Sultanov B.K. Kazakhstan Today

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4.9. Agriculture

Agriculture is one of the key industries of Kazakhstan’s econo-

my.

In the north, the climate is favourable for the cultivation of

spring wheat, oats, barley and other crops, as well as vegetables,

melons, and a number of industrial plants (sunﬂ ower, crown ﬂ ax,

tobacco, etc.).

In the warm south, at the foothills and in the river valleys, cot-

ton, sugar beet, yellow tobacco and rice are grown using irrigation.

Gardens and vineyards bear fruit.

Kazakhstan’s diverse nature provides signiﬁ cant opportunities

for the development of animal husbandry. Sheep, horse, camel

and cattle breeding are the traditional types of husbandry in Ka-

zakhstan.

The desert and semi-desert areas in central and southwest Kaza-

khstan are widely used as seasonal pastures. In summer, mountain

meadows in the east and southeast are used.

As a priority sector of the country’s economy, agriculture has great

potential and signiﬁ cant reserves.

Kazakhstan’s agrarian sector has the following features:

– the horizontal and vertical zoning of soil and vegetation is

strongly expressed. The forest-steppe and steppe zones account for

10% of all land, semi-desert and desert about 60%, and mountain

areas about 5%. Annual precipitation is low in all farming areas

(150-320 mm);

– the total area of agricultural land is 222.6 million hectares,

including 24 million hectares (10.8%) under the plough, 5 million

hectares (2.2%) occupied by hayﬁ elds, and 189 million hectares

(85%) by pastures;

– northern regions specialise in growing crops and animal hus-

bandry; southern regions, where irrigation plays a signiﬁ cant part,

cultivate diverse plants (crops, oil plants, fruit and berries, vegetables,

cotton);

– Kazakhstan is a major exporter of wheat and ﬂ our (one of

the top ten exporters globally); cotton and leather/wool have a sig-

niﬁ cant portion in the country’s agricultural exports (15% and 25%,

respectively);

– animal husbandry is traditional in Kazakhstan.

To strengthen the rural economy, state and industrial programmes

to develop and support the agricultural sector and villages were

adopted over the last ten years and fuelled with solid ﬁ nance. Addi-

tionally, the Kazagro national holding was set up in 2006 to improve

the system of state support. The holding includes the Food Contract

Corporation, Mal Onimderi Korporatsiyasy, Kazagroﬁ nance, the

Agrarian Credit Corporation, the Fund for Financial Support to Ag-

riculture, Kazagrogarant, and Kazagromarketing.

The holding company works to implement the state policy of food

security, provide credits and insurance for agricultural businesses, and

develop the markets in agricultural produce and rural areas.

These and other issues can be resolved if the policy of invest-

ment in Kazakhstan’s agricultural sector is improved, the agrarian

production and service infrastructure is advanced, and horizontal

and vertical ties and the respective production cycles are created in

the agricultural sector. Currently, the development of exports and

respective infrastructure, and control and stabilisation of domestic

food markets are of particular importance.

The strategic objectives for the investment policy are to diversify

the sources of ﬁ nance for the sector, expand the market in domestic

and foreign capitals, develop the system of guarantees to creditors,

and enhance the instruments of ﬁ nancing, because the national budget

still remains the main source of funds. Measures are also being taken

to advance rural businesses and the system of ﬁ nancial services to

rural population, including with the participation of the commercial

players in the ﬁ nancial market.

Kazakhstan is trying to make its agricultural sector export-ori-

entated, which is why it is particularly important to develop the

production and service infrastructure. This involves providing the

sector with better equipment, introducing up-to-date processes and

leasing schemes, encouraging associations of small agricultural

producers, developing the full production cycle, advancing non-

agricultural businesses in rural areas, and ensuring the institutional

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development of credit and consumer partnerships and cooperatives

in rural areas.

In addition, taking into account foreign achievements in the promo-

tion of competitive agriculture, it is planned to develop an insurance

system for the crop growing sector, provide agricultural players with

access to exhibitions and fairs, and set up a network of information

and advisory centres in rural areas.

