Gross external debt is a sum of the external debt guaranteed by the Government and the debt of private companies without government guarantees. The Government’s portion of the external debt is represented by direct credits from international financial institutions and the Governments of other countries, as well as by the two Eurobond issues.

Kazakhstan’s total external borrowing of has increased significantly from USD 1.9 billion in early 1994 to USD 5.9 billion as of the beginning 1998. Within the gross external debt, there was a significant increase in the portion of debt which is not guaranteed by the Government, which is, in fact, the borrowing of second tier banks and private companies. These types of legal entities had not virtually existed before 1994 (or were not capable to borrow abroad), which explains the negligible amount borrowed by that type of borrower before 1995. Foreign trade contracts (mostly, import contracts), the payment on which is due, represent the portion of external debt which we call "companies’ contracts", and it has increased dramatically since 1995.

The table presented below shows the position of Kazakhstan’s external debt compared with other CIS countries. Its ratio of external debt to GDP is modest; higher than in politically isolated, communist-oriented Belarus (9%), and much lower that in heavily burdened Turkmenistan (99%). Although in absolute terms the Kazak external debt is higher than those of other CIS countries, with the exception of Russia and Ukraine, it reflects the country’s ability to attract foreign capital. It also shows that Kazakhstan did not have to focus so much on financing repayment of earlier debts (as Russia or Ukraine). Kazakhstan’s external debt coverage ratio is realistic at 78% of exports, as opposed to 640% in Georgia or 147% for Russia. We also would like to stress that since the beginning of 1998, Kazakhstan has not taken steps towards increasing its external debt with just few exceptions of borrowing by second tier bank. On the other hand, Russia received multibillion dollar rescue packages from the IMF and other international financial organisations, and saw a series of eurobond issues by municipalities and corporations.