Kyrgyzstan Business & Economy - The Times Of Central Asia

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Kyrgyzstan Plans to Export Electricity to Pakistan Next Year

Kyrgyzstan's energy ministry has presented a project to develop the country's National Energy Program until 2035. As part of this project, both Kyrgyzstan and Tajikistan will export electricity to Pakistan next year. The CASA-1000 (Central Asia - South Asia) program plans to supply electricity to Afghanistan and Pakistan. The Kyrgyz side forecasts that around 1.25 billion kilowatt-hours of summertime electricity will be exported to South Asia in 2025. In summer Kyrgyzstan's reservoirs are full, and hydroelectric power plants produce a lot of electricity, which has nowhere to go -- unlike in winter, when there is an electricity shortage in the country. At the same time, officials plan to increase electricity production and exports yearly. In 2026 supplies are expected to grow to 1.7 billion kWh. Electricity exports starting from 2028 will average 1.75 billion kWh. At the beginning of this year Kyrgyzstan signed a joint declaration with Pakistan and Tajikistan to resume the CASA-1000 project. It began constructing high-voltage power lines near the border with Tajikistan, after construction had been halted due to the border conflict between Bishkek and Dushanbe. Power lines were also resumed in Afghanistan, where construction was also stopped after the Taliban came to power.

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Ten Years of the EAEU: Trade Wars Rumble On Against Backdrop of GDP Growth

The Eurasian Economic Union (EAEU) recently celebrated its first significant anniversary. According to the numbers, the years of integration have positively impacted the member states' economies; however, there are serious trade wars in the bloc, and some entrepreneurs fear the collapse of entire industries. The agreement on creating the EAEU was concluded on May 29, 2014, in Astana by the presidents of Kazakhstan, Russia, and Belarus. Later, Armenia and Kyrgyzstan joined the union, whilst Moldova, Uzbekistan, and Cuba hold observer state status. The member states initially emphasized the strictly economic nature of the union, and continuously refused to politicize it. For Kazakhstan, membership in the EAEU is advantageous, because it simplifies exporting raw materials to foreign markets. In addition, the union has unified customs regulations and duty-free trade. According to official sources, the GDP growth rate of all EAEU countries in 2023 amounted to 3.8%, which is higher than global GDP growth. In Armenia, growth is 8.7%, in Kyrgyzstan 6.2%, in Kazakhstan 5.1%, in Belarus 3.9%, and in Russia 3.6%. Mutual trade between member states has almost doubled since the union's inception, with foreign trade increasing by 60%. Kazakhstan has increased trade turnover with EAEU countries 1.7 times, and foreign exports have doubled. According to the Bureau of National Statistics of Kazakhstan, foreign trade turnover for January-March 2024 increased to $31.2 billion, of which the share of trade with EAEU countries amounted to 19.6%, reaching $6.1 billion. Russia's share in the volume of Kazakhstan's external trade turnover (within the EAEU) exceeds 90%. Nevertheless, creating a common harmonized market intended to copy that of the European Union has not yet been possible. A regulation financial system, logistics system, efficient electricity market, and other projects have yet to be implemented. In addition, the EAEU is often shaken by trade wars, and producers suffer from price dumping. Kazakhstani businessmen and farmers have repeatedly complained that the expansion of cheap Russian goods threatens their livelihoods. This problem is particularly acute in the production of eggs, chicken, and dairy products, whilst Kazakhstan is critically dependent on Russian imports in some sectors, especially food. For example, when Russia imposed quotas on sugar exports or otherwise restricted sales, the cost of these products in Kazakhstan tripled in 2022. As soon as Russia removed these restrictions, the price quickly adjusted. Comparable fluctuations are also observed in other sectors. Due to international sanctions, dairy producers from Russia and Belarus redirected their supplies to Kazakhstan and started dumping prices to take over the Kazakh market. In this regard, some experts proposed that the border be closed to these products to preserve the local dairy industry. At the same time, analysts referred to Russia's frequent bans on the export of certain goods, mainly wheat and sugar. Such measures are not conducive to integration, but rural producers believe that Kazakhstani officials cannot effectively defend their interests in the EAEU market, even though they hold significant positions in the integration body. This year, Kazakhstani entrepreneurs again complained that Russia and Belarus were flooding...

