Kazakhstan President Kassym-Jomart Tokayev announced plans to allocate 6.5 trillion tenge (approximately $14.2 billion) from the national fund for a major infrastructure initiative that aims to build hospitals, schools, railways, and power plants across the country by 2029. Starting in January, the monthly minimum wage will increase from 85,000 tenge to 110,000 tenge.
During his annual state address on October 28, President Tokayev referred to this initiative as 'People's Construction' (Haliktyk Kurilis) and described it as the largest infrastructure project in Kazakhstan's history. He proposed designating next year as 'The Year of National Construction.'
"Kazakhstan must transform into a vast construction site," Tokayev stated, emphasizing the need for comprehensive construction efforts across all regions rather than isolated projects.
The address, titled 'Challenges Facing Kazakhstan in a New Historical Cycle,' marks the first state address since the new constitution, which was confirmed by a national referendum on March 15 and took effect on July 1, replaced the bicameral parliament with a unicameral assembly called the Kurultai.
The national fund is a sovereign wealth fund that manages oil revenues. Tokayev cited International Monetary Fund (IMF) projections, stating that this year's gross domestic product (GDP) is expected to approach $400 billion, with per capita GDP exceeding $19,000. Combined gold and foreign exchange reserves and national fund assets exceed $130 billion.
Of the allocated budget, 1.5 trillion tenge will be designated for the commencement of social infrastructure projects from this year until February next year. The initial phase includes approximately 70 medical facilities and around 50 educational, sports, and cultural facilities, as well as expansions in gas and drinking water supply.
The government is required to prepare a list of regional projects by the end of the year, with qualified local small and medium-sized enterprises participating in the construction. Tokayev stated that this initiative will create hundreds of thousands of jobs.
In the healthcare sector, eight maternity centers and seven children's hospitals will be constructed. The children's hospitals will be located in Atyrau, Aktobe, Almaty, Shymkent, Kaskelen, Semey, and Aktau, with two additional medical facilities in the capital, Astana.
Conditions have been set for budget utilization. Tokayev emphasized that public funds should serve as a catalyst for attracting private investment, stating, "It is unacceptable to use national fund resources for import payments." He called for an increase in domestic production of construction materials, metal structures, and engineering equipment.
The minimum wage increase will benefit approximately 1.8 million people, including over 370,000 public sector workers. On the same day, salaries for primary healthcare professionals will also rise by up to 40% based on years of service, affecting around 77,000 individuals.
Welfare programs will focus on those in need, with new systems to be piloted before broader implementation. With over 237,000 children requiring integrated education, there is a need to expand related facilities and specialized personnel, while also reducing administrative burdens on teachers.
Tokayev also addressed the issue of taxing the wealthy, stating, "I believe it is time to discuss applying higher tax rates to large asset holders," while assuring that legally acquired wealth will be protected. He instructed the government to propose selective amendments to the new tax law to eliminate ambiguous provisions and excessive burdens on businesses.
The new civil code is targeted for adoption by the Kurultai by the end of 2027, and the establishment of a capital markets law is underway. The banking sector's assets exceed 75 trillion tenge, with deposits surpassing 52 trillion tenge. Tokayev identified price stability and real income growth as key priorities, calling for cooperation between the government and the central bank, as well as an expansion of long-term investment loans.
To address power shortages, Tokayev set a deadline. Kazakhstan produces approximately 123 billion kWh annually but still faces electricity deficits. He pledged to achieve a stable surplus in power supply by 2029 through the modernization of new power facilities and transmission networks, as well as expanding environmentally friendly coal power and solar-based renewable energy.
Nuclear power development is accelerating. Construction of the Balkhash Nuclear Power Plant is expected to begin as early as next year, and Tokayev urged swift construction of the second plant, the Moinkum Nuclear Power Plant, following a comprehensive cooperation agreement. Despite being the world's largest uranium producer, Kazakhstan currently has no operational nuclear power plants.
He called on international partners for technology transfer, support for advanced industries, and training of domestic specialists. A national strategy for uranium reserves to fuel domestic nuclear power plants over the next century is also under consideration. The government must revise the national energy supply plan by 2035 to reflect industrial demand and the increase in AI and data centers.
In logistics, Tokayev clarified the goal of surpassing transit countries. He stated, "We must immediately transition to fully organizing international cargo flows." This includes fostering domestic transport companies and establishing collection and delivery centers, as well as manufacturing and trade hubs in transportation nodes.
The Bakhyt-Ayagoz railway, connecting to China, is set to open in 2027, increasing cargo transport capacity between the two countries by 20 million tons. The Aral-Caspian corridor, which began construction in August, will reduce the Caspian Sea crossing route by approximately 1,000 kilometers and shorten transport times by up to three days, linking China and Europe through Kazakhstan, the Caspian Sea, Azerbaijan, and Georgia.
In the digital sector, two supercomputers are currently operational under the 'Digital Kazakhstan' strategy, with plans to add a third by the end of the year. A submarine fiber optic cable in the Caspian Sea has also been completed.
Tokayev emphasized the need to move beyond fragmented automation projects to an AI-based digital economy, calling for the commercial application of blockchain and asset tokenization. Asset tokenization involves converting asset ownership into digital tokens, allowing companies to raise capital directly and enabling more citizens to share in asset ownership.
By the end of the year, a simplified legal framework for digital employment will be established, and next year, a pilot project will assist rural producers in selling agricultural products through digital platforms in collaboration with the government and businesses. AI will also be introduced into administration to reduce bureaucracy and identify inefficient budget expenditures, while a digital twin of urban infrastructure will be developed.
Small and medium-sized enterprises account for 40% of GDP and approximately 70% of fixed capital investment. Tokayev instructed the government to develop long-term financing and technological modernization plans for medium-sized enterprises, as well as to reserve a portion of public procurement for small businesses.
He also proposed a three-year moratorium on government inspections for small businesses and micro-enterprises starting January 1, 2027, reflecting lessons learned from the 2020-2023 moratorium. Additional decriminalization of economic offenses, fair competition, and the eradication of illegal interference in business activities were also emphasized.
The investment attraction system will be streamlined. A proposal was made for the state development holding company, Baiterek Holding, to take on a more active role alongside the Ministry of Economy and the Ministry of Foreign Affairs.
A special legal framework will be established in the new city of Alatau City, with an investment court following the British common law model to handle commercial cases, while other cases will be addressed by a separate civil court. The government is required to submit necessary legal amendments to the Kurultai by the end of January.
In the minerals sector, the government has been tasked with innovating geological exploration technology, disclosing geological information, and expanding private investment. By the end of the year, a management system for core mineral reserves must be proposed, along with plans for non-ferrous metals and rare earth reserves.
Agriculture grew by approximately 6% last year, with agro-industrial production reaching 15 trillion tenge. Baiterek Holding has identified promising projects in the food industry worth 500 billion tenge, which require low-interest financing. Tokayev urged the acceleration of AI adoption in agriculture during the visit of Jensen Huang, CEO of NVIDIA, to Astana this month.
Water scarcity has been identified as an urgent issue. The government has been instructed to reduce leaks in the water supply network, enhance usage management, and expedite the reform of water tariffs and the establishment of a national water resource information system.
Deadlines for administrative reforms have also been set. The presidential office must present a comprehensive administrative reform plan covering all levels from central government to rural administrative bodies by June 1, 2027. The presidential office, the Strategic Planning and Reforms Agency, and research institutions are to develop a long-term national development vision within a year.
The new Astana airport is set to begin construction in 2027, with all land border checkpoints scheduled for reconstruction in the same year.
* This article has been translated by AI.
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