Cluster development projects (with regard to the cotton, horticul-

ture, processing, and poultry breeding clusters) are being implemented

within the framework of the government’s strategic programmes. In

particular, as a result of government support and private investors,

projects are being implemented to set up a network of vegetable

warehouses, greenhouses and poultry farms and build grain and cot-

ton processing factories.

The agricultural sector needs to enhance exports and diversify

markets. This will allow the country to use the advantages of the

sector when global demand for quality food expands.

To this end, new grain terminals will be built abroad (in Iran, on

the Black Sea, and on the Chinese border) and the Aktau seaport

capacity will be increased.

In addition, the government is providing support to innova-

tive agricultural projects, as well as research and engineering.

Kazagroinnovatsiya was set up for this purpose. This company

consolidates agricultural research institutions, in particular in the

area of grain farming, animal husbandry, food industry, forestry,

farming, crop growing, ﬁ shery, mechanisation, and agricultural

economics.

The consolidation of agrarian research and production potential

will raise the effectiveness of new agricultural technologies and

ensure their commercialisation, as well as the adoption of best

world practices and their adaptation to domestic conditions. The

priorities of agrarian science are based on the peculiarities of

the country’s agricultural sector, its competitive advantages and

specialisation.

Environmental security, the quality of produce and restoration of

natural resources are issues of particular importance.

Agricultural businesses are also proactive in enhancing coopera-

tion between each other. In 2005, the Agricultural Union of Kazakh-

stan was created in order to consolidate farms, public associations

and agricultural organisations. The association’s members are legal

entities and their associations and unions, including the Farmers’

Union, the Poultry Farmers’ Union, the Grain Union of Kazakhstan,

and associations of regional households.

The association provides advisory and legal assistance to its

members so that they can obtain grants and loans from the state or

private ﬁ nancial institutions or lease equipment. This is made pos-

sible because of the connections to state authorities and large private

agricultural organisations.

As Kazakhstan’s agrarian potential evolves, more attention is

being paid to the quality of equipment in the sector. The demand for

modern machinery and mechanical aids is being fuelled by changes

in production processes, growing specialisation and concentration

of production, and quantitative and qualitative characteristics of

agricultural equipment.

Animal husbandry is traditional in Kazakhstan. Domestic animals

(horses, sheep, cows, and camels) were the basis of the Kazakh ‘fam-

ily economy’ for centuries.

The government policy in the area of animal husbandry ensures

stable increases in cattle and poultry population and improvements

in their yields and reproduction.

Work is being done to further raise competitive production in the

sector in order to maintain the country’s food security and exports.

Enhancements to the infrastructure for large animal farms are planned,

which will include special feedlots for cattle and sheep, a network of

slaughter facilities, and modern meat processing plants. Production

and advanced processing of wool and leather will be developed.

These projects will be implemented within the framework of

public-private partnership and with the participation of foreign in-

vestors.

Another important issue for animal husbandry is the expansion

of the livestock breeding sector, which will include an increase in

the speciﬁ c weight of pedigree stock, development of specialised

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infrastructure, and modernisation of animal farms. The number of

animal farms is expected to grow to 500. Kazagro provides ﬁ nance

to import pedigree livestock.

Investment in agriculture increases year by year. The size of agri-

cultural businesses’ own funds, loans and foreign investment grows

in addition to budget allocations.

Kazagro is an active participant in these processes. The holding

company attracts domestic and foreign investment to increase Ka-

zakhstan’s agricultural potential and provides systemic government

support to upgrade the sector and make it competitive.

4.10. Trade

Trade is one of the most prominent economic activities in Kaza-

khstan, essential for the successful development of its economy.

Since 2003, the sector’s share in the nation’s GDP has been be-

tween 11% and 12%. The trading sector employs up to 15% of the

economically active population. Trade turnover is increasing year on

year and the percentage of non-foods is growing continuously.

The sector has the highest representation of private properties and

small and medium businesses. It also provides full-time and part-time

employment for women and young people, which is why it has so

much social and economic importance.

The trading sector in Kazakhstan is advancing in line with global

tendencies: traditional forms of trade are being replaced by modern

ones; large retail chains achieve dominance; the supply system is

becoming vertically integrated; up-to-date sales, marketing and mer-

chandising technologies are being used; and new forms of trade such

as e-commerce and mobile commerce are emerging.

