Features - The Times Of Central Asia

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AI Governance

Kazakhstan Smart Cities Face the Test of Turning AI Ambition Into Results

Almaty has ranked 38th among 61 cities in the inaugural Intelligent Cities Index, a respectable result that also reveals the distance between Kazakhstan’s digital ambitions and the world’s leading urban centers. The index, compiled by Boston Consulting Group (BCG), assesses how cities use artificial intelligence and digital technology to improve services and outcomes for residents. Almaty scored 62 out of 100, placing it in BCG’s “emerging” category. What Almaty's Ranking Reveals This score placed Almaty 38th among 61 major cities worldwide, ranking above cities including Milan, Melbourne, and Istanbul. However, it remained five points below the lowest-ranked city in BCG’s higher “accelerating” category and 23 points behind London, which headed the index with 85 points. Almaty performed reasonably well on strategy, adoption, and digital infrastructure, but its weakest score was for “ways of working,” which covers institutional readiness, governance, and project implementation. BCG found that leading cities combined technology with clear accountability, reliable funding, and measurable improvements for residents. The publication of these rankings has coincided with Kazakhstan’s adoption of a national methodology for Smart Cities and Smart Regions, approved by the Ministry of Artificial Intelligence and Digital Development. The framework, which took effect on July 12, sets common requirements and deadlines for the country’s cities. The question is whether it will improve urban life or encourage local authorities to accumulate equipment and platforms in pursuit of higher scores. Tackling Everyday Urban Problems The clearest examples in Almaty concern public transport, which residents will be able to judge through their daily journeys. Buses already carry GPS trackers and video cameras, while fares can be paid through the ONAY electronic payment system. The city plans to add payment by bank card, Apple Pay, and Samsung Pay. Electronic information displays are due to be installed at 1,188 bus stops during 2026–27. Officials also announced in February that 50 driverless vehicles would be placed on city roads in cooperation with Yandex Kazakhstan under a pilot program. The stated deadline was May 1, 2026, although no subsequent official announcement confirming the deployment was readily available by late July. This illustrates a wider problem: announcements are often reported more prominently than results. For these projects to improve Almaty’s position, the city will need to show whether digitalization has reduced journey times, made bus arrivals more reliable, improved road safety, or encouraged greater use of public transport. Capital Investment Astana provides a larger-scale example. In February 2025, the capital signed a six-year, $190 million agreement with the UAE-based Presight AI. The project covers traffic management, public services and sensors. Astana is also installing or integrating more than 22,000 AI-enabled facial-recognition cameras. The capital’s iKomek 109 contact center handled approximately 2.5 million requests in 2025, with 83% reportedly resolved during the first call. Alatau City: Kazakhstan’s Largest Test The most ambitious scheme is Alatau City, being developed between Almaty and the Kapshagai Reservoir. Unlike existing cities, Alatau is being designed from the outset with a separate legal and administrative framework and extensive digital management. The government intends...

