Art and Inspiration: Capturing the Essence of Almaty

With colorful illustrations of landmarks, natural monuments, and city-life moments, Aidana Niyazalieva’s postcards of Almaty stand out. TCA spoke with the artist to learn more about her inspiration, creative process, and challenges behind her postcards and the Almaty arts scene.

I've been drawing since I can remember; everything surrounding me – my room, the streets, and the buildings – inspires me. This led me to study architecture. However, after working as an architect, I realized that my passion for drawing was stronger. I decided to try it, eventually devoting myself to illustration and turning this hobby into a profession. I started with the city I grew up in, Almaty, and created a few postcards of the views I walked past the most. This became a way to combine everything I love - art, architecture, and my love for the city.

I choose places and themes close to me that evoke an emotional connection in people. Usually, the ideas come from my walks around the city. During my walks, I take many photos for possible drawings. Sometimes, a few buildings of the same type could grow into a series of illustrations, as in the “Houses“ postcard set that was united by the old houses of the Soviet period located in a Golden Square area. Also, I might get requests from people about places they would like to see, as happened with the Kazakhstan Hotel or Esentai River illustrations.

My favorite place in Almaty is the old city center. Its unique architecture, with characteristic features from different periods from neoclassical to modernist buildings, and its streets with cafes and terraces have always attracted my attention. Those buildings keep their history, whether these are old houses with sophisticated details or monumental facades of theaters and institutes. When I'm there, I always look closely at small elements like the carved balconies, window frames, mosaics, and patterns on the facades – I try to capture them in every illustration.

As a local, I have a personal connection to almost every location I illustrate. Capturing a place authentically requires more than just visual reference - it also needs an emotional connection. That’s why I barely draw locations I’ve never visited. Behind almost every illustration is a moment tied to the place. For example, the Kasteyev Museum holds a special place in my heart. My grandma used to take me there often when I was little, and it’s where I first took art lessons. So, I decided to create this illustration to capture the architecture of the museum and the memories connected to the place.

Firstly, after the location is chosen, I create a rough sketch to determine the composition that will best convey the atmosphere of the place. After that, I move on to the detailed drawing, experimenting with colors to find the palette reflecting the general mood. Then, I add finishing touches, like strokes, textures, and people. While placing them, I always love to imagine a little story of who they are and how they communicate with the place and each other. When everything is finished, I step aside and leave the finished illustration until the next day or so, and then I come back to see if anything needs to be retouched.

For the past few years, I switched from traditional materials to digital. When I started to take commissioned orders, it was also more convenient for me as it speeds up the process and makes it easier to edit the illustration for the client if needed. I use brushes and techniques similar to analog for digital drawings to keep the feeling of being made traditionally. When sketching just for myself, I usually use materials that are easy to carry with me, like brush pens or colored pencils.

There was a moment when I asked myself the same question: “How do you convey the core of Almaty in the illustrations?” To answer it, I decided to make a list of everything that, for me, defines the essence of the city. I later created a sticker sheet from that list called “Almaty is…, " showcasing my associations with the city. The sheet includes nine stickers with the captions: “cozy balconies,” “summer terraces,” “fountains,” “walks,” “houses with history,” “colorful details,” Medeo,” “mountains,” and “cultural places.” I believe these are the signature elements that reflect Almaty’s unique character. So, when I create an illustration, I try to incorporate at least one of these elements to capture the atmosphere, whether it’s a cityscape or nature.

TCA: Do you collaborate with local businesses or other artists in Almaty?

Yes, I’ve collaborated a few times with local companies. The goal of such projects is usually not to earn money but to create new connections and promote each other’s work. Such projects also help to exchange your audiences. For example, there was a collaboration with a local photo studio for their birthday. We have created postcards and stickers that people could buy at their studio or directly from me. This way, more people reached out to both of us and even brought me more commissions.

TCA: What challenges have you faced as an independent artist in this niche?

