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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)

Books on Kazakstan


Area ( 


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

(formerly Akmola)


Nursultan Nazarbayev


Update No: 285 - (01/10/04)

Reform on hold for the moment
Russian President Vladimir Putin's decision to cut back on democratically elected posts following September's Beslan school siege gave the leaders of Kazakhstan and Kyrgyzstan - the two most liberal (if not very) Central Asian states - a precedent for slowing their own political reforms. 
Kazak President Nursultan Nazarbayev's main message to Kazakstan's electorate in the parliamentary campaign before elections on September 19th was that his 15-year rule has brought peace and prosperity in an ethnically mixed and, at least nominally, mostly Muslim state, so voters should choose "stability."
But the spectre of last year's bloodless revolution in another former Soviet state - Georgia - visibly haunts the presidential palaces of Central Asia, whose ageing occupants look uncomfortable at regional summits with Georgia's youthful new leader, Mikhail Saakashvili.
"I think the problem will be if those leaders (in Kazakhstan and Kyrgyzstan) resist what are natural political changes and try to cling on to power too long," said one observer. "Leaders trying to stay on unnaturally long produce this level of discontent and potential unrest."

Kazak president's party in the lead in parliamentary elections
Nazarbayev's party, Otan, earned an overwhelming majority in September 19th's parliamentary elections, that were criticized by international observers as falling short of democratic standards, election officials said on September 22nd. Otan Party's deputy chairman Amangeldy Yermegiyayev said that according to the Central Election Commission, the party had won 30 of 67 directly elected seats up for election in the ballot.
He claimed it had also won 60 percent of party-list votes, therefore guaranteeing it a majority of the remaining 10 seats in the 77-seat legislature. Those seats are divided between all parties that win more than 7 percent of the vote. 
"Otan will have a majority in the future Parliament," Yermegiyayev told reporters. "Our election victory was expected and we said repeatedly that our aims were high." 
Nazarbayev's Otan party earned 60.6 % of party-list votes, giving it seven seats among the 10 to be distributed among parties. These results could be indicative for the 67 other seats in the lower chamber, which were directly elected. 
The opposition party, Ak Zhol, was narrowly second with 12 percent in the party-list voting, earning one seat. The Asar party led by Nazarbayev's daughter, Dariga Nazarbayeva, surprisingly only came in third with 11.4 percent, also gaining one seat. 
The pro-government AIST bloc earned the last seat, with 7.1 percent. All other parties failed to meet the 7 percent requirement to enter the parliament as a party. 
Election officials took four days to announce complete results of the voting in the nation of 15 million, inciting confusion and charges of fraud. Opposition parties have already said they will refuse to accept the election results and a leading critic of Nazarbayev has said Ak Zhol had actually placed first in the vote. Nazarbayev's former right-hand man has claimed that Ak Zhol had placed first in the election, not Otan, and he accused authorities of manipulating the vote.
Referring to government sources, Zamanbek Nurkadilov said Ak Zhol had actually come in first in party-list voting with 35 percent, with Otan at 26 percent. Nurkadilov, the former Emergencies Agency chairman, was fired earlier this year after demanding Nazarbayev resign. He said that the radical opposition bloc of Democratic Choice and the Communists had 16 percent and Asar was last with 14 percent.
The Organization for Security and Cooperation in Europe(OSCE) and the United States have both said Kazakstan failed to meet its promise of running a free and fair election. OSCE observers noted irregularities during counting, pro-government media bias and official pressure being placed on students and state employees to support government-allied parties. 
The election was seen as a key test for democracy in oil-rich Kazakstan, where the opposition has gained strength in recent years and had its best chance yet to win a substantive voice in government. 
Nazarbayev, who ruled the Central Asian nation since before it became independent after the 1991 Soviet collapse, has been criticized in recent years for turning increasingly authoritarian. The outcome of the elections allows Nazarbayev to preserve a loyal Parliament. 
Election authorities said that 22 of the 67 directly elected districts have to be decided in run-offs, which were to take place two weeks later.

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S&P: Kazak banking system leads the regional pack

