Uzbekistan International Affairs - The Times Of Central Asia

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Oil and Gas

Afghanistan to Boost Oil Production in the Amu Darya Basin

Afghanistan plans to launch 25 new oil wells in the Amu Darya basin, increasing daily oil production to 3,000 tons. Hamdullah Fitrat, the deputy spokesman of the Islamic Emirate of Afghanistan, shared that there are currently 24 active wells in this field, from which 1,300 tons of oil are extracted daily. According to Fitrat: "The Ministry of Mines and Petroleum plans to activate 25 more wells by the end of this year, of which 18 will be newly drilled, two will be exploratory wells, and five will be rehabilitated.” Economic experts stress that officials should carefully plan new well drilling and attract investors to process the extracted oil. Economic expert Abdul Zahoor Madaber stated that Afghanistan has abundant natural resources but lacks modern machinery to process them, and cooperation with other countries is needed to import this equipment. Mohammad Asif Stanekzai, another economic expert, added: “The production and processing of natural resources can create job opportunities and have a positive impact on reducing inflation in Afghanistan.” According to the Ministry of Mines and Petroleum, only 10% of Afghanistan’s oil needs are currently met from domestic production. The Amu Darya is a vital river for Central Asian countries. While 72-73% of its water originates in Tajikistan, the majority is used by neighboring countries. In April of this year, the countries of Central Asia distributed Amu Darya and Syrdarya water for the summer of 2024. Under the agreed quota, the draw on water from the Amu Darya watershed will be 56 billion cubic meters for the year, with about 40 billion cubic meters used in the April-to-October growing season. As stated in the Interstate Commission for Water Coordination (ICWC) agreement, Uzbekistan will receive 16 billion cubic meters, Turkmenistan will receive 15.5 billion cubic meters, and Tajikistan will receive 6.9 billion cubic meters. The ICWC claims that the total number of irrigated lands in Central Asian countries is 4.3 million hectares in Uzbekistan, 2.5 million hectares in Kazakhstan, 1.9 million hectares in Turkmenistan, 1 million hectares in Kyrgyzstan, and 680,000 hectares in Tajikistan.

Bilateral Cooperation

Kazakhstan and Uzbekistan Prioritize Cooperation Between Regions

On October 22, the 4th Interregional Forum, “Uzbekistan-Kazakhstan,” was held in Samarkand, Uzbekistan. The forum addressed issues such as increasing bilateral trade turnover, developing industrial cooperation, and enhancing collaboration in the water, energy, transit, and transport sectors. Speaking at the forum, Uzbekistan’s Prime Minister, Abdulla Aripov, emphasized that developing cooperation between the regions of Uzbekistan and Kazakhstan is a priority in relations between the two countries. Aripov stated that “Over the past seven years, trade turnover between Uzbekistan and Kazakhstan has grown almost 2.5-fold, reaching $4.4 billion last year. Today, more than 1,000 enterprises with Kazakh capital operate in Uzbekistan. Border regions have established direct and close ties with each other — the Republic of Karakalpakstan [in Uzbekistan] with the Mangistau region [in Kazakhstan], the Tashkent region with the Turkestan region, and the Navoi region with the Kyzylorda region. At the same time, this great potential has yet to be realized.” Kazakhstan’s Prime Minister, Olzhas Bektenov, meanwhile, announced at the forum that Kazakhstan is ready to increase exports to Uzbekistan by over $550 million, offering 40 types of high-value-added Kazakh products. Uzbekistan is Kazakhstan’s main trading partner in Central Asia. From January-August 2024, bilateral trade amounted to $2.5 billion, with more than 50% of Uzbekistan’s trade passing through Kazakhstan in transit. The forum paid special attention to the development of industrial cooperation, including 74 joint projects with a total investment volume of $3.4 billion and the creation of 14,600 jobs. Of these, 65 enterprises will be established in Kazakhstan, creating 13,600 new jobs. Examples of Kazakh-Uzbek industrial cooperation include the manufacture of Chevrolet Onix cars in Kostanay (Kazakhstan), a plant for the production of household appliances in Saran (Kazakhstan), sewing, spinning, and weaving factories in the Shymkent and Turkestan regions (Kazakhstan), and the production of autoclaved aerated concrete in Angren (Uzbekistan). Kazakhstan and Uzbekistan are also working on establishing the International Center for Industrial Cooperation “Central Asia,” which will offer “one-stop shop” for services and tax and customs for entrepreneurs from both countries.

