In 2024, Kazakhstan ranked 88th in Transparency International’s Corruption Perceptions Index (CPI), scoring 40 out of 100 possible points. Compared to 2023 (39 points, 93rd place), this represents a formal improvement of one point and five positions. The news of the “improved ranking” was widely covered by Kazakhstani and international media, creating an impression of progress in the fight against corruption. However, according to Transparency International’s classification, Kazakhstan remains among highly corrupt countries, with a score below the global average. In reality, this slight improvement does not reflect meaningful changes in addressing the systemic issue of corruption in the country.
What are the persistent corruption challenges hindering Kazakhstan’s development, and why should this “improvement” not be misleading?
The Illusion of Progress: What Lies Behind the Rating?
The CPI, compiled by Transparency International, is based on assessments from experts and the business community, not on objective metrics such as the number of corruption convictions or the volume of recovered assets. Experts suggest that the slight improvement may be linked to increased civic activism following the January 2022 events, rather than fundamental reforms.
According to Transparency International, Kazakhstan continues to be classified as a “highly corrupt” country, with a score below 50, which “hinders economic development and citizens’ social well-being.” For comparison, the CPI leaders – Denmark with 90 points and Finland with 88 points – demonstrate robust anti-corruption systems. Kazakhstan’s one-point increase from 39 to 40 falls within the margin of statistical error and does not indicate qualitative changes in anti-corruption policy. The media frenzy surrounding the “improved rating” appears to be an attempt by authorities to portray the situation in a positive light.
Following the January 2022 events, Kazakhstan took some steps to enhance anti-corruption measures. For instance, in 2023, the Committee for Asset Recovery was established under the General Prosecutor’s Office, which successfully returned some assets to the state, later allocated to infrastructure projects. However, these efforts remain largely superficial and fail to address systemic issues such as judicial dependence, weak transparency in state processes, and the influence of political elites on the economy.
Key Corruption Challenges
Capture of Natural Resources
Kazakhstan is a major player in the global oil and gas market, and this sector remains a primary arena for corrupt schemes. Despite attracting significant foreign investment, control over these resources is often exercised by oligarchs and political elites through state-owned enterprises. A notable example is the dispute over the Kashagan oil field, where, according to an ICIJ investigation, the government claims that international oil companies receive 98% of revenues after royalty payments, highlighting an unequal distribution of benefits.
Another case involves Timur Kulibayev, the son-in-law of former President Nazarbayev, who controlled companies in the oil and gas sector, using offshore structures to conceal assets, as revealed in ICIJ investigations. Additionally, the case of Kairat Boranbayev, convicted in 2023, who returned assets worth over 90 billion tenge to the state, including oil companies and funds, exemplifies these issues.
These are just the tip of the iceberg: access to deposits and extraction contracts is often allocated opaquely through shell companies or intermediaries, leading to profit outflows to offshore jurisdictions.
Offshore Schemes and Asset Flight
Offshore schemes remain a significant challenge for Kazakhstan. According to Transparency International, insufficient transparency in financial flows enables elites to siphon capital abroad, evading taxes and concealing illicit income. Investigations like “Kazakhgate” pointed to multimillion-dollar bribes tied to oil deals in the 1990s, and anti-corruption probes suggest such practices persist.
A recent OCCRP investigation revealed how Meridian Capital, operating in Kazakhstan’s oil and gas sector, used offshore jurisdictions to obscure its owners, complicating the tracking of corrupt flows. According to GAN Integrity investigations, Kazakhstan loses billions of dollars annually due to such offshore schemes.
The Committee for Asset Recovery began efforts in 2023 to repatriate illegally withdrawn funds, but the scale of the problem remains vast, with minimal public oversight.
“Bailing Out” Banks with Public Funds
Kazakhstan’s banking sector is also marred by opaque and corrupt ties with the state. According to an ADB Blog investigation, from 2009 to 2023, the government spent at least $27.3 billion supporting banks, amounting to up to 7.2% of GDP in some years. Bank bailouts are often justified as stabilizing the financial system, but in practice, public funds may cover losses caused by mismanagement or corruption. Well-known cases include BTA Bank, bailed out twice, Kazkommertsbank, Jusan Bank, and Bank CenterCredit.
The state continues to prop up the banking system, using not only budget funds but also citizens’ pension savings. In 2024, the National Bank of Kazakhstan allocated 500 billion tenge from pension funds to purchase bank bonds. No one can confirm the appropriateness or efficiency of such massive injections, or guarantee the return of these pension funds. Kazakhstan’s history of sudden bank failures provides ample cause for concern.
The Review
The Illusion of Progress
In 2024, Kazakhstan ranked 88th in Transparency International’s Corruption Perceptions Index (CPI), scoring 40 out of 100 possible points. What are the persistent corruption challenges hindering Kazakhstan’s development, and why should “improvement of rating” CPI not be misleading?
