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World Bank Allocates $800 Million to Support Uzbekistan’s Market Economy Transition

The World Bank has allocated $800 million to accelerate Uzbekistan's transition to an inclusive and stable market economy. The government’s reform program, supported by the World Bank, aims to improve Uzbekistan’s business environment, increase agriculture, railways, and energy efficiency, improve public finance management, expand social services, and enhance readiness for environmental risks. Finance provided by the World Bank through highly concessional loans, is reported to offer the government low-cost, long-term repayment options "more favorable than those available in international financial markets." The financial package aims to achieve concrete results in the social protection system, combating gender-based violence, land security for farmers, business environment, public finance management, tackling climate change, water resource management, and environmental and climate assessment. It also includes reforming climate-sensitive investment in the railway and energy sectors. Uzbekistan has received $100 million from the World Bank in May to develop social protections. On 21 June, it was announced that Uzbekistan is the first country worldwide to receive payment from the World Bank for reducing carbon emissions through a policy crediting program and to date, has been awarded a $7.5 million grant for cutting 500,000 tons of carbon emissions.

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Tajikistan and Russia Explore Joint Oil and Gas Development Opportunities

Tajikistan and Russia are studying the possibility of jointly exploiting oil and gas fields in Tajikistan. At the intergovernmental commission meeting held in Dushanbe, Tajikistan's Prime Minister, Kohir Rasulzoda, and the Deputy Chairman of the Russian Government, Marat Khusnullin, discussed the development of mines. “We have given the Russian side a list of promising oil and gas fields in Tajikistan for joint development. We propose to continue working on finding common ground to implement a mutually beneficial project in this area,” Rasulzoda said. He said the Russian side's opinions were considered when making this decision. The Statistical Agency of Tajikistan provides information that in 2023, about 18,000 tons of oil were produced in the country, which isn’t enough to supply oil refineries. In this regard, oil products are imported to Tajikistan. Russia, the leading supplier, provides gasoline and diesel to Tajikistan without customs fees.

Central Asia Environment Kyrgyzstan Environment Kyrgyzstan Local Politics Kyrgyzstan International Affairs Business & Economy Kyrgyzstan Local Politics Kyrgyzstan Business & Economy

Kyrgyzstan Plans to Stop Importing Coal and Electricity by 2027

Kyrgyzstan plans to abandon coal imports within the next two years and stop buying foreign electricity by 2027. Speaking at a parliamentary group meeting, Energy Minister Taalaibek Ibraev announced that the country is already preparing to meet these challenges by actively developing the energy sector's infrastructure. Ibraev emphasized that the problem with transformers, which was relevant earlier, will be solved next year. Repairs have already been carried out in all 56 RECs (district electric networks), and five spare transformers have been provided for each of them in case of emergencies. A tender has also been held for purchasing one thousand transformers worth $58 million, of which $25 million are loan funds, $25 million is a World Bank grant, and $8 million is a Swiss grant. In addition, 600 thousand new meters are planned to be purchased. These measures will significantly improve the reliability of the country's electricity supply. The minister also noted that the country's generating capacity deficit is 300 to 400 megawatts. To solve this problem, solar power plants will be launched, allowing the country to scale down electricity imports. In addition, Ibraev announced plans to refuse coal imports in the next two years. The country is developing projects to introduce alternative energy sources and ensure energy independence. Problems with transformers in Kyrgyzstan have been acute over the past few years due to worn-out energy infrastructure and equipment shortages. Many transformer stations needed modernization, resulting in power supply failures. The government initiated large-scale transformer replacement and repair projects in response to these challenges.

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Kazakhstan Awaits Results of Nuclear Referendum; Exit Polls Indicate a “Yes” Vote

Kazakhstan is awaiting the official results of a referendum on whether to build its first nuclear power plant, though exit polls showed “yes” voters were in the majority, according to state-run media reports. The project could ease chronic energy shortages and reduce reliance on coal-fired facilities but is fraught with concerns about costs, transparency, and the legacy of the human and environmental cost of Soviet nuclear weapons testing decades ago. Led by President Kassym-Jomart Tokayev, Kazakhstan’s political establishment has backed the idea of peaceful nuclear power as a way to move the country forward and the referendum appears aimed partly at giving people a sense of agency after the trauma of Soviet testing at Semipalatinsk. But some opponents allege that authorities restricted their efforts to organize a “no” campaign with detentions and other pressure designed to lock in an expected vote in favor. Officials results had not been announced as of early Monday morning. Voting at polling stations in Kazakhstan ended at 8 p.m. on Sunday and turnout among eligible voters was 63.87%, according to the Central Election Commission. The highest turnout was in the Kyzylorda region (82.48%) and the lowest turnout was in the city of Almaty (25.39%). Turnout in Astana, Kazakhstan’s capital, was 50.81%. “The precinct referendum commissions have begun counting the votes. The counting process at each polling station must not exceed twelve hours from the start of the count,” the commission said. Additionally, more than 7,358 Kazakh citizens voted at polling stations abroad, including in Asia, South America, Europe, and the United States, according to Roman Vassilenko, Kazakhstan’s Deputy Minister of Foreign Affairs. He noted at a briefing on Sunday night that the referendum had been monitored by observers from regional organizations, including the Shanghai Cooperation Organization, the Organization of Turkic States, and the Astana-based Conference on Interaction and Confidence-Building Measures in Asia. The heads of the observer missions said the referendum was “open, free, and legitimate, with no violations detected at any polling stations,” Vassilenko said. Kazakhstan also invited observers from the Organization for Security and Cooperation in Europe, but the OSCE declined to send a delegation “due to heavy workload,” reported the state-run Kazinform news agency. The OSCE sent a mission to observe a 2022 referendum on constitutional changes in Kazakhstan and concluded that it took place “in an environment short of genuine political pluralism.” One critic of the rules surrounding the nuclear referendum is Tamara Yeslyamova, editor-in-chief of the Uralskaya Nedelya, a newspaper that has sparred with the government over the years. A judge issued her with a fine for 110,760 tenge ($230) after she conducted video interviews about the referendum on nuclear power with half a dozen people on the street, the newspaper reported. It said the judge concluded that the interviews amounted to a public opinion survey; the law says such a poll can only be done by a state-sanctioned entity.

