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Agriculture

Kazakhstan Launches Michurin Orchard to Advance High-Tech Horticulture

Kazakhstan has taken a significant step in modernizing its agricultural sector with the inauguration of the Michurin Orchard, a collaborative venture between the National Academy of Sciences of Kazakhstan and the Russian Academy of Sciences. The orchard, launched on December 1 in the village of Almalyk, Almaty region, will serve as a flagship platform for developing intensive horticulture and integrating science with high-value agricultural production. The initiative is part of the Kazakh-Russian Center for Advanced Technologies in the Agro-Industrial Sector, established in April 2025. Named after Ivan Michurin (1855-1935), a renowned Russian pioneer in plant selection, the orchard will operate as an open-air research and production site. Its core objectives include testing promising fruit and berry varieties, applying intensive horticultural techniques, and deploying water-, energy-, and resource-saving technologies. Initial plantings will focus on high-yield Russian apple cultivars adapted to Kazakhstan’s climate, along with pear, cherry, sweet cherry, plum, and a broad range of berries such as raspberry, honeysuckle, currants, sea buckthorn, and rose hips. Akhylbek Kurishbayev, President of the National Academy of Sciences of Kazakhstan, described the orchard as “a long-term investment in the development of Kazakhstan’s fruit growing industry.” He emphasized that the initial three-hectare planting represents the foundation of a new generation of resilient, high-productivity varieties capable of withstanding climatic stress. Kurishbayev noted that the Michurin Orchard will contribute to national breeding programs, build a sustainable raw material base for food processing industries, ranging from juices and concentrates to functional foods and help shift Kazakhstan’s agro-industrial model from raw-materials dependence to knowledge-intensive production. The orchard will also function as a live testing ground for horticultural technologies, from the selection of planting material to the delivery of premium fruit to consumers. Horticulture is emerging as a strategic growth sector within Kazakhstan’s agro-industrial complex. According to Deputy Minister of Agriculture Yerbol Taszhurekov, Kazakhstan’s apple orchards now span nearly 29,000 hectares, predominantly located in the southern regions of Almaty, Turkestan, Zhambyl, and Zhetisu. In Almaty and Zhetisu regions alone, apple orchards cover more than 2,400 hectares and include over 416,000 trees. In parallel, Kazakhstan is working to revive the iconic aport apple, a variety deeply intertwined with the country's botanical heritage and the city of Almaty, widely regarded as the ancestral home of the apple. Under a targeted 2024-2028 program involving private investors and specialized nurseries, the government aims to produce certified saplings and scale commercial aport cultivation. By 2027, Kazakhstan plans to plant 110 hectares of aport orchards.

Caspian Pipeline Consortium

Why Attacks on the Caspian Pipeline Consortium Could Alter Kazakhstan’s Strategic Plans

