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World Bank Supports Economic Reforms in Kazakhstan

Approval was granted on March 14th for the loan of $600 million to Kazakhstan by the World Bank’s Board of Executive Directors. The loan will be used to implement the first phase of a series of reforms aimed to promote sustainable growth in the country and support Kazakhstan's transition to a more competitive, greener, and inclusive economy. As a carbon-intensive economy, Kazakhstan has ambitions to scale-up action on tackling climate change and reduce reliance on the extraction of natural resources. The reforms aim to increase renewable energy generation, gradually phase out fossil fuel subsidies, improve energy efficiency, and protect poor and vulnerable households. These measures are integral to Kazakhstan’s Nationally Determined Contributions, which are committed to reducing harmful emissions by 25 percent by 2030. “This new partnership with the Government of Kazakhstan supports tangible measures to advance a low-emissions development strategy as part of the global fight against climate change,” said Andrei Mikhnev, World Bank Country Manager for Kazakhstan. Funding provided by the World Bank, with a low-cost and long-term repayment option, will support the government’s reforms in the following areas: In developing greener and more efficient energy, the program implements key recommendations by the Country Climate and Development Report (CCDR) to support the reduction of Kazakhstan’s carbon footprint and contribute to global efforts to combat climate change. In developing more competitive digital and financial markets and promoting transparent procurement practices, the program aims to enable more firms to provide digital services, develop safeguards essential for a digital economy, allocate credit to support productivity and increase transparency in procurement practices. In targeting the poor and supporting regional development, reforms aim to strengthen the social protection system and enhance regional development, as part of broader efforts to enhance inclusion and provide greater opportunities nationwide.

Kyrgyzstan Tightens Control Over Foreign-Funded NGOs

BISHKEK, Kyrgyzstan - Kyrgyzstan´s parliament has passed a law that tightens control over foreign funded non-governmental organizations despite international concerns that the measure would further erode rights and access to basic services in the Central Asia country. Supporters of the law have characterized the law as a way to ward off foreign interference in Kyrgyzstan, while critics say it represents a slow-moving crackdown that rolls back efforts to develop civil society with the help of international governments and other institutions. The Jogorku Kenesh, or parliament, approved the law by a vote of 66-5 on Thursday. The government has said the law would assign the status of a foreign agent to NGOs, media and other institutions, as well as individuals in some cases, that are financed from abroad. Furthermore, materials posted on behalf of foreign principals on the Internet will be required to contain the phrase: “Materials (information) were produced, distributed and (or) sent by a non-profit organization performing the functions of a foreign representative.” Violations of the law could lead to criminal penalties. President Sadyr Japarov of Kyrgyzstan has said that “only a small number, but a [quite] vociferous group, of these structures financed by foreign states… is a source of inaccurate information for their grantors”. Last month, Japarov pushed back against concerns about the draft law that were expressed by U.S. Secretary of State Antony Blinken in a written response emphasizing that the draft law – which MPs initiated and adopted in its first reading – “is close to the Foreign Agents Registration Act (FARA) adopted in 1938 in the United States”. “My only request is that you do not interfere in the internal affairs of our country,” Japarov said. Some opponents claim it is based on Russia´s “foreign agents” law and could be used as an instrument of oppression. Members of non-governmental groups and other critics strongly opposed the draft law as it moved toward ratification in the parliament. On March, 15 groups wrote to four international finance institutions that are backing projects in Kyrgyzstan and asked them to join their efforts to block it. “The law would inevitably create a climate of fear, preventing people, including workers, human rights defenders and civil society organizations, from speaking out due to fear of reprisals,” the groups said in their letter to the Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank and World Bank. Separately this week, the government in Kyrgyzstan withdrew a draft law on the media that critics said would have restricted free speech. Among the terms of the measure was the right of government agencies to revoke a journalist’s accreditation if it disapproved of the reporter’s coverage of an issue.

