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Middle Corridor

Kazakhstan Expands Middle Corridor Fleet as Caspian Sea Levels Fall

Containers are piling up on Kazakhstan's Caspian coast as they await shipment to Azerbaijan. A shortage of vessels and weather-related restrictions are delaying cargo along the Middle Corridor, a trade route connecting China and Europe while bypassing Russia. Kazakhstan plans to acquire five vessels and has ordered another six to expand maritime freight capacity. At the same time, falling Caspian Sea levels are limiting how much cargo existing ships can carry and complicating port operations. Yerkin Nygmetov, CEO of KTZ Express Shipping, described the container backlog at the New Silk Way international transport forum, held in Astana on October 15–16. According to Nygmetov, adverse weather conditions can restrict operations at Kazakhstan's ports for a total of up to 75 days a year. Freight Volumes Rise as Vessels Face Delays The Middle Corridor, officially known as the Trans-Caspian International Transport Route, runs through Kazakhstan, the Caspian Sea, Azerbaijan, and Georgia. From there, cargo continues to Turkey and Europe, including via the Black Sea. Following Russia's invasion of Ukraine in 2022, the route attracted increased interest from companies seeking to reduce their dependence on transit through Russia. According to Kazakhstan's national railway company, Kazakhstan Temir Zholy (KTZ), container traffic along the Middle Corridor reached 44,200 twenty-foot equivalent units (TEUs) in January–August 2026, an increase of 58% from a year earlier. A TEU is a standard measure of container capacity equivalent to one 20-foot container, approximately six meters long. During the same period, 419 container trains departed China along the route, compared with 228 a year earlier. The maritime section requires containers to be transferred from trains onto vessels in Kazakhstan and then back onto railcars in Azerbaijan. Waiting for an available ship increases delivery times, particularly during periods of heavy cargo arrivals. The World Bank has assessed the corridor's potential for growth. According to a study published in September, investments in transport infrastructure and better coordination of logistics procedures could more than triple trade volumes along the Trans-Caspian Corridor by 2040 and cut delivery times in half. The bank also projects that implementing the proposed measures could increase the combined GDP of nine countries connected to the route by 3.3% and create two million jobs. Kazakhstan Orders Vessels from China and Azerbaijan KTZ Express Shipping, a subsidiary of KTZ, plans to acquire five container vessels in 2026. Another six multipurpose dry cargo and container ships have been ordered from shipyards in China and Azerbaijan. By 2028, the company aims to expand its own fleet to 13 vessels with a combined deadweight tonnage of 96,000 metric tons. Deadweight tonnage refers to the maximum weight a vessel can carry, including cargo, fuel, supplies, and other variable loads. On October 15, Kazakhstan's Samruk-Kazyna sovereign wealth fund confirmed that two dry cargo vessels would be built at the Baku Shipyard under contracts signed in April 2026. Another four vessels have been ordered from China's Jiangsu Haizhongzhou Shipping Industry. Each is designed to carry up to 537 TEUs, with a deadweight tonnage of 9,900 metric tons. The...