International Cooperation

Foreign Companies to Invest in Waste Recycling Plants across Uzbekistan

On October 21, Uzbekistan President Shavkat Mirziyoyev attended a presentation on new projects for recycling household waste into electricity. As reported by the president’s press service, Uzbekistan produces 14 million tons of solid waste annually, but only 4-5 percent is recycled. As a consequence, over 7 million tons of greenhouse gases and 43,000 tons of toxic substances formed at waste landfills are annually emitted into the atmosphere and penetrate the soil. To resolve the problem, the Ministry of Ecology, Environmental Protection, and Climate Change has prepared several projects with foreign investors. The plan is to build waste incineration plants across Uzbekistan and process landfill gases at the Akhangaran landfill, with a total investment of about $1.3 billion. A Chinese company, CAMC Engineering, will invest $350 million in constructing two waste incineration plants in the Andijan and Tashkent regions, capable of processing 4,000 tons of waste daily and generating 630 million kilowatt-hours of electricity annually. Another Chinese company, Shanghai SUS Environment, plans to invest $310 million in building two plants in the Samarkand and Kashkadarya regions to process 3,000 tons of waste daily and generate 480 million kilowatt-hours of electricity annually. The United Arab Emirates Group is to invest $200 million in a plant in the Bukhara and Navoi regions to process 1,500 tons of waste daily and generate 363 million kilowatt-hours of electricity annually, and Sejin (Republic of Korea) will invest $55 million in the construction of a 16-megawatt electricity plant in the Akhangaran district of Tashkent to generate electricity from landfill gases. The combined projects, to be implemented between 2025-'27, are predicted to burn over 4.7 million tons of solid municipal waste annually and generate 2.1 billion kilowatt-hours of electricity worth $97 million, saving 152 million cubic meters of natural gas and reducing greenhouse gas emissions by 2.4 million tons. Back on September 26, the President of Uzbekistan established the Agency for Waste Management and Circular Economy Development aimed to introduce modern methods of collecting, sorting, and recycling waste and producing alternative energy, raw materials, and organic fertilizers. Eco-industrial zones are also to be created on landfill sites across Uzbekistan.

International Investment

Warren Buffett’s Companies Expand Investment in Uzbekistan

Uz500, a wealth advisory and private sector development organization focused on Uzbekistan, Eurasia, and the wider Global South, is to analyse direct foreign investments in Uzbekistan, starting with billionaire Warren Buffett. Since 1965, Buffett has transformed Berkshire Hathaway into a trillion-dollar company, primarily investing in American businesses. Currently, Berkshire owns stakes in eight non-US companies, including five major Japanese firms and China's BYD. Notably, half of these companies have expanded their presence in Uzbekistan, launching major energy, infrastructure, and manufacturing projects. Last month, the Sumitomo Corporation announced its agreement to acquire a 49% stake in several renewable energy assets in Uzbekistan from ACWA Power, a company listed in Saudi Arabia. Through this ACWA-Sumitomo partnership, they aim to develop 2.5 GW of renewable energy (solar and wind) and 968 MW of battery storage capacity in Uzbekistan, with a total investment of $4.2 billion. In August 2024, an international consortium of TAQA Water Solutions, Marubeni, and SUEZ signed a $1 billion joint development agreement with the Government of Uzbekistan to build the CIS region’s largest wastewater treatment facility in Tashkent. Meanwhile, Mitsubishi’s advanced power equipment is responsible for 90% of Uzbekistan’s large-scale gas-fired generation, including Navoi 1, 2, and 3 and the $2.5 billion Sirdarya 1 and 2 combined-cycle gas turbine (CCGT) power projects. The first EVs were produced at the BYD Uzbekistan JV plant in June 2024. While the world’s largest EV maker announced or started building its plants in Thailand, Brazil, Turkey, and Hungary, BYD Uzbekistan became BYD’s first operational overseas plant. Uz500 predicts that Japanese companies Itochu and Mitsui, part of Berkshire Hathaway’s portfolio, will follow their peers and invest in Uzbekistan, the region's fastest-growing economy. Their investments could include acquiring renewable energy or infrastructure assets from ACWA Power or Masdar or forming joint ventures to develop uranium and mineral resources. Mitsubishi, Sumitomo, and Marubeni are also expected to increase their investments through more projects and acquisitions. As a result, Berkshire’s indirect investment in Uzbekistan (already worth several hundred million dollars) is likely to grow significantly in the coming years.