During this period working for myself, I've had to struggle with a few things. The first thing is finding an audience. In the initial stages, attracting attention to my work was difficult. I had to learn how to properly present my projects on social media and local markets to get noticed. The second thing was the financial side, where I had to consider the cost of expenses on materials such as printing and packaging and, based on this, plan the budget so that the cost pays off and simultaneously keeps the price affordable. Another struggle is finding the balance between creativity and administration. Working for yourself, in addition to drawing, you have to do everything, from taking photos of your products and running social media to responding to messages and shipping orders. That takes a reasonable amount of time and energy, but all these challenges have taught me to stay flexible and organized.

To keep myself motivated, I participate in local markets from time to time. Preparing for the market stimulates you to create something new, and it helps you revise and organize your workflow in a limited time, although it can be a little challenging. But mostly, I feel inspired by people who support my work. When I receive feedback from people telling me they have my art and send postcards around the world, it always warms my heart and motivates me to create more.

I also love trying new things: exploring new styles, participating in art challenges, workshops, or visiting shows by other artists. This helps me to stay inspired and not get stuck in a routine. Of course, there are moments of artistic block when it feels like you can’t create anything new. In these moments, I just allow myself to rest, switch to something else, or work on something small and insignificant – usually, it helps.

Over the past few years, the city's landscape has changed a lot. There are lots of new buildings, cafes, and local businesses that constantly modify the urban identity. It inspires me to create works that combine heritage and modernity and adapt to changes in the city's culture. For instance, in the past few years, people have spent more time on summer terraces due to the rise of cafes and coffee shop culture. One of the other changes is that people have become more aware of their surroundings, showing more interest in buildings' history and details. All these changes stimulated me to highlight more of these moments in my illustrations.

If I had to think of a postcard to represent the city, I'd choose something that combines architectural landmarks and scenes of nature. I think that description applies to one of the existing postcards where we can see its famous buildings, like the Kazakhstan Hotel and the Kok Tobe TV tower that have become the city's symbols, and there are our mountains with their green slopes in the background. That is, by the way, the postcard people tend to choose the most when they want to send it to someone to show the essence of Almaty.

If I were to create a postcard for a resident, the landscape would be different and include a place that might not exist today, but was prevalent in the old days. One such place was the Ldinka (Льдинка) Café, located in the heart of the Golden Square area. That postcard would be a mixture of the old and new. Along the way, there’s the Panfilov Street Promenade with crowds passing by, the Abay Opera House in the background, and mountain peaks in the distance. That kind of postcard, in my opinion, would evoke a nostalgic feeling in the older generation, but still be recognizable for the younger one, whilst simultaneously reflecting the city's soul.

Potato Hunt: Astana Restricts Potato Sales Amid Price Surge

Supermarkets in Astana, including the Small and EuroSpar chains, have introduced a restriction on the sale of potatoes, limiting purchases to no more than 5 kilograms per customer. The Astana Akimat's Department of Investment and Entrepreneurship Development announced that the measure aims to prevent speculation. However, officials have not provided a timeline for when the restrictions might be lifted.

A Sharp Spike in Prices

The price of potatoes has surged sharply in Kazakhstan. According to the Bureau of National Statistics, this spike occurred within a single week, from January 14 to 21. The annualized price increase averaged 57.8% across the country, with some regions experiencing even steeper hikes. In Astana, the price of potatoes doubled - rising by 100% - with a kilogram costing between 400 and 500 KZT ($0.96).

The Ministry of Agriculture (MOA) attributes the price surge to speculation by unscrupulous middlemen. Deputy Minister Yerbol Taszhurekov clarified that the situation cannot be classified as “price collusion” but acknowledged significant price disparities between agricultural producers and retail outlets.

“This is the result of speculative activity. After the New Year, many vegetable storages and warehouses remained closed, leading to a reduced supply in the market. Resellers and speculators exploited this temporary shortage to raise prices,” Taszhurekov explained.

Tackling the Reseller Problem

In response, local governments (akimats) began releasing potatoes from government stabilization funds at significantly reduced prices—between 115 and 130 KZT ($0.25) per kilogram. These measures were implemented to counter speculative practices and stabilize prices until the new harvest.

The MOA reported that Kazakhstan currently has more than 62,000 tons of potatoes in reserve, excluding stocks in trade networks. These supplies are deemed sufficient to meet domestic demand until the next harvest.

