Kazakhstan Outpaces Neighbors in Digital Maturity and Volume of Attracted Investments – Expert

How do Kazakhstan's economic priorities align with the Central Asian agenda? June 26, 2025 · 12:15 Kazakhstan’s strategic location, developed human capital, and firm commitment to reforms create vast opportunities for both investors and the national economy, said President Kassym-Jomart Tokayev at the 37th meeting of the Foreign Investors’ Council. What makes Kazakhstan attractive to investors? What real progress has been made in diversifying the economy? And how do Kazakhstan’s economic priorities align with the agenda of other Central Asian countries? Kyrgyz economist and expert in business planning and green economy, Iskender Sharsheev, shared his opinion in this interview. – In the first five months of 2025, Kazakhstan has shown 6% economic growth despite global instability. What factors contribute to such economic resilience, in your view? – Several complementary factors have ensured this stability. First, dynamic growth in manufacturing and the mining sector: total output increased by 6.4%. Second, a construction boom (+15.4%) and large-scale infrastructure investments have stimulated domestic demand and boosted related services. Third, double-digit growth in transport and trade, fueled by the expansion of the Trans-Caspian route and integration with the EAEU and China, has strengthened exports and transit. This is complemented by moderate inflation, stable domestic consumer demand, and a conservative fiscal policy that mitigates macroeconomic risks. – President Kassym-Jomart Tokayev has identified economic diversification as a priority. How do you assess Kazakhstan's progress in this direction? – Since 2019, output in the engineering sector has tripled, and the non-oil sector accounted for over 70% of GDP growth. In 2024, the main drivers were non-resource industries — agriculture, construction, transport, and IT services. Systemic support measures (preferential financing, industrial zones, localization of supply chains) have already shifted the development focus toward processing and high-tech niches. – What economic reforms in Kazakhstan would you highlight from recent years? – Over the past two to three years, the government has introduced a broad package of measures aimed at reducing state involvement in the economy and boosting competition. In May 2024, President Tokayev signed a liberalization decree instructing the acceleration of quasi-public sector privatization and the reduction of business barriers. A new Tax Code draft was also put up for public discussion: it simplifies reporting for small businesses and introduces a unified annual declaration, which should reduce administrative costs. In 2024, the sixth package of amendments to competition legislation came into effect, strengthening oversight of collective dominance and equipping the antimonopoly agency with rapid intervention tools. Decriminalization of business-related offenses continues: new amendments limit criminal liability for tax errors, shifting focus toward economic penalties. From January 1, 2025, the updated Public Procurement Law came into force — procedures are now shorter, and the “quality” criterion now carries more weight than “price” when choosing winners; all tenders have moved to a unified digital platform. In agriculture, the national project “Strong Agro-Industrial Complex 2024–2028” was launched, with €33 billion in planned investments and the creation of over 200 “digital farms,” aimed at improving subsidy transparency and technological advancement in agriculture. Lastly, the state is revising energy tariffs and expanding renewable energy auctions, resulting in “green” electricity accounting for 6.43% of generation in 2024. – The UN named Kazakhstan the second-largest recipient of foreign direct investment among landlocked countries. What makes Kazakhstan attractive to investors today? – Investors are drawn to Kazakhstan’s predictable macroeconomic policy and a Moody’s rating of Baa1 with a “stable” outlook. Business operations are facilitated by the Astana International Financial Centre regime, arbitration under English law, and active privatization of the state sector. Moreover, nearly $73 billion of the $130 billion in FDI has been directed to the manufacturing industry, creating a diversified market for technology and capital suppliers. – At the Foreign Investors’ Council meeting in Astana, President Tokayev noted that Kazakhstan ranks in the UN's top 30 for digitalization. What benefits is Kazakhstan seeing from its focus on digital and AI infrastructure? – Currently, 92% of government services are available online, saving citizens millions of man-hours annually. The fintech market grew by 30% in 2024 