Kyrgyzstan Business & Economy - The Times Of Central Asia

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Central Asia’s AI Pursuit: A Tale of Ambition and Progress

The term “rare earth metals” has become a buzzword in the modern geo-economic lexicon, popularized by U.S. President Donald Trump in contexts where American investments are expected. However, before that, “artificial intelligence” (AI) had already emerged as a global symbol of technological advancement and economic competitiveness. At least four of the five Central Asian republics have joined the race to implement AI technologies, though, until recently, two of them lacked the necessary prerequisites for such a leap. Kazakhstan Sets the Pace A key factor for the successful adoption of AI is the level of digitalization, an area in which Kazakhstan has made significant progress. The country’s digital transformation began with the banking sector and later expanded to public services, with nearly 100% of government services now available online. The COVID-19 pandemic accelerated this shift, making digital access to state institutions and banks a necessity. Since 2022, when AI became synonymous with technological leadership, exemplified by developments in China and the U.S., Kazakh President Kassym-Jomart Tokayev has actively promoted AI initiatives. In the summer of 2023, the government adopted the Concept for the Development of Artificial Intelligence for 2024-2029. During discussions on this initiative, officials reviewed measures already in place, such as Smart Data Ukimet, a centralized system integrating data from 93 government databases. Plans include deploying a supercomputer, expanding data processing centers, launching a national AI platform, and enhancing fiber-optic networks. Additionally, the Ministry of Science and Higher Education is working on a large language model (LLM) focused on the Kazakh language and cultural heritage. Prime Minister Olzhas Bektenov has set a clear goal: “By 2029, the number of AI-based products should increase fivefold. The share of educational programs related to AI must also expand. We need qualified specialists in this field, and it is crucial to consider the needs of domestic companies, which will have a multiplier effect on the economy.” Bektenov also emphasized the role of the National Center for AI in fostering youth involvement, developing human capital, and promoting AI culture. Furthermore, he instructed the Ministry of Justice to enhance legal frameworks for AI regulation. In December 2024, President Tokayev presented Kazakhstan’s first Kazakh language AI model, KazLLM, expressing satisfaction with its development: “We have taught artificial intelligence to think, analyze, and communicate in Kazakh. This achievement opens new prospects for our language in the digital sphere. We must build a Multimodal Language Model, capable of processing various data types simultaneously.” On March 3, 2025, Kazakhstan’s Mazhilis (lower house of parliament) reviewed a draft law, On Artificial Intelligence. If passed, it will be the world’s second AI law after the European AI Act. Uzbekistan's Ambitious Strategy Uzbekistan, another Central Asian country vying for AI leadership, has similarly prioritized digitalization. However, it lags slightly behind Kazakhstan in implementation speed. On October 14, 2024, Uzbekistan adopted its Strategy for the Development of Artificial Intelligence Technologies Until 2030, which outlines several ambitious targets: Increasing AI-driven software and services to $1.5 billion Expanding AI-powered government services on the Single Portal of...

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Kyrgyzstan to Issue $1.7 Billion in Eurobonds for the First Time

The Ministry of Finance of Kyrgyzstan has summarized its 2024 financial results and outlined its plans for 2025. According to Finance Minister Almaz Baketaev, the country’s recent financial policies have played a key role in rebuilding the economy. First-Ever Eurobond Issuance For the first time, Kyrgyzstan is preparing to issue Eurobonds worth $1.7 billion with a 10-year maturity period. The bonds will be denominated in U.S. dollars, euros, Chinese yuan, UAE dirhams, Hong Kong dollars, and the Kyrgyz som. Earlier, The Times of Central Asia reported that the government was working on issuing European and American bonds, though at the time, the Ministry of Finance had not provided specific details. Now, the scale and scope of the plan have been confirmed. “This issuance will be aimed at implementing priority projects in the energy sector,” said Umutzhan Amanbayev, director of the Central Treasury at the Ministry of Finance. Investment and Economic Growth Strategy The Ministry of Finance believes that Kyrgyzstan’s stable budget surplus, improving economic indicators, infrastructure development, and large-scale reforms continue to enhance its position in global financial rankings, attracting greater attention from international investors. The Treasury has emphasized that strengthening the country’s financial and economic foundation will require: Effective budget policies Improvements in the social sector Increased foreign investment These measures, officials argue, will help sustain economic growth and ensure long-term stability. Growing Role in Financial Markets Kyrgyz authorities have begun actively engaging with international financial markets to attract investment. In 2024, the government issued green bonds to fund environmental projects. Additionally, Kyrgyzstan is working on integrating its stock exchange with those of the Eurasian Economic Union (EAEU) countries. The recent decision by S&P Global Ratings to assess Kyrgyz government securities has further bolstered interest in the country’s financial instruments, enhancing the appeal of Kyrgyzstan’s sovereign bonds.

