The Asian Development Bank Fuels Kazakhstan’s Powerful Economy
The primary objective of the Asian Development Bank (ADB) is eradicating poverty in Asia and the Pacific region, and its operations in Kazakhstan are focused on financing transport corridors and small and medium enterprises (SME) to help the country diversify the economy and raise its competitiveness. ADB’s work resembles the activities of the World Bank, with their expertise more focused on Asia.
Giovanni Capannelli, ADB’s Country Director in Kazakhstan, emphasizes that the country has a “vast territory and is located at the crossroads of Europe and Asia, which is why the infrastructure and transport corridors are crucial for enhancing connectivity and Kazakhstan’s integration into the global economy. The construction of new and modernization of existing interconnecting corridors will substantially increase economic development throughout Kazakhstan.” As a secretariat of the Central Asian Regional Economic Cooperation Program (CAREC), ABD recognizes Kazakhstan’s fundamental role in this initiative and recently approved a US$240.3 million loan to help the country modernize its transport system. The project envisions the reconstruction and upgrade of the deteriorated section of the Aktobe–Makat Road, part of the Trans-Caspian Sea Transit Corridor Baku–Astrakhan–Atyrau–Aktobe–Aktau–Turkmen border. The road connects Kazakhstan with Azerbaijan and Europe in the West, with the Russian Federation in the North, and with Turkmenistan in the South, also linking the country to CAREC Corridor 1B at Aktobe and Corridor 6A at Makat, providing further access to China and Southeast Asia. In addition to the road reconstruction, ADB’s funds will also be used for developing a modern transport information system aimed at increasing road traffic safety effectiveness.
ADB is working on financing SMEs to develop the private sector further, by adding a new component of micro enterprises under the recently approved loan, thus providing much needed access to finance for entrepreneurs in rural areas. The funding has been channeled through the DAMU Entrepreneurship Development Fund, whose financial schemes are supported through selected banks. “We have provided US$500 million so far, adding another US$200 million loan this month. Supporting SMEs growth is essential for improving the competitiveness and diversity of Kazakhstan’s economy and its resilience to adverse external factors,” says Giovanni Capannelli.
ADB is currently discussing with Kazakhstan’s government the projects for improving irrigation systems and urban water management. It is also providing advisory support to the government on promoting private sector participation in provision of healthcare services in regions, particularly through public private partnerships.
ADB plans to increase its financing and investments in Kazakhstan to US$3 billion in the next five years, providing even bigger incentives and assurances for businessmen choosing Kazakhstan as their next investment destination.