Improvements in the economic and operating environment in Kazakstan in the past 5 years have led to enhanced creditworthiness and commercial profiles for the domestic banking sector, Standard & Poor's Ratings Services said in a report entitled "Bank Industry Risk Analysis: Kazakstan (Republic of)," Interfax News Agency reported on August 24th.
Trofimova pointed out that the Kazak banking system has been experiencing enhanced activity on the back of the economic revival since mid-2000. "This is reinforced by increased liquidity entering the system as confidence in the banking system improves," she explained. She said that economic growth remained robust during the past several years, and is expected to be sound in the coming years, driven by a solid revival in domestic demand and strong output across all sectors.
According to the report, the Kazak banking system, with 36 financial institutions, is overbanked for a population of 15m. The three dominant banks are Kazkommertsbank (KKB), Bank TuranAlem (BTA), and Halyk, which represent about 60% of the system.
As a result, competition is intense and the profitability of the banking system has been decreasing.
Pushed by the improving macroeconomic environment and robust growth, Kazak banks increased lending volumes by over 40% per year in the last 2 years after annual growth of over 60% in the 3 previous years. This growth pace is likely to be sustained in 2004, with a lending increase of 15% reported for the first 4 months of 2004, the group said.
"While lending expansion has been beneficial to net income levels," said Standard & Poor's credit analyst, Magar Kouyoumdjian, co-author of the report, "internal capital generation has trailed the growth in risk assets, constraining capitalisation."
Kazak banks have also benefited from relatively good access to foreign funding as demonstrated by the banks' growing international borrowings, including Eurobonds. The report notes, however, that this could lead to repayment concentrations and refinancing risks. Despite sound advancements, Kazak banks' creditworthiness remains constrained by low ownership transparency, limited business diversification, a relatively unrestructured corporate sector, high loan concentrations by industry and individual borrowers, and a high proportion of foreign currency lending.
All of these, coupled with fast loan growth, expose the banks to economic, interest rate and exchange rate volatility. Another concern is that Kazak banks are intensifying their expansion into other higher risk CIS markets, mainly Russia. While overseas business volumes are still rather low, they are increasing rapidly.
On the positive side, the report noted that solid progress in the legal and regulatory framework and its growing effectiveness should protect the banks from potential problems in their still-challenging operating environment. Any changes in the ratings on domestic banks will depend on the degree to which the financial and commercial profile of each entity improves and the entities' own efforts to strengthen their risk management controls. Although bank ratings have the potential to improve, particularly in the case of large banks ratings are constrained by high but improving economic and industry risks prevailing in the country.

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AES to inject 5 million Euro into Kazak power plant

AES Ekibastuz, owner of the Ekibastuz GRES-1 power plant in northern Kazakstan's Pavlodar region, plans to put 694m tenges (around 5m euro) into overhauling the plant's generating units in 2004, a press release from AES Kazakstan said on August 19th, Interfax News Agency reported.
AES Kazakstan is a subdivision of the US corporation AES. AES Ekibastuz will be investing 182m tenges in upgrading unit number five, making it possible to increase output from 300 to 400 megawatts. Another 512m tenges will be spent rejuvenating unit number three, the release said. Of that money, 132m tenges has already been used. This block's launch is slated for February 2005.
Number three was shut down in the wake of a November 2003 accident. The expected result of these modernising efforts is AES Ekibastuz increasing overall output capacity to 2,000 megawatts by March.

Karachaganak to expand supplies to Orenburg

Gas supplies from the Karachaganak field in Kazakstan to Orenburg gas processing plant will increase from 7bn cubic metres to 8bn cubic metres from January 1st, 2005, OOO Orenburggazprom said in a recent press release, cited by Interfax. The release said company management discussed technical issues connected with increasing supplies at a meeting with representatives from the Kazak gas company Karachaganak Petroleum Operating. "Both sides are interested in implementing this project, as it will make it possible to increase profits for both companies and, as a result, increase tax payments," the statement said.

CPC pumps 8.3m tn of Tengiz oil in 7 months

Caspian Pipeline Consortium (CPC) in January-July pumped 8.3m tn of oil produced by the TengizChevroil joint venture at the Tengiz field in West Kazakstan, TengizChevroil said in a statement recently. The figure included oil produced in December, Interfax News Agency reported. The company did not say how much oil was pumped along the CPC pipeline in the first 7 months of 2003.
TengizChevroil produced 7.8m tn of oil in January-July 2004. It produced 12.7m tn in 2003. TengizChevroil is producing 2-3bcm associated gas per year.
In January-July 2004, the joint venture produced 477,022 tn of propane and butane, selling 480,249 tn, including propane and butane produced in December last year, the statement said. Propane and butane production totalled 709,000 tn in 2003.
The company said it sold 1.9 million cubic metres (mcm) of dry gas, 700,000 cubic metres of it to Russia, in 2004. It sold 3.2mcm in 2003 - 1.3mcm of it to Russia. TengizChevroil sold 446,752 tn of Sulphur in January-July to countries from the Mediterranean region, China and Russia. It sold 410,000 tn in the whole of 2004. The company exports oil to Eastern and Western Europe, the Far East and North and South American. Latest estimates say the Tengiz collecting basin could contain up to 1.125bn tn or 6-9bn barrels of recoverable oil. The drilled-out sections and sections that have yet to be drilled out contain a proven 3.133bn tn. The basin is up to 19km long and 21km wide.
TengizChevroil started to produce oil at the Tengiz field in 1994 following the signing in 1993 of a 50:50 deal between Chevron and the Kazak government. ChevronTexaco Overseas currently owns 50%, ExxonMobil Kazakstan Ventures Inc 25%, Kazakstan's state-owned KazMunaiGaz 20% and the Russian-US LUKArco 5.0% of the joint venture.
Russia owns 24% of the CPC, Kazakstan - 19%, Oman CPC Co - 7%, and another 50% of the consortium is divided between Chevron Caspian Pipeline Consortium Co (15%), Mobil Caspian Pipeline Co (7.5%), Oryx Caspian Pipeline LLC (1.75%), LUKArco BV (12.5%), Rosneft-Shell Caspian Ventures Ltd (7.5%), Agip International (NA) NV (2%), British BG Overseas Holdings Ltd (2%) and Kazakstan Pipeline Ventures LLC (1.75%).
The pipeline from the Tengiz oil field in Kazakstan to the Russian port of Novorossiisk is 1,580km long.
The first stage of the pipeline, which was officially opened in November 2001, will have the capacity for 28.2m tn of oil per year, of which Kazakstan will provide 21.7m tn. Capacity will gradually increase to 67m tn per year. The CPC carried 15m tn of oil produced in Kazakstan in 2003.

