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Kazakhstan

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Kazakhstan country brief

General

Kazakhstan is the largest of the Central Asian Republics and the ninth-largest country in the world, covering some 2.7 million square kilometres. Kazakhstan is bordered by Russia to the north, the Caspian Sea to the south-west, Turkmenistan, Uzbekistan and the Kyrgyz Republic to the south, and China to the east.

Kazakhstan gained its independence from the former Soviet Union on 16 December 1991. In 1998, the capital was moved from the south-eastern city of Almaty to the northern city of Astana. On 23 March 2019, the capital was renamed 'Nur-Sultan' in honour of the previous President of 30 years, Nursultan Nazarbayev.

The current population of Kazakhstan is 18.4 million people, of which 68 per cent are ethnic Kazakhs. There is also a sizeable Russian community (19 per cent of the population) and smaller communities of Uzbeks, Ukrainians, Uighurs, Tartars and Germans. Religious affiliation is split between Islam (70 per cent of the population) and Russian Orthodox (26 per cent) according to a 2009 census.

The national language, Kazakh, is a Turkic language and is thus akin to the Kyrgyz, Uzbek, Tatar, Turkmen and Uighur languages spoken across Central Asia. Kazakh has a well-established community of speakers in Kyrgyzstan and Tajikistan as well as in Mongolia, China and Iran. It can be written in Cyrillic, Latin or Arabic script. Russian is extensively used for administrative and technical purposes, and is still a first language for a significant proportion of the population.

Kazakhstan is a member of numerous multilateral organisations including the United Nations (UN), Organisation of Islamic Cooperation (OIC), Shanghai Cooperation Organisation (SCO), North Atlantic Cooperation Council (NACC), Commonwealth of Independent States (CIS), Collective Security Treaty Organisation (CSTO) and the Organisation for Security and Cooperation in Europe (OSCE). It was the OSCE Chair in 2010, holding the first OSCE Summit for 11 years in Nur-Sultan that year. Kazakhstan joined the World Trade Organization on 30 November 2015 and in June 2016; Kazakhstan became a non-permanent UN Security Council member for the 2017-18 year, becoming the first state in the Central Asia region to be selected.

Political overview

Kazakhstan is a presidential republic where power rests almost entirely with the President. Kazakhstan has had two constitutions since independence. The first gave the President wide-ranging powers. The second, approved by referendum in 1995, further strengthened the President's role by abolishing the position of Vice-President. Kazakhstan's constitution provides for a Prime Minister and a deputy Prime Minister, both appointed by the President.

The President is elected by direct vote for a five-year term. The President appoints the Prime Minister and the First Deputy Prime Minister. The Parliament consists of a Senate (upper house) and the Majlis (lower house). There are 47 members of the Senate, 15 of whom are appointed by the President. The other members are popularly elected by proportional representation. The Majlis comprises 107 seats. Members are popularly elected to serve four-year terms.

Nursultan Abishuly Nazarbayev was first elected in December 1991 and remained as Kazakhstan's President from independence until 20 March 2019, when Kassym-Jomart Tokayev was elected second President of Kazakhstan. Prior to his election in 1991, Nazarbayev was Chairman of the Supreme Soviet of the Kazakh Republic within the Soviet Union. The current Prime Minister is Askar Mamin, who took office on 25 February 2019. President Tokayev is a former diplomat and fluent in Chinese, English, Russian and French. In his role as Foreign Minister Tokayev advocated strongly on nuclear non-proliferation issues. He served as Prime Minister from 1992-2002. President Tokayev returned to political life in 2008 when he was elected to Kazakhstan's Senate. Tokayev served as Director-General of the United Nations Office at Geneva from 12 March 2011 to 16 October 2013.

Elections in Kazakhstan are held every five years on a national level to elect a President and the Parliament (the upper and lower Houses). Local elections for local representative bodies (Maslikhats) are also held every five years. Federal elections are administered by the Central Election Commission of the Republic of Kazakhstan. Politics in Kazakhstan is dominated by the Nur-Otan Party. During the Majlis (lower house) election in January 2012, Nur-Otan Party, won 81 per cent of the vote. Two other parties closely aligned with Nur-Otan won seats, making this Kazakhstan's first multi-party parliament. Most recently In June 2019, the Nur-Otan Party won 71 per cent of the vote and Dania Espaeva (Ak Zhol Party) became the first female presidential candidate in Kazakhstan history.

Nuclear disarmament and energy

Kazakhstan allowed the destruction of the 1,300 nuclear warheads it inherited following the collapse of the USSR. All of Kazakhstan's nuclear facilities are now under International Atomic Energy Agency (IAEA) safeguards. Kazakhstan signed the Additional Protocol to its Safeguards Agreement with the IAEA in 2004; this entered into force in 2007.

