For current reports go to EASY FINDER




Area ( 


ethnic groups 
Kazaks 44.3%
Russians 35.8%
Ukrainians 5.1%
Germans 3.6%
and many others

(formerly Akmola)


Nursultan Nazarbayev

a NEW service


a FREE service

FREE World audit country reports on democracy, corruption, human rights and press freedom

Parties & Elections
parties &

Currency converter


Native Kazaks, a mix of Turkic and Mongol nomadic tribes who migrated into the region in the 13th century, were rarely united as a single nation. The area was conquered by Russia in the 18th century and Kazakstan became a Soviet Republic in 1936. During the 1950s and 1960s agricultural "Virgin Lands" program, Soviet citizens were encouraged to help cultivate Kazakstan's northern pastures. This influx of immigrants (mostly Russians, but also some other deported nationalities) skewed the ethnic mixture and enabled non-Kazaks to outnumber natives. Independence has caused many of these newcomers to emigrate. Current issues include: developing a cohesive national identity; expanding the development of the country's vast energy resources and exporting them to world markets; and continuing to strengthen relations with neighbouring states and other foreign powers. 

Update No: 267 - (27/03/03)

The economy booms
The Kazak economy is currently the most dynamic in the FSU and has been over recent years. GDP growth has been running at around 10% (9.5% in 2002), while it has been enjoying a foreign trade boom that is enabling the republic to pay back foreign debt.
It has all been based on energy and primary commodity exports, in other words on minerals and metals, of which the country has an abundance. Nevertheless, the uncertain world situation is inducing a certain slowdown. Growth of GDP was 9.2% in the first quarter of 2003 on an annual basis; but growth for the whole year is expected to be 6-7%, according to the Economics Ministry.
For the first three months, industrial output is forecast to grow 7-8%, of which 9-10% is in the extractive industry and 8-10% in the manufacturing sector. Figures are expected to go up 12% for oil and gas and 4.6% in oil refining. Capital investments are expected to go up 9-11%. The ministry forecasts that the foreign trade surplus will also increase in the first quarter. Exports will be US$2.58bn and imports US$1.753bn. This year as a whole, industrial output could grow 7-8% and investments 13-15%; however farm output is forecast to fall by 3.4%. 

Turning to Russia
President Nursultan Nazarbayev is wary of the West and did not go quite so overboard on inviting in the US after 9:11 as his fellow Central Asian autocrats, Turkmen dictator Saparmurat Niyazov excepted. The other three all allowed the Americans to have bases, which they still possess.
Nazarbayev prefers the company of Putin to that of Bush. Indeed he went to Moscow recently to discuss a whole host of bilateral matters. It is to be the "Year of Kazakstan in Russia." He was warmly welcomed by Putin, whose relations with the US are also not of the best right now. He prefers the company of Asiatic autocrats to Western democrats, who have a tendency to raise the indelicate aspects of his own rule. Nazarbayev would never so much as mention Chechnya, any more than Putin would discuss Kazakstan's abysmal human rights record or the Nazarbayev clan's fleecing of their country's revenues.
In addition, they will continue fulfilling their agreement on the transit of Kazak oil through Russia, and will work further on the Caspian Sea's legal status. In turn, Kazak President, Nursultan Nazarbayev, said "long-term agreements on the transit of Kazak oil through Russian territory free Kazakstan from searching for alternative routes" for this transit. "This is profitable for Russia and for Kazakstan," he said. He said that the two countries have many cooperation projects, particularly in electricity. Nazarbayev noted the importance of the construction of the Balkhash nuclear power plant with expressed Russian help. The Russian leader expressed confidence that future trade ties between the countries would unfold despite the present low rate in their trade turnover. "I am absolutely sure that next year, we can and must make these relations even better," he said. In the course of the talks Nazarbayev called Russia his country's leading partner in trade. "The Russian Federation is our leading trade partner: trade turnover between our two countries totalled US$4bn last year."
Whilst being interviewed by a Russian daily, Nazarbayev disclosed that this year should see 220 events designed "to bring our economies closer together," noting that the integration processes would progress even further thanks to the oil and gas alliance Russia was building with his country, in addition to joint ventures in the Caspian.
"Relations between our countries are reaching a qualitatively new stage of development, as we signed a number of bilateral agreements that have already been called break-throughs. For instance, Moscow and Astana have resolved all issues concerning the Caspian," the Kazak president said. "Our countries have set geographical coordinates for drawing a modified median line in the northern part of the sea. We also agreed to jointly develop oil and gas resources from disputed geological structures such as Khvalynskoye, Tsentralnoye and Kurmangazy, whose aggregate reserves are estimated at one billion tonnes," he added.
The Kazak leader recalled that ambitious plans would also jointly occur in the Baikonur space centre, reiterating last December's agreement with Putin to extend the lease of the space centre for another 50 years and modernise its infrastructure.

