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Organization of Turkic States

Opinion: Turkey’s Third Vector: How the Turkic States Are Expanding Central Asia’s Room for Maneuver

President Recep Tayyip Erdoğan’s May 13-14 state visit to Kazakhstan and the May 15 informal summit of the Organization of Turkic States in Turkistan should not be read as isolated diplomatic events. Together, they point to a larger shift in Central Asia’s geopolitical architecture. During Erdoğan’s visit to Astana, Kazakhstan and Turkey signed the Declaration on Eternal Friendship and Expanded Strategic Partnership, along with agreements covering trade, transport, energy, education, investment, defense cooperation, oil and gas, and financial-sector collaboration. The two sides also reaffirmed their goal of raising bilateral trade to $15 billion. Erdoğan was awarded the newly established Khoja Ahmed Yassawi Order, a symbolic gesture tied to the summit being hosted in Turkistan, the city most closely associated with Yassawi’s legacy. A day later, Turkistan hosted the informal summit of the Organization of Turkic States under the theme “Artificial Intelligence and Digital Development.” The timing matters. Central Asia is no longer operating inside a simple Russia-China framework. Russia remains deeply embedded in the region through security history, infrastructure, language, labor migration, and energy networks. China remains the region’s main infrastructure and trade heavyweight. The West is increasingly focused on sanctions, critical minerals, connectivity, and the Middle Corridor. But Turkey is becoming something different: not a replacement for Russia or China, but a useful third vector. Its influence is built on identity, logistics, defense technology, education, digital cooperation, and institutional networking through the Turkic States framework, rather than overwhelming capital or military dominance. Turkey as a Corridor Power Turkey cannot match China’s investment scale in Central Asia. It also cannot match Russia’s historical security depth. Ankara does not need to replace either power to matter. Its comparative advantage is different. Turkey connects Central Asia westward, to the South Caucasus, the Black Sea, the Mediterranean, and Europe. It also offers a language of partnership that is culturally familiar and politically less threatening than great-power patronage. Tokayev captured this dimension during the joint statements in Astana, describing Turkey as a “golden bridge” connecting Europe and Asia. The framing is telling: not a partner of equal weight, but a connector, exactly the function of a corridor power. A corridor power does not dominate a region directly. It expands the routes, partnerships, platforms, and strategic options available to states that do not want to be trapped between larger powers. That is why the Erdoğan-Tokayev meeting and the Turkistan summit matter. The issue goes beyond bilateral trade. It is the gradual construction of a Turkic corridor linking identity, transport, defense, digital governance, and markets. The OTS as Identity Infrastructure The Organization of Turkic States is often dismissed as symbolic: summits, speeches, flags, cultural rhetoric, and references to shared history. That reading is incomplete. Identity is not just emotion. In international politics, identity can become infrastructure. Shared language, educational networks, media links, cultural affinity, and repeated institutional contact reduce the cost of trust-building. They make it easier to sign agreements, build transport projects, expand student exchanges, coordinate business forums, and create political habits of consultation. The...

