Kazakhstan Business & Economy - The Times Of Central Asia

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Central Asian Countries and World Bank Discuss Progress on Kambarata-1 Hydropower Project

On January 27, Tashkent hosted a roundtable discussion on advancing the construction of the Kambarata-1 Hydropower Plant (HPP), an ambitious regional initiative being jointly undertaken by Kyrgyzstan, Kazakhstan, and Uzbekistan. The project aims to enhance regional cooperation in Central Asia regarding water and energy resource management. The meeting was attended by Kyrgyzstan’s Minister of Energy Taalaibek Ibrayev, Uzbekistan’s Minister of Energy Jurabek Mirzamakhmudov, Kazakhstan’s Deputy Minister of Energy Sungat Yesimkhanov, and the World Bank Regional Director for Central Asia Tatiana Proskuryakova. The Kambarata-1 HPP, with a projected capacity of 1,860 megawatts and an average annual electricity generation of 5.6 billion kilowatt-hours, will be constructed at an estimated cost exceeding $4 billion. It is planned to be located in the upper reaches of the Naryn River in Kyrgyzstan. Upon completion, it will become the largest hydropower plant in Kyrgyzstan and is expected to address the country's chronic electricity shortages. At the meeting, ministers from the three participating countries requested the World Bank’s assistance in preparing and financing the Kambarata-1 HPP construction. Kyrgyzstan's Ibrayev described the project as "the project of the century" for Kyrgyzstan, emphasizing its potential to strengthen regional cooperation and foster long-term development across Central Asia. “Today's roundtable in Tashkent continues a series of meetings that took place in Vienna, Brussels, and Washington in 2024. These events help coordinate and accelerate the project’s implementation, as well as attract the necessary international support,” Ibrayev stated. From Kazakhstan’s side, Yesimkhanov highlighted the meeting as another step forward in strengthening regional cooperation in the water and energy sectors. He expressed confidence that the project would bolster good relations among Central Asian nations. Uzbek representative Mirzamakhmudov reiterated his country’s commitment to the project, underscoring its strategic importance for the region. "The project will bring significant benefits to all Central Asian countries by strengthening regional energy security, accelerating the transition to a green economy, and improving the use of water resources," he said. Currently, Kyrgyzstan, with the World Bank’s technical support, is revising the project’s feasibility study. This includes assessing the technical, economic, financial, environmental, and social dimensions of the Kambarata-1 HPP. World Bank Regional Director Proskuryakova reaffirmed the institution’s readiness to support the three governments in their efforts to ensure a stable energy future for the region. “We will continue to provide technical assistance in the implementation of the Kambarata-1 HPP construction project. Together with other international development partners, we are working to attract the financing necessary to implement the project,” she said. Ibrayev has previously stated that all preparatory stages of the project are scheduled for completion by May 2025. In September 2024, Kyrgyzstan’s Cabinet of Ministers and the World Bank organized a roundtable to discuss dam selection for the Kambarata-1 HPP. The Swiss engineering firm AFRY proposed several options, and Kyrgyzstan’s Ministry of Energy has confirmed that the feasibility study will be finalized based on the chosen dam design by May 2025.

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Kazakhstan Restricts Poultry Imports from U.S. and Germany Due to Avian Flu

Kazakhstan has temporarily suspended the import of poultry products from Delaware and South Carolina in the United States, as well as from the German state of Baden-Württemberg, due to outbreaks of avian flu in these regions. The decision was announced by Kazakhstan's authorities and is based on data from the World Organization for Animal Health. The ban covers a broad range of items, including live poultry, hatching eggs, down and feathers, poultry meat, and any poultry products that have not been heat-treated at a minimum temperature of 70°C. Additionally, the restrictions apply to feed and feed additives (excluding those derived from plants or produced through chemical or microbiological synthesis), hunting trophies from game birds that have not undergone taxidermy treatment, and used equipment for poultry farming, slaughter, and processing. The measures concerning Baden-Württemberg took effect on January 20. These steps follow earlier restrictions imposed on January 14, when Kazakhstan banned livestock imports from Germany due to an outbreak of foot-and-mouth disease in the Brandenburg region. Kazakhstan’s veterinary authorities continue to monitor the global epizootic situation closely in order to respond swiftly to any threats posed by the spread of dangerous animal diseases.