All common forms of retailing are present in Kazakhstan. The

range of goods offered in the market is continuously being expanded

and the quality of services is growing. The number of modern trad-

ing ﬂ oors is increasing with the development of the competitive

market.

Kazakhstan’s market is rather attractive for retail development.

The contributing factors are the growing trends towards concentration

of economic activities, increased economic density, improvements

in personal incomes and living standards, and the implementation of

urban development programmes.

The retail segment (cash-and-carry stores, supermarkets, hyper-

markets, trade networks) has been the most dynamic in the recent

years. Shopping malls have also become very popular as places for

family entertainment.

Kazakhstan has a number of large chain stores and some malls

franchised by international trading companies.

Prior to 2006, individual entrepreneurs and markets dominated

the retail market. Yet, as the consumer market develops, the trading

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companies’ percentage in trade turnover is on the increase. Trading

in non-foods has demonstrated the most noticeable growth.

Retail infrastructure also received powerful impetus from the

quality development of trade. Modern warehousing, logistics and

information services, and manufacture of equipment are on the rise.

Today’s retailing is characterised, primarily, by the changing

balance between store-based and non-store forms of trade. The con-

solidation of retail businesses, the emergence of new forms of trade,

and the transformation of the sector into a modern service industry

are a positive inﬂ uence on the development of the sector.

The arrangement of trading in fresh products in retail outlets is very

important to Kazakhstan because individuals and small businesses

get an opportunity to sell their products at fair prices. This is also a

solution to the problem of the sector’s social orientation.

In addition, as Kazakhstan needs to develop its food potential and

saturate the market with fresh products, the need also arises to sys-

tematise the efforts of wholesale purchasers and retail outlets aimed

at the improvement of the supply chain at a regional level to make

it export-orientated. These schemes have been successful in other

countries and include specialised fairs, exhibitions and workshops

where producers and traders can agree on the quality and quantities

of supplies.

Achieving this objective will help strengthen ties between trading

and production systems, improve transport and logistics potential, en-

hance the range of products, and satisfy the demands of the market.

The effective development of retailing depends on the level of

wholesaling. The latter has a function of regulating trade ﬂ ows across

consumers and retailers located in various regions of Kazakhstan.

The wholesaling infrastructure is continuously being developed.

Previously scattered, this segment demonstrates better organisation

of procurement and supply systems, as well as storage and batching,

to meet the market demands.

A highly organised system of trade and services is being built in

Kazakhstan as a result of improvements in the trading policy of the

state and the respective legal framework, as well as in the consumers’

welfare and purchasing power.

The growing investment in the material and technical base of sales

outlets contributes to the advancement of up-to-date infrastructure

that meets the requirements of present-day trade, creates favourable

conditions for domestic producers, and fosters effective ﬂ ows of goods

with minimum transaction costs.

Business activities in the area of trade are not limited to trading

and servicing. To improve quality, it is necessary to set up an infor-

mational infrastructure and a public system to provide producers,

intermediaries and buyers with the latest information on supply and

demand, and news from the sector.

A consumer culture is also growing. Consumer rights institutions

are trying to increase the transparency of service and trade compa-

nies.

From the very ﬁ rst days of the market economy in Kazakhstan,

commodity exchanges emerged as a form of trade. They fostered

the arrangement of domestic exchange of goods and information, on

external markets in particular. However, this form of trade is not very

popular. There are only ﬁ ve commodity exchanges in Kazakhstan and

their sales and turnover are not very high.

Nevertheless, Kazakhstan needs to develop exchanges that would

allow effective prices and terms of supply to be set, as well as quality

requirements that would enhance the prospects of processing com-

panies and the territorial dispersion of markets. A new commodity

exchange is expected to be set up on the Regional Financial Centre

of Almaty’s (RFCA) Special Trading Floor. The Special Trading

Floor was established to develop the regional stock exchange in Ka-

zakhstan, with the intention of becoming a link between the Asian

and European exchanges.