« Top


Kazkommertsbank to issue new Eurobonds by April

Kazkommertsbank plans to issue at least US$200m in Eurobonds in April 2003, Managing Director, Eldar Abdrazakov, told a recent press conference in Moscow, New Europe reported. 
"Corporate bonds are usually placed in March-April following audits," he said, adding that the Eurobonds would mature in seven to ten years. The bank issued US$150m in Eurobonds in April 2002 and US$50m more at the end of the year at 8.19% annually.

« Top


Kazakstan not ready for pipeline projects to China

Kazakstan's state-owned oil and gas company, KazMunaiGaz, said it believes in the viability of projects to construct oil and gas pipelines from Kazakstan to China. However Kazakstan is not yet ready to implement those projects, which cannot take place before hydrocarbon production in Kazakstan has increased, KazMunaiGaz President, Lyazzat Kiinov, said, Interfax News Agency reported.
"China is a huge market and of course a pipeline needs to be built in that direction. China is asking us to deliver 50m tonnes of oil, but we are producing only 47m tonnes," Kiinov said.
During a visit by Kazak President, Nursultan Nazarbayev, to Beijing in December 2002, China again asked Kazakstan to consider supplying the volumes of oil it has requested starting in 2003. Yet China said during talks on pipeline financing that it would be premature to build a pipeline from western Kazakstan as volumes would be too low to justify a pipeline.
"They (China) are asking us to admit them to larger projects in the country, then they will have the opportunity to finance such pipeline," Kiinov said, adding that the issue is under discussion as per a request by Kazak President, Nursultan Nazarbayev.
In 1977 Kazakstan and China reached a top-level agreement by which China undertook to finance the pipeline. It is thought the project, which would cost about US$3bn, could be viable if at least 20m tonnes of oil are pumped along the route each year.
In addition, the Kazak leader asked KazMunaiGaz to look into the possibility of building a gas pipeline from southern Kazakstan to China. The pipeline could carry gas produced in Turkmenistan and Uzbekistan as well.
"China has a very large gas market," Kiinov said, adding that only three per cent of the Chinese capital Beijing's needs for gas are being met. Kazakstan produced 47m tonnes of oil and condensate in 2002. It plans to produce 52m tonnes this year.