4 weeks ago

CA5+UK

Opinion: UK’s C6 Engagement and the Opportunity for British Geostrategic Renewal

Along with Nicholas Spykman, Sir Halford Mackinder is one of the most pre-eminent thinkers in the field of geopolitics. Whilst today geopolitics is a term used interchangeably with “world affairs,” “international relations,” and “foreign policy,” Spykman and Mackinder used the phrase to describe the narrow academic study of how geography influences international relations and the conduct of states. In the 1904 paper, The Geographical Pivot of History, Mackinder theorized that the key to controlling the balance of power in the world rested in a “heartland” of Eurasia, comprising Eastern Europe and Central Asia. Mackinder described the heartland region as the “pivot region” for regional and global hegemony. The word “pivot” has recently been popularized in international relations, with examples including President Obama’s pivot to the Pacific and Britain’s Indo-Pacific pivot in the 2021 Integrated Review. In 1997, former U.S. National Security Adviser Zbigniew Brzezinski built on Mackinder’s ideas in his work, The Grand Chessboard. Brzezinski defined a geopolitical pivot as being “determined by their geography, which in some cases gives them a special role either in defining access to important areas or in denying resources to a significant player. In some cases, a geopolitical pivot may act as a defensive shield for a vital state or even a region.” To Mackinder and Brzezinski, Central Asia was a crucial geostrategic pivot. Central Asia - comprising the five states of Uzbekistan, Kazakhstan, Tajikistan, Kyrgyzstan, and Turkmenistan, collectively termed the C5 - is located between China, Russia, Iran, and Afghanistan. Thus, the near abroad of the region is defined by conflict between Russia and Ukraine, Iran and Israel/U.S., and between Taliban-run Afghanistan and Pakistan. Pragmatic engagement is a necessity for the C5 but has not stopped them from pursuing greater diversification in security and economic arrangements, and they remain committed to U.S.-led diplomatic initiatives. Faced with a regionally assertive superpower in China, risks created by Russia’s war in Ukraine, theocratic Iran, and the Taliban in Afghanistan, Central Asia has continued to show its desire to build and deepen its economic and security partnerships from beyond traditional powers – such as China and Russia – to states in the Gulf, the Caucasus, Western Europe, and elsewhere. The United Kingdom has emerged as a new and important partner. Russia’s invasion of Ukraine has raised concerns in the Central Asian states about its regional revisionism, territorial ambitions, and Putin’s reconstruction of the Soviet Union. In 2014, Putin credited Nursultan Nazarbayev with having “created a state in a territory that had never had a state before,” adding that “the Kazakhs never had any statehood.” The remarks sparked anger in Kazakhstan and fed concern about Moscow’s view of post-Soviet sovereignty. Finally, Putin said that it would be best for Kazakhstan to “remain in the greater Russian world.” In The Grand Chessboard, Brzezinski predicted that “Russia without Ukraine can still strive for imperial status, but it would then become a predominantly Asian imperial state, more likely to be drawn into debilitating conflicts with aroused Central Asians.” Central Asia has been a...

4 weeks ago

TCA Interviews

Screenwriter Yefrat Sharipov on AI and the Future of Kazakhstani Cinema

Screenwriter Yefrat Sharipov is a graduate of Kazakhstan’s Academy of Civil Aviation and the New York Film Academy (NYFA), and one of the country’s most sought-after screenwriters in recent years. He worked on the box office hit Dos-Mukasan, a film about the legendary Kazakhstani musical group often described as the local equivalent of The Beatles. He now reflects on the future of global cinema, the role of artificial intelligence, and why Kazakhstani stories can resonate far beyond the country’s borders. In an interview with The Times of Central Asia, Sharipov discusses how engineering thinking shapes his approach to storytelling, why screenwriters must understand the inner workings of the film industry, and how technology may soon erase language barriers. TCA: You’re a screenwriter with an engineering background who graduated from the Academy of Civil Aviation. How did that happen? Sharipov: Honestly, it’s difficult for me to explain myself. The desire to write stories has been with me since childhood; I always knew I would never stop doing it. The need to express myself through writing appeared very early. Back in school, I was already trying to write short stories, novellas, poetry, even songs. But when it came time to choose a profession, I decided to pursue a technical field, although I never stopped writing “for the drawer.” Later, when I entered the film industry and worked on projects in other roles, I remembered this passion and realized there was a way to apply it professionally. There was a huge demand for screenwriters. At first, it was mostly curiosity, I wanted to see whether anyone besides me would actually find my stories interesting. Gradually, things started to work out, and here I am. TCA: What did you write about as a child? Sharipov: About whatever fascinated me at the time. At one point, I became obsessed with Tolkien and started inventing fantasy stories with imaginary creatures. I mostly wrote for myself, though sometimes I let friends, parents, and relatives read my work. I remember my mother always praising me, and I usually got good grades for essays at school. My friends and I even kept what we called “school chronicles,” where we humorously wrote about everything happening around us. Honestly, if I were a better speaker, maybe I would have become a stand-up comedian. TCA: Does your technical education help you in your current work? Sharipov: It does. Technical disciplines probably influenced the way I approach storytelling. I look at stories almost like an engineer, everything has to be structured and logical. Before starting a film, I research the subject deeply. I don’t just read materials casually. I use an approach similar to scientific research. I gather facts, critically analyze the material, and repeatedly verify information. TCA: So, every film becomes almost like a dissertation. But cinema is always about people. Can human beings really be approached scientifically? Sharipov: When I worked on the Dos-Mukasan biopic, I didn’t just rely on archival material, I tried to meet personally with everyone who had...

