Uzbekistan Business & Economy - The Times Of Central Asia

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Middle Corridor

Insider’s View: Why Uzbekistan’s Caspian Push Might Be Beneficial for Georgia

Over the past year, Georgia has shifted its focus towards Central Asia, establishing strategic partnerships with Kazakhstan and Uzbekistan. The country has long-term plans for the region in several development areas, including trade and transport logistics. However, the current phase of Georgian–Central Asian relations is not solely based on economic pragmatism. It should also be viewed as a means of preserving sovereignty in the face of global challenges that are catalyzing the old-world order to collapse. In this context, strategic connectivity can be defined as a vital component of small states’ long-term stability and security, placing it on a par with defense capabilities. By intensifying political and economic ties with Tbilisi, Tashkent is seeking to reinforce the Western orientation of its foreign policy. This is necessary to successfully balance between the major powers and minimize the risk of becoming overly dependent on neighboring Russia or China, for example. However, this move should not be perceived as a counter to the geopolitical ambitions of non-regional actors in Central Asia and the South Caucasus. It is devoid of political overtones and reflects the parties’ desire to strengthen their sovereignty based on shared economic interests and opportunities. The Trans-Caspian International Transport Route (Middle Corridor) is the key driver in this dynamic, and its significance extends far beyond transport connectivity. It is a mutually beneficial initiative whose ultimate goal is to ensure regional stability and sustainable economic growth. Thus, Uzbekistan gains an alternative route to the European Union market — the country’s third-largest trading partner — via the Georgian ports of Poti and Batumi on the Black Sea coast. Meanwhile, the Trans-Caspian route provides Georgia with access to the rapidly growing markets of East and South Asia via Uzbekistan and neighboring countries. The new transit corridor concepts promoted by Uzbekistan in the context of the expanding Central Asian partnership deserve special attention. Tashkent and Tbilisi have enormous potential to develop transport cooperation by establishing intercontinental logistics chains: China–Kyrgyzstan–Uzbekistan–Turkmenistan–Azerbaijan–Georgia–Turkey/EU, and India–Pakistan–Afghanistan–Uzbekistan–Kazakhstan–Azerbaijan–Georgia–EU. Both projects involve connecting the China-Kyrgyzstan-Uzbekistan (CKU) railway and the Trans-Afghan Railway Corridor (the Kabul Corridor), which are an absolute priority for Uzbekistan, with the Middle Corridor. This will significantly increase the republic’s exports of transport services by attracting additional transit flows from the South Caucasus, Turkey and Europe, while also expanding the freight base for the aforementioned railway corridors. The issue of jointly promoting new trade routes along the east-west and north-south axes (from Europe to China and India, respectively) through Uzbekistan requires ongoing expert discussion to amplify its relevance. To fully realize its own transit potential, it is insufficient for Uzbekistan to focus solely on the infrastructure development of the Middle Corridor. This is because, even after the launch of the China–Kyrgyzstan–Uzbekistan railway, the country’s ability to attract additional transit cargo flows would remain very limited due to Kazakhstan’s dominance in rail transport between the EU, Central Asia, and China via the Caspian Sea. For Uzbekistan, it is far more important to extend the Middle Corridor to China and India. This would...