Energy Security

Kazakhstan Weighs Proposal to Process Russian Crude

Kazakhstan is considering a plan to process Russian crude at its refineries, a step Astana says could support plant utilization and domestic fuel supplies but could also raise sanctions-compliance and diplomatic questions, depending on its scale and structure. The Energy Ministry said on July 30 that discussions cover refining oil “of Russian origin,” selling part of the output in Kazakhstan, and exporting part back to Russia. It did not identify the refineries, volumes, counterparties, or commercial terms. The talks come as parts of Russia face fuel shortages following repeated Ukrainian strikes on refineries. Moscow has extended export restrictions on gasoline, diesel, marine fuel, and gas oils until January 31, 2027, although producers regain exemptions for several products from September 1. The two countries already exchange crude, feedstock, and refined products. Russia discussed buying about 50,000 metric tons of Kazakh gasoline in June. Astana said at the time that it had received no formal request and would protect domestic supply. Trade has since moved beyond discussion. Kazakhstan's Condensate refinery is processing Russian naphtha and exported gasoline to Russia for the first time in July. Kazakhstan has a practical industrial case for considering the proposal. Although the ministry has not identified any refinery involved in the talks, the Pavlodar refinery was designed to process West Siberian crude and remains connected to Russian supply routes. The two countries share extensive energy transport systems and coordinate annual fuel balances. The ministry said steady feedstock would support refinery utilization and domestic supply. The wider regional focus on fuel security was evident on July 31, when Tajik President Emomali Rahmon proposed building large oil refineries in Central Asia, prioritizing domestic demand for essential petroleum products. Decades of infrastructure integration also constrain Kazakhstan’s room for maneuver. More than 80% of its oil exports cross Russian territory through the Caspian Pipeline Consortium. Much of Kazakhstan’s rail trade is tied to Russian networks. These links narrow Kazakhstan’s near-term options and raise the economic cost of abrupt changes to established energy arrangements. The scale and destination of the resulting fuel would determine much of the political meaning. Small volumes sold mainly in Kazakhstan could resemble established regional commerce. A larger export-oriented program supplying Russia during a period of refinery disruption would draw more scrutiny, particularly if it materially eased pressure on Russia’s fuel system. The sensitivity has been heightened by renewed disruption around the Caspian Pipeline Consortium. On July 30, attacks hit NISSOS SIFNOS and MARATHI near the CPC terminal at Novorossiysk. Oil loading stopped only three days after Kazakhstan resumed exports following a week-long disruption. The route is Kazakhstan’s principal oil export artery. The earlier stoppage cut national oil and gas condensate output to about one million barrels per day by July 26, less than half the June average. Russia explicitly blamed Ukraine. Foreign Ministry spokeswoman Maria Zakharova called the July 30 strikes “actions of a terrorist nature” and said they harmed Kazakh and U.S. economic interests. Kazakhstan’s Energy Ministry confirmed the incidents but did not name an attacker....

Black Sea Tanker Attacks

CPC Halts Oil Loadings Again After Two More Tankers Attacked Near Novorossiysk

The Caspian Pipeline Consortium has stopped oil loading at its Black Sea terminal near Novorossiysk after two more tankers were attacked early on July 30. The suspension came only three days after Kazakhstan resumed exports through the route following a week-long disruption. The Marshall Islands-flagged NISSOS SIFNOS was attacked at 1:48 a.m. Moscow time while loading Tengizchevroil crude at single-point mooring SPM-3, CPC said. A drone hit the cargo deck near the manifolds used to receive oil. The strike caused a fire, which the crew extinguished with help from three CPC support vessels. CPC said no employees or contractors were injured, no oil spill occurred, and the crew did not request medical assistance or evacuation. Okeanis Eco Tankers, the vessel’s owner, said NISSOS SIFNOS sustained only minor damage, its crew was safe, and no spill or pollution occurred. The company said the tanker was continuing its voyage operations. The tanker MARATHI was also attacked while awaiting a berth at the CPC terminal, about six nautical miles, or eleven kilometres, offshore. Dynacom Tankers, the vessel’s operator, said it was struck by two projectiles of unknown origin. The resulting fire was extinguished by the crew, all of whom were safe and accounted for. No pollution was reported. Dynacom said it had activated its emergency response plan and remained in contact with the crew and the relevant authorities. “Oil loading has been stopped, while pipeline facilities are operating normally,” CPC said. The consortium did not identify who carried out either attack. No party had claimed responsibility when the suspension was announced. Ukraine’s drone forces later said they had struck four Russian tankers in the Black and Azov seas overnight but did not identify the vessels or locations. The statement therefore did not establish responsibility for the attacks on NISSOS SIFNOS or MARATHI. CPC said appeals from Kazakhstan and its foreign shareholders had been ignored. It said some representations were made through the U.S. State Department. On July 23, the chair of the House Foreign Affairs Subcommittee on South and Central Asia, Bill Huizenga, told The Times of Central Asia that further strikes affecting CPC infrastructure would “not be tolerated.” CPC said attacks near loading equipment could cause a major fire and oil spill. The consortium also warned of damage to Kazakhstan and to shippers including Chevron, ExxonMobil, Eni, TotalEnergies, and Shell. On July 27, CPC had restarted tanker loadings and resumed accepting oil from Kazakhstan after storage constraints forced producers to cut output. The July 30 incidents bring the number of tankers struck near or while serving the CPC terminal during July to at least eight. The sequence began with the Chevron-chartered Yasa Polaris on July 7. Nordic Zenith was hit on July 17. ASIA and NISSOS IOS were attacked while loading Kazakh crude on July 19. NELSA was struck at SPM-1 on July 20, and HERA was reported damaged while approaching the terminal on July 23. The earlier attacks repeatedly stopped loadings. CPC then stopped accepting crude, and tankers scheduled to collect...

