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COUNTRY PROFILES


PROFILE

Country Profile

Area: 2,699,800km
Population: 16.2 million
Capital City: Astana
People: 60.5% Kazakh, 24.5% Russian,2.9% Uzbek, 2.7% Ukrainian, 1.5% Uighur 1.4% German, , 1.4% Tartar, 1.3% Korean, other groups less than 1%
Languages: Kazakh and Russian
Religion(s): Muslim 65%, Russian Orthodox 30%, Protestant 1.3%, Other3.7%
Currency: Kazakh Tenge
Major political parties: Nur Otan ('Fatherland') Party, Adilet, All National Social Democratic Party ‘Azat’, Ak Zhol, Auyl, Communist Party of Kazakhstan, Communist People’s Party, Patriot Party of Kazakhstan, and Rukhaniyat.

Government

Head of State: President Nursultan Nazarbayev
Prime Minister/Premier: Karim Masimov
Foreign Minister: Kanat Saudabayev
Membership of international groupings/organisations: UN, the IMF/World Bank, EBRD, OSCE, Commonwealth of Independent States, the Collective Security Treaty, the Eurasian Economic Community, Central Asian Co-operation Organisation, Shanghai Co-operation Organisation, the Organisation of the Islamic Conference and the Conference on Interaction and Confidence Building Measures in Asia.

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HEALTH

Drugs

Kazakhstan is a significant transit route for Afghan grown and produced opium and heroin. Most of this northern flow is aimed at the growing domestic drugs market in Russia, but Central Asia is becoming a transit route for some Afghan heroin trafficked to Europe. There is also increasing evidence of international crime gangs working in Kazakhstan, often with contacts in Germany and the Baltic States. The total quantity of drugs seized in Kazakhstan in 2009 was 28 tons, no change from 2008 where there was a 19% increase on the previous year. The Central Asian Republics recognise the drugs threat but have only a limited capacity to tackle it, although Kazakhstan is the best equipped. Drug seizures in Central Asia increased tenfold between 1995 and 1999 and almost tripled between 1999 and 2000. Porous borders and ineffective border management hinder the counter-narcotics effort, but the European Commission, OSCE, UN, IOM and US Government are implementing border projects.

Kazakhstan is a sizable producer of illicit cannabis and ephedra, with the largest location of wild growing cannabis in southern Kazakhstan. Precursor chemicals (acetic anhydride) are produced of which the vast majority is for legitimate purposes, but some is diverted for heroin production. According to official statistics, there were 49,795 registered drug addicts in Kazakhstan as of the start of 2011, which is 8 per cent less than the previous year. However, during the last decade the number of drug users in Kazakhstan has increased substantially. UNODC estimate that the real figure is probably higher and that 70% of these are injecting drug users. There has been an increase reported HIV cases – 13,500 cases in 2009 compared to 9,378 cases in 2007.

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ECONOMY

Basic Economic Facts (for 2010 est)

Source: Economist (http://www.inform.kz/eng) Intelligence Unit
GDP: US $ 136.7bn
GDP per head: US $ 11,986
Annual GDP Growth: 4.9%
Inflation: 5.8%
Key exports: Uranium, petroleum, gas, grains, and metals.
Major trading partners – exports: 16.7% Italy, 15.8% Switzerland, 10.8% China, 8.7% Russia, 7.6% France, 6.5% Netherlands, 2.9% Iran.

Kazakhstan holds the Caspian Sea region’s largest recoverable oil reserves. At the end of 2009, Kazakh proven oil reserves amounted to around 5.3 billion tonnes (39.8 billion barrels) which is about 3% of global reserves. Kazakhstan’s oil production is set to swell with the start of commercial production in Kashagan (2012/2013) and a projected rise in output from the Tengiz field. Oil production is also likely to rise with new on/offshore finds. Kazakhstan’s oil reserves are therefore larger than those of Qatar, the US and Canada and it will soon be one of the world’s top oil producers..

Kazakhstan’s gas reserves are 3.7 trillion cubic metres (tcm). Kazakhstan’s main priority is to increase gas production to supply its growing domestic needs.

By 2020, Kazakhstan expects to be exporting 100 million tonnes of oil a year. However, to do this, Kazakhstan will need around $100 billion plus of investment. The UK is playing an important role in the development of the extractive sector in Kazakhstan both through investment in mega oil and gas field projects, but also in developing the Kazakh workforce through education and training, research and development, investment in the local economy and a wide range of diversified industries.

