1. General situation

The COVID-19 pandemic in Kazakhstan is part of the worldwide pandemic of coronavirus disease 2019 caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The virus was confirmed to have reached Kazakhstan on 13 March 2020.

The first lock-down was in effect from March 16 to May 11, 2020.

In July 2020 a new 14-day lockdown, less strict than the earlier one, was introduced in response to rising case numbers. On July 13, it was extended by two weeks to last until the end of July. In late July, an additional lockdown beyond the one set to expire on August 2 was announced. This was extended for two weeks, till August 16, 2020.

As of February 9th, 2022, the total number of coronavirus infected people in the country reached 1,279,842 among them are 1,188,471 recovered, 13,397 people died.

The country and its 14 areas are still in the «red zone» for COVID-19; Kyzylorda region and Shymkent city have moved into the «yellow zone» and the city of Shymkent into the «green zone» for COVID-19. The number of deaths caused by COVID-19 has dropped 1.3 times in January 2022 compared with December last year.

In April 2021, in order to allow the businesses to continue their activities during the period of quarantine measures, as well as minimizes the risks of the spread of Covid-19 and reduces the number of contacts leading to infection, the mobile application "Ashyq" has been launched in Kazakhstan. Ashyq enables through the use of a QR code and integration with the general database of the Ministry of Health of Kazakhstan to determine the status of a visitor: whether he is currently a carrier of the virus or not.

To enter public places, a Kazakhstani citizen scans a special QR code by means of Ashyq and presents at the entrance a risk rating specified in the application.

This status in the form of a color must be shown to the responsible employee of the institution, and, depending on the color, you will be admitted or rejected to visit the institution.

Red status indicates restriction of movement, compliance with a strict regime of home isolation for persons undergoing outpatient supervision.

Yellow - partial restriction of movement - the user is designated in the PCR database as a contact one: visits to the grocery and hardware stores, pharmacies are allowed no further than 500 meters from the place where the patient observes the regime of home isolation.

Blue there are no restrictions on movement for this status, except for places where PCR is mandatory.

Green status means that there are no restrictions on movement and this user is indicated in the database as having passed PCR testing with a negative result for COVID-19.

The use of the application for both entrepreneurs and citizens is free.

Starting from January 2022, entertainment and sports events, weddings, anniversaries, exhibitions, forums are to be held without restrictions for visitors with green status in the Ashyq system regardless of the epidemiological zone they find themselves in.

The sports centers, health, religious and entertainment facilities, shopping malls, retail chains, casinos, nightclubs, and karaoke are also open for visitors with green status.

Hotels, airports, railway stations, river and sea ports, bus stations, public service centers (known as TsONs), Kazpost offices, banks, schools, universities, beauty and SPA centers are open for all visitors with both green and blue status in the Ashyq system.

Transport

International flights by Air Astana, the national air company.

With effect from 17th January 2022, all passengers, both vaccinated and unvaccinated except children under five years old, arriving in Kazakhstan from overseas must present a negative PCR test certificate taken within 72 hours of arrival in the country. The PCR test certificate must be in English, Russian or Kazakh languages.

In the absence of a negative PCR test certificate, passengers, including citizens of Kazakhstan and persons holding residence permit in the Republic of Kazakhstan, will not be allowed on board from the airport of departure.

Visa regime of Kazakhstan for foreign citizens:

From 1 January 2022, a visa-free regime for citizens of 57 countries has been re-established for up to 30 days to enter-exit and stay in the Republic of Kazakhstan. For more details contact local Embassy of Kazakhstan.

A visa-free regime is applicable for citizens of the countries with which Kazakhstan resumed direct air communication, in addition to exceptional cases listed in the Procedure for crossing the border of the Republic of Kazakhstan and those who have permission granted by the Inter- Departmental Commission (IDC) of the Republic of Kazakhstan, provided that exceptional case or permission is supported by necessary documents.

As of February 2022, direct flights are open with 31 countries: Armenia, Azerbaijan, Belarus, China, Czech Republic, Georgia, Germany, Great Britain, Hungary, India, Italy, Kuwait, Kyrgyzstan, Maldives, Montenegro, the Netherlands, Poland, Qatar, Russia, Saudi Arabia, South Korea, Sri Lanka, Tajikistan, Thailand, Turkey, UAE, Ukraine, Uzbekistan, Vietnam, Japan, Iran.

