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Japan-Backed Tunnel Project Begins on Kyrgyzstan’s Bishkek–Osh Highway

Construction has begun on a 750-meter tunnel along Kyrgyzstan’s vital Bishkek–Osh highway, the country’s only overland route connecting the northern and southern regions. The project marks a major step in modernizing national transport infrastructure and improving safety in an area prone to rockfalls, landslides, and harsh weather conditions. The tunnel is being built at the 400-kilometer mark of the highway by Japan’s Takenaka Civil Engineering & Construction Co., using advanced Japanese technologies designed to meet the region’s complex geological challenges. A formal groundbreaking ceremony took place on June 19, attended by Kyrgyz Transport and Communications Minister Absattar Syrgabayev and Japanese Ambassador to Kyrgyzstan Hideki Goda. Minister Syrgabayev described the tunnel as a key solution to the dangers posed by the mountainous terrain. “In this area, the risks are high. A tunnel is the safest and most reliable solution,” he said. Stretching 655 kilometers, the Bishkek–Osh highway runs through the regions of Chui, Talas, Jalal-Abad, and Osh, linking the capital with the country’s second-largest city. It plays a crucial role in both domestic mobility and regional trade, forming part of international corridors that connect Kyrgyzstan with Kazakhstan, Uzbekistan, Tajikistan, and China. The tunnel reflects the government’s continued efforts to strengthen the safety and reliability of one of its most important infrastructure assets.

Business & Economy Uzbekistan Environment Uzbekistan

Uzbekistan Startup to Build First National EV Charging Network

A Tashkent-based startup is set to build Uzbekistan’s first national electric vehicle (EV) charging network, marking a significant step in the country’s push toward clean energy and technological self-reliance. Pulseev, established earlier this year, aims to install 500 EV charging stations across Uzbekistan by 2026, with a long-term target of 3,000 stations by 2030. Its first large-scale charging hub, now under construction, will include more than 50 charging bays, complemented by modular cafés, coworking spaces, and a children’s playground. Designed and assembled locally, Pulseev’s chargers are tailored to Uzbekistan’s energy infrastructure and climatic conditions. The stations will offer fast charging, mobile app integration, and remote monitoring, features aimed at simplifying the user experience. “We’re not just installing hardware,” said co-founder Jasurbek Khodjaev. “We’re creating spaces where people feel proud to power their vehicles with clean energy, while families enjoy time together.” The initiative aligns with Uzbekistan’s broader strategy to invest in renewable energy and improve energy efficiency. The government has expressed strong support for EV adoption and digital infrastructure as part of efforts to reduce dependence on fossil fuels and modernize the national grid. Pulseev’s long-term vision includes expansion into other Central Asian markets and the Middle East. The company promotes a concept it calls “energy freedom,” advocating for democratized access to clean energy not only for transportation but also for everyday life. “This is about dignity, independence, and innovation,” said Mukhammad Khalil, founder of Startup Garage, a regional accelerator supporting Pulseev. The project also reflects a broader shift in Central Asia’s startup ecosystem, with increasing emphasis on indigenous technological solutions to local challenges. By developing EV infrastructure domestically, Pulseev positions itself as a key player in shaping the region’s sustainable transport future.