U.S.-Kazakhstan Relations

Rubio and Kosherbayev Discuss CPC Ahead of Tokayev’s U.S. Visit

U.S. Secretary of State Marco Rubio held a telephone conversation with Kazakhstan’s Foreign Minister Yermek Kosherbayev on 29 July. The discussion focused on the situation surrounding the Caspian Pipeline Consortium, energy cooperation, critical minerals, trade and investment ties, and current international issues. According to the U.S. Department of State, Rubio and Kosherbayev discussed the importance of energy security, including the “reliable and uninterrupted” export of Kazakhstan-origin oil through the CPC system. Rubio also thanked Kazakhstan for supporting President Donald Trump’s peace initiatives and expressed interest in deepening bilateral economic cooperation. Kazakhstan’s Ministry of Foreign Affairs said the two ministers discussed in detail the situation surrounding the Caspian Pipeline Consortium, cooperation in the energy, transport and logistics sectors, supplies of critical minerals, efforts to attract U.S. investment, and coordination in international organisations. The ministry said the conversation also covered preparations for President Kassym-Jomart Tokayev’s forthcoming visit to the United States for the G20 summit. The telephone call took place shortly after Kazakhstan resumed crude oil exports through the CPC system. The pipeline carries the vast majority of crude exports from the Tengiz oilfield, whose largest shareholders include the U.S. companies Chevron and ExxonMobil. Kazakhstan’s Foreign Ministry said the two ministers reaffirmed their commitment to maintaining regular political dialogue. The conversation followed President Kassym-Jomart Tokayev’s meeting with U.S. Senator Steve Daines on 8 July, when the two sides discussed expanding trade and economic cooperation, attracting investment and strengthening cooperation in the energy sector. On 28 July, The Times of Central Asia reported that Kazakhstan had resumed oil exports through the CPC system after a week-long disruption at the consortium’s Black Sea marine terminal near Novorossiysk. The interruption more than halved oil production at Tengiz and again highlighted Kazakhstan’s dependence on its principal oil export route.

Gulnara Karimova

Swiss Court Fines Lombard Odier $3.7 Million in Karimova Money-Laundering Case

Switzerland’s Federal Criminal Court has fined Geneva-based private bank Lombard Odier 3 million Swiss francs, or about $3.68 million, after finding that it failed to take adequate organizational measures to prevent money laundering in a case linked to Gulnara Karimova, the eldest daughter of Uzbekistan’s late President Islam Karimov. The court also dismissed criminal proceedings against Karimova without ruling on the allegations against her. The ruling was delivered on July 27 in Bellinzona, following a trial that began in April. Swiss prosecutors had accused Karimova of accepting bribes and leading a criminal organization known as “The Office,” which allegedly channeled hundreds of millions of dollars through Swiss bank accounts between 2005 and 2013. Lombard Odier and one of its former account managers were accused of helping conceal assets derived from the group’s activities. The former employee was found guilty of aggravated money laundering. The court concluded that the bank had failed to take “all reasonable and necessary organizational measures” to prevent the offense. The former account manager, identified only as “C.,” received a fully suspended 24-month prison sentence. The court also ordered the confiscation in Switzerland of more than 400 million Swiss francs in assets originating from the money-laundering offense or controlled by “The Office.” In a statement, Lombard Odier said the case began after it voluntarily reported suspicious transactions to the Swiss authorities in 2012. It maintained that robust anti-money-laundering controls were in place and said it would appeal. The first-instance judgment is not final. The court dismissed the proceedings against Karimova on procedural grounds. The judges concluded that there was no realistic prospect of her release from prison in Uzbekistan or extradition to Switzerland before the limitation period expired. The court did not rule on the allegations against her. Proceedings were also dismissed against another defendant, identified only as “B.,” who lives in Russia and could not travel to Switzerland through no fault of his own. The sentences imposed on Lombard Odier and its former employee were reduced because of the time elapsed since the offenses in 2011 and 2012. Charges covering events before July 27, 2011, were dismissed as time-barred. Karimova, now 54, has consistently denied wrongdoing. She has been imprisoned in Uzbekistan since March 2019, when she was moved from house arrest after the authorities said she had breached its conditions. She is serving a 13-year sentence for offenses including organizing a criminal group, extortion, and embezzlement. The Swiss investigation began in 2012 and concerns conduct dating back more than two decades. In May 2025, the Federal Criminal Court joined the proceedings against Karimova and Lombard Odier. The wider international investigation has involved assets across several jurisdictions. Assets associated with Karimova in Switzerland, France, and the United States have previously been estimated at nearly $1.4 billion. The case has also led to efforts to return confiscated assets to Uzbekistan. In February 2025, Uzbekistan and Switzerland signed an agreement covering approximately $182 million confiscated by the Swiss authorities. The funds are to be transferred through the Uzbekistan...

