Kazakhstan - Market OverviewKazakhstan - Market Overview
Kazakhstan is the leading market in Central Asia and has emerged as a major transport and logistics hub in the region. The country links the large and fast-growing markets of China and South Asia and those of Russia and Western Europe by road, rail, and a port on the Caspian Sea. Kazakhstan has an abundance of natural resources, including oil & gas, coal and mineral deposits and its economy continues to be fueled by extractive industries. In addition, Kazakhstan boasts significant agricultural potential for both grain and livestock production and U.S. companies are well positioned to help Kazakhstan diversify across this segment of the economy. With a growing middle class and economic growth poised to reach 4 percent in 2019, Kazakhstan provides trade and investment prospects for U.S. firms seeking new opportunities in one of the most dynamic of the emerging markets.
Since gaining independence in 1991, Kazakhstan has steadily worked to improve its business and investment climate. The government of Kazakhstan realizes the need to implement transformative economic reforms to boost productivity and growth. Challenges remain in addressing problems related to the country’s competitiveness and economic diversification, its over-reliance on the extractive sector, continued corruption, inefficient bureaucracy, and arbitrary law enforcement, especially at the regional and municipal levels.
Kazakhstan is currently the United States’ 79th largest goods trading partner. Two-way U.S.-Kazakhstan bilateral trade is about USD2.11 billion, up over 60-percent from 2017 (which was USD1.3 billion). Kazakhstan imported about USD730 million in U.S. goods, including nearly USD288 million in various types of machinery, nearly USD120 million in aerospace products, USD54 million in meat products, USD35 million in medical equipment and pharmaceuticals, and a wide range of metallurgical goods. Kazakhstan exported nearly USD1.4 billion to the United States, including over USD970 million in petroleum products, over USD210 million in iron, steel and related products, and a wide variety of metallurgical and mineral products. The U.S. balance of trade with Kazakhstan is approximately negative USD655 million.
Economic highlights include:
- Kazakhstan is ranked 28 among 190 economies in ease of doing business, according to the latest World Bank annual ratings;
- The level of foreign direct investment is among the highest in the former Soviet Union. The United States is one of the largest investors in the market along with the Netherlands and China.
- Raw mineral extraction continues to dominate Kazakhstan’s economy, making it overly dependent on world market prices for natural resources;
- Kazakhstan has a healthy appetite for imported goods and in some, not all, cases is willing to pay more for higher quality and innovative technologies and services. U.S. branded products and services are well received in the market and recognized for their high quality and value;
- Kazakhstan acceded to the World Trade Organization in November 2015 and will host the organization’s Twelfth Ministerial Conference to be held in 2020 in the nation’s capital, Nur-Sultan;
- The most recent report from the Heritage Foundation’s rated the country as “moderately free” and ranked it 59 out of 180 countries, well above neighboring China (#100) and Russia (#98). Kazakhstan’s overall score decreased by 3.7 points compared to the previous year because of a steep decline in the score for fiscal health, which is underscored by a weak banking sector.
- The Kazakhstani government aims to have the country join the World Economic Forum’s “Global Competitiveness” Top 30 economies by 2050. In the World Bank’s 2018 Competitiveness Rankings, Kazakhstan dropped two slots to #59 out of 140 countries.
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Kazakhstan Trade Development and Promotion