Research Informing Asset-Building Policy in Kazakhstan: The New National Fund for Children

Background: Social protection has become a key element in the strategy of development for Kazakhstan. As one of the low-to-middle-income resource-rich countries, Kazakhstan has been pioneering in starting several innovative social protection policies and services to address poverty and inequality. The well-being of children and families is at the center of the attention of Kazakhstan’s government. In 2024, Kazakhstan started a Child Development Account (CDAs) policy, the National Fund for Children. Under the new policy, 50% of the National Fund’s annual income from natural resources is allocated to a new National Fund for Children, which will support universal CDAs. The National Fund of the Republic of Kazakhstan is a repository for the nation’s natural resource revenue and associated investment returns.

Methods: The study applies qualitative approaches such as a desk review, a systematic review, and content analysis to understand the design of the National Fund for Children in Kazakhstan. The global CDA policies were also studied to compare the CDAs in Kazakhstan with other policies on their key features, such as eligibility, account platform, enrollment mechanism, financial deposits, asset-building purposes, and others.

Results: This research spurred interest and policy discussion over the next few years, and Kazakhstan CDAs were announced in 2023. The new policy reflected key policy design elements, supported by empirical evidence from a large-scale CDA policy experiment in the United States known as SEED for Oklahoma Kids (SEED OK). Built on the SEED OK universal design, Kazakhstan automatically enrolled all children in the country. As an account platform, Kazakhstan used the government’s financial institutions, such as Otbasi Bank and Finance Center, and second-level private banks. Each account receives an annual deposit from the National Fund for Children until the beneficiary turns 18. Deposits and earnings in the accounts will not be taxed, and the assets will remain inaccessible until the beneficiary reaches age 18. Accounts are linked to post-secondary education expenses or housing. If an account beneficiary does not use the funds within 10 years after turning 18, the assets will be automatically transferred to the individual’s pension account. Account holders can monitor their accounts through the Electronic Government of Kazakhstan or the Unified Accumulative Pension Fund. Kazakh citizens who leave the country before age 18 will retain rights to the funds. Parents and legal caregivers may use the funds in their child’s account if the child is unable to do so. A total of 6,919,131 children born from 2006 to 2023 (all children up to age 18) were enrolled. The first deposits of $100.52 per child were transferred from the National Fund for Children to CDAs for all children in Kazakhstan on February 1, 2024. The total distribution for the first year was $700 million U.S. dollars.

Implications: The nationwide universal CDA policy in Kazakhstan will improve the well-being and life chances of children. In addition to improving the financial inclusion, financial capability, and social and economic development of children, CDAs in Kazakhstan will contribute positively to the UN Sustainable Development Goal One (1) “End Poverty”.