Tokayev Frames Modernization as Kazakhstan’s Answer to a Turbulent World
President Kassym-Jomart Tokayev used the opening of the first session of Kazakhstan’s new unicameral parliament, the Kurultai, on August 28 to link institutional renewal at home to Kazakhstan’s ability to adapt and sustain its international standing. In an international system becoming more chaotic and technologically disruptive, he argued, Kazakhstan must continue modernizing and strengthen the domestic foundations of its sovereignty and international role.
Tokayev described global events as increasingly chaotic and difficult to predict. Major powers, he said, had largely stopped trusting one another, weakening the United Nations and creating a larger role for regional organizations and middle powers, including Kazakhstan. The emerging world order was dangerous and contradictory, but also technologically progressive and potentially transformative.
The states most likely to adapt, he argued, would be those able to strengthen their sovereignty through economic strength, scientific capability, military and diplomatic capacity, and human development. He later said Kazakhstan had a clear plan of action and knew where it was going.
That argument dates to the beginning of Tokayev’s presidency. At his inauguration in June 2019, he said the world had entered an era of rapid change shaped by trade wars, international tensions, failing security mechanisms and regional conflicts. The decisive question, he argued, would be which countries could adapt to new global realities and which would be left behind. Economic, social and political progress was Kazakhstan’s necessary response.
Three months later, his first State of the Nation address set out the method. Political reform would proceed consistently, persistently and thoughtfully. Economic modernization could no longer succeed without changes in political and social life. Tokayev reiterated the formula of a strong president, an influential parliament and an accountable government, while introducing the concept of a Listening State able to respond to citizens.
The language has evolved, but the central argument has remained consistent. In Tokayev’s account, reform is not a fixed package but an ongoing response to changing conditions.
After proposing the transition to a single-chamber parliament in his September 2025 State of the Nation address, Tokayev presented it at the UN General Assembly as part of an effort to make the political system more effective, transparent and responsive. Following the 2026 constitutional referendum and the election of the first Kurultai, the proposal has now moved from constitutional design into legislative practice.
Tokayev instructed deputies to bring legislation into line with the new Constitution and maintain and strengthen the legal scrutiny previously carried out by the Senate. He called for wider expert review and the use of the E-Parliament platform and artificial intelligence to improve lawmaking, while emphasizing that technology could not replace professional legal expertise.
He also set out a legislative agenda covering digital assets, AI in secondary education, migration policy and the Golden Visa, energy-sector resilience and online platforms. He supported a proposed ban on social-media registration for children under 16. The Kurultai, in his formulation, must legislate more quickly without sacrificing legal rigor or public discussion.
Tokayev has repeatedly treated political reform, economic policy, technology and social development as parts of the same modernization process. In the August 28 speech, he extended that thinking to national consciousness, calling for a society grounded in reality rather than myth, progress and science rather than nostalgia, and work and self-discipline rather than empty rhetoric.
He said modernization must include not only state institutions and the economy, but also civic outlook and national mentality. Kazakhstan, in his formulation, should understand its history without making grievance the foundation of its identity. A mature nation should learn from the past while retaining the confidence to move forward.
The foreign-policy section connected this domestic agenda to Kazakhstan’s external standing. Tokayev said Kazakhstan had maintained a strong international position despite global turbulence and declining trust among states. He added that major powers take the country’s positions into account and pledged to continue protecting national interests through peace, friendship and mutually beneficial partnership.
That assessment has also been made in Washington. U.S. Representative Tom Suozzi, a member of the Congressional U.S.-Kazakhstan Caucus who has visited Kazakhstan and met Tokayev, described the country in the Congressional Record last year as “a peaceful and stabilizing force in Central Asia” and “a model of pragmatic, balanced diplomacy.”
Tokayev’s August 28 speech placed the Kurultai within a strategic course he has pursued since 2019. Kazakhstan cannot control the turbulence surrounding it, but it can determine how clearly it defines its interests, how steadily it modernizes and how effectively its institutions perform. In a turbulent world, Kazakhstan’s role as a stabilizing force serves a broader international interest. Whether it can sustain that role abroad will depend on how successfully Tokayev strengthens the state at home.
Pannier and Hillard’s Spotlight on Central Asia: New Episode Out Sunday
As Managing Editor of The Times of Central Asia, I’m delighted that, in partnership with the Oxus Society for Central Asian Affairs, we are the home of the Spotlight on Central Asia podcast. Chaired by seasoned broadcasters Bruce Pannier of RFE/RL’s long-running Majlis podcast and Michael Hillard of The Red Line, each fortnightly instalment will take you on a deep dive into the latest news, developments, security issues, and social trends across an increasingly pivotal region. This week, the team is covering the Kurultai elections and what they mean for Kazakhstan. Special guest: Central Asia journalist Paul Bartlett.
