Executive Summary

This report assesses Kazakhstan’s recent decision to allocate 120 billion tenge (approximately USD 265 million) for the development of its defence-industrial base, and its efforts to attract foreign investment from key international partners.

This initiative aims at modernising Kazakhstan’s armed forces and strengthening domestic production. The analysis explores the geopolitical drivers behind this policy shift, its implications for regional security dynamics, and the potential risks linked to foreign involvement in sensitive sectors. This report assesses also Astana’s defence posture, investment, and regional.

Key Takeaways

• Kazakhstan plans to allocate 120 billion tenge (approx. USD 265 million) to reinforce its defence industrial sector through the Defence Industry Development Fund.
• The government is actively negotiating with foreign investors, including from China, the UAE, Turkey, Qatar, and Singapore, to attract capital and technology into the defence sector.
• The initiative aligns with ongoing military reforms, suggesting a strategic shift toward self-reliance and diversification of defence partnerships.

Background Information

In April 2025, the Prime Minister of Kazakhstan, Olzhas Bektenov, publicly addressed a parliamentary inquiry concerning the advancement of the country’s defence-industrial complex and government procurement strategies. Bektenov confirmed that the government completed a legislative framework to regulate the Defence Industry Development Fund, created in December 2023.

The fund’s top priority is to acquire and manufacture domestically crucial military hardware like artillery ammunition, weapons systems, and combat modules. The government formally requested 120 billion tenge (about USD 265 million) from the state budget. Meanwhile, Kazakhstan is negotiating with investors from China, the UAE, Turkey, Qatar, and Singapore to attract foreign investment and technology.

Kazakhstan’s military currently operates with about 40,000 active personnel, supplemented by 30,000 National Guard members. While its military largely relies on Russian and Soviet weaponry, the country has diversified its arms suppliers recently, including France, Israel, Turkey, and South Korea. Military spending in the country is relatively low, around 0.8% of GDP in 2023, but is rising and undergoing structural changes. Kazakhstan remains a committed member of the CSTO and NATO’s Partnership for Peace initiative, while continuing to pursue a multi-vector foreign policy.

Geopolitical Scenario

Kazakhstan’s boosted defence spending and opening its military-industrial complex to foreign investment are part of a complicated geopolitical situation. Ongoing instability in Afghanistan, tensions between Russia and the West, and the escalating competition for dominance in Central Asia, are defining the volatile regional environment. In this context, Kazakhstan seems determined to bolster its national sovereignty and modernise its military, while reducing its dependence on traditional allies like Russia.

Kazakhstan’s strategic focus is shifting with diversified foreign defence partnerships, including China, Turkey, and the Gulf States. Besides capital, these countries offer alternative technological ecosystems, helping Kazakhstan lessen its reliance on Russian equipment and the impact of Moscow’s declining global influence. Partnerships with states such as Singapore show Astana’s intent to integrate into wider defence innovation networks beyond its immediate region.

Both China and the Gulf States mutually benefit from their participation in Kazakhstan’s defence industry. These states aim to expand their geopolitical footprint and merge influence in Central Asia, while also ensuring the stability of key transit corridors within the Belt and Road Initiative. Because of its central position in Eurasian logistics and energy networks, despite being landlocked, Kazakhstan offers significant strategic and commercial opportunities for foreign defence investors.

Within Kazakhstan, the government must carefully balance competing interests. It must pursue military modernisation without triggering domestic or regional concerns over militarisation. Lower defence spending allows for gradual economic growth without risking macroeconomic instability. But closer defence ties with other countries also raise the risk of overextending our military or getting tangled in geopolitical conflicts.

Kazakhstan’s 2022–2024 military reforms anchor the internal rationale for these investments, prioritising territorial defence, institutional professionalism, and improved responsiveness. The creation of the Defence Industry Development Fund is part of a broader strategy to support indigenous defence production capabilities. This move helps Astana achieve its goal of creating a self-sufficient defence industry that meets national needs and may eventually export products.

Conclusion

Astana’s decision to commit substantial national resources to its defence-industrial base reflects more than a procurement effort. It is a calculated strategic move shaped by regional pressures, institutional limitations, and shifting alignments. This investment is significant, not just for its economic impact, but also because it shows a deliberate shift away from outdated Soviet systems towards a more diverse and independent defence strategy.

This shift, however, introduces friction points. Moscow could read the Kazakh engagement with non-CSTO investors, such as China, Turkey, or the Gulf states,  as encroachment into what the Kremlin considers its blizhnee zarubezhe (near abroad). While Kazakhstan has historically maintained a balanced foreign policy, deeper foreign involvement in its military sector risks testing that equilibrium. Concerns about militarisation or foreign influence, especially in key industries, could unsettle political leaders and the public at home, especially without clear communication from Astana.

Much will depend on the government’s ability to sequence reforms, secure results, and maintain coherence in its strategic communication. Integrating foreign technologies and effective safeguards must match capital to avoid compromising sovereignty or operational independence. Well-executed efforts could make Kazakhstan a regional case study in defence modernisation without alignment drift, an outcome of growing interest to both regional partners and global stakeholders.

SpecialEurasia OSINT Team

*Cover image: Members of the Kazakhstan Republican Guard (Credits: Jim Varhegyi, U.S. Air Force, Public domain, via Wikimedia Commons)

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