Uzbekistan Business & Economy - The Times Of Central Asia

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China-Kyrgyzstan-Uzbekistan Railway

Financing Agreement for China-Kyrgyzstan-Uzbekistan Railway Project Signed in Bishkek

On December 16, a loan agreement was signed in Bishkek to finance the construction of the China-Kyrgyzstan-Uzbekistan (CKU) railway, an ambitious regional transport project intended to bolster connectivity across Central and South Asia. According to the Kyrgyz government, the agreement was concluded between China-Kyrgyzstan-Uzbekistan Railway Company LLC, a joint venture formed by the three participating countries and a syndicate of Chinese banks, including the China Development Bank and Eximbank. The CKU railway has been discussed for more than two decades, but repeatedly stalled over financing, route selection, and technical concerns. Momentum increased after 2022 as China sought alternative westbound transport corridors and Central Asian states looked to diversify trade routes and reduce reliance on existing transit pathways. The total cost of the railway project is estimated at $4.7 billion. Half of that amount, approximately $2.3 billion, will be provided as a 35-year loan from China to the joint project company, which will be responsible for repayment. The remaining $2.3 billion will be contributed to the company’s authorized capital: China will cover 51%, while Kyrgyzstan and Uzbekistan will each provide 24.5%. The CKU railway is a strategically significant infrastructure initiative spanning 523 kilometers. Construction officially began on December 27, 2024, in Kyrgyzstan’s Jalal-Abad region. Once completed, the railway will link Kashgar in China with Torugart, Makmal, and Jalal-Abad in Kyrgyzstan, and continue on to Andijan in Uzbekistan. A cargo transshipment station and logistics hub are planned in Makmal. The railway is expected to handle up to 15 million tons of cargo annually. Despite its strategic appeal, the project has raised concerns about debt exposure, particularly for Kyrgyzstan, which already relies heavily on Chinese financing. Officials say the joint-venture structure and long loan maturity will limit fiscal risks, though critics argue projected cargo volumes will need to be met for the railway to be financially sustainable. Currently, neither Kyrgyzstan nor Uzbekistan has a direct rail link with China; the only such connection in Central Asia runs through Kazakhstan. For Uzbekistan, the railway is expected to shorten transit times to Chinese markets and expand export capacity for industrial and agricultural goods. Officials in Tashkent have argued that the CKU route could reduce delivery times by several days compared with existing rail corridors. The CKU railway is among the most technically complex projects in the region. It includes the construction of 50 bridges and 29 tunnels, totaling 120 kilometers in length, meaning roughly 40% of the route will consist of bridges and tunnels. The Kyrgyz section alone will cover 304 kilometers. On December 5, Chairman of the Kyrgyz Cabinet of Ministers Adylbek Kasymaliev visited the construction site of one of the tunnels in the Jalal-Abad region to inspect progress. According to government sources, work has begun on 18 of the 29 planned tunnels and 17 of the 50 bridges. The project currently involves 5,695 pieces of machinery and over 5,000 workers. For Kyrgyzstan, the CKU railway represents the largest infrastructure project in the country’s history. Authorities view the project as a chance to transform...

Natural Resources

Mirziyoyev: Uzbekistan’s Natural Resources Valued at Up to $79,000 Per Person

Uzbekistan’s vast underground wealth has drawn renewed attention following the release of an international ranking of countries by natural resource value per capita, as reported by Uzbek publication Zamin. According to the ranking, Saudi Arabia tops the list, with natural resources valued at approximately $1 million per person, driven largely by its extensive oil reserves. Canada and Australia follow, each exceeding $700,000 per capita, supported by a combination of oil, forests, minerals, iron ore, coal, and natural gas. Russia ranks fourth, with more than $520,000 in resources per person. Although accurately assessing Uzbekistan’s total natural resource value remains difficult due to fluctuating global commodity prices and ongoing geological exploration, the country's long-term potential is considered substantial. In July 2018, Azam Qadirhodjayev, then Deputy Chairman of Uzbekistan’s State Committee for Geology and Mineral Resources, estimated the total potential value of the country’s mineral resources at approximately $5.7 trillion. Of this, over $1 trillion stemmed from explored and currently developed deposits. At the time, only about 20% of Uzbekistan’s territory had been fully studied, leaving considerable room for new discoveries. Additional details were provided in December 2023, when Ilyos Jumayev, a representative of the Ministry of Mining Industry and Geology, announced at a press conference that Uzbekistan officially possesses 101 gold deposits and three silver deposits. According to the ministry, the country holds nearly all mineral types found globally, including gold, silver, copper, uranium, oil, natural gas, lithium, molybdenum, tungsten, manganese, nickel, cobalt, tantalum, and niobium. Major gold reserves serve as the raw material base for the Navoi and Almalyk mining and metallurgical complexes, while copper deposits are primarily located in the Tashkent region. The value of Uzbekistan’s natural resources was also a key topic at the Tashkent International Investment Forum in June 2025. President Shavkat Mirziyoyev stated that the country’s underground wealth is valued at approximately $3 trillion. He emphasized that the global demand for technological minerals is rising amid the fourth industrial revolution and identified strategic reserves of lithium, tungsten, magnesium, graphite, titanium, and vanadium as vital for developing high value-added industries. Based on the president’s $3 trillion estimate and Uzbekistan’s current population of roughly 38.24 million, the per capita value of natural resources stands at approximately $78,000 to $79,000. While lower than the per capita resource wealth in countries like Saudi Arabia or Canada, officials argue that incomplete geological surveying leaves room for this figure to grow. Uzbekistan’s resource base includes not only precious and rare earth metals but also energy resources such as oil and natural gas, underscoring the country’s strategic position in the global minerals landscape.