Attacks on the infrastructure of the Caspian Pipeline Consortium (CPC), reduced export flows, and volatility in commodity markets are generating serious pressures for Kazakhstan. In the coming years, both the country’s financial system and its domestic political balance may face significant tests. A number of experts warn that disruptions in oil logistics via the CPC, which remains the main artery for Kazakh crude exports, could depress budget revenues, strain national companies, and worsen the sovereign outlook. Kazakhstan pumps roughly 80% of its oil exports through the CPC system, and oil revenues account for more than half of the country’s total export earnings. Because CPC Blend is Kazakhstan’s primary export-grade crude, even short interruptions can reverberate through the state budget, the National Fund, and the balance sheets of national companies. This could trigger a domino effect, destabilizing broad swathes of the economy and undermining public finances. Already, the recent rounds of disruption around Black Sea oil shipping are eroding a substantial source of tax revenue for the state. Continued Risk of Strikes Political scientist Dosym Satpaev argues that Kazakhstan may be underestimating the intensity and persistence of the conflict surrounding Ukraine. He contends that both sides in that conflict have used strikes on energy infrastructure as key tools, a tactic that will likely continue. The recent strike targeted the CPC’s single-point moorings (SPMs) at Novorossiysk, a coastal terminal on the Russian Black Sea. These offshore loading points sit in relatively shallow waters and are physically exposed, making them susceptible to the naval drones Ukraine has increasingly deployed against Russian maritime infrastructure. Although the attack officially targeted Russian facilities, the collateral implications for Kazakh oil exports were immediate. According to Satpaev, that means further risks for the CPC. The fact that Kazakhstan remains heavily dependent on this single pipeline reflects a broader failure to diversify exports and reduce reliance on raw material transit. The vulnerability is magnified by the CPC’s ownership structure: although Kazakhstan relies on it for most of its exports, the pipeline network and the Novorossiysk terminal lie on Russian territory and operate under Russian regulatory oversight. Russia holds a majority stake in the consortium, while U.S. firms such as Chevron and Exxon also have significant shares, creating a complex web of interests that limits Astana’s room for manoeuvre. Kazakhstan has already experienced how this dependence can be leveraged. In 2022, Russian regulators repeatedly halted CPC operations over alleged “environmental violations,” moves widely interpreted as political pressure at a moment of diplomatic friction. That precedent underscores how strategic vulnerability to CPC disruptions predates the current wave of attacks. Satpaev is skeptical that alternative export routes, such as via pipelines through the Caspian Sea to Baku-Tbilisi-Ceyhan or transit to China, can substitute for the CPC in the near term. Given the global trend toward reduced oil demand, he believes this leaves Kazakhstan exposed to long-term structural risks. At the same time, Satpaev views as unlikely the possibility that Ukraine would attempt to directly stop the CPC’s operations, given the broader consequences such...

Green Economy

AIIB Provides $500 Million to Support Uzbekistan’s Green Economy Reforms

The Asian Infrastructure Investment Bank (AIIB) and the Government of Uzbekistan have signed a $500 million financing agreement to support the country’s Green and Resilient Market Economy Program, the Bank announced on November 28. The initiative is designed to accelerate Uzbekistan’s transition toward a greener, more resilient, and market-oriented economy through a comprehensive package of policy and institutional reforms. According to AIIB, the funding will assist the Uzbek government in strengthening the policy and governance frameworks necessary for low-carbon development, improved public-sector efficiency, and greater resilience to climate-related risks. The initiative falls under AIIB’s Climate-Focused Policy-Based Financing approach, which supports systemic reforms that have economy-wide climate impacts. The reforms backed by the new financing include measures to enhance efficiency and governance in the energy sector and state-owned enterprises, expand climate-responsive public procurement, and establish transparent systems for carbon-credit development and trading. The program also highlights the development of a robust Measurement, Reporting, and Verification (MRV) system to attract greater private capital for climate investments. “This operation reflects AIIB’s commitment to supporting Uzbekistan’s reform agenda through measures that can deliver lasting climate and economic gains,” said Konstantin Limitovskiy, AIIB’s Chief Investment Officer for Region 2 and Project and Corporate Finance Clients. He noted that the program is expected to foster conditions conducive to increased climate finance and stronger private-sector engagement in Uzbekistan’s green transition. The program is co-financed by the World Bank Group and is aligned with several national strategies, including Uzbekistan’s Strategy for Transition to a Green Economy for 2019-2030, its second Nationally Determined Contribution under the Paris Agreement, and the broader Uzbekistan-2030 development strategy. These frameworks stress clean energy, resource efficiency, and long-term economic resilience. AIIB projects that the reforms will generate substantial environmental and social benefits over time. More efficient resource use, the scaling up of clean energy solutions, and improved climate regulation are expected to reduce greenhouse gas emissions, enhance air quality, and strengthen the country’s capacity to withstand climate shocks. The adoption of cleaner technologies could also lower energy costs and improve living conditions, particularly for vulnerable communities. In a separate agreement earlier this year, AIIB provided a $71.1 million loan to Uzbekistan to modernize rural roads in Khorezm and Karakalpakstan. That project aims to enhance climate resilience and improve access to markets and public services for rural populations.