Kyrgyzstan Hosts SCO Summit as Bloc Marks 25 Years
Leaders of the Shanghai Cooperation Organization's ten member states are due in Bishkek on September 1 for the final summit of Kyrgyzstan's 2025-2026 chairmanship. The meeting is expected to produce a Bishkek Declaration marking the SCO's 25th anniversary, alongside thematic statements and other decisions. For Kyrgyzstan, the gathering is more than a turn in the organization's rotating chairmanship. As many as 21 heads of state are expected in the country during the week, according to presidential spokesman Askat Alagozov. The summit coincides with Kyrgyzstan's Independence Day and the August 31 opening of the World Nomad Games. The member-state session will bring together Belarus, China, India, Iran, Kazakhstan, Pakistan, Russia, Tajikistan, and Uzbekistan, with President Sadyr Japarov as host. Chinese President Xi Jinping will also make a state visit, giving the summit a substantial bilateral program alongside the formal meetings. Kyrgyzstan's Diplomatic Week The summit comes less than three months after Kyrgyzstan was elected to the UN Security Council for 2027-2028, its first term on the body. Hosting the SCO gives Japarov an opportunity to reinforce that diplomatic profile before the Security Council term begins in January. The SCO's foreign ministers reiterated in July that Central Asia is the organization's core and backed a larger role for it in the region's security and economic development. Their statement also praised Kyrgyzstan's chairmanship and confirmed that the Council of Heads of State and SCO Plus meetings would take place in Bishkek on August 31 and September 1. What Cholpon Ata Already Settled At their July 24 meeting in Cholpon Ata, SCO foreign ministers approved the draft declaration and accompanying documents as a basis for the summit. The language is therefore largely negotiated before the leaders arrive, although the final package can still change. The ministerial statement gives a clearer indication of the political agenda, supporting a multipolar world order and rejecting unilateral sanctions. It also calls for more intra-SCO trade. Terrorism, separatism, extremism, drug trafficking, and transnational organized crime remain its stated security priorities. The statement says the SCO is entering a period of institutional reform, including changes to its legal framework and cooperation procedures. A Development Bank Still Taking Shape Economic cooperation will occupy a significant part of the summit. In Tianjin last year, interested member states reached political consensus to establish an SCO Development Bank. The institution is not yet operational. At the fourth consultation meeting in Shenzhen in June, delegates discussed its key elements and the next stage of negotiations. A timetable or capital commitments announced in Bishkek would move the proposal beyond its current design stage. The bank could eventually provide another source of finance for infrastructure, but its structure and membership remain unsettled. Currency diversification will also remain part of the discussion. The 2024 Astana Declaration called for gradual growth in the use of national currencies for settlements among interested members. Sanctions on Russia and Iran have increased the political importance of that effort, although the SCO has not created a common payment system. SCO Plus, but Not a Single Bloc The SCO has two observer states and 15 dialogue partners in addition to its ten members. SCO Plus allows selected partners and international organizations to join the wider discussion, but partner status does not guarantee attendance. Invitations are coordinated among the member states. The expanded format increases the summit's reach while exposing the differences inside the organization. India and Pakistan will again sit at the same table without a bilateral meeting having been announced. Iran's President Masoud Pezeshkian will arrive as conflict involving his country and disruption around the Strait of Hormuz continue to affect energy markets and regional trade. The July ministerial statement condemned military strikes on Iran and called for a political settlement. That shared wording does not mean the member states have identical interests. The declaration is therefore a better indication of what members can agree to say than of what they will actually do. What Bishkek Can Deliver Japarov is already assured a large diplomatic gathering and an anniversary declaration. More durable results could emerge from the bilateral meetings. Xi's state visit is expected to include talks on the $4.7 billion China-Kyrgyzstan-Uzbekistan railway, now under construction after decades of discussion. New financing or cross-border arrangements for the railway would give Kyrgyzstan a concrete outcome from the week. Progress on the Development Bank or agreed reforms to SCO institutions would add weight to the multilateral package. The summit will not resolve the conflicts involving its members, but it places Bishkek at the center of Eurasian diplomacy as Kyrgyzstan closes its chairmanship. The scale of the gathering gives Japarov rare international visibility. The agreements announced in Bishkek will determine whether the summit leaves Kyrgyzstan with anything more durable than diplomatic attention.