Digital Development

The Digital Future of Central Asia: Who Is Shaping It, and How?

Digital security is now a key component of most processes in every country. A large share of organizations is moving, or has already moved, their processes online, which requires increased attention and control. Many Central Asian countries are already rolling out AI technologies at the state level. Financial institutions, social systems, crypto services, rental services, and other high-risk areas can no longer develop effectively without biometric identification and AI. Central Asia is gradually developing its own biometric landscape, and if we look at it not as a set of disparate projects but as an emerging infrastructure, it becomes clear that the countries are moving at very different speeds. Kazakhstan: Leader in Biometrics and Digital Identity in the Region Today, Kazakhstan is the undisputed leader in Central Asia in the field of biometric technologies. In this region biometrics has long gone beyond isolated pilots and has become part of the digital infrastructure on which a significant part of the economy operates. Unlike neighboring countries, where biometrics is most often limited to video surveillance or exclusively state initiatives, Kazakhstan has developed a mature market of independent developers and technology companies creating competitive products both for private organizations and for government platforms. Thanks to active digitalization, biometrics in the country has become not an add-on, but the primary mechanism for identity verification. The state additionally stimulates this process: it expands the use of biometric identification in ministerial processes, strengthens the requirements for remote verification, and transfers critical services, such as the issuance of an Electronic Digital Signature (EDS), to biometric authentication. In this way, an environment is being built in which online processes gain full legal validity and the population receives convenient access to services without the need to visit physical offices. Kazakhstan’s key distinction is that it has a full-fledged biometrics market, not just government-driven initiatives. The private sector actively invests in biometric solutions, integrates them into its processes, and competes on the quality of the user experience. Banks strive to reduce entry barriers for clients, MFIs (software development kits) increase protection against fraud, crypto exchanges strengthen their compliance structure, and marketplaces implement biometric identification to secure transactions. This has created an effect unique for the region: biometrics has ceased to be a one-off project and has turned into an everyday part of business. Against this background, independent local companies are developing that are capable of creating advanced technological solutions within the country. Among them, Biometric.Vision stands out in particular, an international company originating from Kazakhstan, one of the key players in the Kazakhstani market that has formed its own technological stack and operates across several industries. The company has become a technological partner for banks, financial organizations, government services, and regulated industries, providing software modules for remote identification, biometric verification, liveness checks, and fraud prevention. Local products make it possible to respond quickly to new regulatory requirements, adapt to them, and address the real needs of local businesses. For Kazakhstan, the presence of local players in the biometrics market is...

Education Reform

World Bank Approves $250 Million Loan to Expand Student Financing in Uzbekistan

The World Bank has approved a $250 million loan to support Uzbekistan’s ambitious reform of its student financing system, the institution announced on December 11. The funding will back the Edulmkon Program, a three-year initiative aimed at expanding equitable access to higher and vocational education across the country. Scheduled for implementation between 2026 and 2028, the program is expected to benefit approximately 600,000 young people. Roughly 80% of the loan will be allocated to tuition loans for students from low-income families and for women, groups that continue to face significant barriers to accessing higher education. Uzbekistan, home to around 10 million people aged 14 to 30, has made educational reform a national priority in recent years. This push has led to a surge in the number of universities and vocational institutions, as well as a dramatic rise in enrollment. Between 2017 and 2024, youth participation in higher education increased from 8% to 48%. However, the rapid expansion has exposed weaknesses in the country’s student loan system, which is based on state subsidized loans issued through commercial banks. The World Bank has noted that the current model is not well aligned with labor market needs, as loans are not directed toward high demand fields such as science, technology, engineering, and mathematics (STEM), as well as information and communication technology (ICT). This misalignment has contributed to graduate underemployment, while gender disparities persist. Although women represent more than half of all university students and are the primary recipients of tuition loans, only one-third of female students are enrolled in STEM disciplines. The Edulmkon Program, to be led by the Ministry of Economy and Finance, will address these challenges through a series of reforms. These include modernizing tuition loan management, improving inter-agency coordination, and launching a centralized digital platform to streamline loan processing and improve transparency. The program will also revise eligibility and subsidy criteria to better serve vulnerable students. A cornerstone of the reform is the introduction of an income-contingent loan system, where repayments are based on a graduate’s income. This approach is designed to protect low-income borrowers and those facing temporary unemployment after graduation. By the end of 2028, students are expected to access loans through 12 participating commercial banks operating in coordination with the Ministry. The World Bank also noted that the program aims to attract approximately $30 million in private capital, reducing fiscal pressure on the state while expanding access to education financing.

