Uzbekistan Business & Economy - The Times Of Central Asia

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Uzbekistan, Azerbaijan, and Kazakhstan Launch Joint Venture for Green Energy Corridor

Energy companies from Uzbekistan, Azerbaijan, and Kazakhstan have launched a joint venture to support the development of the Caspian Green Energy Corridor, according to the press service of National Electric Networks of Uzbekistan. The new company, “Green Corridor Alliance,” was officially established on July 1 in Baku. It brings together three national power operators: Azerbaijan’s Azerenerji, Kazakhstan’s KEGOC, and Uzbekistan’s National Electric Networks. The joint venture is expected to play a pivotal role in exporting green electricity to Europe while bolstering long-term energy security across the region. Officials have highlighted the corridor’s strategic importance in advancing sustainability goals. “This initiative is important for our energy security and green growth,” the Uzbek side stated. As previously reported by The Times of Central Asia, the Caspian Green Energy Corridor is supported by the Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB). In April, the three countries signed a Memorandum of Understanding with both institutions in Baku to initiate a feasibility study. The corridor aims to enhance cross-border electricity trade and promote renewable energy use throughout Central Asia and the Caspian region. The long-term objective is to integrate the power grids of Uzbekistan, Kazakhstan, and Azerbaijan, creating a streamlined route for clean energy exports to Europe. The agreement builds on a strategic partnership formalized by the presidents of the three countries during the COP-29 climate summit held in Baku in November 2024.

Central Asia Uzbekistan Business & Economy Uzbekistan Business & Economy

Uzbekistan’s Gold Exports Surge 55% in Early 2025, Reaching $6.49 Billion

Uzbekistan’s gold exports surged in the first five months of 2025, reaching $6.49 billion, a 54.8% increase compared to the same period in 2024, according to the National Statistics Committee. Gold now accounts for nearly 44% of the country’s total export revenues, up from $2.66 billion and 37.1% during the same period last year. The rise in gold exports reflects a combination of high global prices, hovering near record highs of around $3,000 per ounce and strong international demand for bullion. Analysts note that much of the growth occurred after February, contributing to a sharp uptick in trade revenue. A Strategic Export Commodity Uzbekistan remains one of the world’s top gold producers, largely due to massive operations such as the Muruntau mine, which in 2021 produced approximately 85,000 kg of gold. According to the World Gold Council, Uzbekistan produced 119.6 tonnes of gold in 2023, ranking tenth globally. Gold plays a pivotal role in Uzbekistan’s economy, generating significant export earnings and bolstering foreign currency reserves. It remains a central pillar of the country’s trade strategy and monetary policy. Record Foreign Reserves With the rise in gold exports, Uzbekistan’s international reserves have reached an all-time high. As of late May 2025, reserves stood at $49.66 billion, up from about $37.4 billion in mid-2024. Much of this increase is attributed to gold: the Central Bank of Uzbekistan’s holdings grew both in volume and value, with the rise in gold prices adding over $1.8 billion in recent months. In January 2025, Uzbekistan even became the world’s top official-sector gold buyer, a move aimed at strengthening its reserve position. In 2023, the country earned $8.15 billion from gold exports, nearly double the previous year’s figure, despite some sales from national reserves. These trends underscore gold’s growing importance as both a trade driver and a stabilizing force for Uzbekistan’s economic and financial position.

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World Bank Urges Uzbekistan to Deepen Reforms to Sustain Growth and Empower Private Sector

