Kyrgyz Bank Wins Brussels Court Case Over Sanctions Accusations
Kyrgyzstan's Bakai Bank has announced victory in a Brussels court case against the non-governmental organization Open Dialogue Foundation (ODF), which had previously published materials calling for sanctions against the bank. The court said the allegations were not supported by sufficient evidence. According to the bank, it filed the lawsuit to protect its business reputation after the Open Dialogue Foundation published materials in 2023 calling for sanctions against the financial institution to be considered. The ODF publications alleged that the bank may have been involved in schemes to circumvent European Union anti-Russian sanctions. Bakai Bank denied these allegations and initiated legal proceedings in Brussels. According to the bank’s statement and reporting on the ruling, a Brussels court held that ODF had made serious allegations without sufficient evidence. As a result, the court ordered the organization to remove the relevant publications, publish the text of the court decision on the main page of its website, and reimburse legal costs. At the time of publication, the Open Dialogue Foundation had not publicly commented on the court's decision. Bakai Bank stated that the court's decision stands as confirmation of the allegations' groundlessness. "We welcome this decision, which confirms the lack of basis for the charges and protects the bank's business reputation. We consistently comply with international law and adhere to the principles of transparency in our operations," the bank's representatives said. Askat Alagozov, press secretary to the President of Kyrgyzstan, commented on the situation on social media. He noted that this is not the first time Kyrgyz banks have faced accusations of evading sanctions. Specifically, Keremet Bank has been sanctioned by the United States and the United Kingdom, while Capital Bank of Central Asia, also known as Kapital Bank, has been sanctioned by the United Kingdom. According to Alagozov, such measures are accusatory in nature, and no public evidence of violations has been presented. He also added that President Sadyr Japarov previously rejected such accusations and stated the country's readiness to conduct an independent international audit of the banking sector. Moreover, Capital Bank of Central Asia, one of the banks targeted by sanctions, is state-owned.
Central Asia Welcomes Ceasefire, Urges Talks as Energy Risks Persist
Central Asian governments have cautiously welcomed the two-week ceasefire between the United States and Iran, describing it as a necessary pause in a conflict that has already begun to affect regional stability, trade, and energy flows. Across the region, official statements struck a consistent balance: support for the truce, alongside calls to translate it quickly into negotiations rather than allow it to become a temporary pause in hostilities. Kazakhstan’s President Kassym-Jomart Tokayev described the agreement as a “ceasefire and truce” reached through international mediation, including efforts involving Pakistan’s leadership. According to the presidential press service, Tokayev said that “this agreement became possible due to the goodwill and wisdom of the President of the United States, Donald Trump, and the senior leadership of Iran, as well as all countries involved in the military conflict.” Tokayev went on to express his hope that the agreement would prove sustainable and contribute to global trade and economic stability. Uzbekistan’s Foreign Ministry described the ceasefire as an “important step toward de-escalating tensions” and stressed that it should serve as a pathway to a broader political settlement. Tashkent called for “all parties to exercise restraint, [and] refrain from actions that could further escalate the situation, warning that further escalation risks widening the conflict and undermining regional stability. The statement reaffirmed Uzbekistan's “unwavering position on the need to resolve conflicts exclusively by peaceful means in strict accordance with the principles of the Charter of the United Nations.” Tajikistan’s Foreign Ministry also welcomed the agreement, expressing hope that the ceasefire would open the way to a comprehensive and long-term peace. Dushanbe emphasized that the conflict has “no military solution and its continuation will only worsen the already difficult situation in the Middle East and cause colossal damage to all countries in the region.” The statement urged all parties to “abandon the use of force” and use political and diplomatic mechanisms in accordance with international law and the UN Charter. Kyrgyzstan’s Foreign Ministry said it “welcomes the achievement of a ceasefire agreement in the Middle East,” highlighting