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Key Economic Data 
  2002 2001 2000 Ranking(2002)
Millions of US $ 24,205 22,400 18,300 60
GNI per capita
 US $ 1,510 1,350 1,250 117
Ranking is given out of 208 nations - (data from the World Bank)


Area ( 


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

(formerly Akmola)


Nursultan Nazarbayev


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: 272 - (29/08/03)

President becoming the senior leader of Central Asia
There are important developments going on in Central Asia. President Nursultan Nazarbayev, already the leader of his country before independence in 1991, is about to become the senior leader in the region, following the decision by his counterpart (and the father-in-law of his daughter) in Kyrgyzstan, Askar Akayev, to stand down, and given the imminent departure in all probability of President Islam Karimov of Uzbekistan, who is gravely ill.
That leaves only two other leaders in the 'stans,' as they are called, President Imomali Rakhmanov of Tajikistan, who only became leader in 1994, and President Saparmurat Niyazov of Turkmenistan, who has been around at the helm as long as Nazarbayev, but is a pariah even among the region's dictators. He never turns up to regional meetings for fear of losing his position by being out of his country, and is getting madder by the day. Niyazov could not be described as an elder statesman by any of his peers, whereas Nazarbayev has a certain gravitas fit for the role.
He runs a very tight ship; he heads a one-party state as in communist times. Opposition is ruthlessly repressed. But he has a certain genuine popularity all the same, not least because the economy, after free-falling in the 1990s, is on the mend.

Economy booms
The rate of growth of GDP is the highest in the FSU and one of the highest in the world. GDP has soared by 10% rates of annual growth or thereabouts throughout the 2000s. The reason has been obvious, buoyant global oil prices. Exports have been rising by spectacular rates, by well over 20% per year and for years. Kazakstan is becoming a global player on the world oil stage, which it never was in communist times, being merely an anonymous part of the USSR.
The find of a massive field in the Caspian at Kashagan, in the 9-15 billion barrels range of reserves, makes sure that the rapid rise to prominence will continue, given that something of the same magnitude obtains at Tengiz, already in full production, with the investment of Chevron. 
The capital of the oil industry is Atyrau on the Caspian and near both vast oilfields. It is the 'gold-rush city,' the gold being black gold, oil, of course. It is three thousand kilometres from Kazakstan's border with China, indicating how vast the republic is, larger than Western Europe in sheer territory. That makes it very difficult for 'drain-down' effects to operate, with the new capital, Astana, nearly two thousand kilometers away and the old capital, Almaty, nearly three. 

The shenanigans mount
Actually, given the nature of the political system in Kazakstan, some of the proceeds from the oil boom have been flowing not down, but out. This is a source of grave embarrassment to all concerned, in the US and in Kazakstan.
The US Justice Department has been investigating huge irregularities in commercial relations. But it has been agreed to disagree and not bring things to a head. 

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KazMunaiGaz to attract credit from BNP Paribas Suisse, Euromin

Kazak national oil and gas company, KazMunaiGaz, plans to attract a structured pre-export syndicated credit of up to US$200m from BNP Paribas Suisse SA and Euromin SA, Interfax News Agency reported. 
KazMunaiGaz, BNP Paribas Suisse SA and Euromin SA have signed the corresponding mandate letter with conditions, a press release stated. According to the signed documents, the rate for this credit line will be monthly LIBOR +1.75% per year, over five years. A source in the company said that at the moment a packet of credit agreements is being prepared for this loan. The main creditor will be BNP Paribas Suisse, the source said. 
The press release notes that the funds attracted will be used to finance investment programs until 2006, which will cost a total of US$2.8bn, according to early figures. The funds will also be used to finance exploration work in the Caspian. The credit will be secured by revenue from exports by KazMunaiGaz subsidiaries.