In Astana, this intervention helped bring down prices in retail chains like Small and EuroSpar to 280 KZT ($0.54) per kilogram. However, a new issue arose: small retailers began purchasing potatoes in bulk from these supermarkets to resell them at higher prices. To address this, supermarkets imposed a restriction on potato sales, limiting purchases to 5 kilograms per customer.

“All necessary measures have been taken to ensure stable potato prices in Astana. There is no shortage in the city, and products are sufficiently stocked on retail shelves and in markets. Supplies are being replenished in a timely manner. However, to prevent bulk purchases by resellers for resale in small neighborhood stores, supermarkets in the Small and EuroSpar chains have implemented temporary purchase limits,” stated the Department of Investment and Entrepreneurship Development of Astana.

Collaboration Between Retail Chains and Farmers

The Ministry of Trade and Integration (MTI) also took steps to address the situation. Following discussions with representatives from major supermarket chains such as Magnum, Small, Anvar, and Dina, an agreement was reached for these retailers to directly purchase 1,500 tons of potatoes from farmers. The supermarkets will independently manage the transportation of these goods to ensure steady supply.

“Akimats in the regions must present their specific needs, including the required volumes, so that retail chains can promptly meet market demand. Additionally, there must be stricter monitoring of key markets and improved coordination between agricultural producers and retailers,” said Aizhan Bizhanova, Deputy Head of MTI.

The ministry also disclosed that since the beginning of the year, authorities have identified 49 instances of violations of the regulation limiting trade markups on potatoes - a socially important product - to no more than 15% of the purchase price.

Export Restrictions

To further stabilize the market, Kazakhstan implemented a six-month restriction on potato exports to non-Eurasian Economic Union (EAEU) countries in early January. This decision was intended to ensure sufficient supply within the country and curb price volatility.

While temporary restrictions on potato sales in Astana aim to address speculative practices and stabilize prices, the government’s broader strategy includes improved supply chain management, tighter market oversight, and direct cooperation between farmers and retailers. These measures highlight the complex challenges in balancing market stability with ensuring affordability for consumers.

With Russia Visit, Kazakh Team Wraps Up Study Tour For Nuclear Project

A Kazakh delegation has toured one of Russia’s main nuclear energy facilities, inspecting the turbine hall, laboratories and cooling systems of power units as it rates possible suppliers for the construction of Kazakhstan’s first nuclear power plant. Similar trips were made late last year to the other countries on Kazakhstan’s short list: South Korea, France and China.  Kazakhstan will make a final decision on a supplier or consortium for the nuclear power plant project this year, the Ministry of Energy said, reflecting momentum since Kazakhstan approved the government-backed plan in a national referendum in October. Kazakhstan, the world’s top producer of uranium, wants to reduce reliance on coal, a major source of pollutants, and address electricity shortages as demand grows.   Kazakh Energy Minister Almassadam Satkaliyev led a team that visited the Leningrad nuclear power plant near St. Petersburg on Tuesday, showing particular interest in VVER-1200 reactor technology, the flagship project of Rosatom, Russia’s state nuclear agency.  “Today, we have completed our series of working visits aimed at studying the world’s best practices in nuclear energy,” Satkaliyev said, according to the ministry statement. He said the visit “provided us with an in-depth understanding of the technologies and safety measures that ensure environmental protection and the well-being of local residents.”  The VVER-1200 reactor, a pressurized water reactor that uses so-called Generation III+ power units, is said to have high safety standards and its technology is being exported to countries including China, India, Egypt and Turkey. The technology incorporates lessons learned from the Fukushima nuclear accident in Japan in 2011, in which an earthquake and ensuing tsunami knocked out the plant’s energy supply.  According to Rosatom, VVER-1200 safety systems allow the nuclear plant to operate in situations such as “earthquakes, floods, storm winds, hurricanes, snowfalls, tornadoes, low and high extremes of temperature, as well as such man induced events as aircraft crash (or impact from aircraft parts), air shock wave, fire, and flooding caused by water pipe breaks.” The Leningrad plant has two VVER-1200 reactors and several older RBMK reactors, which have a graphite-moderated design that was upgraded after the RBMK reactor disaster at Chernobyl in 1986. Those older reactors are gradually being phased out at Leningrad. Many Kazakh people are uneasy about nuclear power because of the legacy of the Semipalatinsk site, where decades of Soviet-era nuclear weapons tests led to health and environmental problems because of radioactive contamination. Ahead of last year’s “yes” vote in the referendum, the government argued that nuclear power would be a relatively clean, cheap – and safe - alternative to coal-fired plants. Some analysts have warned of geopolitical complications for Kazakhstan in choosing foreign partners for its nuclear industry, including concerns about dependence on Russia, which is at war with Ukraine and currently under Western sanctions. But a Carnegie Politika commentary in October said Kazakhstan “has more agency today than at any previous point in negotiations” and could demand favorable terms for nuclear technology transfer, allowing it to build up the “localization” of its industry.  By some estimates, if the nuclear plant construction goes ahead as scheduled, it could start operating in the early 2030s. Kazakh President Kassym-Jomart Tokayev has also suggested that more than one plant could be built. 

