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Almaty: Almaty Now

Feb 1, 2008
2008 / February 2008

Rather than waiting for the day when mention of its name isn’t closely followed by “Hey, did you see that Borat movie?” Kazakhstan is charging ahead, becoming a pillar of progress and stability amongst the post-Soviet Commonwealth of Independent States (CIS) and a standout economic force in Central Asia.

Almaty (formerly Alma Ata) is the former capital of and largest city in Kazakhstan. It’s also the primary commercial center in this, the largest of the former Soviet republics (almost four times the size of Texas), a country of 15.3 million citizens. The area around Almaty is thought to be the ancestral home of the apple — Almaty means “rich with apple” — and fruition is most definitely on the minds of the people here, aspiring to make their city both the financial hub of the CIS and, with easy access to the slopes of the Tien Shan Mountains, the host city for the 2014 Winter Olympics.

This isn’t Almaty’s first run as a high-profile hive of commerce. As a fat map dot on the Silk Road between the 10th and 14th centuries, the city developed into a noteworthy trade, craft and agricultural center, even operating its own mint. Fluctuations on the Silk Road eventually steered business away from Almaty, initiating several centuries of decline. Yet there was an upside; this regional alone-time brought with it a surge of ethnic and political development that laid the foundation for the modern Kazakh state.

By the mid-19th century, the region’s ties with (and/or seizure by) Moscow were well underway. The decision to route the Turkistan- Siberian Railway through Almaty in 1926 sealed the city’s position as a strategic regional economic hub and drastically ramped up its profile. It was declared the new capital of the Kazakh Autonomous Soviet Socialist Republic the following year and the region’s first airport opened here in 1930. Being well equipped, easily accessible and out of the line of fire made Almaty a critical asset during World War II when thousands of people, industries, universities, cultural institutions and even motion picture production companies were evacuated here from threatened parts of the Soviet Union.

Following Kazakhstan’s independence in 1991, a decree was approved in 1997 to transfer the capital from Almaty to Astana. Despite what may seem a devastating demotion, the following year Almaty was granted special status as a scientific, cultural, historical, financial and industrial center, sparking new urban ecological initiatives. (The city is admirably green.) Plans also were made to improve construction, institute industrial zones and fortify the public transport infrastructure, including development of a new subway.

Despite having an economy larger than all other Central Asian states combined and showing consistent drops in unemployment, Kazakhstan’s economy hasn’t enjoyed universal storybook progress of late: The GDP growth rate dropped to 8.5 percent in 2006 (significantly down from 13.2 percent in 2001) and the gross external debt continues to accelerate (jumping to an estimated $73.45 billion in 2006).

Short-term blemishes aside, Kazakhstan has been something of a post-Soviet poster child, with a steadily developing economy, successful political reform and overarching stability, all of which have attracted the attention of foreign investors. The United States alone anted up 27 percent of Kazakhstan’s total foreign direct investment in 2006.

A 2005 high-level international business conference held in Almaty, optimistically entitled “Kazakhstan Draws a New Wave of Investment: Strategies for Diversification and Sustainable Growth,” examined the country’s position as a “global economic player and its potential to promote Central Asia as a strategic destination for investment and a bridge for trade between East Asia and the West.” But, no pressure. Indeed, it seems that the brass ring has already been handed over to Kazakhstan. As former U.S. ambassador Richard C. Holbrooke, chairman of the Asia Society board of trustees succinctly declared, “As one of Asia’s fastest growing economies, Kazakhstan is ripe for a new wave of foreign investment.”

In fact, Kazakhstan hasn’t been exactly hurting for saleable resources. While the centuries-long mainstay of agriculture (grain, cotton, livestock) still accounted for 10.3 percent of Kazakhstan’s GDP in 2005, the rapidly developing gas and oil industry has surged ahead as the leading economic sector, promising to pump out up to three million barrels per day by 2015, making Kazakhstan one of the top 10 oil producing nations in the world.

The busy and profitable Baikonur Cosmodrome is the oldest and largest spaceport in the world (leased to Russia until 2050), with ongoing plans to develop the “Russia-Kazakhstan Baiterek” joint venture greatly expanding the site’s launch capabilities. There’s even talk of establishing ancillary tourist attractions around the Cosmodrome for space enthusiasts who can’t pony up the $12-million blast-off fee.

Almaty has started to focus on tourism development as well. The city’s visitor numbers doubled between 2002 and 2006, albeit to a mere 42,000. Modest, yes, though sights are set much higher. An ambitious plan to restore nearly 750 miles of the Great Silk Road will pass near Almaty, and will include a tourism center offering accommodations, entertainment and sports facilities, exhibition centers and folk villages, according to Tourism and Sports Minister Temirkhan Dosmukhambetov.

The District of Almaty radiates out from the river valley, into the piedmont and foothills of the Tien Shan Mountains. While finance and business plans swirl inside the city, just outside it Kazakhstan’s agricultural foundation continues as it has for untold centuries. Irrigated land yields grains (including rice), legumes and sugar beets; and alpine meadows on the steppe and semi-desert pastures supply year-round grazing for fine-fleeced sheep. As in much of Kazakhstan, the area around Almaty is mineral-rich, primarily with lead and zinc, which are mined in nearby Tekeli.

Though several decades away, Kazakhstan is already planning for the day when its gas and oil supplies run dry. A movement has begun to diversify the economy away from over-dependence on the oil sector by developing medium and light industry. There were 419 enterprises registered in the Almaty area in September 2006, with many more to come if the government is successful in implementing planned measures to ease hurdles such as registration and access to credit for small and medium-size businesses.

Manufacturing is also rising sharply, showing an output growth of 122.7 percent between 2005 and 2006. The city’s clutch of ISO 9000, 9001:2000 certified enterprises is growing, led by the likes of Coca-Cola, Yristy (railway cars), Imstalkon (construction tools), AZTM (equipment for oil fields, iron and steel, and mining), Isker (automobile assembly), RG Brands, Tealand and Almaty Carpet. A recently revamped medical and pharmaceutical factory, Nobel Almaty, is also noted as a local rising star.


Entry Requirements

A valid passport and visa are necessary for all travel to Kazakhstan, including those visitors who are transiting the country or staying for less than 72 hours. Multiple-entry visas require an invitation from an individual or organizational sponsor in Kazakhstan, and travel to some border areas near China and the Kyrgyz Republic may require prior permission from the Kazakhstan government.


More Information

Embassy of Kazakhstan
1401 16th St., N.W.
Washington, D.C. 20036
tel 202 232 5488
http://www.kazakhembus.com

U.S.-Kazakhstan Business Association
1200 G St., N.W., Suite 827
Washington, D.C. 20005
tel 202 434 8791
http://www.uskba.net

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