Citizens of these countries do not require IDC permission when entering Kazakhstan by air. However, if foreign citizens cross the Kazakhstan border by land transport (train, auto), IDC permission is mandatory.

Domestic Flights

Passengers travelling within Kazakhstan are not required to present PCR test certificate.

2. Preventive measures

Nationwide measures

On 27 January 2020, Kazakhstan created an Inter-Departmental Commission (IDC) under the government to coordinate activities to prevent the spread of Covid-19 with all related ministries.

The website www.coronavirus2020.kz has been set up to inform the population of the Government’s actions in the fight against the pandemic.

A hotline was created in Kazakhstan for Covid-19-related consultation or screening.

Kazakhstan provides free healthcare services related to Covid-19, including testing, treatment and vaccination.

Vaccination

The mass COVID-19 vaccination drive began on February 1, 2021, in Kazakhstan and is conducted on a voluntary basis.

Kazakhstan has created its own COVID-19 vaccination, QazCovid-in, developed by the Research Institute for Biological Safety Problems.

In Kazakhstan, citizens are provided with access to vaccination with the following vaccines (free of charge): Gam-COVID-Vac (Sputnik V), QazVac, Hayat-Vax, CoronaVac, Sinopharm.

The Pfizer vaccine is available only for teenagers (12-18 years), pregnant women, nursing mothers and older people over 60.

As of February 9th, 2022, 9 261 131 people have received the first dose of COVID-19 vaccines. Both doses have been administered to 8 832 725 people in the country.

3. Economy

a. Economic impact

Covid-19 is the biggest challenge the global economy has experienced in the post-Second World War era. Because of the lockdown measures taken, domestic consumption declined by 40% in Kazakhstan. The annual GDP growth rate in 2020 declined compared with that of the previous year: -2.8% in Kazakhstan, from January to September 2020.

The number of people living below the poverty line (US$ 5.50 per day for middle-income countries) increased in Kazakhstan by 1.1-1.5 million.

Emergency funds were established to support domestic enterprises to mitigate the economic fallout.

Kazakhstan took measures, such as:

• affordable bank loans at discounted interest rates for businesses

• financial support/cash transfers to poor households and affected individuals

• support for firms’ payments such as short-term working capital or unpaid leave or subsidised salaries

• exemption from tax or social contributions, tax deferrals and subsidised loans for firms or targeted sectors.

These government policies have supported the economy to stay afloat, Kazakhstan unemployment rate for 2020 was 6.05%, a 1.25% increase from 2019.

Forecasts for the 2021-year real GDP should rebound and grow by around 3.0% (Moody’s), 2.8% (KZ MinEcon), from 3.6% to 3.4% (ADB), 2.5% (World Bank), 3.4% (EIU), 3.3% (IMF).

Construction, oil/gas, and industrial output grew despite the pandemic.

World Bank expects that the poverty rate (USD 5.5/person/day) could grow in Kazakhstan from 8.3% to 12.7%.

In January-September 2021, foreign trade turnover amounted to $72.8 billion, including the export indicator amounted to $43.3 billion. At the same time, the export of processed goods increased by 25.5% to $14 billion. Imports of goods amounted to $29.5 billion. In general, the positive trade balance increased compared to last month by $1.8 billion and amounted to $13.8 billion. The manufacturing industry maintains a steady growth trend. In January-October 2021, the volume of production increased by 5.3%.

Kazakhstan, which is oil production country with about 90 million tons of oil produced in 2019, also received less revenues because of declining oil prices due to COVID-19 and problems with oil export from Kazakhstan to China, which was actually stopped due to contamination of the pipeline with organochlorine.

In 2020, the total cost of anti-crisis measures amounted to over 4 trillion tenge (8,48 billion EUR). These expenses were provided at the expense of the state budget in the amount of 2.1 trillion tenge (4,45 billion EUR)), attraction of funds for infrastructure bonds, guaranteed transfer from the National Fund for 1.8 trillion tenge (3,82 billion EUR).

b. Trade barriers

Kazakhstan banned export of masks on February 20, 2020. This measure is still active for the whole Covid-19 pandemic period.

