In the wake of global economic shifts, Germany’s Zeitenwende—its strategic pivot—is not just a military or political maneuver but an economic imperative. It’s a call to diversify markets and supply chains, to reduce critical dependencies, and to forge new, reliable partnerships. At the heart of this economic reorientation is a pressing need to find alternatives to Russian energy and manage risks with other major partners. This shift is pushing German businesses, particularly the Mittelstand, to rethink supply chain risks and seek new opportunities.
Enter Kazakhstan, a strategic and economic partner seeking international help for its own transformation. As Germany’s top trading partner in Central Asia, Kazakhstan is pursuing balanced foreign policies and reforms to diversify its economy beyond natural resources. The country’s ambitious goals, including achieving carbon neutrality by 2060 and significantly increasing renewable energy’s share, require investment, technology, and expertise—areas where German companies, especially innovative SMEs, excel.
Germany’s search for reliable partners and Kazakhstan’s need for investment create a prime opportunity for collaboration. This alignment of national interests increases the chances of successful partnerships and ensures political support, as evidenced by frequent high-level state visits. The strengthening of this relationship could also serve as a model for broader EU-Central Asia cooperation.
The economic partnership between Germany and Kazakhstan is already robust, with bilateral trade hitting €8.75 billion in 2023. However, the trade pattern shows room for diversification. While Kazakhstan mainly exports crude oil and other raw materials to Germany, German exports to Kazakhstan consist of high-value manufactured goods like machinery, vehicles, electronics, pharmaceuticals, and aircraft. German investment in Kazakhstan is increasing, with a 64 percent rise in direct investment in 2023, reaching $770 million. This investment aligns with Kazakhstan’s diversification goals, with about 90 percent of Germany’s cumulative investment of roughly $6 billion historically going into Kazakhstan’s non-resource sector.
The opportunities for German SMEs in Kazakhstan are vast and varied. Key sectors include manufacturing and high-tech, where modernizing industry requires advanced machinery and technology. The energy transition and renewables sector offers potential in wind, solar, green hydrogen, and energy efficiency. Logistics and the middle corridor present opportunities in services, warehousing, transport technology, and infrastructure projects. Agriculture, mining, and critical raw materials also offer significant prospects.
However, navigating the Kazakh market requires careful planning. Support is available from the German Chamber of Commerce Abroad (AHK Central Asia) and Germany Trade & Invest (GTAI), which offer market insights and practical help. Within Kazakhstan, Kazakh Invest assists foreign investors. Risks include bureaucracy, potential corruption, and economic volatility. Mitigation involves thorough research, using support networks, finding reliable local partners, and understanding the legal environment.
For German SMEs, Kazakhstan represents a strategic market worth exploring. The alignment of Germany’s diversification needs and Kazakhstan’s development goals presents a timely opportunity. By entering the Kazakh market, German SMEs can participate in its economic transformation and secure future growth. The construction sector, with its focus on sustainability and innovation, is well-positioned to capitalize on this opportunity. As Germany and Kazakhstan deepen their economic ties, the construction industry can play a pivotal role in building a more sustainable and resilient future for both nations.
