This report outlines a National Action Plan designed to enhance Kazakhstan’s digital trade integration within the Asia-Pacific region. Addressing gaps in digital trade policies will foster a more competitive and transparent environment for businesses and investors in Kazakhstan’s digital economy. Using ESCAP’s Regional Digital Trade Integration Index (RDTII) framework and database, this paper identifies priority areas for policy attention in Kazakhstan, particularly in cross-border data policies, telecom infrastructure, foreign direct investment (FDI) access, and content regulation. These areas of digital trade regulation in Kazakhstan currently exhibit significantly high compliance costs, which may collectively hinder the country’s ambition to become a leading digital trade hub.
Kazakhstan’s stringent cross-border data policies, characterized by strict local data storage mandates and restrictions on data transfers abroad, impose substantial compliance costs on businesses engaged in digital trade. Although these regulations uphold national data sovereignty as per the Law on Informatization, they can create barriers for both local and foreign companies, ultimately affecting their competitive edge. Moreover, while the country’s telecom infrastructure exhibits a robust regulatory framework, foreign ownership caps and complex licensing requirements continue restrict foreign investment in the sector, further limiting competition and the potential to reduce telecom service costs.
Kazakhstan provides targeted investment incentives for sectors like information and communication technology (ICT) manufacturing. However, restrictions in sensitive areas such as media ownership and telecommunications reflect an ongoing struggle to balance attracting investment and maintaining control over critical digital sectors. Furthermore,
regulations on internet content, including measures like blocking and filtering, are intended to address specific local concerns; however, they may also present challenges for leveraging digital trade, e-commerce, and digital economy as a new growth engine.
Kazakhstan faces high trade costs and inefficiencies in cross-border trade due to reliance on paper-based processes. These challenges disproportionately impact SMEs and vulnerable groups, limiting their access to international markets through e-commerce and reducing the potential benefits of trade for poverty reduction.
The report highlights key areas that require greater effort considering these challenges. The following strategic recommendations aim to create a more favorable regulatory
environment that enhances Kazakhstan’s digital trade integration and fosters economic growth.
Policy Recommendations on prioritized areas
1. Accede to the Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia and the Pacific
Acceding to the Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia and the Pacific is a practical step for Kazakhstan to strengthen its role in digital trade, with a particular focus on cross-border e-commerce. All Kazakhstan’s neighboring countries including China, the Russian Federation, Kyrgyzstan, Turkmenistan and Uzbekistan have acceded to the UN Treaty called Framework Agreement on Facilitation of Cross-Border Paperless Trade in Asia and the Pacific (CPTA). The rapid expansion of CPTA participation—nearly tripling since 2021—highlights its growing regional relevance. Kazakhstan’s absence from this agreement risks isolating it from evolving trade networks and expanding economic opportunities, particularly as key trading partners deepen their integration into digital trade systems.
2. Simplify Cross-Border Data Policies
Kazakhstan should consider simplify its current cross-border data policies to reduce compliance costs for small businesses while balancing the need for national data sovereignty. For instance, the existing mandate for local hosting of websites with “.kz” domains should be evaluated for its impact on digital trade and investment in digital businesses. Implementing more flexible data storage options that comply with international standards can reduce operational burdens for foreign companies. Establishing frameworks for controlled data transfers to foreign jurisdictions can allow businesses greater flexibility without compromising national security. Developing bilateral agreements with key trading partners can streamline processes and build trust.
3. Enhance Investment in Telecom Infrastructure and Promote Competition
To enhance competition in telecom services, Kazakhstan could consider to increase foreign ownership and simplifying licensing procedures for telecommunications operators can attract more international players to the market. This approach would increase competition and lower the costs of telecom and related services, ultimately benefiting consumers through improved service delivery. Implementing or enhancing regulations that encourage infrastructure sharing among telecom providers can reduce costs and encourage new
entrants. This move would bolster competition and ensure better coverage, especially in underserved regions.
4. Bolster FDI Policies
Kazakhstan can create a more welcoming environment for FDI, particularly in digital sectors, by simplifying the investment application process and reducing bureaucratic hurdles. Streamlining entry procedures, such as establishing a one-stop-shop for investment inquiries would enhance clarity and efficiency. Additionally, conducting a comprehensive review and impact assessment of existing restrictions in sectors such as media ownership and telecommunications is advisable. While maintaining oversight is important, overly stringent regulations may deter potential investors and limit digital economy growth.
5. Reform Content Access Regulations
Kazakhstan’s approach to digital economy development could benefit from a balanced focus on both security and accessible information. Establishing transparent criteria for content regulation, including blocking and filtering, would foster a more predictable environment for businesses while supporting citizens’ access to information and knowledge. Collaborating with the private sector to enhance cybersecurity measures can improve the overall digital environment. This partnership could focus on developing innovative solutions that ensure online safety without placing undue restrictions on online platforms.
6. Invest in Capacity Building and Digital Literacy
Enhanced digital literacy and digital skills will allow effective participation in the digital economy. Kazakhstan should prioritize educational initiatives by implementing nationwide programs aimed at improving digital literacy among citizens and businesses. Ensuring that stakeholders understand their rights and responsibilities is essential for building trust in digital space. Targetted training and supports for small and medium enterprises (SMEs) can empower them to leverage digital platforms effectively. Supports may include financial incentives, access to digital tools, and guidance on navigating regulatory requirements.
By adopting these policy recommendations, Kazakhstan can significantly improve its digital trade integration within the Asia-Pacific region. Ultimately, these efforts will contribute to Kazakhstan’s broader economic growth, resilience, and positioning as a vital player in the global digital economy.
Source: Trade, Investment and Innovation Division, ESCAP