Economic Growth

Kyrgyzstan Economic Growth: Government Targets 8% Annually

Kyrgyzstan has set a target of average annual real GDP growth of at least 8% and a 20% annual increase in foreign direct investment inflows through the end of 2030. Bishkek aims to achieve these goals by developing export-oriented industries, expanding transport routes, and attracting international capital. While recent international forecasts suggest growth could exceed 8% this year, sustaining that pace through 2030 remains a challenge. The government outlined the priorities at a meeting in Bishkek on October 21. Its plans include expanding production of export goods, modernizing trade and customs procedures, strengthening private property protections, and improving businesses' access to long-term financing. Positive Momentum Set to Continue The targets are set out in the National Development Program through 2030, adopted in June 2025. The program calls for nominal GDP to reach at least $30 billion and GDP per capita to rise to $4,500. International forecasts suggest Kyrgyzstan's economy will maintain strong growth in the near term, although a slowdown is expected. Following 11.1% growth in 2025, the IMF forecasts 9% growth in 2026 and 7% in 2027, while the World Bank projects 9.6% growth this year. However, both institutions have highlighted risks to the country's economic momentum, including a potential slowdown in re-export trade, weaker growth in Russia and China, rising energy prices, and tighter sanctions restrictions. To maintain rapid growth, Bishkek intends to support food processing, pharmaceuticals, chemicals, light manufacturing, machinery production, and mineral processing. The goal is to increase exports of domestically produced goods. Infrastructure-led Growth One of the country's largest infrastructure projects remains the China–Kyrgyzstan–Uzbekistan railway. Construction began in December 2024, with completion scheduled for 2030. The project is estimated to cost $4.7 billion, including $2.3 billion in loans from Chinese banks. China holds a 51% stake in the joint project company, while Kyrgyzstan and Uzbekistan each own 24.5%. The railway is expected to give Kyrgyzstan its first direct rail link to China and provide Uzbekistan with an alternative route to the Chinese market. For Bishkek, it offers an opportunity to generate transit revenue and develop logistics centers. However, the route's commercial viability will depend on freight volumes, tariffs, and the efficiency of border crossings. Another major project is the Kambarata-1 hydropower plant, which Kyrgyzstan is advancing jointly with Kazakhstan and Uzbekistan. Additional electricity generation capacity is needed, among other purposes, to support industrial expansion. On October 14, Kyrgyzstan's ambassador to Switzerland presented both projects to potential investors in Geneva. Bishkek also plans to encourage state-owned companies to issue Eurobonds, expand long-term financing through state banks, and develop the Tamchy special financial and investment zone to attract international capital. Logistics, information technology, tourism, and financial services have been identified as promising sectors. Risks At the same time, Kyrgyzstan's close economic ties with Russia create additional risks for its banking sector and foreign trade. The IMF has warned that exposure to international sanctions and weaknesses in financial oversight could disrupt banking relationships and cross-border trade. A further challenge is ensuring that major infrastructure projects benefit the wider...

Start-ups

Maksim Stepanenko’s Path from Kyrgyzstan to Silicon Valley

Maksim Stepanenko’s career has taken him from Aydarken in southern Kyrgyzstan to Silicon Valley. After co-founding Operator, an artificial intelligence startup acquired by OpenAI, he chose to step away rather than join the buyer. Stepanenko told The Times of Central Asia that he is now taking time off and working on new projects. From Aydarken to MIT Stepanenko was born in Aydarken, in Kyrgyzstan’s Batken region. Before entering university, he represented the country at the International Physics Olympiad. He received an honorable mention in Singapore in 2006, a silver medal in Iran in 2007, and a bronze in Vietnam in 2008. His route to the Massachusetts Institute of Technology was not immediate. After his first application was unsuccessful, he spent almost a year studying in Germany before entering MIT in 2009 to study computer science. While there, he worked as an undergraduate research assistant at the MIT Media Lab. Early Engineering Roles Stepanenko graduated in 2012. His early experience included two summer internships at Google and a role as one of the first software engineers at Locu, a startup founded by MIT graduates. Locu helped local businesses manage their online listings. A business could update its information once and distribute the changes across services including Yelp and Facebook. GoDaddy acquired the company in August 2013 for a reported $70 million. In 2014, Stepanenko joined cryptocurrency exchange Coinbase as employee number 21. Over five years, his work included Coinbase Commerce and the USDC stablecoin, as well as Coinbase Ventures. “I graduated in 2012 and moved to [San Francisco] to work here, at a different startup. Around 2013-2014, I started spending more and more time on crypto – Bitcoin Talk was the popular forum at the time. I was finding it more and more interesting. And then, at some point, I decided I wanted to explore working full-time in this space. At that time, there wasn't really any legitimate company in the space. Coinbase was the only company that was already relatively well known, at least here in Silicon Valley. So, I ended up joining Coinbase,” Stepanenko previously told Compound. Co-Founding Primer In 2019, On Deck’s Erik Torenberg introduced Stepanenko to Ryan Delk. The two co-founded Primer, an education startup offering online learning activities and, later, small in-person schools. [caption id="attachment_59010" align="aligncenter" width="1774"] Ryan Delk (left) and Maksim Stepanenko (right)[/caption] Primer initially focused on homeschooling. During the COVID-19 pandemic, it developed online clubs where children could pursue shared interests and work together on projects. The company later allowed children to create and run their own clubs. It then developed microschools, combining small groups of students with in-person instruction and digital learning tools. The company’s history records expansion to Alabama in 2025 and Texas in 2026. Primer raised a $3.7 million seed round in 2020, led by Founders Fund. In April 2022, it announced a further $15 million round, led by Founders Fund and co-led by Khosla Ventures. Stepanenko left Primer in November 2022. “I decided to step away from the company after...

