Experts name condition for Kazakhstan to join ranks of wealthy countries

Kazakhstan is on the cusp of joining the ranks of high-income countries, with its gross national income per capita reaching $13,740 by the end of 2025, just shy of the $14,375 benchmark. Experts suggest that overcoming the "middle-income trap", a situation where economies stagnate after initial growth, hinges on robust industrial development.

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A strong industry is the main key to overcoming the middle-income trap. The EDB expects this transition to take place as early as 2028–2029. The main task now is to ensure high and sustainable economic growth.

Arman Akhunbayev, head of the Sectoral Analysis Center at the Eurasian Development Bank (EDB), anticipates Kazakhstan could make this transition as early as 2028–2029. He emphasizes that ensuring high and sustainable economic growth is the primary objective. While manufacturing has long been a focus of Kazakhstan's economic policy, with various industrial development programs in place, its accelerated growth is now paramount.

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The familiar raw-materials model has become too vulnerable because of its dependence on imports of complex technologies. In addition, the largest economies are actively subsidizing localization and restructuring supply chains.

The traditional raw-materials export model is deemed too vulnerable due to its reliance on imported technologies and susceptibility to global price fluctuations. Akhunbayev highlights that manufacturing drives global innovation and job creation. Kazakhstan possesses the necessary raw materials and production base to shift towards producing more complex, higher-value goods, a move that could generate an additional $38.4 billion in annual output, according to EDB estimates.

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It is enough to use the existing base for natural sophistication: from the direct sale of oil, metals and grain to the production of polymers, equipment and deeply processed products.

Denis Mirolyubov, a Russian economic analyst, concurs that the raw-materials model has inherent limitations, making revenues heavily dependent on global commodity prices. Developing processing capabilities, he notes, allows for the creation of higher added-value products, new employment opportunities, and a more resilient economy. In the first half of the year, Kazakhstan's manufacturing output surged by 9.8 percent, with notable growth in light industry (89.2 percent), mechanical engineering (23.2 percent), the chemical industry (19 percent), and food production (14.7 percent). Special economic and industrial zones are identified as key instruments for fostering this industrial expansion.

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Budget and economic revenues are too heavily dependent on global prices for oil, gas and metals. The development of processing makes it possible to create products with higher added value, new jobs and makes the economy less dependent on fluctuations in commodity markets.