by Sebastien GOULARD
On January 9, 2024, Kassym-Jomart Tokaïev, the President of Kazakhstan, issued a decree initiating the transformation of Zhetygen village in the Ili district into a burgeoning city named Alatau. Despite its current population of 52,000 inhabitants, Alatau remains a modest urban center situated adjacent to Almaty, the primary economic powerhouse of Kazakhstan. Designated as part of the Alatau Special Economic Zone (SEZ), encompassing an expansive 96,500 hectares, the new city aims to catalyze economic growth, anticipating the creation of up to 110,000 jobs within the SEZ. The incentives proffered by the SEZ are poised to entice investors worldwide, positioning Alatau as an attractive investment destination.
The initial imperative in establishing Alatau as a pivotal economic hub is the enhancement of its infrastructure. Presently, Alatau boasts only basic amenities including a modest rail station, educational institutions, an airfield, and a hospital. Substantial investments are necessitated to revitalize existing infrastructure and erect new facilities, facilitating seamless operations for enterprises in Alatau.
Special Economic Zones in Kazakhstan are a pivotal component of the nation’s economic landscape, with 14 such zones dispersed across nearly every region as of January 2024. Among these, the Khorgos SEZ, situated near the Chinese border, holds considerable renown, aspiring to serve as the primary nexus linking Central Asia, Europe, and China via the main railway artery of China’s Belt and Road Initiative. However, despite its strategic location, Khorgos has yet to fully realize its potential due to its distance from Kazakhstan’s primary economic centers, resulting in limited industrial activity despite its significance as a logistical hub.
Of strategic significance is the Aktau SEZ, located on the shores of the Caspian Sea, aligning with Kazakhstan’s aspirations for enhanced connectivity. Collaborating with Azerbaijan, Kazakhstan seeks to promote a maritime route linking Central Asia with the Caucasus and Europe. Although an extant route exists, its utilization is hindered by the need for multiple modes of transportation. With improved facilities in Aktau, the Trans-Caspian route could emerge as a competitive alternative.
Additionally, several SEZs have been established in proximity to Astana, Kazakhstan’s capital city, including “Astana new city” and “Astana technopolis,” poised to bolster the appeal of northern Kazakhstan. SEZs serve as instrumental tools for attracting foreign direct investment (FDI), underscoring Kazakhstan’s diversified development approach beyond Astana and its endeavor to balance regional growth. The establishment of the Alatau SEZ further underscores Kazakhstan’s resolve to reduce dependence on Russia.
Recent geopolitical developments, notably the Russian invasion of Ukraine, have accentuated Kazakhstan’s awareness of its reliance on Russia. Moscow’s increasingly adversarial stance towards Astana, attributed to Kazakhstan’s distancing from Russian imperial aspirations, has prompted significant shifts. Efforts to promote the use of the Kazakh language over Russian in media and robust enforcement of sanctions against Moscow signify Kazakhstan’s recalibration of its geopolitical stance. Strengthening ties with China, now its foremost trade partner, underscores Kazakhstan’s strategic pivot, evident in President Xi Jinping’s inaugural post-COVID visit to Kazakhstan.
While Russia grapples with self-inflicted entanglements in Ukraine, China consolidates its influence in Central Asia. Aligned with Kazakhstan’s objectives, the Alatau SEZ seeks to attract Chinese investment, albeit not exclusively, as Kazakhstan endeavors to diversify its trade partnerships, with a particular focus on Europe. The European Union has emerged as a significant partner for Kazakhstan, particularly following Russia’s aggression in Ukraine, culminating in a strategic partnership memorandum in November 2022. This agreement not only enhances Kazakhstan’s transition to a green economy but also underscores its broader economic diversification strategy, exemplified by initiatives like the Alatau SEZ, pivotal for job creation and fostering relations beyond regional confines.
Author: Dr. Sebastien Goulard is the founder and editor-in-chief of Global Connectivities.
