Kazakhstan Business & Economy - The Times Of Central Asia

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Innovation Rankings

Central Asia in the Global Innovation Rankings: Supercomputers, Engineers, and the Economics of Government Ambitions

In the Global Innovation Index (GII), published on September 29 by the World Intellectual Property Organization (WIPO), Kazakhstan climbed eight places to rank 73rd among 139 economies. Uzbekistan ranked 77th and Kyrgyzstan 92nd. Tajikistan placed 112th, while Turkmenistan was not included in the study. The overall rankings, however, conceal some interesting details. Uzbekistan ranks second worldwide in the share of graduates in science and engineering. Kyrgyzstan ranks second in labor productivity growth, while Tajikistan leads in utility model applications relative to the size of its economy. Utility models are a simpler form of patent protection, usually for smaller inventions. Such strong results in individual indicators stand in contrast to the countries' relatively modest overall rankings. Part of the explanation lies in the study's methodology. WIPO evaluates education and scientific capacity alongside infrastructure and investment. It also considers business activity and research output. A country may train large numbers of engineers or register technical innovations while lagging in research output and investment, with limited commercial activity. For Central Asia, the rankings also offer a way to compare economic performance with the scale of governments' technological ambitions. Kazakhstan: Supercomputers in Search of Customers In recent years, Kazakhstan has assembled an impressive portfolio of digital projects. The Alem.Cloud and Al-Farabium supercomputers, along with the Data Center Valley project in Ekibastuz, are intended to improve the country's computing infrastructure. The Alem.ai artificial intelligence (AI) center and the KazLLM and AlemLLM large language models are designed to develop its AI capabilities. Training opportunities are also expanding through AI-Sana and Tomorrow School, with TUMO Astana offering education in AI and other digital fields. However, the wider use of AI remains relatively modest. The Digital Qazaqstan strategy through 2029 cites figures for the second half of 2025 showing that generative AI adoption in Kazakhstan stood at 13.7%, compared with a global average of 16.3%. Kazakhstan ranked 24th in the United Nations (UN) E-Government Development Index in its 2024 survey but 73rd in the 2026 GII. Kazakhstan's digitalization model has long centered on government services. The country's high position in the UN study reflects this focus. Commercial technologies present a more complicated picture: here, the government must rely on research teams, private developers, investors, and customers willing to pay for their services. The arrival of supercomputers expands the country's technical capabilities. How extensively they will be used outside government projects remains to be seen. Uzbekistan: Engineering Education and IT Services Exports The country has long focused on workforce development for the IT industry. An export-oriented digital services sector is growing around IT Park. Foreign companies are operating in the country, while training programs in programming and AI are expanding. Tashkent intends to support its workforce development policies with domestic computing infrastructure. Under the AI development strategy adopted in 2024, Uzbekistan plans $50 million in AI infrastructure spending and the training of one million specialists. AI laboratories are also planned at 15 universities. A smaller supercomputer is already operating, and preparations are underway to acquire a more powerful system....

Nuclear Power Plant

IAEA Helps Kazakhstan Prepare for Nuclear Infrastructure Review

Kazakhstan is preparing for an international review of its nuclear infrastructure as it moves ahead with plans to build its first nuclear power plant. Experts from the International Atomic Energy Agency (IAEA) are meeting with Kazakh officials in Astana from October 12 to 15 to help prepare a self-assessment report ahead of a full Integrated Nuclear Infrastructure Review (INIR). According to Kazakhstan’s Atomic Energy Agency, the country is in the second phase of preparations for developing nuclear power under the IAEA’s methodology. At this stage, Kazakhstan must establish the legal, technical, and organizational framework needed to build its first nuclear power plant. The review covers 19 areas, including safety, regulation, financing, and workforce training. Kazakhstan’s first nuclear power plant will be built near the village of Ulken on the shore of Lake Balkhash, approximately 400 kilometers from Almaty. The project calls for two reactors with a combined capacity of 2.4 gigawatts. According to the latest estimates, commissioning could begin in 2037–2038. Preparatory work at the site began in the summer of 2025. The project is being led by a consortium headed by Russia’s state nuclear corporation Rosatom, which signed a construction contract in September 2026. Kazakhstan also plans to build two additional nuclear power plants. China National Nuclear Corporation (CNNC) has been selected as the partner for both projects. Their technical specifications and construction timelines have yet to be determined.