Power Grid

Kazakhstan and Kyrgyzstan Give Conflicting Accounts of Four-Country Blackout

Kazakhstan and Kyrgyzstan have given differing accounts of what triggered the August 14 blackout that cut electricity across swathes of Central Asia. Three days later, the initiating event remains unresolved, and the times released by the two sides do not fit neatly into the same sequence. Kazakhstan’s national grid operator KEGOC says two hydrogenerators at Kyrgyzstan’s Toktogul Hydropower Plant, with a combined capacity of 600 MW, disconnected at 2:37 p.m. Kazakhstan time. KEGOC said the sudden loss of generation overloaded the North-East-South transit corridor, separating southern Kazakhstan from the rest of the national grid and the interconnected systems of Kyrgyzstan, Uzbekistan, and Tajikistan. A special commission is investigating the causes. Meanwhile, Kyrgyzstan’s National Electric Grid has given a different chronology. It said that at 3:34 p.m. Kyrgyzstan time, an external disconnection occurred on a high-voltage line linking the northern and southern parts of Kazakhstan’s power system. The Central Asian network then split into an isolated section, and Kyrgyzstan temporarily operated separately while automatic protection systems worked to protect equipment. The one-hour difference between the countries’ clocks makes the discrepancy clearer. Kazakhstan has used UTC+5 nationwide since 2024, while Kyrgyzstan uses UTC+6. That puts Kyrgyzstan’s reported line disconnection at 2:34 p.m. Kazakhstan time, three minutes before KEGOC’s stated 2:37 p.m. Toktogul shutdown. The two times may describe different stages of a fast-moving cascade, but they do not establish the same starting point. A third timestamp complicates the sequence. Alatau Zharyq Company said three 500 kV KEGOC transmission lines shut down at 2:38 p.m., and that those lines triggered automatic load-shedding and frequency protection in Almaty and the surrounding region. Taken together, the public statements leave a sequence of 2:34 p.m., 2:37 p.m., and 2:38 p.m. that investigators will need to reconcile. TCA reporters in Almaty and Bishkek experienced power cuts, while local media reported outages in Dushanbe, Khujand, and southern parts of Uzbekistan. In Kazakhstan, the disturbance affected consumers in the Zhambyl, Turkistan, Kyzylorda, Zhetysu, and Almaty regions, with further restrictions in Karaganda, Ulytau, and Abai. KEGOC said supplies were restored across the affected regions later that afternoon. The four-country impact reflects how tightly the systems are connected. Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan operate in parallel through the Central Asian power system. Cross-border links allow operators to share electricity and reserve capacity, but also mean that a sudden loss of generation or a major transmission line can be felt beyond one national grid before protection systems isolate the disturbance. Central Asia has been here before. In January 2022, a major blackout hit southern Kazakhstan, Kyrgyzstan, and Uzbekistan. The event also involved a sharp imbalance on the regional network and the separation of Kazakhstan’s northern and southern grids. Its precise starting point was disputed in the immediate aftermath. The regional grid dates to the Soviet period. Uzbekistan later withdrew from the old electricity ring, leaving Tajikistan largely isolated for years. Regional links have since been rebuilt; Tajikistan began reconnecting to the unified system in 2024. An Asian Development Bank project is adding...

Agricultural Export

Kazakhstan Agricultural Exports Face Growing Competition from Uzbekistan

Kazakhstan is rapidly increasing the value of its agricultural exports and trying to sell more processed products abroad rather than simply exporting raw commodities. In 2025, the country’s agricultural exports reached $7 billion, with processed products accounting for $3.6 billion. In the first four months of 2026, exports of agricultural and food products rose another 36% to $3 billion. But Kazakhstan’s relationship with Uzbekistan, one of the main buyers of its agricultural products, shows another side of this process. Uzbekistan is also beginning to challenge the established pattern. It buys Kazakh grain, vegetable oils, and oilseed products, but is expanding its own processing capacity. In some sectors, finished Uzbek products are now entering the same foreign markets where Kazakh producers have traditionally been strong. This is most clearly visible in the flour market. Kazakhstan has long been a dominant regional flour exporter and was until recently Afghanistan’s main supplier. Uzbekistan, meanwhile, imported both Kazakh wheat and flour. As Tashkent expanded its domestic milling capacity, it increasingly bought raw Kazakh wheat and turned it into flour at home. By 2025, the balance had shifted. Kazakhstan supplied Afghanistan with about 1.05 million metric tons of flour, while Uzbekistan shipped nearly 1.59 million tons. Almost all of Uzbekistan’s flour exports in 2025 went to the Afghan market. Kazakhstan has not disappeared from this production chain. Uzbekistan remains one of the largest buyers of Kazakh wheat. Those grain shipments help supply Uzbek flour mills, with the finished flour then exported, including to Afghanistan. Uzbekistan also continues to import Kazakh flour, so the substitution has not been complete. Kazakhstan is also developing its agricultural processing. Exports of processed agricultural products rose 35% to $3.6 billion in 2025. In the flour market, however, the value-adding step of milling grain and exporting the flour has increasingly shifted to its neighbor. There are signs of a similar shift in the vegetable oil and fat industry, although Kazakhstan’s position here remains considerably stronger. Between September 2025 and May 2026, Kazakhstan supplied Uzbekistan with 553,000 metric tons of vegetable oils and meal and oilcake, 31% more than during the same period of the previous season. Kazakhstan accounted for more than 90% of Uzbekistan’s vegetable oil imports in 2025. For Kazakhstan, this is an example of moving beyond the simple export of agricultural raw materials. Uzbekistan, meanwhile, is expanding its own oils and fats industry. Large enterprises produced 31,200 metric tons of margarine and spreads in 2025, up 21.4% from a year earlier. Sunflower oil production is also growing. In January-August 2025, large Uzbek enterprises produced 83,500 metric tons, compared with 28,000 metric tons during the same period in 2023. Domestic production is therefore rising rapidly even as Uzbekistan continues to import large volumes of sunflower oil. Uzbekistan is also beginning to export more sunflower oil. In the first half of 2025, Uzbekistan supplied Afghanistan with more than 17,700 metric tons of sunflower oil, becoming its largest supplier during that period, according to data from agricultural market analyst Marina Sidak and as reported by APK-Inform....