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Turkish Company to Build Hydropower Plants in Kyrgyzstan and New Heat and Power Plant for Bishkek

Kyrgyzstan’s Ministry of Energy and Turkish open joint-stock company Orta Asya Investment Holding signed a protocol of intent on February 27 to construct the Kazarman cascade of hydroelectric power plants (HPP) on the Naryn River, with a total capacity of 912 MW. New Hydropower Projects According to the Ministry of Energy, the agreement includes preparations for an investment agreement and a feasibility study for the project. Orta Asya Investment Holding has expressed interest in constructing three hydropower plants in the cascade: Ala-Buga HPP - 600 MW Kara-Bulun-1 HPP - 149 MW Kara-Bulun-2 HPP = 163 MW Together, these HPPs will generate 3.746 billion kWh of electricity annually, significantly contributing to Kyrgyzstan’s growing energy demands. New Heat and Power Plant for Bishkek On the same day, the Ministry of Energy and Orta Asya Investment Holding discussed the construction of a 250 MW natural gas-fired combined heat and power plant (CHPP-2) in Bishkek. The project is estimated to take 2 - 4 years, with a budget of $443 million. Orta Asya Investment Holding has committed to investing approximately 3 billion KGS (about $34 million) in the project. The Ministry and the company have agreed to finalize a feasibility study for Bishkek CHPP-2 within three months and then begin implementation. Once completed, CHPP-2 will: Increase the country’s energy capacity. Ensure stable electricity and heat supply for residents and businesses. Improve Bishkek’s environmental situation by using natural gas, a cleaner energy source. CHPP-2 will be Bishkek’s second power plant, reducing reliance on the city’s aging Thermal Power Plant (TPP). Power Shortage in Bishkek Bishkek, home to over one million residents, currently relies on a single power plant for both electricity and heating. The Bishkek TPP produces approximately 13% of Kyrgyzstan’s total electricity output, with the remainder coming from hydropower plants. The TPP also provides heat and hot water to nearly two-thirds of the capital. However, the aging plant has suffered two major accidents in recent years: January 2018 - A breakdown left the city without heating for three days in freezing temperatures. February 2, 2024 - An explosion seriously injured three people and forced authorities to impose hot water and heating restrictions in some parts of the city. Following the 2024 accident, the government prohibited newly built high-rise residential buildings from connecting to the existing TPP heating system. Once completed, Bishkek CHPP-2 is expected to meet the city’s growing heating needs and reduce the risk of energy shortages.

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Kyrgyzstan Pushes to Lift U.S. Sanctions on Keremet Bank

