Flag of Kazakhstan

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. It 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 (known at the time as Akmola).

The current population of Kazakhstan is 16.7 million people, of which 63 per cent are ethnic Kazakhs. There is also a sizeable Russian community (23 per cent of the population) and smaller communities of Uzbeks, Ukrainians, Uighurs, Tartars and Germans. Kazakhstan’s population is again slowly rising following mass emigration of minorities during the post-independence period. Religious affiliation is split between Islam (70 per cent of the population) and Russian Orthodox (26 per cent) according to 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 Astana that year. As an OSCE observer Australia was represented at the Summit by the Foreign Minister.

Kazakhstan plays an active role in the Northern Distribution Network supply routes for NATO/ISAF forces in Afghanistan and participates in regional stability efforts.

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.

The President is elected by direct vote for a five year term. He 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.

President Nursultan Nazarbayev was first elected in December 1991 and has been Kazakhstan’s only President since independence. Prior to his election in 1991, he was Chairman of the Supreme Soviet of the Kazakh Republic within the Soviet Union. The current Prime Minister is Karim Massimov, who took office on 8 January 2007. In the Presidential election held on 3 April 2011, Nazarbayev gained over 95 per cent of the vote, an increase on the 91 per cent he gained in the last Presidential election in 2005. OSCE observers, whilst seeing improvement on past polls, have stated that the elections failed to meet international standards in transparency and competition in the vote.

During the last Majlis election in January 2012 the President’s party, Nur-Otan, 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.

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.

Kazakhstan is currently the world’s biggest uranium exporter. According to Kazatomprom (the state-owned producer), Kazakhstan has about 19 per cent of the world’s uranium reserves. In 2011 Kazakhstan produced 19,450 tonnes of uranium, around 35 per cent of the global total.

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 on 14 May 2008 and is an active partner nation in the Global Initiative to Combat Nuclear Terrorism.

Economic overview

Kazakhstan’s economy has performed strongly over the last decade, powered by booming energy and mineral exports, and facilitated by some 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. This 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 and forecast growth of 5.9 per cent in 2012. Kazakhstan’s nominal GDP per capita of US$10,694 for 2011, 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.

Kazakhstan has observer status of the World Trade Organisation (WTO), having applied to join in 1996. WTO accession negotiations are continuing. On 1 January 2010 Kazakhstan established a customs union with Belarus and the Russian Federation, which has seen progress towards common tariffs and the eventual removal of internal border controls.

Energy and minerals

Kazakhstan possesses vast reserves of natural resources and fossil fuels, many of which are untapped. Globally, Kazakhstan ranks in the top ten countries for coal, oil, gas, chrome, zinc and bauxite reserves. Kazakhstan possesses about 19 per cent of world uranium reserves, eight per cent of 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. According to the US Department of Energy, Kazakhstan’s oil production in 2011 was 1.6 million barrels per day. Full development of its major oil fields could add a further 1.5 million barrels per day by 2014. Kazakhstan’s sector of the Caspian Sea is believed to hold several other major oil and gas reserves as yet unexploited.

Steadily rising natural gas production has turned Kazakhstan from a net importer to a net exporter over the past few years. 20.2 billion cubic metres of natural gas were produced in 2011, of which 8.1 billion was exported.

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

Agriculture

Given its vast steppe lands able to accommodate both livestock and grain production, agriculture is an important industry for Kazakhstan. Kazakhstan is among the world’s leading wheat producers. 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 2011 wheat production total was 22.7 million tonnes, a new record, due to a bumper harvest and increasing yields. Kazakhstan also achieved increased barley crop production in 2011.

Services and investment

Foreign direct investment in Kazakhstan exceeds US$100 billion. 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 Kazakhstan 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. Ambitions for the China-Europe Highway, expected for completion in 2013, is one such example. Aimed at cutting transit times between Asia and Europe in half, the Kazakh government has committed to building 2787 km of this highway. The project was dubbed ‘the construction of the century’ by President Nazarbayev in his State of the Nation Address on 27 January 2012.

Kazakhstan’s investment promotion agency is Kaznex Invest.

Australia’s relationship with Kazakhstan

Australia is celebrating 20 years of diplomatic relations with Kazakhstan in 2012. Australia established diplomatic relations with Kazakhstan in 1992. Australia opened an embassy in Almaty in 1995, but it closed in 1999 due to resource constraints. Kazakhstan opened a consulate in Sydney in January 1996, but closed in March 2003 for similar reasons.

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. Kazakhstan’s Ambassador to Australia, is resident in Singapore. Kazakhstan has an Honorary Consul in Perth.

Australia’s Ambassador to Germany, Peter Tesch, is Australia’s Special Envoy to Central Asia. Mr Tesch was Australia’s Ambassador to Kazakhstan from 1996 to 1999.

At the 2006 census, 649 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. Ms Aitzhanova is now Minister for Economic Integration.

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 the Speaker of the House of Representatives, Peter Slipper, to Kazakhstan in April 2012. Inaugural Senior Officials Talks were also held in April 2012.

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 in 2011 was worth A$29.4 million. Australia’s exports to Kazakhstan, worth A$22.7 million, consisted principally of live animals, beef, goods vehicles and hand or machine tools. Imports from Kazakhstan, worth A$6.7 million, consisted mostly of pig iron. Some trade is handled through intermediate markets such as Russia, China and the Netherlands.

Australian investment in Kazakhstan totalled A$73 million in 2011. Several Australian companies are active in Kazakhstan, including WorleyParsons, 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 $530 million Macquarie Renaissance Infrastructure Fund (MRIF).

Agriculture is an area of considerable potential for cooperation. The Australian Centre for Plant Functional Genomics in Adelaide is linking with the Kazakhstan Government on wheat and barley genetics. The two parties have signed a memorandum of understanding, which will see 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. There was a successful Australian education road show in Kazakhstan in 2008. The Kazakh Government’s ‘Bolashak’ International Scholarship Program has seen approximately 50 scholarship recipients study in Australia each year since 2007. In 2011 there were 158 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 Astana.

Austrade’s Moscow and Vladivostok offices provide support for trade and two-way investment with Kazakhstan.

Last updated July 2012