BG sells half of Kashagan stake

BG Group agreed on 7th March to sell half its stake in Kazakstan's Kashagan field for US$615m, almost double the value BP was able to extract for a comparable sale nearly two years ago, the Financial Times has reported.
The cash-rich Chinese buyer CNOOC - which is determined to transform itself into an international force - may, however, not end up securing the stake.
The deal must be approved by the Kazak government, but crucially, Kashagan's other stakeholders have the right to match the bid.
They are Italy's ENI, ExxonMobil, Shell and Total-FinaElf, each with 16.67 per cent, and ConocoPhillips and Inpex, with 8.33 per cent each. Despite the rise in the price, analysts expect them to take the opportunity, as they have in the past.
The sale of half of BG's 16.67 per cent stake, following BP's departure in June 2001, illustrates the rise in value of the Kashagan project, as its development has progressed, analysts said. BP managed to obtain 42 cents a barrel for its reserves, while BG's deal is calculated at 83 cents a barrel, according to one analyst's calculations.
The increase in the value of the asset was pegged to the increased capital expenditure in the past two years, the additional oil discovered and the fact that the field is closer to its expected date of first production at the end of 2006, analysts said.
For BG, the sale recalibrates its portfolio back to gas versus oil, and decreases its non-OECD exposure.
Gordon Kwan, HSBC analysts, said of CNOOC's move: "Without access to a strategic petroleum reserve, China is keen to diversify its sources of oil imports, with the geopolitical tension in the Middle East as catalyst."
The Kashagan field, whose main attraction is its vast oil reserves rather than its gas holdings, was discovered in June 2000 and represents one of the largest finds in 30 years.
Conservative estimates put Kashagan's proven oil reserves at between 7bn and 9bn barrels and its probable reserves at 38bn barrels.
However, the field lies within difficult terrain. Environmentally, the companies must contend with ice storms as well as a risk of causing grave damage through oil spills that is higher than in many other regions. 

Azeri-Kazak oil export talks "successful", Azeri oil boss says

The latest round of Azerbaijani-Kazak negotiations on prospects of oil transport from the western shores of the Caspian Sea through the Baku-Tbilisi-Ceyhan pipeline (BTC) was successful, SOCAR [State Oil Company of the Azerbaijani Republic] President Natiq Aliyev said following negotiations with the management of the KazMunayGaz [Kazak oil and gas extracting and transporting] national oil and gas company, in which Aliyev headed the Azerbaijani delegation, Turan News Agency has reported.
Aliyev said that the sides had decided that working groups set up to discuss prospects for the transport of Kazak oil through the Aktau-Baku-Tbilisi-Ceyhan route would prepare all the necessary documents for Kazakstan to join the BTC project. The documents will be similar to those signed earlier on the transit of Azerbaijani oil through Georgia and Turkey.
"A new company will be set up in Kazakstan that will be responsible for transporting oil from the port of Aktau to Baku and deliver crude to the BTC company," Aliyev said.
The negotiations were held in Kazakstan on 10th-11th March. These issues had been discussed earlier in Baku and London in November-December 2002.

Major plans in alternative energy fields take shape

Kazakstan plans to build a wind electricity generator as a pilot project. The generator will be situated in a mountainous area near Almaty. "We have developed the world's only windmill that can resist winds up to 30-35m per second round the clock in the Dzhungar Gate," the energy and mineral resources minister recently told parliament, Interfax News Agency reported. The windmill will have a capacity of five megawatts. The minister said the project would be funded by the UN Food Programme and the Kazakstan Electricity Grid Operating Company (KEGOC). As for solar energy, he said the current state of technology would make it too expensive but that applying this kind of energy might make sense in parts of the country with plenty of sunny weather.

« Top


IMF says Kazakstan economic performance strong 

According to ITAR-TASS News Agency, a statement by an International Monetary Fund mission that visited Kazakstan from February 20th to March 9th has noted that "it was not only oil wealth but also early structural reforms and prudent macroeconomic management that underlie Kazakstan's strong economic performance," Baku Today has reported.
The economy grew by about 9.5 per cent in 2002 and by over 10 per cent per year over the last three years. Inflation in 2002 at 6.5 per cent was broadly unchanged from the previous year, but accelerated somewhat in early 2003. External performance was also strong. Reserves of the National Bank reached US$31bn by end-2002, while assets of the National Fund now exceed US$2bn. This strong macroeconomic performance is expected to continue during 2003, the statement said. 
A report on the IMF official website stressed that the mission "welcomed the important role played by the National Fund in managing the growing oil wealth and agreed with the authorities' intention to use part of the oil wealth to address pressing social and economic needs." The mission noted that ensuring competitiveness in the non-oil sector required the acceleration of structural reforms, trade liberalization, and further improvements in the business climate. 
The mission confirmed that the IMF resident representative in Kazakstan will not be replaced when his term ends in August 2003. "The decision to do this results from the impressive achievements made in stabilizing the economy, the extremely favourable medium- and long-term economic outlook for Kazakstan, and the very low probability that the country will need to borrow from the Fund in the future," the report said. 
The IMF resident representative in Estonia and Latvia was also recently not replaced for similar reasons. The mission assured the authorities that the policy dialog would continue through periodic visits and other contacts, that the IMF would continue to respond positively to requests for technical assistance, and that an office with local staff would be maintained in Kazakstan. 

