Geopolitical Outlines: 
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• Internally, during his presidency Nazarbayev has made several legislative amendments to further strengthen his position. So was the power of the president increased constitutionally, after which less emphasis was placed on human rights, and he can appoint every member of the cabinet, excluding the position of premier and head of the state bank. In October 1998, the Kazakh legislature approved constitutional amendments that enabled Nazarbayev to call an early presidential race for January 1999 and extended the president’s term from five to seven years. Additionally, in 2007 the parliament voted to allow Nazarbayev to stay in office for an unlimited number of terms. In 2010, he was granted the title “Leader of the Nation” and was given immunity from any prosecution. This means that Nazarbayev will be able to control Kazakh politics even when he retires. However, after winning the presidential election in April 2011, the 71-year-old Nazarbayev stated that he was not considering giving up the presidential position. [1]
• Kazakhstan is historically connected with Russia being a part of first, Russian Empire and then Soviet Union. As we said Russian language still dominates in strong cities. After Russia, China is the second main partner of the country. This strategy corresponds globally to the Eurasianism. However there is a kind of controversy in the political debates in Kazakhstan about the choice of the priority foreign partner. On the one hand, there are calls to continue the Eurasian integration and on the other hand, there is the influence of other forces to ensure the economic and political independences of the country. 

• Foreign relations of Kazakhstan are primarily based on economic and political security. The Nazarbayev administrationhas tried to balance relations with Russia and the United States by sending petroleum and natural gas to its northern neighbor at artificially low prices while assisting the U.S. in the War on Terror. Kazakhstan is a member of the United Nations, Organization for Security and Co-operation in Europe (which it chaired in 2010), North Atlantic Cooperation Council,Commonwealth of Independent States, the Shanghai Cooperation Organisation, and NATO's Partnership for Peace-program. Kazakhstan established a customs union with Russia and Belarus, transformed into the Eurasian Economic Community then in 2015 into the Eurasian Economic Union. President Nazarbayev has prioritized economic diplomacy into Kazakhstan's foreign policy. Kazakhstan has a “multi-vector” foreign policy, i.e. a triangulation between the major powers of Russia, China and the US. Kazakhstan has called for “intra-regional integration in Central Asia” and international integration of the region. ​
• More than this, President Nazarbayev has called with Iran for a common currency not just among EEU countries but also among Asian countries. Kazakhstan became a member of the Collective Security Treaty Organization (the Russian equivalent to NATO) on a number of reasons:

1. Due to its geographical stance, Kazakhstan stands a good chance to face the challenges of regional security. It is not only terror, but also the attempts to destabilize the political situation in the country.
2. There is a real possibility of the armed conflict scenario between the Central Asian countries because of the controversy around the use of water and earth resources. The CSTO and Russia as a geopolitical controlling entity are the effective deterrents in this context,
3.  Privileged military cooperation with Russia within the frameworks of the CSTO allows Astana to feel safe under the Russian “nuclear umbrella” and to strengthen its conventional armed forces. 

• Kazakhstan is also one of the main countries that fight against nuclear proliferation since the country has voluntary relinquished its stockpiles of nuclear weapons after the fall of the USSR. This status has brought the country to the forefront concerning debates against nuclear proliferation but has weakened its armed forces. This struggle may explain why on 28 June 2016 Kazakhstan was elected a non-permanent member of the UN Security Council (UNSC) for the period of 2017-2018. Kazakhstan is the first Central Asian country to become a non-permanent member of the UNSC.

Macroeconomics Outlines: 

