Kazakhstan - The Times Of Central Asia

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Drug Smuggling

Russian Rapper Navai Detained at Kazakhstan Border on Suspicion of Drug Smuggling

Russian rapper Navai Bakirov, known professionally as Navai, was detained on October 13 while entering Kazakhstan from Kyrgyzstan. A Kazakh court has since ordered him held in custody as police investigate suspected drug smuggling and unlawful possession of narcotics. Police in Kazakhstan’s Zhambyl region said officers and border guards discovered and seized a narcotic substance during a search of his vehicle at the Korday checkpoint. They have not identified the substance or disclosed the quantity seized. Navai had performed in Bishkek the previous day as part of a Central Asian concert tour. His concert scheduled for October 14 in Astana was canceled, with organizers citing technical reasons. Kyrgyzstan’s State Border Service has launched an internal investigation into how the musician passed through its Ak-Zhol checkpoint. The service said it would take action if any violations by border officials were uncovered. Navai is a singer of Azerbaijani descent who rose to prominence as part of the duo HammAli & Navai. The duo’s popular songs include “Pustite Menya na Tantspol” (“Let Me on the Dance Floor”), “Pryatki” (“Hide and Seek”), and “Devochka-Voyna” (“Warrior Girl”).

CICA

Kazakhstan Proposes Asian Transport Strategy at Baku Summit

Kazakhstan has proposed a common transport strategy for Asia at a summit in Baku, where Central Asian leaders called for closer economic and technological cooperation. The leaders of Kazakhstan, Kyrgyzstan, and Uzbekistan presented their initiatives on October 15 at the seventh summit of the Conference on Interaction and Confidence Building Measures in Asia (CICA). The proposals came amid negotiations to transform the forum into a full-fledged international organization. CICA has particular historical significance for Kazakhstan. The idea of establishing the forum was first proposed in 1992 by Nursultan Nazarbayev, then the country’s president, at the United Nations General Assembly. President Kassym-Jomart Tokayev called for the development of a CICA Transport Connectivity Strategy. It would examine the potential of China’s Belt and Road Initiative, the International North–South Transport Corridor, the Trans-Caspian International Transport Route, also known as the Middle Corridor, and the Trump Route for International Peace and Prosperity, a planned transport link through Armenia. The Middle Corridor connects China and Central Asia with European markets through the Caspian Sea, Azerbaijan, Georgia, and Turkey. The North–South Corridor focuses on freight transportation between Russia, the Caspian region, Iran, and India. For Central Asian countries, developing several routes simultaneously means having more export options and reducing dependence on individual transit routes. Tokayev also linked the prospects for improved transport connectivity to better relations between Azerbaijan and Armenia. Opening transport links in the South Caucasus could expand shipping options between Asia and Europe, although the specific arrangements for operating new routes have yet to be agreed upon. Another proposal from Kazakhstan is a CICA Water Partnership for joint research, technology exchange, and water conservation. Tokayev also raised the issue of protecting the Caspian Sea. For Central Asia, water management is closely linked to growing demand from agriculture and the energy sector, as well as the effects of climate change. Kyrgyz President Sadyr Japarov focused on investment and industrial cooperation. He called on CICA member states to pursue more joint projects, invited investment in the Tamchy Special Financial Investment Territory, and proposed developing cross-border digital infrastructure. The country is building the China–Kyrgyzstan–Uzbekistan railway to expand its transit connections. Uzbek President Shavkat Mirziyoyev presented proposals on the responsible use of artificial intelligence (AI), confidence-building, and climate cooperation. He proposed establishing a CICA expert platform to develop common recommendations and coordinate practical measures on AI. Tashkent is pursuing digitalization domestically and is interested in international standards and technological partnerships. The summit adopted the Baku Declaration and admitted Laos as CICA’s 29th member. The transport proposals came a week after regional leaders agreed to prioritize East–West and North–South transport routes at an October 8 meeting in Avaza, Turkmenistan.

