Draft - The Times Of Central Asia

Viewing results 7 - 12 of 46

Oil Prices

Opinion: Kazakhstan, Oil, the Iran War and Dutch Disease

In 1977, The Economist coined a new term for the (potential) negative consequences of a short-term boom in natural resources: “Dutch disease.” The phenomenon got its name from an analysis of the decline of the manufacturing sector in the Netherlands following the 1960s natural gas discoveries at Groningen, in the northeastern Netherlands. The theory was that a surge in the price of a natural resource like oil or gas would likely cause currency appreciation, making imports cheaper and other sectors, like manufacturing, less competitive. Whether the recent spike in oil prices will contribute to Dutch disease in oil-rich Kazakhstan will likely depend on the length of the Iran war’s effect on oil prices (which could last well beyond the end of the conflict itself) and the government’s stewardship of Kazakhstan’s economy. President Kassym-Jomart Tokayev deserves credit for the government’s efforts to diversify the national economy. Investing in the nation’s manufacturing base, especially SMEs, educating the Kazakh workforce, and improving healthcare are all helping broaden the Kazakh economy and reduce the country’s dependence on oil. But oil is the main driver of Kazakhstan’s wealth, and while other sectors are increasing their share of Kazakhstan’s economy, oil and the wider extractive sector remain central to public finances, accounting for over 40% of government revenues. So, let’s do a deep dive on Kazakhstan’s oil. Most of Kazakhstan’s oil comes from the west of the country, including the Tengiz field near the Caspian Sea and the offshore Kashagan field in the northern Caspian. The Tengiz oil field is one of the deepest and largest oil fields in the world, while Kashagan, an offshore deposit, ranks as one of the largest global oil discoveries since the 1960s. Kazakhstan’s main export blend, CPC Blend, is a light, sweet crude, a desirable oil type that’s easy to refine into gasoline and diesel. Because the Iran war and restrictions around the Strait of Hormuz have disrupted tanker traffic and raised fears of supply shortages, global oil prices have climbed. And while high oil prices are generally a net positive for Kazakhstan, the current price - Brent crude was trading above $100 per barrel in mid-May 2026 - could present problems. In the short term, high oil prices tend to boost government revenues and budget surpluses. They can increase inflows to Kazakhstan’s National Fund, depending on production, tax receipts, transfers, and government withdrawal policy, and provide resources for government spending on infrastructure and social programs. They can also stimulate demand in related sectors, boosting Kazakhstan’s oil-related industries. And since oil exports typically make up more than half of the nation’s export revenues, high oil prices generally lead to a rise in Kazakhstan’s GDP. So far, so good. But high oil prices also carry risks. For one thing, they can strengthen the tenge and add to domestic demand, especially if higher revenues feed into faster government spending. Which is where Dutch disease comes in. As the stronger currency makes non-oil exports less competitive, capital and labor shift toward the energy...

Agriculture

Chinese Firm Eyes Virus-Free Potato Production in Kazakhstan

Kazakhstan is in discussions with China’s Inner Mongolia Muland Agricultural Technology Co., Ltd over the establishment of a high-tech facility to produce virus-free seed potatoes, according to the Ministry of Agriculture. The proposal was reviewed during a meeting between Agriculture Minister Aidarbek Saparov and the company’s CEO, Wei Jinglong. Virus-free seed potatoes are cultivated using in vitro techniques that eliminate pathogens and diseases, improving varietal purity and significantly boosting yields. Specialists estimate that such methods can increase output by 30-50% compared with conventional seed tubers. Saparov said potato farming remains a strategically important sector of Kazakhstan’s agricultural industry. In 2025, potatoes were planted on 131,000 hectares, with total production reaching 2.8 million tons. “Developing a technologically advanced domestic seed production system is a key priority for the sector. It is about building a sustainable foundation for food security,” Saparov said. He added that expanding biotechnology and scaling up the production of virus-free planting material would help reduce dependence on imports and enhance the competitiveness of Kazakhstan’s domestic breeding programs. At present, 22 specialized farms in Kazakhstan produce original and elite seed potatoes. Biotechnological laboratories, including the Kazakh Research Institute of Fruit and Vegetable Growing, play a crucial role. The Chinese company has expressed interest in building a laboratory and greenhouse complex using advanced technologies to produce micro- and mini-tubers, drawing on its experience implementing similar projects. “The project envisions launching industrial-scale production of high-quality seed material and developing export potential targeting Central Asian markets,” the ministry said. Company representatives indicated they plan to begin implementation in the near term, with the first batch of seed material expected within a year. The Times of Central Asia previously reported that another Chinese firm, Snow Valley Agricultural Group Co. Ltd, is planning to build a deep-processing potato facility in Kazakhstan’s Pavlodar region.