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AIIB Forwards Construction of Strategic Bridge in Tajikistan

The Asian Infrastructure Investment Bank (AIIB) has approved a loan equivalent to US $75.5 million to Tajikistan for the construction of a 920-meter-long bridge and approach routes on the Obigarm-Nurobod section of M41 International Highway. The bridge is the first of such magnitude in Tajikistan and a critical component of the county’s road network. Linking Corridors 2, 3 and 5 of the Central Asia Regional Economic Cooperation Program, it will provide essential connections between Tajikistan’s landlocked terrain and neighbouring regional markets. Designed to withstand all weathers, the bridge will connect over 350,000 residents of the northeast region of Tajikistan to the capital Dushanbe, as well as the border of Kyrgyzstan. To align with Tajikistan’s National Development Strategy, the government has prioritized its timely completion and construction of the 75-kilometer Obigarm-Nurobod section has been divided into three phases to ensure synchronized implementation. Illustrative of a collaborative approach to advancing sustainable development and enhancing connectivity in Tajikistan, AIIB has fostered close coordination with other financiers, including the Asian Development Bank, OPEC Fund for International Development and European Bank for Reconstruction and Development. Lauding the initiative, Konstantin Limitovskiy, AIIB’s Vice President for Investment Operations in Region 2, commented: “The project aligns with two core thematic priorities of AIIB. First, it contributes to cross-border connectivity by establishing vital cross-border links with improved road safety along Tajikistan's essential corridor and ensuring connectivity between regions. Secondly, it embraces green-finance principles by integrating environmentally and socially responsible practices and promoting resilient sustainable mechanisms in the road infrastructure development.”

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Fight Against Corruption Allows Kyrgyzstan to Increase State Budget

The head of the Kyrgyz Cabinet of Ministers, Akylbek Japarov, has said that thanks to the fruitful work of the government, “a new era in the financial sector of the Kyrgyz Republic has begun.” During a conference, which was attended by ministers, deputies, officials of various levels, representatives of the World Bank, Asian Development Bank, and other international organizations, Japarov spoke about the new monetary policy. According to him, in 2020, the consolidated budget amounted to 247.8 billion KGS ($2.8 billion), whereas in 2024, the budget is estimated at 670 billion KGS ($7.6 billion). In four years, the authorities were able to increase the state budget by almost 400 billion som ($4.5 billion). “The reason for such achievements was the elimination of corruption. The main disease was the Kumtor deposit. Dividends received from it from 1994 to May 2021 amounted to $100 million. Over the past two and a half years, we have made a profit of $300 million,” Japarov said. The head of the Cabinet emphasized that Kyrgyzstan's GDP has reached 1.4 trillion som ($15.9 billion), while at the time of the collapse of the USSR and independence, the republic's GDP was only 100 million som ($1.1 billion). “The growth of state budget revenues has become a solid basis for the implementation of policies to improve the socioeconomic situation of citizens,” Japarov summarized.

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The Geography of Labor: Where Do Central Asian Migrants Travel To?