According to the World Nuclear Association, Kazakhstan has 12 per cent of the world's Uranium reserves and in 2009 became the world’s leading Uranium producer with almost 28 per cent of global production. By 2018, Kazakhstan had increased its share to 41 per cent of global production, and in 2019 had increased total output to around 22,800 tonnes.

Like Australia, Kazakhstan had nuclear weapons tested in its territory (home to the infamous Semipalatinsk Test Site), and takes an active approach to nuclear disarmament and non-proliferation. Kazakhstan is a party to the Nuclear Non-Proliferation Treaty (NPT), the Comprehensive Test Ban Treaty (CTBT) and the Central Asian Nuclear Weapon Free Zone (CANWFZ). Kazakhstan ratified the International Convention on the suppression of Acts of Nuclear Terrorism and is an active partner nation in the Global Initiative to Combat Nuclear Terrorism. In 2015, Kazakhstan was formally recognised by the Australia Group as adhering to the Australia Group's guidelines, intended to counter the spread of technologies and materials used for chemical and biological weapons. During its role as Security Council member, Kazakhstan advocated strongly for nuclear non-proliferation.

Economic overview

Kazakhstan's economy performed strongly from 2001 to 2007, powered by booming energy and mineral exports, and facilitated by economic reform, foreign investment and (mostly) good harvests. According to the International Monetary Fund (IMF), Kazakhstan sustained an average annual GDP growth of 9.7 per cent per annum from 2001 to 2007. However, this solid growth slowed during the Global Financial Crisis to only 1.2 per cent in 2009. A strong recovery saw the IMF report growth of 7.5 per cent in 2011, 5.1 per cent in 2012 and 5 per cent in 2013. Largely as a result of low oil prices and external pressures caused by the economic situation in Russia and the devaluation of the Russian rouble, growth declined to 2 per cent in the final quarter of 2015. Kazakhstan's nominal GDP per capita of US$10,450 for 2019, still far exceeds that of its Central Asian neighbours and is comparable to Russia's.

For historical and geographic reasons, including its natural resources, Kazakhstan's economy is closely tied to that of Russia, which remains its largest import partner. Russia continues to lease some 6,000 sq. km of Kazakh territory around the Baikonur Cosmodrome space facility, where Sputnik I was launched in 1957. The cosmodrome is in active use and its lease has been extended to 2050. Kazakhstan, however, is also becoming closely integrated with China, which became its largest export partner in 2011. Together with Russia, Belarus, Armenia and Kyrgyzstan, Kazakhstan is also a member of the Eurasian Economic Union, a customs union intended to facilitate greater economic integration in the region.

Kazakhstan's application to join the World Trade Organization was accepted by the WTO Governing Council in June 2015 and its formal membership began on 30 November 2015.

Energy and minerals

In addition to uranium, Kazakhstan possesses vast reserves of natural resources and fossil fuels, many of which are untapped. Globally, Kazakhstan has the 12th largest proven oil reserves and 14th largest natural gas reserves, and ranks in the top ten countries for coal, gold, chrome, zinc, lead and bauxite reserves. Kazakhstan possesses eight per cent of the world's zinc, seven per cent of manganese and four per cent of iron ore. In production terms, however, the Kazakh mining industry remains far from realising its full potential. Kazakhstan's daily oil production in 2016 was 1.6 million barrels, of which 73 per cent were exported. Kazakhstan's sector of the Caspian Sea is believed to hold several other major oil and gas reserves as yet unexploited.

Oil exporting capacity was substantially enhanced in 2001 with the opening of a pipeline from Kazakhstan to Novorossiysk, a Russian port city on the Black Sea. Kazakhstan's oil is also exported across the Caspian Sea to join the Baku-Tbilisi-Ceyhan pipeline. In late 2005 a pipeline to China was opened. New pipelines are also being planned across the region.

In addition to oil, steadily rising natural gas production has turned Kazakhstan from a net importer to a net exporter, mostly to Russia and China.

Kazakhstan's industrial sector is heavily reliant upon mining and mineral processing and on related activities such as the production of mining and engineering equipment.

Agriculture

Given its vast steppe lands are able to accommodate both livestock and grain production, agriculture is an important industry for Kazakhstan. Kazakhstan is a major wheat producer. Its main export markets are its Central Asian neighbours, Iran and Turkey; although in recent years it has begun exporting to China, South Korea and Japan. The US Department of Agriculture estimated that Kazakhstan's 2019/20 wheat production total was 14 million tonnes.

Services and investment

Foreign direct investment in Kazakhstan exceeded US$129 billion in 2014. Attracting further investment is integral to the Kazakhstan Government's plans to diversify the economy- especially in areas like non-ferrous metals production which complement its energy endowment- and to develop industrial clusters to promote synergies in sectors of comparative advantage.