Antalya Diplomacy Forum

Central Asia Came to Antalya With a Clearer Voice and a Wider Agenda

The Antalya Diplomacy Forum, from April 17 to 19, brought together heads of state, foreign ministers, and senior officials at a tense moment in international politics. The official theme, “Mapping Tomorrow, Managing Uncertainties,” reflected the backdrop: war in the Middle East, pressure on trade, and growing doubts about the strength of international institutions. Central Asia did not dominate the gathering, but the region was visible across the program and in the meetings around it. Kazakhstan’s President Kassym-Jomart Tokayev was the highest-profile regional figure in attendance, while Kyrgyzstan sent Foreign Minister Jeenbek Kulubaev, Turkmenistan sent Foreign Minister Rashid Meredov, and Tajikistan sent Deputy Foreign Minister Farrukh Sharifzoda. Uzbekistan was also active through Foreign Minister Bakhtiyor Saidov in meetings held during the forum dates. The strongest Central Asian intervention came from Tokayev. Speaking at a panel session, he said the United Nations remains indispensable, but also made clear that its present structure is failing to keep up with current crises. “We must honestly acknowledge that the Security Council is the central element in the reform of the United Nations,” he said. He also warned that many key negotiations now take place outside the UN system, in separate capitals and closed rooms, rather than through the institution that was built for that purpose. Tokayev framed the problem in practical terms rather than abstract ones. He said global leaders must approach peace and security “with a strong sense of responsibility,” adding that “we must act more responsibly and exercise restraint.” Tokayev also said Kazakhstan calls on all countries involved in the Iran conflict to cease hostilities while keeping the focus on the core issue of nuclear proliferation. His language matched the line Astana has tried to hold for years: avoid escalation, preserve room for dialogue, and keep diplomatic channels open. Tokayev went further when he turned to the role of what he called “middle powers,” naming Kazakhstan and Türkiye among the states that, in his view, show a high degree of responsibility in both diplomacy and practice. He said it would “not be an exaggeration to say that today middle powers often demonstrate a greater degree of responsibility than major powers represented in the Security Council, which, regrettably, often obstruct the resolution of key global issues.” That was one of the sharper lines delivered at the summit. It also showed how Kazakhstan now wants to place itself in the world: not as a passive actor caught between larger powers, but as a state that can help steady an increasingly unstable system. Türkiye was central to that framing. At the start of his remarks, Tokayev praised President Recep Tayyip Erdoğan’s role in the region and said Kazakhstan was looking forward to Erdoğan’s state visit next month. That also reflects a broader trend of closer coordination between Kazakhstan and Türkiye, including in the Trans-Caspian transport route (Middle Corridor) and shifting Caspian dynamics. Uzbekistan approached the summit in Antalya differently. Tashkent did not have a presidential intervention on the main stage, but it used the gathering for...