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Mintek joins Kazak project to smelt nickel

South African metals and minerals research body Mintek recently announced its involvement in a new nickel-smelting project in Kazakstan. Mintek was commissioned by Oriel Resources to participate in the Schevchenko nickel project in northern Kazakstan, Business Day (Johannesburg) reported on August 13th. "Initial smelting testwork has been completed on a representative ore sample at Mintek's DC arc pilot plant in Randburg," the state research company declared.
A preliminary feasibility study is due to be completed this month, and if the plan goes smoothly then a detailed definitive feasibility study will follow during the first half of next year. Mintek and engineering group, Bateman, are managing the preliminary feasibility study, and will assess the process parameters and provide capital and operating costs estimates for the proposed smelter.
"With the strong heavy engineering capabilities and good infrastructure in the region, Oriel anticipates that Schevchenko could start up by early 2007," Mintek said, adding: "The scale of production is likely to be about 120,000 tonnes of ferronickel, containing 30,000 tonnes of nickel metal, a year. Electricity, gas, coal, labour and other costs in Kazakstan are low by world standards, and the variable operating costs of the project should be less than €1 a pound of nickel, with total costs in the region of €1.50-€1.70 a pound. This would place Schevchenko among the second lowest quartile cost producers."

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Telecom industry reshuffling

The Kazak government will reshuffle management of the country's telecommunications sector, according to a government source recently. He said Birzhan Kaneshev has vacated the post of chairman of the State Information and Communications Agency and plans to continue his education abroad, Interfax reported on August 24th. The vacancy has been temporarily offered to Kaneshev's deputy Askar Zhumagaliyev. The government, meanwhile, is considering candidacies to this post, among them head of the Kazaktelecom national telecommunications operator Aben Bektasov. Kaneshev, 38, took charge of the information and communications agency in June 2003. Prior to this appointment he had been chief of the presidential staff's domestic policies department.

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Kazak companies transport 706.5m tonnes of cargo

According to the Kazak Transport Ministry, companies transported 706.5m tonnes of cargo and more than 4.5bn passengers in the first half of this year, up 8.0% and 3.0% year-on-year, respectively. Cargo turnover was up 10.5% to 96.6bn tonnes/km and passenger turnover grew 6.0% to 47bn passengers/km. Cargo loading through Aktau port was up 30% in the first half to 5.2m tonnes, Interfax News Agency reported.
Kazakstan's transport complex, which includes railroad, truck, air, water, and pipeline transport, is a priority sector due to the country's geographic location at the intersection of Eurasian trade routes and the nature of the economy, where the leading sectors specialise in exports. Automobile and railroad transport handle most of the cargo and passengers in Kazakstan.
Both sectors posted good results for the first half of the year, with cargo transport up 8.0% and 7.0%, while cargo turnover was up 7.0% and 11%, respectively. The continued success of automobile and railroad transport is tied closely to the development of international transport corridors that pass through Kazakstan.
Kazakstan has established market infrastructure and liberalised prices for virtually all types of transport services. The transport and communication complex contributes about 13% of gross domestic product (GDP) in Kazakstan.
In the opinion of the statistics agency, pipeline transport in the first half of this year amounted to 94.1m tonnes, up 16.3% from the same period last year. This included 29.7m tonnes of oil and petroleum products, up 23.6% year-on-year, and 64.4m tonnes of gas, up 13.2%.
With a low frequency of railroads and waterways, roads are the predominant, and in many regions the only, means of moving goods, industrial and agricultural cargo, and passengers. Kazakstan has 128,000km of roads, including 85,600km of general roads and 42,400km of roads that access industrial enterprises, mines, farms, and timber enterprises. Kazakstan had 1,365,000 vehicles at the start of this year, including 51,400 buses, 214,200 trucks, and 37,000 special vehicles. About 2,200 vehicles owned by 160 transport companies and private owners are used in international automobile shipments at present, using nearly 100 regular routes connecting Kazakstan to the CIS and other countries.
Interfax quoted the transport ministry as saying Kazakstan would invest €319m in road projects this year, including €72m in borrowed funds.
Financing for road construction will grow to €414m next year. The most important projects are the restoration of the Almaty-Bishkek road, reconstruction of sections of the Samara-Shymkent road, continued work to build roads from the city of Ridder to the Russian border, and reconstruction of the Astana-Kustanai-Chelya-Binsk road.
The immediate plans include reconstruction of the Samara-Shymkent road and the Astrakhan-Atyrau-Aktau-Turkmenbashi road.
Kazakstan will also continue work along the Great Silk Way on the section from Khorgos-Almaty-Shymkent that connects Kazakstan with China and Uzbekistan.

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