The Design and Development of Child Development Accounts (CDA) in Kazakhstan

Background: The well-being of children in natural resource-rich Kazakhstan is at the center of the attention of the government. Since its independence from the Soviet Union, Kazakhstan has launched several child-friendly programs and services which supported the development, and protection of children. The President of the Country declared 2022 “The Year of Children” and during this year, Kazakhstan announced the launching of the National Fund for Children, a Child Development Accounts policy that will open savings accounts for children in 2024 and allocate 50% of the National Fund’s annual investment income from natural resource-rich revenues to children’s accounts to support them to accumulate assets from childhood. This study examines the development and design of the CDA policy and compares it with the CDAs in the global context.

Methods: The study applies the qualitative approach to interview key informants to understand the development and the design of the National Child Fund in Kazakhstan. We also conduct a systematic review of the global CDA policies (e.g., Singapore, Canada, the U.K., Taiwan, South Korea, Israel, and several states in the U.S.), and compare the CDAs in Kazakhstan with other policies on their key features, such as eligibility, savings platform, enrollment mechanism, financial deposits, asset-building purposes, and others.

Results: In Kazakhstan, the National Child Fund will be automatically opened at birth for every child. It is a universal account and covers all children of Kazakhstan. The government will deposit USD 150 till the age of 18. Families and account owners will not be allowed to withdraw money until they turn 18 years old. Savings are allowed to spend on education or buy housing. The Ministry of Finance will administer the CDAs and every year will transfer funds to each account. The accounts are recommended to be opened and delivered by the government banks such as Otbasi Bank, Finance Center, and a couple of private banks which will be collaborating with the governmental entity, Unified Pension Fund. After 18 years old, if owners will not use the funds, accumulated funds will be automatically transferred to their pension accounts. The CDAs in Kazakhstan share many policy features with the policies in other countries, following a CDA policy model initiated in the early 1990s.

Implications: The country is currently working on the implementation mechanism to deliver the policy at the beginning of 2024. The nationwide universal CDA policy in Kazakhstan will have an impact on the improvement of social justice in natural resource-rich countries and the financial inclusion of children. The accounts will also support children of Kazakhstan to start adult life confidently at 18 with some assets. CDAs also will help children to learn saving behaviors from a young age. There are about 15 million children saving assets in their CDAs globally, and this policy adds all Kazakhstan’s children to the global CDAs. The design, development, and implementation of CDAs in Kazakhstan will have important policy diffusion impacts for other countries.