4 weeks ago

Mining

Astana Mining Congress to Highlight Kazakhstan’s Role in Critical Minerals

The 16th International Mining and Metallurgy Congress and Exhibition, Astana Mining & Metallurgy (AMM) 2026, will take place on June 11-12 at the Hilton Astana, bringing together mining and metals companies, investors, technology suppliers, government officials, and industry experts. The forum comes as Kazakhstan is trying to strengthen its position in the global critical minerals race. The country already has a large extractive base, but officials and industry groups are increasingly focused on processing, technology, and investment partnerships rather than raw-material exports alone. Kazakhstan’s appeal lies not only in the size of its mineral base, but also in the timing. The U.S. Department of Commerce says the country has substantial reserves of rare earth elements, copper, lithium, tungsten, tantalum, and other materials used in clean energy, advanced manufacturing, and defense technologies. The European Union has also signed a strategic partnership with Kazakhstan on raw materials, batteries, and renewable hydrogen, underscoring Astana’s growing role in efforts to diversify supply chains away from dominant producers. According to Kazakhstan's Bureau of National Statistics, the country's industrial production index reached 107.5% in 2025. Mining and quarrying grew by 9.4%, driven by higher production of coal, crude oil, natural gas, and other minerals. Organizers said the wider mining and metallurgical complex, including related industries such as mechanical engineering, logistics, energy, and industrial services, may account for up to a quarter of Kazakhstan's economy. Against that backdrop, they said the sector needs new investment, technological solutions, and expanded international partnerships. Alongside the congress, an international specialized exhibition dedicated to mining and metallurgical technologies will be held. The exhibition will feature solutions for geological exploration, extraction and processing of raw materials, industrial automation, and workplace safety. Companies from Germany, Kazakhstan, Canada, China, Russia, Saudi Arabia, Finland, France, the Czech Republic, and Sweden are expected to participate. National delegations from Canada, Saudi Arabia, the United States, and Sweden are also expected to attend. Among the new participants announced by organizers are INCO Engineering, ABP Engineering, David Brown Santasalo, and Actuator Service. Last year's event attracted about 2,900 industry professionals, while 50 companies participated in the exhibition. The business program will be held under the slogan “From the Depths of the Earth to the Heights of Intelligence,” with a focus on digitalization and technological transformation in the industry. The first day will include a plenary session on global partnerships in mining and metallurgy, as well as panel discussions on international metals trade, the investment climate, taxation, and critical minerals. Particular attention will be paid to copper's role as a strategic metal. Copper is central to electrification, grid expansion, and data infrastructure, making it one of the metals most closely tied to the energy transition. The critical minerals component gives the event a wider geopolitical significance. Kazakhstan's Foreign Ministry said in April that Astana had invited the U.S. Under Secretary of State for Economic Affairs Jacob Helberg to participate in AMM and the first C5+1 Critical Minerals Dialogue, both scheduled for June in Astana. The C5+1 format brings together the...

