructure projects deemed vital for the country’s long-term economic resilience and modernization. This commitment reflected a broader policy approach aimed at leveraging infrastructure development as a catalyst for economic diversification and growth, even in the face of external pressures. By sustaining investment in infrastructure, Kazakhstan sought to enhance connectivity, improve productivity, and create employment opportunities, thereby mitigating some of the negative impacts of the global downturn. The president’s statement followed a high-level government meeting convened specifically to address the issue of falling global prices for energy and commodities, sectors that hold significant importance for Kazakhstan’s export-driven economy. During this meeting, policymakers evaluated the implications of declining prices on national revenues and economic performance, considering both short-term responses and longer-term strategic adjustments. The discussion highlighted the vulnerability of Kazakhstan’s economy to fluctuations in global commodity markets, given its reliance on exports of oil, gas, and mineral resources. In response, the government explored measures to stabilize the economy and support affected industries, while also seeking to diversify export markets and products. At the time of these developments, Kazakhstan’s economy experienced a temporary boost, which was attributed to rising export demand and the suspension of certain U.S. tariffs that had previously affected Kazakh goods. This reprieve provided a momentary alleviation of some economic pressures, as increased demand for exports helped to bolster national income and improve trade balances. The suspension of U.S. tariffs, in particular, opened up opportunities for Kazakh exporters to access key markets more competitively, enhancing the country’s trade prospects amid a challenging global environment. This combination of factors contributed to a cautiously optimistic outlook, even as the government remained vigilant in addressing the broader systemic risks posed by the ongoing global economic crisis.