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KAZAKHSTAN
K
WORLD RANK:
42
REGIONAL RANK:
11
ECONOMIC FREEDOM STATUS:
MODERATELY FREE
azakhstan’s economy has benefited substantially from
increased openness and flexibility over the past decade.
Although the state continues to maintain its ownership in key
enterprises, particularly in the energy sector, the economy is
mostly in private hands, and more privatization is being sought.
Beneficial structural reforms have included bank privatization,
implementation of competitive flat tax rates, and modernization
of the trade regime.
Deeper institutional reforms to reduce barriers to investment
and increase the efficiency of the judiciary are critical to further
success. Despite measures to expand the non-energy sector, the
overall regulatory framework needs to be more streamlined to
enhance competitiveness.
ECONOMIC FREEDOM SCORE
69.0

( ▲ UP 5.4 POINTS )
0
50
60
70
80
60.4
60.9
REGIONAL AVERAGE
WORLD AVERAGE
(ASIA-PACIFIC REGION)
NOTABLE SUCCESSES:
Government Size and
Trade Freedom
100
CONCERNS:
Rule of Law, Investment Freedom,
and Financial Freedom
OVERALL SCORE CHANGE
SINCE 2013:
+6.0
QUICK FACTS
FREEDOM TREND
90
80
70
60
POPULATION:
17.7 million
UNEMPLOYMENT:
5.6%
GDP (PPP):
$429.1 billion
1.2% growth in 2015
5-year compound
annual growth 4.8%
$24,268 per capita
INFLATION (CPI):
6.5%
FDI INFLOW:
$4.0 billion
PUBLIC DEBT:
23.3% of GDP
50
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
2015 data unless otherwise noted. Data compiled as of September 2016
BACKGROUND: President Nursultan Nazarbayev, whose rule began in 1989 when Kazakhstan was still a
Soviet republic, won a sixth five-year term in 2015. The opposition is marginalized, and the lack of a succession plan creates longer-term political uncertainty. Kazakhstan joined the Eurasian Economic Union, which
includes Russia and Belarus, on January 1, 2015. The past year has been tumultuous for Kazakhstan. In April
2016, there were widespread protests against government land-reform plans. In June, a terrorist attack in
the northwestern city of Aqtobe left 28 people dead. Modernization of the Atyrau, Shymkent, and Pavlodar
refineries is due to be completed in 2018. Kazakhstan is also the world’s largest producer of uranium.
138
2017 Index of Economic Freedom
KEY:
WORLD AVERAGE
12 ECONOMIC FREEDOMS | KAZAKHSTAN
RULE OF LAW
70th
GOVERNMENT SIZE
52nd
93rd
100
100
80
80
70
70
60
60
50
50
56.1
56.5
38.0
Property
Rights
Judicial
Effectiveness
Government
Integrity
Property rights are not protected effectively,
although the government has made enforcement of
contracts easier by introducing a simplified fast-track
procedure for small claims. Judges are subject to
political influence, and bias is evident throughout the
judicial system. Corruption is widespread, and those
in positions of authority and individuals with ties to
government or law enforcement officials may act
with impunity.
49th
13th
100
80
80
70
70
60
60
50
50
82.5
73.9
Business
Freedom
Labor
Freedom
Monetary
Freedom
The regulatory framework has undergone a series
of reforms. The private sector now faces fewer constraints, although there is still much room for institutional reform. Labor regulations are relatively flexible,
facilitating the development of a more dynamic labor
market. Kazakhstan is subsidizing renewable energy
with the goal of having 10 percent of its needs met by
renewables by 2030.
85.7
98.9
Tax
Burden
Government
Spending
Fiscal
Health
OPEN MARKETS
127th
74.5
93.3
Rank
The flat personal income tax rate is 10 percent, and
the standard corporate tax rate is 20 percent. Other
taxes include a value-added tax and excise taxes. The
overall tax burden equals 13.2 percent of total domestic income. Government spending has amounted to
21.8 percent of total output (GDP) over the past three
years, and budget surpluses have averaged 0.5 percent
of GDP. Public debt is equivalent to 23.3 percent
of GDP.
100
0
14th
0

REGULATORY EFFICIENCY
0
31st
KAZAKHSTAN
0
15th
91st
135th
70th
78.5
40.0
50.0
Trade
Freedom
Investment
Freedom
Financial
Freedom
Rank
Trade is important to Kazakhstan’s economy; the
value of exports and imports taken together equals
53 percent of GDP. The average applied tariff rate is
3.3 percent. Foreign investment in some sectors of the
economy is restricted, and state-owned enterprises
distort the economy. The state has been providing
additional support to the banking sector since 2014.
The number of nonperforming loans continues to
be high.
The Heritage Foundation | heritage.org/Index
139