From Lenin to Kenesary: What Kazakhstan’s Renamed Streets Say About Power
In July 2026, a new constitutional law on Kazakhstan’s administrative-territorial structure came into force. It retained a layered process for changing place names: local authorities must consider residents’ views, while onomastic commissions review proposals before final decisions are made. The previous legal framework dated to 1993. Replacing it with a constitutional law did not dismantle the machinery of onomastic policy but consolidated the roles of public consultation, local government and official commissions. The law formalized a system built over three decades, during which thousands of streets were renamed but the country’s urban map changed at markedly different speeds. Kazakhstan’s experience is often described as a simple substitution of Lenin with Abai and communist terminology with the symbols of independence. The geography of renaming suggests something more precise: a centralized nation-building project whose reach depends on local demography and the political cost of opposition. Research documenting 6,832 cases across 37 cities between 1991 and 2019 shows the disparity. Five cities accounted for 72% of all recorded renamings: Shymkent had 1,767, Almaty 1,064, Astana 860, Aktobe 783, and Kyzylorda 470. Pavlodar recorded 34, Petropavl 28, Oskemen 23, and Rudny only two. Raw totals partly reflect city size and urban expansion, but the study’s statistical analysis identified both city status and ethnic composition as significant factors. Renaming occurred less frequently where the share of Slavic residents was higher, a pattern the author interpreted as evidence of greater state caution in ethnically mixed cities. The procedure helps explain why a national symbolic agenda produced such local variation. Proposals move through public consultation, local representative and executive bodies, and onomastic commissions. These stages do not guarantee that public preferences will determine the outcome, but they create points at which opposition can slow or redirect a proposal. Astana, extensively rebuilt after becoming the capital in 1997, could remake its urban identity quickly. Established industrial cities in the north and east moved more carefully. The contrast between what disappeared and what survived is equally revealing. Explicitly ideological names associated with Lenin, Marx, Engels, and the October Revolution became far less common, while Almaty retained streets named after Soviet scientists, writers, and figures connected to Kazakhstan’s development. The authorities did not treat every Soviet reference alike. They separated communist ideology from cultural and intellectual contribution, producing selective de-Sovietization rather than wholesale symbolic purification. Municipal practice further complicates a purely nationalist reading. Official data from Kyzylorda for 2025 lists 874 city streets: 497 named after individuals, 270 after localities and water features, and 107 carrying conventional names. This snapshot does not identify which streets were renamed, but it shows that the present naming system encompasses historical figures, local geography, and ordinary municipal conventions. In the expanding Arai-Shugyla neighborhood, seven previously unnamed streets received names drawn from localities and water features. Onomastic policy was therefore organizing new urban space as well as redistributing historical visibility. Naming new streets and replacing old ones use the same administrative machinery, although their political consequences are not always comparable. The politics became clearer when renaming reached independent Kazakhstan’s own history. In 2017, central Almaty’s Furmanov Street became Nursultan Nazarbayev Avenue while Nazarbayev was still president. Unlike the commemoration of Abai or Kenesary, the decision placed an incumbent ruler directly into the city’s symbolic landscape. After the January 2022 unrest, activists staged a symbolic renaming of the avenue as Qantar and called for the change to be made permanent. The demand was not adopted, but it extended the argument beyond Soviet memory. Streets could now be used to contest which figures and events from the post-Soviet period deserved public legitimacy. Derzhavinsk in Akmola Region exposed the limits of consultation. In 2023, local authorities proposed renaming the town after Kenesary Khan, the 19th-century leader of resistance to Russian imperial rule. At a public meeting, 192 residents voted in favor and 125 opposed. Opponents subsequently gathered nearly 400 signatures, questioned the consultation process, and argued that Kenesary had no direct connection to the area. Officials described the vote as an initial test rather than a final decision, and the process stalled. Three years later, official district announcements were still using the name Derzhavinsk in August 2026. A majority at one meeting had not settled the larger dispute over whose history the town should represent. Kazakhstan’s renaming policy is selective both in the symbols it removes and the places where it proceeds most decisively. Its effect on public identity remains empirically uncertain: administrative records show which names changed, but not how residents interpreted the new urban landscape. The next disputes are likely to concern less the Soviet past than the legitimacy of the post-Soviet order. As the country evaluates the Nazarbayev era, renaming will no longer be only about where national history begins. It will also become an argument over how independent Kazakhstan chooses to remember itself.
Xi Jinping Heads to Bishkek as Kyrgyzstan Prepares to Host 21 Heads of State
Chinese President Xi Jinping will attend the Shanghai Cooperation Organization summit in Bishkek and make a state visit to Kyrgyzstan, Beijing has confirmed. The trip, which also includes a state visit to Egypt, will run from August 30 to September 3. The formal meeting of the SCO Council of Heads of State is scheduled for September 1. As many as 21 heads of state are expected in Kyrgyzstan during the week, according to presidential spokesman Askat Alagozov. Xi had long been expected to be among the leaders traveling to the Kyrgyz capital, but the formal confirmation turns attention from the guest list to the business that may be conducted around the main session. For Kyrgyzstan, the most consequential part of the visit may come in Xi's talks with President Sadyr Japarov rather than in the summit hall.
The Times of Central Asia will be reporting from Bishkek as the delegations arrive, and from the opening ceremony of the World Nomad Games on August 31. Several visiting heads of state are expected to attend the ceremony, which will bring summit diplomacy and Kyrgyzstan’s biggest cultural showcase together on the eve of the SCO meeting. Kazakhstan’s President Kassym-Jomart Tokayev has already confirmed that he will be there.
The spectacle will be considerable, but the substance is likely to emerge in the bilateral meetings, signed agreements, and final documents released around the September 1 summit.