Art and Culture

Threading a New Canon: Interview with Batima Zaurbekova

How does an artist born in a remote village in Kazakhstan become one of the country’s most recognized artists? “I realised that if I put in the work, I can achieve everything,” says Batima Zaurbekova, a pioneer of Kazakh tapestry, as she walks through Threads of Heritage at the Abylkhan Kasteyev National Museum of Arts in Almaty. The exhibition runs from September 25 to November 8, 2026. An energetic lady with a strong personality and a playful attitude, Zaurbekova is the subject of a retrospective marking her 80th birthday and consecrating a lifetime of artistic production, at a time when Kazakhstan, event after event, is gaining ever greater international cultural recognition. Video: TCA. Narration: Naima Morelli. It is indeed a momentous time to be in the art world in Kazakhstan. At the forefront of the discourses on de-coloniality in the arts, and among those contributing to a new canon of contemporary art, Kazakh artists like Zaurbekova embody what is truest to their culture and local specificity, letting it flow in the global discourse. [caption id="attachment_58628" align="alignnone" width="936"] Detail of Batima Zaurbekova’s The Bride’s Farewell (2003). Credit: Naima Morelli.[/caption] The passion with which Zaurbekova describes even the smallest technical details reveals her deep love for weaving. That devotion is also a political stance in the face of the Western canon of art history. The reclamation of an art canon which would belong to Central Asia started in the second half of the 20th century, when artists worldwide challenged the relegation of textiles to the category of craft. Starting from the very local arts of felt and weaving, and against the canon of Soviet painting, a generation of artists recovered something that was truly theirs and called it by its name: not simply craft, but art in its own right, with Zaurbekova at the heart of that movement. [caption id="attachment_58629" align="alignnone" width="2560"] Entrance display for Threads of Heritage at the Abylkhan Kasteyev National Museum of Arts in Almaty. Credit: Kirill Fedorov.[/caption] A matriarchal line While today biennales and fair around the world look for those artists whose cultural background is legible in their art, it wasn’t always like that. When Zaurbekova began weaving in the late 1960s, her teachers strongly discouraged her from devoting herself to weaving. Her teachers, many of whom had trained in Leningrad and Moscow, saw her as a painter, at a time when textiles were still considered a “lower” type of art, and far too slow and demanding. “I’d spend fifteen hours every day for days on end working on just one tapestry, and my teachers would tell me: ‘It’s so slow! In the same amount of time you could have painted three paintings already!” she tells me, laughing. They used to scold her with a Kazakh saying for it: “You’re digging a huge well with a small needle.” Zaurbekova was born in 1946 in Furmanovka, in the Moiynkum district of the Jambyl region, and grew up in Merke, where her family moved when she was in fifth...

U.S.-Uzbekistan Relations

Uzbekistan’s U.S. Package: What Supports the $12 Billion Figure?

