Well-timed market reforms, active foreign trade and investments are the basis for steady economic growth in Kazakhstan. Kazakhstan is implementing its own model of economic reforms on the basis of the presence of rich natural resources, the need to create a number of the forms of ownership and economic entities, a more rational use of the scientific-technical and production capabilities. Non-state sector of the economy - stock companies, cross-sectoral and foreign economic associations, corporations and consortia - are actively developing.

Economy of Kazakhstan is growing rapidly. During the years of independence the past decade witnessed the country's GDP increase by more than 10 times. The share of GDP per person has grown by 17 times - from $700 to $12 000. The Republic is among the world leaders in terms of development. The state reserves contain more than $80 bln. According to the assessment of British observers, Kazakhstan is ranked 3rd among the 25 most dynamic economies of the 21st century, following only China and Qatar. GDP growth in Kazakhstan for 6 months of 2012 was 5,6%. According to the Statistics Agency, the production growth was observed in 13 regions of the country. The government expects growth of Kazakhstan's GDP in 2013 will amount to 5-6%. In the ranking of Doing Business-2016 (countries are ranked according to favor of doing business from 1 to 183 places), Kazakhstan currently is taking the 41st place. Therefore, Kazakhstan is a leader among the CIS countries.

Economic geography

 

Kazakhstan consists of 5 major economic areas. Agriculture, mining of iron ore and coal, machinery, petroleum products and alloys, energy are developed in the north. Non-ferrous metals, energy, machinery and forestry dominate in East Kazakhstan. Western Kazakhstan is the largest oil and gas producing region not only in Kazakhstan but also in the CIS. Basic branches of Central Kazakhstan are ferrous and non-ferrous metallurgy, machinery, and cattle breeding. Cotton, fruits, vegetables, and important non-ferrous metallurgy, instrument, light and food industries, fisheries and forestry grow in Southern Kazakhstan. Accommodation of industry is attracted to mineral deposits, large cities and water resources.


Investments

 

According to the World Bank, Kazakhstan is among the top 20 countries in the world, the most attractive for investment. The amount of foreign direct investments attracted to the economy of Kazakhstan during the years of independence, reached $170 bln. The volume of foreign investments in Kazakhstan for the period from January to April 2014 is amounted to 171.8 billion tenge. Investment attractiveness of Kazakhstan market provides a set of access to natural resources, the stable growth of the market, the strategic location of the country and a stable political situation. Now priority areas for investment are fuel and energy, agriculture, infrastructure, including transport, telecommunications and financial sectors.


Export - Import

 

At the moment the export potential of Kazakhstan has a clear raw material dependence and is formed due to the fuel, metallurgical and chemical industries.

In the structure of Kazakhstan's exports are:
- oil and oil products - 35%
- non-ferrous metals - 17%
- ferrous metals - 16%
- ore - 12%
- cereals - 9%
- other - 11%

The main imported products are machinery and equipment, vehicles, appliances and machines, chemical products, mineral fuel and food. The structure of Kazakhstan's exports and imports undergoes a change in the direction of diversification of business relations every year. However, the share of trade with traditional partners - the countries of the CIS and Baltic countries - still high, accounting for about 59% of exports and 63% of imports. The main trade partner of Kazakhstan is Russia. The commercial relations successfully develops with such countries as China, Turkey, Belarus, Germany, Switzerland, Czech Republic, Italy, USA, UK, South Korea and others.

In July 2010, the Customs Union of Belarus, Kazakhstan and Russia was launched. Customs Union creation boosts economic development, and as experts say, can give an additional 19% to the GDP of the participating countries in 2015.


Hydrocarbons

 

Kazakhstan has 15 sedimentary basins in total, where commercial production of hydrocarbons is carried out only in 5 of them: the Caspian, South Mangyshlak, Ustyurt-Buzashinsk, South Torgay and Chu-Sarysu. Over 100 deposits of hydrocarbons are being developed within these basins, and over 65% of the recoverable oil reserves and 70% of free gas are involved in the operation accounted by the State.

Oil production in Kazakhstan is one of the most important items of revenue in the state budget. The Republic of Kazakhstan is in the 9th place in the world on confirmed oil reserves. The first Kazakh oil was produced from the Karashangul field over a 100 years ago in 1899. Dynamics of production since independence is impressive. If in 1992, it was produced 25, 8 million tons, then on January-September 2012 it was accounted for 49.155 million tons of crude oil. The growth in the industry is due to the discovery of the Kashagan field, increase of reserve estimates at Tengiz and major work of the overall geology of Kazakhstan.

Recoverable oil reserves are concentrated in 13 major fields (91%), including two mega-fields (69%) - Tengiz and Kashagan. These prospective deposits are distributed extremely uneven in the territory of the state. All of the major oil fields (along with small and medium) are located in the west of Kazakhstan, while most of the fields of south of the country belong to medium and small. Thus, the eastern, northern and central regions of Kazakhstan do not have a resource hydrocarbon potential.

The explored reserves of oil fields accounted for 6,5 billion tons, while the predicted reserves, according to experts, are estimated at 25 billion tons. According to reports from the Ministry of Oil and Gas of the Republic of Kazakhstan, the recoverable reserves of "black gold" will last for 50-60 years with the annual growth in production and rising to 120 million tons per year by 2020.

The oil industry in the Republic is represented by numerous companies. The largest national oil and gas company is "KazMunaiGas" which is engaged in a full production cycle: exploration, production, refining and transportation. Currently companies from 45 countries invest in subsurface mineral complex of Kazakhstan, including the Corporation of the USA, the Netherlands, Great Britain, France, Italy, Canada, China, Japan, Russia, Switzerland, Liberia and other. 75% of investment is directed for the development of hydrocarbon fields.