The State Visit and the Railway The state visit format gives Xi and Japarov a bilateral program alongside the summit. The most prominent economic issue is likely to be the China-Kyrgyzstan-Uzbekistan railway, a project discussed for decades that is now under construction across some of Kyrgyzstan's most difficult terrain. The Kyrgyz authorities put the railway’s construction cost at about $4.7 billion. China holds 51% of China-Kyrgyzstan-Uzbekistan Railway Company LLC, while Kyrgyzstan and Uzbekistan each hold 24.5%. Roughly half of the cost is being financed through a 35-year Chinese loan to the company. The summit could bring clearer evidence of how quickly construction is progressing. Any new financing, contracts, or cross-border arrangements would be more significant than another general statement of political support. The railway also places Kyrgyzstan inside a larger shift in regional trade. Commerce between China and the five Central Asian states passed $100 billion in 2025. Bishkek wants a larger share of that traffic and more of the value created along transit routes. Xi's visit offers Japarov an opportunity to press the case for logistics hubs, local employment and supporting roads rather than transit alone. The Documents Behind the Ceremony The SCO's national coordinators have been finalizing the outcome documents in the weeks leading up to the summit. Under Kyrgyzstan’s chairmanship, the SCO has emphasized regional stability and economic cooperation, alongside digital transformation, cyber threats, environmental policy, and cultural exchange. SCO decisions require consensus, which tends to soften disagreements in final communiqués. Any agreements that specify funding, deadlines, or responsibility would give the Bishkek package more weight. Bilateral Meetings Around the Summit The summit will bring several difficult relationships into the same room. Indian Prime Minister Narendra Modi and Pakistan’s Shehbaz Sharif are both due in Bishkek, although no bilateral meeting between them has been announced. Russian President Vladimir Putin has said he plans to meet Modi during the SCO gathering. Putin is also set to meet Iranian President Masoud Pezeshkian, with Iran’s ambassador to Moscow confirming plans for talks on the sidelines of the summit. Meanwhile, any meeting between Xi and Modi would come amid a cautious improvement in China-India relations after years of border tensions. For Japarov, the concentration of leaders creates a dense bilateral calendar alongside the SCO program. Meetings announced in the final days before the summit may prove as important as the plenary itself, particularly where they produce agreements on infrastructure, trade, energy, or financing. Bishkek Before September 1 The first major wave of officials is expected to arrive in the Kyrgyz capital on August 31. Manas International Airport will restrict scheduled passenger flights from 9 a.m. to 8 p.m. that day to accommodate aircraft carrying heads of state and official delegations. Restrictions will continue from 10 a.m. to 10 p.m. on September 1. The September 1 session is expected to conclude with the Bishkek Declaration and a package of accompanying documents prepared during Kyrgyzstan’s chairmanship. Foreign ministers have already approved drafts of the declaration, thematic statements, and other decisions as a basis for the summit. By then, however, much of the diplomacy may already have taken place in the meetings around it.
Kazakhstan Forecasts GDP Growth Above 5% in 2027–2029
Kazakhstan’s government has approved a socioeconomic development forecast and draft republican budget for 2027–2029, projecting average annual real GDP growth above 5% as manufacturing, agriculture, construction, transport, and other non-oil sectors expand.
The forecast was prepared with reference to the global economic outlook and conditions in external markets. The accompanying draft budget, approved at the same government meeting chaired by Prime Minister Olzhas Bektenov, will be submitted to the Kurultai for consideration.
Under the government’s baseline scenario, real GDP is projected to grow by 5.3% in 2027, 5.5% in 2028, and 5.4% in 2029. Nominal GDP is expected to rise from KZT 199.3 trillion in 2027 to KZT 245 trillion in 2029, an increase of almost 23%.
Non-oil sectors are expected to provide the main impetus for expansion. Manufacturing output is forecast to grow by an average of 5.9% a year, substantially faster than the 2% projected for mining. Metallurgy, mechanical engineering, construction materials, chemicals, and food production are expected to make the largest contributions.
Oil exports and the broader mining sector will remain central to the economy and public finances, but the forecast assumes that manufacturing and other non-oil activities will account for a larger share of new output.
TCA reported in July that Kazakhstan’s economy expanded by 4.1% in the first half of 2026 despite an 8.4% decline in oil production. The non-oil economy grew by more than 5%, with manufacturing, construction, trade, and transport accounting for more than 80% of overall growth. Manufacturing output increased by 9.8%.
Agriculture is expected to expand by at least 5% annually. Construction is projected to remain among the fastest-growing sectors, increasing by 16% in 2027 and 17.3% in 2029. Deputy Prime Minister and Minister of National Economy Serik Zhumangarin said the expansion would be supported by transport and logistics, energy, and water projects, together with the modernization of housing, utilities, and social infrastructure.
The services sector is also expected to maintain strong momentum. Trade is forecast to expand by an average of 5.7% annually, information and communications by 9.2%, and transport and warehousing by 10.4%.
The transport forecast builds on rapid expansion along the Trans-Caspian International Transport Route, or Middle Corridor. Annual freight volumes through Kazakhstan have risen from 0.8 million to 4.5 million tons over seven years, while delivery times fell from approximately 28–32 days to 13–17 days. The route still carries substantially less cargo than established northern corridors, and participating countries continue to work on remaining bottlenecks.