Kazakhstan Continues Afforestation Efforts on the Aral Sea

Kazakhstan is pressing ahead with a large-scale afforestation project aimed at restoring the ecosystem on the dried bed of the Aral Sea. The initiative brings together KATCO - a joint venture between the French state-owned company Orano and Kazakhstan’s national atomic company Kazatomprom - and other state and private entities to create artificial forests, combat land degradation, and improve environmental conditions in the Aral region.

The Decline of the Aral Sea

Once the world’s fourth-largest inland body of water, the Aral Sea spanned 68,000 square kilometers, straddling Kazakhstan and Uzbekistan. However, starting in the 1960s, extensive water diversion from its feeder rivers - the Amu Darya and Syr Darya - for cotton irrigation caused the sea to dry up rapidly. By 2007, the Aral had shrunk to just 10% of its original size.

The environmental fallout has been catastrophic. Over 100 million tons of salt, sand, and dust are carried annually by winds from the exposed seabed, damaging nearby ecosystems and posing significant health risks to residents of the surrounding areas.

Progress in Afforestation

According to Kazakhstan's Ministry of Ecology and Natural Resources, significant strides have been made in afforestation efforts. Between December 16 and 30, 2024, sowing was completed on 12,000 hectares of the former seabed. Efforts are continuing, with plans to sow seeds across 108,000 hectares in January and February 2025. By March 2025, an additional 16,492 hectares will be planted with saxaul shrubs, a hardy plant well-suited to the region’s arid conditions.

The ultimate goal is to plant saxaul shrubs on 1.1 million hectares of the dried-up Aral Seabed. Between 2021 and 2024, afforestation was completed on 475,000 hectares, including 127,000 hectares in 2024 alone. For 2025, Kazakhstan plans to plant saxaul on an ambitious 428,000 hectares.

Nationwide Tree-Planting Initiative

Kazakhstan’s efforts to restore the Aral Sea ecosystem are part of a broader national afforestation program. The country aims to plant 2 billion trees by 2027. From 2021 to 2024, 1.1 billion seedlings were planted over a total of 736,800 hectares, including 306 million seedlings planted in 2024 on 205,200 hectares.

For 2025, the goal is to plant 336.5 million seedlings across 494,000 hectares. Beyond rural afforestation, 15 million trees are planned for urban and village areas, with more than 12 million already planted between 2021 and 2024.

A Step Toward Environmental Recovery

Kazakhstan’s afforestation efforts represent a critical step toward mitigating the environmental damage caused by the desiccation of the Aral Sea. By stabilizing the exposed seabed with saxaul shrubs and increasing tree cover nationwide, the country aims to reduce airborne pollutants, improve regional biodiversity, and enhance the quality of life for affected communities.

The project is not only an environmental undertaking but also a testament to Kazakhstan's commitment to sustainable development and ecological restoration on a massive scale.

Kazakhstan Modernizes Civil Aviation Infrastructure to Boost Tourism and Investment

In 2024, Kazakhstan made significant strides in modernizing its air transport infrastructure, opening three new passenger terminals at the airports of Almaty, Shymkent, and Kyzylorda. The upgrades are expected to expand the capacity of these airports, increase the number of air routes, and stimulate growth in passenger traffic. According to the Ministry of Transport, these developments will enhance domestic and international tourism while boosting the investment appeal of Kazakhstan’s regions.

