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Kazakhstan to Launch AI Fund Backed by National Bank

Kazakhstan will establish a dedicated Artificial Intelligence Fund to finance digital and educational initiatives, Deputy Prime Minister and Minister of Artificial Intelligence and Digital Development Zhaslan Madiev announced at an expanded government meeting. According to Madiev, the fund will be capitalized using resources from the National Bank, with the government currently finalizing its financial and organizational structure. The fund is expected to serve as the main vehicle for identifying and supporting priority AI and digitalization projects, as well as educational programs. Madiev cited international precedents, noting that leading technological nations allocate between 4% and 6% of GDP to digital development and artificial intelligence over three years. Based on ministry projections, such investments could yield a multiplier effect of 5 to 1, with the potential to contribute up to 1.5% of GDP annually in additional economic growth. One of the fund’s key focuses will be integrating AI solutions into Kazakhstan’s public and quasi-public sectors. Simultaneously, the country is pursuing international tech partnerships. With presidential backing, Kazakhstan has approved the creation of a joint venture with Chinese artificial intelligence firm 01.AI. Scheduled to launch in March, the venture will operate the National Artificial Intelligence Platform and focus on developing AI agents to enhance public sector decision-making. 01.AI is a startup founded by former Google China CEO Kai-Fu Lee. The company is best known for its open-source language model Yi-34B, positioned as an alternative to ChatGPT. At the meeting, President Kassym-Jomart Tokayev emphasized that AI is a foundational pillar of Kazakhstan’s emerging economic model. Anticipated benefits include increased labor productivity, growth in export-oriented industries, higher production of high value-added goods, and deeper integration into global digital networks. However, Tokayev also cautioned against using insufficient digitalization as a scapegoat for systemic inefficiencies. “Technology should not serve as an excuse for management shortcomings,” he noted. As previously reported by The Times of Central Asia, Kazakhstan joined OpenAI’s “Education for Countries” initiative, aimed at integrating AI tools into national education systems.

Economy

Kazakhstan Targets Raising Wage Share of GDP to 40%

The Kazakh government is preparing a series of measures aimed at accelerating wage growth and increasing the overall wage fund, with the goal of raising its share in the country’s GDP to 40%, Prime Minister Olzhas Bektenov announced during an expanded government meeting. According to government estimates, household incomes are currently growing more slowly than the broader economy and corporate profits, including those generated with state support. At present, wages account for roughly 31% of Kazakhstan’s GDP, a figure considered relatively high by Central Asian standards but still below the levels seen in developed economies, where wage funds typically exceed 40% of GDP. Kazakhstan’s GDP growth in 2025 reached $20.1 billion in monetary terms, with the economy expanding at an annual rate of 6.5%, according to official data. To address the income gap, the government is developing a comprehensive package that includes financial, tax, and regulatory incentives for employers to raise wages. The initiative also prioritizes the creation of new, decently paid jobs, upskilling of the workforce, and reducing the financial burden on citizens. Real income growth has been designated a key economic policy priority for 2026. A complementary role will be played by the upcoming Joint Action Program for 2026-2028, developed by the Cabinet, the financial regulator, and the National Bank. The program aims to stabilize the macroeconomic environment and improve public welfare, setting a target of household income growth at a rate of at least 2-3% above inflation each year. According to official statistics, the average monthly salary in Kazakhstan stood at approximately $873 by the end of the third quarter of 2025. However, earlier reports indicated that the minimum wage will remain frozen at $172 in 2026, despite prior commitments to increase it.

Crypto Market

Kyrgyzstan’s Crypto Market Generates More Tax Revenue Than Country’s Largest Bazaar

Kyrgyzstan’s virtual asset market has rapidly become one of the fastest-growing segments of the national economy. In the first nine months of 2025 alone, the country’s cryptocurrency turnover exceeded $7.9 billion, a figure that industry insiders believe could continue to rise substantially. Kyrgyz law currently permits fully legal cryptocurrency transactions, and the authorities are actively working to enhance regulation and oversight. According to official figures, the total volume of crypto transactions last year surpassed $20.5 billion, generating $22.8 million in tax revenue. Temir Kazybaev, Chairman of the Association of Virtual Asset Market Participants, told The Times of Central Asia that tax income from crypto turnover has already outpaced revenue collected from the Dordoi bazaar, Kyrgyzstan’s largest commodity trading hub, as well as the total from voluntary patent fees. “Just over $7.9 million in taxes was collected from the Dordoi bazaar over the year. Patent tax collection totaled $13.6 million. In other words, the entire market and all individuals in Kyrgyzstan working under a patent paid as much tax as was collected from cryptocurrency turnover,” Kazybaev explained. He noted a significant shift in public perception of the sector. “A few years ago, most Kyrgyz people saw the crypto market as a scam or a pyramid scheme. That perception is changing. People and businesses now see it as an opportunity. This is in large part because President Sadyr Japarov is personally invested in the topic,” Kazybaev said. He also highlighted recent developments in the market’s professional infrastructure. “The development of virtual assets is a critical area. As far as I know, the National Council on Virtual Assets has a dedicated secretariat, and our association is deeply involved in this work. Educational events are being held actively. We are training compliance officers, including those focused on crypto, and we’ve already trained two groups of accountants in crypto asset accounting,” he said. As of early 2026, more than 200 crypto exchanges and 11 mining companies are officially registered in Kyrgyzstan. The sector received a further boost with the launch of the USDTKG digital asset, a token said to be backed by Kyrgyz gold, which is gradually gaining domestic recognition.

