It was the tail end of the oil- and credit-fuelled 2000s boom when I arrived in Kazakhstan as bne’s brand new Central Asia correspondent back in spring 2008. The president had been in power since the Soviet era, but newly rich Kazakhs paraded the streets of the country’s commercial capita Almaty in designer labels and SUVs, and land prices had briefly soared above London values. 

After the crash, Almaty's skyline bore the scars of a collapsed housing bubble – unfinished towers standing ghost-like behind metal hoardings. The word “subprime” had entered the vernacular, even rolling off the tongues of old men in kalpaks on the city buses.

The underlying story for the next six years was one of recovery as Kazakhstan grappled its way through the Great Recession, adapting to sharp falls in commodity prices and the collapse of its largest bank. After leaving in 2014, I didn’t return to Kazakhstan for a decade, coming back in summer 2024 and again in 2025 to find a country transformed in many ways, not least in the wholesale embrace of new technologies. Yet in others, it was still wrestling with familiar political and economic dilemmas from the late 2000s.

Appearances are important in Kazakhstan – part of the reason behind the conspicuous consumption that exploded in the early years of this century – so when looking at the changes over the last decade, it seems appropriate to start with the visual. Returning in 2014, Almaty’s historic centre was little changed, apart from the arrival of McDonald’s and a welcome proliferation of coffee shops. But outside the centre, parts of the city were almost unrecognisable.

The most striking changes were in the upper city, around the Almaty Financial District, where high-rises have mushroomed where the land starts to rise between the old centre and the foothills of the Ala-Too mountains. Even the road layout had changed, with new flyovers and underpasses – though these were still clogged with the heavy traffic I remembered well from my time in the city. By night the area pulsated with lit up signs.

Urban sprawl had stretched Almaty into the surrounding countryside to accommodate a growing population. Official figures show the city’s population nearly doubled from 2004 to 2024, mirroring national demographic trends. “Don’t compare Almaty’s changes to European cities like London or Paris,” one businesswoman told me in Almaty. “It’s more like Seoul or Hong Kong, or another Asian city.”

Geo-strategic shift

The architectural transformation reflects Kazakhstan’s geopolitical orientation. While Western oil majors initially flocked to the newly independent republic to tap its hydrocarbon wealth, recent years have seen growing influence from investors in Turkey, South Korea and the Gulf.

In the former Russian colony and ex-Soviet republic, in the early years post-independence, it was mostly Western oil companies that rushed in to develop the hydrocarbons of the Caspian basin. Yet in recent years the influence of Russia and the West has been diluted by the arrival of investors from Asia and the Middle East. 

This mirrors Astana’s multi-vector foreign policy strategy of balancing balances its relations with Russia, China and the West. Recently, as bne IntelliNews has argued, emerging mid-level powers such as the Gulf states and South Korea have become desirable partners to help develop its economy. 

Still, of all the countries in the former Soviet space, Kazakhstan was arguably the most closely entwined with Russia, and it has remained a close ally of Moscow. It was Russia that Kazakhstan turned to during the Bloody January protests in 2022. Initially triggered by a steep rise in liquefied petroleum gas (LPG) prices, protests spread nationwide as a broader expression of public anger over government policies and economic hardship. In Almaty, the demonstrations escalated into violent riots in which over 200 people were killed.

Though rare, these eruptions of unrest have punctuated Kazakhstan’s otherwise stable political landscape. During my six years in Kazakhstan, the worst incident was the deadly riots that erupted in the western oil town of Zhanaozen, while sporadic protests also flared in remote industrial cities like Temirtau and Zhezkazgan. 

The authorities have employed a calculated strategy – offering just enough reform or economic relief to temper broader unrest. This approach helped weather successive crises, from the Great Recession to the contagion from Russia’s financial crisis in 2014-16 and the coronavirus (COVID-19) pandemic. Money from the country’s oil fund, the National Fund of Kazakhstan, helped stabilise the economy, and with the exception of 2020, Kazakhstan has posted positive GDP growth every year of the 21st century.

New developments in the countryside around Almaty to accommodate the growing population. 

New leadership, familiar patterns

That economic stability has been matched by political continuity. Since 2019, Kazakhstan has had a new president, Kassym-Jomart Tokayev, but he remains very much a product of the old system, having served under Kazakhstan’s first president Nursultan Nazarbayev as prime minister and Senate chairman. It was only after the 2022 unrest that Tokayev began to publicly distance himself from his predecessor.