The Role of Air Transport

As the world’s 9th-largest country, Kazakhstan relies heavily on air transport to complement its extensive railway network. Fast and efficient air travel is crucial for connecting the nation’s vast territories and integrating its economy into global markets.

New Terminals and Capacity Expansion

Almaty International Airport

The new terminal at Almaty International Airport, which opened on June 1, has increased the airport’s capacity from 2.5 million to 14 million passengers annually. Almaty Airport serves as a hub for domestic airlines such as Air Astana, SCAT, Qazaq Air, and Fly Arystan. It operates regular flights to 19 cities across Kazakhstan and offers international connections on 50 routes to 26 countries through 30 foreign airlines.

Shymkent Airport

In southern Kazakhstan, the new terminal at Shymkent Airport expanded the facility’s capacity from 800,000 to 6 million passengers per year. The airport now offers international flights to 10 destinations, including Jeddah and Medina (Saudi Arabia), Doha (Qatar), Phu Quoc (Vietnam), and Phuket (Thailand). The frequency of flights has also increased to 24 per week.

Kyzylorda International Airport

The new terminal at Kyzylorda International Airport in south-central Kazakhstan has raised its capacity from 300,000 to 2 million passengers per year. The airport now operates 25 domestic flights, significantly enhancing connectivity for the region.

Strategic Projects: Khorgos-Eastern Gate

Beyond passenger terminals, a $500 million project to construct a cargo-passenger airport at the Khorgos-Eastern Gate Special Economic Zone (SEZ) is underway. The project, led by the Kazakh-German consortium SKYHANSA, will position Kazakhstan as a critical link on the Western Europe–Western China highway and the Trans-Caspian International Transport Route (TITR), which connects China and Europe.

The new airport will include:

• A passenger terminal capable of handling up to 500 passengers per hour.
• A cargo terminal with an annual capacity of 250,000 tons.
• A fuel storage facility with a capacity of 550,000 tons.
• A technical center for aircraft servicing.
• Tourism, shopping, and entertainment facilities.

This project underscores Kazakhstan’s commitment to expanding its role as a logistics and trade hub in Central Asia.

Growth in Air Transportation

The air transport sector in Kazakhstan continues to grow at a rate of 10-15% annually. In 2024, Kazakh airlines transported approximately 15 million passengers, while the nation’s airports served 30 million passengers. Cargo transportation also saw significant growth, with 28,000 tons transported in the same period.

Kazakhstan’s domestic airlines add 10-15 aircraft to their fleets each year, bringing the total fleet to 102 aircraft as of 2024.

Expanding International Connectivity

Kazakhstan operates 582 flights per week to 31 countries, including Russia, Kyrgyzstan, Uzbekistan, Tajikistan, Georgia, Belarus, Azerbaijan, the UAE, Saudi Arabia, Qatar, South Korea, China, India, and several European nations such as Germany, Italy, and the Netherlands. Other destinations include countries in Southeast Asia, the Middle East, and South Asia, as well as Turkey and the Maldives.

The Ministry of Transport reports that Kazakhstan’s compliance with international flight safety standards is at 82%, the highest among CIS countries and comparable to European Union nations like Denmark and Poland.

Kazakhstan’s ongoing modernization of its civil aviation infrastructure is transforming the country into a major regional hub for air travel and logistics. By expanding airport capacity, developing new routes, and investing in strategic projects such as the Khorgos-Eastern Gate SEZ, Kazakhstan is not only improving connectivity but also enhancing its competitiveness as a destination for tourism and investment. These developments are poised to strengthen the country’s position as a key player in Central Asia’s economic and transportation networks.

Kazakhstan Introduces New Reserve Military Service

Kazakhstan’s parliament has approved a bill introducing a new type of military service in the form of reserve duty, aimed at enhancing the country’s defense capabilities. This initiative is expected to bolster the military’s readiness by training specialists in key areas, expediting mobilization processes, and increasing overall combat efficiency.