High-Profile Speakers Open B5+1 Forum in Almaty

The ‘B5+1’ platform – a group of countries comprising the five Central Asian republics and the United States – took an important step forward today, with the launch of the inaugural B5+1 Forum in Almaty. Instrumental in the formation of the B5+1 group has been the Center for International Private Enterprise (CIPE), which aims to develop public-private partnerships in the Central Asia region. This new business platform has been created to help international and local companies to capitalize on opportunities in global business and trade – while assisting the six governments in attracting more direct foreign investment. The theme of the opening day was “Looking within Central Asia”. It began with a panel discussion on boosting economic integration in the Central Asia region, drawing from the area's distinctive context, and successful examples like ASEAN and the EU. Recommendations, from panelists including Richard E. Hoagland of the Caspian Policy Center and Alisher Shaykhov from Uzbekistan’s National Venture Capital Fund, included integrating the region's value chain into the global economy, and promoting collaborative investment initiatives. The second panel offered perspectives from Central Asia’s business leaders. Panelists including B5+1 representatives Aziza Shuzheyeva (Kazakhstan, e-commerce) and Manusurjon Rasulev (Uzbekistan, agribusiness) gave insights into the region’s high-profile industries. Speakers advocated for policy synchronization in these sectors, as well as in tourism and trade, as a means to boost regional growth. For the third panel, government officials voiced their support for enhancing public-private dialogue. Tajikistan was represented by its deputy minister for economy Ahliddin Nuriddinzoda; his counterpart Ainura Usenbekova spoke on behalf of Kyrgyzstan, and Turkmenistan’s minister of finance Serdar Jorayev also spoke at length. Their focus was on national reforms and regional integration. The B5+1 Forum forms part of CIPE’s program called “Improving the Business Environment in Central Asia” (IBECA). CIPE themselves are affiliated to the US Chamber of Commerce – the catalyst behind the B7 and B20 platforms – and receive funding from the US Department of State. The B5+1 Forum continues tomorrow, Friday 15 March, with a thematic day dedicated to “Central Asia’s place in the world economy”.

President of Kyrgyzstan Withdraws Controversial Draft Mass Media Law

The head of state has instructed representatives of the Supreme Council to withdraw the draft mass media bill after he met with representatives of the Kyrgyz media, as reported on the President's website. During a meeting with 40 Kyrgyz journalists, President Sadyr Japarov said that the country's leadership is ready for a constructive dialog with media representatives to ensure a transparent information policy in the country. "Following the meeting, having heard information from media representatives and taking into account the proposals received from them regarding this bill, President Sadyr Japarov instructed representatives to withdraw the said draft law", presidential spokesman Askat Alagozov wrote on his Facebook page. In September 2022, the presidential administration submitted for public discussion a new draft law on mass media, citing the fact that the current law, adopted in 1992, is obsolete. The bill was immediately criticized by many public organizations. In particular, the authors of the bill wrote that there should be no censorship in the media, but they wanted to oblige journalists to submit their materials to the officials whose name is mentioned in the material before each publication. In addition, according to the draft law Kyrgyz journalists would have to be accredited by the state ministry responsible for that reporter's field of work. Furthermore, each government agency would have the right to revoke a journalist's accreditation if it didn't like that reporter's coverage of an issue. "We should not be talking about introducing censorship, but about introducing public control over what goes out on the pages of the press, electronic media, and television screens," the background to the bill said. The proposed bill also introduced changes in the status of the mass media. Such basic concepts as "mass media outlet," "editorial board," "founder," and "publisher" were to be defined differently than before. According to lawyers, an analysis of the new law showed that there were serious risks of weaker legal protections, from basic human rights to freedom of expression. Certain provisions of the bill jeopardized the activities of independent media and journalists - including foreign ones. "The procedures for registering media outlets, the status of which will also apply to websites, are significantly complicated. A number of norms proposed by the draft law do not comply with the basic principle of legal certainty, which may lead to arbitrary application of the law in practice, and some articles show a discriminatory approach. Based on the results of the analysis, we can conclude that the adoption of the draft law in the form in which it is posted for public discussion may lead to the decline of democracy in Kyrgyzstan," said lawyers from the Adilet Legal Clinic. As a result, the bill failed to gain support in public debate and was sent for revision three months later. A presidential decree set up a working group to finalize the law. But, as local journalists who are members of this group noted, the draft law was never coordinated, approved and finalized by all members of the working...