The visual evidence of Nazarbayev’s personality cult – billboards showing him surrounded by schoolchildren or beaming from a field of wheat – have disappeared. Many key figures from the old guard, including family members, have fallen from grace. Karim Massimov, who was prime minister during much of my time in Kazakhstan, is now in prison.

Still, few Kazakhs I spoke to believe the political substance has changed. Despite investment in public services, Kazakhstan remains starkly unequal. The lifestyle of a senior official in Astana is worlds apart from that of a market trader in a provincial town or a subsistence farmer from the wastelands around the Aral Sea. 

Investing beyond oil

Kazakhstan is a wealthy country. With vast reserves of oil, gas and minerals, many of strategic importance, it has long benefited from natural resource exports. It is also a leading global wheat producer. Much of this wealth has been siphoned off, as numerous corruption investigations have revealed. Yet significant investment has also gone into schools, hospitals, transport infrastructure and efforts to diversify the economy.

These have focused on industrial diversification into chemicals, manufacturing and agricultural processing. More recently, Kazakhstan is making a serious push into digital and high-tech industries.

“Simply exporting commodities is not enough for Kazakhstan,” said Evgeny Vinokurov, chief economist at the Eurasian Development Bank, in an interview with bne IntelliNews earlier this year. “Digital transformation is not just another fad. It is a strategic necessity.”

He added: "Kazakhstan – as well as other Central Asian economies – wants to grow not only sustainably but also outright rapidly. Rapid growth is needed to achieve higher living standards and to get a better place in the international division of labour. Industrialisation is key here.” 

Sultan Zhumagali, head of analytics at BCC Invest, also commented on the change in Kazakhstan’s sources of growth: “The main growth driver now is trade, followed by construction… In addition to traditional sectors such as natural resource extraction, Kazakhstan is actively developing other sectors of the economy and places high demand on the development of IT products.”

Fintech is king

In a country once reliant on cash transactions and lagging behind the West in technology, Kazakhstan has leapfrogged ahead in fintech in particular. 

When I lived in Kazakhstan from 2008-14, it was mostly a cash-based economy. I would pay my monthly rent with a big stack of banknotes. Certain banknotes were sporadically scarce. 200 and 500 tenge notes were handed over grudgingly in shops and hoarded to pay for taxi rides (hailed back then with an outstretched hand at the side of the road, not through the Yandex app). Kazakhs making a major purchase such as a car might take along a posse of male relatives as bodyguards as they made their way to the notary’s office with a stash of high denomination notes. 

Back in 2008, broadband had only recently become affordable and there were long waiting lists to get a connection. Filing copy outside the main cities required finding a fancy hotel with wifi or an old fashioned internet cafe. 

By contrast, in the mid-2020s, virtually all payments were taken electronically – from cars and houses to bus tickets and even the public toilets at the old GUM department store, everything could be paid for by a mobile app (or a credit card for Western luddites like me). 

“Kazakhstan has become a regional leader in the development of the fintech ecosystem. We are really proud of our fintech companies,” commented Zhumagali. 

The transformation was led by Kaspi, which launched its “super app” in 2017. The app’s massive success culminated in a $1bn Nasdaq IPO in 2024. It was followed by other Kazakh banks such as Halyk, overcame any disadvantage as the second mover by offering a much broader range of services, via what it calls a lifestyle ecosystem. 

To find out more about this, I went to see Halyk, meeting up with the bank’s deputy chairman Nariman Mukushev and chief information and innovation officer Andrey Zavarzin. Both demonstrated the app’s capacities on their phones, showing how users can stream films and TV shows, buy and sell, get a prescription delivered, organise parking or car insurance and access a wide variety of government services. 

“We started from the bank then added other verticals like travel, entertainment, marketplace, government and education,” explained Zavarzin. 

Halyk is a universal bank, “but we now position ourselves as more than a bank,” said Mukushev. “We already have a lot of customers who are using financial services only online, and almost never visit our branches.”

High-tech steppe

Kazakhstan’s digital transformation extends beyond banking. “The recent approval of the National AI Development Strategy is a milestone,” said Vinokurov. “Digitalisation is reshaping agriculture, energy and public administration – cutting costs and boosting efficiency.”

