Non-Resource Economy: How Development Institutions Shape Kazakhstan's New Growth

On the Talday Talks podcast, Rustam Karagoishin, Chairman of the Management Board of National Investment Holding Baiterek JSC, discussed how Kazakhstan’s development institutions are operating amidst intensifying global competition for investment.

Rustam Karagoishin believes that development institutions in Kazakhstan fulfill a key mission: diversifying the economy, supporting small and medium-sized enterprises (SMEs), ensuring economic growth, and participating in the implementation of infrastructure projects. Additional priorities include housing construction and agriculture.

According to him, Kazakhstan is already demonstrating the initial results of diversification. While the export structure was predominantly resource-based just a few years ago, by the end of 2025, industrial exports began to approach resource exports in terms of revenue. In his estimation, this marks a fundamental shift for an economy that has traditionally been dominated by oil and metals.

"We see that industry is gradually catching up with resource exports. While industrial goods include products from the mining and metallurgical complex, this represents a higher stage of processing—with greater added value... The impact of this support includes job creation, tax revenues, and more. Last year, the economy grew by 6.5%, of which up to 1% was contributed by Baiterek’s funds, according to the Ministry of National Economy," Karagoishin noted.

He also highlighted rising efficiency: despite a reduction in direct budget support, the holding's performance has improved significantly.

"Until 2024, we received up to 800-900 billion tenge from the national budget for various programs; in 2025, this volume was approximately 500 billion tenge. Meanwhile, lending volumes increased substantially: while it was around 3-4 trillion tenge in 2023, it has now reached approximately 8 trillion. In effect, we are providing a much greater economic impact with a smaller amount of budget funds," the head of the holding emphasized.

From a regional perspective, the speaker added that Kazakhstan is already outpacing many Central Asian countries in terms of institutional support and the depth of industrial processing, moving toward higher-value manufacturing.

However, Karagoishin estimated that global competition for investment is only intensifying. In this environment, development institutions play a crucial role as a key mechanism for attracting capital and launching complex projects. He cited examples such as Temasek Holdings in Singapore and ADQ in the UAE. Kazakhstan is following a similar path by strengthening the role of umbrella structures.

"There is, essentially, a global competition for investment. To compete with other countries, consolidation is necessary—both for balance and for a broader toolkit within specific umbrella development institutions. This is exactly what Baiterek is," he stressed.

Saken Zhumashev, Managing Partner and CEO of KPMG Caucasus and Central Asia, is convinced that "a strong Kazakhstan cannot be built without development institutions," because these institutions step into sectors where the private sector is not yet ready to take on high risks.

"If Baiterek stops helping SMEs tomorrow, our economy will immediately stagnate. Secondly, complex projects will not develop, and our entire economy will continue to revolve around raw materials—oil, metal, and grain. Related fields like artificial intelligence and advanced processing would fail to progress," Zhumashev stated.

Economist Kuanysh Zhaikov also noted that development institutions "solve the task of accelerating economic growth" and that their role in large-scale infrastructure projects cannot be discounted.

Rustam Karagoishin stated that the holding is currently undergoing a massive transformation by restructuring its business processes. For example, since the end of 2025, the holding has transferred projects worth $650 million—which have completed their investment phase and are generating stable income—to second-tier banks (STBs) without a commission. Additionally, co-financing products, known as "syndicates," are being developed.

In the agricultural sector, there is also significant progress: while loans were previously issued in February or March, starting in 2025, funds began to be distributed in December. This allows farmers to prepare for the sowing season well in advance.

Currently, Baiterek’s operations have shifted from a "reactive" model to a "proactive" one. The holding analyzes data from more than 2.7 million active business entities in the country to identify promising directions.

Future Plans and Objectives:

• Damu Fund: 500 billion tenge in preferential loans under the "Orleu" program.
• Agrarian Credit Corporation: Approximately 500 billion tenge for the agricultural sector.
• Industrial Development Fund (IDF): Approximately 1 trillion tenge to support mechanical engineering (in tenge and foreign currency equivalents).

Maulen Ashimbayev, Speaker of the Senate and host of the podcast, concluded that the new stage of the holding’s activities must be oriented toward achieving the strategic goals set by the Head of State: diversifying the economy and creating high-tech manufacturing.

For reference: The holding includes major organizations such as the Development Bank of Kazakhstan, the Damu Fund, the Industrial Development Fund, the Agrarian Credit Corporation, the Export Credit Agency, and the Qazaqstan Investment Corporation.

For 2026, the holding has a pipeline of 449 projects worth 3.4 trillion tenge. The financing plan for the real sector stands at 8 trillion tenge.