« Top


EBRD to grant 99.3m Euro loan to Kazaktelecom

Kazaktelecom, Kazakstan's national telecoms provider, plans to borrow and use €99.3m (US$110m) in European Bank for Reconstruction and Development credit. Kazaktelecom's Board of Directors has given the go-ahead to sign the deal on a syndicated loan for that amount with the EBRD, company President, Aben Bektaasov, told a recent press conference, New Europe reported. Bektasov said the new credit would refinance an earlier EBRD loan of €45.2m (US$50m) to Kazaktelecom.

TuranAlem Bank inks US$40m credit

Kazakstan's TuranAlem Bank has already signed agreements with international credit organisations in Almaty to attract credits amounting to US$40m. Interfax News Agency reported that the Kazak bank is receiving a credit of US$30m from the European Bank for Reconstruction and Development (EBRD) and a consortium of banks headed by Austria's Raiffeisen Zentralbank (RZB). The EBRD will provide US$20m of this credit, and the other banks in the syndicate - US$10m. 
The bank plans to use the credit received to finance projects in the real sector of the economy and also for pre-export and trade financing. The EBRD and TulenAlem also signed a credit agreement for US$10m as part of a second cooperation programme with Kazakstan to finance small- and mid-sized businesses.

« Top


Celtic Resources Holdings finances gold projects

Ireland's Celtic Resources Holdings Plc is arranging a US$18m project finance package with a Kazak bank for the expansion of the Suzdal gold mine in the east of Kazakstan. The expansion will enable sulphide ores to be treated and production is forecast to be approximately 100,000 ounces per year by 2004, Celtic Resources said in a news release. 
Gold production from Suzdal was 37,176 ounces or 1.2 tonnes in 2002 at a cash cost of US$169 per gram. Local company Alel, which is a 100% Celtic subsidiary, holds the Suzdal licence. Suzdal has been under semi-commercial development since 1999.

« Top


Dongfang electric secures locomotives deal with Astana

The Kazak Railways Company is expecting to receive 152 new electric locomotives by 2009 under a contract with China's Dongfang Electric Corp., Interfax News Agency quoted the company's press service as saying. "Under the contract, in 2003 Dongfang will produce the first two electric locomotives for Kazakstan, which will be delivered in 2004," the press service said. The remaining 150, each carrying a price tag of US$1.165m, will be made at Kazak plants. China's export-import bank will issue a credit for this project.

« Top





Our analysts and editorial staff have many years experience in analysing and reporting events in these nations. This knowledge is available in the form of geopolitical and/or economic country reports on any individual or grouping of countries. Such reports may be bespoke to the specification of clients or by access to one of our existing specialised reports. 
For further information email:

Considering an investment or a trip to any newnation? First order our Investment Pack which will give you by e-mail the last three monthly newnation reports and the complete worldaudit democracy check for the low price of US$12. The print-out would be a good companion to take with you. Having read it, you might even decide not to go!
To order please click here:
Investment background report

« Top

« Back


Published by 
International Industrial Information Ltd.
PO Box 12 Monmouth 
United Kingdom NP25 3UW 
Fax: UK +44 (0)1600 890774