Artificial Intelligence

Kazakhstan’s AI Strategy: Eurasia’s Emerging Digital Power

Astana hosted AI & Digital Bridge 2026 on October 1–3, and NVIDIA founder and CEO Jensen Huang is scheduled to visit the capital on October 23 for a fireside chat with Zhaslan Madiyev, Kazakhstan’s Deputy Prime Minister and Minister of Artificial Intelligence and Digital Development. Speaking to The Times of Central Asia earlier this month, Madiyev described a strategy that goes beyond building data centers. Kazakhstan’s digital development builds on capabilities it already has (a mature digital-government system, an established energy and industrial base, cross-border fiber and data-transit infrastructure, and a growing technology sector) to move beyond carrying data and exporting raw materials toward processing more data and producing more technology at home. The push aligns with President Kassym-Jomart Tokayev’s call for Kazakhstan to become a fully digital nation, with artificial intelligence (AI) integrated across the economy. Digital Services and Startup Growth Madiyev began with what Kazakhstan already does, describing the country as known for advanced government technology, or GovTech. He cited Kazakhstan’s 24th-place ranking in the United Nations E-Government Development Index. More than 90% of public services are available online, around 90% of transactions are cashless, and approximately 40 personal documents have been digitized, he said. Digital documents have the same legal standing as physical ones, allowing people to use their phones when traveling, visiting banks, or accessing government services. An important part of that development was opening the government’s digital platform to banks rather than keeping public services within a single government application. Banks including Kaspi, Halyk, and Freedom can integrate those services into platforms customers already use, helping expand adoption and making services easier to access. Madiyev cited vehicle purchases and re-registration completed through an application in three to five minutes, mortgage approvals within a day, and a digital process that helps mothers register newborns and receive eligible benefits directly into their bank accounts. The aim is to organize services around people’s life events, with one completed process triggering the next rather than requiring separate applications to different institutions. He also pointed to Astana Hub, which has more than 2,500 registered startups and information technology (IT) companies exporting services to more than 100 countries. Its network extends across Kazakhstan and into Silicon Valley, Shanghai, and Dubai, with further expansion planned in Southeast Asia and Europe. Those overseas locations provide working space, access to investors, and acceleration programs to help companies enter international markets. A venture fund-of-funds, predominantly financed by the private sector and standing at approximately $115 million at the time of the interview, is intended to increase the financing available to regional startups. Madiyev said companies may need to raise capital six or seven times on the way to becoming unicorns, making access to successive funding rounds important. Connectivity That Serves the Region Kazakhstan already carries international traffic. Kazakhtelecom’s 2024 annual report records 200 gigabits per second (Gbps) of Europe–Uzbekistan transit capacity and 100 Gbps on the Europe–Kyrgyzstan route, while the Internet Society rates Kazakhstan’s upstream connection diversity as “Very Good.” Kazakhstan’s international internet capacity stood...