alone, thanks to regulatory sandboxes for startups and an open payment API. The launch of a Tier IV data center in Astana doubled available computing power and reduced cloud service costs for businesses. Integrating machine learning into the mining and agtech sectors has increased productivity and lowered state control costs. – The president noted that by 2029, Kazakhstan plans to reconstruct 11,000 kilometers of existing railways and build another 5,000 kilometers of new lines. Can Kazakhstan already be considered a strategic transport and logistics hub? – Given the completed and ongoing projects, Kazakhstan has effectively secured its role as a key link in Eurasian transit. In June 2025, the president confirmed that the 830-kilometer Dostyk–Moyynty section would be completed two years ahead of schedule, increasing the capacity of the “Middle Corridor” fivefold. Transit through this corridor, via the Caspian Sea to Europe, reached 4.1 million tons in the first eleven months of 2024 — a 63% year-on-year increase, demonstrating strong demand for an alternative route between China and the EU. Ports like Aktau and Kuryk along the route are being expanded, and highway modernization is creating a multimodal network connecting Russia, Central Asia, the Caucasus, and the Persian Gulf. Considering the planned reconstruction of 11,000 km of railway and construction of 5,000 km of new lines by 2029, Kazakhstan is building a transport framework comparable to major transit nations, and can already justifiably be called a strategic logistics hub. – Digitalization and AI, transport transit, energy, agriculture, and human capital — President Tokayev identified five key sectors where Kazakhstan aims to achieve self-sufficiency and even leadership. Where is Kazakhstan already “in the game,” and where is it just starting? – In digitalization and AI, the country is making a noticeable leap: under the 2024–2029 AI Development Concept, a national platform, data centers, and a supercomputer are being created. The alem.ai ecosystem is attracting talent and investment. In transport, as shown by growing freight volumes and accelerated infrastructure projects, Kazakhstan is clearly “in the game” and strengthening its position. The energy sector is confidently shifting to renewables — thanks to auctions and a carbon neutrality strategy, the share of renewable generation has exceeded 6%, and investment in wind and solar plants continues to grow. The agricultural sector, by contrast, is only entering a dynamic phase: the national project “Strong Agro-Industrial Complex” is driving large-scale digitalization of farms and aims to double exports of processed products by 2028, but most initiatives are still in early implementation stages. Human capital development is also accelerating: the national project “Comfortable School” envisions building 369 modern schools by 2026; 105 have already opened. The eGov Mobile app delivered over 20 million digital services in just the first half of 2024, making state services available “in one click.” In short, Kazakhstan is already firmly positioned in AI, logistics, and renewable energy, while agriculture and human capital development are gaining momentum, backed by clear political priorities and funding. To further build on these achievements, Kazakhstan must pay closer attention to climate change, disaster response and prevention systems, and focus more on regional social development — involving all social groups in economic activity to ensure equitable distribution of national wealth. – How do Kazakhstan’s economic priorities align with those of other Central Asian countries? – Key focus areas — infrastructure, industrialization, and digitalization — are indeed unifying the region. Uzbekistan is prioritizing privatization and energy reform, while Kyrgyzstan focuses on social infrastructure and hydropower development. However, Kazakhstan leads its neighbors in digital maturity and investment volume, setting the benchmark for joint transit and industrial cooperation projects. – How would you assess the comparative success of Kazakhstan, Kyrgyzstan, and Uzbekistan in reforms and ensuring sustainable growth? – Kazakhstan demonstrates the most balanced model: 6% growth with a broad sectoral base and stable capital inflows. Kyrgyzstan posted a record 9% growth in 2024, driven by construction and re-exports. Uzbekistan has maintained momentum through currency market liberalization, large-scale privatization, and strong FDI inflows. The key factors across the board are institutional quality, access to finance, and the ability to implement structural reforms. Source: https://kapital.kz/economic/138279/kazahstan-operezhaet-sosedej-po-urovnyu-cifrovoj-zrelosti-i-obuemu-privlechennyh-investicij-ekspert.html