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Kazakhstan Ships First Batch of Kashagan Oil to Baku

Kazakhstan has shipped its first batch of oil from the Kashagan field to the Azerbaijani port of Baku, marking a significant step in the country’s efforts to diversify its export routes. The shipment was confirmed by the national oil company KazMunayGas (KMG). The tanker Taraz, carrying Kashagan oil, departed from the port of Aktau and is en route to Azerbaijan. Upon arrival in Baku, the oil will be transported via the Baku-Tbilisi-Ceyhan (BTC) pipeline system to the Mediterranean Sea. The export operation is being carried out by KMG Kashagan B.V., a subsidiary of JSC NC KazMunayGas, which manages Kazakhstan’s share in the North Caspian Production Sharing Agreement (PSA). This initiative aligns with Kazakh President Kassym-Jomart Tokayev’s directive for KazMunayGas to develop alternative hydrocarbon export routes. The shipment also advances the development of the Trans-Caspian International Transportation Route, a vital corridor for Kazakhstan’s oil exports. In 2022, KazMunayGas and Azerbaijan’s state oil company SOCAR signed a general agreement to enable the transit of Kazakh oil. In March 2024, the two parties finalized plans for a phased increase in deliveries through Azerbaijan. Under the agreement, annual transit volumes are expected to reach 2.2 million tons. KMG Kashagan B.V., which holds a 16.88% stake in the North Caspian PSA, represents Kazakhstan’s interests in the North Caspian Project (NCP). The company is responsible for the exploration and production of hydrocarbons in the Caspian Sea, as well as the independent transportation and sale of its production share under the PSA’s terms. Energy analysts highlight that diversifying export routes will help Kazakhstan reduce its reliance on traditional oil supply corridors, thereby increasing flexibility and resilience in the face of global market volatility.

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Potato Hunt: Astana Restricts Potato Sales Amid Price Surge

Supermarkets in Astana, including the Small and EuroSpar chains, have introduced a restriction on the sale of potatoes, limiting purchases to no more than 5 kilograms per customer. The Astana Akimat's Department of Investment and Entrepreneurship Development announced that the measure aims to prevent speculation. However, officials have not provided a timeline for when the restrictions might be lifted. A Sharp Spike in Prices The price of potatoes has surged sharply in Kazakhstan. According to the Bureau of National Statistics, this spike occurred within a single week, from January 14 to 21. The annualized price increase averaged 57.8% across the country, with some regions experiencing even steeper hikes. In Astana, the price of potatoes doubled - rising by 100% - with a kilogram costing between 400 and 500 KZT ($0.96). The Ministry of Agriculture (MOA) attributes the price surge to speculation by unscrupulous middlemen. Deputy Minister Yerbol Taszhurekov clarified that the situation cannot be classified as “price collusion” but acknowledged significant price disparities between agricultural producers and retail outlets. “This is the result of speculative activity. After the New Year, many vegetable storages and warehouses remained closed, leading to a reduced supply in the market. Resellers and speculators exploited this temporary shortage to raise prices,” Taszhurekov explained. Tackling the Reseller Problem In response, local governments (akimats) began releasing potatoes from government stabilization funds at significantly reduced prices—between 115 and 130 KZT ($0.25) per kilogram. These measures were implemented to counter speculative practices and stabilize prices until the new harvest. The MOA reported that Kazakhstan currently has more than 62,000 tons of potatoes in reserve, excluding stocks in trade networks. These supplies are deemed sufficient to meet domestic demand until the next harvest. In Astana, this intervention helped bring down prices in retail chains like Small and EuroSpar to 280 KZT ($0.54) per kilogram. However, a new issue arose: small retailers began purchasing potatoes in bulk from these supermarkets to resell them at higher prices. To address this, supermarkets imposed a restriction on potato sales, limiting purchases to 5 kilograms per customer. “All necessary measures have been taken to ensure stable potato prices in Astana. There is no shortage in the city, and products are sufficiently stocked on retail shelves and in markets. Supplies are being replenished in a timely manner. However, to prevent bulk purchases by resellers for resale in small neighborhood stores, supermarkets in the Small and EuroSpar chains have implemented temporary purchase limits,” stated the Department of Investment and Entrepreneurship Development of Astana. Collaboration Between Retail Chains and Farmers The Ministry of Trade and Integration (MTI) also took steps to address the situation. Following discussions with representatives from major supermarket chains such as Magnum, Small, Anvar, and Dina, an agreement was reached for these retailers to directly purchase 1,500 tons of potatoes from farmers. The supermarkets will independently manage the transportation of these goods to ensure steady supply. “Akimats in the regions must present their specific needs, including the required volumes, so that retail chains can promptly meet...