As the Kazakhstani Government implements its transport development strategy, opportunities may emerge for Australian business in infrastructure development and financing. Valued at over US$30 billion, the strategy involves redevelopment of highways, railroads, airports and port facilities. The China-Europe 'New Silk Road' railway line is one such example. The rail link means that freight can travel from Germany to South-Eastern China in just 15 days. Kazakhstan's investment promotion agency is Kazakh Invest.

Australia's relationship with Kazakhstan

Australia opened an embassy in Almaty in 1995, but it closed in 1999 due to resource constraints. Kazakhstan opened a Consulate-General in Sydney in 2015.

Australia's Ambassador to Kazakhstan is resident in Moscow, and makes regular visits to Kazakhstan. In January 2005, Australia established an Honorary Consulate in Almaty (the position is currently vacant). Kazakhstan's Ambassador to Australia, is resident in Singapore. Kazakhstan has a Consulate-General in Sydney and has Honorary Consuls in Perth and Melbourne.

According to the Australian Bureau of Statistics, as of 2019, 2,310 Australian residents declared they were born in Kazakhstan.

A number of high-level visits have taken place between Australia and Kazakhstan. Kazakhstan's then Prime Minister, Sergey Tereshchenko, visited Australia in 1993; then Governor General of Australia, Bill Hayden, visited Kazakhstan in 1994; President Nazarbayev visited Australia in 1996. Zhanar Aitzhanova, then Vice-Minister of Industry and Trade, led a trade and agriculture delegation to Australia in 2008.

Former Foreign Minister, Kevin Rudd, visited Astana in December 2010 to attend the OSCE Summit held whilst Kazakhstan was Chair of the organisation. He returned in June 2011 for the OIC Foreign Minister's meeting in Astana. Australia sent a parliamentary delegation, led by then Speaker of the House of Representatives, Peter Slipper, to Kazakhstan in April 2012. Senior Officials Talks were also held in Canberra in 2015. Then Parliamentary Secretary to the Treasurer, the Hon Steven Ciobo MP, visited Nur-Sultan to attend the 47th Asian Development Bank Annual meeting in May 2014.

The two Governments signed an Agreement on Economic and Commercial Cooperation, which came into force on 2 June 2004. The agreement aims to facilitate trade, investment and economic cooperation between the two countries. As part of Kazakhstan's WTO accession process, Australia concluded a bilateral market access agreement on goods and services with Kazakhstan in 2008.

Commercial relationship

Kazakhstan is Australia's leading trading partner in Central Asia, however, the level of trade between Australia and Kazakhstan remains modest. Two-way merchandise trade with Kazakhstan in 2018-19 was worth A$28.5 million. Australia's exports to Kazakhstan, worth A$21 million, consisted principally of manufactured goods. Imports from Kazakhstan, worth A$7.5 million, consisted mostly of Copper and Pig-iron. Some trade is handled through intermediate markets such as Russia, China and the Netherlands.

Australian investment in Kazakhstan totalled A$81 million in 2018. Several Australian companies are active in Kazakhstan, including Worley Parsons, Iluka Resources, Orica, Ausenco, Jupiter Energy, Gloria Jean's Coffees, Rio Tinto and the Snowy Mountains Engineering Corporation (SMEC). In addition Macquarie Group has an interest in Kazakhstan through its $630 million Macquarie Russia & CIS Infrastructure Fund (MRIF).

In October 2015 Austmine (the peak industry body in Australia for the mining equipment, technology and services sector) and Kazakhstan's Association of Mining and Metallurgical Enterprises (AAME), signed a Memorandum of Understanding that will provide a framework for industry to industry collaboration in future.

Agriculture is an area of considerable potential for cooperation. The Australian Centre for Plant Functional Genomics in Adelaide have signed a memorandum of understanding, which has witnessed greater collaboration between Australian and Kazakh scientists working on drought, salinity and nutrient deficiencies and toxicity affecting cereal crops in both countries.

Opportunities exist for Australia to increase its share of the education market in Kazakhstan. The Kazakh Government's 'Bolashak' International Scholarship Program has seen approximately 75 scholarship recipients study in Australia each year since 2007. In 2015 there were 108 Kazakh nationals enrolled to study in Australia. In Kazakhstan, the Melbourne School of Engineering (University of Melbourne) has been involved in course development at Nazarbayev University in Nur-Sultan, and academics from other Australian universities have undertaken short-term teaching placements. Kazakhstan hosted Expo 2017 in Astana, with the theme of "Future Energy". The event focused on innovative ways to assist the growth of green energy and green economy industries.

Austrade's Moscow office provide support for trade and two-way investment with Kazakhstan.

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