ADB's Work in Kazakhstan
After declaring independence in 1991, Kazakhstan catapulted to upper-middle-income status in less than 2 decades. ADB has remained a steady partner in supporting this progress.
In Kazakhstan, a single congested and dangerous road had become a bottleneck to the country’s ambitious plans to expand trade with Europe and Asia via the Caspian Sea.
An estimated 30 million tons of cargo are transported across the Caspian Sea each year, with more than one-third of it transiting the international port in the Kazakhstan city of Aktau. The city sits in Mangystau region, which is the source of most of the country’s oil and minerals, and acts as a regional hub for transporting oil to Asia and Europe.
Traditionally, a portion of this cargo traveled over gravel or dirt roads in Mangystau region, or over highways that were partially paved with severely deteriorated and impassable sections. The road from Aktau to Beyneu region, which links the international port to the main road system in central Kazakhstan, has been in poor condition for many years.
As part of a regional transport development project, ADB has helped rebuild the Aktau–Beyneu road. The road is one link in a broader initiative, organized under the Central Asia Regional Economic Cooperation (CAREC) program, which seeks to make it easier to transport goods and people through Central Asia to Europe, the Russian Federation, the People’s Republic of China (PRC), and other parts of Asia.
Helping to open up the Caspian Sea to more trade from Kazakhstan was just one initiative in a partnership that has included more than $4.9 billion in investments across sectors, including agriculture, education, finance, irrigation, and water supply and sanitation.
ADB’s work with Kazakhstan began in 1994 after the collapse of the Soviet Union and the country’s declaration of independence in 1991. As it did throughout Central Asia, ADB helped Kazakhstan transition from a centrally planned economy to a more modern, free-market system.
In one of the early projects in which ADB and Kazakhstan partnered, outdated irrigation and water drainage systems were improved to increase yield crops. The Water Resources Management and Land Improvement Project, which began in 1997, helped build drainage wells and water channels, and used computer models to maximize the impact of water use. The results were higher yields of cotton and alfalfa for export, and a more rapid decrease in poverty in the project area.
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In the late 1990s, Kazakhstan also joined CAREC in an effort to transform from a landlocked economy to a “land-linked” one that is connected to its neighbors and beyond. ADB helped build critical roads, and also assisted with trade facilitation and logistics development in order to use those links effectively to benefit the economy and create jobs.
ADB has supported a 2,700-kilometer road linking the PRC to Europe through Kazakhstan. ADB contributed to this megaproject by providing funding for the reconstruction of a 470-kilometer road section in Zhambyl region, which borders the Kyrgyz Republic.
Rustam Niyazov, a truck driver on one of the country’s smooth new highways, says: “We are happy with the road. I wish that all roads in Kazakhstan were like this one. It’s good for drivers and for the trucks, of course.”
With a new ADB office opened in Kazakhstan in 1998, the two partners were poised in the early 2000s to pursue the country’s evolving economic and social development goals. As a middle-income country, it faced the challenge of avoiding economic stagnation.
During the early 2000s, Kazakhstan’s prosperity resulted in a reduced need for development financing, so ADB worked to support the government’s efforts to sustain a high economic growth rate, promote environment-friendly development, catalyze the private sector, facilitate regional cooperation and integration with Central Asia.
The global economic crisis in 2007 and 2008 set Kazakhstan back and prompted the government to seek external financing once again. ADB responded with a $500 million loan package to help the government cover critical expenses, support road improvements, and encourage private sector development, especially small and medium-sized businesses.
Under ADB’s $500 million Small and Medium Enterprise Investment Program, more than 1,500 businesses have received financing. Improved access to finance has helped drive investment, increase employment, and generate income for small and medium-sized enterprises, particularly those located in regions outside Astana and Almaty, and those operated by women entrepreneurs. Diversifying the economy is a priority for Kazakhstan. Knowledge and experience exchange can help the country achieve more equitable and sustainable growth. New partnerships to this end are getting underway.
This article was originally published in a special edition of Together We Deliver, which tells 50 stories highlighting the importance of good partnerships in Asia and the Pacific in meeting the complex development challenges of this dynamic region.