Economic Policy

The New Kazakhstan: Central Asia’s Most Promising Emerging Market

Kazakhstan’s economic restructuring has the country’s economy in an upswing. Yaela Collins provides an overview of the second wave of privatization and what this could mean for interested investors.


When thinking of emerging markets, BRICS often come to mind. However, Kazakhstan’s dedication to enhancing economic prosperity and its location as the link between Europe and Asia, make it a prime destination for foreign direct investment (FDI). On October 4th, the Council on Foreign Relations hosted the Kazakhstan in a Changing Eurasia conference. The all-day event, sponsored by big names like Kazakh Invest, Chevron and European Resources Group, was focused on highlighting the many new investment opportunities in Kazakhstan created by the country’s new privatization scheme.

Economic reforms enacted under the Complex Privatization Plan for 2016-2020 are aimed at improving the country’s business and investment climate through measures that eliminate red tape and improve intellectual property protections. The idea behind the change is to use common law principals in commercial law to foster best practice in corporate finance. The Governor of the Astana International Finance Center (AIFC), Kairat Kelimbetov, called it the “Dubai model.”

The four-year plan covers over 900 facilities that are in the process of being privatized or reorganized and re-registered under the government. Several profitable sectors of the economy including agriculture, metallurgy, domestic and transnational railways, and ICT are now offering IPOs. The government also hopes to digitize the economy and increase broadband reach to modernize and support the new Kazakhstan. Alik Aidarbayev, Deputy Chairman of the Management Board at Samruk-Kazyna, predicted that the privatization of 50 assets would be complete by the end of this year.

According to Susan M Elliott, President and CEO at the National Committee on American Foreign Policy, Kazakhstan has “maintained low business risk,” sustained healthy diplomatic relations with the United States, and recognizes the importance of investing in human capital. Further easing worries of Western investors are the sentiments expressed by Todd Levy, President of Europe, Eurasia and Middle East Exploration and Production at Chevron; he stated that tensions between the U.S., E.U. and Russia have not impacted business practices of foreign entities in Kazakhstan.

Levy painted a sunny picture of Chevron operations in the country, declaring a 25-year history of good business and plans to inject an additional USD 36 billon to increase oil production. He also made sure to mention that Chevron has found Kazakhs to be “open and trustworthy,” and that they have consistently “delivered on their commitments.”

The World Bank’s International Bank for Reconstruction and Development’s  Doing Business 2018 report ranked Kazakhstan 36 out of 190 for “ease of doing business” and 6 out of 190 for “enforcing contracts.” The country was also ranked number 1 for “protecting minority investors.” A World Bank Group Central Asia Regional Program overview published in December also highlights that in 2017, more than 60% of all FDI to the region was invested in Kazakhstan.

Other political institutional reforms, stated commitments to increasing government transparency, a new stock exchange, and international financial institutions now operating in the country are helping Kazakhstan strengthen its economic groundwork. Even as long-time leader Nursultan Nazarbayev seems to be preparing to step down, Mr. Kelimbetov has suggested that the “stable foundation…is unlikely to shake even in the hands of a new leader.”

Yaela Collins is currently working at The Bassiouni Group where she engages in security and development research and business management consulting focused on sustainability. She received her BA in International Relations with a focus on Developing World from the State University of New York College at Geneseo and a M.S. in Global Affairs from New York University.

Please note that opinions expressed in this article are solely those of our contributors, not of Political Insights, which takes no institutional positions.

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