"Lukoil" and "Rosneft” are the largest Russian oil companies in this sector. “Chevron”, “Eni”, “Exxonmobil” and “Total” take a significant share in the oil industry of Kazakhstan among foreign Western companies. Local refining industry is represented by 3 refineries located in Pavlodar, Shymkent and Atyrau. The combined capacity is about 20 million tons of oil per year. Among the potential projects in the oil industry of the Republic of Kazakhstan, Kashagan takes the most important place. Kazakhstan intends to enter the top 5 oil-producing countries in the world according to the amount of production at Kashagan. Kashagan, discovered in 2000, has quickly become one of the largest in the world. Another important project is the development of the Kurmangazy field, also a large work at the Aral Sea is conducted.

Proven gas reserves total to 3,9 trillion cubic meters in Kazakhstan. The share of Kazakhstan in the world's proven reserves of hydrocarbons in oil is 3,2% (approximately 5 billion tons), 1,5% of gas (about 2 trillion cubic meters). In this case, probable reserves of gas – 6 trillion cubic meters and 1,8 billion tons on condensate.

The future of the oil and gas industry of the country is mainly connects with the Kazakhstan sector of the Caspian Sea. State programme for its development, adopted in 2003, covers the full range of gradual measures for subsurface management, the investment attracting, the development of social programmes in the regions and local infrastructure, efficient field development with a view to minimizing damage effects on the environment, construction of transport of export routes for oil and gas and others. Implementation of this programme will increase the annual production of oil in the Caspian Sea already in 2015 up to 90 million tons from 2015; will provide annual oil output to 100 million tons over the next 25 years. Given the current global imbalance between the level of oil production and consumption, Kazakhstan has good potential to increase the volume of its annual oil production and consequently the export of hydrocarbons to world markets.


Ferrous metallurgy

 

Kazakhstan ranked 8th in the world on stocks of iron ore. Its share of world reserves amounts to 6%. 73,3% are easy minable from 8,7 billion tons of proven reserves of iron ore. More than 70% of the country of iron ore is exported.


Non-ferrous metallurgy

 

Non-ferrous metals have always played a significant part among the other industries in Kazakhstan. A wide range of commodities, including 25 kinds of nonferrous, rare, scattered and precious metals are being produced in Kazakhstan. Copper, lead, zinc, titanium, magnesium, rare and rare earth metals are being mined and produced. Kazakhstan is one of the world's largest producers and exporters of refined copper, and is the 3rd in the CIS as a producer of gold, mining and production increases every year. Over 170 gold deposits are registered in the country. The main non-ferrous metallurgies in Kazakhstan are copper, lead, zinc and recently released aluminum and titanium. Each of these sectors has important interstate and is presented by mines and quarries, processing plants and factories, which together often form large complexes. Such form of non-ferrous metals production in Kazakhstan connected with the features of their ores, low assay of pure metal (from 1 to 5 - 6%), while the scattered metals less than 1%.

Mining and smelting of copper concentrate in the central and eastern parts of the country. The largest enterprises in the copper industry are Balkhash and Zhezkazgan mining and metallurgical plants, they work on the Kounrad, Sayaka and Zhezkazgan copper ores. Small-capacity smelters are Irtysh in the Glubokoe village near Ust-Kamenogorsk and Karsakpay, near Zhezkazgan. Lead-zinc or polymetallic industries are developed in eastern and southern Kazakhstan. Altai features the Leninogorsk - oldest center of the industry - and the latest Ust-Kamenogorsk. They use lead and zinc concentrates of local processing plants. Shymkent lead plant on ore deposits of the Karatau Mountains works in the south of the republic. The main centers of base metal industry are also Tekeli in the south-east and Zhairem in central Kazakhstan.

New sectors of non-ferrous metallurgy in Kazakhstan, which are aluminum and titanium, began to develop in the country since the middle of 60's. The smelting of energy-intensive metals is produced in Pavlodar and Ust-Kamenogorsk, where there are large thermal and hydroelectric power plants which produce a lot of cheap electricity, as the melting of one ton of aluminum requires 1820 kWh of electricity, while the smelting of titanium and magnesium much more.


Chemical industry

 

Chemical and petrochemical industry of the country produce plastics, chemical fibers and threads, tires for cars and agricultural machinery, a wide range of rubber products, chromium compounds, calcium carbide, caustic soda and other.


Agriculture

 

Agriculture is an important sector of the economy. Climatic conditions are favorable for the cultivation of spring wheat, oats, barley and other grains, as well as it allows to develop vegetable, melon and cultivate a number of commercial crops - sunflower, flax, tobacco and other in northern Kazakhstan. In the south of the republic, in the foothill and river valleys, where there is a lot of heat, artificial irrigation gives high yields of cotton, sugar beets, yellow tobacco, rice, fruit orchards and vineyards. Grain production in Kazakhstan is on the 3rd place in the CIS after Russia and Ukraine. Natural conditions of Kazakhstan cause considerable potential for the development of cattle breeding. The country has traditionally engaged in sheep, horse, camel, cattle breeding.


Transport

 

Geographical location of Kazakhstan in the center of Eurasian continent predetermines its significant transport capacity in transit. The length of ground transportation routes of the Republic is 106 000 kilometers. 13 500 km of these are railway lines, as 87 400 km are superhighways of public service with hard surface, 4 000 km are river road. Sea shipping is realized in the Caspian Sea (the Aktau port, Bautino port) with way out through the waterways of Russia on the Black Sea and the Baltic Sea. The national airline "Air Astana" mastered routes in Kazakhstan, countries of CIS and foreign countries. Such leading foreign companies, as “British Airways”, “Lufthansa”, “KLM”, “Transaero”, “Turkish Airlines” and other ones work in the country.