4 weeks ago

Afghanistan

Opinion: The Southern Dimension of the Middle Corridor – Afghanistan’s Role in Eurasia’s New Logistics Landscape

Afghanistan’s integration into the Trans-Caspian International Transport Route (TITR) is extending beyond local logistics and evolving into one of Eurasia’s key geo-economic projects. Amid the global transformation of supply chains, Central Asia has an opportunity to move beyond its role as a transit periphery and become an active participant in shaping new economic corridors, creating a full-fledged “southern dimension” of Eurasian connectivity. Two Routes: Strategic and Operational Two main directions for Afghanistan’s integration into the Eurasian transport system are currently under discussion, each reflecting a distinct development logic: strategic and pragmatic. The “Eastern Branch” (Termez-Mazar-i-Sharif-Kabul-Peshawar) is traditionally viewed as the primary trans-Afghan route. Its key advantage is direct access to the ports of Karachi and Gwadar, providing the shortest connection between Central Asia and the Indian Ocean. At the same time, geography makes the project highly complex. The route passes through the central and eastern regions of Afghanistan, including the Hindu Kush mountain range, where long tunnels and bridges would be required. This would sharply increase construction and maintenance costs, extend implementation timelines, and heighten security and infrastructure risks. According to available estimates, the project could cost around $5 billion and handle 15-20 million tons of cargo annually. However, the lengthy investment cycle and dependence on political stability mean implementation remains a long-term prospect. The “Western Branch” (Turgundi-Herat-Kandahar-Spin Boldak) represents an alternative logistics corridor based on more favorable geography. Western Afghanistan is characterized by predominantly flat, semi-arid terrain, reducing the need for complex engineering structures and allowing the project to be implemented in phases. This significantly lowers capital costs, shortens construction timelines, and reduces infrastructure risks. The western route’s initial capacity is estimated at 7-10 million tons of cargo annually, making it the more realistic option for medium-term planning. An additional advantage is its geo-economic flexibility. Via Herat, the route could be integrated not only southward through Pakistan, but also westward through Iran, providing access to Persian Gulf ports. This would transform it into a multi-directional corridor capable of serving several logistics flows simultaneously. The Eastern Branch, therefore, remains the strategic option offering the shortest route to the ocean but requiring substantial investment and time. The Western Branch, meanwhile, presents a more pragmatic solution: faster to implement and more flexible from a geo-economic standpoint. The Role of Turkmenistan and Kazakhstan in the “Western Maneuver” The implementation of the western trans-Afghan corridor depends on close coordination between two key regional players, Kazakhstan and Turkmenistan, which form the northern foundation of the future route by providing access to the Caspian Sea and, beyond it, global markets. Astana and Ashgabat are effectively creating a new geo-economic framework that could transform Central Asia from an isolated region into a strategic crossroads linking the Caspian Sea with the Indian Ocean. In 2026, Kazakhstan moved toward deeper institutionalization of the initiative, making the route through Herat and Kandahar a government priority. Astana’s strategy is multifaceted. In addition to establishing a permanent interdepartmental commission, Kazakhstan is actively seeking to attract international operators such as the Emirati AD...

