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U.S.-Uzbekistan Relations

Uzbekistan’s U.S. Package: What Supports the $12 Billion Figure?

Uzbekistan announced a package of 54 agreements and prospective initiatives that it valued at about $12 billion during U.S. Secretary of State Marco Rubio’s visit to Samarkand on October 19. The Ministry of Investment, Industry and Trade lists engine supplies from GE Aerospace for new Uzbekistan Airways aircraft as part of the package. The investment ministry makes that value conditional on implementation. The presidency’s account says a comprehensive implementation program will be developed for the agreements and initiatives. October’s $12 billion may include projects still awaiting finance or development, but the values assigned to them must have an identifiable basis in project estimates or specific transactions. The official announcements identify counterparties and sectors, but the evidence examined does not provide the individual values needed to reconstruct the $12 billion total. Earlier Announcements and Additional Value In November 2025, Donald Trump announced that Uzbekistan would undertake roughly $35 billion in purchases and investment in American sectors over the following three years. The stated total did not separate the amounts assigned to purchases and investment. Uzbekistani purchases from American suppliers and investment in American sectors cannot be counted as an equivalent inflow of U.S. capital into Uzbekistan. Purchasing American equipment and receiving American investment give Uzbekistani participants different roles in the financing and implementation of projects. In September 2026, Investment Minister Laziz Kudratov said projects worth $7 billion had already been completed within a $35 billion portfolio. UzDaily described the figure as one-fifth of the value of the previous year’s agreements, without identifying the completed projects or defining completion. A transaction-level account would show what equipment was delivered, which facilities were commissioned, and what contract payments were made, giving the value and completion date of each transaction. October’s $12 billion cannot be added to the earlier figures without reconciling the transactions included in each package and the values assigned to them. The matching $35 billion figures do not establish that Kudratov and Trump referred to the same transaction list. An October agreement could introduce a fresh transaction or add obligations within an existing project, but it could also cover work already reflected in an earlier valuation. A company’s reappearance in successive announcements does not establish which relationship applies. What the Agreements Establish American Resources Corporation and ReElement Technologies announced an October 19 agreement with Uzbekistan Technological Metals Complex and the Fund for Reconstruction and Development, advancing their November 2025 memorandum. ReElement’s release describes a further stage of technical and commercial work under an existing partnership, but it provides no valuation showing how that work contributes to the $12 billion total. The companies report successful processing of Uzbek-sourced tungsten into high-purity oxide. The planned demonstration at ReElement’s U.S. facilities is intended to evaluate commercial viability, processing efficiency, and scalability; preliminary engineering and economic modeling concern possible refining operations in Uzbekistan. In the financial sector, the investment ministry describes Franklin Templeton, Oppenheimer, Citigroup, and BlackRock as helping to attract capital, but does not explain whether or how these arrangements contribute to the $12 billion...