Foreign Debt

Opinion: Is Uzbekistan Importing a Future Crisis?

Once hidden from the view of international investors, Uzbekistan is rapidly rewriting its economic narrative. Over the past eight years, the nation attracted over $113 billion in foreign investment, drawing financial firms and mutual funds eager to seize the momentum of Tashkent’s trade liberalization and its ambition to double GDP by 2030. And rightly so; 40% of the country’s population, which is the largest in Central Asia, is under the age of 25, while its gold production is within the top ten globally. Uzbekistan is in its breakout moment. With Uzbek bonds receiving a further upgrade to a BB rating from both Fitch and S&P Global, comparisons to Vietnam or Indonesia no longer seem aspirational. However, the question remains: Is Uzbekistan ready to set foot on the financial global stage, and, more importantly, is it structurally equipped to stay there? Amidst its sweeping economic transformation, IMF officials have warned the administration to remain vigilant against economic shocks beyond its control: volatile commodity prices, contractions in foreign investor liquidity, and consequently, tighter external financing. These warnings are not theoretical. They come from decades of IMF experience with financial crises in other emerging markets, such as the Latin American debt crises in the 1980s, the “Tequila Crisis” in 1994, and the “Asian Flu” in 1997. In those historic cases, newly liberalized economies suffered not because they lacked growth, but because they lacked a defense against the liquidity cycle. The economic reality is that global capital flows are often driven by decisions made in New York or London, not Tashkent. This economic phenomenon is often explained by the “liquidity model,” which argues that changes in exogenous liquidity conditions - driven by the economic situation of investor countries - shape capital flows into emerging markets. Thus, without sufficient financial market depth, emerging capital markets cannot absorb external shocks. And when global liquidity tightens, these flows can abruptly reverse, resulting in prolonged economic instability and loss of monetary sovereignty. The sequence unfolds as follows: capital inflows surge and balance-sheet vulnerabilities quietly build up; then an external shock - such as a monetary tightening in the creditor economy - causes inflows to slow; the local currency depreciates; and a feedback spiral of declining confidence and weakening balance sheets pushes the economy into crisis. Currency loses trust, struggles to recover, and money flees. Some initial signs of this pattern can be observed in Uzbekistan’s current boom. The economy is increasingly reliant on foreign borrowing: external debt as a share of GDP rose from 24.7% in 2017 to 61.4% in 2024, reaching $78.5 billion by June 2025. According to CEIC benchmarks, this level is already comparable to Poland’s 51.8% and Malaysia’s 69.9%, and now exceeds Kazakhstan’s 59.2%, reflecting growing dependence on financing from the World Bank, Eurobond investors, and major East Asian institutions. High debt levels alone do not necessarily imply instability. They can reflect efforts to accelerate domestic development. The real source of fragility in past crises was not the volume of debt but its denomination. When...

Organization of Turkic States (OTS)

Organization of Turkic States Discusses Key Eurasian Energy Projects

At the 5th meeting of ministers responsible for energy within the Organization of Turkic States (OTS), held on December 10 in Istanbul, OTS Secretary General Kubanychbek Omuraliev outlined major joint energy initiatives underway among member states. Founded in 2009, the OTS comprises Azerbaijan, Kazakhstan, Kyrgyzstan, Turkey, Uzbekistan, and Turkmenistan. Hungary and Northern Cyprus participate as observer states. Omuraliev touched upon the following projects: Major oil and gas routes such as the Baku-Tbilisi-Ceyhan (BTC) oil pipeline, Baku-Tbilisi-Erzurum (BTE) gas pipeline, South Caucasus Pipeline, Trans-Anatolian Natural Gas Pipeline (TANAP), Trans Adriatic Pipeline (TAP), and the Iğdır-Nakhchivan gas pipeline; A strategic partnership between Azerbaijan, Kazakhstan, and Uzbekistan to develop and transmit green energy; The Azerbaijan-Georgia-Turkey-Bulgaria Green Energy Corridor, which extends the Central Asia-Azerbaijan corridor and opens new avenues for energy exports to Europe; Construction of the Kambarata-1 Hydropower Plant in Kyrgyzstan, a project jointly developed with Kazakhstan and Uzbekistan; and A planned Black Sea submarine cable to transmit renewable energy. Omuraliev emphasized that enhanced intra-OTS cooperation bolsters both the economic potential of member states and regional energy security. Ministers at the meeting noted the significant fossil fuel and clean energy resources held by OTS members and observers, describing the region as a strategic energy bridge between Asia and Europe. They stressed that advancing practical cooperation is essential amid growing global energy demand and the accelerating energy transition. Participants agreed to move forward with joint projects under the OTS framework, including the establishment of a Regional Center for Technologies and Green Initiatives. As previously reported by The Times of Central Asia, on December 5, the Board of Governors of the Turkic Investment Fund announced in Bishkek that the fund will begin operations in the first quarter of 2026. The Turkic Investment Fund is the first dedicated financial institution jointly established by OTS member states. Headquartered in Istanbul, its mandate is to promote economic cooperation, boost intra-regional trade, and support sustainable development by financing major joint initiatives across the region.