Entrepreneurship

Kazakhstan Aims to Double Output of Existing Medium-Sized Enterprises

Kazakhstan’s Ministry of National Economy, in partnership with the European Bank for Reconstruction and Development (EBRD), is developing a strategy to help existing medium-sized enterprises increase their production capacity two to threefold. The initiative is part of the “Improving the Investment Attractiveness of Medium-Sized Businesses” program. Deputy Minister of National Economy Yerlan Sagnaev announced the initiative at a press conference hosted by the Central Communications Service. According to Sagnaev, companies will receive state-backed support in the form of diagnostic assessments and customized development plans. “Today, medium-sized businesses are primarily concentrated in the manufacturing sector, which currently accounts for about 12% of total SME output. Yet there remains significant untapped potential for growth, as much as two to three times the current level,” he said. Sagnaev noted that the most active sectors include metallurgy, light industry, construction materials, mechanical engineering, and chemicals. The state plans to prioritize these industries, including through joint programs with the EBRD. According to ministry data, small and medium-sized enterprises (SMEs) now contribute 39.8% to Kazakhstan’s GDP. In the first half of 2025, the sector’s total output reached $82.6 billion, representing a 25% increase. Employment in the SME segment rose by 3.9% to 4.4 million people, with trade, industry, construction, transport, and agriculture driving the highest growth. However, challenges persist. A recent Business Climate rating by the “Atameken” National Chamber of Entrepreneurs shows that while 35.4% of small businesses plan to expand, only 10.1% are interested in launching new projects. Requests for government support remain modest at 18.8%, and 6.2% of respondents are considering staff cuts or closures. Timur Zharkenov, Deputy Chairman of the Atameken Board, highlighted the most pressing concerns for medium-sized businesses: a high tax burden (28.1%), labor shortages (16.2%), and inconsistent support from local authorities for investment initiatives. In autumn 2025, domestic manufacturers reported a decline in orders and a rise in production costs, reinforcing the urgency of state support and the need to improve operational efficiency.

Renewable Energy

Kyrgyzstan’s Renewable Pivot and the Strategic Weight of China’s Rising Role

China’s energy engagement in Central Asia has undergone a quiet but decisive transformation since 2018. What was once a relationship built almost entirely on pipelines, hydrocarbons, and state-backed fossil fuel projects is now expanding into a much more diversified portfolio in which renewable energy plays an increasingly central role. Kazakhstan and Uzbekistan were the first to attract large-scale Chinese commitments in solar and wind power, yet Kyrgyzstan is quickly emerging as the newest frontier in this shift. Recent agreements demonstrate how Bishkek is rapidly positioning itself within China’s clean energy expansion. In 2022, Kyrgyzstan signed an agreement with Chinese investors to build a 1-gigawatt solar plant in Issyk-Kul. Furthermore, the government concluded another agreement with Shenzhen Energy Group for the construction of two additional power plants, one solar and one wind. The Energy Ministry has also reached an investment deal with States Technology Co. and San Energy Co. for a 250-megawatt solar facility in Batken. These projects indicate that Chinese capital is not only filling Kyrgyzstan’s immediate energy gaps, but is also beginning to reshape the country’s long-term energy structure. This push toward solar and wind arrives at a critical moment. Kyrgyzstan remains overwhelmingly dependent on hydropower, which generates more than 90% of the country’s electricity. Yet this climate-sensitive resource is now far less stable than in the past. Shifts in water levels driven by changing weather patterns have introduced new uncertainties into the country’s ability to meet domestic demand. At the same time, electricity consumption has surged at an unprecedented rate, rising by nearly one billion kilowatt hours in a single year due to newly launched industrial enterprises and rapid residential construction. The combination of climate volatility and soaring consumption has placed the energy system under severe strain. The government has declared a three-year energy emergency and introduced consumption restrictions designed to save approximately 40 kilowatt hours per month. Under these conditions, diversifying away from near-total reliance on hydropower is no longer optional but an urgent strategic necessity. Solar and wind investments offer a viable path forward. Expanding renewable capacity will give Kyrgyzstan a more predictable and resilient energy base, enabling the country to better manage seasonal shortages and climate-driven disruptions. Kyrgyzstan also imports all of its fossil fuels. As renewable capacity expands and the use of electric vehicles increases, the country could gradually reduce its dependence on oil imports from Russia, easing both financial pressures and geopolitical exposure. For this reason, cooperation with China represents more than a set of commercial transactions. It is evolving into a strategic pillar of Kyrgyzstan’s broader effort to strengthen energy security and modernize its power system. Chinese companies bring financing, technology, and implementation speed, all of which are essential for a country facing immediate and long-term energy risks. The benefits may extend beyond the domestic market. With sufficient renewable capacity, Kyrgyzstan could eventually re-enter regional electricity trade as an exporter. Some estimates suggest that cross-border energy sales could generate up to 220 million dollars annually in foreign currency earnings, providing a significant...