Direct Flights

Etihad Flights to Uzbekistan Begin Daily as Almaty Service Moves to 2027

Etihad Airways has launched daily service between Abu Dhabi and Tashkent, adding Uzbekistan to its operated network. A direct service to Almaty that had been scheduled for March 2026 is now expected in 2027. Etihad's inaugural outbound flight departed Abu Dhabi on August 9 and arrived in Tashkent early on August 10. The return flight left later that morning, and the route is operated with an Airbus A320. Etihad senior vice president Jurriaan Pieter Stelder told The Times of Central Asia that the airline had studied Uzbekistan's aviation market for several years before entering it. He said the growth of local airlines and established business demand led Etihad to begin with a higher frequency than it might use in other new markets. Etihad expects the route to perform in line with its network, which recorded an average passenger load factor of 89.7% in the first two months of 2026. Stelder said the carrier expects to fill at least 140 of roughly 160 seats on each leg. The route is supported by a codeshare agreement with Uzbekistan Airways that took effect in May. Etihad customers can buy a single ticket through Tashkent to eight domestic destinations, while Uzbekistan Airways passengers can connect to Abu Dhabi on the Etihad service. The partnership allows Etihad to test demand for Samarkand through Uzbekistan Airways. “We know there is particularly strong demand for Samarkand,” Stelder said. He added that Etihad could eventually operate another route in Uzbekistan if the market grows. Commercial ties between Uzbekistan and the United Arab Emirates (UAE) have grown rapidly, including through civil aviation cooperation. In January 2025, the two governments set targets to increase bilateral trade by a factor of ten by 2030 and raise the bilateral investment portfolio to $50 billion. Etihad Chief Digital Officer Frank Meyer said the relationship already supports business travel, while tourism demand needs further development. He added that Etihad would hire local staff for airport operations and sales, while local contractors would handle ground services. Etihad already reaches Kazakhstan through a codeshare with Air Astana. The agreement allows customers to book Air Astana-operated connections through Almaty and Astana. Etihad announced plans for its own Almaty route in July 2025, with eight weekly flights scheduled from March 16, 2026. The launch did not take place, but Stelder said the carrier had not abandoned the destination. “We expect to start flying to Kazakhstan, specifically Almaty, sometime in 2027,” he said. “For now, we decided it was better to start with Tashkent.”

