Kazakhstan, formally the Republic of Kazakhstan, is a landlocked nation located in northern Central Asia and Eastern Europe. Kazakhstan is the biggest landlocked nation in the world and the ninth largest overall, with an area of 2,724,900 square kilometers (1,052,100 sq mi). Kazakhstan is Central Asia’s economic powerhouse, accounting for 60% of the region’s GDP, mainly via its oil/gas sector. Kazakhstan has enormous mineral resources.
It is bounded by Russia, China, Kyrgyzstan, Uzbekistan, and Turkmenistan, and also shares a significant portion of the Caspian Sea with these countries. Kazakhstan’s landscape is diverse, including flatlands, steppe, taiga, rock gorges, hills, deltas, snow-capped mountains, and deserts. Kazakhstan’s population was projected to be 18 million in 2014. Given its vast geographical area, Kazakhstan has one of the lowest population densities in the world, at fewer than six people per square kilometer (15 people per sq. mi.). Astana is the capital, having been relocated from Almaty, the country’s biggest city, in 1997.
Kazakhstan’s land has traditionally been populated by nomadic tribes. This began to alter in the 13th century, when Genghis Khan conquered the area and incorporated it into the Mongolian Empire. After internal conflicts among conquerors, authority ultimately returned to the nomads. By the sixteenth century, the Kazakh had established themselves as a separate people, split into three jüz (ancestor branches occupying specific territories). In the 18th century, the Russians advanced into the Kazakh steppe, and by the mid-19th century, they officially controlled all of Kazakhstan as part of the Russian Empire. Kazakhstan’s territory has been restructured many times after the 1917 Russian Revolution and subsequent civil war. In 1936, it was incorporated into the Soviet Union as the Kazakh Soviet Socialist Republic.
Kazakhstan was the last Soviet country to declare independence when the Soviet Union disbanded in 1991. Since then, the nation has been led by the current President, Nursultan Nazarbayev, who is described as authoritarian, with a history of human rights violations and repression of political dissent. Kazakhstan has made strenuous efforts to improve its economy, particularly its thriving oil sector. According to Human Rights Watch, “Kazakhstan severely limits freedom of assembly, expression, and religion,” and other human rights groups often criticize Kazakhstan’s human rights status.
Among Kazakhstan’s 131 ethnic groups are Kazakhs (who account for 63% of the population), Russians, Uzbeks, Ukrainians, Germans, Tatars, and Uyghurs. Islam is followed by about 70% of the population, while Christianity is practiced by 26%; Kazakhstan officially recognizes religious freedom, but religious leaders who criticize the government face repression. Kazakh is the state language, but Russian is equally official at all administrative and institutional levels.
Kazakhstan | Introduction
Native Kazakhs, a mingling of Turkic and Mongol nomadic tribes that arrived in the area in the 13th century, were unified as a single country in the mid-16th century. In the 18th century, Russia seized the region, and Kazakhstan became a Soviet Republic in 1936.
Soviet people were urged to assist develop Kazakhstan’s northern pastures with the start of the agricultural “Virgin Lands” program in the 1950s and 1960s. This flood of immigrants (mainly Russians, but also some other deported ethnicities, such as Volga Germans) skewed the ethnic balance, allowing non-Kazakhs to outnumber locals. Many of these immigrants and their descendants have emigrated since the country’s independence.
Kazakhstan today is a neo-patrimonial state marked by significant nepotism and President Nursultan Nazarbayev’s control over political and economic matters. However, in comparison to neighboring Turkmenistan, Uzbekistan, and China, it is not a very autocratic regime, and opposition is seldom fired or imprisoned. Since the country’s independence from the Soviet Union in 1991, the Kazakh government has encouraged international investment in the capital’s development. The discovery of substantial oil and gas deposits, especially in the north and west, has resulted in a considerable amount of riches for the nation, but the money is concentrated in the hands of a few individuals. Nonetheless, Kazakhstan is currently classed as a middle-income nation with a high human development index. Corruption is prevalent in Kazakhstan, although not as prevalent as in other nations in the area.
Current issues include: developing a cohesive national identity; expanding the development of the country’s vast energy resources and exporting them to global markets (an oil pipeline to China has been built; the gas pipeline is under construction); achieving long-term economic growth outside the oil, gas, and mining sectors; and strengthening relations with neighboring states and other foreign countries.
Kazakhstan is one of just two landlocked nations in the world that contains territory on both sides of the Ural River, which is regarded the dividing line with the European continent (the other is Azerbaijan).
