Risk-takers win: Timur Turlov’s op-ed on how to navigate uncertainty

Today, many people feel that we are living in an era of continuous, large-scale change. Countries and industries are evolving rapidly, external relationships and dependencies are shifting, and traditional value chains are dismantled while new ones take shape. The global electronic distribution of products and services is challenging competition and national regulations. Multinational corporations are being replaced by global digital ecosystems. Meanwhile, products are becoming increasingly complex and companies’ profit centers are growing more elusive.

Perhaps most significantly, the very meaning of economic and technological transformation is shifting. For many market participants, the complexity of modern products has reached a point where they seem almost indistinguishable from magic.

Markets are being reshaped, consumption models are transforming and public administration systems are entering a new phase of restructuring. More than ever, human capital is taking center stage, surpassing accumulated financial capital, infrastructure assets and long-established political traditions. These traditions once served as the foundation for economic growth and global dominance in the 19th and 20th centuries, yet their influence is now being redefined.

Amid these global shifts, the return of Donald Trump, with his business-first mindset and aggressive but effective approach honed over decades, no longer seems accidental. His ability to think outside the box and act without deference to outdated traditions suggests that he was chosen not just by the conservative-leaning American voter, but by the moment itself.

Even if Trump’s presidency does not prove successful or Elon Musk’s influence does not yield immediate results, the broader trend they represent — an emphasis on unconventional, high-stakes decision-making — is certain to continue.

The current reality demands solutions that require a higher level of responsibility and, in simpler terms, courage. This means that economic and financial strategies, including those of government officials, must become more risk-oriented. Certainly, the potential for reforms and change is never absolute. It is akin to driving a race car on a track with unpredictable weather conditions: you are not always in full control. Turning the wheel in one direction does not always guarantee the desired outcome, and reckless decisions can lead to consequences that take decades to repair, no matter how justified they may seem in the moment.

History shows that countries that can adapt and leverage their accumulated potential gain a significant advantage. I believe Kazakhstan is one of them.

Thanks to what has been built and accumulated since independence — and its well-balanced relations with the U.S., Europe and China — Kazakhstan has a unique opportunity to become a true digital hub in Central Asia. It has the potential to emerge as a leader in predictive artificial intelligence (AI) development, supported by a number of established digital ecosystems and a vast volume of commercial and government big data. This data can now be used to build advanced models for decision-making, recommendations and risk assessment. Very few countries have such well-structured government data and a clear legislative framework for its safe access and processing.

Kazakhstan also benefits from a highly skilled workforce. Hundreds of thousands of people in the country have strong labor productivity, quality education and a clear understanding of their potential. Over the past 30 years, they have integrated well into the global economy, building a broad network of international connections.

Therefore, to our surprise, we are already ahead of many of our Western competitors in certain areas. While they often operate slowly — sometimes too cautiously, expensively and with solutions that are outdated by the time they launch — Kazakhstan is still actively experimenting. Yes, we make mistakes, and we may not always have the experience or wisdom of more established economies, but we are also highly productive in innovation. And we take pride in that.

Kazakhstan has a unique chance to become a full-fledged connector between Turkic states and the post-Soviet region. It has the potential to serve as a major financial and payment hub, attracting foreign currency deposits that can, in turn, fuel the development of the domestic economy. We are the only country in the region with an investment-grade credit rating, an open capital account and a solid international reputation. This gives us a rare opportunity to become a new regional «Switzerland.» However, realizing this potential requires both courage and professional risk management, not a paralyzing fear of risks that are poorly understood.

What is the key takeaway? Politicians and entrepreneurs often find themselves at the mercy of market conditions. During economic booms, even poor decisions can lead to success: just recollect «the prosperous 2000s.» But in times of economic downturn, even the most well-planned, strategic and timely efforts can yield disappointing results.

Trump’s return to power signals that we are now in an era where risk-takers are replacing those who shy away from uncertainty. And this mindset isn’t just for politicians; it’s essential for anyone making decisions daily. Today’s market conditions create the perfect moment for Kazakhstan’s government to embrace bold, calculated risks.

We are incredibly fortunate. Looking at the broader region, Kazakhstan stands out as a country that has already undergone a transition of power. A new, younger leadership team has emerged, and our president is one of the few leaders committed to this new model of governance, one that prioritizes modernization and scalability across the entire state apparatus.

On the one hand, the urgent need for transformation is undeniable. On the other, attracting investment is equally critical. Over the past decade, Kazakhstan’s ratio of fixed capital investment to GDP has averaged below 17%. Preliminary data for 2024 suggests it has now fallen below 15%, even with a significant push in state-led capital investment last year. For comparison, in the years leading up to the 2008 financial crisis, this ratio consistently exceeded 20%, a more typical trend for a developing economy like Kazakhstan.

The fact that we are now below «normal» levels is evident in everyday life: overcrowded schools operating in three shifts, long hospital wait times and frequent accidents in housing and communal services enterprises that have suffered from chronic underfunding.

In its winter update on Kazakhstan’s macroeconomic forecast, the World Bank also highlighted the country’s infrastructure shortfalls. According to its data, Kazakhstan’s road network density is two to four times lower than that of comparable developing and developed countries. In terms of road quality, the country lags behind by about 50%.