In the future, it is likely that a common commodity exchange

will be organised with the Russian Trading System (RTS). Ka-

zakhstan produces a great deal of exchange commodities and its

convenient geographic location attracts traders from all over the

continent.

Because of changes in the global trade on exchanges, the CIS needs

to create a relevant trading system and a pricing policy that would

take into account the speciﬁ cs of production and marketing.

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The effective development of trade will be fostered by enhance-

ments in logistics, which includes logistics complexes, the packaging

industry, transport, warehousing, freight-forwarding services, and

regional transport terminals. The transport and logistics sector is one

of the priorities for the Kazakhstan-2030 Strategy.

To this end, warehousing and logistics zones will be built near

large cities to ensure the sale of goods. Essential communications

will link these areas with the cities. These facilities will be built on

the terms of public-private partnership. The possibility of setting up

special economic zones will also be considered.

In these zones, with the help of investors, distribution centres,

warehouse stores (which will purchase goods from industrial or agri-

cultural producers), and A- and B-class shared warehouses (managed

by warehouse operators) will be developed.

New forms of trade constantly emerge in global trading. E-com-

merce, which includes using mobile access to the Internet for shop-

ping, is an innovation that is still underdeveloped in Kazakhstan.

E-commerce has serious potential for the advancement of small and

medium businesses. Signiﬁ cant attention is being paid to the develop-

ment of this segment, taking into account the territorial dispersion of

population and manufacturers in Kazakhstan.

The hospitality and household and business service industries are

also developing impressively. The latest technologies are spread-

ing rapidly and international companies are entering Kazakhstan’s

markets.

In the foodservice sector, almost all formats (restaurants, cafes,

canteens, fast food restaurants and catering) representing many world

cuisines are present. The number of businesses is growing at a sig-

niﬁ cant pace (almost threefold from 2004 to 2008, with the number

of seats having grown more than fourfold and the value of services

almost fourfold).

The level of service is also growing as competition tightens. Mas-

tery contests and festivals are being organised.

The service sector is demonstrating similarly high results. Com-

petition in this sector is the toughest and fosters the development of

modern service techniques and organisation of business.

4.11. Banking

From its ﬁ rst days, Kazakhstan’s banking system has been orien-

tated towards international ﬁ nancial market standards. At present, this

is an established sector, able to play a proactive part in the concentra-

tion and redistribution of capital.

From the very beginning, Kazakhstan’s banking system was

formed in line with the best banking principles used worldwide. In

January 1991, the Law On Banks and Banking in the Kazakh SSR

was adopted to launch banking reforms.

After the state sectoral banks had been reorganised and the na-

tional divisions of the Gosbank of the USSR had been vested with

the functions of the central banks of sovereign states, and following

the establishment in 1991 of the ﬁ rst commercial banks, a two-tier

banking system was formed in Kazakhstan.

The ﬁ rst tier of the new system included the National Bank of

the Republic of Kazakhstan and its branches in oblast centres. The

second tier comprised banks that were established from former spe-

cialised banks, and those newly established by individuals and legal

entities.

In the early 1990s, the number of ﬁ nancial institutions – com-

mercial banks and organisations offering banking services – soared.

The number of commercial banks in 1993 exceeded 200. However,

following tightened requirements for second-tier banks, in 2002 their

number decreased to 38.

On the other hand, the number of institutions offering banking

transactions increased signiﬁ cantly over the same period. Improve-

ments in ﬁ nancial control and supervision helped strengthen the

ﬁ nancial stability of second-tier banks and the reliability of the system

as a whole.

By November 1993, when the tenge was introduced, Kazakhstan’s

banking system had been generally formed. This allowed the move

to the country’s own monetary policy.

To further strengthen the banking system, the Programme for the

Second-Tier Banks’ Adoption of the International Financial Report-

ing Standards was approved in December 1996. In accordance with

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the programme, all banks operating in Kazakhstan were obliged to

reach international levels in the sufﬁ ciency of equity, liquidity, asset

quality, management, accounting, and data input and transfer before

the end of 2000.