• Oil and gas resources have strengthened the country’s power. Kazakhstan is a major oil producer. The estimated total petroleum and other liquids production of the country was 1.70 million barrels per day (bbl./d) in 2014 [1]. The key to its continued growth in liquids production from this level will be the development of its giant Tengiz, Karachaganak, and Kashagan fields. Development of additional export capacity will also be necessary for production growth. Kazakhstan had proved crude oil reserves of 30 billion barrels as of January 2014 [1] — the second largest endowment in Eurasia after Russia, and the twelfth largest in the world, just behind the United States. KazMunayGas is the Kazakhstan’s national oil company and has played an increasingly important role in the country’s oil and natural gas sector. The main oil field in Kazakhstan is the Kashagan field which is the largest known oil field outside the Middle East and the fifth largest in the world in terms of reserves. It is located off the northern shore of the Caspian Sea near the city of Atyrau. On September 11th, 2013, production from the super-giant field commenced, eight years after the original scheduled startup date. In October 2013, just a few weeks after production had begun, production had to be halted because of leaks in the pipeline that transports natural gas from the field to shore. Production is not expected to resume until the second half of 2016. Much of the repeated delays at Kashagan were the result of the field's adverse operating environment and complexity, resulting in significant cost overruns. Companies operating in Kashagan are KazMunayGas, Eni, ExxonMobil, Shell, Total, CNPC and Inpex.
• Kazakhs authorities want to keep access to the huge Russian and Belarussian markets, creating the level playing field for Kazakh companies. Then great hopes were placed on competition within the jurisdiction of the Customs Union as taxes in Kazakhstan are lesser and the investment climate is much better than in Russia. All the more than Kazakhstan has nowadays gained access to the main oil and gas pipelines to Europe, this with the EU buyers of hydrocarbons. To increase its economy’s competitiveness in the world market, Kazakhstan has consequently made the choice of the economic integration into Eurasian Economic Union by signing an agreement in 2014. 
• Kazakhstan’s economy faces the challenge of adjusting to a large terms-of-trade shock in a context of declining domestic and external demand. After a substantial drop during the second half of 2014, oil prices remained low in 2015. Meanwhile, China’s GDP growth rate is estimated to have slowed to less than 7 percent, and Russia’s economy is estimated to contract by 3.8 percent in 2015, affecting demand for Kazakhstan’s exports and, thus, translating into lower economic growth and inflation for Kazakhstan.

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Economic Complexity

The economy of Kazakhstan has an Economic Complexity Index (ECI) of 0.341 making it the 52nd most complex country. Kazakhstan exports 78 products with revealed comparative advantage (meaning that its share of global exports is larger than what would be expected from the size of its export economy and from the size of a product’s global market).

• Oil prices dropped by more than 50 percent between June 2014 and October 2015, cutting export revenues by almost a half and creating a twin deficit in the fiscal and current-account balances in 2015. In addition, foreign direct investment (FDI) inflows declined and the overall external balance deteriorated, putting downward pressure on the tenge (Kazakh currency).
• The authorities responded to the collapse of global oil prices through a rapid fiscal adjustment, followed by corresponding monetary and exchange-rate policy adjustments. In March 2015, the Kazakh government balanced out earlier allocated spending for the infrastructure development program, Nurly Zhol, with reductions or delays in other non-priority capital expenditures, allowing it to keep the state budget deficit (or a debt accumulation) within 3 percent of GDP in 2015. Meanwhile, the central bank tightened its monetary policy stance in support of the pegged exchange-rate regime to ensure price and exchange rate stability. Tighter monetary policy reduced credit to the economy despite the government’s provision of subsidized loans to specific sectors. ​
• The defense of the pegged exchange rate regime affected official international reserves. It also contributed to the real appreciation of the tenge and dollarization of deposits in the banking system.
• In August 2015, the authorities decided to move to a floating exchange rate and shift the country’s monetary policy to an inflation-targeting regime. The tenge lost a third of its value against the US dollar by the end of October 201519. These policy measures and the adjustment of the relative prices were necessary to safeguard fiscal and external accounts sustainability in the medium term and help adjust national income in a context of lower oil prices. 
• On the 14th December 2012 Nursultan Nazarbayev announced a new strategy for Kazakhstan that he called the “2050 Strategy”. The objective is to develop the country to position Kazakhstan among the top 30 global economics by 2050 [2] with the following goals:

1. Budgetary policy: The focus will to divert the economy and its infrastructure; these will be selected based on feasibility and rate of return and must be as carefully managed as private sector investments to avoid any misleading. There will also be a renewed focus on building up reserves to provide a buffer against future global economic deterioration.
2. Tax policy: The focus will be on stimulating internal growth, driving exports and encouraging saving and investment by individuals. The drive to simplify tax and customs administration and reporting will continue, and tax benefits will be made available to those involved in production and new technology sectors.
3. Monetary and debt policy: Key tasks of the National Bank and the Government in this area will be to manage inflation while encouraging economic growth; to maintain public and quasi-public sector debt at moderate levels; and to reduce the budget deficit to 1.5% of GDP by 2015 (from the 2.1% expected in 2013). The plan also calls for Kazakhstan’s banks to meet private sector-demand for finance.

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[1] U.S. Energy Information Administration
[2] https://strategy2050.kz/en/
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source: tradingeconomics.com

Oil&Gas Industry in Kazakhstan  

credits: condorpetroleum.

Strategy 2050: Governmental Plan