[Voice of the Observer Network]
Kazakhstan’s President Tokayev is working to reshape the economy of the largest crude oil producer in Central Asia, aiming to modernize the country of 20 million people by improving the business environment.
In an interview with Bloomberg, Kazakhstan's Deputy Prime Minister and Minister of National Economy Zhu Mangalin said that thanks to cooperation with China, the country is actively promoting economic transformation and striving to get rid of its dependence on oil.
Zhu Mangalin told U.S. media that China has replaced Russia as Kazakhstan’s largest trading partner, and that goods from China are expected to continue to grow significantly as Kazakhstan plans to build new railways and transportation channels through the western part of its country.
He further revealed that the railway transportation volume from China bypassing Russia via the Trans-Caspian Sea international transportation route will increase from the current 4.5 million tons to 7 million to 10 million tons in the next few years. Mangarin said that this will transform Kazakhstan from a "landlocked country" to a "land-linked country".
The international transportation route across the Caspian Sea, also known as the "Middle Corridor", connects China, Kazakhstan, Azerbaijan and other countries and leads to Europe through the Black Sea, is an important international logistics channel and the "Middle Corridor" adopts the combination of rail, road and sea transportation, becoming the shortest multi-modal trade route connecting China and Europe, can greatly reduce the time of landing and sea transportation between China and Europe. The development of the route has important strategic significance for Kazakhstan, contributes to consolidating its Asian-European transportation hub position, and achieves the diversification of trade routes in the context of global supply chain adjustment.
According to comprehensive media reports in Kazakhstan, in July this year, China and Kazakhstan signed a strategic agreement to focus on the development of international transportation routes across the Caspian Sea. The two sides agreed to deepen cooperation in the fields of railway transportation, logistics, process digitalization and infrastructure construction. According to the report, the signing of the agreement marks a new level of partnership between the two countries in the field of transportation.
Deputy Prime Minister of Kazakhstan Zhu Mnangagwa Eurasian Economic Union
According to Bloomberg News, in addition to deepening cooperation with China, Kazakhstan also plans to invest tens of billions of dollars to support economic growth. Rumangarin said that the Kazakh government has formulated an infrastructure plan that will invest US $80 billion by 2029. About half of the funds will be used in the energy sector, while the rest will be dedicated to transportation, digital development and water supply projects.
In addition, the state-owned investment company, which is a subsidiary of the Central Bank of Kazakhstan, will receive $1 billion for the first time from the Petroleum Fund to invest in high-tech projects in Kazakhstan through private equity and other mechanisms.
Rumangarin introduced that Kazakhstan plans to inject 1 trillion tenge (about 13.07 billion yuan) into Bayterek State Holding Company, which controls the country's development bank, every year before 2028, so that its annual borrowing capacity will be increased to 7 trillion tenge (91.49 billion yuan). He said, "Our goal is to build a strong development institution on par with top international institutions."
In the field of digital infrastructure, Kazakhstan has allocated $1.7 billion in funding for related construction. Meanwhile, the planned smart city Alatau, a cryptocurrency industry center, is also being prepared.
The Kazakh government estimates that by 2029, the city project will create more than 21,000 jobs. At the beginning of September, at the eighth meeting of the China-Kazakhstan Entrepreneurs Committee held in China, Kazakh President Tokayev revealed that a Chinese construction company would participate in the construction of the project.
China's influence is also reflected in the grand plan of Kazakhstan's automobile industry. Rumangarin specifically mentioned that a factory in the country can currently produce multiple Chinese brand cars, with an annual output of up to 90,000 vehicles; Another factory of South Korea's Kia Group is expected to have an annual production capacity of 70,000 vehicles.
Although oil will continue to play an important role in Kazakhstan’s fiscal revenue, the Global Ratings last month also noted that Kazakhstan’s economic growth will continue to rely on increased crude oil output in the coming years.
"By next year, our economic development will finally no longer be subject to oil. This change is reasonable and necessary," he said. "Oil will still generate considerable income, but its impact on economic growth will no longer be significant."
The official forecast of the Ha Economic Ministry is that the country’s GDP will grow by 6% this year, and the nominal GDP size will hit $300 billion for the first time, but Zhanggalin said his personal goal is to boost the economic growth rate to 6.5% this year whileining a “prudent optimism” for the next three years to keep the growth rate above 5%.
According to Kazakh International News Agency and other August news, the latest forecast data released by the International Monetary Fund (IMF) shows that by current price calculations, Kazakhstan’s per capita GDP (GDP) this year will jump to the top of the former Soviet countries.
Kazakhstan media pointed out that for Kazakhstan, this ranking is not only an important economic achievement, but also marks the acceleration of its development and the further consolidation of its regional position. IMF data show that Kazakhstan has surpassed Russia, which is considered to be the leader of the post-Soviet economy, and Turkmenistan, which is rich in energy resources.
According to the analysis, Kazakhstan's rapid economic growth has benefited from many factors: Kazakhstan has abundant reserves of oil, natural gas, uranium and other mineral resources, and energy and mineral exports are still the main driving force of the economy; At the same time, in recent years, Kazakhstan has continuously promoted the reform of the business environment, attracted more foreign investment, accelerated the pace of infrastructure construction, and played an important role in investment in transportation, logistics, technology and other fields.
In addition, Kazakhstan is strategically located at the intersection of Europe and Asia, and has natural advantages in the regional and global economic structure. Active participation in the "the belt and road initiative" initiative and pragmatic cooperation with partners such as Russia, China and the European Union have further enhanced its economic potential.
While Kazakhstan is in a period of rapid growth, it is not without economic concerns, but analysts believe that the country overall will still maintain a better economic outlook.At the end of July, the IMF forecasted Kazakhstan's economic growth rate this year at 5% and 4.3% in 2026.