In November 1999, the Kazakhstan Deposit Insurance Fund was

founded, which became the backbone of the Deposit Insurance Sys-

tem. Sixteen banks joined this system in early 2000. On 1 January

2004, the deposit insurance system became compulsory. This means

that if a bank is licensed to accept deposits from individuals it is

obliged to join the insurance system.

Amendments to the banking laws made in April 2000 concerning

the banking secrecy of individuals’ deposits also contributed to the

improvements to the deposit protection system.

These improvements fostered the attraction of people’s savings to

banks. As a result, the volume of banking transactions increased, the

banks’ competitiveness improved, and their services became cheaper

and more accessible to the general public. At present, the population

of Kazakhstan are active users of the services of second-tier banks

(savings, payments, etc.) and this is a positive inﬂ uence on the coun-

try’s economic development.

In 2004, the Agency for the Regulation and Supervision of the

Financial Market and Financial Institutions was set up to better protect

the users of ﬁ nancial services, develop a stable infrastructure for the

domestic ﬁ nancial market, and create an effective and independent

system of consolidated supervision. The National Bank assigned the

Agency the respective functions and powers; the Agency now func-

tions successfully as the national regulator.

The National Bank implements state monetary policy, issues ban-

knotes and coins, and exercises the central bank’s functions, foreign

exchange regulation and control, management of gold and foreign

exchange assets, and trust management of the National Fund of the

Republic of Kazakhstan.

Today, 37 second-tier banks operate in Kazakhstan. They have

380 branches nationwide and 15 representative ofﬁ ces abroad. A

total of 16 banks, including seven subsidiary banks, have foreign

participants. Also, 33 representative ofﬁ ces of foreign banks operate

in Kazakhstan. This conﬁ rms interest in Kazakhstan’s market and the

advanced level of the national banking system.

Kazakhstan’s leading banks are striving to enhance their foreign

economic transactions and their rankings by international rating agen-

cies. These ratings help them attract capital from global markets.

The banking sector is one of the key elements of the country’s

economy. The banks’ assets equal 80% of the country’s GDP, deposits

30%, and loans about 60%. In comparison to the ﬁ rst days of Kaza-

khstan’s banking sector, these ﬁ gures have grown tremendously.

Over the last year, the dynamics of the banking system slowed

because of external inﬂ uences. It should be noted however that the

regulator’s policy and state measures aimed at ensuring the stability

of the banking sector helped prevent a sharp decline in the perform-

ance of the banks.

Commercial banks in Kazakhstan offer a wide range of services

for individuals and legal entities. These include traditional bank-

ing services as well as innovations such as e-banking and Internet

banking. These services apply the most modern bank and service

technologies.

As the clients’ ﬁ nancial expertise and trust in ﬁ nancial institutions

grow, the competition in the banking market toughens. This is causing

the banks to improve their services and operations.

In conclusion it can be said that Kazakhstan’s banking sector has

been following market principles and is able to create the conditions

necessary to accumulate the population’s savings and further provide

them in the form of loans to the real sector.

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4.12. Transport

Ever since ancient times, people living in the territory of today’s

Kazakhstan and Central Asia have made use of the advantages of

the proximity of the Great Silk Road running from the southeastern

borders of China to the Mediterranean coast of Turkey – a distance

of more than 6,500 km. The Silk Road transited an enormous number

of goods and cultural achievements.

Kazakhstan has taken measures to strengthen its trade and eco-

nomic relationships along the famous route. At present, Kazakhstan

has transport (rail, motor, and air) links to China and can deliver goods

from Europe and Asia to almost every point in China and Southeast

Asia. It also has sea links to Iran and intermodal (rail and motor)

connections to Turkey.

Transport is extremely important to Kazakhstan. Its vast territory,

low population density, long distances between populated localities, and

remoteness from global markets make the transport system vital.

Despite its landlocked location, Kazakhstan has high transit po-

tential as a bridge between Europe and Asia. This is why there is a

need to develop the transit sections of continental routes. This is the

objective of the Transport Development Strategy until 2015 (Trans-

port Strategy) approved in 2005, which envisaged the creation of a

transport and communications complex complying with government’s

economic strategies.