Kazakhstan is the world’s ninth-biggest nation and the largest landlocked country, with an area of 2,700,000 square kilometers (1,000,000 square miles) — about the size of Western Europe. Kazakhstan lost some of its land to China’s Xinjiang autonomous region and some to Uzbekistan’s Karakalpakstan autonomous republic when it was a member of the Soviet Union.
It shares borders with Russia of 6,846 kilometers (4,254 miles), Uzbekistan of 2,203 kilometers (1,369 miles), China of 1,533 kilometers (953 miles), Kyrgyzstan of 1,051 kilometers (653 miles), and Turkmenistan of 379 kilometers (235 miles). Astana, Almaty, Karagandy, Shymkent, Atyrau, and Oskemen are among the major cities. It is located between the latitudes of 40° and 56° N, and the longitudes of 46° and 88° E. While Kazakhstan is mostly in Asia, a tiny part of it is also in Eastern Europe, west of the Urals.
Kazakhstan’s geography stretches west to east from the Caspian Sea to the Altay Mountains, and north to south from Western Siberia’s plains to Central Asia’s oases and deserts. The Kazakh Steppe (plain) covers one-third of the nation and is the world’s biggest dry steppe region, covering about 804,500 square kilometers (310,600 square miles). The steppe is distinguished by extensive grasses and sandy areas. The Aral Sea, Lake Balkhashand Lake Zaysan, the Charyn River and canyon, and the rivers Ili, Irtysh, Ishim, Ural, and Syr Darya are among the major oceans, lakes, and rivers.
The climate is continental, with hot summers and cool winters. Precipitation differs between dry and semi-arid environments.
The Charyn Canyon is 80 kilometers (50 miles) long and runs along the Charyn River valley in northern Tian Shan (“Heavenly Mountains,” 200 kilometers (124 miles) east of Almaty) at 43°21′1.16′′N 79°4′49.28′′E. The steep canyon sides, columns, and arches reach heights of 150 to 300 meters. The canyon’s inaccessibility offered a safe refuge for a rare ash tree, Fraxinus sogdiana, which survived the Ice Age and is now growing un other places. Bigach crater, located at 48°30′N 82°00′E, is an 8 km (5 km) diameter Pliocene or Miocene asteroid impact crater that is believed to be 53 million years old.
The current population of Kazakhstan is 15,460,484, according to the US Census Bureau International Database, although UN sources such as the UN Population Division estimate it to be 15,753,460. According to official estimates, Kazakhstan has a population of 16.455 million people as of February 2011, with 46 percent living in rural areas and 54 percent living in urban areas. According to the Kazakhstan Statistics Agency, Kazakhstan’s population increased by 1.7 percent over the previous year in 2013 to 17,280,000.
The 2009 population estimate is 6.8 percent greater than the population recorded in the January 1999 census. The demographic decrease that started after 1989 has been halted and may be reversed. Men make up 48.3 percent of the population, while women make up 51.7 percent.
Ethnic Kazakhs make up 63.1 percent of the population, while ethnic Russians make up 23.7 percent. Other ethnic groups include Tatars (1.3%), Ukrainians (2.1%), Uzbeks (2.8%), Belarusians, Uyghurs (1.4%), Azerbaijanis, Poles, and Lithuanians. In the 1930s and 1940s, Stalin deported to Kazakhstan certain minorities such as Germans (1.1 percent), Ukrainians, Koreans, Chechens, Meskhetian Turks, and Russian political opponents of the government. The country was home to some of the biggest Soviet labor camps (Gulags).
During the Khrushchev period, significant Russian immigration was also associated with the Virgin Lands Campaign and the Soviet space program. In 1989, ethnic Russians made up 37.8 percent of the population, while Kazakhs dominated just 7 of the country’s 20 districts. Prior to 1991, there were about 1 million Germans in Kazakhstan, the majority of them were descendants of Volga Germans transported to Kazakhstan during WWII. Following the disintegration of the Soviet Union, the majority of them moved to Germany. The majority of the Pontian Greek community has moved to Greece. Thousands of Koreans were transported to Central Asia by the Soviet Union in the late 1930s. Koryo-saram is the name given to these people.
Many of the country’s Russians and Volga Germans emigrated in the 1990s, a trend that started in the 1970s. As a result, indigenous Kazakhs have become the biggest ethnic group. Higher birth rates and immigration of ethnic Kazakhs from China, Mongolia, and Russia are also contributing to the growth in the Kazakh population.