Botst u buiten de EU op handelsbelemmeringen of andere problemen op het vlak van markttoegang? Laat het ons weten via handelsbelemmering@fitagency.be. Wij analyseren uw aangifte en maken die via de geijkte kanalen over aan de bevoegde instanties.

c. Measures for economic relaunch

The government of Kazakhstan reacted rapidly to the pandemic, designing an anti-crisis package of USD 10 bn (KZT 4.4 trn or about 9% of GDP) to augment the social safety net and support businesses, in particular SMEs. Kazakhstan started deconfining in May 2020, while developing new support and recovery measures. A joint action plan of the government and the National Bank included an additional series of support measures on taxation, digitalisation, public-private partnerships (PPPs), and reforms of the regulatory environment for investments. A "Comprehensive Economic Growth Recovery Plan" was also developed during the summer 2020, providing for an expansion of business financing and concessional lending, together with extensions to the Employment Roadmap. As a second wave threatened the country, a new medium-term growth agenda has been presented, and the creation of a Supreme Council for reforms under the President and an Agency for Strategic Planning and Reforms was announced in September 2020.

On 25 June 2020, the Asian Development Bank (ADB) approved a USD 1bn loan in budget support for KZ pandemic response; it expects USD 750 mln co-financing from the Asian Infrastructure Investment Bank. ADB will continue supporting key structural reforms, access to finance for small businesses, support green finance, and agriculture.

On 12 June 2020, the EBRD approved two senior loans of up to EUR 243.5 mln to state owned Intergas Central Asia and KazTransGasAimak, for restructuring, sustaining their cash flow, in support of transition from coal and reducing air pollution. The bank is also lending USD 40 mln in local currency to KMF, the leading local microfinance organization with over 225,000 customers. The EBRD extended KZT 10 billion to the Industry Development Fund (formerly BRK-Leasing, a subsidiary of the Development Bank of Kazakhstan, and part of the Baiterek National Managing Holding) to supply ambulances for Kazakhstan’s healthcare system. The funds were provided as part of the EDB’s support to combat the COVID-19 pandemic and its consequences in the Bank’s member countries – Armenia, Belarus, Kazakhstan, the Kyrgyz Republic, Russia, and Tajikistan. The agreement envisions the opening of two five-year loan facilities to purchase state-of-the-art vehicles made in Kazakhstan, which will be supplied to all regions of the country. On 10 September 2020, Kazakhstan’s Ministry of Healthcare and the EBRD signed a memorandum of understanding and cooperation.

d. Economic outlook

In Kazakhstan, GDP grew by 3.4% in January–September 2021. Manufacturing recorded growth at 5.7% with state support, while mining declined by 0.8% as oil output decreased by 3.4% and gas output by 5.6%. Services expanded by 2.9% on the gradual removal of pandemic restrictions. Construction growth remained strong at 9.7% as legislative changes introduced on 1 January 2021 permitted citizens to use some pension funds to finance housing, and as large public infrastructure development programs continued to benefit the industry. Despite livestock and crop losses to severe drought, agriculture grew by 1.4%. On 4 November 2021, oil exporters led by the Organization of the Petroleum Exporting Countries (OPEC+) agreed to raise planned oil output by 400,000 barrels per day from December 2021. Oil production will likely be further spurred by recovery in global demand for commodities and higher oil prices. These developments prompt growth projection revision for Kazakhstan from 3.4% up to 3.7% for 2021 and from 3.7% up to 3.9% for 2022.

e. Long term opportunities

In 2021 Kazakhstan plans roadshows in Huston, London, Singapore and Dubai aiming to attract more than €2.2 billion foreign investment for geological exploration over the next five years. It plans spending €340 million of its own public funds for early-stage exploration.

4. Useful links

• https://reliefweb.int/country/kaz
• https://www.kt.kz/eng/
• https://newsline.kz/
• https://www.inform.kz/en
• https://www.macmap.org/covid19
• https://thediplomat.com/regions/central-asia/

5. Dossier Coronavirus

Het coronavirus heeft een wereldwijde impact, niet alleen op de gezondheid maar ook op de economie. Ook uw export kan hiervan gevolgen of zelfs hinder ondervinden.

FIT monitort de risico's dagelijks en ons buitenlands netwerk informeert u over alle implicaties voor Vlaamse exporteurs op hun internationale activiteiten.

In het dossier Coronavirus vindt u een aantal nuttige tips, adviezen en inzichten in de economische impact van de verspreiding van het virus op internationaal ondernemen.

Met vragen over internationaal ondernemen in tijden van Corona, kan u terecht bij exportadvies-corona@fitagency.be.