4 weeks ago

TCA Interviews

Ukraine’s Foreign Minister on Kazakhstan, Trade, and War

As Kyiv works to rebuild ties across Central Asia, Kazakhstan has become one of Ukraine’s most important regional interlocutors. The relationship has been shaped by war, trade disruption, humanitarian support, and the search for new transport routes linking Asia and Europe. The Times of Central Asia has previously reported on Ukraine’s efforts to deepen engagement with Central Asia and on Astana and Kyiv’s attempts to restore trade ties. In an interview with TCA, Ukraine’s Foreign Minister Andrii Sybiha discussed Kazakhstan’s role in this changing landscape, the prospects for economic cooperation, the Middle Corridor, post-war reconstruction, and the humanitarian and cultural ties connecting the two countries. TCA: Against the backdrop of shifts in global politics and Central Asia’s growing role, Ukraine has been deepening its dialogue with the region. How are these relations being translated into practical cooperation in politics, economics, and the humanitarian sphere? Foreign Minister Sybiha: Ukraine and Kazakhstan share a long-standing, traditionally friendly relationship, not only at a governmental level, but also between our peoples. My own family history is directly connected with Kazakhstan. My father worked in your wonderful country, in Kostanay. Many of his friends still live there. He often told me that he dreams of returning one day to see them again. Personally, I associate Kazakhstan with many warm memories, including your unique cuisine. I love qazy; it is an incredibly delicious dish. Kazakhstan possesses a rich and distinctive culture, language, and national identity. I greatly admire how all of this continues to develop in modern Kazakhstan, especially how young people are embracing traditions and striving to preserve and enrich them. This is a sign of a strong nation that knows its roots and therefore has a future. Kostanay is also linked to the story of our outstanding writer, Mykola Khvylovy, who lived and worked there for a period of time. You see how much connects our countries, even if we take just one city as an example. Unfortunately, there are tragic chapters as well. It was in Kostanay that our world-renowned orientalist, Slavic scholar, and one of the founders of the Ukrainian Academy of Sciences, Ahatanhel Krymsky, died in imprisonment. Those were terrible times, a painful past from which we must draw the right conclusions for the present and the future. Turning to politics and global issues, I would emphasize the following: all our efforts are aimed at achieving peace. This war cannot be ended solely on the battlefield; Ukraine understands this very realistically. The question is whether Moscow is finally prepared to understand it as well. It is time to end the war and move toward diplomacy. Today, Ukrainians are defending their homes and their children with weapons in their hands against unprovoked aggression. This is an existential struggle for the future of the next generations and for the right to remain Ukrainian. This struggle did not begin four and a half or even twelve years ago. Russia’s strategic objective is to complete what the Russian Empire began and what the Soviet Union...

4 weeks ago

Demographics

Kazakhstan’s Demographic Shift Puts Labor Market Under Strain

Kazakhstan’s population surpassed 20.5 million in the spring of 2026, but the country’s rapid demographic growth is increasingly being accompanied by structural economic imbalances. Kazakhstan is simultaneously facing the effects of declining birth rates, population aging, and a widening gap between the education system and labor market needs. Economists warn that the country is entering a phase in which the large generation born during the baby boom of the 2000s is placing growing pressure on the labor market, even as the share of the working-age population gradually declines. According to Kazakhstan’s Bureau of National Statistics, the number of births peaked in 2021, when 446,500 children were born. By 2025, this figure had fallen to 335,000, the lowest level in the past five years. The total fertility rate also declined to 2.57 children per woman, marking the lowest level since 2009. The decline in births has occurred despite a growing number of women of reproductive age. By early 2026, their number had reached a record 4.79 million. Analysts note that the drop in the overall birth rate to 16.43 births per 1,000 people, the lowest level in more than two decades, points to changing household behavioral patterns. In Kazakhstan’s largest cities, including Almaty and Astana, families are increasingly postponing childbirth because of high housing costs and rising debt burdens. The average age of motherhood has approached 30 years, reaching 29.9. High inflation is adding further pressure on households. Annual inflation remained in double digits in early 2026, which, combined with mortgage expenses, has made raising large families significantly less affordable for the urban middle class. Kazakhstan’s demographic dynamics are also becoming increasingly uneven. In the southern and western regions, fertility rates remain above the replacement level of 2.1 children per woman. However, in northern regions, fertility has declined to between 1.63 and 1.75, approaching levels more typical of Eastern European countries. Population growth is still supported by rising life expectancy and relatively low mortality, around 6.64 deaths per 1,000 people over the past four years. Nevertheless, demographers warn that the current increase in population masks a gradual future decline in the labor force. One of the key risks is the shrinking share of the working-age population. Over the past decade, it has fallen from 64% to 57.7%, increasing pressure on employed citizens to finance pension and social welfare systems. Experts warn that a decline in the number of contributors paying mandatory social contributions creates long-term risks for Kazakhstan’s Unified Accumulative Pension Fund and the Social Health Insurance Fund. At the same time, an aging population is increasing state healthcare expenditures. Businesses are already facing labor shortages in some industrial and agricultural regions. In the North Kazakhstan Region, employers have reported shortages in agriculture, manufacturing, and other key sectors. Kazakhstan adds more than 350,000 new labor market entrants each year, thanks to the generation born in the early 2000s. However, instead of entering industry or agriculture, many young people are increasingly choosing jobs in the urban service economy, including taxi services, delivery...