Middle Corridor

Azerbaijan–Kazakhstan Ties Could Reorient Central Asian Integration

The five Central Asian presidents met with Azerbaijan’s Ilham Aliyev in Avaza on October 8 for the Consultative Meeting of the Heads of State of Central Asia and the Republic of Azerbaijan. Azerbaijan’s participation brings a principal outlet for Central Asian trade into the six governments’ economic deliberations. Within their consultative format, the states can coordinate industrial projects with the transport services through which regional producers reach foreign markets. If Azerbaijan and Kazakhstan connect cross-Caspian transport more closely to industrial cooperation, the corridor could become an organizing axis for regional integration. The Case for Trans-Caspian Integration Closer Azerbaijan–Kazakhstan cooperation would make cross-Caspian transport more dependable if trains reach Kazakhstani ports in time for Caspian sailings and cargo arriving at Azerbaijani terminals connects with onward services through Georgia. A 2023 assessment by the International Bank for Reconstruction and Development (IBRD), also called the World Bank, identified trade among Kazakhstan, Azerbaijan, Georgia, and Europe as a driver of corridor demand, giving regional exporters a place alongside China–Europe transit traffic. Onward connections from the China–Kyrgyzstan–Uzbekistan (CKU) railway now under construction could run through Turkmenistan and across the Caspian to Azerbaijan, providing an alternative to routes through Iran. Conflict involving Iran strengthens Azerbaijan’s position as the more dependable western outlet for Europe-bound exports. Greater predictability could offset the cost of a Caspian crossing by reducing the stocks firms must hold against delays and the losses caused by interrupted deliveries. Extending the operating coordination developed with Kazakhstan to these southern connections could make Azerbaijan commercially preferable for Central Asian exporters serving European markets. Kazakhstan and Azerbaijan occupy the principal positions in this prospective reorientation. Together, they represent approximately one-third of the six countries’ population but account for more than three-fifths of their nominal GDP. Yet bilateral merchandise trade amounted to only $470.7 million in 2025. Their combined economic weight is thus disproportionate to the commerce presently linking them. The infrastructure and institutions connecting industrial investment to markets across the Caspian could give the two countries a basis for organizing wider regional integration, provided firms sustain commercial relationships through those connections. The Bilateral Basis for Regional Integration Export commitments depend on the cost and timing of the complete transport service. At Avaza, Kazakhstan’s President Kassym-Jomart Tokayev attached “particular importance” to developing the Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor. His Azerbaijani counterpart, Ilham Aliyev, advocated joint investment, manufacturing, and entry into foreign markets. For firms undertaking joint production, the commercial viability of Aliyev’s proposal would depend on transport coordinated from departure to delivery. Kazakhstan is developing the Middle Corridor along with the eastern branch of the International North–South Transport Corridor, which links Russia and Iran through Kazakhstan and Turkmenistan. At Avaza, Turkmenistan’s President Serdar Berdimuhamedov supported the development of North–South corridors in addition to East–West routes. Tokayev also highlighted the continuing importance to Kazakhstan of the North–South route in cooperation with Russia. Kazakhstan’s multi-vector approach thus extends to transport infrastructure: the Middle Corridor strengthens westward access without displacing the commercial connections maintained...