the role of Pakistan’s mediation efforts in reducing tensions. Bishkek reaffirmed that disputes must be resolved exclusively through political and diplomatic means on the basis of the UN Charter and international law, and expressed its “hope for achieving sustainable and long-term peace in the region.” Turkmenistan had not issued an official public statement on the ceasefire at the time of publication, in line with its longstanding policy of neutrality and cautious approach to external conflicts. Meanwhile, Azerbaijan’s Foreign Ministry also welcomed the “announced ceasefire” and praised the efforts of mediators who helped broker the agreement. Baku called on all parties to “engage in productive dialogue aimed at resolving existing problems and strengthening mutual trust” and signaled its readiness to “support initiatives aimed at strengthening lasting peace, security, and cooperation in the region.” The convergence in tone reflects more than diplomatic routine. The conflict has already spilled into Central Asia’s political and humanitarian agenda, prompting coordination on evacuations, aid deliveries, and contingency planning. It has also exposed the region’s vulnerability to disruption along key energy and transport corridors, raising the cost of renewed escalation if the ceasefire fails. That vulnerability is already visible in global energy markets. Disruption in the Strait of Hormuz — a critical artery for global oil shipments — has prompted major Asian importers to seek alternative supply routes, with Central Asia increasingly entering the conversation as a potential, if partial, substitute. Countries such as South Korea and Japan, both heavily dependent on Middle Eastern crude, are exploring ways to diversify supply, including increased engagement with Kazakhstan and Azerbaijan. For these buyers, the appeal of Caspian crude lies not only in its availability but in its compatibility with existing refinery systems. Yet geography imposes clear constraints. Unlike Gulf producers, Central Asian exporters rely on longer, more complex routes, including transit across the Caspian Sea and onward through the South Caucasus or the Black Sea. Much of Kazakhstan’s oil also continues to move through infrastructure linked to Russia, notably via the Caspian Pipeline Consortium (CPC), adding a further layer of geopolitical risk. Even so, the current crisis may accelerate longer-term investment in alternative corridors, including the Trans-Caspian route, as governments and energy companies seek to reduce exposure to chokepoints such as Hormuz. What has changed is not just the perception of risk, but the cost of maintaining reliable connectivity. For Central Asia, the ceasefire offers a reprieve. Whether it holds — and whether it leads to a negotiated settlement — will determine not only the trajectory of the conflict, but the region’s role in an increasingly fragmented global energy and transport system.
Pannier and Hillard’s Spotlight on Central Asia: New Episode Out Now
As Managing Editor of The Times of Central Asia, I’m delighted that, in partnership with the Oxus Society for Central Asian Affairs, from October 19, we are the home of the Spotlight on Central Asia podcast. Chaired by seasoned broadcasters Bruce Pannier of RFE/RL’s long-running Majlis podcast and Michael Hillard of The Red Line, each fortnightly instalment will take you on a deep dive into the latest news, developments, security issues, and social trends across an increasingly pivotal region. This week, we examine a series of significant developments across Central Asia, from the deepening fallout of Kyrgyzstan's political power struggle, with fresh arrests, widening investigations, and reports of military build-ups in one of the country's key districts, to a meeting of the Organisation of Turkic States carrying implications that could reverberate well into the rest of the year. We also look at Kazakhstan's announcement of a new oil discovery so substantial it comes close to rivalling Kashagan, alongside the decision by four of Central Asia's five states to dispatch aid convoys in support of the humanitarian response in Iran, as well as a notable diplomatic development where two neighbouring states are finally moving to establish formal relations for the first time since 2021. Before finally turning to the escalating conflict between Afghanistan and Pakistan, where some of the heaviest fighting in months is raising fresh questions about border stability, regional security, and the risk of wider spillover. Special guest on the show this week: - C. Christine Fair, professor in the Security Studies Program within the Edmund A. Walsh School of Foreign Service at Georgetown University, and an expert in the Pakistani military and Afghan relations.