Kazakhstan-U.S. Relations

No Longer a Startup Market: Kazakhstan Makes Its Case to U.S. Investors

Washington D.C. - Acting on President Kassym-Jomart Tokayev’s push to convert strategic alignment with Washington into tangible commercial gains, senior Kazakh officials told U.S. investors on April 14 that the bilateral relationship is entering a deeper phase focused on energy, critical minerals, and transport infrastructure. Within that context, the country has undertaken constitutional reforms and other modernization efforts to digitize and improve the investment climate. The Kazakhstan delegation was led by Erzhan Kazykhan, President Kassym-Jomart Tokayev’s Special Representative for Negotiations with the United States on priority issues of bilateral cooperation, and included National Bank Governor Timur Suleimenov and Deputy Foreign Minister Alibek Kuantyrov, who traveled to Washington for the meetings. Kazakhstan’s Ambassador to the United States, Magzhan Ilyassov, also participated. A Delivering Partner, Not a Prospective One Kazykhan presented the new commercial push as a direct outgrowth of Tokayev’s November 2025 Oval Office meeting with President Trump, casting the Kazakh leader as a partner in a more ambitious phase of U.S.-Kazakhstan relations aimed at converting political trust into practical cooperation on energy security, critical minerals, and strategic transport corridors. He placed that agenda within the framework of Kazakhstan’s participation in U.S.-backed regional diplomacy as well, pointing to Kazakhstan joining the Abraham Accords and President Trump’s broader peace initiatives. Kazykhan also highlighted Kazakhstan’s role as a founding member of the Board of Peace, noting that Tokayev signed its charter in Davos in January and participated in its inaugural meeting in Washington on February 19. Kazakhstan is positioning itself as a constructive U.S. partner not only in Eurasian connectivity and resource security, but also in Middle East stabilization through support for reconstruction, healthcare, education, and longer-term peace-building efforts. Kazakhstan is seeking to set itself apart as a partner that delivers. While many countries pitch cooperation with Washington in terms of future potential, Astana’s message is that engagement has already produced tangible commercial outcomes. Following the Oval Office meeting, 29 agreements had been signed, including with Cove Capital, Boeing, Cerberus Capital Management, and Wabtec, with a combined value of more than $17 billion. Kazykhan added that more than 600 American companies operate in Kazakhstan and that cumulative U.S. investment has exceeded $60 billion, making the United States the country’s largest foreign investor. [caption id="attachment_47222" align="aligncenter" width="1429"] Kazakhstan Deputy Prime Minister and Minister of National Economy Serik Zhumangarin; Special Representative for Negotiations with the United States, Erzhan Kazykhan; and Kazakhstan's Ambassador to the United States Magzhan Ilyassov meet with U.S. Secretary of State Marco Rubio on April 15 to strengthen commercial ties and advance regional cooperation. Image: USDOS[/caption] No Longer a Startup Market Ambassador Ilyassov said the discussion was more in-depth than a typical roundtable, because the relationship with U.S. partners has matured over many years. The tone of the session matched that description. The discussion centered on specifics of expansion, supply chains, regulation, and long-term capital rather than general market entry. [caption id="attachment_47219" align="aligncenter" width="2048"] Kazakhstan’s Ambassador to the United States, Magzhan Ilyassov; image: Kazakhstan Embassy, U.S.[/caption] Unlike the rest of Central Asia,...

Iran

How an Incident on the Azerbaijan-Iran Border Became a Test for Diplomacy in the Region

The drone strike on Azerbaijan's Nakhchivan Autonomous Republic on March 5 has become one of the most serious incidents in relations between Baku and Tehran in recent years. Azerbaijani authorities described the incident as a terrorist act and demanded explanations and an apology from Iran. Tehran, in turn, rejected the accusations, suggesting the possibility of a provocation by “third forces.” Following the drone incident, Kazakh President Kassym-Jomart Tokayev held a phone call with Azerbaijani President Ilham Aliyev to discuss regional security. According to the Azerbaijani presidency, Aliyev thanked Tokayev for condemning the attack on Nakhchivan and for voicing support for Azerbaijan. What began as a local security incident has raised concerns about regional stability in the South Caucasus. Terrorist Act Against the State Azerbaijani President Ilham Aliyev issued a statement strongly condemning "this despicable terrorist act. Those who committed it must be brought to justice immediately,” Aliyev said. According to Azerbaijan’s Ministry of Foreign Affairs, one drone hit the terminal building of Nakhchivan International Airport, while another crashed near a school in the village of Shekerabad. Two civilians were reportedly injured. Baku stressed that the attack, allegedly launched from Iranian territory, violated international law and could lead to a dangerous escalation of tensions in the region. Diplomatic Escalation Despite the harsh rhetoric in the first hours after the incident, Baku opted to rely primarily on diplomatic tools. The Iranian ambassador was summoned to the Azerbaijani Foreign Ministry and handed a formal note of protest requesting official explanations. Azerbaijan said on Friday that it was evacuating staff from its embassy in Tehran as well as its consulate in the city of Tabriz. At the same time, Azerbaijani security forces were placed on high alert. According to Aliyev, the country’s armed forces were instructed to prepare possible countermeasures. Turkish President Recep Tayyip Erdogan spoke by phone with Aliyev, condemning the attack and expressing support for Azerbaijan, according to official statements. Reports of alleged Iranian-linked sabotage plots also surfaced, with the Azerbaijani authorities stating that several terrorist attacks had been prevented on the country’s territory. According to the State Security Service, the Iranian Islamic Revolutionary Guard Corps was behind the plots. Among the alleged targets was the Baku-Tbilisi-Ceyhan oil pipeline, a strategic energy corridor linking the Caspian region with Turkey and one of the main routes for exporting Azerbaijani oil. According to Azerbaijani sources, other potential targets included the Israeli embassy, a synagogue in the capital, and a leader of the local Mountain Jewish community. The security service reported that three explosive devices had been brought into the country but were discovered and defused before they could be delivered. The development of the crisis has prompted increased diplomatic contact between world leaders. Russian President Vladimir Putin held a telephone conversation with Iranian President Masoud Pezeshkian amid the growing regional tensions. Shortly thereafter, Russia’s Foreign Ministry called on both sides to exercise restraint and emphasized the need for a thorough investigation into the drone strike. On March 7, the foreign ministers of all the Central...

