Kazakhstan’s Logistics: Mukhtar Tolegen on Infrastructure and Reform
Kazakhstan has invested tens of billions of dollars in transport infrastructure in recent years and has positioned itself as a key transit link between Europe and Asia. Yet the country still ranks in the middle of the World Bank’s Logistics Performance Index (LPI). Why have these large investments not produced a sharper improvement, and what reforms are needed to change that? The Times of Central Asia spoke with Mukhtar Tolegen, executive director for transport logistics at the Union of Transport Workers of Kazakhstan, “KAZLOGISTICS.” TCA: What is Kazakhstan's current position in the LPI, and how has it changed? Mukhtar: In the World Bank's 2023 LPI ranking, Kazakhstan ranks 79th out of 139 countries, with an overall score of 2.7 on a five-point scale. This represents a decline from the previous ranking, when the country ranked 71st. It's important to note that the index's methodology was updated in 2023. In addition to expert assessments, the calculation now includes real-world cargo tracking data, including GPS-based data. This made the ranking more objective and simultaneously increased competition between countries. Despite its decline, Kazakhstan is demonstrating steady progress in a number of areas. This is primarily due to the development of transport infrastructure, the construction of new highways, the modernization of checkpoints, and the creation of transport and logistics centers. Strengthening the country's transit potential within international transport corridors, including the Middle Corridor, the North-South Corridor, and the China-Kazakhstan-Europe route, is also playing a significant role. At the same time, digitalization of logistics is rapidly advancing, including electronic customs solutions, cargo tracking systems, and other technological tools. An additional driver is the growing interest of international investors, including in the context of the Belt and Road Initiative. TCA: How does a country's position in the ranking affect its economy and investment attractiveness? Mukhtar: The LPI index is not simply a reflection of the state of the logistics system, but an important indicator of a country's economic competitiveness. The higher a country's ranking, the lower its logistics costs for exports and imports, the faster cargo flows across borders, and the higher the level of trust among international partners and investors. Low scores, on the other hand, indicate bottlenecks, for example, in customs procedures or infrastructure. Under such conditions, large international companies may choose alternative routes, which reduces the country's transit potential. Thus, the LPI serves as a tool that directly influences the development of international trade, investment attractiveness, and the country's strategic position in the global market. TCA: In which index components is Kazakhstan showing progress, and where are challenges remaining? Mukhtar: The LPI index is based on six key components, and the dynamics of these components in Kazakhstan remain uneven. Quality of Infrastructure Steady progress is being observed here, driven by large-scale investments in the transport system. The modernization of the Dostyk-Moiynty railway section has significantly increased the capacity of the Kazakhstan-China route. Projects are underway to build new lines, including a bypass of Almaty, as well as the Moiynty-Kyzylzhar, Darbaza-Maktaaral, and Ayagoz-Bakhty routes....