Kazakhstan also has weaker access to fresh water than countries with similar geographic conditions and income levels, as well as lower broadband internet penetration. And that’s just a fraction of the challenges we face.

The current Kazakhstani government cannot be called a team of «risk dodgers.» Consider this: from 2020 to 2024, state budget expenditures grew by an average of 18% per year, compared to just 13% in the five years before COVID-19. The government has made extensive use of transfers from the National Fund and actively borrowed, despite high interest rates. Could it have chosen not to raise teachers’ salaries, not to invest in higher education, not to build schools or to pause road construction? In my view, these investments have been on pause for far too long.

Some argue that the cabinet has squandered public finances and should focus on living strictly «within its means.» But there’s another perspective: faced with mounting socioeconomic, demographic and infrastructure challenges, the government did not delay or turn a blind eye. Instead, it committed to finding effective, sustainable solutions, fully aware of the risks involved, to ensure we have a future to build upon.

For example, after identifying a projected shortage of 1.1 million student places in secondary schools by 2026, the government launched the Comfortable Schools national project at the president’s initiative. The project allocates 2.4 trillion tenge (approximately $4.8 billion) to finance the construction of 740 modern secondary schools from 2023 to 2025.

Similarly, amid rising accidents in energy and utility infrastructure and an increasing electricity deficit, the government consolidated modernization efforts into another national project for 2025-2029. With a total budget of 15 trillion tenge ($30 billion), including 1.5 trillion tenge in public funds, this initiative aims to overhaul the country’s energy sector.

These are just a few high-profile examples of how Kazakhstani officials are tackling complex challenges rather than shying away from the risks associated with bold decision-making.

The real economy and business sector, too, are waiting for similarly decisive actions. A key step, in my opinion, should be shifting institutional investors — particularly the Unified Accumulative Pension Fund (UAPF) — toward more active funding of Kazakhstani banks and domestic projects. The fund should provide long-term, stable financing for mortgage lending and infrastructure development. If managed professionally, this approach is not only more reliable but also far more profitable than investing in U.S. Treasury securities that yield returns below inflation.

This set of solutions would provide businesses with long-term capital, strengthen the economy’s fixed assets and create jobs and affordable housing for the population.

The proposed changes will require a bolder approach to monetary policy management. More than ever, what’s needed is not just theoretical knowledge of economic laws but a deep understanding of the feedback from decisions made, balancing on a fine line while grasping the complexities of processes at the state level. Ultimately, the burden of taking risks should not rest solely on the president. Avoiding risk is already proving to be extraordinarily costly.

Can Kazakhstan afford to lend to its economy? Yes. With one of the largest gold and foreign exchange reserves in the world, we can allocate both foreign currency and tenge to stimulate economic growth: building housing, creating jobs and investing in digitalization.

But every theoretical model has its limitations. For a risk-oriented leadership model, the primary constraint is trust. This isn’t just about public trust — elected politicians earn that through elections. Trust must also come from all key players in the system, including government officials, the national bourgeoisie and large and medium-sized enterprises.

This brings us back to a fundamental challenge that President Kassym-Jomart Tokayev has repeatedly emphasized: the urgent need to invest in the national economy. Progress cannot be made if decisions are shaped by mutual distrust. The government must place greater trust in businesses and the public, encouraging them to reciprocate. When trust is absent, even high returns won’t attract capital. This is why the tenge’s depreciation has not led to increased demand but rather further sell-offs, contrary to basic economic logic. Strong investments are built on a foundation of strong trust.

That’s why I am encouraged when I hear discussions about trust in our president’s speeches, something rarely addressed elsewhere in the world. Notably, President Tokayev launched his series of reforms by establishing the National Council of Public Trust, designed to restore fruitful dialogue between the government and society.

He has repeatedly emphasized mutual trust as a key principle in implementing his vision of a Fair Kazakhstan. Speaking about tax reform — one of the most widely discussed topics this year — he stated last fall that the new Tax Code is intended to reset the existing system and establish a fundamentally new tax administration based on trust in taxpayers.

However, a top-down approach to building trust is unfeasible. As experts in cryptography and neural networks would say, trust networks must function in all directions or they don’t function at all. Taking risks requires trust.

Today, the president is making bold moves, and the government has already proven itself to be a team willing to take risks. Now, it is up to businesses and society to uphold their end of the equation by fostering the necessary level of trust and embracing responsibility. Responsibility also means recognizing that, as a society, we must be prepared to contribute to the reforms we demand. This includes accepting potential tax increases and committing to greater transparency.

Building trust is never easy. But it is the foundation of success. If we remain united and trust our leaders as they push forward with critical reforms, we have a real opportunity to emerge from this moment in history as winners. During times of seismic change, it is crucial to accelerate, to lead, and not to hesitate. We must take risks, invest boldly and resist the urge to simply hoard resources out of fear.

We must trust each other. Trust the people around us. Trust the young generation that represents our future. And trust our leaders, who, in my view, genuinely care about the country and its future.