Aktau – the gateway to Kazakhstan

Although Kazakhstan is the 9 ^th largest country in the world, whenever we come to the country we tend to land in just one of two places: Astana (the capital) or Almaty (the former capital). We hear a lot about the oil-rich west, but few of us go there to explore business opportunities – a big mistake in my view.

From what I’ve seen, I would claim that Aktau – in the western Mangystau region - is a gateway to Kazakhstan.

I have visited this ‘oil capital’ twice this year and I have gained an understanding of the issues and opportunities is this developing region - named after the Mangystau peninsula. The potential is impressive – it has all the ingredients to become a transport and logistical hub for Eurasia, along the New Silk Road. In fact, transport traffic through Aktau is currently gaining prominence as an alternative route, following the introduction of Russian trade sanctions.

While oil and grain products are the main commodities shipped out of the region (mostly to Iran and Turkey), there is nonetheless room for more multimodal (rail, sea, road) shipping opportunities, and the Chinese “Silk Way” cargo train route through Kazakhstan (from Khorgos - on the border with China - to Aktau) remains the cheapest and quickest route to Europe.

The Kuryk ferry port is also being built to provide multimodal transportation for general and bulk freight - enhancing the export potential of the Trans-Caspian International route.

Additionally, the multifunctional Sea Port of Sarzha, located just 60 kilometers from Aktau, will help take transportation and logistics services to the next level, following investment which are expected to increase the transshipment capacity of this port to about 4 million tons of ferry cargo every year.

Opportunities for Diversification

Today, the main objective of the region's investment strategy is to create an enabling environment for expanding extra budgetary sources of financing, capital investments, and state support for effective investment projects. Among the many different areas of economic potential (manufacturing sector, transport and logistics, water supply, energy, etc.), two areas stand out for me: tourism and agriculture. 

It’s prime location on the Caspian Sea makes Aktau an obvious destination for boaters, yachters, and other aqua-enthusiasts. But the area offers other wonders to curious tourists as well, including the magnificent ‘Martian’ landscapes of the Ustyurt Plateau. 

In addition to tourism, modernizing the agro-industrial complex and using agriculture as a platform for creating added value and exports is a vital – and underutilized – component for economic growth in the region. Today the region is seeing a number of projects under consideration in a wide variety of areas of agriculture, including the construction of a camel-breeding stock farm for milk production, and fish-breeding complexes for sturgeon.

To diversify the economy, it is necessary to create sustainable jobs that will contribute to improving the well-being of the entire population. To achieve this, it is necessary to maintain macroeconomic stability, keep inflation low, stop the expansion state structures, and ensure that expenditures remain at levels that the state can afford.

After 25 years of successful cooperation with the country, the World Bank intends to continue supporting the development of the Kazakhstani economy. The country cannot move forward relying entirely on oil.

However, the experience gained by developing the oil sector remains important for the country –  as it can be replicated in other sectors of economy. To this end, bringing outside knowledge and investment is vital. 

Energy remains important – and the country can, of course, still find ways to enhance its economy in this sector – particularly through gains in energy efficiency. Kazakhstan ranks among the top ten most energy-intensive economies in the world, translating into significant costs for the country in terms of economic competitiveness, public health, and the environment.

 

Today, the World Bank is supporting the Kazakhstan Energy Efficiency Project nationwide. There are several facilities in Aktau that are already benefiting from this project, which aims to showcase how cost-effective retrofits can help municipalities benefit from better air quality associated with reduced carbon emissions. These actions can also result in significant budget savings on energy bills.

 

To paraphrase Isaac Newton, if you want to move ahead, you need to stand on the shoulders of giants. Giants that provide an ecosystem for many innovators.

Aktau is almost there – so let’s not lose the momentum!

Let’s open the gates for new ideas!