Five key initiatives for Kazakhstan’s economic resilience

Kazakhstan enters 2026 facing a set of serious structural challenges – a slowdown in economic diversification, rising competition from neighboring countries, aging infrastructure, energy shortages, and intensifying water stress.

In my view, the following five priority areas can serve as the foundation for sustainable growth, balanced regional development, and stronger national resilience.

1.⁠ ⁠Targeted Support for Domestic Producers

Problem: Kazakhstan’s agro-industrial complex continues to face mounting pressure from growing imports, especially from Russia.

Although Kazakhstan’s exports are rising, the trade deficit with Russia exceeds $8.5 billion. Imports of food products alone surpass $3.2 billion, displacing local goods from store shelves and limiting sales markets for domestic producers.

Solution: A more focused and long-term support policy for domestic agricultural producers, particularly in regions bordering Russia:

• ⁠ ⁠Concessional loans at 2.5% for up to 10 years, expanded to include processing industries such as oil-and-fat, meat, and dairy.
• ⁠ ⁠Subsidies for delivering raw materials to processing plants (milk, meat, grain, wool, vegetables), which would increase plant utilization and enhance food security.

2.⁠ ⁠Renewal of Housing Stock in Northern Regions

Problem: More than 60% of the housing stock in northern and border regions was built before 1991. These buildings no longer meet modern standards for safety and energy efficiency.

Banks also refuse to accept homes older than 50 years as collateral, which limits access to mortgages and reduces labor mobility in these regions.

Solution: Launch a regional preferential mortgage program involving Otbası Bank and the Kazakhstan Khalkyna Foundation.

The program could be integrated into the existing state housing framework, with a special quota for northern regions.

Key parameters:

• ⁠ ⁠Low interest rate (4-5% annually);
• ⁠ ⁠Subsidized down payments for young families and public sector employees;
• ⁠ ⁠Incentives for developers to build energy-efficient housing.

3.⁠ ⁠Development of Small Modular Nuclear Reactors (SMRs)

Problem: By 2030, Kazakhstan’s electricity demand is projected to reach 141 billion kWh, creating a real risk of energy shortages.

More than 80% of power generation relies on coal and gas, while transmission networks are over 60% depreciated. Western regions frequently experience blackouts and lack backup capacity.

Despite being the world’s leading uranium producer (about 40% of global output), Kazakhstan still lacks its own nuclear power generation.

Solution: Kazakhstan should shift toward small modular reactors (SMRs) – safe, compact, and cost-effective power units with a capacity of up to 300 MW.

Global experience (UK, Canada, USA) shows that such reactors can be built in 4-5 years with predictable returns on investment.

Recommendations:

• ⁠ ⁠Identify 2-3 pilot regions (in western and southern Kazakhstan) for SMR construction;
• ⁠ ⁠Establish a dedicated SMR financing fund through public-private partnerships and international consortia;
• ⁠ ⁠Use locally produced uranium for domestic energy generation.

4.⁠ ⁠Exploration and Utilization of Groundwater Resources

Problem: Kazakhstan is among the countries facing severe water stress. More than 50% of irrigation water is lost during transportation, and 65% of total water consumption goes to agriculture.

Due to climate change and transboundary water limitations, the water deficit could exceed 80% by 2040.

Solution: Kazakhstan’s state geological balance lists 1,282 groundwater deposits, but only 25% of them have been studied.

The estimated potential of underground water resources is 64 billion cubic meters per year, enough to cover the country’s needs for at least three decades.

Priority actions:

• ⁠ ⁠Conduct hydrogeological surveys to assess reserves by region;
• ⁠ ⁠Build pipelines from large underground basins (e.g., the Priirtysh basin to supply Astana);
• ⁠ ⁠Introduce water-saving technologies and automated accounting systems.

5.⁠ ⁠Reboot of Social-Entrepreneurial Corporations (SPCs) and Special Economic Zones (SEZs)

Problem: Today, Social-Entrepreneurial Corporations (SPCs) and Special Economic Zones (SEZs) are far from realizing their potential as development institutions.

Most SPCs are loss-making and compete with the private sector instead of complementing it. Meanwhile, private investment in SEZs accounts for less than 30%.

Solution: Reorient SPCs and SEZs toward real investment promotion, export development, and regional value chain creation.

Key steps:

• ⁠ ⁠Eliminate SPCs’ commercial competition with private businesses;
• ⁠ ⁠Transform them into regional development agencies;
• ⁠ ⁠Develop industrial and technology parks using the “industrial mortgage” model (as in Almaty);
• ⁠ ⁠Attract private capital through flexible PPP mechanisms.

These five initiatives represent a pragmatic roadmap for Kazakhstan’s qualitative growth in 2026 and beyond. The goal is not just faster GDP growth – but better, smarter growth that improves the quality of life for citizens across all regions.