Infrastructure spending is a central element of the draft budget, but Bektenov said it must be accompanied by stronger financial discipline. Under President Kassym-Jomart Tokayev’s instructions, accelerated construction of infrastructure and social facilities has been designated as a principal budget priority. Government bodies were told to meet the approved economic targets, while administrators of budget programs were directed to increase the return on every tenge spent.
The headline budget deficit is forecast to fall from 2.3% of GDP in 2027 to just 0.4% in 2029. However, the non-oil deficit, which measures the shortfall without oil revenue, will remain considerably larger. It is expected to decline from 5.3% to 2.5%, showing that Kazakhstan’s public finances will remain dependent on hydrocarbon income and the National Fund.
That dependence is visible in the proposed National Fund withdrawals. The government plans to withdraw KZT 4.4 trillion, approximately $9.6 billion at the current exchange rate, in 2027. Of this, KZT 2.4 trillion will support the general budget, while KZT 2 trillion is earmarked for critical infrastructure. Total withdrawals are scheduled to fall to approximately $8.5 billion in 2028 and $7.6 billion in 2029.Despite those withdrawals, National Fund foreign-currency assets are forecast to rise from $65.2 billion in 2027 to $70.6 billion in 2029.
Inflation is projected at 7.5% to 9.5% in 2027, followed by a decline to 6% to 8% in 2028 and 2029. That would represent a moderation in price pressures, although inflation would remain high enough to affect household purchasing power, business costs, and financing conditions.
Kazakhstan is also expected to retain a positive merchandise trade balance, but only narrowly by the end of the period. Goods exports are projected to rise from $82.8 billion in 2027 to $88.5 billion in 2029, while imports increase from $80.5 billion to $88.4 billion. Based on the published rounded figures, the trade surplus would narrow from approximately $2.3 billion in 2027 to near balance in 2029.
The government’s forecast is more optimistic than the latest assessment from S&P Global Ratings. As TCA reported following S&P’s August upgrade of Kazakhstan to BBB, the agency expects economic growth to average 4%-4.5% in 2027–2029, which it says would still exceed growth in many of Kazakhstan’s commodity-exporting peers.
Reaching the government’s higher growth path will depend on infrastructure being delivered on schedule, new manufacturing investment translating into productive capacity, and fiscal consolidation proceeding without weakening the investment needed to sustain the non-oil economy.
AIFC Interview: Central Asia Investment, Middle Corridor and ESG
The Astana International Financial Centre (AIFC) positions itself as a platform for international investment in Kazakhstan and across Central Asia. In an interview with The Times of Central Asia, Zhanbolat Kakishev, Chief Product Officer at the AIFC Authority, discussed competition for investment, financing for the Middle Corridor, investor protection, ESG, and currency risks. Kakishev said the AIFC ecosystem has attracted $26.3 billion in investment to Kazakhstan and registered more than 6,000 companies from 90 countries. TCA: How does the AIFC assess the current investment climate in Central Asia amid the fragmentation of global markets, and what share of foreign direct investment into the region does the centre aim to attract in the coming years? Zhanbolat Kakishev: We assess Central Asia’s investment climate as resilient and gradually strengthening despite the fragmentation of global markets. Moreover, the restructuring of global supply chains and investors’ search for new sources of growth are creating additional opportunities for the region. International investor interest in Central Asia already rests on a solid foundation. According to UNCTAD, by the end of 2025, the stock of foreign direct investment in the region had reached approximately $235.5 billion, of which $156.4 billion was in Kazakhstan. The region combines a substantial resource base, a growing domestic market, and a strategic position between Europe and Asia. It also has significant investment potential in areas including transport and logistics, energy, critical minerals, digitalisation, and financial services. The AIFC does not set a target in the form of a fixed share of total FDI flowing into Central Asia. Our task today is to continue improving the AIFC ecosystem, its infrastructure, and the conditions that allow international capital to enter Kazakhstan effectively, as well as to participate in regional projects. To date, $26.3 billion in investment has been attracted to Kazakhstan through the AIFC ecosystem. More than 6,000 companies from 90 countries are registered in the Centre’s jurisdiction. For us, however, it is not only the volume of capital attracted that matters, but also its quality — long-term investment that contributes to economic diversification, private-sector development, and the further integration of Kazakhstan and Central Asia into global capital markets. TCA: Given the growing interest in the Middle Corridor, or Trans-Caspian International Transport Route, what investment instruments does the AIFC offer to finance major infrastructure and logistics projects in the region? Zhanbolat Kakishev: The AIFC provides comprehensive legal and financial infrastructure for structuring and attracting financing for major infrastructure and logistics projects, including those along the Middle Corridor. Depending on the structure of a project, special-purpose vehicles or companies (SPVs/SPCs), joint ventures, and investment funds can be used to pool capital from strategic, institutional, and private investors. Through the Astana International Exchange (AIX), projects