Economy

IMF: Uzbekistan’s Economy Strong but Reforms Needed to Sustain Momentum

Uzbekistan’s economy remains robust, supported by strong domestic demand, high gold prices, and rising investment, according to the International Monetary Fund (IMF). The assessment was released in an end-of-mission statement following an IMF staff visit to Tashkent from November 17 to 25, led by Yasser Abdih. The IMF reported that real GDP grew by 7.6% year-on-year in the first nine months of 2025, driven by buoyant household consumption and increased investment. Despite sustained demand, inflation has moderated. Headline inflation fell to 7.8% in October, while core inflation eased to 6.6%. This slowdown, the IMF noted, reflects the diminishing impact of last year’s administrative energy price adjustments, a firmer exchange rate, and continued tight monetary policy. Household lending grew rapidly, up 23% in September, though business lending rose more modestly. The external current account deficit narrowed significantly in the first half of 2025, bolstered by high global gold prices, a strong performance in non-gold exports, and steady remittance inflows. International reserves remain “ample,” covering roughly 12 months of projected imports. The IMF forecasts GDP growth to exceed 7% in 2025, tapering to around 6% in 2026. Inflation is expected to gradually decline toward the Central Bank of Uzbekistan’s 5% target by the end of 2027. Overall, the economic outlook is “broadly positive,” with risks described as “largely balanced.” However, the IMF cautioned that stronger-than-expected revenues, particularly from gold exports, could lead to excessive government spending. To avoid overheating the economy, it advised limiting new expenditures, curbing real exchange rate appreciation, and reducing exposure to gold price volatility. The Uzbek government has reaffirmed its commitment to keeping the fiscal deficit below 3% of GDP in both 2025 and 2026. The mission urged authorities to broaden the tax base and raise the tax-to-GDP ratio. It welcomed the government’s planned medium-term revenue strategy and ongoing reforms to reduce the shadow economy and modernize the Tax Committee. Key recommendations include restricting new tax incentives, enhancing audit systems, and publishing annual tax expenditure reports to improve transparency. On monetary policy, the IMF stressed the need to maintain a tight stance to drive inflation down. The Central Bank of Uzbekistan has held its policy rate at 14% since March. The IMF welcomed the country’s move toward greater exchange rate flexibility, introduced in April. The Fund also called for acceleration of financial sector reforms, including phasing out directed and preferential lending programs. It urged the finalization of a comprehensive roadmap to implement the 2025 Financial Sector Assessment Program recommendations. Structural reforms remain critical to sustaining long-term growth. The IMF emphasized the need to continue privatizing and restructuring major state-owned enterprises, improve governance, strengthen market competition, and prepare for World Trade Organization accession, targeted for March 2026. The IMF concluded the mission by thanking Uzbek authorities for their cooperation, noting that the visit will not result in a formal Board discussion. A year earlier, the IMF delivered similarly upbeat projections for Uzbekistan, citing 6.4% GDP growth in the first half of 2024, rising remittances, and solid reserves. However, it...