The 5 Largest Landlocked Developing Nations

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Credit: Photo by Christine Roy on Unsplash

The geographical location of a nation is often seen as a crucial way to gauge its competitive advantage, especially for trade by the sea route. However, more than one-fifth of the world’s nations are landlocked, which means that they do not have direct access to the ocean.

While a few of the landlocked nations in Europe such as Switzerland, Luxembourg, Austria, Hungry and Czech Republic are developed, there are 32 nations that are considered developing per UNCATAD. According to the UN, “The level of development in landlocked developing countries is about 20% lower than it would be were they not landlocked.”

Here's a look at the five largest landlocked developing nations based on Gross Domestic Product (GDP).

1. Kazakhstan

Kazakhstan, the largest landlocked nation by area is also the largest developing landlocked nation. The nation has the second largest endowment of oil in Eurasia and the 12th largest in the world with 30,000 million barrels of proven oil reserves. The economy of Kazakhstan has seen significant economic progress in the past three decades since its emergence as an independent nation.

GDP growth due to structural reforms, strong domestic demand, foreign direct investment and large oil reserves has placed Kazakhstan’s economy in the category of an ‘upper middle income’ nation by the World Bank. The size of its economy, which was $2.87 billion in 1992, grew to $236.64 billion by 2013. The plunge in oil prices in 2014 negatively impacted its economy, which shrank to $137.29 billion by 2016. Kazakhstan’s GDP is expected to be $193.61 billion in 2022 and expand further to $225.93 billion next year. Going by current estimates, IMF projects Kazakhstan’s economy to be $279.85 billion by 2027. Tengiz and Karachaganak are two biggest oil-producing fields in Kazakhstan, together producing almost half of its oil. 

2. Ethiopia

With a projected GDP size of $105.325 billion for 2022, the Federal Democratic Republic of Ethiopia is the second largest developing landlocked nation. According to the World Bank, in the 15 years till 2019, Ethiopia was among the fastest growing in the world (at an average of 9.5% per year). The pace of economic growth slowed to around 6% in the last two years due to the pandemic and the civil war, which erupted in November 2020. Ethiopia is projected to grow at 3.8% in 2022 before it catches pace starting with 5.7% growth in 2023 and reaching 7% by 2026. While Ethiopia managed to reduce poverty with consistent growth, the populous nation lags in terms of per capita GDP. Ethiopia, currently classified as a ‘low-income’ nation by the World Bank, is working to attain the ‘lower-middle-income’ status by 2025. Ethiopia has abundant natural and renewable resources. The country has the potential to generate over 60,000 megawatts of electric power from hydroelectric, wind, solar and geothermal sources. Coffee, cut flowers, oil seeds, khat, gold, pulses and leather are its major exports.

3. Turkmenistan

Turkmenistan is classified as an upper-middle-income nation since 2012 by the World Bank. The IMF projects its economy to grow to $76.59 billion in 2022 with a per capita income of $12,273.66. The economy will grow to the size of close to $120 billion with a per capita GDP of $17,928.58. The country faces the problem of a shrinking population led by huge exodus, falling birthrate and rising mortality.

 Turkmenistan is one of the five Caspian Sea coastal countries, an area with large volumes of oil and natural gas reserves. Its gas reserves are estimated to be the world’s fourth largest, representing about 10% of global reserves. Turkmenistan has not been a dominant player in energy markets because of the lack of infrastructure. However, over last few years, Turkmenistan has received high foreign investments from China and entered strategic partnerships mostly in the oil and gas sector. Turkmenistan is among the largest producer and exporter of cotton. In addition to cotton and natural gas, the country is rich in petroleum, sulfur, iodine, salt, bentonite clays, limestone, gypsum and cement. China is the single major export destination for Turkmenistan.

4. Azerbaijan

Azerbaijan has undergone significant economic development since its independence in 1991. Post-independence, its economy was devastated, and by 1995, Azerbaijan’s GDP was only 37% of what it had been in 1989. Gradually, the country began to tap its oil potential by entering contracts and partnerships. Azerbaijan signed the first major oil contract with international firms in 1994, and “the foreign direct investment surge and the construction of the Baku-Tbilisi-Ceyhan oil pipeline injected billions of dollars into the economy,” according to ADB.

An annual economic growth of 10% between 1996 and 2005 resulted in a sharp decline in poverty from 68% in 1995 to 29% in 2005. The production and exports of crude oil and natural gas are central to Azerbaijan’s economy, making its progress vulnerable to oil shocks. According to the World Bank, “The country needs reforms to boost private sector investment, reduce the state footprint, tackle issues of competitiveness, and develop human capital.” The GDP of Azerbaijan is projected at $73.37 billion in 2022 and is expected to reach $80.08 billion by 2027. It is classified as an ‘upper middle income’ nation by the World Bank.

5. Uzbekistan

Uzbekistan is a mixed economy. The size of its economy which is projected at $73 billion in 2022 is expected to grow to $130 billion by 2027. Among industries, mining, quarrying and oil and gas extraction are the leading contributors to its economy. With annual production of around 100 tons, Uzbekistan is one of the leading producers of gold worldwide. The Muruntau gold deposit is one of the largest individual gold deposits worldwide with resources more than 5,000 metric tons of gold.

According to International Energy Agency, “Uzbekistan, in 2019 launched a multi-phase multi-year transition from a state-owned and subsidized energy sector to competitive gas, oil and electricity markets with significant private sector participation and cost-covering energy prices.” The country is simultaneously working to harness its significant but largely unexploited solar and wind potential to build a cleaner power sector by 2030. Services is a leading sector of the economy contributing 36% to its GDP. Tourism is a segment with high growth potential and the government has initiated reforms to facilitate tourism development. The agricultural sector accounts for approximately 25% of GDP. 

Disclaimer: The rankings are based on IMF data for Gross Domestic Product released in April 2022. Nominal GDP is mentioned as GDP is at current prices, U.S. dollars. GDP per capita, current prices, U.S. dollars is interchangeably written as per capita income. Other data based on reports from mentioned sources. The report has been carefully prepared, and any exclusions or errors in it are totally unintentional. The author has no position in any stocks mentioned. Investors should consider the above information not as a de facto recommendation, but as an idea for further consideration.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Prableen Bajpai

Prableen Bajpai is the founder of FinFix Research and Analytics which is an all women financial research and wealth management firm. She holds a bachelor (honours) and master’s degree in economics with a major in econometrics and macroeconomics. Prableen is a Chartered Financial Analyst (CFA, ICFAI) and a CFP®.

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