Kazakstan intends to tender rights to off-shore oil blocks

Kazakstan intends to hold tenders for the development of oil blocks in 2004-2005 in its off-shore sector of the Caspian, Vladimir Shkolnik, minister of energy and mineral resources, told a press conference in Astana, New Europe has reported. "The first tenders will be in 2004-2005, in line with our programme, when the necessary documentation for the tenders will be ready," he said. "This includes collection of all geological information, creating possible economic models for the projects in different fields, and evaluating their efficiency."
Shkolnik said that as part of the first stage of developing hydrocarbon resources in the Caspian, there would be preparatory work on the development, to be carried out jointly with Russia, of the border Kvalynskoye, Tsentralnoye (under Russian jurisdiction) and Kurmangazy (Kazakstan) oil structures. Russia and Kazakstan have agreed to develop these structures on an equal basis.
Shkolnik said that on Kazakstan's side, KazMunaiGas, the national oil and gas company, has been named as the authorised organisation for the development of Kurmangaza. In accordance with the agreement KazMunaiGaz will have at least a 50 per cent share in the project.

Kazakstan may build oil terminal at Kuryk

Kazakstan is considering the possibility of building a large oil terminal at the port of Kuryk in Mangistau region on the Caspian, KazMunaiGas President, Uzakbai Karabalin said at a press conference in Astana. "As agreements are reached in the future on the Baku-Tbilisi-Ceyhan pipeline, we plan to set up a large oil terminal in Kuryk," he said, New Europe has reported.
"This means that at the first stage of Caspian development, until large volumes are reached, trans-shipment of a tens of millions of tonnes of oil will be carried out by barge through the Caspian, and this infrastructure will be built for this," he said. Karabalin noted that the project being implemented by Agip KCO and Kazakstan to set up onshore support for marine operations in Bautino is aimed only at the North Kazakstan project. Karabalin also said that it is planned that in the future Bautino may be used to support oil operations in the north and middle sections of the Caspian and Kuryk will support work in the south of the sea. He added that work on the development of Aktau port in Mangistau region would also be continued.

Karachaganak processing complex kick-starts in Kazakstan

The international consortium, Karachaganak Petroleum Operating (KPO) has launched the largest of the new installations at the Karachaganak oil and gas condensate field in Kazakstan - Karachaganak Refining Complex, New Europe has reported.
Kazak President Nursultan Nazarbayev, who attended the ceremony, officially launched oil exports from new production facilities at the Karachaganak field. Chiefs from the four KPO founders including ENI, BG, Chevron-Texaco and LUKoil attended the ceremony, at which the launch of a new gas injection facility was also announced.
After the new facilities are put into operation, KPO intends to increase production of liquid hydrocarbons to over 10 million tonnes per year, with gas production of over seven billion cubic metres. It is expected that two thirds of the volume will be transported via the 635 kilometre Aksai-Bolshoik Chagan-Atyrau pipeline (capacity seven million tonnes per year), which will have access to the Caspian Pipeline Consortium pipeline. The remaining volumes will be transported via the Orenburg refining complex.
KPO shareholders include ENI and BG with 32.5 per cent each, ChevronTexaco 20 per cent and LUKoil 15 per cent. Planned investment over 40 years amounts to US$15bn. Over these 40 years the companies plan to extract 320m tonnes of liquid hydrocarbons and 797bn cubic metres of gas. Kazakstan's expected profit will be more than US$14bn. The Karachaganak field is one of the largest in the world with reserves of over 1.2bn tonnes of liquid hydrocarbons and 1.3 trillion cubic metres of gas. In 2002 KPO extracted over 5,157,874 tonnes of condensate and 4.833 billion cubic metres of gas (up 29.1 per cent and 269 per cent compared to 2001).