Growth Forecasts

Why Central Asia Growth Forecasts Differ So Sharply

How fast can Central Asia continue to grow? The Eurasian Development Bank (EDB) and the International Monetary Fund (IMF) give markedly different answers. The contrast is sharpest in Kyrgyzstan, where the EDB expects another year of double-digit growth, while the IMF sees a much more pronounced slowdown. Both institutions are looking at the same countries and have access to broadly the same set of macroeconomic data. Their forecasts, however, reflect different assessments of how much of Central Asia’s recent momentum can be sustained. The EDB expects strong investment to keep growth high, while the IMF is more cautious about how long the recent pace of expansion can continue. The EDB is itself a regional development institution. It was established by Russia and Kazakhstan in 2006, with Armenia, Belarus, Kyrgyzstan, and Tajikistan later becoming shareholders. Uzbekistan joined the bank in 2025. The EDB is headquartered in Almaty. The comparison covers the four Central Asian states that are EDB members; Turkmenistan is not included. Its latest forecast for Central Asia is optimistic. In 2026, the EDB expects growth of 10.2% in Kyrgyzstan, 8.3% in Tajikistan, 7.9% in Uzbekistan, and 5.5% in Kazakhstan. The region’s economy as a whole is expected to grow by more than 6.5%, with its combined GDP exceeding $600 billion for the first time. The IMF gives lower figures. Its latest available country projections put 2026 growth at 4.6% for Kazakhstan, 6.8% for Uzbekistan, 6.1% for Kyrgyzstan, and 6.0% for Tajikistan. These projections were published at different times rather than as a single set of four country forecasts. The largest gap is in Kyrgyzstan, where the forecasts differ by 4.1 percentage points, but there are nevertheless modest percentage point gaps between the forecasts for Tajikistan (2.3), Uzbekistan (1.1), and Kazakhstan (0.9). These differences are large enough to raise the question: why the difference in expectations? Part of the answer lies in how the institutions assess the effect of a more uncertain global economy. The IMF expects the world economy to grow by 3% in 2026 and 3.4% in 2027. Its July update said the conflict in the Middle East was weighing particularly heavily on energy importers and warned that renewed conflict or financial-market disruption could weaken the outlook. For the four countries, this means different things. Kazakhstan exports oil and benefits from high prices, although it also depends on the condition of export routes and external demand. Kyrgyzstan and Tajikistan import a significant share of their fuel, while their economies are closely linked to migrant remittances. Uzbekistan has a larger domestic market and its own resource base. Kazakhstan illustrates the logic of the IMF forecast particularly well. Its GDP grew by 6.5% in 2025, one of its strongest performances in recent years. The Fund does not expect that surge to be repeated. Oil production is expected to stabilize after last year’s increase, with growth slowing to 4.6% in 2026, according to the IMF forecast. This does not mean that the Fund attributes everything to oil. Domestic demand remains strong,...

Space Technology

Uzbekistan’s AI Module Reaches Orbit Aboard Samarqand-2028 Satellite

A Chinese-built Earth observation satellite carrying artificial intelligence developed by Uzbek specialists was launched from a sea platform off China’s Shandong province on August 5. The Samarqand-2028 satellite was launched alongside Lampung-1, another Earth observation satellite from China’s STAR.VISION Aerospace. A livestream showed the rocket lifting off from the platform. STAR.VISION developed Samarqand-2028, while specialists from Uzbekistan’s national space agency, Uzbekcosmos, created its onboard AI module. Uzbekcosmos said this was the first time Uzbek specialists had participated in developing artificial intelligence for a satellite. Samarqand-2028 carries a hyperspectral sensor that records reflected light in 22 wavelength bands. A conventional color image records visible light in only three broad bands, while the additional bands can reveal details difficult to see with the human eye. Uzbekcosmos plans to use the images to create national maps of cotton and wheat cultivation and make initial assessments of air quality. As The Times of Central Asia reported on August 4, processing images onboard the satellite could reduce the amount of data transmitted to Earth and allow useful information to reach officials more quickly. Samarqand-2028 is separate from Uzbekistan’s first national scientific satellite, Mirzo Ulugbek. Seven Uzbek engineers studying at Kyushu Institute of Technology in Japan have begun developing the 6U satellite, which is scheduled for launch in 2028. The program is intended to train specialists and establish a domestic satellite engineering team. The next stage will be commissioning Samarqand-2028 and testing whether its AI module functions as intended in orbit. Its practical value will depend on whether Uzbek institutions can convert the imagery into useful information for agriculture and environmental monitoring.