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Chinese Company to Develop Low-Altitude Technologies and Intelligent Manufacturing in Kazakhstan

Kazakh Invest, Kazakhstan’s national investment company, has signed a memorandum of understanding (MoU) with China's Polyking New Horizons Technology Industry Co. Ltd. The agreement focuses on collaboration in the emerging field of low-altitude economy and intelligent manufacturing. As part of the partnership, the companies plan to establish an industrial park in Kazakhstan, which will integrate drone technologies, smart city solutions, and advanced manufacturing systems. The $200 million project is expected to create 1,000 new jobs, according to Kazakh Invest. Expanding High-Tech Opportunities The MoU also includes provisions for developing projects in the chemical industry and innovative technologies. These initiatives aim to strengthen Kazakhstan's position as a hub for high-tech production and innovation in Central Asia. Azamat Kozhanov, Managing Director of Kazakh Invest, highlighted the vast potential for low-altitude technologies in various sectors, including agriculture, energy, construction, and infrastructure management. “The advanced technologies and expertise of Polyking will bring new momentum to the development of this field in Kazakhstan,” Kozhanov stated. He also noted the significant economic opportunity tied to this sector, adding: “By 2050, the global low-altitude economy market is expected to reach $8.8 trillion. Therefore, we are actively creating platforms to develop new industries and providing comprehensive support.” Broader Trends in Low-Altitude Technology Kazakhstan has already taken steps to integrate drone production into its economy. The Times of Central Asia recently reported on a $12 million project by Yesil Technology Company, a subsidiary of China’s Shaanxi Kaizhuo Electronic Technology Co. Ltd., to establish an industrial drone manufacturing facility in the country. This collaboration underscores Kazakhstan’s strategic focus on becoming a leader in the low-altitude economy, a field that includes drones, unmanned aerial vehicles (UAVs), and other advanced technologies that operate at low altitudes. The partnership between Kazakh Invest and Polyking New Horizons Technology marks another milestone in Kazakhstan’s push to diversify its economy through high-tech industries. The planned industrial park, along with complementary projects like drone manufacturing, positions Kazakhstan to capitalize on the growing global market for low-altitude technologies and intelligent manufacturing. If successfully implemented, these initiatives could transform the country into a regional leader in cutting-edge technology and innovation.

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Kazakhstan Leads Central Asia in Average Salaries

Kazakhstan continues to hold the top position in terms of average wages among Central Asian countries, according to a study conducted by analysts at Ranking.kz. Wage Comparisons Across Central Asia Data from the Interstate Statistical Committee of the CIS reveals that as of September 2024, Kazakhstan's average nominal monthly salary stood at $817.20. This figure is nearly twice as high as in Uzbekistan ($437.80) and Kyrgyzstan ($411.20). Tajikistan trails significantly behind, with an average salary of just $242.80 - 3.4 times lower than Kazakhstan’s. Notably, the wage gap between Kazakhstan and Tajikistan would have been even greater if not for a significant increase in Tajik wages. Over the past year, nominal salaries in Tajikistan rose by 24.9%, while real wages increased by 21.1% - the highest growth rate in the region. In comparison, wage growth in Kazakhstan, Kyrgyzstan, and Uzbekistan was more moderate. Data on salaries in Turkmenistan remains unavailable as the country has not updated its wage statistics since 2023. Minimum Wage Comparison Kazakhstan also leads the region in terms of minimum wages. In 2024, the minimum wage in Kazakhstan is 85,000 KZT ($181.10). By contrast: In Uzbekistan, the minimum wage is $89.40. In Tajikistan, it is $54.90. In Kyrgyzstan, it is just $28.30. In Turkmenistan, the official minimum wage is reported as $402.90, based on the fixed exchange rate of 3.5 TMT per dollar. However, due to the country’s reliance on a "black market" exchange rate (approximately 19 TMT per dollar), the actual minimum wage is estimated to be much lower, around $74.20. Sectoral Analysis When analyzing nominal salaries by economic sector, the highest wages in the region are found in finance and insurance. In Kazakhstan, the average salary in this sector exceeds $1,700 - three times higher than in Tajikistan ($561.90). Workers in Kazakhstan's mining industry also enjoy high incomes. In Uzbekistan and Kyrgyzstan, the financial sector and IT industry offer the highest salaries. Meanwhile, in Tajikistan, relatively high wages are reported in the manufacturing and service sectors. Inflation and Its Impact Inflation remains a key factor affecting the real purchasing power of wages across Central Asia. According to the CIS Interstate Statistical Committee, the most significant price increases in 2024 occurred in the economically developed countries of the region - Kazakhstan and Uzbekistan. Uzbekistan: Inflation reached 7.7% in October 2024. Kazakhstan: Inflation stood at 6.6%. Kyrgyzstan: Inflation was lower at 4.2%. Tajikistan: The region’s lowest inflation rate was recorded at 3.2%. These inflation rates directly influence the population's purchasing power, even in countries with higher nominal salaries like Kazakhstan and Uzbekistan. Kazakhstan’s leadership in wages and minimum income underscores its position as the most economically advanced country in Central Asia. However, inflation and significant disparities in income distribution between sectors and regions remain challenges. While countries like Tajikistan are showing progress in wage growth, the overall gap in earnings between Central Asian nations continues to highlight economic inequalities within the region.