When this objective is achieved, Kazakhstan’s transport sector will

become integrated with the global transport system and will ensure

accessible, secure and rapid deliveries between the East and the West.

Using the country’s transport potential will bring signiﬁ cant income

to the nation and transport companies and promote the advancement

of a competitive transport and logistics sector.

The sectoral strategic programme provides for the gradual develop-

ment of a network of transport routes and interlinks. In addition, infra-

structure facilities and all types of transport means will be upgraded.

The strategy covers all types of transport (except pipelines);

the development and effectiveness of these depend largely on state

policy.

The role of rail transport in Kazakhstan is very important. Rail-

ways account for the largest portion of freight and passenger trafﬁ c

in the country.

Kazakhstan’s rail network has four major longitudinal routes

(Turksib, Trans-Kazakhstan (Petropavlovsk-Karaganda-Shu), Oren-

burg-Tashkent, and Kungrad-Beineu-Makat-Astrakhan) and three

latitudinal routes (Trans-Siberian, Central Siberian, and Southern

Siberian (with branch lines)).

The total length of the railways in Kazakhstan exceeds 14,000

km. Fifteen division points (eleven with Russia, two with Uzbekistan,

one with Kyrgyzstan, and one with China) connect the country’s rail

system with neighbouring states. The Transport Strategy provides for

the building of 1,600 km of new railways and the electriﬁ cation of

2,700 km of the existing lines.

The construction of the Druzhba-Alashankou cross-border railway

passage between Kazakhstan and China and opening of the Saraghs-

Mashhad railway passage between Turkmenistan and Iran has opened

new transit routes on the Great Silk Road, from the Chinese ports

of Lianyungang, Qingdao, and Tianjin on the Paciﬁ c coast, to Kaza-

khstan, Kyrgyzstan, Uzbekistan, Turkmenistan, Iran, and Turkey, and

to the ports of the Mediterranean and the Persian Gulf. At present,

goods are being transported along this route through Kazakhstan at

a great rate.

Kazakhstan has a network of motor roads totalling more than

88,000 km. Five international motor routes, with a total length of

17,000 km, cross Kazakhstan. All oblast cities and towns have au-

tomobile connections to all regional localities and settlements. The

investment policy is aiming at the modernisation of the existing roads

and construction of new international and local routes.

Because of the country’s vast territory, air transport is extremely

important and there is often no alternative. Kazakhstan is home to

22 large airports, including 14 international hubs. Freight and pas-

senger transit between Europe and Asia is extremely important to

the sector.

Air Astana, the nation’s largest airline, provides both domestic

and international ﬂ ights. Leading international companies, including

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British Airways, Lufthansa, KLM, Turkish Airlines, and Iran Air, also

operate in Kazakhstan.

The length of Kazakhstan’s navigable waterways is more than

6,000 km. The water routes run along the Irtysh, Syrdarya, Ural,

Kigach, Ili, and Ishim Rivers, the Bukhtarma, Ust-Kamenogorsk,

Shulba, and Kapchagai Water Reservoirs, and Lakes Balkhash and

Zaisan.

The Caspian Sea links Kazakhstan with Russia, Iran, Azerbaijan,

and Turkmenistan. Russian rivers and channels provide connections

to the Black and Baltic Seas and further to Western Europe.

The Aktau Port situated on the Caspian Sea is the only ice-free

seaport in Kazakhstan and a strategic international hub. Grain, ores,

coal, wood, and oil products are being transported by sea. Because

of the extensive development of the oil sector, freight trafﬁ c on the

Caspian Sea has grown signiﬁ cantly.

Pipeline transport is becoming increasingly important in light of the

enhancement of the country’s oil and gas potential. The ﬁ rst oil pipeline

from the Dossor ﬁ eld to the Rakusha port was commissioned in 1915 to

pipe the Emba oil to the Caspian Sea. In the 1930s, when oil production

increased, a 900-km Guriyev-Orsk oil pipeline was built.

The development of oil ﬁ elds in Western Kazakhstan called for

the construction of the Uzen-Makat-Samara pipeline, with a link to

the Atyrau Reﬁ nery, and the Uzen-Zhetybai-Shevchenko pipeline.