Central Asia Uzbekistan International Affairs Kyrgyzstan Local Politics Kyrgyzstan International Affairs Kyrgyzstan Local Politics Kazakhstan Uzbekistan Business & Economy Kazakhstan International Affairs Business & Economy Kyrgyzstan Business & Economy Kazakhstan Business & Economy Uzbekistan International Affairs

Kyrgyzstan Returns Four Resorts to Uzbekistan with Additional Conditions Imposed on Kazakhstan

Shavkat Mirziyoyev, President of the Republic of Uzbekistan, has approved an agreement between the governments of Uzbekistan and Kyrgyzstan, to regulate the ownership and continued operation of four spa and recreation centers in the Issyk-Kul region. Kyrgyzstan's transfer of ownership of the four resorts to Uzbekistan determines the authorization for implementing property rights but as cited by one Uzbek publication “The recreational facilities aren’t given, they are returned!” In April 2016, the “Golden Sands of Central Asia” (formerly “Bosteri”), “Rohat-NBU” (formerly “Rakhat”), “Dilorom” (formerly “Enesay”), and the unfinished construction of “Buston", were transferred to the jurisdiction of Kyrgyzstan. Although located on the territory of Kyrgyzstan, the resorts previously belonged to JSC “Tashkent Mechanics Plant,” JSC “National Bank of Foreign Economic Activity,” JSC “Asakabank” and JSC “Uzsanoatkurilishbanki” of Uzbekistan. Back in 2016, the government of the Kyrgyz Republic, under Prime Minister Temir Sariyev, decided to seize recreational facilities from the Republic of Uzbekistan. This led to litigation in international arbitration and the facilities were immediately renamed. In September 2016, the Uzbek owners of resorts applied to the International Center for Settlement of Investment Disputes (ICSID). Uzbekistan considered that the 1992 agreement between the countries of the former Soviet Union, regulating the use of facilities left on the territory of other republics as a result of the collapse of the Union, was violated. According to this document, property belonging to one state but located on the territory of other CIS countries remains the property of its owners. Thus began a long series of arbitration discussions and efforts to settle the matter amicably, leading to the announcement of an agreement between the Kyrgyz government and the Cabinet of Ministers of Uzbekistan in December 2017, whereby the land plots of the resorts would remain the property of Kyrgyzstan whilst other properties would be returned to the ownership of the Uzbek side. After formalizing property rights, Uzbekistan would undertake to upgrade boarding houses to a level of three or four stars and ensure their operation throughout the year. The agreement, however, was not signed, and discussions continued. The dispute resolution review was completed in May 2023 in ICSID. Details of the deal remained confidential until Kyrgyzstan's president Sadyr Japarov, announced that the international court had decided that Kyrgyzstan should pay Uzbekistan more than $40 million. Following negotiations, the parties agreed to lease the facilities for investors from Uzbekistan for 49 years. The president then warned," We cannot invest in their renovation in the next 15-20 years because we have many other critical issues. We cannot talk about recreational facilities until we solve them." Whilst Article 2 of the agreement clearly states that the Kyrgyz side transfers the ownership of buildings and structures to the Uzbek side, the recent agreement does not provide a fixed period for the rental of the recreational facilities. Kazakhstan and Kyrgyzstan have long-standing problems with boarding houses, including those in the former's “University”, “Olympus”, “Samal” and “Kazakhstan”sports and health resorts, in Issyk-Kul. At the end of the 1960s, the USSR declared Issyk-Kul...

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Uzbekistan Ends Forced Labor, But Cotton Industry Faces New Challenges

Global Voices reports that Uzbekistan has succeeded in phasing out forced labor in its cotton industry, but now faces new challenges. The country has made progress in ending forced labor and modernizing its cotton sector, driven by economic and political reasons. Forced labor hurts businesses and the nation’s international image, which the government has aimed to improve since 2016. Cotton production accounts for 12% of GDP. Since 2017, the government has introduced major reforms to modernize Uzbekistan’s cotton industry, led by President Shavkat Mirziyoyev after he took office in 2016. By 2018, labor control was strengthened, and the cotton cluster system, which controls the entire production process, began to take shape. Today, almost all cotton is grown through 142 clusters. Cotton quotas have been abolished by 2020, and the minimum wage will now be negotiated. The same year, the International Labor Organization reported that child labor was no longer a problem, and the international boycott was lifted in 2022. Eradicating forced labor has been hailed as “one of the most significant victories anywhere in the world in the battle against forced labor in the twenty-first century,” said Bennett Freeman, co-founder of the Cotton Campaign in 2022. This achievement was possible thanks to the diligence of organizations such as human rights defenders of Uzbekistan and the Uzbekistan Forum for Human Rights, which monitored the cotton fields and recorded violations, as well as the government's promptness in reviewing these reports. Global Voices writes that despite the progress achieved in Uzbekistan's cotton industry, there are still serious problems. The report states, “Despite abandoning forced labor, the government still continues to exert strong control over cotton production and prevents farmers from fully operating on their own terms.” Farmers receive resources and loans, but the system remains inefficient, with state-set cotton prices often differing from global rates. The government and industry need to address these ongoing issues while pursuing international standards and export opportunities to build trust and transparency.