Kazakhstanâs $600 Million Scandal Exposes Collapse of Regional Development Funds
A state audit in Kazakhstan has revealed serious shortcomings in the performance of regional development corporations (SPCs). Over nearly two decades, these bodies have failed to deliver meaningful economic growth despite receiving billions in public funding. The findings also exposed widespread financial mismanagement and a lack of proper oversight.
The Supreme Audit Chamberâs report highlighted that 13 regional SPCs received 288.6 billion tenge in budgetary funds over the past five years. Yet no unified legal framework exists to regulate their operations. Instead of driving investment, activity within the corporations has ground to a halt, with investor trust severely weakened.
The audit uncovered extensive financial problems. Irregularities totalled 137.9 billion tenge, while 33.6 billion tenge had been misallocated. Accumulated losses across the 13 SPCs reached 209.5 billion tenge. Many had also established unprofitable subsidiaries, later liquidating them, while struggling under heavy debt burdens. Transparency issues were another major concern. Corporations managing municipal assets did so without mandatory approvals or clear oversight. In response, the report announced plans to designate the Finance Ministry as the controlling authority for these regional development bodies.
The auditâs findings confirm that SPCs have not fulfilled their intended role of stimulating local economies. With billions in losses, mismanaged funds, and a lack of regulatory clarity, the corporations now face stricter oversight. The Finance Ministry will take charge of monitoring their activities moving forward.