Uzbekistan has made significant progress on economic reforms since 2017, but more decisive action is needed to sustain high growth rates and foster a dynamic private sector, according to the World Bank’s latest Country Economic Memorandum. The report, which analyzes the country's economic trajectory from 2010 to 2022, outlines key policy recommendations for the coming years. Between 2010 and 2022, Uzbekistan’s per capita GDP grew at an average annual rate of 4.2%, outpacing the regional averages for Europe and Central Asia and for lower-middle-income countries. However, the World Bank notes that this growth has been driven largely by capital accumulation rather than productivity gains, while the private sector remains underdeveloped. “To become an upper-middle-income country by 2030, Uzbekistan needs to boost its growth closer to double digits,” the report states. Achieving this requires sharp improvements in total factor productivity, which hinges on reducing regulatory and market distortions, deepening trade integration, and investing in human capital. State Role and Infrastructure Gaps State-owned enterprises (SOEs) still dominate many sectors of the economy. As of 2020, over 2,000 SOEs accounted for revenues equivalent to 32% of GDP. Many of these operate in areas where private firms could be more efficient. The report recommends accelerating privatization, particularly in competitive sectors, and enhancing transparency in the process. Infrastructure remains a major bottleneck to sustainable growth. While Uzbekistan has taken steps to attract private investment, especially in the energy sector, greater efforts are needed. The World Bank urges targeted investment in electricity and transport infrastructure, prioritizing economically strategic regions such as Tashkent and Qarshi, and improving connectivity between hubs like Samarkand, Navoi, and Khorezm. Trade and Regulation Since 2017, Uzbekistan’s trade-to-GDP ratio has more than doubled, reaching 71.6% in 2022. Still, only 6% of domestic firms are engaged in exporting. To capitalize on its growing trade openness, the report calls for further tariff reductions, streamlined customs processes, and modernized logistics and transport networks. To foster a more competitive business environment, the World Bank recommends comprehensive regulatory reforms. This includes establishing independent regulators in sectors such as energy, rail transport, and telecommunications, and enhancing the mandate of the Competition Promotion and Consumer Protection Committee. If implemented, these reforms could help Uzbekistan accelerate its economic transformation, create more jobs, and strengthen its position in the global economy.

Central Asia Uzbekistan Kyrgyzstan Business & Economy Kazakhstan Uzbekistan Business & Economy Kazakhstan Business & Economy Kyrgyzstan Business & Economy

Turkic States Push Digital Integration and Organic Farming in Agriculture Sector

The fourth meeting of agriculture ministers from the Organization of Turkic States (OTS) took place on June 25 in Cholpon-Ata, in Kyrgyzstan’s Issyk-Kul region, with a strong focus on organic agriculture and digital transformation in the sector. Strengthening Regional Agricultural Cooperation Agriculture ministers from Azerbaijan, Kazakhstan, Kyrgyzstan, Turkey, Uzbekistan, and Hungary convened to reaffirm their shared commitment to sustainable agriculture and explore strategies for deepening regional cooperation. Central to the discussions was the promotion of organic farming as a tool for ensuring food security, preserving natural resources, and adapting to climate change. The ministers unanimously supported Kyrgyzstan’s proposal to designate Cholpon-Ata as the “Agricultural Capital of the OTS” for one year, beginning in September 2025. A major outcome of the meeting was the decision to establish a Digital Agro-Platform for OTS member states. This digital initiative is designed to simplify market access for farmers and agribusinesses, reduce trade and customs barriers, and increase transparency in agricultural supply chains. The platform aims to streamline trade within the region and bolster exports. The ministers also endorsed the promotion of a unified regional label, “OTS-Made”, for agricultural and food products originating from member countries, with the goal of strengthening brand identity and consumer trust. Kyrgyzstan’s Organic Agriculture Ambitions During the forum, Kyrgyzstan’s Deputy Chairman of the Cabinet of Ministers and Minister of Water Resources, Agriculture and Processing Industry, Bakyt Torobayev, announced a national organic agriculture development program for 2025-2029. The program sets ambitious targets: expanding certified organic farmland from the current 63,000 hectares (5.25% of arable land) to 200,000 hectares by 2029 and transitioning the Issyk-Kul and Naryn regions entirely to organic farming methods. In addition to increasing the land under organic cultivation, the government aims to raise the share of organic products to 25% of total agricultural output and increase the proportion of organic goods in agricultural exports to 25%. “Kyrgyz agricultural products are environmentally friendly, as they are produced in favorable agro-climatic conditions, on mountain pastures irrigated with clean glacial waters, and on fertile lands,” said Torobayev. By positioning organic agriculture as a regional priority and embracing digital tools, the OTS member countries are taking coordinated steps to modernize their agricultural sectors and ensure long-term food and environmental sustainability.

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The Battle for Control Over Central Asia’s Digital Future