Since 1999 strong oil and other raw material prices combined with strong macro-economic performance and financial health have helped to sustain a period of economic growth. However, like others, Kazakhstan is feeling the continued impact of the global economic slowdown. GDP growth was around 1% in 2009 (down from 8.9% in 2007). The Government responded to the slowdown by devaluing the tenge and taking majority shares of the worst hit banks (BTA and Alliance).

Kazakhstan now feels that it has weathered the financial crisis and according to its government’s estimates, its economy grew at an annual rate of 7% in 2010. Growth should continue in 2011 and beyond. Nevertheless, Kazakhstan continues to face a number of challenges. Average unemployment is expected to stay at 7-8% and the budget will remain in deficit for the next few years. The banking sector also remains vulnerable. Although the President continues to stress the importance of diversification, the economy is more reliant on the energy sector than ten years ago.

UK Trade & Investment Country Profile: Kazakhstan (http://www.uktradeinvest.gov.uk/ukti/kazakhstan)

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HISTORY

Recent History

The Kazakh Republic was formed as an autonomous Republic within the Russian Federation in August 1920 and became a Republic of the Soviet Union in December 1936. Kazakhstan declared its independence on 16 December 1991 - the last Soviet Republic to do so.

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INTERNATIONAL RELATIONS

Kazakhstan's relations with the UK

We have a wide-ranging dialogue with Kazakhstan, which we regard as a strategic partner in the Central Asian region. This covers energy issues, democratisation and human rights, the investment climate, good governance, regional and international security and stability, and drugs trafficking and terrorism.

Since independence, we have provided substantial assistance – both bilaterally and multilaterally – to support economic and political reforms. During the financial year 2009/10 we provided more than £3 million to Kazakhstan to support democratic and human rights reform as well as energy sector reform and non-proliferation. For a fuller list of Embassy projects visit our website: http://www.ukinkz.fco.gov.uk (http://www.ukinkz.fco.gov.uk) .

Kazakhstan offered the use of its airspace and bases for humanitarian aid supplies to Afghanistan. The UK has greatly welcomed the support of Kazakh troops in the reconstruction of Iraq. We are helping to train Kazakh peace-keeping forces (Kazbat) to enable them to take part in future peace-keeping operations.

The UK recognised Kazakhstan on 31 December 1991 immediately after the dissolution of the USSR. Diplomatic relations between the two countries were established on 19 January 1992 during the visit to Kazakhstan by Douglas Hurd, the Secretary of State for Foreign Affairs at the time. The British Embassy was opened in Almaty in October 1992. The British Embassy has since further expanded its presence in Kazakhstan. In September 2003 HRH The Duke of York opened a Trade and Investment office in Atyrau. In December 2006 the Embassy moved to Astana, though it retains the British Embassy Office in Almaty, primarily for consular and visa work.

Kazakhstan opened an Embassy in London in February 1996.

Bilateral

A British - Kazakhstan All Party Parliamentary Group was established in October 2001. This has been followed by a number of inter-parliamentary visits as well as the signing of an inter-parliamentary Memorandum of Understanding in February 2010. The British-Kazakhstan All Party Parliamentary Group visited Almaty and Astana most recently in September 2010 to discuss ways of taking forward areas of co-operation identified in the MOU.

Cultural Relations with the UK

The British Council in Kazakhstan runs programmes in the English language, the arts, education information and human rights, all aimed primarily at aspiring young people.

The British-Kazakh Society was established in 2003 under the patronage of HRH The Duke of York and President Nazarbayev. The Society aims to promote commercial, cultural and people-to-people links between the two countries.

The improvement of its vocational education system and skills-development are vital to Kazakhstan’s development and an area of increasing UK-Kazakh co-operation. Kazakhstan's Ministry of Education and Science has signed a MOU covering co-operation with Technical Vocational Education and Training UK (TVET UK) which represents a wide range of British vocational education colleges, accreditation bodies and corporate training providers. This initiative builds on the good foundations laid by many individual UK companies. The Kazakh-British Technical University was established in 2001 to help provide young Kazakhs with the skills they need to develop a modern economy. The former British Prime Minister Tony Blair and President Nazarbayev are patrons of the university. Several British universities are involved in running programmes, and Shell and BG Group have provided substantial funding for the post-graduate school. In 2008 Haileybury School opened in Kazakhstan’s largest City, Almaty, and another will open in Astana in 2011. University College London (UCL) is in partnership with the new Nazarbayev University in Astana on delivery of foundation & ELT programmes.

Recent Visits

Inward

-- Kazakhstan National Bank Chairman Grigori Marchenko and Kairat Kelimbetov Chairman of state holding company “Samruk-Kazyna” visited the UK for the Kazakhstan Business Forum in October 2010.

