How New Roads in Kazakhstan Create Jobs, Save Lives, and Boost Trade

Key Highlights

• The World Bank has supported the development of the Western Europe–Western China corridor in Kazakhstan since 2009, connecting approximately 5.5 million people living in the regions along the corridor and profoundly reshaping the economic landscape of the entire area.
• A World Bank survey revealed that 43% of respondents experienced better job and income opportunities due to the South-West Roads Project, while 93% noticed a higher quality of life post-project.
• Travel time along the corridor has been cut by approximately 67%, with travel speeds tripling from 25 km/h to 80 km/h, thanks to over 1,600 km of new high-quality roads.
• Upgrades to the Western Europe–Western China International Transit Corridor have led to a 35% reduction in road user costs, benefiting regions previously among the nation's poorest.
• The new infrastructure has provided quicker, safer access to essential services, contributing to a 62% reduction in maternal deaths from 2009 to 2019 in the areas served by the roads.
• The project has spurred regional development and curbed youth migration by creating over 50,000 construction jobs and 1,200 permanent road maintenance positions, with a focus on training, new qualifications, and equitable conditions for women, thus becoming a catalyst for social mobility in the region.

Challenge

Kazakhstan's strategic position as an economic bridge between China, Europe, and the Middle East has historically been underutilized due to poor connectivity. This has not only hindered the country’s ability to leverage its geographical advantage, but also led to pronounced regional disparities. Lack of efficient transport links contributed to unequal access to employment, education, healthcare, and various social and cultural opportunities. High transit costs—in terms of time, finances, and vehicle wear and tear—posed significant obstacles to international commerce and stymied local socio-economic progress, particularly in the southern regions. These challenges also disproportionately impacted women, who faced higher unemployment than men, and suffered from maternal mortality rates. Persistent underinvestment and limited institutional capacity within the road sector compounded these issues, which further impeded the development of a robust transportation infrastructure.

Approach

The World Bank supports the acceleration of sustainable economic growth and more equitable development in Kazakhstan through increased regional integration and national and international connectivity. World Bank investments and technical assistance supported the development of two modern road corridors, with a length of almost 2,000 kilometers (km). The South-West Road (SWRP) and East-West Road (EWRP) projects have helped to crowd in the investments needed for such a large-scale infrastructure project from other multilateral development banks (MDBs). The World Bank also supported the establishment of KazAvtoZhol, the national highway authority, and the National Center for Quality of Road Assets to ensure sustainable management of the new road assets. Other institutional components of the roads projects provided technical assistance to improve maintenance, safety standards and financial sustainability of the sector by the introduction of tolls.

Results

The road construction projects substantially altered the outlook of residents in the project region. In survey conducted by the World Bank when the project launched in 2009, a mere 20% percent felt optimistic about their future in the area. Yet by 2020, this number soared to 83%. The project created 50,000 new jobs in construction and provided over 1,200 permanent roles in road maintenance for residents, which contributed to this increasing optimism.

The projects have significantly enhanced connectivity, fueling the expansion of cities and towns along the corridors. The travel time reduction from Shymkent, Kazakhstan’s third-largest city and a key southern gateway, to Astana, the capital, from 40 hours in 2009 to 16 hours in 2018, has fortified the link between the southern growth pole and the country’s center, triggering an economic upswing and a population increase in Shymkent to over one million residents. Retail trade in the project area has seen a 50% increase, while wholesale trade increased by 640% within the first three years after the roads were completed.

Improvements in local connectivity since 2019 have halved the price of some goods delivered into the region and accelerated access to markets and social services. The speed at which rice and other crops reach regional markets has doubled or even tripled. Improved market access enabled a 400% increase in fish production in Kazaly district of the Kyzylorda region. The new roads have been especially beneficial for rural women, providing them better access to maternity hospitals and contributing to a dramatic decrease in maternal mortality rates by over 61% across the four regions of the transport corridor and over 87% in the Kyzylorda region between 2009 and 2019.

To ensure sustainability and transparency in Kazakhstan’s road system, World Bank projects supported the establishment of KazAutoZhol highway management company. KazAutoZhol models performance-based remuneration for state sector employees, promoting efficiency and accountability in public service management.

Data Highlights

• Road freight transit from China to Europe via Kazakhstan has surged from 1,195.9 tons in 2015 to 106,112.7 tons in 2023, marking an increase of nearly 88 times (see Figure 1).

• Enhanced connectivity has had a remarkable effect on public health, with maternal mortality rates in the four regions along the transport corridor decreasing by over 61% on average, and three regions achieving even more significant decreases: 87.5% in the Kyzylorda region, 75.4% in the Turkistan region, and 70% in the Zhambyl region (see Figure 2).

One World Bank in Action

The World Bank's investment in the construction of the Western Europe–Western China Highway was complemented by the International Finance Corporation's (IFC) structuring of the Big Almaty Ring Road (BAKAD) 20-year concession. This 66-km road is critical to the whole corridor, because it bypasses Almaty, Kazakhstan's most populous city, mitigating highway congestion and potentially enhancing urban air quality by diverting transit traffic. The IFC served as a lead advisor to the government, supporting it during bidding and negotiations and helping it amend the legislation to make BAKAD and future infrastructure public-private partnerships possible.

World Bank Group Contribution

The World Bank Group’s substantial financial contribution of $3.2 billion has been a driving force behind the modernization of Kazakhstan's road infrastructure. This investment, divided between the East-West Road Project (EWRP) at $2.125 billion and the South-West Road Project (SWRP) at $1.068 billion, has supported the adoption of international standards, improved road safety, road asset management, and the financial sustainability of the road sector.

Partnerships

The financing of the International Transit Corridor Western Europe–Western China, which stretches around 2,700 kilometers is the result of a collaborative effort. The World Bank's financing of approximately 1,600 km is bolstered by contributions from the Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD), Islamic Development Bank (IsDB), and the government of Kazakhstan, which financed around 480 km, 100 km, 50 km, and 500 km, respectively. The Kyrgyz Republic and Uzbekistan, whose capitals lie within 25 km of their borders with Kazakhstan, have also built roads to connect their capitals to this corridor, enhancing regional connectivity. The World Bank has established an effective working relationship with the implementing agency, the Committee for Roads of the Ministry of Transport of the Republic of Kazakhstan, as well as with the Ministry of Finance, Ministry of National Economy, and the newly established KazAutoZhol road management agency. Technical assistance provided by the World Bank also allowed government agencies to promptly and adroitly address all issues arising during project implementation.

Looking Ahead

The World Bank envisions future projects that will further expand transport and social infrastructure to alleviate regional imbalances in Kazakhstan. The focus will be on the development of multimodal transport and trade facilitation through improved logistics. The World Bank is committed to advancing safety and climate resilience and will continue to support effective governance in the transport sector. These projects will also work to ensure that communities near major corridors benefit from spillover effects, including last-mile connections to populations in remote areas.