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CORONA VIRUS - The situation in Kazachstan

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.

On 15 March, President of Kazakhstan Kassym-Jomart Tokayev declared a state of emergency from 16 March to 11 May 2020. Many holidays such as Nauryz and the Victory Day military parade were cancelled.

On 19 March, a quarantine was placed on the cities of Nur-Sultan and Almaty where the highest cases were occurring. On 30 March, Atyrau and 5 cities in Karaganda Region were under a lockdown.

As of April 1, all international flights to Nur-Sultan and Almaty Airports were suspended indefinitely. This has led to the cancellation of scheduled flights from these airports.

As of May 4, the Prime Minister approved easing some restrictions previously in effect to prevent the spread of COVID-19.

In July a new 14-day lockdown, less strict than the earlier one, was introduced in response to rising case numbers. On July 13, President Tokayev announced that the lockdown would be 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.

Starting from August 17, the Interdepartmental Commission made a decision to ease quarantine in Kazakhstan.

Starting from September 14, the work of business facilities was eased.

As of June 14th, 2021, the total number of coronavirus infected people in Kazakhstan reached 402,996, among them are 378,707 recovered, 4,180 people died. Since 1 August, 2020, pneumonia cases having coronavirus symptoms totaled 56,216 people, among whom are 51,705 recovered people and 962 of them died.

The coronavirus incidence in Kazakhstan has more than halved since the beginning of May 2021. Overall, since 6 June 2021, Kazakhstan has entered into the “green zone”. The capital city Nur-Sultan is the only “red zone” in the country, where the number of coronavirus cases keeps growing.

Transport

​From 12 May 2021, all passengers entering the Nur-Sultan airport are required to have the "Ashyq" mobile app installed in their mobile devices to enter the airport. From 21 May 2021, the same rule is applied to passengers departing from the Almaty airport. Please download the "Ashyq" mobile app before your trip to the airport.

Foreign visitors without the “Ashyq” app will be asked to provide their passport details upon entering the airports for their return journey, enabling sanitary teams to validate PCR tests taken whilst in Kazakhstan for their return journey.  Short stay visitors to Kazakhstan, (staying less than the minimum time to execute a PCR test whilst in Kazakhstan), will be required to show their negative PCR Test certificate used to enter Kazakhstan.

Passengers with “green” or “blue” status will be admitted to enter the airport building and go on their trip. Passengers with “red” or “yellow” status will not be admitted to the airport.

Passengers with “red” and “yellow” status are asked to contact the place of purchase of tickets for rebooking or cancellation of their trip.

The project "Ashyq" is introduced in accordance with paragraph 3 of the Protocol of the meeting of the Interdepartmental Commission to prevent the spread of coronavirus infection in the territory of Kazakhstan on 29 April 2021.

Status and additional information can be checked through official Ashyq.kz website.

International Flights by Air Astana, the national air company:

As of June 2021, Air Astana operates direct regular flights to Seoul, Dubai, Frankfurt, Kyiv, Istanbul, Antalya, Tashkent, Bishkek, Moscow, Tbilisi, Batumi, Dushanbe and Podgorica.

Passengers arriving to Kazakhstan from the foreign countries should have a negative PCR test certificate (no more than 3 days should pass from the day the result is issued till the moment of crossing the border of Kazakhstan).

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

Persons who have received a full course of vaccination against COVID-19 in Kazakhstan upon providing a documentary confirmation, do not need to present a negative PCR test certificate.

Please note:

  • PCR test certificate must be in English, Russian or Kazakh languages.
  • PCR test certificate with a negative result is also required for international transit passengers connecting in Kazakhstan.
  • Children under 5 years old do not need to take the test.

Domestic Flights

Air Astana operates direct flights within Kazakhstan. Daily flights between Nur-Sultan and Almaty and to the regions of Kazakhstan.

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

Visa regime of Kazakhstan for foreign citizens:

The visa-free regime of entry, stay and departure from Kazakhstan has been suspended for the citizens of 54 countries (including Belgium) until the 31 December 2021 in accordance with the Resolution of the Government of Kazakhstan. For more details contact local Embassy of Kazakhstan.

Citizens of the countries with which Kazakhstan resumed direct air communication can enter the territory of Kazakhstan during the period of the quarantine restrictions, 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-Governmental Commission of the Republic of Kazakhstan, provided that exceptional case or permission is supported by necessary documents.

At the moment, Kazakhstan has resumed direct air communication with the following countries: Russia, Ukraine, Uzbekistan, Kyrgyzstan, South Korea, Belarus, Netherlands, Germany, UAE, Turkey, Egypt, Georgia, Maldives, Tajikistan.

Citizens of Hungary, Thailand, and Mongolia can now enter Kazakhstan if they show proof they were vaccinated, according to a new resolution of the country's chief medical officer Yerlan Kiyasov. The Department of Transport Control allows entry for citizens of Hungary, Thailand, and Mongolia provided that they have proof of vaccine, a vaccine passport. The document came into effect on June 11, 2021.

2. Preventive measures

Nationwide measures

On 15 March 2020, President Tokayev imposed a state of emergency from 16 March to 15 April 2020. From 19 March, around the border of several regions of Kazakhstan and large settlements, round-the-clock sanitary posts were posted.