Opinion: Supply Chains of Power: How Critical Minerals Are Shaping China–U.S. Competition in Central Asia
Central Asia is no longer a distant frontier for global geopolitics. It is developing into a central arena of competition for critical minerals, supply chains, and industrial power, where minerals are no longer simple commodities but have instead become key components of contemporary statecraft. In essence, this transformation highlights a recognition in Washington and other capitals that critical mineral supply chains are fundamental to next-generation energy systems, the development of artificial intelligence (AI), and strategic defense capabilities. Even as the global economy is multipolar, critical mineral supply chains remain highly concentrated and dominated by China. Control of rare earths is increasingly geopolitical, with clear economic, political, and security consequences. The significance of that imbalance is now shaping U.S. foreign policy, Central Asia’s development strategies, and the future of global economics. China’s Strategy: Control the Chain, Not Just the Mine Though many years in the making, China’s critical minerals strategy is still often misunderstood as focused primarily on resource access. However, Beijing’s efforts are far broader and more effective. Not only securing raw materials, the Chinese leadership has also worked to control the entire supply chain—from extraction to processing, refining, and manufacturing. China’s long-term focus and investments began in the 1980s with efforts that culminated in the Made in China 2025 plan for national and overseas manufacturing. In 2023 alone, Chinese firms invested more than $120 billion in overseas mining and processing, targeting key elements used in energy supply chains. Beijing also fed its industrial base by providing over $220 billion for the production of electric vehicles, batteries, and renewable infrastructure. As a result, China now controls approximately 60% of lithium processing, more than 70% of cobalt refining, and over 90% of battery material manufacturing. Strategically, China controls roughly 90% of global rare earth refining and associated technologies. Early investments in supplies enabled Beijing to subsequently concentrate funds into refining capacity to feed its industrial sector. This integrated approach has shifted the power dynamic for global supply chains tied to the critical minerals economy. As evidenced by Beijing’s near monopoly on processing, market control is not just associated with geological supplies but with processing capacity. China’s willingness to weaponize access not only to rare earths but also to processing technology demonstrates Beijing’s market muscle. This distinction is critical. Rare earth elements are not inherently scarce, but they are rarely found in concentrated deposits, making them difficult to extract and refine. Over decades, Beijing developed unique refining capabilities and subsidized an industrial base that disincentivized competition and encouraged processing to shift to China. The Vicious Circle Prohibitive investment costs, long development timelines, and market volatility have discouraged Western investment in alternative supply chains. Each stage (mining, processing, refining, manufacturing) is interdependent: miners won’t invest without buyers and offtake agreements, processors and refiners need secure financing and stable mineral supply, and manufacturers need steady inputs. Such interdependence creates an investment standoff and heightens perceptions of risk. By integrating all stages, Beijing exerts influence across global markets, from pricing to production. This has conditioned global markets to depend upon Chinese materials and standards. To build competing systems requires substantial up-front capital and long-time horizons, which together can pose significant deterrents to investment. While some countries are seeking to break out of this vicious cycle of dependency, China is also adapting to compensate. Through the Belt and Road Initiative (BRI), Beijing is advancing loan and infrastructure projects in exchange for expanding into offshore processing partnerships tied to long-term offtake agreements. This secures Beijing stable supplies for its industries, but also extends its influence across global markets. The U.S. Shifts to Being a Strategic Actor The United States has been slow to respond, but this is changing. Critical minerals are now a national security priority. Initiatives such as Project Vault, the Critical Minerals Ministerial, and the FORGE framework represent a strategic shift. These are not simply funding efforts but strategic attempts to build U.S. resilience while disrupting and restructuring the global mineral market away from China’s unchecked dominance. Project Vault, a $12 billion public–private initiative, is designed as a strategic reserve to stabilize demand and support investment. Building off the 1939 U.S. National Defense Stockpile initiative, Project Vault goes beyond defense to protect broader U.S. industrial needs, using price floors and trade mechanisms to reduce volatility and encourage private investment. FORGE represents a broader ambition of building a parallel supply chain among trusted partners with aligned policies and access. Elevating multilateral economic cooperation, this new market would create a trusted trading system outside of China’s orbit. However, out of the new and expanded list of 60 critical minerals identified by the U.S. Geological Survey, the United States is completely “import-reliant” on 11 of these minerals and rare earth elements. Of the remaining minerals needed by U.S. industries, many depend upon foreign sources for more than half of their supply. Overall, China remains the central supplier. With so high a level of dependence comes acute vulnerability. U.S. supply chains are exposed not only to