E-Commerce

Wildberries Kazakhstan Sellers Count Losses After Ukraine Strikes

Over the past month, Ukrainian forces have carried out a series of strikes on the facilities of Russia's largest online marketplace, Wildberries. As with previous attacks on Russia's energy infrastructure, including that of the Caspian Pipeline Consortium (CPC), the consequences are again being felt by citizens and businesses in neighboring countries, highlighting the extent to which the war's economic effects now extend far beyond the battlefield. Since July 18, Ukrainian strikes have hit Wildberries logistics facilities in Moscow, St. Petersburg and Crimea, as well as in Tver and Tambov Oblasts. According to the Russian business daily Kommersant, the attacks damaged logistics facilities representing more than 10% of Wildberries’ total warehouse floor space, with a combined area exceeding 550,000 square meters. Alongside Wildberries, another major Russian marketplace, Ozon, also operates in Kazakhstan. Its logistics network has so far not been affected by similar attacks. Together, the two companies account for more than 85% of Kazakhstan’s cross-border online marketplace segment, according to data presented in June by Mazhilis deputy Aituar Koshmambetov during parliamentary discussions on the development of e-commerce. E-commerce has become one of Kazakhstan’s fastest-growing sectors, expanding roughly fivefold since 2020. The market was valued at $6.7 billion in 2025, and the government aims to increase that figure to $19.5 billion by 2029. Against that backdrop, Kazakh sellers were always likely to be affected sooner or later. On Tuesday, Kazakhstan’s National Chamber of Entrepreneurs, Atameken, said it had begun collecting information on Kazakh businesses affected by the attacks on Wildberries facilities in Russia. According to preliminary estimates by the Ecommerce-KZ Association, more than 100 member companies suffered losses as a result of fires at the marketplace’s logistics centers. Their combined losses exceed $2.1 million. Following an request from Atameken to Kazakhstan’s Ministry of Trade and Integration, the ministry has approached Russian authorities and the Wildberries for further information. For neighboring Kyrgyzstan, the situation surrounding Wildberries has proved even more painful. Compensation for lost goods is now being discussed at the level of the country’s economy minister, who is negotiating with the marketplace’s management. Much of Kyrgyzstan’s garment industry and trading sector now depend on Wildberries. According to the country’s association of garment manufacturers, individual producers have suffered losses ranging from 1 million to 100 million Kyrgyz soms, or approximately $11,400 to $1.14 million. While businesses in Russia, Kazakhstan, and Kyrgyzstan are counting their losses, Wildberries itself appears to be reconsidering its logistics strategy. According to a report in Kommersant, the company has begun searching for vacant warehouse space in Kazakhstan and is prepared to lease virtually all of the country’s available modern warehouse capacity. According to NF Group, only 5.8% of Kazakhstan's modern warehouse space was vacant at the end of 2025. Stanislav Akhmedzyanov, managing partner at IBC Global, said the Kazakh market has no single warehouse facility of 100,000 square meters, which is reportedly the amount of space Wildberries requires. As of the end of June 2026, only 130,000 square meters of warehouse space remained available across the country, scattered...