can also raise debt and equity financing, including through conventional, green, and sustainability bonds, as well as Islamic finance instruments such as sukuk. For large infrastructure projects, the ability to combine different sources of capital is particularly important. These can include financing from international financial institutions and banks, funds from strategic and institutional investors, and capital-market instruments. This approach makes it possible to create more flexible financing structures and distribute risks among different categories of investors. The AIFC jurisdiction is already being used for initiatives related to the Middle Corridor. Middle Corridor Multimodal Ltd., established by the railway companies of Kazakhstan, Azerbaijan, and Georgia, is developing multimodal transportation and helping improve transport and logistics processes along the Trans-Caspian International Transport Route. KPMC, a joint venture between Kazakhstan Temir Zholy and PSA International, is developing logistics and digital solutions for the Middle Corridor. Caspian Integrated Maritime Solutions, a joint venture between KazMunayGas and AD Ports Group that provides maritime freight services across the Caspian Sea, is also registered with the AIFC. These projects are also listed in the AIFC’s own materials on the development of Kazakhstan’s transport and logistics sector. Another example of an investment mechanism is SK-AIH Investment Fund Ltd., established on the AIFC platform by Samruk-Kazyna and Azerbaijan Investment Holding. The $300 million fund is focused on investments in projects in Kazakhstan and Azerbaijan, including those related to the development of the Trans-Caspian International Transport Route and transport and logistics infrastructure. The AIFC has previously confirmed the fund’s role as an investment vehicle for Middle Corridor projects. TCA: English common law and the AIFC’s independent court are often cited as the centre’s main advantages. How does this system protect investors’ rights in practice when cross-border disputes arise in Central Asia? Zhanbolat Kakishev: The AIFC Court and International Arbitration Centre (IAC) have operated since January 1, 2018, and are independent of the judicial system of the Republic of Kazakhstan. The AIFC Court applies the principles and rules of English common law, and proceedings are conducted in English, with interpretation into Kazakh and Russian available. Where the relevant agreement allows, the parties can choose the applicable law themselves, providing additional flexibility when structuring cross-border transactions involving partners from different jurisdictions. In practice, investor rights are protected through a number of procedural safeguards. Decisions of the AIFC Court are final under applicable law, providing a high degree of legal certainty and avoiding lengthy appeal proceedings. Since February 2019, the eJustice system has also allowed documents to be filed and proceedings to be conducted remotely. Depending on the nature of a dispute, parties can choose litigation before the AIFC Court or alternative mechanisms — arbitration and mediation — through the IAC. The statistics demonstrate the use of these mechanisms. As of August 19, 2026, the AIFC Court and IAC had completed and enforced 5,415 cases, including 289 court judgments, 1,155 arbitration awards, and 3,971 mediation agreements. For Central Asia, this system has particular practical significance. Since not all foreign investors and their representatives are able to travel to Kazakhstan in person, the AIFC Court and IAC have established specially equipped facilities for in-person hearings in cooperation with leading law schools and universities in eight Eurasian countries — Armenia, Azerbaijan, Georgia, Kyrgyzstan, Tajikistan, Turkey, Turkmenistan, and Uzbekistan – as well as in China and in Almaty. The initiative is based on mutually beneficial cooperation and does not require funding from Kazakhstan’s national budget, while allowing parties to cross-border disputes in the region to hold full hearings without travelling to Astana. The system’s international recognition is also growing. The AIFC Court and IAC participate in major international dispute-resolution events, including Paris, London, and Istanbul Arbitration Weeks. In 2026, the IAC was nominated for a Global Arbitration Review (GAR) award, one of the best-known professional awards in international arbitration. Further development is aimed at expanding the system’s international presence and strengthening the position of the AIFC Court and IAC as a venue for resolving commercial disputes in Central Asia and beyond. TCA: What are the key incentives for developing ESG investment within the AIFC, and how strong is actual institutional investor demand for green and social bonds in Kazakhstan and neighbouring countries? Zhanbolat Kakishev: The key driver of ESG investment within the AIFC is the combination of regulatory infrastructure, the economy’s growing need to finance the energy transition, and the opportunity to attract a broader range of international investors. First, Kazakhstan has already established the basic infrastructure for sustainable finance: a national green taxonomy is in place, while AIX has dedicated rules for ESG-labelled bonds based on the international principles of ICMA and the Climate Bonds Initiative. Rules for issuing sovereign green bonds were also approved in 2025. Within the AIFC, this infrastructure is complemented by its independent jurisdiction and the AIX exchange. AIX offers listing-fee incentives for ESG bonds, significantly reducing costs for issuers of labelled instruments. The AIFC Green Finance Centre plays a key role in developing this market. It assists issuers in structuring green, social, and other