Growth Forecasts

Central Asia Economic Growth Expected to Slow in 2027

After several years of rapid expansion, Central Asian economies are expected to lose some momentum. The European Bank for Reconstruction and Development (EBRD) forecasts that regional economic growth will slow from 5.8% in 2026 to 5.3% in 2027. However, growth in manufacturing and construction will not necessarily translate into comparable increases in household incomes. The forecast appears in the EBRD’s September report. The bank’s Central Asia figures also include Mongolia, so the regional growth rate should not be interpreted as an average for the five Central Asian countries alone. The Eurasian Fund for Stabilization and Development (EFSD) has published its own projections for Kazakhstan, Kyrgyzstan, and Tajikistan. They differ somewhat from the EBRD’s forecasts but also anticipate continued economic growth. Kyrgyzstan and Tajikistan Maintain Strong Growth The EBRD expects the economies of Kyrgyzstan and Tajikistan to grow by 7% in 2027, the highest rates projected for the five countries in the region. Kyrgyzstan has experienced a construction boom in recent years, driven by investment in roads, housing, and energy infrastructure. The service sector is also expanding. The country’s economy grew by 11.9% in the first half of 2026. However, rapid growth has been accompanied by rising food and fuel prices. The country's performance is closely tied to economic conditions in Russia, where a significant number of Kyrgyz migrant workers are employed and from which Kyrgyzstan imports the vast majority of its fuel. Changes in the Russian labor market can affect remittances and household spending in Kyrgyzstan. In Tajikistan, growth is supported by investment and exports, particularly precious metals and mineral resources. The economy expanded by 8.2% in the first half of 2026. Tajikistan also relies heavily on imported goods and equipment, with spending on imports exceeding export earnings. Remittances from migrant workers in Russia are an even more important source of household income for Tajiks than for their Kyrgyz neighbors, while rising fuel costs are putting additional pressure on family budgets. Kazakhstan Remains Dependent on Oil Exports For Central Asia’s largest economy, the EBRD forecasts growth of 4.5% in 2027, while the Eurasian Fund for Stabilization and Development expects 5%. In 2026, Kazakhstan’s economy has been constrained by disruptions to oil production and exports. Problems arose at the Tengiz oil field and along the Caspian Pipeline Consortium (CPC) export route, through which a significant share of Kazakhstan’s oil reaches global markets via Russia. Meanwhile, Kazakhstan’s factories increased production. But even growth in industries outside the oil sector has yet to eliminate the country’s dependence on commodity exports. For international buyers, the reliability of supply routes is also important. Disruptions to the CPC can restrict Kazakhstan’s oil exports regardless of demand or global prices. The Times of Central Asia recently examined the challenges facing Kazakhstan’s oil logistics. Inflation is another concern. According to the EFSD, prices in Kazakhstan are expected to rise by approximately 9.5% by the end of 2026. This means economic expansion will not necessarily be accompanied by a noticeable improvement in household purchasing power. Uzbekistan’s Growth Driven by...

Economic Growth

Kazakhstan Economic Growth Hits 4.2% Despite Decline in Oil Production

Kazakhstan’s economy grew by 4.2% in the first nine months of 2026, despite an 8.3% drop in oil production. Growth in construction, manufacturing, transportation, and trade helped offset the decline in the country's main export industry, although real household incomes have barely risen. According to figures presented on October 13 by Deputy Prime Minister and Minister of National Economy Serik Zhumangarin, Kazakhstan produced 69.4 million metric tons of oil between January and September. GDP growth accelerated slightly from 4.1% in the first eight months of the year. Kazakhstan is Central Asia’s largest economy and a significant supplier of oil to the global market. Most of its oil exports pass through Russia, including via the Caspian Pipeline Consortium (CPC) pipeline system to a terminal on the Black Sea. Disruptions along these routes can force producers to cut output. The Times of Central Asia previously examined why even high global oil prices do not always translate into the expected revenues for Kazakhstan. According to government estimates, the non-resource sector expanded by 5.4%. Manufacturing, construction, transportation, and trade accounted for more than three-quarters of GDP growth. Manufacturing output rose by 8.6%, with machinery production increasing by 22.8%. Over the nine-month period, automobile production increased by nearly 30%, while electrical equipment output rose by approximately 21%. Production of fabricated metal products, food, chemicals, and pharmaceuticals also increased. Investment in fixed assets, including buildings and equipment, rose by 7% between January and September, reaching 16.1 trillion tenge (approximately $35.7 billion). Private investment accounted for 85.7% of the total and increased by 18.2%, with particularly strong growth in manufacturing and construction. At the same time, the strengthening of the tenge, Kazakhstan’s national currency, has put pressure on exporters when dollar-denominated earnings are converted into local currency. Consumer lending has also slowed: annual growth in consumer loans fell from 26.4% in August 2025 to 10.4% in August 2026. Annual inflation stood at 9.3% in September, down from 9.8% in August. Prices are still rising, although somewhat more slowly. In the second quarter, real household incomes per person, adjusted for inflation, grew by just 0.7% compared with the same period last year, following an increase of just 0.1% in the first quarter.