Business & Economy Kazakhstan Kazakhstan Business & Economy

Kazakhstan’s Youth Face Barriers to Entrepreneurship

A recent analysis by the analytical portal Ranking.kz reveals a concerning stagnation in youth entrepreneurship in Kazakhstan. Despite government rhetoric promoting innovation and small business, the number of young individual entrepreneurs has remained nearly flat over the past two years. Youth Entrepreneurship by the Numbers As of the end of Q1 2025, Kazakhstan recorded 736,100 individual entrepreneurs (IE) under the age of 35. Of these, 698,900 are active. The growth rate over two years is just 0.2%, signaling stagnation rather than progress. The decline in young entrepreneurs' share of the total business landscape underscores this trend. In 2023, they made up 50.9% of all active IEs; by 2025, that figure dropped to 47.3%. According to the National Statistics Bureau, today’s young entrepreneur in Kazakhstan is more likely to be a woman (55.4%) than a man (44.6%). Urban residents dominate the demographic, comprising about 75.3% of the total, while rural entrepreneurs represent only 24.7%. Sectoral Growth and Decline Trade remains the leading sector for young entrepreneurs, employing 303,300 individuals, though it saw no growth over the past year. The most significant expansion occurred in transportation and logistics, which grew by 90.1% to 49,700 entrepreneurs. Construction also showed positive movement, with a 10.7% increase, totaling 21,000 entrepreneurs. In contrast, other sectors experienced contraction: agriculture dropped by 25.1%, manufacturing by 11.9%, and real estate by 2.8%. These declines suggest a shift away from traditionally accessible sectors for new entrepreneurs. Geographically, growth was concentrated in major urban centers. Almaty leads with 121,200 active young entrepreneurs, followed by Astana (89,500) and Shymkent (62,100). Modest gains were also observed in the Almaty, Kostanay, Pavlodar, and North Kazakhstan regions. The Ulytau region registered the lowest number, with just 6,700 young individual entrepreneurs. Barriers to Growth The Atameken National Chamber of Entrepreneurs' 2024 "Business Climate" rating provides insight into regional variations in the ease of doing business. Entrepreneurs in Shymkent, Kyzylorda, and Ulytau reported the most favorable conditions. Conversely, Astana, Pavlodar, and North Kazakhstan ranked lowest. Key challenges cited by entrepreneurs include: High tax burdens (44% of respondents) Excessive bureaucracy and a complex licensing system (43.1%) Frequent inspections by regulatory authorities (42.4%) Corruption, especially in land allocation and public procurement These issues are reflected in the National Bank's 2025 Q1 business sentiment survey, where 31.4% of respondents cited taxes as the primary obstacle, while 30% pointed to broader economic conditions and high competition. Despite a vibrant and youthful potential workforce, Kazakhstan’s business environment continues to present structural challenges that deter innovation and sustainable growth. Addressing these barriers will be critical if the country is to harness its demographic dividend and support the next generation of entrepreneurs.

Business & Economy Kyrgyzstan Kyrgyzstan Business & Economy

Kyrgyzstan to Introduce Mandatory QR Code Tax Payments

Beginning July 1, 2025, all taxes and insurance contributions in Kyrgyzstan must be paid exclusively using a unique payment code or QR code. The change was announced by the press service of the State Tax Service (GNS) of the Kyrgyz Republic. The new system will apply to taxes, non-tax revenues, and mandatory insurance contributions. Taxpayers will be able to generate a QR code through their account on the State Tax Service website or via a dedicated mobile application. Alternatively, QR codes can be obtained at Business Service Centers or local tax offices. Mirlan Rakhmanov, Deputy Chairman of the State Tax Service, emphasized that the shift to QR code payments is designed to enhance transparency and streamline the payment process. “Payment via QR code enables real-time crediting of funds to the state budget, eliminates manual entry errors at banks, accelerates service delivery, and reduces the need for queuing,” Rakhmanov stated. Banking sector representatives who attended consultations with tax officials expressed readiness to support the transition. The State Tax Service confirmed that banks are technically equipped to implement the new system without disruptions. The announcement comes as part of a broader package of reforms aimed at modernizing tax administration. The agency reported that it has intensified analytical efforts to combat tax evasion, particularly schemes involving the artificial fragmentation of businesses to qualify for tax benefits intended for small enterprises. “The State Tax Service possesses the digital tools necessary to monitor economic activity, including through data-sharing arrangements with other government agencies,” the statement added.

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The Battle for Control Over Central Asia’s Digital Future