Since February 2022, international observers have been predicting changes in labor migration in Central Asia. It is no secret that for 30 years Russia was the main attraction for labor resources in the region, and in the "noughties," Kazakhstan joined as a viable alternative. Over the past two years, the geography of labor migration from Central Asia has expanded somewhat, but still not to the extent that one could say that the region is slipping away from Moscow's economic influence. In Russia itself, despite growing anti-migrant sentiment after the terrorist attack at the Crocus City concert hall, the country's leadership has no intention of refusing to accept migrants from Central Asia. The current phase of Russia's economic development requires a constant inflow of labor resources, so Moscow is even talking about expanding the geography of sources of labor on an industrial scale, particularly to African countries. However, the movement of labor resources from Central Asia to the outside world is a process that benefits both the countries of origin of migrants and those who receive them. The region's countries shed their excess population, thus avoiding possible social explosions, while the receiving countries get workers willing to do low-paid and low-skilled labor. This is true for three of the five Central Asian countries. We do not consider Turkmenistan -- a republic closed to the outside world -- but labor migration from Kazakhstan is more like a "brain drain," which puts it on a par with Russia, which is experiencing similar problems. In the Central Asian republics, the topic of labor migration is still victimized, and the pejorative term "gastarbeiters" remains in common use. Thus, research on these processes is not permanent, which makes it difficult to work with statistical data. And since the largest receiving country is Russia, where chaos reigns regarding labor migration, we can only operate with approximate data. Uzbekistan Let us start with Uzbekistan, the most populous republic in Central Asia. Uzbekistan does not have the same opportunities as Kazakhstan with mineral resources, primarily oil. In Uzbekistan, the rate of labor migration abroad remains the fastest; only the pandemic has been able to affect it. Before the pandemic, in 2019, according to official data, more than 2.5 million Uzbek citizens were listed as labor migrants. In 2021, this number dropped to 1.67 million people, but now, the number of those who left for work has recovered. The main labor migration flows come from Russia - 71%, Kazakhstan - 12%, South Korea - 4% and Turkey - 3%. In the first quarter of 2024, cross-border remittances to Uzbekistan increased from $2.3 billion to $2.5 billion. Russia's share dropped to 68% (78-87% in previous years). Kyrgyzstan Russia, Turkey, and Kazakhstan are also the main destinations for migrants from Kyrgyzstan. South Korea and the UK have been added to the list recently. According to open-source data, in 2022, 1.2 million labor migrants from Kyrgyzstan were registered in Russia, with about 30,000 in Turkey and Kazakhstan. In Kyrgyzstan, labor migration has become important...

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World Economic Forum Names Kazakhstan Best Tourism Destination in Central Asia

The World Economic Forum recently announced the Travel and Tourism Development Index for 2024. In this rating, the USA took first place, followed by Spain and Japan, which took second and third place respectively. France, Australia, Germany, Great Britain, China, Italy, and Switzerland completed the top ten. The Times of Central Asia has reviewed this report on the scale of Central Asian countries. When compiling the rating, 119 countries were considered in several categories: enabling environment, policy and condition, infrastructure and service, resources, and sustainability. In this rating, Kazakhstan takes 52nd place with a score of 4.07. Kazakhstan’s healthcare infrastructure, accessibility, and health security are rated at 5.98 points; it occupies 23rd place in this category. Another high indicator of the country is its socio-economic impact, in which Kazakhstan took 5th place. According to Kazakhstan's Ministry of Tourism, 1,084,800 foreign tourists visited the country in 2023. This is 156,800 more people than last year. “Our goal to develop the tourism sector in terms of quality is reflected in the rating improvement according to various criteria, including price competitiveness, quality of service, and socio-economic impact,” said Ermek Marjikpayev, minister of tourism and sports. Uzbekistan takes 78th place in the rating, up from 94th in 2019. The indicators' growth indicates that the country's tourism initiatives are gradually improving. Uzbekistan records relatively good indicators in terms of price competitiveness (25), safety and security (26), socio-economic impact (33), and demand sustainability (40). The lowest indicator is the prioritization of travel and tourism. Uzbekistan’s potential in this regard is estimated at 3.30, occupying 105th place. According to the Statistics Agency of Uzbekistan, 6.6 million tourists visited the country in 2023. During the year, citizens of the neighboring republics of Tajikistan, Kyrgyzstan, and Kazakhstan recorded the largest number of visits. The Central Asian countries record a good result in terms of price competitiveness. Tajikistan takes 10th place in this direction; its overall capabilities are estimated at 3.42 points, and it takes 99th place among 119 countries. We can also see that the country’s capabilities are relatively good in the categories of demand sustainability (21), safety, and security (33). The lowest results are non-leisure resources (113) and openness to travel and tourism (111). For reference, 1 million 256 thousand tourists visited Tajikistan in 2023, with 92.5% of them being citizens of the CIS. This is 20.2% more than in 2022. Kyrgyzstan recorded the lowest indicator in the region with 3.38 points, occupying 102nd place. Although its results are low compared to those of the other countries in the region, it ranks 11th in terms of price competitiveness. According to Nurgozi Toychuyev, the Kyrgyz representative for the economy ministry's tourism department, the republic's situation in the field of tourism is stable. “If we do not consider the coronavirus period, the number of tourists is increasing yearly. For example, at the end of 2023, Kyrgyzstan received 8 million 557 thousand foreign citizens,” he said.