The new legislation introduces a status for “military reservists,” who will be equated with active servicemen during training camps and exercises. The recruitment of reserve forces is set to begin in 2025, marking the start of a program modeled on successful practices implemented in other Commonwealth of Independent States (CIS) countries and beyond. The move aligns with Kazakhstan’s defensive strategy to maintain an army capable of safeguarding the nation’s sovereignty and territorial integrity.

Reserve Force Details

In the initial phase, the Ministry of Defense plans to enlist approximately 2,000 reservists from across the country, with future adjustments based on military needs. The service will be voluntary, requiring recruits to meet medical and age criteria: officers may serve up to the age of 60, while sergeants and soldiers can serve up to 50.

Reservists will undergo training at military units in their local areas. The training program will be funded by the state budget. During 30-day training camps, participants will receive payments equivalent to their average monthly salary, while routine training sessions will guarantee them at least the minimum wage.

Comprehensive Legal Reforms

To accommodate the introduction of reserve service, the new bill includes about 100 amendments across six legal codes and 14 laws. A new chapter on reserve service will be added to the law “On Military Service and Status of Servicemen” to regulate the selection process, rights, duties, and specific conditions of reservists’ service.

Under the new framework, reservists will be classified as servicemen and will be subject to military criminal law, similar to active-duty personnel. Amendments to the Criminal Code and the Code of Criminal Procedure will incorporate the unified term “serviceman” for both active and reserve military personnel.

Social Support for Reservists

The law also outlines measures for the social support of reservists, including provisions for payments, insurance contributions, and pensions. These benefits are designed to incentivize participation in the reserve service while ensuring financial security for those who enlist.

A Voluntary System for National Defense

The new reserve service will be exclusively voluntary, open to adult citizens of Kazakhstan who meet the necessary requirements. By offering training opportunities close to home and guaranteeing compensation for participants, the program seeks to attract skilled and motivated individuals to contribute to national defense.

Strengthening Defense Readiness

Kazakhstan’s decision to introduce reserve military service reflects a strategic commitment to bolstering its armed forces while remaining consistent with its defensive posture. By creating a robust pool of trained reservists, the nation is taking a proactive step toward ensuring its sovereignty and readiness in the face of potential challenges.

The program's success will depend on careful implementation and sustained support, but it represents a significant milestone in Kazakhstan’s approach to modernizing its military.

Kazakhstan Ends Era of Cheap Fuel: Price Controls Set for Abolition

On January 17, the Ministry of Energy of the Republic of Kazakhstan published a number of draft orders on the Open NLA (normative legal acts) portal, which were to be discussed within five days. In total, the Ministry proposed the abolition of eleven orders regulating wholesale and retail prices for petroleum products, which have been under price control since 2014. In addition, it intends to change the calculation formulas and price ceilings for wholesale and retail sales of liquefied and natural gas.

I have been writing about the need for price liberalization since 2018, as seen in articles such as “#Kazneft, part 2: The Bermuda Gasoline Triangle - Why Prices Will Rise” and “#Kazneft, part 4: We Rank Seventh in the World for the Cheapest Gasoline. Is It Sold at a Loss?”

This is a landmark event for the Government of Kazakhstan, which has long maintained not only the lowest fuel prices in the region but some of the lowest globally. The country consistently ranks among the top ten nations with the cheapest energy resources, including fuel, natural gas, coal, and electricity.

Cheap and Even Cheaper

According to Global Petrol Prices, as of January 20, 2025, fuel prices per liter in dollar terms across the EAEU, CIS, and neighboring countries are as follows:

(Table 1)

Kazakhstan ranks seventh globally for the affordability of RON-95 gasoline, trailing behind Angola, Egypt, Algeria, Kuwait, Turkmenistan, and Malaysia. At the same time, there are “throwaway” prices in Iran, Libya, and Venezuela, but these price indicators do not reflect the actual availability of fuel in these countries. Turkmenistan also shows relatively low fuel prices, primarily due to the use of alternative fuels, such as methane, in transportation.

Kazakhstan has historically had nearly double the price gap compared to its neighboring countries, which has facilitated the shadow export of fuel despite an official ban on exporting petroleum products.