4 weeks ago

Industrial Production

Kyrgyzstan’s Industrial Output Rises as Employment Falls

Industrial production in Kyrgyzstan has increased more than six times over the past 15 years, although the sector’s share of the national economy has declined and employment in industry has fallen sharply, according to data from the National Statistical Committee. By the end of 2025, industry accounted for 17.7% of Kyrgyzstan’s GDP, compared to 20.7% in 2010. At the same time, industrial output increased by more than 530% over the same period. In 2010, the value of industrial production was estimated at around $1.4 billion, while by 2025 output had reached approximately $9.1 billion. The figures indicate significant industrial growth, although other sectors of the economy, particularly trade and services, have expanded even faster, analysts say. The sector has also experienced a sharp decline in employment. Around 268,000 people worked in industry in 2010, but by 2025 that number had fallen to 144,000. At the same time, the number of industrial enterprises increased from roughly 2,000 to 2,400, which statisticians say points to structural changes and rising productivity. Manufacturing remains the backbone of Kyrgyzstan’s industrial sector, accounting for nearly 80% of all industrial enterprises. The country’s main industrial segments include food processing, textile production, construction materials, and primary raw-material processing, including metallurgy. High-tech industries such as machinery manufacturing, electronics, and advanced chemical processing remain underdeveloped. Energy accounts for around 10.2% of industrial production, while mining contributes 9.2%. Economists note that much of Kyrgyzstan’s processing industry still produces goods with relatively low added value. The raw materials sector, particularly gold mining, continues to be one of the main drivers of industrial growth despite its comparatively modest share in the overall production structure. At the same time, energy development remains one of the biggest constraints on further industrialization. Despite active construction of solar and wind power plants, small hydropower stations, and implementation of the large Kambar-Ata-1 hydropower project, Kyrgyzstan continues to face electricity shortages during the winter season. The energy deficit limits the launch of energy-intensive industries and continues to restrain investment inflows into the industrial sector.

4 weeks ago

IPO

IPO as a Lifeline: Who Will Pay for Kazakhstan Railways’ Growing Debt?

The planned IPO of Kazakhstan’s national railway operator, Kazakhstan Temir Zholy (KTZ), once presented by the authorities as one of the largest public offerings in Central Asia, is increasingly being viewed as an attempt to stabilize the company’s balance sheet amid rapidly rising debt. The share sale, expected in late 2026, may turn out to be less a growth story than a mechanism for refinancing the obligations of the state-owned carrier. During parliamentary hearings on April 24, company executives acknowledged that one of the key objectives of the IPO is to raise funds to service KTZ’s growing debt burden. According to official company and government data, KTZ’s nominal debt has risen sharply. It stood at about $5.7 billion in early 2024, and roughly $8 billion by 2025. By April 2026, it had reached 4.7 trillion tenge, or about $10.4 billion. The increase reflects heavy borrowing for rolling stock, infrastructure modernization, and the expansion of Kazakhstan’s transit capacity, including projects linked to the Middle Corridor. It also reflects the cost of maintaining below-market tariffs for socially important domestic freight. Kazakhstan’s Supreme Audit Chamber warned as early as 2024 about risks related to the company’s financial sustainability. However, the authorities and KTZ management argue that large-scale borrowing was necessary to prevent an infrastructure crisis. According to official estimates, borrowed funds include about $4.9 billion for renewing rolling stock, including locomotives and railcars, and about $2.3 billion for modernizing railway infrastructure. The currency structure of the debt represents an additional vulnerability. More than half of the company’s obligations are denominated in foreign currencies, making KTZ highly sensitive to fluctuations in the tenge. Any weakening of the national currency automatically increases debt servicing costs and reduces the operator’s profitability. Potential investors face another challenge: historically, KTZ has served not only as a commercial company but also as an instrument of state social policy. A substantial share of revenues from China-Europe transit freight is used to subsidize unprofitable domestic passenger transport and the transportation of socially important goods within Kazakhstan. This cross-subsidization mechanism limits the company’s ability to generate free cash flow. Grain transportation under regulated tariffs alone generated losses of approximately $95 million (44 billion tenge) for KTZ in 2024. In an effort to improve the company’s attractiveness ahead of the IPO, KTZ has initiated large-scale tariff increases for mainline railway services. Beginning in April 2026, transportation tariffs for coal, grain, and iron ore were doubled. However, the move risks adding to costs in Kazakhstan, where railway tariffs directly affect the cost of food, electricity, and industrial goods. Annual inflation stood at 12.2% in January 2026, adding to concerns that higher railway tariffs could feed into wider price pressures. Additional inflationary pressure may come from the expiration of the government’s moratorium on utility tariff increases, after which household utility bills in some regions could rise by 10-20%. Against this backdrop, analysts do not rule out a return to tighter state regulation of tariffs, a development that could once again limit the ability of natural...