Uzbekistan announced a package of 54 agreements and prospective initiatives that it valued at about $12 billion during U.S. Secretary of State Marco Rubio’s visit to Samarkand on October 19. The Ministry of Investment, Industry and Trade lists engine supplies from GE Aerospace for new Uzbekistan Airways aircraft as part of the package. The investment ministry makes that value conditional on implementation. The presidency’s account says a comprehensive implementation program will be developed for the agreements and initiatives. October’s $12 billion may include projects still awaiting finance or development, but the values assigned to them must have an identifiable basis in project estimates or specific transactions. The official announcements identify counterparties and sectors, but the evidence examined does not provide the individual values needed to reconstruct the $12 billion total. Earlier Announcements and Additional Value In November 2025, Donald Trump announced that Uzbekistan would undertake roughly $35 billion in purchases and investment in American sectors over the following three years. The stated total did not separate the amounts assigned to purchases and investment. Uzbekistani purchases from American suppliers and investment in American sectors cannot be counted as an equivalent inflow of U.S. capital into Uzbekistan. Purchasing American equipment and receiving American investment give Uzbekistani participants different roles in the financing and implementation of projects. In September 2026, Investment Minister Laziz Kudratov said projects worth $7 billion had already been completed within a $35 billion portfolio. UzDaily described the figure as one-fifth of the value of the previous year’s agreements, without identifying the completed projects or defining completion. A transaction-level account would show what equipment was delivered, which facilities were commissioned, and what contract payments were made, giving the value and completion date of each transaction. October’s $12 billion cannot be added to the earlier figures without reconciling the transactions included in each package and the values assigned to them. The matching $35 billion figures do not establish that Kudratov and Trump referred to the same transaction list. An October agreement could introduce a fresh transaction or add obligations within an existing project, but it could also cover work already reflected in an earlier valuation. A company’s reappearance in successive announcements does not establish which relationship applies. What the Agreements Establish American Resources Corporation and ReElement Technologies announced an October 19 agreement with Uzbekistan Technological Metals Complex and the Fund for Reconstruction and Development, advancing their November 2025 memorandum. ReElement’s release describes a further stage of technical and commercial work under an existing partnership, but it provides no valuation showing how that work contributes to the $12 billion total. The companies report successful processing of Uzbek-sourced tungsten into high-purity oxide. The planned demonstration at ReElement’s U.S. facilities is intended to evaluate commercial viability, processing efficiency, and scalability; preliminary engineering and economic modeling concern possible refining operations in Uzbekistan. In the financial sector, the investment ministry describes Franklin Templeton, Oppenheimer, Citigroup, and BlackRock as helping to attract capital, but does not explain whether or how these arrangements contribute to the $12 billion...

Tobacco

Kazakhstan Vape Ban Faces a Test Under Eurasian Economic Union Rules

Kazakhstan banned vapes two years ago, but anti-tobacco organizations now fear that new rules being developed by the Eurasian Economic Union (EAEU) could allow them back onto the market. Public health advocates have appealed to President Kassym-Jomart Tokayev, accusing the government's economic officials of attempting to weaken the restrictions. Undermining Prohibition? Since June 2024, Kazakhstan has prohibited the production, import, and sale of electronic cigarettes, vaping liquids, and certain smokeless tobacco products. This includes snus, a form of tobacco placed under the upper lip. Violations can result in criminal prosecution. The EAEU, which comprises Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia, is developing a common technical regulation for nicotine-containing products allowing manufacturers to operate under common standards across several national markets. The Coalition for a Smoke-Free Kazakhstan argues that the regulation, being developed at Armenia's initiative, could create a legal basis for resuming trade in products currently banned in Kazakhstan. However, a version of the proposed draft prepared by Russia's Agriculture Ministry in November 2025 explicitly states that products cannot be placed on the market in EAEU member states where their circulation is prohibited under national law. Compliance with common technical standards would therefore not, by itself, authorize vape sales in Kazakhstan. It remains unclear whether this provision has been retained in the text currently under negotiation. A Boon for the Treasury The coalition also accused Deputy Prime Minister and Minister of National Economy Serik Zhumangarin of pressuring the Ministry of Health. According to the activists, he has been pushing for approval of the regulation despite the ministry's objections. In July, Zhumangarin met with executives from Philip Morris International, a multinational tobacco company with manufacturing operations in Kazakhstan. According to the government, the deputy prime minister supported common EAEU rules that would take national legislation and public health commitments into account. The company presented plans to establish a laboratory in Kazakhstan to test nicotine-containing products, with the facility also intended to serve markets in other countries. The tobacco industry generates substantial revenue for Kazakhstan's budget. In 2025, excise taxes on tobacco products totaled 330.7 billion tenge (approximately $735 million). During the first three months of 2026, Kazakhstan exported $42.5 million worth of cigarettes. The Hookah Lobby In spring 2026, Kazakhstan also debated relaxing its anti-tobacco legislation by allowing hookah smoking in licensed restaurants and other food-service establishments. Hookah smoking has been prohibited in enclosed public places since 2020. Supporters of legalization argued that the restrictions had driven the hookah business underground. According to their estimates, approximately 22,000 establishments offer hookahs. They projected that licensing would generate more than 16 billion tenge annually (approximately $35.5 million) in government revenue. The anti-tobacco coalition opposed the proposal. Its leader, Jamilya Sadykova, warned that licensing would effectively legalize tobacco use in places where the government is supposed to protect customers and employees from smoke exposure. In August, the World Health Organization supported maintaining the existing ban. Nevertheless, hookahs continue to be offered in cafes and specialized establishments, and customers are periodically fined during police raids....