According to the 2009 Census, 70% of the population is Muslim, 26% Christian, 0.1 percent Buddhists, 0.2 percent others (mainly Jews), and 0.5 percent did not respond. Kazakhstan is a secular state, according to its Constitution.
Article 39 of Kazakhstan’s Constitution guarantees religious freedom. According to Article 39, “Human rights and liberties must not be infringed upon in any manner.” Article 14 bans “religious discrimination,” and Article 19 guarantees everyone the “freedom to decide and identify or not to declare his/her ethnic, political, and religious membership.” The Constitutional Council recently confirmed these rights by finding that a proposed legislation restricting some people’ religious freedom was unconstitutional.
The majority religion in Kazakhstan is Islam, followed by Orthodox Christianity. After decades of religious repression by the Soviet Union, the arrival of independence saw a rise in ethnic identity expression, partially via religion. The free exercise of religious beliefs and the creation of complete religious freedom resulted in a rise in religious activities. Hundreds of mosques, churches, and other religious buildings were constructed in a few years, and the number of religious organizations increased from 670 in 1990 to 4,170 now.
Some statistics suggest that non-denominational Muslims outnumber denominational Muslims, while others show that the majority of Muslims in the country are Sunnis who adhere to the Hanafi school of thought. This includes ethnic Kazakhs, who make up about 60% of the population, as well as ethnic Uzbeks, Uighurs, and Tatars. Sunni Shafii Islam is practiced by less than 1% of the population (primarily Chechens). There are some Ahmadi Muslims as well. There are 2,300 mosques in Kazakhstan, all of which are connected with the “Spiritual Association of Muslims of Kazakhstan,” which is led by a supreme mufti. Unaffiliated mosques are being forced to shut. Eid al-Adha is a national holiday in Saudi Arabia.
Russian Orthodox Christians make about one-quarter of the population, which includes ethnic Russians, Ukrainians, and Belorussians. Roman Catholics and Protestants are two more Christian denominations. There are 258 Orthodox churches, 93 Catholic churches, and more than 500 Protestant churches and prayer houses in all. Kazakhstan recognizes Russian Orthodox Christmas as a national holiday. Judaism, the Bahá’ Faith, Hinduism, Buddhism, and The Church of Jesus Christ of Latter-day Saints are among the other religious organizations.
Kazakhstan boasts Central Asia’s biggest and most dynamic economy. Kazakhstan’s economy expanded at an average of 8% per year until 2013, before slowing down in 2014 and 2015. Kazakhstan was the first former Soviet republic to repay all of its debt to the International Monetary Fund, 7 years ahead of schedule.
Boosted by high global crude oil prices, GDP growth rates were between 8.9 percent and 13.5 percent from 2000 to 2007, then falling to 1–3 percent in 2008 and 2009 before increasing again in 2010. Kazakhstan’s other significant exports are wheat, textiles, and cattle. Kazakhstan is a major uranium exporter.
In 2014, Kazakhstan’s GDP increased by 4.6 percent. The country’s economic development slowed beginning in 2014, owing to declining oil prices and the impact of the Ukrainian conflict. In February 2014, the country’s currency was devalued by 19%. In August 2015, the currency was devalued by further 22%.
The budgetary position in Kazakhstan is steady. The government has maintained a cautious economic strategy by limiting budget expenditure and conserving oil income in its Oil Fund – Samruk-Kazyna. Kazakhstan was obliged to expand its public borrowing to sustain the economy as a result of the global financial crisis. The public debt rose to 13.4% in 2013 from 8.7% in 2008. Between 2012 and 2013, the government earned a 4.5 percent total budget surplus.
Kazakhstan has been attempting to handle large inflows of foreign money without causing inflation since 2002. However, inflation has not been strictly controlled, reaching 6.6 percent in 2002, 6.8 percent in 2003, and 6.4 percent in 2004.
Kazakhstan was awarded market economy status under US trade law by the US Department of Commerce in March 2002. This change in status acknowledged substantial market economy reforms in the areas of currency convertibility, wage rate setting, foreign investment openness, and government control over the means of production and resource allocation.
Economic stewardship during the Global Financial Crisis
Kazakhstan fared well throughout the global financial crisis by combining fiscal flexibility with monetary stability. In 2009, the government implemented large-scale support measures such as bank recapitalization and assistance for the real estate and agricultural industries, as well as small and medium-sized businesses (SMEs). The overall cost of the stimulus initiatives was $21 billion, or 20% of the country’s GDP, with $4 billion going to banking sector stabilization. Kazakhstan’s GDP fell by 1.2 percent in 2009 during the global economic crisis, although the yearly growth rate later rebounded to 7.5 percent and 5 percent in 2011 and 2012, respectively.