Grain Trade

Kazakhstan’s Grain Exports to Europe Hit Russian Rail Bottleneck

Russian Railways (RZD) has rejected October requests to transport grain from Kazakhstan through Russia to Estonian ports, citing insufficient rail capacity. There is no formal ban on shipments, but without approval, exporters cannot move their cargo along the usual route. Zeynolla Abdumanapov, head of Kazakhstan's National Association of Exporters KazGrain, reported the problem. The affected rail border crossings are Ivangorod–Narva and Pechory–Koidula, through which Kazakhstan's shipments travel to the Estonian ports of Muuga and Sillamäe. The Baltic route is particularly important for shipments of Kazakhstan's durum and high-protein wheat, as well as oilseed flax, to Europe. These crops command higher prices than ordinary wheat. On October 8, Estonia banned the transit of grain originating in or exported from Russia and Belarus. The restrictions do not apply to grain from Kazakhstan passing through Russian territory, and exporters had hoped to take advantage of available capacity at Estonian ports, where Russian grain transit had already been virtually nonexistent. However, disruptions to shipping through the Black Sea, caused by Ukrainian attacks on Russian port infrastructure and vessels, have forced Russia to redirect much of its grain toward its own Baltic ports, including Ust-Luga and Vysotsk. St. Petersburg is another destination. Russian grain also continues to pass through Latvia and Lithuania, which have not imposed equivalent bans. The shift has increased pressure on the railway network serving the Baltic region. According to Reuters, RZD has given priority to grain shipments heading toward Baltic and Arctic ports. Russia has also raised freight tariffs for shipments to Baltic and Finnish border crossings. Gani Yessenbayev, a representative of Kazakhstan Temir Zholy (KTZ), the country's state railway operator, told the Eurasian AGRICOM 2026 conference that KTZ is negotiating with RZD and recommending that exporters resubmit their applications. The volume of cargo affected by the rejections has not yet been disclosed. Russia can be bypassed via the Trans-Caspian International Transport Route through Azerbaijan and Georgia. However, KazGrain estimates that shipping costs along this route are roughly twice as high, while transshipment capacity is constrained by the facilities at Georgia's Port of Poti. For large-scale wheat exports, the additional costs could prove too high. Kazakhstan's grain trade with Iran is also becoming more difficult. According to Abdumanapov, sea freight rates from Aktau have risen from $17 to $95 per metric ton. Suppliers from Kazakhstan must compete with cheaper Russian grain, while a stronger tenge further reduces their export earnings in local currency. Most of Kazakhstan's grain exports, however, go to neighboring countries rather than Europe. From January through September 2026, grain shipments by rail for export increased by 14% to 8.4 million metric tons. Of that total, 5.5 million tons went to Central Asia. Uzbekistan received 4.11 million tons and Tajikistan 1.18 million tons. Shipments to Afghanistan totaled 762,000 tons, while China received 750,000 tons. Kazakhstan increased its agricultural export revenue by more than a third in 2025. The restrictions on transit through Russia therefore primarily threaten sales of Kazakhstan's higher-value agricultural products to the European Union. Future shipments will...

Flaxseed Trade

Kazakhstan Flaxseed Exports Hit Record 1.3 Million Tons

Kazakhstan ended the 2025/2026 marketing year with record flaxseed exports of nearly 1.3 million metric tons, 2.5 times the previous season's volume. The country accounted for 72.5% of flaxseed imports into the European Union (EU) in the 12 months to June 2026, with European tariffs on Russian flaxseed helping Kazakhstan improve its position in the market. "Kazakhstan is the undisputed leader in flaxseed supplies to the EU and the second-largest exporter to China after Russia," said Yevgeny Karabanov, head of the Analytics Committee of the Grain Union of Kazakhstan. Flaxseed, also known as linseed, comes from the flax plant, which is grown for the fibers used to make linen. The seeds are eaten as food, added to animal feed, or pressed for oil used in cooking and industrial products such as paints and varnishes. According to Karabanov, the export total covers September 2025 to August 2026. European Commission data show that the EU imported 686,800 metric tons of flaxseed between July 2025 and June 2026, up 16.8% from the previous 12-month period. Kazakhstan supplied 497,800 metric tons of that total. Karabanov attributes the shift in the European market to higher tariffs on Russian flaxseed, which rose to 20% in 2025 and 50% in 2026. In January 2026, the value of Russian flaxseed exports to the EU fell to €96,500, its lowest level since July 2010. Belgium became the largest European buyer of Kazakhstan's flaxseed, increasing purchases 1.84-fold to 347,100 metric tons. Other European buyers, including Poland and Estonia, also increased their purchases. Outside the EU, China remains Kazakhstan's largest market. Exports there totaled 537,700 metric tons, 2.8 times the previous season's volume. Afghanistan increased its purchases 3.38-fold to 141,400 metric tons. Exports to Uzbekistan, Tajikistan, and Turkey also grew. China and Belgium together accounted for 68.1% of Kazakhstan's total flaxseed exports. Afghanistan, the third-largest buyer, accounted for another 10.9%. In the new season, exports to Europe could face logistical constraints. According to Karabanov, the redirection of Russian grain exports to Baltic ports could increase pressure on rail networks and complicate the transit of Kazakhstan's shipments through Russia. An alternative route through Belarus and Lithuania would be more expensive. Rising transportation costs are already affecting prices in Ghent, Belgium, a major European trading hub for agricultural commodities. Flaxseed prices there have been rising for the past six weeks, he said. Further increases in logistics costs could erode Kazakhstan's price advantage in the European market.