A Leaky Bucket

I have described Kazakhstan's domestic fuel market as a "leaky bucket"— no matter how much fuel is produced, it is constantly in short supply. In 2024, the country processed about 18 million tons of oil, with its three major refineries — Atyrau: 99% owned by the national company KazMunayGas (KMG), Shymkent: 51% owned by China National Petroleum Corporation (CNPC), and 49% by KMG, and Pavlodar: 100% KMG — accounting for approximately 17 million tons. Mini-refineries produced an additional one million tons. The production of petroleum products (excluding fuel oil) amounted to around 14.5 million tons.

For 2025, the Indicative Supply Plan between the Russian Federation and the Republic of Kazakhstan provides for a duty-free supply of 1.6 million tons of petroleum products within the EAEU. For gasoline, the highest dependence is observed during periods of refinery maintenance, whilst for diesel fuel there is a high volume of imports during planting and harvesting seasons. There is also a dependence on the importation of winter and Arctic diesel due to the low domestic production of these specific products.

As for jet fuel and bitumen/hydrone for highway construction, the level of dependence can be defined as critical. One should also take into account that the ongoing exchange of attacks on energy and oil infrastructure in Russia and Ukraine exacerbates the fuel supply situation -  Russia has imposed bans on gasoline and diesel exports, though exceptions are made for EAEU countries.

Despite near-full utilization of Kazakhstan's refineries and increasing imports from Russia, the domestic market still faces periodic shortages of certain petroleum products. For example, there was a shortage of RON-95 gasoline in the summer of 2024 due to fuel flowing into neighboring countries via illegal schemes, such as modified fuel tanks, exports disguised as other goods, and even makeshift pipelines crossing borders.

With such significant price differences and vast land borders, combating fuel smuggling is almost impossible. For instance, in 2024 alone, over 1,200 attempts to illegally export fuel were intercepted at the Kazakhstan-Kyrgyzstan border. Taking into account the high level of corruption and semi-legal export, the Ministry of Energy assumes that shadow exports are growing and amount to at least 500,000 tons annually to border countries, including the Russian Federation.

Kazakhstan has essentially become a low-cost fueling station for the entire transit flow of Central Asia. For example, diesel trucks transporting fruits and vegetables from Uzbekistan to Moscow travel around 3,500 km on Kazakh fuel: they refuel in Kazakhstan at the border with Uzbekistan, drive across Kazakhstan on Kazakh diesel, fill a full tank (from 1,000 to 3,000 liters) at the border with the Russian Federation, and can then drive on a full tank to Moscow and back to Kazakhstan.

While this is simply business, maintaining the lowest prices in the region ensures that fuel is siphoned off through both illegal and legal means.

Attempts to introduce differentiated fuel prices for foreign vehicles have failed. For instance, the government tried to curb diesel outflows by requiring vehicle registration certificates and driver's licenses for refueling. However, official data showed that only 1% of fuel sales were to foreign vehicles, indicating that the measures were ineffective and prone to corruption at private gas stations.

Day of Independence from Addiction

When analyzing the situation, it is essential to consider the structure of the domestic market. Oil companies, under their subsoil use contracts, are required to supply 50–80% of their crude to domestic refineries at $20–25 per barrel. This is not only three times below global prices, but also below the average production cost of over $40 per barrel. Meanwhile, large international oil and gas projects that are considered “whales,” such as Tengiz, Karachaganak, and Kashagan - which account for two-thirds of national output - do not supply oil to the domestic market.

Thus, out of the 87.8 million tons of oil and gas condensate extracted in 2024, approximately 59 million tons are produced by these "whales." In contrast, other companies supply 18 million of the 29 million tons they produce (62%) at prices close to or below actual production costs, covering losses through crude oil exports.

Kazakhstan’s multilayered "dependency pie" also includes Chinese companies, which provide 35% to 45% of all refining volumes for the domestic market. The earliest the country might be able to reduce its reliance on Russian oil products is by 2030. This will require the expansion of PetroKazakhstan Oil Products LLP (the Shymkent refinery in the south of the country), jointly owned by CNPC and KMG, which plans to increase its capacity from 6 million to 12 million tons yearly.