On 22 March, the entrances and exits from Almaty and Nur-Sultan have been completely blocked, including for air and rail services. From 30 March to 5 April, in Nur-Sultan and Almaty, the activities of all enterprises and organizations were suspended, regardless of ownership, with the exception of central government bodies, mayors, law enforcement agencies, healthcare organizations, the media, grocery stores, pharmacies and life support organizations.

To avoid panic and to counter disinformation, the President instructed the Ministry of Information and Public Development to deliver daily briefings. To reinforce these messages the website www.coronavirus2020.kz has been set up to inform the population of the Government’s actions in the fight against the pandemic.

Ministry of Industry and Infrastructural Development jointly with JSC "Kazakhtelecom" developed an interactive map of the accessible transport networks (closed and open routes), which allows to track online accessible routes (https://www.ismet.kz/ru/infotransport).

On 11 May 2020, the quarantine ended in Kazakhstan.

In July a new 14-day lockdown, less strict than the earlier one, was introduced in response to rising case numbers. On July 13, President Tokayev announced that the lockdown would be 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.

3. Exit strategy

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. On 7 April 2021, the healthcare minister Alexey Tsoi announced the Kazakh government had requested 4 million doses of Russia's Sputnik V vaccine, in addition to 2 million doses already received earlier in 2021, as part of an ongoing vaccination program alongside QazCovid-in.

As of June 16th, 2021, according to the Kazakh Health Minister Alexei Tsoi, 2,587,884 people or 26% of the eligible population have received one dose of COVID-19 vaccines. Both doses have been administered to 1,480,309 in the country.

4. Economy

a. Economic impact

The COVID-19 crisis hit Kazakhstan both through the consumption channel, resulting from the nationwide and global lockdown, and the revenue side with the sharp decline in oil prices. Overall, GDP is estimated to have contracted by 3% in January-August 2020, investments dropped by 5.2%, and inflation increased due to both supply disruptions and currency depreciation. Unemployment has risen by 0.2% to 5% in July according to official statistics and is expected to increase to above 6% by the end of 2020. If growth is expected to recover moderately in 2021, Kazakhstan’s economy remains vulnerable to a new deterioration of the sanitary situation that would severely affect business activity and employment.

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). The IMF outlook for Kazakhstan GDP is -2.7% in October. 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%.

Following the results of eight months of this year, Kazakhstan's foreign trade turnover decreased by 12% compared to January-August last year, amounting to USD 55.6 billion. Of these, 57.3% (USD 31.85 billion) accounted for exports and 42.7% (USD 23.78 billion) for imports. The downward trend is observed both in exports (by 15.7%) and in imports (by 6.4%) following the results of eight months, the main trade partners were: Russia (with a 20% share in Kazakhstan's trade), the volume of mutual trade amounted to USD 11.1 billion; China (17.8%) - trade turnover amounted to USD 9.9 billion; Italy (9.4%) - trade turnover amounted to USD 5.3 billion; Republic of Korea (7.9%) - trade turnover amounted to USD 4.4 billion; Netherlands (4%) - trade turnover amounted to USD 2.2 billion. In the structure of Kazakhstan's exports, the EAEU countries occupy 10.5%, the share of third countries is 89.5%. 

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.

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).

To support businessmen whose financial situation worsened due to the state of emergency, the government of Kazakhstan provided an exemption from payment of taxes until 31 December 2020 which were: property tax for legal entities and individual entrepreneurs at large retail facilities, trade entertainment centers, cinemas, theaters, exhibitions, and fitness and sports facilities, land tax on agricultural lands of agricultural producers, individual income tax of individual entrepreneurs working in the generally established taxation procedure. President Tokayev also suspended interest on unfulfilled tax liabilities until 15 August 2020 and postponed the deadline for submitting tax reports for the third quarter of 2020.

Working citizens of Kazakhstan who lost income during a state of emergency due to being forced to leave their jobs without pay received financial support from the state social insurance fund. The amount of social benefits per employee amounted to 42.5 thousand tenge (80 euro) per month. To date, 4,25 mln people have received the financial support.

b. Trade barriers

Kazakhstan banned export of masks on February 20. 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, providing for an expansion of business financing and concessional lending, together with extensions to the Employment Roadmap. As a second wave threatens 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. The country is now adopting a new series of containment measures at regional levels, including lockdowns and mobility restrictions.

According to official statistics, support programs so far have provided employment to over 750 000 people, and direct income support to about 4.6 million. As of September 2020, banks have granted KZT 160 bn (USD 386 m) in preferential loans to SMEs, while more than 1.6 million people and 11 000 SMEs have received deferral on loan payments (about KZT 360 bn or USD 870m). Tax incentive measures have benefited more than 270 000 companies and individual entrepreneurs. The DAMU Fund alone has supported more than 7000 entrepreneurial projects for a total of KZT 566 bn (USD 1.3 bn) during the COVID-19 crisis.

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

Real GDP is expected to contract by 4% in 2020 before growing by 3% in 2021. The upturn next year will be supported by recovery of private consumption and higher oil prices, but significant downside risks remain, notably a possible resurgence of the pandemic which would likely keep oil prices depressed in the short term.

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.

5. Useful links

6. 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.

18 juni 2021