-- Minister for Energy and Mineral Resources Mynbaev visited the UK in June 2010, attending a British-Kazakh Society dinner where he met with Energy Minister Hendry.

-- Deputy Prime Minister Shukeev headed the Kazakh delegation at KBTIC (Kazakh-British Trade and Investment Council) in June 2010.

-- Central Elections Committee member Marat Sarsembayev visited the UK in May 2010 to observe the UK general elections.

-- Ambassador Nurgaliev, Kazakhstan’s then OSCE Special Representative for Frozen Conflicts, visited London in April 2010 for an exchange of views on the OSCE.

-- Foreign Minister Saudabayev attended the Afghanistan Conference in London in January 2010.

-- Deputy Foreign Minister Zhigalov visited the UK in April 2009.

Outward

-- December 2010: The Deputy Prime Minister Nick Clegg and Minister for Europe, David Lidington, attended the OSCE Summit in Astana, meeting with President Nazarbayev.
-- October 2010: Sir John Stuttard, Co-Chairman of the Kazakh-British Trade and Investment Council, visited Astana for a Samruk-Kazyna conference.
-- July 2010: Minister for Europe, David Lidington, attended the OSCE Informal Ministerial Conference in Almaty, meeting with Kazakh Foreign Minister Saudabayev.
-- April 2010: HRH The Duke of York visited Kazakhstan, meeting with President Nazarbayev and the Prime Minister.
-- April 2010: Sir John Stuttard, Co-Chairman of the Kazakh-British Trade and Investment Council, visited Almaty and Astana.

-- March 2010 Lord Hunt, Minister for Energy, visited Astana.
-- October 2009: Minister for Higher Education and Intellectual Property, David Lammy, visited Kazakhstan.
-- September 2009: Minister for Europe, Glenys Kinnock, visited Almaty and Astana.
-- Jully 2009: Lord Mayor of the City of London, Ian Luder, visited accompanied by a financial services delegation.

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GEOGRAPHY

Kazakhstan is the second largest (after Russia) of the former Soviet Republics and the fourth most populous. It is geographically diverse, comprising extensive grassland, semi-desert and mountainous areas. It is bordered by Russia, China, Kyrgyzstan, Uzbekistan, Turkmenistan and the Caspian Sea.

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TRADE AND INVESTMENT

Trade and Investment with the UK

The UK and Kazakhstan enjoy a strong trade and investment relationship based on free market access, significant two-way trade and investment flows and regular dialogue at senior levels.

UK exports to Kazakhstan in 2010 were US$315 million and imports from Kazakhstan totalled US$300 million (provisional figures). Much of the UK figure is represented by export of machinery and specialised equipment for the key oil and gas sector as well as for the important mining, power generation and manufacturing sectors. BG Group and Shell have strong investment interest in Kazakhstan, as do some of the UK's large contracting companies such as AMEC & Invensys. A large number of smaller oil-field service and supply companies have established themselves in the market, usually in tandem with Kazakhstani partner companies.

Two-way investment flows are healthy. Historically the UK is a major investor in Kazakhstan, usually either in second or third position for foreign direct investment at any given time. Kazakhstani companies are increasingly listing on the London stock Exchange, with Initial Public Offerings in excess of US$14 billion since 2005.

UK businesses already engaged in Kazakhstan enjoy an excellent reputation as reliable and socially-responsible business partners offering a range of good quality products and services appropriate to Kazakhstan’s needs, as well as investment in key areas such as oil and gas exploration and production, mining and steel. ‘Blue chip’ corporations such as BG, Shell, AMEC & Invensys which are heavily engaged in oil and gas projects in west Kazakhstan are obvious examples. But with well over a hundred UK enterprises, invariably operating with Kazakh partner companies, our smaller supply and services companies also make a significant contribution to the relationship. The UK is also very strong in the Financial & Business Services Sector, HSBS, RBS, the big four accountancy firms and law firms such as Denton Wilde Sapt & Michael Wilson & Partners are all long-established in the market. Kazakhstan's national airline, Air Astana, is a joint venture between the Government of Kahstan and the UK's BaE Systems.

Development of the economic relationship is assisted through the Kazakh-British Trade and Industry Council (KBTIC), established in 1995, which had its 14th meeting in London in June 2010. Directed by senior business leaders and ministers from both countries, KBTIC identifies key sectors for co-operation, business opportunities and trade & investment issues that need to be jointly addressed.