The Omsk-Pavlodar pipeline was laid in the 1960s when the Pavlodar

Reﬁ nery was commissioned.

The major Central Asia-Centre and Bukhara-Ural gas pipelines

cross Kazakhstan with links to the industrial centres in Western and

Northern Kazakhstan. Southern regions are fed with gas from the

1,317 km Mubarek-Tashkent-Shymkent-Taraz-Almaty pipeline.

Future pipeline development strategies will try to ensure that new

oil pipelines provide stable supplies to the nation’s own reﬁ neries and

transport Kazakh oil to external markets, using the routes that are the

most convenient to freight forwarders.

At present, the most signiﬁ cant transport objective for Kazakhstan

is to further improve domestic and interstate links and upgrade the

majority of the existing infrastructure.

To speed up these large-scale efforts that are of international im-

portance Kazakhstan needs signiﬁ cant investment in order to upgrade

its railroads, ground facilities, and air trafﬁ c control system.

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4.13. Communications

Communications are an integral part of Kazakhstan’s economic

and social infrastructure. The main components of this sector are

telecommunications and postal services.

The largest providers of telecommunications and postal services

in Kazakhstan are Kazakhtelecom and Kazpochta, respectively.

The country has ﬁ ve cellular operators, including three GSM

providers.

In accordance with the Access to Telephony Programme, by 2013,

telephone and Internet connections, including those based on the mod-

ern CDMA-40 wireless format, will be made available nationwide.

The number of Internet users has grown signiﬁ cantly recently.

However, only 14 out of 100 people in Kazakhstan had access to the

Internet before 2008 and the 2008 ﬁ gure was expected to increase

to 21.

The government has prepared and introduced a proactive E-Gov-

ernment Development Programme. The number of state services

provided via web-portals to people and businesses is increasing every

day. Some information services are already available electronically.

These include information on real estate, and data related to the draft

law on the national register of registration numbers databases.

In order to successfully advance the Internet, the government has

adopted the Blueprint for the Formation and Development of Ka-

zakhstan’s Internet Segment (Kaznet) as a Single Information Space

for 2008-2012.

In 2006, the Samgau National Science and Technology Holding

was set up, which is a determinant of how telecommunications, the

Internet in particular, and technical progress will advance. The main

objective of this organisation is to provide a basis for the creation of

a high-tech society in Kazakhstan. To achieve this, equal access to

knowledge, information, information and communications services,

and technologies will be provided to all people irrespective of their

social status, age, or location.

The postal service is managed by Kazpochta, the national postal

operator, which represents Kazakhstan in the global community. Ka-

zpochta offers a wide range of services, including mailing, ﬁ nancial

and agency services, and is a system that handles all information,

money and commodity ﬂ ows. The postal operator has the largest

network of branches and these provide full coverage of the country,

including districts and rural areas.

Kazpochta was the ﬁ rst operator in the CIS to develop a postal

and savings system and is the only structure that has implemented it.

The regional communications community acknowledged the success

of Kazpochta and recommended Kazakhstan’s new postal system as

a promising model for postal services in the CIS.

Kazakhstan’s postal service presently employs approximately

21,000 people and has more than 3,200 ofﬁ ces nationwide, including

14 oblast and four national branches.

Kazakhstan’s postal service is now being intensively transformed

into a multifunctional ‘ﬁ nancial supermarket’, which will soon offer

a full range of postal, ﬁ nancial and other services, as well as into a

general logistics operator, something that is essential for such a big

country with high transit potential.

Kazpochta is the only major network which has access to almost

all of Kazakhstan’s population and has no alternatives. At the same

time, courier, direct mail and mail order services are being developed.

Major international logistics operators such as DHL, EMS, FedEx,

and UPS have representative ofﬁ ces in Kazakhstan.

Oblast branches are connected to the corporate information net-

work by optical ﬁ bre lines (Frame Relay). All regional postal branches

are interconnected by satellite channels. Since 2007, negotiations

have been underway to transfer these channels to IP VPN ground

lines provided by Kazakhtelecom.