Iran

Middle East Conflict Tests Central Asia’s Trade Routes and Energy Security

The escalating conflict between Iran, the United States, and their regional partners is raising economic concerns across Central Asia. Turkmenistan shares a long border with Iran, while other Central Asian economies depend on energy markets and trade routes that pass through or around the Persian Gulf. A wider conflict there could ripple across Central Asia through higher fuel prices, disrupted logistics, and pressure on key transport corridors. For countries such as Kyrgyzstan and Tajikistan, the most immediate risk is rising fuel prices. Both depend heavily on imported fuel. Kyrgyz security expert Taalaibek Jumadylov has warned that Kyrgyzstan could face rising prices for food, clothing, and other essential goods. For Tajikistan, the closure of the Strait of Hormuz would significantly increase import costs. Tajik media reports that trade between Tajikistan and Iran has grown rapidly over the past five years. Tajik-Iranian trade turnover increased from $377.7 million in 2024 to approximately $484 million in 2025, a rise of around 28%. Tajikistan’s exports totaled about $113 million, while imports from Iran exceeded $371 million, giving Iran a 4.5% share of Tajikistan’s total foreign trade turnover. If global oil prices rise significantly, Tajikistan could also face additional pressure on its budget. There are indirect risks as well: a slowdown in the economies of Russia, China, or other major partners could affect Tajikistan through trade, investment flows, and remittances. In Uzbekistan, analysts note that in recent years Iran has actively pursued transport diplomacy with Central Asia, seeking to strengthen its position as a regional logistics hub. Uzbek analyst Nargiza Umarova says this trend aligns with China’s Belt and Road Initiative. Iran and China signed a 25-year cooperation agreement in March 2021, a deal widely described as deepening Iran’s role in Belt and Road-linked connectivity. Kazakh economist Almas Chukin highlighted the logistical advantages of transport routes through Iran. “If we take the point where the Turkmenistan railway connects with Iran and the route to the Persian Gulf, it is about 1,200-1,500 kilometers. This is comparable to the distance from Astana to Almaty. Once you cover this distance, you reach the Persian Gulf and its major ports, where you can handle anything from oil transshipment to grain shipments. From there, sea transport to Rotterdam takes about three to four weeks,” he stated. Chukin added that such routes could simplify exports compared with transporting oil through Russia to Novorossiysk and then via the Black Sea, the Bosphorus Strait, and the Mediterranean. According to his estimates, a rail route to Europe through Iran would be about 3,500 kilometers from the Turkmen border. The economist suggested that if Iran’s political system changes and sanctions are lifted, Central Asia could benefit significantly. “This would be a huge shift for Central Asia: a region with a population of 80 million, abundant resources, and a young workforce, but constrained by geography, suddenly gaining direct access to global markets,” Chukin argued. Some analysts also point to emerging competition among regional transport corridors. In the South Caucasus, a proposed Zangezur corridor has been promoted...