Central Asia is digitalizing quickly. Governments across the region have invested in smart cities, 5G, and AI-powered platforms. Kazakhstan ranks 24th in the world in global e-government indexes, and in Tashkent and Bishkek, young, tech-savvy populations are pushing for innovation. But such progress is not without risks. A new report from the German Marshall Fund (GMF), a Washington-based think tank, outlines how Central Asia is becoming ever more reliant on Chinese and Russian technology. These two countries, the report argues, are using digital tools not just to supply infrastructure but to shape how governments in the region manage data, surveillance, and speech. Beijing and Moscow’s tech exports act as snares, tying customers into their own economies. “Central Asian governments are aware of these challenges,” Dylan Welch, the author of the report and a China analyst at the GMF, told The Times of Central Asia. But he notes that it can be difficult to convince policymakers to prioritize the dangers of such overexposure. “For the national leaders, their imperative is to deliver economic growth because they have these young, dynamic populations that need jobs… if they don't deliver on that, then they're in for a long period of instability at home,” he said. This makes Chinese and Russian offers to develop their digital industries extremely tempting. An Entrenched Presence The report coincides with a flurry of Russian and Chinese engagement in the region. Over the weekend, Kazakhstan announced that between them, Beijing and Moscow will be responsible for delivering a new generation of nuclear reactors to the country, currently leaving French and Korean alternatives out in the cold. Then came this week’s visit of Chinese President Xi Jinping to Astana for a summit with the five Central Asian leaders. On the digital front, one notable announcement from this summit included a plan to develop an Artificial Intelligence Cooperation Center in Kyrgyzstan. China has used the term “Digital Silk Road” to describe its investments in Central Asia, and it has built much of the physical infrastructure behind the region’s digitization drive. For its part, Russia has exported its software, legal models and surveillance practices. Taken together, these systems are helping local governments tighten control over digital life. “This strategic integration makes it more difficult for regional states to diversify in the future, even though many continue to pursue multi-vector foreign policies aimed at balancing global partnerships,” Yunis Sharifli, Non-Resident Fellow at the China-Global South Project, told TCA. Where the Vulnerabilities Lie The report uses a “technology stack” framework to explain the problem. This framework looks at five layers: network infrastructure, data storage, consumer devices, digital platforms, and government policies. Across these layers, it argues, Central Asia is exposed to Chinese and Russian influence. Take Kazakhstan. It may be the most advanced digital economy in the region, but most of its internet traffic still passes through Russia. Telecom firms across the region are also required to install a Russian-made surveillance technology known as SORM (System for Operative Investigative Activities), which can intercept internet...

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Opinion: The U.S. Dollar Loses Its Luster as the Uzbek Som Shines

From May 20, 2025, to June 19, 2025, the U.S. dollar declined from 12,885 Uzbek som to 12,625 som, reaching its lowest level since early December 2023. This trend is anticipated to persist. Over the past 30 days, the dollar has depreciated by 2.08% against the som. The Central Bank of Uzbekistan adheres to a flexible exchange rate mechanism, commonly referred to as a floating exchange rate. This approach allows the value of the Uzbek som to be primarily influenced by market forces of supply and demand, rather than being fixed or pegged to another currency. In the context of Uzbekistan, the Central Bank defines the market-determined exchange rate, permitting the som to fluctuate freely based on the interactions between buyers and sellers in the foreign exchange market. In 2017, Uzbekistan transitioned to a flexible exchange rate regime, aligning the som with market conditions and narrowing the gap between the official and parallel exchange rates. This move is expected to enhance export competitiveness, as noted by the European Bank for Reconstruction and Development (EBRD). While the market predominantly determines the exchange rate, the Central Bank reserves the right to intervene in the foreign exchange market to mitigate excessive fluctuations or address significant imbalances. However, it does not maintain a fixed exchange rate. The primary objective of the Central Bank is to uphold price stability, ensuring low and stable inflation. The flexible exchange rate regime empowers the Central Bank to utilize interest rates as a tool to influence inflation and manage the overall economy. Since 2020, the Central Bank of Uzbekistan has been implementing an inflation targeting framework that guides its monetary policy decisions, including those related to the exchange rate. Uzbekistan has recently achieved a remarkable milestone, with its international reserves soaring to an unprecedented $49.6 billion, primarily driven by a substantial increase in gold prices. This significant figure, recorded at the end of last week, represents the highest level of international reserves since the Central Bank of Uzbekistan began tracking this data in 2013. Uzbekistan has been on a remarkable journey of financial growth, marked by a sustained increase in its reserves over the past five months. Since the beginning of the year, the country's reserves have increased by an impressive $8.48 billion, reaching a new historic high of $49.66 billion. In May alone, the reserves saw a substantial boost of $410.2 million, translating to a 0.8% increase compared to April. This consistent upward momentum not only highlights the resilience of Uzbekistan's economy but also demonstrates its ability to adapt and thrive in a dynamic global landscape. Central to this financial ascent has been the role of gold, which has enjoyed significant demand due to its elevated prices in international markets. Over the last month, gold prices surged by 3.27%, rising from $3,280 to $3,390.07 per ounce. When examining the broader trends, it is evident that gold has significantly appreciated, with a striking 25.5% increase since the start of this year and an even more impressive 41.3% surge over...