Investments

Kazakhstan’s Potential to Overtake China in Production of Rare-Earth Metals

Kazakhstan has become a major participant in the international race for the extraction of valuable rare-earth metals or rare-earth elements (REEs). According to an https://asiatimes.com/ interview with international development expert Javier Piedra, the republic can not only compete with China -- but even overtake it in terms of production. Mr. Piedra, a financial consultant and former representative of the U.S. Agency for International Development (USAID), reported that China currently controls 70% of the global production REEs. He also explained that because of China's tense relations with the West, Kazakhstan was in an advantageous position to develop its domestic industry in the sector. In a report by the Asia Times, Piedra stated, "Kazakhstan could be on par with China in mining such rare earth elements as scandium, yttrium and 15 lanthanides, which are used in the production of computers, turbines and cars." European and American investors are actively seeking opportunities to develop the industry outside China, and the republic's subsoil, rich in rare metals, can provide a highly valuable resource to industries such as technology and manufacturing. In addition to Western countries, India also stands to benefit from the extraction of Kazakhstan's rare earth elements and according to the Indian business press,the republic could already cover India's demand for REEs. The REE potential of Kazakhstan has been known since 2010 but was largely ignored by foreign investors in preference to developing their businesses in China. Extraction of REEs is an expensive and financially risky business. Exploration for deposits is similarly costly and markedly time consuming. However, the strategic importance of rare metals is growing. As claimed by Piedra in the Asian Times, everything may well change; "Western governments should identify alternative suppliers, including Kazakhstan, to reduce possible risks for investors and the likelihood of supply disruptions." The U.S. and the European Union (EU) are now poised to invest heavily in large-scale mining projects and are exploring alternative supply channels. Today, all consumption of yttrium and scandium in the United States depends on imports -- and the EU imports 98% of its rare metals from China. . Last September, New York hosted a presidential summit at which representatives from Kazakhstan, Kyrgyzstan, Turkmenistan, Uzbekistan and the U.S. discussed the exploration and production of critical rare metals. Mr. Piedra believes that Kazakhstan is ready to benefit from its reserves of REEs but mining would first need to be updated to meet current environmental requirements. Care would also be required when choosing potential investors. "Astana will be wary of diplomats, foreign consultants and miners with an outdated view of the world and unfounded geopolitical ambitions. Central Asian countries will discourage attempts to penetrate them 'through the back door.' Such tricks may have worked in the 90s, but not now," warned Piedra via Asia Times. Meanwhile, Kazakhstan's authorities continue to explore opportunities to utilize rare-earth deposits. Last November in Astana, Kassym-Jomart Tokayev and Emmanuel Macron discussed the extraction of strategically important minerals, and last month an alternative dialogue was held between the presidents of Kazakhstan and the...

Economy

CIPE’s Inaugural B5+1 Forum Opens in Almaty

In recent years the countries of Central Asia have taken more confident steps towards working with the United States and Europe, so that both local and international companies and agencies can capitalize on the region’s potential. Instrumental in this process has been the Center for International Private Enterprise (CIPE), which last year created the diplomatic ‘C5+1’ platform – a group comprising the governments of the five Central Asian republics – Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Turkmenistan – plus the United States, whose State Department has been integral to the development of the platform. Following the first C5+1 Summit in New York in September 2023, led by the presidents of all six countries, CIPE has now created a dedicated business platform for these nations: ‘B5+1’. The inaugural B5+1 Forum will be held in Kazakhstan’s business capital of Almaty this week, and will bring together policy makers from Central Asia, America and other countries, as well as high-profile private companies working in the region. At the C5+1 Summit, presidents Biden, Tokayev, Mirziyoyev, Japarov, Rahmon and Berdimuhamedov had committed to the establishment of B5+1 in order to “accelerate regional cooperation and connectivity [and]… advance efforts to create a more favorable business environment for U.S. private sector trade and investment in Central Asia.” The B5+1 event will be divided into two thematic days: “Looking within Central Asia” on Thursday 14 March, where representatives of the US Department of State, Kazakhstan’s Ministry of National Economy, the Caspian Policy Center and others will present their visions for improving Central Asia’s investment climate and economic integration; and “Central Asia’s place in the world economy” on Friday 15 March, where leaders from the US-Kazakhstan Business Council, the American-Uzbekistan Chamber of Commerce, the European Bank for Reconstruction and Development (EBRD) and others will look outwards, to give an international perspective on how the region can grow its trade and investment volumes. At a time of geopolitical upheaval and disruption of existing supply chains, the Almaty forum will also continue the conversation on enhancing regional connectivity via the Trans-Caspian International Transport Route, also known as the Trans-Caspian Corridor. The B5+1 Forum forms part of CIPE’s program called “Improving the Business Environment in Central Asia” (IBECA). CIPE themselves are affiliated to the US Chamber of Commerce – the catalyst behind the B7 and B20 platforms – and receive funding from the US Department of State. The establishment of B5+1 is closely aligned with commitments made during the September C5+1 Presidential Summit and outlined in a document called the New York Declaration to strengthen their economic relations, and improve the business environment for regional economic integration and investments. The upcoming Forum aims to deliver on two key commitments in the declaration. The Times of Central Asia will be in attendance at the B5+1 Forum on 14-15 March, and will be publishing insight and analysis from the event.