market fluctuations but to geopolitical leverage. China’s 2025 imposition of export controls on rare earth elements (germanium and gallium) in retaliation for U.S. semiconductor restrictions is a prime example of how effectively such leverage can be deployed. Central Asia: From Frontier to Strategic Market Central Asia is gaining prominence in this context. Long viewed as a frontier zone under Russian and Chinese influence, the region is now emerging as an independent and strategic market with scale and growth potential. The region’s fundamentals are strong: over 7% GDP growth, significant foreign investment, and a young population of 80 million. It also possesses major reserves of rare earths and critical minerals, producing 50% of global uranium along with significant gold and copper. Historically, infrastructure tied the region to exporting raw materials to China and Russia. China’s BRI investments further incentivized these transfers through large-scale infrastructure projects that promised transformative benefits. But sales and shipments of cheap raw ore from Central Asia to China for refining and processing only netted significant added value for Beijing. Central Asian governments are now seeking to change the equation. They aim to capture more value at home while foreign backers get secure, off-take supplies at better prices than from Beijing. This shift reflects both a newfound economic ambition and geopolitical awareness. Leaders across the region emphasize diversification and multi-vector partnerships. Noting that Astana is working with U.S. partners on major mineral projects, Kazakhstan’s President Kassym-Jomart Tokayev implies that critical minerals are not just a resource, but a pathway to economic development and geopolitical agency. The Missing Ingredient: Long-Term Capital Despite momentum, a key constraint remains—lack of capital. Western investment has been limited and inconsistent, while mining and processing projects require decades of commitment. Many Central Asian deposits have already been located, but developing a major mining project can still take decades from inception to production. Processing and refining require additional capital and technology. Political cycles further complicate investment. While projects require long-term commitments, policy and political cycles are often much shorter. China has filled this gap, offering long-term project financing and development packages that sometimes created a significant debt burden for the Central Asians, which enabled Beijing to lock down mineral resources and export networks. Central Asian governments are increasingly seeking to diversify partnerships and regain autonomy and agency in managing their relations. To reverse China’s existing supply chain and export advantages, sustained Western engagement (financial, diplomatic, and institutional) will be needed to compete. Wars and the New Geopolitical Geography Recent geopolitical developments are accelerating Central Asia’s importance. The war in Ukraine has catalyzed the development of the Middle Corridor, a transport route linking Asia and Europe while bypassing Russia. At the same time, instability in the Middle East has exposed vulnerabilities in maritime routes such as the Strait of Hormuz. Overland transport, especially rail, is gaining further importance as a result. Central Asia sits at the intersection of these shifts—as both a resource base and a transit hub. Freight along the Middle Corridor has increased fivefold in seven years. Kazakhstan has expanded oil output and refining capacity in response to global disruptions. This convergence enhances the region’s strategic value. It is not only what Central Asia produces, but how those resources reach global markets. The Middle Corridor is evolving from a convenience to a necessity, representing a resilient routing that provides vital economic flexibility, redundancy, and risk reduction for Central Asia. The Next Phase of Competition Power in today’s global economy is evolving. Critical minerals are now central to industrial capacity, technological leadership, and geopolitical influence. China’s dominance reflects decades of sustained strategy and investment. Building alternatives will require a similar commitment. The United States must move from recognition to execution by developing long-term frameworks that endure beyond political cycles. Central Asia presents a rare and timely opportunity combining resource abundance with growing economic dynamism and a desire for diversifying its partnerships. Plus, the region is seeking to move beyond extraction toward value creation. Yet the window for competitors to enter is narrowing as China expands its integrated supply chain model and raises barriers. Western policymakers have begun to recognize that the competition over critical minerals is not just about output, but about who controls supply chains and industrial systems. Recent rare earth export restrictions, sanctions, and war-related disturbances highlight the core reality that supply chains must be built before crises emerge and not in response to disruption. Mines and associated processing capabilities take decades to develop. For the United States and its partners, the imperative is to move beyond discussion to implementation. Capital needs to be mobilized, policies aligned, and institutional frameworks that enhance resilience need to be built. For Central Asia, the opportunity is transformative. By building value chains and leveraging geography, it can move from the periphery to the center of global markets. The stakes extend far beyond economics. Control over critical mineral supply chains may help define not only patterns of trade and production but also the balance of power in the 21st century. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of the publication, its affiliates, or any other organizations mentioned.
