Page 8 - bne IntelliNews monthly magazine April 2025

8 I Companies & Markets bne April 2025
Evgeny Vinokurov, chief economist at the Eurasian Development Bank (EDB), speaks to journalists at the EDB's 2024 annual meeting in Almaty. /
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economic growth is expected to slow to an average of around 3% annually.
“[F]or Kazakhstan, the main challenge would be slower growth of export demand. Hence, Kazakhstan will simply have to rely more on internal sources of growth,” said Vinokurov.
Industrialisation drive
A central part of Kazakhstan’s economic strategy has been attracting investment into its manufacturing sector.
Kazakhstan's economic strategy prioritises diversification, with a strong focus on industrial development. Over the past four years, the industrial sector’s share of GDP has grown
by an average of 1.7 pp compared to the 2015-19 period. Meanwhile, the contribution of mechanical engineering enterprises to industrial output growth doubled on average between 2017 and 2024 compared to 2011-14.
An EDB study identifies Kazakhstan as the leading destina- tion for mutual investments in the Eurasian region. In terms of foreign direct investment (FDI) from outside the region, Kazakhstan has a significant investment stock from China, though its growth has been relatively modest. Meanwhile, FDI from Gulf countries, particularly the UAE and Qatar,
has quadrupled, reaching $3.1bn, reflecting the Gulf states' increasing presence in Central Asia.
As demand grows, Kazakhstan is positioning itself as a leader in critical raw materials, particularly uranium and rare earth elements (REEs).
"The country accounts for 40% of global uranium output, supplying China, the EU and the US, with Kazatomprom play-
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ing a dominant role in the international market. Moreover, Kazakhstan boasts vast reserves of REEs, tungsten, copper, lithium and cobalt, all essential for high-tech industries and the green transition," Vinokurov said. All of these are critical for high-tech industries and the green transition.
A major lithium deposit discovered in 2024, valued at $15.7bn, reinforces Kazakhstan’s role in the global battery and renewable energy industries. With 2.2mn tonnes of tungsten, it also ranks among the world’s largest holders of this strate- gic metal. The country is expanding REE mining, focusing on elements vital for electric vehicle (EV) motors, wind turbines and electronics.
Mitigating the landlocked 'penalty'
As a landlocked country, Kazakhstan faces inherent logistical challenges. However, strategic investments in transport infra- structure are giving it a more prominent role in global trade.
"Kazakhstan is a key player in the transport and logistics market of Central Asia and Eurasian region – three out of five major Eurasian transport corridors pass through its territory," said Vinokurov.
The EDB has long supported investments into transport connectivity in Eurasia, which are crucial given that five of its six member states, including Kazakhstan, are landlocked.
“Landlocked economies grow slower on average than compa- rable economies with good access to the ocean. There is a ‘penalty’ of sorts for being landlocked. The policy challenge is at least to mitigate this situation. And, at best, turn it around, making such regions a transport crossroads,” said Vinokurov.
“Kazakhstan is a key player in the transport and logistics market of Central Asia and Eurasian region
– three out of five major Eurasian transport corridors pass through its territory”
“Historically, our region has developed east-west links. Now it is supplementing them with corridors and routes in the north-south direction. This is an opportunity for Central Asia to reduce the 'penalty' and then become a transport cross- roads for Eurasia.”
Cargo traffic along the Middle Corridor, for example, grew by 62% year on year to 4.5mn tonnes in 2024, while the volume of container traffic increased 2.6 times. The number of container block trains from China to the Caucasus and Turkey rose 30 times to an all-time high of 358.