sustainable-finance instruments, provides independent external assessments and verification, and supports transactions in accordance with ICMA and Climate Bonds Initiative standards. In this way, the Centre effectively lowers barriers to entry for new issuers and increases investor confidence in the quality and transparency of ESG issuances in Kazakhstan and Central Asia. At the same time, the range of projects using sustainable finance is expanding. It now extends beyond renewable energy to energy efficiency, modernisation of energy infrastructure, transport, social infrastructure, and other sectors. AIX, for example, has expanded its product range from conventional green bonds to social, sustainability-linked, transition, and other ESG instruments. As for institutional demand, we see it as growing, although the market cannot yet be described as deep or fully developed. Interest comes from development banks, international financial institutions, quasi-state organisations, and investors with ESG mandates. For most institutional investors, however, the decisive factors remain the issuer’s credit quality, yield, issue size, liquidity, and the quality of the underlying project. ESG status broadens the potential investor base and increases confidence in how proceeds are used, but it does not in itself guarantee demand. The most successful issuances today are therefore those in which the ESG component is combined with a strong credit profile and high-quality external verification. The market has nevertheless already reached a significant scale. According to the AIFC Green Finance Centre, by the end of 2025 the total volume of registered sustainable-finance instruments in Kazakhstan had reached approximately $2.86 billion, and around $5.59 billion across Central Asia and Azerbaijan. According to the latest figures, from the market’s launch in 2020 through July 2026, the volume of thematic green, social, and sustainability bonds together with labelled loans in Kazakhstan exceeded $3.5 billion. This shows that the market has moved beyond isolated pilot issuances, although it remains relatively concentrated. Institutional demand in the region therefore already exists and is gradually expanding. One of the main constraints, however, remains the supply of high-quality, sufficiently large, and liquid ESG instruments. The next stage of market development should be a shift from individual flagship transactions towards more regular issuance by banks, corporations, the quasi-state sector, and, potentially, sovereign and municipal issuers. In this process, the AIFC can serve as a regional platform that lowers barriers for issuers and makes such instruments more transparent and comparable for international investors. TCA: Many investors see currency volatility in Central Asian markets as a risk. What hedging mechanisms and conditions for profit repatriation are available within the AIFC to help minimize these concerns for foreign investors? Zhanbolat Kakishev: Currency risks remain an important factor for international investors operating in emerging markets. Currency risk cannot be eliminated entirely, but international investors need confidence in the free movement of capital and investment income, as well as the ability to conduct their activities in accordance with applicable AIFC law. The AIFC is developing a regulated infrastructure and legal environment in which investors can manage currency risk through financial instruments while benefiting from clear conditions for the cross-border movement of capital. For example, the AIFC has a regulatory framework for derivatives such as forwards, futures, options, and swaps. These instruments allow investors to hedge their currency positions and reduce the impact of adverse exchange-rate movements on the value of investments and future cash flows. The movement of capital is equally important. The AIFC operates under a special currency regime that allows transactions in both tenge and foreign currencies, subject to applicable currency legislation and banking procedures. The AIFC’s currency regulation rules separately set out the procedures governing foreign-exchange transactions involving Centre participants, AIFC banks, residents, and non-residents. Astana International Exchange, the AIFC’s regulated exchange, plays an important role in this infrastructure by providing international investors with access to local and international markets. AIX supports multicurrency trading and settlement, including settlement in currencies different from those of the underlying financial instruments. This allows investors to structure transactions more flexibly and reduces the need to assume additional currency risk where that risk is not part of the investment strategy itself. For foreign investors, the AIFC’s appeal therefore lies in the combination of three elements: risk-management instruments, a predictable currency regime, and regulated infrastructure for cross-border transactions. This makes it possible to structure investments not only for entry into the Kazakh market, but also with future exit and the receipt of investment income in mind. For example, a foreign investor can structure an investment through an AIFC participant company, gain access to investment instruments through AIX infrastructure, receive project income in accordance with the chosen structure, use currency instruments to manage foreign-exchange risk, and subsequently transfer that income across borders subject to applicable currency, tax, AML/CFT, and banking procedures. It is precisely this combination of a clear legal environment based on English common law principles, a regulated financial market, and special currency arrangements that makes the AIFC a convenient platform for international capital operating in Kazakhstan and Central Asia more broadly.