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Kazakstan to protect Caspian from environmental hazards

A Kazak senior official has announced that the government plans to make energetic efforts to set up an ecological monitoring system for the Caspian Sea region, Interfax News Agency reported.
"A monitoring centre for the Caspian Sea will be established (in the republic) next year," Kazak Ecology Minister, Aitkul Samakova, was quoted as telling representatives of the Caspian region at a recent meeting. These members are working to define a legal mechanism for the Caspian's environmental protection. "Kazakstan is implementing a national plan to prevent oil spills in the Caspian Sea," she was quoted as saying.
"A state programme for the development of the Caspian's Kazak sector provides for the ecological safety of this unique body of water," the minister added. "The Caspian Sea is one of the most productive fishing areas on the planet."
The shallow northern part of the sea shelf is most in danger of environmental crises, Samakova said, adding this area was declared a reserve in addition to the Volga and Ural deltas almost 30 years ago. "Large-scale development of oil and gas in all states of the Caspian Sea basin will increase the impact on the sea," the minister said.
Samakova recalled several oil spills in the Caspian Sea, including the wreck of Azerbaijan's Mercury-2 ferry off Baku last October, which killed 45 and caused an oil spill on 15 square kilometres of the sea. "Urgent measures are needed to prevent such accidents," Samakova said.

The Aral Sea gets a new lease on life

After nearly half a century of studying and deploring the drying up of the Aral Sea, one of the world's greatest environmental disasters, international agencies are building a dike to resuscitate part of the sea, the International Herald Tribune reported on August 7th.
There is broad agreement that it is impossible to return the sea level to its pre-1960 level, 22 metres, or 72 feet, higher than it is now. That was before the rivers that fed it were diverted to irrigate cotton fields and rice paddies.
The World Bank is financing the next best option, a US$85m project to revive the northern part of the sea, known as the Small Sea, while giving up on the largely dead Big Sea to the south. Work on the project, a 12 kilometre dike, started there in July, and officials expect five kilometres, or about 7.5 miles, to be completed by December 31st, with the rest to be finished next year.
At Kokaral, the uninhabited place where the Syr Darya flows into the sea, stands the remains of a dike that volunteers built 10 years ago. Made of sand, with no sluice to prevent the water from going over the top and no stone cover on the sea side to stop erosion, the dike was repeatedly breached. The last time, in 1999, two people drowned. Now, contractors said, the work is being properly carried out. The slope will be much shallower on the sea side, the sand will be covered in seashells and stones to resist waves, and the structure will stand three metres above what experts anticipate to be the future level of the sea.
Syr Darya water will be prevented from flowing into the Big Sea, where it has been losing a battle with evaporation. Instead, it will flow to the Small Sea, which in four years or so engineers expect to rise by four metres and re-cover about 600 square kilometres of exposed former seabed.
Then a sluice will be opened, and the excess water will be allowed to flow south again into the Big Sea. The World Bank project includes rebuilding water-works along the Syr Darya to increase the flow of the waterway substantially. As a result of the two components, experts said, the salt content of the Small Aral should drop, to somewhere between 4 parts per thousand to 17 parts. It is now up to 35. Many of the 24 fish species that once supplied a 50,000-ton-a-year fishery are expected to return. To the Kazaks near the Small Aral, the benefits will be considerable. 
In addition to reviving the commercial fishery, experts expect the Small Aral revival to increase rainfall and expand pastures. It should also improve the groundwater, much of which has become too salty to drink and, according to health experts, has caused increases in stomach and oesophagus cancers. The greater rainfall will most likely reduce the dust storms that have increased respiratory diseases, Aralsk doctors say. At the Big Sea to the south, the salinity is so high that nearly all fish have died off.
The project has drawn experts' praise. "I think there would be net positive ecological and economic benefits, even taking into account potential damage to the southern sea," said Philip Micklin, a retired professor of geography at Western Michigan University in Kalamazoo who specialises in the Aral Sea. "And given the money available and the magnitude of problems, I guess it's the best one could expect."
Nikolai Aladin of the Zoological Institute of the Russian Academy of Sciences in St Petersburg, thinks of himself as a father of the project. He recalled how he had advocated the first dike, whose positive, if ephemeral, effects the World Bank cited as proof of the value of the project. "It was experimental," he said. "We wanted to prove that disasters made by the hand of man could be repaired by the hand of man. I am very proud they are building it properly now."

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