Sovereign wealth is typically measured by the size of reserves that allow a country to weather periods of crisis. However, for future generations, it is not only the amount left in financial accounts that matters. Of equal importance is the state of the country they inherit alongside these savings: the quality of its schools and hospitals, the condition of utility networks, roads, energy, and other core infrastructure.
For Kazakhstan, this question holds special significance. Revenues from natural resources enable the country to build a substantial financial cushion. The National Fund accumulates a portion of commodity revenues and serves two primary functions: a savings function aimed at preserving assets for future generations, and a stabilization function designed to reduce the state budget’s vulnerability to fluctuations in global commodity markets. It should be noted that by mid-2026, the fund’s foreign-currency assets reached $65.5 billion. (1)
Sovereign wealth operates differently
There is no single global model for managing sovereign wealth funds. States strike different balances between intergenerational savings, fiscal stabilization, and deploying accumulated capital for development. However, international experience demonstrates that these goals are not inherently contradictory.
Norway adheres to one of the most disciplined models of sovereign wealth management. Its fiscal rule aligns withdrawals with the expected real return of the Government Pension Fund, while preserving the flexibility to use fiscal policy in response to major economic shocks. (2)
The stabilization function is even more pronounced in Chile. Funds from the Economic and Social Stabilization Fund have been drawn upon repeatedly during periods of economic stress. In 2009, withdrawals reached nearly $9.28 billion, with significant funds also deployed in 2019–2021. (3)
Other countries also utilize commodity revenues not only as a source of long-term savings, but as a catalyst for economic development. The experience of Kuwait is illustrative, where these responsibilities are divided between the Future Generations Fund, focused on preserving capital for future generations, and the General Reserve Fund, whose investment portfolio encompasses energy, industry, transport and logistics, healthcare, and infrastructure. This model allows Kuwait to preserve a portion of national wealth for upcoming generations while transforming another portion into assets that expand the country’s economic potential today and build the foundation for long-term growth. (4)
Azerbaijan, whose sovereign wealth origins closely mirror Kazakhstan’s, has utilized resources from the State Oil Fund to finance major projects of national importance, including the Baku–Tbilisi–Kars railway, the Oguz–Gabala–Baku water supply system, and equity participation in major oil and gas transport initiatives. (5)
None of these models can be mechanically copied by another country. Together, however, they demonstrate that sovereign wealth management does not boil down to a binary choice between “saving” and “spending.” What matters far more is the form in which national capital can deliver the greatest long-term return for the nation.
From financial capital to national capital
Savings from the National Fund are already being utilized directly in the interests of future generations. Since 2024, Kazakhstan has operated the “National Fund for Children” program: every young citizen of Kazakhstan is annually allocated a portion of the fund’s investment income, and upon reaching 18 years of age, the accumulated funds can be used for education or housing improvement. This program has already entered the phase of practical asset utilization. Between February 2024 and August 1, 2026, payouts were received by more than 338,000 young Kazakhstanis, totaling approximately $67.8 million. Meanwhile, the funds belonging to minors remain within the National Fund’s assets and continue to be invested until they reach adulthood. (6)
At the same time, Kazakhstan faces a challenge familiar to many economies that have accumulated significant revenues from natural resources: what portion of national wealth should remain in financial assets, and what portion makes sense to convert into capital working domestically.
Soon, Kazakhstan plans to deploy a portion of the National Fund’s assets to finance major infrastructure projects of nationwide significance. In 2027, over $4 billion is planned for these purposes, followed by slightly over $3 billion annually in 2028 and 2029 (7).
According to several experts, the economic rationale for such a decision extends beyond mere financing. When funds are directed into long-term social and engineering infrastructure, national wealth does not disappear. The form in which it exists simply changes.
Money allocated to current consumption expires alongside the budget cycle. A school, hospital, utility network, road, or energy facility remains in the economy and operates for decades.
This is precisely why infrastructure investments differ fundamentally from covering operational expenses. A portion of financial capital is effectively transformed into physical and human capital within the country.
Such an approach yields economic benefits right from the project implementation stage. Construction generates demand for materials, equipment, transport, design, and installation work, providing orders for domestic enterprises and creating added value within the country. Once facilities are operational, another, far more sustained effect begins. Modernizing heating and water supply systems increases their reliability, reduces losses, and diminishes the need for costly emergency repairs. Roads enhance regional connectivity. Energy infrastructure removes bottlenecks for expanding existing production and launching new industrial capacity.