Central Asia is digitalizing quickly. Governments across the region have invested in smart cities, 5G, and AI-powered platforms. Kazakhstan ranks 24th in the world in global e-government indexes, and in Tashkent and Bishkek, young, tech-savvy populations are pushing for innovation. But such progress is not without risks. A new report from the German Marshall Fund (GMF), a Washington-based think tank, outlines how Central Asia is becoming ever more reliant on Chinese and Russian technology. These two countries, the report argues, are using digital tools not just to supply infrastructure but to shape how governments in the region manage data, surveillance, and speech. Beijing and Moscow’s tech exports act as snares, tying customers into their own economies. “Central Asian governments are aware of these challenges,” Dylan Welch, the author of the report and a China analyst at the GMF, told The Times of Central Asia. But he notes that it can be difficult to convince policymakers to prioritize the dangers of such overexposure. “For the national leaders, their imperative is to deliver economic growth because they have these young, dynamic populations that need jobs… if they don't deliver on that, then they're in for a long period of instability at home,” he said. This makes Chinese and Russian offers to develop their digital industries extremely tempting. An Entrenched Presence The report coincides with a flurry of Russian and Chinese engagement in the region. Over the weekend, Kazakhstan announced that between them, Beijing and Moscow will be responsible for delivering a new generation of nuclear reactors to the country, currently leaving French and Korean alternatives out in the cold. Then came this week’s visit of Chinese President Xi Jinping to Astana for a summit with the five Central Asian leaders. On the digital front, one notable announcement from this summit included a plan to develop an Artificial Intelligence Cooperation Center in Kyrgyzstan. China has used the term “Digital Silk Road” to describe its investments in Central Asia, and it has built much of the physical infrastructure behind the region’s digitization drive. For its part, Russia has exported its software, legal models and surveillance practices. Taken together, these systems are helping local governments tighten control over digital life. “This strategic integration makes it more difficult for regional states to diversify in the future, even though many continue to pursue multi-vector foreign policies aimed at balancing global partnerships,” Yunis Sharifli, Non-Resident Fellow at the China-Global South Project, told TCA. Where the Vulnerabilities Lie The report uses a “technology stack” framework to explain the problem. This framework looks at five layers: network infrastructure, data storage, consumer devices, digital platforms, and government policies. Across these layers, it argues, Central Asia is exposed to Chinese and Russian influence. Take Kazakhstan. It may be the most advanced digital economy in the region, but most of its internet traffic still passes through Russia. Telecom firms across the region are also required to install a Russian-made surveillance technology known as SORM (System for Operative Investigative Activities), which can intercept internet...

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Opinion: The U.S. Dollar Loses Its Luster as the Uzbek Som Shines

From May 20, 2025, to June 19, 2025, the U.S. dollar declined from 12,885 Uzbek som to 12,625 som, reaching its lowest level since early December 2023. This trend is anticipated to persist. Over the past 30 days, the dollar has depreciated by 2.08% against the som. The Central Bank of Uzbekistan adheres to a flexible exchange rate mechanism, commonly referred to as a floating exchange rate. This approach allows the value of the Uzbek som to be primarily influenced by market forces of supply and demand, rather than being fixed or pegged to another currency. In the context of Uzbekistan, the Central Bank defines the market-determined exchange rate, permitting the som to fluctuate freely based on the interactions between buyers and sellers in the foreign exchange market. In 2017, Uzbekistan transitioned to a flexible exchange rate regime, aligning the som with market conditions and narrowing the gap between the official and parallel exchange rates. This move is expected to enhance export competitiveness, as noted by the European Bank for Reconstruction and Development (EBRD). While the market predominantly determines the exchange rate, the Central Bank reserves the right to intervene in the foreign exchange market to mitigate excessive fluctuations or address significant imbalances. However, it does not maintain a fixed exchange rate. The primary objective of the Central Bank is to uphold price stability, ensuring low and stable inflation. The flexible exchange rate regime empowers the Central Bank to utilize interest rates as a tool to influence inflation and manage the overall economy. Since 2020, the Central Bank of Uzbekistan has been implementing an inflation targeting framework that guides its monetary policy decisions, including those related to the exchange rate. Uzbekistan has recently achieved a remarkable milestone, with its international reserves soaring to an unprecedented $49.6 billion, primarily driven by a substantial increase in gold prices. This significant figure, recorded at the end of last week, represents the highest level of international reserves since the Central Bank of Uzbekistan began tracking this data in 2013. Uzbekistan has been on a remarkable journey of financial growth, marked by a sustained increase in its reserves over the past five months. Since the beginning of the year, the country's reserves have increased by an impressive $8.48 billion, reaching a new historic high of $49.66 billion. In May alone, the reserves saw a substantial boost of $410.2 million, translating to a 0.8% increase compared to April. This consistent upward momentum not only highlights the resilience of Uzbekistan's economy but also demonstrates its ability to adapt and thrive in a dynamic global landscape. Central to this financial ascent has been the role of gold, which has enjoyed significant demand due to its elevated prices in international markets. Over the last month, gold prices surged by 3.27%, rising from $3,280 to $3,390.07 per ounce. When examining the broader trends, it is evident that gold has significantly appreciated, with a striking 25.5% increase since the start of this year and an even more impressive 41.3% surge over...