Small Businesses

Almaty Facade Renovations Leave Small Businesses in the Dust

When Gaukhar Osmonalieva rented a space in central Almaty for a pet grooming salon and coffee shop, renovations to the building’s facade were already underway. She was assured the work would be finished soon. Her business opened in August, but instead of a busy street and an outdoor terrace, she found herself surrounded by scaffolding, a torn-up sidewalk, and constant dust. By mid-October, construction was still underway, and the customers she had hoped to attract by choosing the location were coming less frequently. “At one point, the construction workers dug up the entire road, and foot traffic dropped noticeably. We chose this location because it was convenient and had heavy pedestrian traffic, but those are precisely the advantages we have now practically lost,” Osmonalieva told The Times of Central Asia. Almaty is Kazakhstan’s largest city and commercial hub. In 2026, the city launched a large-scale renovation of residential building facades, many dating back to the Soviet era. The original program covered 176 buildings in three central districts – Almaly, Bostandyk, and Medeu. More than 25.8 billion tenge (approximately $57 million) was allocated for the work. Many of the buildings house cafes, shops, and small businesses on their ground floors. [caption id="attachment_58399" align="aligncenter" width="2560"] Classes continue as normal at a language school on Abay Avenue as restoration goes on outside.[/caption] City officials promised to update the facades while preserving the buildings’ architectural features. But questions about how the work was organized emerged as early as spring. Local news outlet Vlast found that construction had begun at some sites in March, before public tenders were announced and contracts signed. Under the tender terms, renovating a single building was supposed to take three to five months. By August, only nine of the 178 buildings listed in updated district administration figures had been fully renovated. Authorities in Bostandyk expected to complete most of the work by September, while those in Almaty targeted October. Osmonalieva was initially told the renovations would take three weeks, then that they would be completed by September. After complaining via e-Otinish, Kazakhstan’s government complaints platform, she was given a new deadline: October 15. “But today is already October 12, and judging by the condition of the facade, I wouldn’t say even half the work has been done,” she said. According to Osmonalieva, there are often only three or four construction workers on the building. Tools are left near the entrance, while workers cut cladding materials beside the salon, filling the area with dust. [caption id="attachment_58396" align="aligncenter" width="2560"] A coffee shop on Kunaev Street, with construction materials stacked outside.[/caption] The coffee shop has suffered most. Osmonalieva had planned to open an outdoor terrace, a popular feature in Almaty, where warm weather lasts for several months. But scaffolding made it impossible to set up tables outside. “As a result, we missed the entire season. This had a significant impact on the coffee shop: demand was lower than expected, and we couldn’t reach our planned targets,” she said. The construction has created additional...

Mineral Processing

Kazakhstan Proposes Local Rare Earth Processing Partnership with Belgium

Kazakhstan has invited Belgian companies to help process critical minerals domestically. Astana hopes to gain access to European processing technologies to expand exports of higher-value products used in high-tech industries. For now, the two sides are discussing laboratory testing and potential projects, with no new investment agreements announced. The proposal was presented at a Kazakhstan-Belgium seminar held on October 12 at Nazarbayev University in Astana. Vice Minister of Industry and Construction Olzhas Saparbekov said Kazakhstan could supply 21 of the 34 critical raw materials on the European Union's list. "We are ready to discuss phased models under which processing is gradually transferred to Kazakhstan along with the necessary technologies and expertise," Saparbekov said. Belgian companies were offered opportunities to cooperate in extracting metals using chemical solutions, separating rare earth oxides, recycling, and manufacturing industrial equipment. Potential projects include producing materials for batteries, semiconductors, specialty alloys, and permanent magnets. The participants also discussed shipping products to Europe through Belgium's port of Antwerp. Kazakhstan already produces several sought-after industrial metals, including tantalum, niobium, and beryllium. It also plans to begin gallium production, with a target of 15 metric tons a year. However, developing more advanced processing facilities remains a challenge. Since 2018, Kazakhstan has allocated more than 67 billion tenge (approximately $149 million) to geological exploration. According to the ministry, surveys at 11 exploration sites have identified 38 promising areas. Commercial development will require determining the metal content of the ores and the cost of extracting them. In particular, studies of the Kuirektykol site in the Karaganda region have revealed significantly larger rare earth reserves than previously estimated. The size of the discovery does not establish whether mining would be commercially viable. To study mineral resources and test processing technologies, Kazakhstan plans to establish a regional rare earth research center with the participation of European institutions. The European Bank for Reconstruction and Development has supported the preparation of a preliminary feasibility study. Construction of the laboratory complex is expected to begin in 2027, with operations scheduled to start in 2028. Representatives of metals processor Molymet Belgium and Australia's Lindian Resources Limited, which owns a rare earth processing plant in Kazakhstan, took part in the discussions. The next stage of negotiations is expected to involve exchanging samples, testing processing methods, and preparing feasibility studies. For European industry, Kazakhstan could become an additional supplier of critical minerals amid Europe's dependence on Chinese processing capacity. However, the country's stated potential to supply 21 types of critical raw materials encompasses projects at different stages of development, ranging from geological exploration to operating production facilities.