4 weeks ago

Oil Prices

Opinion: Kazakhstan, Oil, the Iran War and Dutch Disease

In 1977, The Economist coined a new term for the (potential) negative consequences of a short-term boom in natural resources: “Dutch disease.” The phenomenon got its name from an analysis of the decline of the manufacturing sector in the Netherlands following the 1960s natural gas discoveries at Groningen, in the northeastern Netherlands. The theory was that a surge in the price of a natural resource like oil or gas would likely cause currency appreciation, making imports cheaper and other sectors, like manufacturing, less competitive. Whether the recent spike in oil prices will contribute to Dutch disease in oil-rich Kazakhstan will likely depend on the length of the Iran war’s effect on oil prices (which could last well beyond the end of the conflict itself) and the government’s stewardship of Kazakhstan’s economy. President Kassym-Jomart Tokayev deserves credit for the government’s efforts to diversify the national economy. Investing in the nation’s manufacturing base, especially SMEs, educating the Kazakh workforce, and improving healthcare are all helping broaden the Kazakh economy and reduce the country’s dependence on oil. But oil is the main driver of Kazakhstan’s wealth, and while other sectors are increasing their share of Kazakhstan’s economy, oil and the wider extractive sector remain central to public finances, accounting for over 40% of government revenues. So, let’s do a deep dive on Kazakhstan’s oil. Most of Kazakhstan’s oil comes from the west of the country, including the Tengiz field near the Caspian Sea and the offshore Kashagan field in the northern Caspian. The Tengiz oil field is one of the deepest and largest oil fields in the world, while Kashagan, an offshore deposit, ranks as one of the largest global oil discoveries since the 1960s. Kazakhstan’s main export blend, CPC Blend, is a light, sweet crude, a desirable oil type that’s easy to refine into gasoline and diesel. Because the Iran war and restrictions around the Strait of Hormuz have disrupted tanker traffic and raised fears of supply shortages, global oil prices have climbed. And while high oil prices are generally a net positive for Kazakhstan, the current price - Brent crude was trading above $100 per barrel in mid-May 2026 - could present problems. In the short term, high oil prices tend to boost government revenues and budget surpluses. They can increase inflows to Kazakhstan’s National Fund, depending on production, tax receipts, transfers, and government withdrawal policy, and provide resources for government spending on infrastructure and social programs. They can also stimulate demand in related sectors, boosting Kazakhstan’s oil-related industries. And since oil exports typically make up more than half of the nation’s export revenues, high oil prices generally lead to a rise in Kazakhstan’s GDP. So far, so good. But high oil prices also carry risks. For one thing, they can strengthen the tenge and add to domestic demand, especially if higher revenues feed into faster government spending. Which is where Dutch disease comes in. As the stronger currency makes non-oil exports less competitive, capital and labor shift toward the energy...

4 weeks ago

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