Chinese partners have long been dissatisfied with the prevailing pricing policies and obligations to supply oil domestically. Meanwhile, the Kazakhstan-China export pipeline operates at only 11 million of its 20-million-ton capacity, with 10 million tons of that volume coming from Russian oil via swap arrangements.

Thus, oil-producing Kazakhstan remains, and will continue to remain, dependent on both Russian oil and oil products supplies and on Chinese oil companies, which play a crucial role in domestic supply and own major infrastructure, including the largest refinery in the south of the country.

The combination of these factors, along with uncertainty over stable oil product supplies from Russia amid sanctions, attacks on refineries, growing domestic demand, and the declining national currency (since last year the devaluation of the tenge amounted to 18%) has led to the need to abandon marginal wholesale and retail prices for fuel, which is a cause for some discontent among both the public and shadow networks that control the distribution of scarce fuel resources.

Efforts to establish oil and oil product trading on exchanges, which Kazakhstan had been gradually moving toward, were "frozen" after the January 2022 events, which were exploited in an attempted coup.

The abandonment of the state regulation of fuel prices and transition to market-based pricing methods, including within the framework of the Common Market of oil, oil products, and gas of the EAEU starting January 1, 2027, will undoubtedly impact all countries in the region. It will lead to higher transportation costs for both individuals and businesses.

The break-even price for the most common gasoline grade, AI-92, is at least $0.60 per liter, compared to its current price of $0.40 per liter. This means an imminent price increase of at least 1.5 times. However, the government is likely to implement this adjustment gradually, avoiding an abrupt shift to market prices.

In conclusion, Kazakhstan's experiment with subsidized energy prices, much like in other oil-producing countries, has failed. Instead of benefiting the domestic market, it has only deepened the country's dependence on Russia and China.

Kazakhstan’s Digital Exports Expand

Kazakhstan exported $471 million worth of IT services to 95 countries during the first nine months of last year, according to Zhaslan Madiyev, Minister of Digital Development, Innovation and Aerospace Industry (MDDIAI).

The primary driver of export revenue in Kazakhstan's IT services market is Astana Hub, the largest international technology park for IT startups in Central Asia, located in the country's capital. Astana Hub is home to over 1,500 companies, including 400 international firms. In 2024, its total revenue reached 620 billion KZT ($1.1 billion), with export revenue amounting to 227 billion KZT ($428 million) across 92 countries. Additionally, the products of JSC "National Information Technologies" (NIT JSC), the operator of Kazakhstan’s “e-government” infrastructure, have also entered global markets.

According to Madiyev, NIT JSC’s main exported products include Smart Data Ukimet, Smart Bridge, and Gov.kz:

• Smart Data Ukimet: An information-analytical platform designed for the secure collection, storage, and analysis of data from government information systems.
• Smart Bridge: A platform that simplifies integration processes between government agencies and private businesses through a "service showcase" model.
• Gov.kz: A unified platform for the online resources of government agencies.

The export of Kazakhstan’s digital public services (GovTech) reached $2.7 million, with these solutions currently supplied to Tajikistan, Togo, and Sierra Leone.

In addition to GovTech, Kazakhstan’s IT exports also include software, computer games, fintech solutions, and marketplaces. Among the largest exporters are five software developers, three computer game companies, one fintech firm, and one marketplace. “Most of the major exporters are foreign companies that have relocated to Kazakhstan, creating new jobs in major cities and regions, as well as contributing to export revenue,” said Madiyev.

Kazakhstan has made significant strides in developing its IT infrastructure. The country now boasts 20 regional IT hubs that work closely with Astana Hub, fostering innovation across the nation. Furthermore, Kazakhstan is establishing an international network of IT hubs by opening IT offices in the United States, Saudi Arabia, Singapore, and the United Kingdom.

“Kazakhstani startups now have foreign infrastructure to attract investment and expand their export markets,” said Madiyev.

The minister also announced the launch of a fund of venture capital funds under the jurisdiction of the International Financial Center Astana (MFCA), based at Astana Hub. This fund, with an expected capital of $1 billion, will finance IT startups in Kazakhstan.

As previously reported by The Times of Central Asia, Kazakhstan is home to 12 regional IT hubs that are actively contributing to the country’s growing digital economy.