Tajikistan Business Economy - The Times Of Central Asia

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Rivers Without Boundaries Coalition Criticizes Rogun HPP Plans

Rivers Without Boundaries, an international environmental organization, has released a detailed report analyzing alternative strategies for completing the Rogun Hydroelectric Power Plant (HPP) in Tajikistan. This report has been submitted for review to the World Bank Board of Directors. The report highlights the importance of exploring alternative energy development options in Tajikistan before committing to the $6.4 billion Rogun HPP project. The coalition advocates for solutions that minimize environmental and social risks while maximizing long-term benefits for the region. Environmentalists caution that even if the World Bank approves the construction of the world's tallest dam, standing at 335 meters, many of Tajikistan's pressing challenges will remain unresolved. Persistent electricity shortages, for example, are projected to continue until at least 2036, despite the project’s completion. Additionally, the project poses significant threats to the UNESCO-listed Tigrovaya Balka Nature Reserve and the endangered shovelnose sturgeon in the Vakhsh River. Agricultural disruption is another major concern, as over seven million people across Tajikistan, Uzbekistan, Turkmenistan, and Afghanistan risk losing access to vital water resources for farming. The coalition proposes an alternative approach that combines a smaller Rogun HPP with the development of solar power plants. By reducing the dam’s height by 70 meters, the plan could substantially lower economic, social, and environmental risks. This modified strategy offers several benefits, including reducing the number of displaced residents from 40,000 to roughly 13,000. Moreover, integrating solar energy into the energy mix could enable Tajikistan to meet its winter electricity demands by 2030–31 while enhancing resilience to climate change. Diversifying the energy sector would also mitigate long-term economic vulnerabilities. Previously, Rivers Without Boundaries published a report titled “Rogun Hydroelectric Power Plant Project: Non-Compliance Report with World Bank Requirements,” which detailed how the Rogun HPP project violates the World Bank’s environmental and social standards in six critical areas: environmental assessment, biodiversity protection, resource efficiency, dam safety, public participation, and forced displacement. The coalition calls on the World Bank and Tajik authorities to consider alternative solutions that align energy development with environmental sustainability and social responsibility, ensuring a balanced and equitable approach to the region’s energy needs.

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EDB Thinks Tajikistan and Kyrgyzstan Will Show Strongest Growth in 2025

The Eurasian Development Bank (EDB) forecasts that Tajikistan and Kyrgyzstan will lead regional economic growth in 2025. According to the bank’s Macroeconomic Forecast, published on November 5, GDP growth rates for Kyrgyzstan are given at 8.7%, Tajikistan at 8.4%, and Kazakhstan at 5.5%. For comparison, the corresponding figure for Russia is just 2.4%. Tajikistan’s robust growth is attributed to rising prices for gold and other export metals, coupled with reduced costs for imported energy and food products. These factors are expected to enhance economic efficiency by freeing up funds for consumption and investment. Additionally, the country’s rapidly growing population remains a central driver of its economic expansion. Similarly, Kyrgyzstan’s strong economic performance will be fueled by industrial development, high investment activity, and resilient domestic demand. However, in both Kyrgyzstan and Tajikistan, industrial growth and investment activity are anticipated to lag behind GDP expansion. Kyrgyzstan and Tajikistan are expected to grow above the global average, supported by steady exports and robust domestic demand. Kazakhstan’s economy will benefit from increased oil production, large-scale government infrastructure projects, and supportive fiscal policies. The EDB predicts that inflation across the region will gradually decline, from 7.9% in 2024 to 6.4% in 2025. High interest rates will remain a key tool in controlling inflation, with rates expected at 7.3% in Kazakhstan by the end of 2025. Inflation in Kyrgyzstan and Tajikistan is projected to remain within target levels, reaching 5.0% and 5.8%, respectively. These lower inflation rates are expected to support continued economic stability in both countries.

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Central Asia’s Economy Expands Fourfold Over Two Decades, Outpacing Global Growth Rates

Over the past two decades, the gross domestic product (GDP) of Central Asia has grown fourfold in real terms and sevenfold in nominal terms, according to Evgeny Vinokurov, Deputy Head of the Eurasian Development Bank (EDB). Vinokurov highlighted significant improvements in the region’s economic landscape. Over the same period, population mobility has tripled, and incoming investments have surged by more than 17 times. Vinokurov emphasized that the last two years have underscored Central Asia’s status as an economically attractive and strategically important region. Positioned at the heart of Eurasia, Central Asia boasts strong transport and transit potential, a growing consumer market, and expanding opportunities for investment. Despite external challenges, the region’s economies have displayed remarkable resilience, maintaining steady growth and weathering global shocks effectively. Between 2022 and 2023, Central Asia’s economies grew at an average annual rate of 4.8%, significantly outpacing the global average of 3.4%. This makes the region’s growth rate 1.4 times faster than the global average. Vinokurov projected that Central Asia’s nominal GDP will surpass $500 billion in 2024. Despite these achievements, Central Asia faces complex challenges that require regional collaboration. Key issues include: -- Lack of access to the sea: Geographical isolation limits trade and economic integration. -- Climate and environmental risks: These pose threats to sustainable development. -- Water and energy management: Disjointed policies among countries hinder efficiency and sustainability. Vinokurov stressed the importance of joint efforts to address these challenges. Coordinated development of water and energy resources, renewable energy, and the Eurasian transport framework can yield cost-effective and efficient solutions. Central Asia’s impressive economic growth over the past 20 years reflects its potential as a key economic and transit hub in Eurasia. While the region faces significant challenges, collaborative solutions and investments in infrastructure and sustainability could unlock further growth and prosperity.

