In 1997, when the government announced it was moving the capital, the reaction abroad was skeptical. The site chosen sat in the middle of the steppe and held fewer than 300,000 people.
Countries that relocate a capital usually see one of two outcomes. The old capital loses its energy, or the new one hardens into a town of civil servants. Kazakhstan avoided both. The two cities split the work, and together they generate roughly 35 percent of national gross domestic product.
Almaty took commerce and talent. It drew $8.58 billion in gross foreign direct investment last year, more than twice Astana's total, and services account for 85.9 percent of its gross regional product.
South Korean manufacturers landed there too. Hyundai Motor assembles cars at a plant in Almaty with local partner Astana Motors, at an annual capacity of 80,000 vehicles. Kazakhstan is South Korea's largest trading partner in Central Asia, with two-way trade of $5.5 billion in 2023.
Astana took a different route. Rather than chase what Almaty had, it built what did not exist. The Astana International Financial Centre (AIFC), which opened in 2018, carved out a zone where English common law applies instead of national law, with its own court, regulator and exchange. For a foreign investor, that settles in advance which court rules if a contract goes wrong.
Registered companies reached 6,014 by midyear, 45 percent of them with foreign investors, and capital mobilized since opening stands at $26.3 billion. In the Global Financial Centres Index in March, Astana placed 65th worldwide and first across Eastern Europe and Central Asia. Almaty ranked 99th.
The gap describes a division rather than a hierarchy. Astana laid a legal channel through which foreign capital can enter with confidence, and Almaty holds the market where that capital is put to work. Equity market capitalization at the Kazakhstan Stock Exchange in Almaty stood at about $76 billion at the end of last year.
South Korean firms work the transport side too. SK Ecoplant and the Korea Expressway Corporation built the Almaty ring road with a Turkish contractor. Air Astana flies Incheon to Almaty daily, Asiana Airlines resumed the route in March, and Korean Air begins flying it on Dec. 17.
The town on the steppe has passed 1.5 million residents. Astana added more than 110,000 people last year alone, a rise of 7 percent, and now produces about $37.6 billion in output a year.
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