International Transport

Levies on Uzbek Drivers in Afghanistan Reduced

According to the Ministry of Transport in Uzbekistan, negotiations with Afghanistan have reduced the levies collected from Uzbek drivers in Afghanistan by 5,000 Afghanis (about $80). A levy of 12,000 Afghanis (about $180) was previously charged to cross the Amudarya bridge. Since September 28, this amount has been set at 7,000 Afghani (about $100). The fee for entering Afghanistan with a cargo vehicle, which was 5,000 Afghanis (about $75), has decreased to 3,500 Afghanis (about $55). According to the announcement, the Ministry of Transport continues to create favorable conditions for cargo transportation through the Trans-Afghan multimodal transport corridor, and to optimize the number of levies. This transport corridor accelerates and simplifies the increase and processing of transit cargo through Uzbekistan, Afghanistan, and Pakistan. In recent years, the volume of transit cargo through Afghanistan has increased by over 30%, reaching almost 1 million tons per year. Following a transit trade agreement between Uzbekistan and Pakistan in 2021, cargo volumes have increased significantly, and in 2022, cargo transportation between the two countries through Afghanistan increased 2.5-fold. This year, Uzbekistan plans to transport more than 1 million tons of cargo through Afghanistan to Pakistan.

Migrants

Migrants in the Crossfire: Russia’s Recruitment for Ukraine War Sparks Tensions

Russia’s ongoing “special military operation” in Ukraine has increased the demand for additional forces, and, in response, Russia is increasingly viewing the use of migrants as a good solution to the situation. As of September 1, 2024, official figures state that 3,985,000 citizens of Central Asian countries lived in Russia. Uzbekistan leads the way with over 1,792,000 migrants, followed by Tajikistan with more than 1,231,000, Kazakhstan with 606,900, Kyrgyzstan with 262,800, and Turkmenistan with 92,000. Some Central Asian migrants have signed contracts with the Russian Ministry of Defense to participate in the war, motivated mainly by financial incentives. However, economic reasons are not the only factor driving them to war. People from Central Asian countries who have received citizenship are also being threatened with imprisonment for failing to join the war effort. TCA has previously reported on efforts by officials to recruit young men detained at the Sakharovo immigration processing center to join the Russian army and fight in Ukraine. In addition, a decree issued by Vladimir Putin has simplified the process for foreigners who join the military to gain Russian citizenship. In contrast, Central Asian governments have looked to discourage their citizens from engaging in the conflict. For example, Uzbekistan has warned that any citizen involved in the Russia-Ukraine war will face legal consequences. In October 2023, an Uzbek citizen who fought in Ukraine for financial reasons was sentenced to three years in prison by a Uzbek court. The defendant had returned to Uzbekistan after being wounded in the conflict, and authorities discovered military documents and proof of his Russian citizenship during their investigation. By September 2024, a growing number of Central Asians had perished in the war, including 47 Uzbeks, 51 Tajiks, and 26 Kyrgyz nationals. In Kazakhstan, since 2014, following the start of the war in the Donetsk and Luhansk regions, criminal liability was been introduced for citizens who participate in armed conflicts abroad. A person who commits such an offense can be punished with imprisonment for up to 12 years, face the confiscation of property, and be deprived of their citizenship. For example, in November of last year, a 34-year-old man from Kazakhstan was imprisoned for six years and eight months for participating in the war in Ukraine. Kyrgyzstan and Tajikistan have also applied measures involving the deprivation of liberty their citizens who participate in the war. Tajikistan’s economy significantly depends on remittances from labor migrants in Russia, which account for approximately one-third of its GDP. Despite the war in Ukraine, over 1.7 million Tajik citizens sought work in Russia in the first half of 2022. However, reports indicate that many Tajik migrants are being sent to Ukraine against their will, raising concerns. The situation further deteriorated after a terrorist attack at Crocus City Hall in February 2024. Tajik nationals were among the primary suspects, leading to a shift in Russia’s attitude towards Central Asian migrants. Tajikistan’s Foreign Minister, Sirojiddin Muhriddin, expressed concerns over the violations of Tajik citizens’ rights in some CIS countries, calling for a...