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Central Asia’s Population Surpasses 80 Million, With Rapid Growth Expected to Continue

The population of Central Asia has reached a historic milestone, exceeding 80 million people as of December 2024. Projections indicate this figure could surpass 100 million by 2050, highlighting the region’s rapid demographic growth and the challenges it brings for sustainable development. Rapid Population Growth According to the Eurasian Development Bank’s (EDB) macroeconomic forecast, Central Asia’s population has grown by nearly one and a half times over the past 24 years, increasing by approximately one million people annually. Tajikistan and Uzbekistan lead the region in demographic growth. Tajikistan’s population reached 10 million at the beginning of 2024, marking an 80% increase since 1991. Uzbekistan, the region’s most populous country, has maintained an annual growth rate of 1.1–1.2%, with its population now exceeding 36.7 million. The region as a whole has a youthful demographic profile, with an average age of 26.2 years. Diverging Population Estimates PopulationPyramid.net estimates Central Asia’s 2024 population at over 82 million. The discrepancy with other sources likely arises from differing methodologies and data collection techniques. Despite this, all sources agree that the population has surpassed the 80 million mark. Future Projections and Challenges Central Asia’s population is expected to exceed 100 million by 2050. However, rapid demographic growth presents serious challenges for the region. Key concerns include: • Sustainable Economic Development: Ensuring that economic growth keeps pace with population increases. • Job Creation: Addressing the needs of a growing labor force. • Quality of Life: Improving access to education, healthcare, and essential services. Managing these issues will be a top priority for state policies in the coming decades, as governments seek to balance population growth with sustainable development.

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Central Asia Prioritizes Food Security Amid Shared Challenges

Food security remains a top priority for Central Asian nations, yet they face shared challenges that threaten regional stability. Deteriorating water resources, climate change, reliance on external food markets, and geopolitical pressures have intensified the need for regional cooperation in addressing these issues. Bilateral and Regional Efforts Talks between the presidents of Uzbekistan and Kazakhstan, Shavkat Mirziyoyev and Kassym-Jomart Tokayev, on August 8 underscored the importance of collaboration. The two leaders witnessed the signing of an agricultural cooperation agreement between their respective ministries. This followed Tokayev’s November 2022 visit to Tashkent, which was particularly productive in advancing food security. Agreements included joint production of mineral fertilizers and a bilateral cooperation program worth $1.3 billion aimed at boosting mutual trade and developing agricultural projects. Trade within Central Asia has grown significantly, with Uzbekistan’s trade volume with its neighbors nearly doubling between 2017 and 2019. Kazakhstan, the region’s leading grain supplier, plays a central role: • Uzbekistan accounts for 60% of Kazakhstan’s grain exports. • Tajikistan consumes 18%. • Kyrgyzstan takes 14%. • Turkmenistan absorbs 6%. Despite this growth, experts highlight the untapped potential for expanding trade and cooperation in agriculture. Common Challenges Food security challenges are compounded by shared threats, including demographic growth and dwindling water resources. The region’s population has reached 75.5 million, while irrigated land per capita has decreased by more than 25% over the past 15 years. Water availability in the Syr Darya and Amu Darya river basins—crucial for irrigating 10 million hectares - faces a projected 15% decline. This is exacerbated by the alarming retreat of glaciers that feed these rivers, jeopardizing long-term agricultural sustainability. The Need for Regional Solutions While each Central Asian country primarily relies on its resources to address food security, the interconnected nature of these challenges calls for a collective approach. Enhanced regional cooperation is essential to develop resilient agricultural systems, manage water resources effectively, and ensure sustainable growth in food production.

Amid Sanctions, China’s Xinjiang Strengthens Ties with Central Asia

China’s Xinjiang region is deepening its engagement with Pakistan and Central Asia as part of efforts to counter Western sanctions and bolster its role in the Belt and Road Initiative (BRI). On November 26, officials from Xinjiang met with their counterparts from Kazakhstan’s Zhetysu region for the first meeting under a new cross-border coordination mechanism. The discussions focused on cross-border tourism, infrastructure, market regulation, quarantine measures, and joint crime prevention. The meeting culminated in the signing of a memorandum on cross-border tourism. The discussions took place near the port of Khorgos, a critical hub for the China Railway Express, which connects China with Europe. Khorgos is home to China’s first cross-border cooperation center, where residents of neighboring countries can engage in business and shop visa-free. The center allows duty-free purchases of up to 8,000 yuan ($1,104) per day. Xinjiang Governor Erkin Tunyoz stressed the importance of strengthening ties with Zhetysu in areas such as trade, tourism, security, and agriculture. This cooperation is becoming increasingly crucial for Beijing as Xinjiang grapples with sanctions from the United States and other Western countries over alleged human rights abuses—a claim that China denies. Sanctions include the U.S. Uyghur Forced Labor Prevention Act, which prohibits imports from Xinjiang suspected of being produced using forced labor. Similar measures have been implemented by Canada, the United Kingdom, and the European Union. In addition to its collaboration with Kazakhstan, China has established a dialogue mechanism with the five Central Asian countries—Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. Since 2020, foreign ministers from these nations have met annually to discuss logistics, trade, investment, agriculture, mining, and security. Li Lifan, a Central Asia scholar at the Shanghai Academy of Social Sciences, described Xinjiang as a “bridgehead” for the BRI. He highlighted the region’s rich natural resources and its role as a base for major industries, including automobile manufacturing. In 2023, trade between Xinjiang and Central Asian countries surged by 50%, reaching 283 billion yuan ($39 billion). Despite these successes, Li cautioned about future challenges. He noted uncertainties surrounding potential Western secondary sanctions, geopolitical tensions, and Russia's ongoing war in Ukraine. Additionally, U.S.-China relations remain fraught, with further unpredictability anticipated under the leadership of Donald Trump. “Full economic development may only be achievable once global tensions ease,” he said.