When people talk about Kazakhstan’s industrial future, they usually think of giant factories, extractive industries and multi-billion-dollar investment projects. In my view, however, the real industrial economy begins elsewhere – in the regions, where entrepreneurs build factories from the ground up, train skilled workers and compete every day not only with one another, but with global manufacturers.
I know this not from reports, but from experience. For more than fifteen years, my team and I have been building an industrial business in Burabay District of the Akmola Region. Asiafilter started with just $1,000 and a staff of four. Today, we employ 40 people and produce 500,000 filters a year – production volumes the region had never seen before. I still remember the moment during the COVID-19 pandemic when border closures left major domestic companies without their usual foreign suppliers. They turned to us for filters instead. That was when it became clear that regional manufacturers could produce every bit as well as large industrial plants in the country’s biggest cities.
That is why I particularly value the changes now taking place in Kazakhstan’s industrial policy. I know how difficult it is to build a manufacturing business outside the major urban centers, and I can see how many more opportunities are opening up for a new generation of entrepreneurs.
The country is entering a pivotal stage of its development. The new Constitution has laid the foundation for reforms aimed at building a fairer state and a new economic model. For industry, this means moving beyond a resource-based economy toward higher-value manufacturing, technological development and stronger economic sovereignty.
The first results are already visible. According to the Ministry of National Economy, manufacturing output expanded by 9.8% in the first half of the year. Over the past five years, the sector has posted average annual growth of 11.2%, accelerating to 12.1% last year. The share of high-tech manufacturing has increased from 20.7% to 27.6%. The strategy is delivering results. The real question is what will make that progress irreversible.
This column offers a manufacturer’s perspective on the decisions needed to take the next step. It draws on personal experience, international best practice and an inside understanding of how the industry actually works.
First. Kazakhstan needs a comprehensive support program for regional manufacturers. It is the regions that create new jobs, expand the tax base and drive the growth of small and medium-sized industrial businesses. International experience makes this clear. Germany’s Mittelstand – the family-owned and medium-sized manufacturers located outside major cities – generates nearly half of the country’s GDP and employs 58% of its workforce. Germany became an industrial powerhouse not only because of companies like Siemens or BASF, but because of thousands of regional factories much like ours.
Second. The priority given to domestic producers in public procurement must be strengthened in law and enforced in practice. Government purchasing should support Kazakh manufacturers rather than remain a formal declaration. The United States has operated its Buy American policy for almost a century, and the rules continue to tighten. Since 2025, products purchased through federal procurement have been required to contain at least 65% American-made components, with the threshold set to rise to 75% by 2029. While other countries are strengthening local content requirements, Kazakhstan cannot afford for this mechanism to fall short.
Yet it does fall short – at every level. This year’s list of national exemptions was approved only in May, effectively shutting domestic manufacturers out of procurement opportunities for almost half the year. But the deeper problem goes beyond timing. The law requires procurement authorities to give preference to domestic producers under a specific national product classification code. It does not, however, require state-owned enterprises to issue tenders under that code in the first place. For our factory, the consequences are significant. By our estimates, this loophole alone costs us annual production of around 100,000 to 140,000 filters that could have been supplied to Kazakh enterprises. The customers exist. Our products meet their requirements. Yet the procurement notice never reaches us. Loopholes like this undermine the very purpose of domestic preference legislation. What gets lost is not statistical percentages, but real factories and real jobs.
Third. Kazakhstan needs to significantly expand preferential financing and industrial leasing. Modern equipment, automation and robotics are no longer optional – they are essential for survival. South Korea’s transformation from an agrarian economy into an industrial leader was driven in large part by decades of low-cost, long-term financing directed to priority industries through specialized development banks rather than commercial lending rates that growing manufacturers could not afford. Those who gain access to affordable capital first are the ones who reach export markets first. We see this firsthand at our own factory.
Fourth. The country needs more industrial zones and small manufacturing parks with ready-to-use infrastructure. These reduce project launch times and lower investment costs. Akmola Region already provides a compelling example. Investment has exceeded KZT 900 billion, while the AQMOLA industrial zone has assembled a project pipeline approaching KZT 1 trillion. In 2026 alone, five brick factories with a combined annual capacity of 400 million bricks are scheduled to open there, creating 4,500 new jobs. Every region should have growth hubs like this rather than treating them as exceptions.
Fifth. Industrial digitalization deserves special attention because it is now a question of competitiveness, not the future. Thanks to initiatives launched by the Head of State, Kazakhstan is becoming one of the region’s centers for digital transformation. So far, however, the benefits have been felt mainly in major cities rather than across the regions. Germany’s Industrie 4.0 strategy has made it a global leader in industrial digitalization. Estonia has shown how digital government can directly benefit business: its X-Road platform allows companies to be registered in just 20 minutes and annual tax returns to be filed in two. Kazakhstan needs a single digital industrial platform bringing together the registry of domestic manufacturers, public procurement, state support measures, offtake contracts and business services through one integrated system.
The government has already created many of the necessary tools. Over the past year alone, the value of offtake contracts within the Samruk-Kazyna group increased tenfold to KZT 191 billion, while the overall contract portfolio reached KZT 1.4 trillion. Yet each instrument still operates in isolation. The Ministry of Industry maintains the registry of domestic manufacturers, Samruk-Kazyna manages offtake contracts, while the Ministry of Energy oversees local content requirements. We experience this fragmentation every day. Our factory participates in procurement across every available platform and enterprise, and we see that domestic preference rules are applied inconsistently. Too often we have to explain regulations that procurement officers should already know, or spend months negotiating import substitution from scratch. The calculation is simple: if the system were unified and transparent from the outset, both sides would save valuable time. And time is money. Manufacturers need a single coordination and digital monitoring platform so that these mechanisms function as one ecosystem instead of three parallel systems that businesses must navigate manually.
The strategic objective is clear: Kazakhstan must move from exporting raw materials to producing high-value goods – pipes and cables, aluminum and copper products, engineering components, and equipment for the oil and gas industry. These industries create well-paid jobs, strengthen regional economies and make Kazakhstan more resilient.
Raw materials generate revenue once. Manufacturing creates prosperity year after year.
Indira Nurlan, expert in industrial policy and import substitution, entrepreneur, exclusively for EconomyKZ.org