UK Trade & Investment Country Profile: Kazakhstan (http://www.uktradeinvest.gov.uk/ukti/kazakhstan)

Foreign Policy

Kazakhstan tries to maintain a foreign policy balance. It enjoys a particularly close relationship with Russia and sees China as a key potential market. It also wants stronger relationships with the EU, its main trading partner, and with the US. With this in mind, in August 2008, President Nazarbayev endorsed a State programme: “Path to Europe”, which is ongoing.

Kazakhstan has signed up to global and regional security structures. It joined the UN in March 1992 and renounced nuclear weapons in 1995. It is a member of a number of regional organisations including the Shanghai Co-operation Organisation, the Conference for Security and Confidence-Building Measures in Asia, (a Kazakhstani initiative), the Collective Security Treaty Organisation and the Eurasian Economic Community. Since 2004 Kazakhstan has been contributing troops to the International Coalition against Terrorism work in Iraq. It is the only Central Asian country to have agreed an Individual Partnership Action Programme with NATO. It is an active participant in the US/Russian initiative on the non-proliferation of nuclear weapons of mass destruction.

In 2010 Kazakhstan became the first Central Asian and CIS state to chair the OSCE. This chairmanship concluded with Kazakhstan hosting the first OSCE Summit in eleven years on 1 and 2 December in Astana. In 2011, Kazakhstan will chair the Shanghai Co-operation Organisation as well as the Organisation of the Islamic Conference.

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POLITICS

President

Kazakhstan is a Presidential Republic. President Nursultan Nazarbayev, the former First Secretary of the Central Committee of the Communist Party of Kazakhstan, was elected first President of the Republic of Kazakhstan with 91% of the vote on 1 December 1991. A nationwide referendum in April 1995 extended the President’s term in office until 1 December 2000. However, in autumn 1998, Nazarbayev called Presidential elections for January 1999, nearly two years early.

Despite OSCE concerns about the fairness of elections held at such short notice, the elections went ahead. Official results recorded that Nazarbayev won with a79% of the vote. Further Presidential elections were held on 4 December 2005 with Nazarbayev taking 91.16% of the vote. The OSCE’s Office of Democratic Institutions and Human Rights (ODIHR) noted a number of significant shortcomings in proceedings.

2007 Constitutional amendments reduced the presidential term from seven to five years. They also limited the number of consecutive terms to two, although the first President of the Republic is exempt from this restriction.

In June 2010, legislation came into force making President Nazarbayev the life-long ‘Leader of the Nation’. This means that he and his immediate family enjoy life long immunity from investigation and prosecution. The legislation also gives Nazarbayev the right to veto legislation and address Parliament at will, even when no longer President. In addition, it introduces penalties for those found guilty of insulting the honour of the President.

In December 2010, a public campaign was launched in favour of a national referendum extending the President’s term in office, without elections, until 2020. Many domestic and international observers, including the UK, EU and US, expressed concern at this initiative. Following advice from the Constitutional Council, the President instead issued a decree calling early Presidential elections on 3 April 2011.

President Nazarbayev sees his greatest achievement as building an independent country without violence or a split along ethnic or religious lines. He has also overseen some of the most extensive financial and economic reforms in the former Soviet Union. Another of his achievements is that he dismantled the enormous nuclear legacy left to Kazakhstan following independence.

Parliament

The Parliament of Kazakhstan is bicameral and consists of the Lower House (Majilis) and the Upper House (Senate). In 2007 Constitutional amendments set the number of representatives in the Majilis at 107 and the number of Senators at 47. 98 members of the Majilis are elected by proportional representation for five-year terms. The remaining nine are elected by the Assembly of the Peoples of Kazakhstan (a body formed in 1995 to represent the different ethnic minority groups in Kazakhstan), Fifteen Senators are appointed by the President. The remainder are elected by regional legislatures for six year terms.

Following 2007 Parliamentary elections, only one political party, the President’s Nur Otan, is represented in Parliament, as no other party achieved the requisite 7% threshold. However, in order to secure the 2010 OSCE Chairmanship, Kazakhstan committed itself to legislative reforms, including in the areas of political parties and elections. Resulting 2009 legislation guarantees that from the next Parliamentary elections onwards, there will always be a minimum of two parties in Parliament. The legislation does not reduce the 7% threshold (as recommended by ODIHR). Instead, the second placed party will automatically be included.

Political Parties

Political parties in Kazakhstan are generally based on the personal appeal of leading individuals rather than political orientation. There are currently nine registered parties in Kazakhstan. Another party, Alga, has been unsuccessfully seeking official registration since 2006.