Electric Vehicles

Kyrgyzstan to Install Electric Vehicle Charging Stations in Key Tourist Region

State-owned Chakan GES OJSC will install 10 electric vehicle (EV) charging stations across the Issyk-Kul region, Kyrgyzstan’s primary tourist destination, and home to Lake Issyk-Kul and the country’s largest mountain ski resort in Karakol. The initiative is being implemented with support from the Ministry of Energy as part of ongoing efforts to promote environmentally friendly transportation and enhance tourism and transport infrastructure in the region. The new stations will be located in Karakol, the administrative center of the Issyk-Kul region (2 stations); Cholpon-Ata, the main resort hub (2); Balykchy (2); and the villages of Bokonbaevo (1), Kyzyl-Suu (1), and Tyup (2). All are scheduled to begin operations later this year. The number of electric vehicles in Kyrgyzstan is steadily rising. According to First Deputy Prime Minister Daniyar Amangeldiev, more than 200 EVs are imported into the country daily under a VAT exemption scheme. As a member of the Eurasian Economic Union (EAEU), Kyrgyzstan has an annual quota allowing for the duty-free import of up to 15,000 electric vehicles. Despite this growth, EVs still make up a small share of the national vehicle fleet. According to Minister of Natural Resources, Ecology, and Technical Supervision Meder Mashiev, Kyrgyzstan had over 1.9 million registered vehicles as of early 2026, a 13% increase from 2024. Of these, 972,000 run on gasoline, 339,000 on diesel, 56,900 on gas, and 37,000 are hybrids. Electric vehicles account for just 0.8% of the total, or approximately 15,200 units. The government is also advancing plans to localize EV assembly as part of its broader strategy to expand eco-friendly transport options and combat air pollution, particularly in cities like Bishkek. In June 2025, the Ministry of Economy and Commerce signed a memorandum of understanding with South Korean firms EVSIS, NGS, and the Korea Automobile Environment Association. The agreement focuses on developing EV charging infrastructure in Bishkek. As The Times of Central Asia previously reported, South Korean partners also intend to launch production of EV charging stations in Kyrgyzstan, aiming to establish local manufacturing and create a nationwide charging network across major cities and regions.

Infrastructure Development

Uzbekistan and Islamic Development Bank Sign $164 Million Agreements for Roads and Schools

Uzbekistan and the Islamic Development Bank (IsDB) have signed new financing agreements totaling $164 million to support major infrastructure and education initiatives, further deepening a partnership that plays a key role in the country’s long-term development strategy. The agreements were formalized on February 8 in AlUla, Saudi Arabia, during the Second AlUla Conference for Emerging Market Economies. Prior to the signing, both sides held bilateral talks focused on scaling up cooperation across transport, education, and other high-priority sectors. The discussions emphasized the importance of projects that strengthen regional connectivity and human capital. Road Infrastructure: 4R40 Project One agreement allocates $70 million under the IsDB’s broader $192 million commitment for the 4R40 road project. The funds will support the reconstruction of 143 kilometers of the Dashtabad-Zaamin-Bakhmal-Galyaaral highway, as well as the rehabilitation of 30 kilometers of local and rural roads in the Jizzakh region. The road upgrades are expected to ease transit bottlenecks, enhance safety, and improve access to markets and public services for approximately 200,000 residents. The project will also strengthen regional links to the M39 international transport corridor. Education Reform: SmartEd Project The second agreement covers $94.06 million, part of a total contribution of $160.25 million for the SmartEd project, a national initiative aimed at transforming Uzbekistan’s education system. Funds will be used to build and equip 58 new schools and expand existing institutions with an additional 2,431 classrooms. The initiative targets nearly 73,000 students annually, with provisions for specialized training for over 36,000 teachers and administrators. The project is designed to promote a competency-based, inclusive education system. A Broader Partnership These new agreements build on earlier commitments. At the first AlUla conference in February 2023, Uzbekistan and the IsDB signed $299 million in financing deals, laying the foundation for the infrastructure and education reforms now entering the implementation phase.

Freight Industry

Kyrgyzstan Launches e-Permit System for Freight Transport to China and Turkic States

Kyrgyzstan has launched a new digital system for international freight transport, replacing paper permits with an electronic platform for cross-border trucking to China and several Turkic states. The Ministry of Transport and Communications introduced the e-Permit system in January 2026, allowing domestic carriers to obtain permits online for shipments to China, Uzbekistan, Azerbaijan, and Turkey. Previously, Kyrgyzstan and China operated under a fixed annual quota of paper permits exchanged on a parity basis; 130,000 permits were issued in 2025 alone. The digital platform eliminates in-person applications, significantly reducing queues and administrative burden. According to the ministry, the new system has cut processing times from up to 24 hours to just 10 minutes. Officials say it enhances transparency, improves administrative efficiency, and helps reduce the risk of corruption. Regional Logistics Strategy The launch of e-Permit is part of Kyrgyzstan’s broader effort to position itself as a regional logistics hub. Authorities view streamlined cross-border transport procedures as essential to boosting trade, especially as the country expands its economic ties with neighboring and Turkic states. Integration with TRACECA The e-Permit rollout follows Kyrgyzstan’s December 2025 accession to the multilateral permit system of the Transport Corridor Europe-Caucasus-Asia (TRACECA). Membership in TRACECA allows Kyrgyz carriers to conduct bilateral and transit shipments using a single multilateral permit across participating countries, including Armenia, Georgia, Moldova, Romania, Turkey, and Ukraine. Officials say the integration will lower transport costs, reduce delivery times, and facilitate broader access for Kyrgyz exports to European, Turkish, and Black Sea markets.