Kazakhstan became the first country in the CIS to obtain an investment grade credit rating from a major international credit rating firm in September 2002. Kazakhstan’s total foreign debt was about $22.9 billion as of late December 2003. The total public debt was $4.2 billion, or 14% of GDP. There has been a decrease in the debt-to-GDP ratio. In 2000, the ratio of total public debt to GDP was 21.7 percent; in 2001, it was 17.5%; and in 2002, it was 15.4 percent. Economic development, coupled with previous tax and banking sector reforms, has significantly improved government financing from a 3.5 percent of GDP budget deficit in 1999 to a 1.2 percent of GDP deficit in 2003. Government revenues increased from 19.8 percent of GDP in 1999 to 22.6 percent of GDP in 2001 before falling to 16.2 percent of GDP in 2003. In an attempt to consolidate these advantages, Kazakhstan implemented a new tax system in 2000.
The Law on Changes to the Tax Code, which lowered tax rates, was passed on November 29, 2003. The value added tax was reduced from 16% to 15%, the social tax was reduced from 21% to 20%, and the personal income tax was reduced from 30% to 20%. On July 7, 2006, the personal income tax was lowered even more to a flat rate of 5% for dividends and 10% for all other personal income. Kazakhstan advanced its reforms by passing a new land law on June 20, 2003, and a new customs code on April 5, 2003.
Energy is the most important economic sector. In 2012, Kazakhstan’s oil and gas basins produced 79.2 million tons of crude oil and natural gas condensate, up from 51.2 million tons in 2003. Kazakhstan increased its oil and gas condensate exports to 44.3 million tons in 2003, a 13% increase over 2002. Kazakhstan’s gas output in 2003 was 13.9 billion cubic meters (491 billion cu. ft), a 22.7 percent increase over 2002, with natural gas production being 7.3 billion cubic meters (258 billion cu. ft). Kazakhstan has about 4 billion tons of known recoverable oil reserves and 2,000 cubic kilometers (480 cu mi) of gas reserves. According to industry experts, increased oil production and the development of new fields would allow Kazakhstan to generate up to 3 million barrels (480,000 m3) per day by 2015, putting the country in the top ten oil-producing countries in the world. Kazakhstan’s oil exports in 2003 were worth more than $7 billion, accounting for 65 percent of total exports and 24 percent of GDP. Tengiz has 7 billion barrels (1.1109 m3) of viable oil reserves; Karachaganak has 8 billion barrels (1.3109 m3) and 1,350 km3 of natural gas; and Kashagan has 7 to 9 billion barrels (1.4109 m3).
In 1998, Kazakhstan launched an extensive pension reform initiative. The pension assets were about $17 billion as of January 1, 2012. (KZT 2.5 trillion). The nation has 11 saving pension funds. The sole state-owned fund, the State Accumulating Pension Fund, was privatized in 2006. The pension funds are overseen and regulated by the country’s unified financial regulatory body. The increasing need for quality investment outlets by pension funds has accelerated the growth of the debt securities market. Pension fund money is nearly entirely invested in business and government bonds, including Kazakhstan government Eurobonds. Kazakhstan’s government is considering establishing a single national pension fund and transferring all accounts from private pension plans to it.
Kazakhstan’s financial sector is quickly expanding, and its capitalisation already surpasses $1 billion. In its effort to improve the banking industry, the National Bank has implemented deposit insurance. The banking industry is still in jeopardy due to problematic and non-performing bad assets. RBS, Citibank, and HSBC are among the main international banks with branches in Kazakhstan. Both Kookmin and UniCredit have lately entered Kazakhstan’s financial services sector via acquisitions and stake purchases.
Kazakhstan was rated 72nd in the world in terms of economic competitiveness in the 2010–11 World Economic Forum Global Competitiveness Report. One year later, Kazakhstan was rated 50th in the most competitive markets by the Global Competitiveness Report.
Kazakhstan received $14 billion in foreign direct investment inflows in 2012, with a 7% growth rate, making it the most appealing location to invest among CIS countries.
Kazakhstan’s fixed investment rose by 7.1 percent in the first half of 2013 compared to the same period in 2012, reaching 2.8 trillion tenge ($18 billion US dollars).
According to human-rights activist and lawyer Denis Jivaga, there is a “oil fund in Kazakhstan, but nobody knows how the money is used,” according to Aftenposten in 2013.