Net foreign direct investment (FDI) into IT has grown sevenfold over the past decade, hitting $129.2mn in 2024. IT service exports stood at $546.7mn in 2023, with a target of $1.8bn by 2029, according to EDB figures.

Alim Khamitov, CEO of Most Ventures, argued that Central Eurasia’s youthful population and strong educational heritage provide a solid foundation for tech sector growth. He pointed specifically to opportunities in oil tech, mining tech and Industry 4.0, where Kazakhstani startups are building on the country’s existing strengths in sectors such as mining and oil and gas.

The rise of super apps is also turning Kazakhstan into a nation of investors, with citizens accessing domestic and international markets via their smartphones. “Nowadays every investment company in Kazakhstan has their own mobile app which allows you buy stocks and bonds very easily,” Kazakhstan Stock Exchange (KASE) CEO Alina Aldambergen told bne IntelliNews. “They [retail investors] want to diversify their assets. You can see some money is going to the market from bank deposits and from the real estate sector.” 

Beyond oil

Many of the efforts towards diversifying the economy, investing into education and more broadly developing human capital are directed at a future beyond oil. 

Back in the late 2000s, the emphasis was more on when Kazakhstan no longer has large quantities of oil and gas that are economically viable to extract. Fast forward to the mid-2020s, and the focus is not only on oil running out but also on the expected fall in demand for oil as climate change forces countries to aim for net zero around the middle of this century. Kazakhstan itself has set 2060 as its target to achieve carbon neutrality. 

Diversifying “is particularly important as Kazakhstan will in some time run out of oil that is economically viable to extract, and at the same time as countries aim for net zero demand is set to fall,” said BCC Invest’s Zhumagali. 

“Kazakhstan has lot of oil and gas, but the traditional growth drivers such as oil and gas are slowing down,” he continued. 

“When we talk about the long term, for 5-10 years oil production will increase, then the oil production will decrease from 2035. What will happen next is a really good question. The next 5-10 years are really important to get prepared for this. We need to develop other industries, not to only believe in oil and gas.”

A greener future

Newly independent Kazakhstan inherited a ravaged land from the Soviets. In the west, the drying up of the Aral Sea, whose waters were diverted for cotton irrigation, created the world’s worst manmade ecological disaster. In the east, the area around Semey (formerly Semipalatinsk) was the USSR’s main nuclear testing site. In between, mono-industrial towns producing coal, steel, chrome and a multitude of other valuable but dirty metals dotted the steppe. 

Now efforts are underway to turn Kazakhstan into a green economy, despite it having lots of fossil fuels. And just like in neighbouring Uzbekistan, these efforts are being pursued very determinedly. Kazakstan aims to produce 15% of its electricity from renewables by 2030 and 50% by mid-century. 

“Kazakhstan is obviously one of the countries where energy intensity is higher than in many other countries. They have a lot of coal, oil and other fossil fuels. But there is also a great understanding of the importance of moving towards reduction of emissions, and forward to carbon neutrality,” said Hüseyin Özhan, acting managing director for Central Asia and Mongolia at the European Bank for Reconstruction and Development (EBRD) in an interview with bne IntelliNews. 

In Almaty, pollution remains severe, particularly in winter, when a brownish blanket of smog is visible, hanging in the air over the city.

A blanket of smog can be seen over Almaty on some winter days. 

However, efforts are underway to clean up. International development banks are helping convert the city’s coal-fired CHP-2 plant to gas, while the BAKAD ring road diverts traffic away from the city centre. “This project is almost like a public health initiative,” said Özhan. “It could cut CO₂ emissions by 3.5mn tonnes and eliminate sulphur and nitrogen oxides.”

Traffic, however, remains a problem. The metro that opened in 2011 is now reasonably popular (it was mostly shunned by suspicious locals when it first opened) and the buses are now green – both in emissions and literally in colour. However, public transport still carries a social stigma.

Visually, Almaty has greened too. Metal hoardings once marking abandoned construction sites have vanished. While many of the old projects had been completed, and a whole generation of new ones started and finished, some were simply scrapped and in the past 16 years the vacant lots have become parks, complete with colourful flower beds and playgrounds for the new generation.