Investments in healthcare and education occupy a special place. Modern hospitals, clinics, and educational institutions represent both social infrastructure and direct investments in human capital. The accessibility of medical care, public health status, quality of education, and workforce qualifications are directly tied to labor productivity and the long-term potential of the economy. All social infrastructure is as much an element of national capital as transport or energy infrastructure, and its returns and effectiveness extend far beyond the construction timeline of any individual project.
The cost of deferred development
Utilizing accumulated capital carries an opportunity cost. However, delaying investments carries an opportunity cost as well. Insufficient capacity of transport networks, energy shortages, worn-out utility systems, and a deficit of schools or medical facilities impose costs today. The longer modernization is postponed, the longer the economy and population bear these costs.
Therefore, the pace of infrastructure development carries clear economic value. If a necessary facility opens today rather than ten years from now, the country gains additional years of its economic and social returns.
Moreover, the social and economic effects of infrastructure are largely inseparable. Reliable utility networks, modern healthcare, education, transport, and energy simultaneously elevate the quality of life and create an environment in which private economic activity can thrive.
A reserve that has already worked
Using the National Fund’s resources to address strategic priorities is not a new practice for Kazakhstan. The fund’s ability to provide supplementary resources when the economy needs them most has repeatedly served as a key factor in the country’s economic resilience.
During the global financial crisis of 2008–2009, $10 billion was directed to stabilize the financial sector, support real estate, small and medium enterprises, and the agribusiness sector (8). In 2015–2017, an additional $9 billion was withdrawn (9). During the pandemic in 2020–2021, transfers from the National Fund helped preserve economic stability and support citizens. Thus, having an accumulated reserve allowed the state to act proactively—promptly directing additional resources where they were required to prevent more severe economic repercussions.
The existence of a large financial reserve enabled Kazakhstan to navigate periods of external shocks with an additional funding source without relying exclusively on current budget revenues.
Today, it is not the principle of using the fund that is changing, but the nature of the task. Previously, accumulated resources primarily served to mitigate the impact of global shocks. Now, a portion of the capital is intended to eliminate infrastructural bottlenecks that could constrain long-term development.
This expands the sovereign fund’s role: resources accumulated during favorable periods are used not only after a crisis arises, but also to build assets that enhance the resilience and potential of the economy for years to come.
The account of future generations
Ultimately, the success of this strategy will be measured not by the volume of funds withdrawn from the National Fund, but by the value of the assets created with them and the overall effect they deliver to the economy and citizens.
This fundamentally shifts the evaluation criteria. If a financial asset worth one dollar is transformed into infrastructure that enhances productivity, lowers business costs, elevates human capital quality, and fosters conditions for new private investment over decades, the very structure of national wealth undergoes a qualitative transformation.
Therefore, the central question for the coming years is not whether to utilize National Fund resources, but the quality of the assets Kazakhstan creates in return. For future generations, this exact balance between preserved financial capital and the value of the domestic economy built in its place will stand as the primary legacy of today’s decisions.
- National Bank of the Republic of Kazakhstan, Report to the President dated June 4, 2026: Foreign Currency Assets and Investment Income for 2025.
- AI-CIO, “Norway to Withdraw Record Amount from Sovereign Wealth Fund”: https://www.ai-cio.com/news/norway-withdraw-record-amount-sovereign-wealth-fund/
- The Market Value of the Economic and Social Stabilization Fund (ESSF): https://www.hacienda.cl/english/work-areas/international-finance/sovereign-wealth-funds/economic-and-social-stabilization-fund/financial-situation/market-value
- Kuwait Investment Authority, “Investments” (General Reserve Fund and Future Generations Fund overview): https://www.kia.gov.kw/investments/
- oilfund.az, State Oil Fund of Azerbaijan – Question and Answer (mandate); naturalgasworld.com, “SOFAZ financing Azerbaijan’s share in TANAP project”: https://oilfund.az/en/fund/press-room/question-and-answer
- Target Savings Payments under the “National Fund for Children” Program: https://www.enpf.kz/ru/press-center/news/282547/
Foreign-Currency Assets of the National Fund to Increase to USD 70.6 Billion by 2029: https://www.gov.kz/memleket/entities/economy/press/news/details/1279482?lang=en
Concept of Formation and Use of Resources of the National Fund of the Republic of Kazakhstan (Decree of the President of RK dated Dec 8, 2016, No. 385): https://cdb.kz/sistema/pravovaya-baza/o-kontseptsii-formirovaniya-i-ispolzovaniya-sredstv-natsionalnogo-fonda-respubliki-kazakhstan/
Concept of Formation and Use of Resources of the National Fund of the Republic of Kazakhstan: https://adilet.zan.kz/rus/docs/U1600000385