Tobacco

Kazakhstan Vape Ban Faces a Test Under Eurasian Economic Union Rules

Kazakhstan banned vapes two years ago, but anti-tobacco organizations now fear that new rules being developed by the Eurasian Economic Union (EAEU) could allow them back onto the market. Public health advocates have appealed to President Kassym-Jomart Tokayev, accusing the government's economic officials of attempting to weaken the restrictions. Undermining Prohibition? Since June 2024, Kazakhstan has prohibited the production, import, and sale of electronic cigarettes, vaping liquids, and certain smokeless tobacco products. This includes snus, a form of tobacco placed under the upper lip. Violations can result in criminal prosecution. The EAEU, which comprises Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia, is developing a common technical regulation for nicotine-containing products allowing manufacturers to operate under common standards across several national markets. The Coalition for a Smoke-Free Kazakhstan argues that the regulation, being developed at Armenia's initiative, could create a legal basis for resuming trade in products currently banned in Kazakhstan. However, a version of the proposed draft prepared by Russia's Agriculture Ministry in November 2025 explicitly states that products cannot be placed on the market in EAEU member states where their circulation is prohibited under national law. Compliance with common technical standards would therefore not, by itself, authorize vape sales in Kazakhstan. It remains unclear whether this provision has been retained in the text currently under negotiation. A Boon for the Treasury The coalition also accused Deputy Prime Minister and Minister of National Economy Serik Zhumangarin of pressuring the Ministry of Health. According to the activists, he has been pushing for approval of the regulation despite the ministry's objections. In July, Zhumangarin met with executives from Philip Morris International, a multinational tobacco company with manufacturing operations in Kazakhstan. According to the government, the deputy prime minister supported common EAEU rules that would take national legislation and public health commitments into account. The company presented plans to establish a laboratory in Kazakhstan to test nicotine-containing products, with the facility also intended to serve markets in other countries. The tobacco industry generates substantial revenue for Kazakhstan's budget. In 2025, excise taxes on tobacco products totaled 330.7 billion tenge (approximately $735 million). During the first three months of 2026, Kazakhstan exported $42.5 million worth of cigarettes. The Hookah Lobby In spring 2026, Kazakhstan also debated relaxing its anti-tobacco legislation by allowing hookah smoking in licensed restaurants and other food-service establishments. Hookah smoking has been prohibited in enclosed public places since 2020. Supporters of legalization argued that the restrictions had driven the hookah business underground. According to their estimates, approximately 22,000 establishments offer hookahs. They projected that licensing would generate more than 16 billion tenge annually (approximately $35.5 million) in government revenue. The anti-tobacco coalition opposed the proposal. Its leader, Jamilya Sadykova, warned that licensing would effectively legalize tobacco use in places where the government is supposed to protect customers and employees from smoke exposure. In August, the World Health Organization supported maintaining the existing ban. Nevertheless, hookahs continue to be offered in cafes and specialized establishments, and customers are periodically fined during police raids....

Nuclear Energy

U.S. Promotes Small Nuclear Reactors in Uzbekistan

The United States is promoting small modular nuclear reactors in Uzbekistan as Tashkent develops its nuclear power sector with Russia. Secretary of State Marco Rubio promoted the technology during his October 19 visit to Samarkand, linking it to rising energy demand. “We’re introducing U.S. small modular reactors and modernizing the Uzbek electric grid and gas distribution network,” Rubio told the U.S.-Uzbekistan Business and Investment Council. He said the cooperation would help the government keep pace with growing energy demand. Rubio did not name a reactor supplier or announce financing or a construction schedule for an American plant. Uzbekistan’s interest predates Rubio’s visit. In November 2025, the country expressed interest in studying designs from Holtec, GE Hitachi, and NuScale, according to the World Nuclear Association. Tashkent has pursued those discussions alongside its current nuclear partnership with Russia. Small modular reactors generally have an electrical capacity of up to 300 megawatts per unit, according to the International Atomic Energy Agency. Factories can manufacture their components and assemble them on site. Utilities can add smaller units in stages as demand increases. For Uzbekistan, nuclear power forms part of an effort to expand electricity supply as domestic gas production declines. Once a net gas exporter, the country became a net importer in 2023. Gas output fell 16.3% year-on-year in January-August 2026, increasing pressure on supplies. The World Nuclear Association puts natural gas at 76% of Uzbekistan’s electricity output in 2023. Reducing the amount burned in power stations could ease import needs and leave more available for industry, including petrochemicals. Russia’s state nuclear corporation Rosatom is developing Uzbekistan’s first nuclear complex in the Forish district of the Jizzakh region. The design combines two large Russian VVER-1000 reactors with two smaller RITM-200N units, providing about 2.1 gigawatts of capacity. The smaller reactors are each rated at 55 megawatts. Presidents Shavkat Mirziyoyev and Vladimir Putin launched the project by video link in June, accompanied by a concrete pouring ceremony. The development has expanded substantially since the countries agreed in 2024 to build a plant consisting of six small reactors. The published schedule envisages a technical launch of the first small unit in late 2029, with the larger units following in the 2030s. Nuclear generation is therefore several years away. Uzbekistan must also improve the networks that deliver electricity to homes and businesses. Following a nationwide referendum on the issue, Kazakhstan is also investing in nuclear power. Its planned Balkhash plant, near Ulken on Lake Balkhash, will use Russian technology. A nuclear agreement signed in May envisages two VVER-1200 reactors with a combined capacity of about 2.4 gigawatts. Kazakhstan’s Atomic Energy Agency put the project’s cost at approximately $16.5 billion, including security and supporting infrastructure. Kazakhstan’s strategy calls for at least three nuclear power plants by 2050. China National Nuclear Corporation has been selected to lead the second project. The country is the world’s largest uranium producer, but developing power stations also requires foreign reactor technology and expertise. Kazakhstan and Uzbekistan have begun cooperating on nuclear safety. Officials...

