Kazakhstan sits atop some of the largest hydrocarbon reserves on earth. The Tengiz and Kashagan fields in the Caspian basin rank among the most significant oil discoveries of the twentieth century. Since independence in 1991, the country has earned hundreds of billions of dollars from petroleum exports. Yet thirty-four years after the Soviet flag was lowered over Alma-Ata, a persistent question circulates in Kazakhstani public discourse, in university seminars, and in the dry language of development economics: where has the money gone, and who controls it?
The question is not merely rhetorical. It is one that economists, civil society organizations, and ordinary citizens are asking with increasing directness as the gap between resource wealth and public welfare becomes harder to explain away.
The Architecture of Resource Capture
The institutional vehicle for Kazakhstan's oil revenues is the National Fund of the Republic of Kazakhstan, established in 2000 under then-President Nursultan Nazarbayev to accumulate and manage hydrocarbon receipts. The fund held approximately $57 billion in assets as of early 2025, according to data from the National Bank of Kazakhstan — a substantial sum, though modest relative to the total petroleum revenues the country has earned over three decades and smaller, per capita, than comparable sovereign wealth funds in Norway or the Gulf states.
Critics of the fund's governance have long pointed to two structural problems. The first is opacity: for many years, the fund's full investment portfolio and expenditure allocations were not publicly disclosed. The second is the practice of drawing on fund assets for quasi-fiscal operations — subsidizing state-owned enterprises, recapitalizing banks, and financing infrastructure projects that serve political priorities rather than intergenerational savings goals.
Dina Sharipova, an associate professor of public policy at KIMEP University in Almaty, has written that the National Fund was structured more as a political stabilization tool than as a genuine wealth fund for citizens. "The design reflects a deliberate choice," she has argued in academic work examining Central Asian resource governance. "Revenue flows were channeled through institutions with limited public accountability, enabling elite capture at the expense of broad-based redistribution."
What the Data Shows
The contrast between resource revenues and public investment is quantifiable. Kazakhstan's public spending on health as a share of GDP has consistently ranked below the OECD average and below comparable upper-middle-income economies. World Bank data shows Kazakhstan allocating approximately 3.5 percent of GDP to healthcare — less than Thailand, Brazil, or Turkey, countries with comparable or lower income levels. Education spending tells a similar story: adequate by regional standards, but not reflective of an economy generating substantial petroleum rents.
Under Nazarbayev's thirty-year rule, the concentration of economic assets in the hands of a small network of politically connected families and oligarchs was documented by international anti-corruption organizations including Global Witness and Transparency International. The Nazarbayev family's assets — spread across real estate in London, Dubai, and Switzerland, as well as stakes in Kazakhstani banking and energy sectors — became a subject of Western legal scrutiny, most prominently in the United Kingdom's unexplained wealth investigations.
The Tokayev Transition
The political rupture of January 2022 — when mass protests over LPG fuel price increases escalated into the most significant unrest in Kazakhstan's post-independence history, suppressed with assistance from the Collective Security Treaty Organization — forced a partial reckoning. President Kassym-Jomart Tokayev, who assumed power in 2019, used the crisis to sideline Nazarbayev and launch what he termed a "New Kazakhstan" reform agenda, including pledges of greater social redistribution and anti-corruption measures targeting the old elite.
Civil society observers have noted incremental progress: asset recovery proceedings against figures linked to the former president's inner circle, a new National Fund withdrawal framework intended to direct revenues toward a "People's IPO" scheme giving citizens shares in state enterprises, and pledges of increased social spending. But structural reform of the underlying resource governance architecture has been slower.
"The rhetoric of redistribution has improved," noted a representative of a Kazakhstan-based civil society network that monitors public budget allocations, speaking to international development researchers in late 2024. "The actual numbers — what reaches a pensioner in Shymkent or a schoolteacher in Petropavl — remain deeply insufficient relative to what this country earns from its subsoil."
The Geopolitical Dimension
The distribution of oil wealth is inseparable from Kazakhstan's geopolitical positioning. The major hydrocarbon consortia operating Tengiz and Kashagan include American, European, Russian, and Chinese shareholders. The terms of the original production-sharing agreements, negotiated in the early 1990s when Kazakhstan had limited technical capacity and significant foreign investment dependence, have been criticized by successive governments as insufficiently favorable to Kazakhstani interests. Renegotiations have occurred — most notably regarding cost-recovery provisions at Tengiz — but the fundamental architecture of foreign-dominated extraction remains.
For ordinary Kazakhstanis, the oil wealth question is ultimately one of social contract: whether the extraordinary geological fortune beneath the Kazakh steppe translates into better hospitals, better schools, and a dignified old age. Thirty-four years after independence, the evidence suggests that contract remains, at best, partially written.
In Central Asia, as across the Silk Road, geography determines destiny — and creates opportunities for balanced diplomacy. But geography endowed Kazakhstan with resources, not institutions. Building the latter, transparently and accountably, is the unfinished work of independence.
