Kazakhstan: The Story So Far
We should all cast our eyes to Kazakhstan. In 2002, it became the first former Soviet republic to be designated investment grade. We can see why. Kazakhstan’s economy grew by 4.6% in 2014. The country has a well-educated workforce, with 99.8% literacy among the population. Unemployment remains relatively low at 3.9%. With a GDP of over $200bn, Kazakhstan is the most economically successful of the Central Asian countries.
This is no coincidence. The country has strong and long-standing economic ties with some of the world’s most extensive and dynamic economies. China alone accounts for 22.7% of Kazakhstan’s exports, while Russia and Germany account for 8% each. The openness of Kazakhstan’s economy is the reason for this. The country boasts many free trade agreements, including with the United States and Russia. The agreement with the European Union has seen 40% of Kazakhstan’s exports head to these countries.
The United Kingdom has long been a strong economic partner for the country. Since 1991, the UK has invested more than $15bn in Kazakhstan. In 2012, exports from the UK to Kazakhstan were worth over half a billion dollars. This relationship continued in 2013, with the visit of Prime Minister David Cameron. He was accompanied by a delegation of thirty British businesses, determined to benefit from Kazakhstan’s growing economy. These companies brokered deals worth over $1bn with various Kazakh companies and government authorities.
Kazakhstan’s national currency ‘the Tenge’
In Kazakhstan the oil industry is the main driver of the economy, and it has already seen substantial foreign investment. BG Group and Shell have long operated in the country, and in 2013, British drilling company Dando Drilling International entered into a joint venture with the Kazakhstan government. Oil may be the strongest sector, but the government have been expanding the economy’s horizons. A targeted diversification drive has seen investment in areas as wide as transport, telecommunications, minerals, and pharmaceuticals. These emerging sectors are already enticing foreign investors. SUN Gold Ltd increased its investment stake in a gold mine to $400m. Surrey Satellite Technology signed a deal to further develop Kazakhstan’s satellite programme.
Kazakhstan’s economic outlook and international economic engagement is strong. Its rapidly growing economy will ensure that it will see increasing levels of investment over the next few years. When the annual International Exposition, Expo 2017, arrives in the capital Astana, the eyes of the world will be on Kazakhstan, and with good reason. With Kazakhstan poised to become a high-income economy before the end of the decade, it surely is one to watch.
If you like this article you may be interested in “The 21st Century Silk Road: What You Need To Know”.