The economic success of a country is possible only if a modern

IT infrastructure exists. The creation of this infrastructure needs

to involve domestic engineers and producers. This is an objective

necessity – if an up-to-date IT infrastructure is missing, it will be

impossible to enhance the economy. The development of a competi-

tive communications sector ensures the harmonious progress of the

economic space.

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Kazakhstan today

Chapter 4. Kazakhstan’s Economy

4.14. Tourism

When thinking where to go, tourists are attracted by natural

landscapes, geographic peculiarities, cultural heritage, advanced

infrastructure, and security. Kazakhstan has all the opportunities to

become a country with a favourable tourism image.

Kazakhstan is situated in the heart of Eurasia, at the intersection of the

largest Asian and European countries. This favourable geographic loca-

tion is very beneﬁ cial for the development of international tourism.

Kazakhstan has diverse tourism potential and unique opportunities

to develop almost all types of tourism, from visits to historic places

and ecotourism, including observation of rare species of ﬂ ora and

fauna, to adventure travel and other active types of tourism.

The country has many unique natural preserves and national parks,

over 100 therapeutic facilities, and more than 9,000 archaeological

and historic sites.

Kazakhstan’s tourism sector is an established structure, which is

continuing to progress. This is conﬁ rmed by annual increases in the

number of incoming tourists.

The development of tourism is one of the priorities of the Strategy

for Kazakhstan’s Joining the World’s 50 Most Competitive Coun-

tries. The State Tourism Development Programme for 2007-2011

was adopted because the tourism cluster is one of the seven priority

non-primary sectors, the advancement of which will raise the com-

petitiveness of the country and enhance its economic diversiﬁ cation.

A number of investment incentives and preferential treatments are

provided and the visa laws are being improved.

The country’s recreational potential allows the development of a

host of promising sub-sectors.

A list of twenty breakthrough projects attractive to tourists was

compiled and is being implemented. The largest projects are the con-

struction of the Zhana Ile tourist centre on the Kapchagai Reservoir,

the Burabai complex in the Shchuchinsk and Borovoye recreational

area, and the Kenderli Resort in Mangystau Oblast.

Following the example of the U.S., who have made the National

Aeronautics and Space Administration (NASA) a popular tourist

site, Kazakhstan is developing the First Space Harbour on the Planet

project in Baikonur. This project will include excursions into the

history of the space industry.

Other major projects include the construction of a chain of cheap

tourist-class hotels in the regions. Twenty small hotels for 900 beds

are already being built in Akmola Oblast alone. Another project en-

visages the construction of a 4,000-seat sports complex on the left

bank of the Ishim River in Astana.

The creation of a special economic zone in Mangystau Oblast is

also being considered. A project has been prepared to develop beach

and cruise tourism on the Caspian Sea, including building the Aktau

City coastal town. Another promising project is the construction of

the Kenderli Resort.

Kazakhstan’s geographic peculiarities make it evident that the

country has signiﬁ cant potential for ecotourism. In particular, Ka-

zakhstan’s diverse mountainous rivers are ideal for rafting.

Tremendous work is being carried out in order to develop the

ten most attractive tourist routes in the national natural parks, Altyn

Yemel, Ile Alatau, and the Charyn Canyon in particular.

The Great Silk Road routes are also being worked on as an area

of cultural and educational tourism. A 1,200 km northern line of the

Silk Road runs through Kazakhstan, from China to Uzbekistan. This

section is a unique complex of historic, archaeological, and archi-

tectural sites.

The ancient cities of Otrar, Sauran, and Turkestan were not only

trade centres, but scientiﬁ c, cultural, and religious hubs. Today, more

than 300,000 people visit these places every year for educational and

religious purposes. Hotels and caravanserais are being planned along

the route, and mutual recognition of tourist visas in Central Asia is

being negotiated.

The launch of the Silk Road Pearl tourist train along the route

Almaty-Turkestan-Tashkent-Samarkand-Bukhara-Urgench-Mary-

Ashgabat-Almaty is also planned.

In addition, Kazakhstan has world-class ski sites that can com-

pete with the best ski resorts in the world. The most popular tourist

sites are the Shymbulak ski resort, the Medeo high-altitude skating