Logistics

Kazakhstan’s Warehouse Market Faces Mismatch Between Supply and Demand

Central Asia is seeking a larger role in trade between China and Europe by offering alternative shipping routes that bypass Russia. However, growing interest in transit has not been matched by balanced development of warehouse infrastructure. Some transport hubs face shortages of modern facilities, while others have vacant space. For international freight operators and retailers, this means additional costs. For investors, it raises the risk of financing warehouses that may struggle to attract tenants. These contradictions were discussed on October 15 in Almaty at the Central Asia Warehouse Summit 2026, organized by consulting firm IBC Global. The summit brought together industry representatives and investors. Research presented at the event showed a growing disconnect between warehouse construction and actual demand. Vacant Warehouses Exist, but Not Where They Are Needed According to IBC Global, the vacancy rate for modern warehouse space in Kazakhstan is about 5%. This gives tenants more options when choosing facilities and negotiating rents. However, the national figure masks significant differences between cities and types of warehouse space. Industry estimates put Astana's shortage of modern warehouse space at approximately 350,000–400,000 square meters. Separately, property consultancy Bright Rich reported that Almaty's warehouse vacancy rate had reached 13.3% in May 2026. These estimates come from different periods and surveys, and should not be treated as directly comparable. Class A warehouses are modern facilities with high ceilings, loading docks, security systems, and infrastructure designed to handle large volumes of goods. Kazakhstan's warehouse market is nevertheless expanding rapidly. According to an IBC Global ranking presented at the summit, the total area of Class A warehouses covered by its research increased by 39% over the past year to 730,000 square meters. More than half of that space, approximately 400,000 square meters, is controlled by the five largest property owners. Their facilities are concentrated mainly in Almaty and Almaty Region, Astana, and Shymkent. Developers Continue Building Despite Weaker Demand A survey of more than 100 warehouse market participants across four Central Asian countries revealed a gap between developers' plans and tenants' expectations. According to IBC Global, 81% of developers intend to launch new projects or complete facilities already under construction within the next twelve months. Yet 62% of developers surveyed identified weak tenant demand as the main obstacle to market development, while 52% cited the high cost and limited availability of financing. IBC Global's market sentiment index for Kazakhstan stood at 48.1 points in the third quarter of 2026, below the neutral threshold of 50. However, 52% of respondents expect supply and demand to move closer to equilibrium over the next year. The risks are particularly high for speculative developments launched without a tenant already under contract. Developers expect to secure customers after construction is completed, but by then business requirements and market rental rates may have changed. One alternative is the build-to-suit model, in which a facility is constructed to meet the requirements of a specific tenant. Its location, size, equipment, and operating conditions are agreed upon in advance. This reduces vacancy risk for...

Harassment Laws

Sexual Harassment in Kazakhstan: Why Are Such Cases Difficult to Track?

