A breakthrough area in Kazakhstan’s foreign trade policy in 2019 was the expansion of regional trade
Moscow, 10 August 2020. One of the breakthrough areas in Kazakhstan’s foreign trade policy in the past year was the expansion of regional trade through deeper integration with other Central Asian countries, including Uzbekistan whose economy had become significantly more open compared to previous years. This finding is presented in the report entitled Main Tendencies in Kazakhstan’s Integration Development in 2019 prepared by the Eurasian Development Bank’s (EDB) Centre for Integration Studies.
Kazakhstan’s development in 2019 was characterised by the consistent implementation of tasks to improve the market mechanism. International ratings reflected this process. Kazakhstan ranked 25th in the World Bank’s Doing Business 2020 rating, having climbed three notches from the 28th place in 2018. The country has outpaced all other countries of the Eurasian Economic Union (EAEU) – it is three notches ahead of Russia, and as many as 55 notches ahead of the Kyrgyz Republic, which has the lowest ranking among all Union countries. In mid-2019, Moody’s Investors Service affirmed Kazakhstan’s credit rating at Baa3, with a positive outlook (the outlook was stable in 2017).
Integration developments have also been positive. While the global economy weakened and trade with third countries declined, Kazakhstan’s mutual trade with EAEU countries in 2019 went up, influencing the overall indicators of foreign trade.
Although the share of hydrocarbons, primarily oil and oil products, as well as that of ores and metals in Kazakhstan’s trade remain significant, in 2019 the country was steadily building up non-primary exports. These were actively stimulated by the government, in particular by taking measures to improve the institutional framework for the development and promotion of the exports of processed goods and services.
Kazakhstan’s mutual trade with EAEU countries continues to focus on Russia because of the historically close cooperation and other established ties that are of strategic importance to the country’s economy. In trade with Russia, Kazakhstan is a net importer. That said, its commodity structure is highly diversified and includes, among other things, high-tech products.
Remittances are of limited importance to the country’s economy and balance of payments, compared to other EAEU countries (except Russia) that export labour.
The gross inflow of foreign investment to Kazakhstan in 2019 remained practically unchanged. The net inflow (less repayments) from Russia declined but remained highly significant for the Kazakh economy. The primary sector continues to dominate the industrial structure of foreign direct investment.
Kazakhstan’s most intensive corporate ties – in the area of both investment and trade – are with Russia. It is notable that, after his appointment in 2019, Kassym-Jomart Tokayev, the new President of Kazakhstan, made his first official foreign visit to Russia, which confirmed his adherence to the principles of integration development within the EAEU.
The full version of the report is available on the EDB’s website.
Additional Information:
The Eurasian Development Bank (EDB) is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth, and the expansion of mutual trade and other economic ties in its member states. The EDB's charter capital totals US $7 billion. The member states of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan.
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