The party represented in Parliament is Nur Otan. President Nazarbayev has been Chairman of Nur Otan since its 2007 congress. Other political parties include: Adilet; The All Social Democratic Party ‘Azat’; Ak Zhol; Auyl; The Communist Party of Kazakhstan; The Communist People’s Party of Kazakhstan; The Patriot Party of Kazakhstan; and Rukhaniyat.In 2002, the 1996 Law on Political Parties was amended to increase the number of registered members of a political party in order to register from 3,000 to 50,000. The effect was to considerably reduce the number of registered political parties. During the 1999 parliamentary elections, 19 political parties were registered. Only 12 parties were registered during the 2004 parliamentary elections. In 2009, new legislation was introduced reducing the 50,000 threshold to 40,000.

Elections

Elections to the lower chamber of the Kazakh Parliament (Majilis) were held on 18 August 2007. Seven parties contested the election. The Communist Party of Kazakhstan decided to boycott the election in protest at the introduction of proportional representation.

The final results were:
Nur Otan: 88.41%
USDP: 4.54%
Ak Zhol: 3.09%
Aul: 1.51%
People’s Communist Party: 1.29%
Patriotic Party: 0.78%
Ruhaniyat: 0.37%
Nur Otan took all 98 seats: none of the other parties cleared the 7% threshold to gain representation in parliament. Neither were any of the nine seats chosen by the Assembly of Peoples awarded to the opposition.

The OSCE/ODIHR observation mission reported some areas of progress, particularly as regards the information work of the Central Election Commission and the media campaign. However, several fundamental OSCE requirements were not observed, in particular some elements of electoral legislation and the actual vote count, where more than 39% of observers gave negative assessments.

Two opposition parties, Ak Zhol and USDP, refused to recognise the results, stating that they did not reflect the real division of political power and were not a step forward.

The next Parliamentary elections are due to take place in 2011.

Reform, Democratisation and Human Rights

Kazakhstan signed the International Covenant on Civil and Political Rights (ICCPR) and the International Covenant on Economic, Social and Cultural Rights in November 2003 (both since ratified in December 2005).

In 2003, President Nazarbayev announced a moratorium of the death penalty. Life imprisonment legislation was introduced in January 2004. On 30 December 2005, the Senate passed the jury bill introducing a continental model (judges and lay people deliberate together both as to the guilt of the accused and the appropriate punishment) for death penalty and life imprisonment cases. The first jury trials started in January 2007. Since May 2007 constitutional amendments, only serious crimes committed during wartime, as well as acts of terrorism resulting in death, attract the death penalty.

In September 2007, Kazakhstan signed the First Optional Protocol to the International Covenant on Civil and Political Rights (ICCPR) and the Optional Protocol to the Convention against Torture (OPCAT). On 3 June 2008, Kazakhstan ratified OPCAT. With British Embassy support, legislation is currently being prepared on establishing a National Preventative Mechanism against torture, whereby places of deprivation of liberty will be monitored. In August 2010, President Nazarbayev issued a decree on ‘humanisation of the criminal justice system’ which has resulted in a reduction in the number of crimes that attract custodial sentences. However, instances of torture and high prison populations remain concerns.

In late 2009, Parliament passed legislation on gender equality and domestic violence. Whilst some argue that this legislation does not go far enough, it does represent a step forward.

Kazakhstan's performance on human rights in other areas since independence has been patchy. NGOs are active and civil society is developing steadily. But opposition activists are subject to harassment, there are limitations on freedom of assembly for political rallies, and freedom of the press is severely curtailed.

In 2007, in order to secure the 2010 chairmanship of the OSCE, then Foreign Minister Tazhin committed Kazakhstan to legislative reforms in the areas of elections, political parties, the media and local-self governance. Corresponding 2009 legislation made some improvements in each area, but many believe the changes fell short of full OSCE standards.

In February 2009 a restrictive law on Freedom of Conscience and Religious Organisations was rejected by Kazakhstan’s Constitutional Council. However, minority religious groups continue to report difficulties.

A controversial ‘internet law’ was passed in July 2009 which subjects internet for a., including blogs, to the same restrictions as mass media. This means that individuals can be prosecuted under libel laws. Criticism by the OSCE Representative for Freedom of the Media and by the EU, including a local démarche, made clear that this was not in line with international standards or OSCE commitments.

Kazakhstan underwent its UN Universal Review in February 2010. The UK made a number of recommendations, including that Kazakhstan establish an independent national Preventative Mechanism, that it raise awareness of its law enforcement officials so that individuals may exercise their right to freedom of religion of belief and that it establish an effective and inclusive process to follow up on the review. The UK continues to support reform in Kazakhstan in the areas of democratisation and human rights including through the British Embassy’s Bilateral Programme Budget and the FCO’s Strategic Programme Fund.

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Last Updated: February 2011

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