A woman who said she was sexually harassed on a bus in Astana decided against going to the police because she feared she would be unable to prove what had happened. Instead, she confronted the man and photographed him. "It wasn't an accidental touch because the bus was crowded. He was groping me," she wrote on Threads. Police identified the 46-year-old man after discovering her post. A court sentenced him to ten days of administrative detention for indecent behavior on public transport. On October 13, a court in the capital had imposed the same penalty on an inDrive driver who had asked a female passenger intimate questions and propositioned her for sex during a ride. The woman also took to Threads to describe the incident. The court classified the driver's actions as petty hooliganism. Why Sexual Harassment is Prosecuted as Petty Hooliganism Kazakhstan does not have a comprehensive legal provision specifically addressing sexual harassment of adults in public places. Depending on the circumstances, law enforcement authorities may apply administrative or criminal law. Article 434 of the Code of Administrative Offenses, which covers petty hooliganism, is used in cases of this kind. It applies to offensive harassment of others and other conduct that disturbs public order, including obscene language. The law does not distinguish sexual harassment from other forms of offensive behavior. A first offense is punishable by a fine of 20 times the monthly calculation index (MCI) or 20 to 60 hours of community service. Alternatively, courts can impose five to 15 days of administrative detention. The MCI is a government-set unit used to calculate fines and certain other payments. In 2026, it stands at 4,325 tenge, making a fine of 20 MCI equal to 86,500 tenge, or approximately $190. In August 2023, an Almaty moped rider was held administratively liable under the petty hooliganism provision after slapping a woman he did not know on the buttocks. Because these incidents are recorded alongside other public order violations, official statistics do not show how many cases specifically involve unwanted sexual conduct. Criminal law provides more serious penalties for certain forms of sexual coercion. Article 123 of the Criminal Code addresses coercion into sexual acts through blackmail or threats against property. It also covers exploitation of a victim's financial or other dependence. It does not cover every instance of unwanted touching or verbal sexual harassment. In April 2024, Kazakhstan amended legislation protecting women and children, including provisions establishing criminal liability for sexual harassment of children under 16. The amendments did not create an equivalent standalone offense covering all forms of sexual harassment of adults in public places. Workplace Sexual Harassment Legislation Is Being Developed The Ministry of Labor and Social Protection of the Population has developed amendments that would introduce a definition of workplace sexual harassment into national labor legislation for the first time. The proposals would establish employers' responsibilities for preventing such conduct and create legal grounds for dismissing offenders. However, they would not establish a separate criminal or administrative penalty...

Regional Security

China Seeks Closer Intelligence Cooperation with Tajikistan

China has called for closer intelligence cooperation with Tajikistan and stronger protection for Chinese citizens and businesses. Premier Li Qiang raised both issues during October 19 talks with President Emomali Rahmon in Dushanbe, following attacks that disrupted Chinese projects near the Afghan border. According to China’s Foreign Ministry, Li urged the two countries to “strengthen intelligence exchange and sharing” and deepen law enforcement cooperation. He also called for “strong measures” to protect Chinese nationals and enterprises in Tajikistan. Li placed those requests alongside proposals for closer economic ties, including cooperation in infrastructure and minerals. The Chinese account did not announce a new intelligence-sharing agreement or explain how the proposed cooperation would operate. Security concerns have already affected work on a major road connecting Tajikistan with China. Chinese specialists returned under armed protection to the Kalai-Khumb–Vanj section of the Dushanbe–Kulma highway earlier this year after construction stopped following the November 2025 killings. Tajikistan’s Transport Ministry said the specialists returned in April. Radio Ozodi subsequently described Tajik special forces guarding Chinese workers in Darvaz in late May. The project is funded by a $230 million Chinese grant and is being carried out by China Road and Bridge Corporation. The road runs through difficult mountain terrain toward the Kulma Pass on the Chinese frontier. Its reconstruction is intended to shorten journeys and improve year-round access. For workers on sections close to the Afghan border, however, returning to construction also required protection from armed attacks. On November 26, 2025, an assault on a company camp in Tajikistan’s Khatlon region killed three Chinese workers. Tajikistan’s Foreign Ministry said the attack came from Afghanistan and involved a drone carrying explosives. Four days later, gunmen targeted China Road and Bridge Corporation employees in Darvaz district. Two Chinese nationals were killed. Tajik border officials said the perpetrators came from Afghanistan, but did not publicly identify the organization responsible. Beijing subsequently pressed Dushanbe to protect its citizens. Rahmon convened senior security officials and ordered measures to prevent further attacks. Taliban officials announced two arrests in December 2025 in connection with the killings, but did not publicly identify the suspects. China’s economic connections with Tajikistan have continued to expand. On October 17, state-owned Tajiktelecom and China Mobile International launched a direct fiber-optic link through the Pamirs. The connection has an initial capacity of up to one terabit per second and provides an additional route to international communications networks. The Tajik section extends for 1,010 kilometers, including 435 kilometers through Gorno-Badakhshan, joining China’s network at the Kulma Pass. Together with the highway, the cable illustrates the importance of eastern Tajikistan to the countries’ cross-border infrastructure. For Tajikistan, the immediate issue is protecting the people building and operating these connections. Li’s request brings the protection of those workers into discussions about closer intelligence cooperation at the highest level.