The Alatau Effect: Why Kazakhstan needs a new metropolis that operates by its own rules

May 22, 2026

Alatau is intended to be more than just a new city near Almaty; it is a place where Kazakhstan will attempt to tackle several major challenges at once: relieve congestion in the southern capital, attract investors, launch new technologies, and test special governance rules. The project is already promising air taxis, crypto payments, digital services, new districts, and major investments. But the main question lies elsewhere: can a city with its own constitutional law truly operate faster and more efficiently than the usual bureaucratic system? Tengrinews.kz discussed this with experts.

A Special Law

Another key idea is to shield the project from the usual dependence on the central government and the constant redistribution of funds. Until 2050, Alatau is exempt from having its revenues transferred to the national budget. The plan is for the funds earned by the city to remain within the city and be used for its own infrastructure.

But the main foundation of Alatau is not air taxis, skyscrapers, or even cryptocurrency. All these plans may remain nothing more than a pretty facade, if the city follows the same bureaucratic path as ordinary territories. That is precisely why, in May 2026, the President signed the Constitutional Law “On the special legal regime of the city of Alatau” .

This is an important precedent for Kazakhstan. Previously, special conditions were created for individual organizations, industries, or territories such as the AIFC. Now, an entire city is being granted a special legal regime—with its own governance system, specific rules for investors, and priority in decision-making within the framework established by law.

The Main Question

Essentially, the state is launching a major governance project. The goal is to create, within Kazakhstan’s legal framework, a territory where decisions are made more quickly, the rules of the game remain stable, and development does not get bogged down in endless approvals.

Alatau must demonstrate which is more difficult: attracting investment and constructing buildings, or establishing institutions capable of operating without direct oversight.

We spoke with Sabina Sadiyeva, an expert in public administration, and Timur Odilov, one of the developers of the constitutional law, about the project’s underlying mechanics, its strengths, and its main risks.

Why Standard Incentives Are Not Enough

The first question, that arises when analyzing the project is: why did the government need to draft a constitutional law, when Kazakhstan has long had an established mechanism for special economic zones? At first glance, Alatau could also be developed through incentives, preferential treatment, and special conditions for investors.

But the drafters and experts emphasize: treating Alatau as just another SEZ or industrial zone with incentives is a fundamental mistake. In the case of the new city, the issue is not about tax breaks within the old system, but about an attempt to change the management system itself.

"An SEZ is, as a rule, merely a tax and customs regime within the general system of legislation and public administration. That is, simply preferences for certain types of activities, while regulation and bureaucratic processes remain the same as everywhere else. In the case of Alatau, we are talking about a much more profound model—a special legal regime with separate mechanisms for economic regulation, governance, and decision-making,” explains Timur Odilov.

Sabina Sadiyeva puts this difference even more bluntly: A SEZ is an economic regime—that is, incentives within the old administrative system. A constitutional law is an institutional regime: a new administrative system and new rules.

"A SEZ is exclusively an economic and fiscal tool. Within a SEZ, an investor receives incentives but still follows the same bureaucratic channels, coordinating projects with ministries, committees, and local administrations. The constitutional law creates a fundamentally new institutional architecture and governance regime. It changes the governance environment within which Alatau will be able to take shape precisely as a development project,” says Sadiyeva.