The National Bank of Kyrgyzstan is negotiating with the U.S. Treasury Department to lift sanctions imposed on Keremet Bank, according to National Bank Chairman Melis Turgunbaev. The U.S. authorities sanctioned Keremet Bank over alleged ties to Promsvyazbank, a Russian financial institution under sanctions. In response, the National Bank of Kyrgyzstan has formally petitioned for the sanctions to be lifted. Efforts to Lift Sanctions “We have submitted a formal request, provided the necessary information, and are actively engaging with U.S. officials. Typically, cases like this are reviewed within 30 to 45 days. Sanctions on Keremet Bank are set to take effect on March 1, and we are doing everything possible to reverse this decision before then,” Turgunbaev stated. According to him, this window allows the bank to manage its international assets and keep clients informed. Keremet Bank’s Response Keremet Bank has welcomed the government’s efforts to challenge the sanctions. “The bank operates in full compliance with national and international laws, adhering to principles of transparency and responsibility. We have submitted an appeal to OFAC (the U.S. Office of Foreign Assets Control) disputing the allegations against us,” the bank told The Times of Central Asia. Growing Time Pressure and UK Sanctions Despite optimism from Kyrgyz authorities, time is running short for a resolution. Keremet Bank has warned its clients that Visa payment cards issued by the bank will stop working on February 28. In a further setback, the United Kingdom has also imposed sanctions on Keremet Bank, designating it as a foreign financial institution supporting Russia. Previously, the National Bank of Kyrgyzstan instructed commercial banks to tighten control over financial transactions in response to increased enforcement by OFAC.

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Kyrgyzstan Faces Labor Shortages Amid Growing Return Migration

As of February 1, 2025, Kyrgyzstan had 6,305 job vacancies, with the highest demand for blue-collar workers, according to the Ministry of Labor, Social Security, and Migration. The official unemployment rate currently stands at 1.8%. A total of 69,300 people have sought assistance from the employment service, with 49,800 officially registered as unemployed. Since the beginning of the year, 12,246 citizens have applied for job placement, and 1,283 have successfully secured employment. To enhance job seekers' competitiveness in the labor market, the employment service has introduced training programs for in-demand professions. These include computer operation, sales, cooking, cosmetology, hairdressing, manicuring, massage therapy, makeup artistry, translation, accounting, sewing, driving, electric and gas welding, plumbing, and beekeeping. Over the past three decades, hundreds of thousands of Kyrgyz citizens have migrated abroad for work, primarily to Russia. However, in recent years, return migration has been rising due to Russia’s economic downturn, stricter regulations, and increasing anti-immigrant sentiment toward Central Asians. In response to this trend, the Kyrgyz government has prioritized establishing new industrial enterprises to create job opportunities for returning labor migrants.

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Uzbekistan to Help Kyrgyzstan Export Nuts and Dried Fruits to Global Markets

Kyrgyzstan has secured a trade agreement with a leading Uzbek exporter of dried fruits, paving the way for systematic food exports to Europe and the Persian Gulf. Ecofruit, a major Uzbek producer and exporter of dried fruits, has expressed strong interest in Kyrgyz nuts and dried fruits, citing their high quality and ecological purity. "Among the products that can enter international markets are apricots, dried uruk, prunes, walnuts, pistachios, barberries, and white and red beans. Of particular interest were walnuts and prunes, which enjoy stable demand in foreign markets," the Kyrgyz Ministry of Economy said. The Uzbek company also announced plans to open a representative office in Kyrgyzstan, signaling long-term cooperation. Kyrgyzstan is expanding its dried fruit exports, with apples accounting for the largest share of the country’s fruit and berry production. In 2023, Kyrgyzstan exported nearly 1,000 tons of dried apples to Germany. Other key importers include Russia, Turkey, Kazakhstan, and Japan. Sample shipments are now reaching the countries of the Persian Gulf, and South Korea. Once used primarily as an ingredient, dried apples are now marketed as snacks. Kyrgyzstan is also known for its high-quality beans, particularly from the Talas region, which is a major production and export hub. Kyrgyz beans are exported to Turkey, Russia, India, Iran, and several European countries. In 2024, exports expanded to China, with 16 Kyrgyz companies registered as official bean suppliers. Walnuts have an even wider global market and are grown primarily in the southern regions of Kyrgyzstan, particularly in the renowned Arslanbob walnut forests, which span 42,500 hectares. At the end of 2023, the Kyrgyz Ministry of Economy signed agreements to export walnuts to China and Turkey. While Russia remains the primary buyer, Kyrgyz walnuts are also exported to the Middle East. With Uzbekistan’s Ecofruit expanding its presence in Kyrgyzstan, the country’s nuts and dried fruits sector is poised for stronger global market integration. The partnership could increase export volumes and create new trade routes, benefiting Kyrgyz farmers and agribusinesses.