Kazakh Refinery Plans Fuel Exports to Russia Amid Petrol Shortages
A small refinery in western Kazakhstan is preparing to process Russian crude and send most of the resulting petrol and diesel back to Russia as Moscow struggles with fuel shortages. The arrangement was confirmed on August 25, the same day that separate incidents occurred at two of Kazakhstan’s three major refineries. On August 19, Russian Deputy Prime Minister Alexander Novak said that, given the situation on the fuel market, the government was “keeping its finger on the pulse” and monitoring supplies daily with companies and regional authorities. According to Novak, Russia had already imposed export restrictions and begun importing petroleum products. Several refineries were also expected to return from repairs, increasing domestic supplies. Russia’s Fuel Shortage The pressure on Russia’s fuel market is illustrated by data published by the industry portal InfoTEK. According to its August 24 snapshot, AI-95 petrol, the widely used 95-octane grade, was available at only 5,620 of Russia’s 26,098 operating filling stations, or 22%. Even in Moscow, it could be found at 161 of 786 operating stations, about 20%. Russia has also temporarily relaxed restrictions on lower environmental grades of fuel, including Euro 4, Euro 3 and Euro 2, known in the Russian classification as K4, K3 and K2. Since 2016, only fuel meeting at least the Euro 5 standard had generally been permitted. Russian economist Boris Grozovsky estimates that, given the refining capacity knocked out by Ukrainian strikes and the number of plants undergoing repairs, Russia is currently short of roughly one-third of the petrol needed at peak demand. August is traditionally a high-demand month because of summer travel and agricultural work. “If it were November now, the situation would be a little easier for the Russian government. Russia is trying to bring in petrol from India, Morocco, Turkey, Kazakhstan and Azerbaijan, but imports also have limitations. The petrol brought in from India turned out to be too expensive,” Grozovsky said. Kazakh Refinery Steps In Speaking at a government briefing on August 25, Kazakhstan’s Energy Minister Yerlan Akkenzhenov said that the small Condensat refinery in Aksai, West Kazakhstan Region, would process Russian crude, with around 70% of the petrol and diesel it produces sent to Russia. Up to 30% will remain on the Kazakh market, while the refinery also retains the right to export products outside the Eurasian Economic Union. “Under the agreement we currently have, up to 30% of the petroleum products in demand, petrol and diesel, will remain in Kazakhstan, while the rest will be shipped to the Russian Federation,” the minister told reporters. Akkenzhenov said the arrangement reflected Condensat’s location close to the Russian border. The refinery is not connected by pipeline to either country’s main oil network, meaning both crude deliveries and fuel exports depend on rail capacity. Akkenzhenov also stressed that the refinery’s owner is not under sanctions and said the Energy Ministry did not see sanctions risks for the project. He said the arrangement would also bring investment and preserve jobs at a refinery that has struggled financially. Condensat’s Financial Troubles Condensat was established in 1992 and for years processed unstable gas condensate from the Karachaganak field. Its supply dwindled after Karachaganak developed its own processing facilities, leaving the refinery struggling to secure sufficient feedstock. For the first stage of the upgrade, which included production of K5-standard petrol, the Development Bank of Kazakhstan provided $120 million. The modernization was completed by 2018, but shortages of crude continued, and the company struggled to service its debt. The dispute ended in a settlement, with the repayment schedule extended until 2028. In 2024, Condensat began processing crude supplied by Russia’s Tatneft on a tolling basis and received a quota to export the petrol it produced. The refinery’s ownership also has indirect links to Tatneft. Its main shareholder, Birinshi Shina Kompaniyasy LLP, is co-owned by Dubai-based Osprey Investment L.L.C. Osprey is also a co-owner of Mining Development Company Ltd., whose other shareholder is Turkish fuel distributor Aytemiz Akaryakıt Dağıtım A.Ş., which is wholly owned by Tatneft. The Development Bank of Kazakhstan currently lists Dzintars Puzaks as Condensat’s ultimate beneficiary; according to Kursiv, he represents Osprey and previously worked for Tatneft. Sanctions and Refinery Incidents The arrangement comes as Ukraine’s European allies discuss tightening restrictions on energy supplies to Russia through third countries. On August 24, French President Emmanuel Macron called on allies to prevent their companies from selling Russia oil, gas or diesel fuel. He said sanctions should increasingly target cases in which Russian companies buy fuel through “Swiss and other foreign companies.” “It is very important that we introduce this new series of sanctions. Until recently, this did not exist because Russia was an exporter. But now, thanks to our actions, Russia is importing,” Macron said. No sanctions targeting Condensat over the arrangement have been announced. Akkenzhenov said the refinery’s owner is not on sanctions lists and that the government sees no sanctions risk. The timing nevertheless added to an already nervous backdrop. On the same day the minister confirmed the plan, incidents occurred at two of Kazakhstan’s three major refineries. A fire broke out at the Atyrau Oil Refinery’s treatment facilities at 12:35 p.m. on August 25, when oil sludge caught fire inside an enclosed mechanical treatment facility. The refinery said no work was being carried out there when the fire began. No injuries were reported and the refinery continued operating normally. Later, the Shymkent refinery, operated by PetroKazakhstan Oil Products, suffered a voltage drop from an external 220 kV KEGOC power line. PetroCouncil.kz reported that the refinery’s catalytic cracking complex shut down automatically. KazMunayGas confirmed that one processing unit was being restarted but said the disruption had not affected daily fuel production or shipments. The third major refinery, in Pavlodar, had attracted attention a day earlier because of motorists’ complaints about petrol quality. Akkenzhenov said an inspection had begun, with representatives of the Energy Ministry and the Committee for Technical Regulation and Metrology sent to the refinery. There is no evidence that the incidents at Atyrau and Shymkent, the complaints concerning Pavlodar, or the Condensat arrangement are connected. Their coincidence in time, however, has produced an unusually tense backdrop for a decision that was already politically sensitive because of Russia’s fuel shortages and renewed discussion in Europe of sanctions on energy supplies to the country.
Short Stories from the Region