Kyrgyzstan Faces Elite Realignment as Tashiyev Network Comes Under Pressure
In the last week, political tensions in Kyrgyzstan have risen following the arrest of Shairbek Tashiyev, the brother of Kamchybek Tashiyev, the former head of the State Committee for National Security (GKNB). Shairbek, a former member of the Jogorku Kenesh, Kyrgyzstan’s parliament, was detained on April 1 following questioning at the Ministry of Internal Affairs. The case unfolds against the backdrop of a widening rift between President Sadyr Japarov and his once long-time ally Tashiyev, who played a key role in helping Japarov consolidate power following the political upheaval of October 2020. After coming to power, President Japarov and Tashiyev built one of the most consolidated political tandems in Kyrgyzstan’s post-Soviet history, concentrating authority across the presidency, parliament, and security structures. In February, Tashiyev was removed from his position, followed by what observers described as a broader sidelining of his allies within security structures and parliament. This fueled speculation about a breakdown in the political partnership that had underpinned relative stability in recent years. Shairbek Tashiyev is now a central suspect in a corruption investigation involving the state-owned company Kyrgyzneftegaz. The Ministry of Internal Affairs announced the criminal case on March 17, following materials released by the State Tax Service alleging financial misconduct within the company. According to investigators, former executives of Kyrgyzneftegaz and affiliated private entities were detained shortly after the case was opened. A criminal case was initiated under Article 336 of the Criminal Code, alleging “Corruption.” Among those detained was former National Bank head Melis Turgunbayev, whose pretrial detention was later changed to house arrest by a court in Bishkek. It later emerged that another of those initially detained was Baigazy Matisakov, identified as a nephew of Kamchybek Tashiyev. He was subsequently released after reportedly reaching an agreement with investigators. On April 2, a court ordered Shairbek Tashiyev to remain in custody until May 16, 2026. His lawyer stated that he denies the charges and considers them unfounded. The investigation, led by the State Tax Service and the Ministry of Internal Affairs, covers Kyrgyzneftegaz’s operations from 2021 to 2025. Authorities allege total financial violations amounting to 4.1 billion soms (approximately $46.5 million), including lost profits and unpaid taxes. Investigators have outlined three main alleged schemes that they are continuing to investigate. The first involved intermediary companies allegedly linked to individuals close to the Tashiyev family, which resold oil to the Kyrgyz Petroleum Company refinery. The second involved the write-off of raw materials, with around 20,000 tons of oil reportedly classified as “technological losses” beyond established norms. The third concerned preferential sales, with diesel and fuel oil allegedly sold at below-market prices to favored companies. The case is being watched closely in Kyrgyzstan, where elite reshuffles have historically signaled broader political realignments rather than isolated legal actions. It remains unclear whether the investigation will expand further and implicate additional individuals connected to Tashiyev or what the potential impact could be on the broader political environment within the country.
Opinion: Trump Has Golden Opportunity to Launch C6+1 on Sidelines of UN
Representatives of the five Central Asian states — Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan — along with Azerbaijan, are expected in New York for the United Nations General Assembly in September. Historically, meetings between the Central Asian states and the United States – the C5+1 – have taken place on the sidelines of the United Nations. It is the most natural and logistically efficient venue for President Donald Trump to re-engage with the C5 partners he hosted at the White House last November. As of now, only foreign ministers are expected to attend the UNGA. But this could change if Trump extends an invitation to the leaders, according to a Central Asian diplomatic source. This time, however, he has the opportunity to add Azerbaijan, transforming the format into a C6+1. Baku has already been invited to participate as a full member in Central Asian gatherings, and Washington should build on that momentum. Azerbaijan is uniquely positioned: close to both Israel and Turkey – two of America’s most important regional partners – it sits astride one of the most important connectivity corridors linking Europe and Asia. Its inclusion would turn the C5+1 into a genuinely trans‑Caspian framework that reflects the emerging realities of Eurasian integration. The move would also link two major diplomatic achievements of Trump’s second term: the launch of the Trump Route for International Peace and Prosperity (TRIPP), a 43-km strategic transit corridor connecting mainland Azerbaijan to its Nakhchivan exclave through Armenia, and Trump’s elevation of the C5+1 to a White House-level summit. While TRIPP was discussed at the C5+1 meeting in November, bringing Azerbaijan into the next gathering would allow the administration to present itself as the architect of a new Eurasian trade and energy map. Strategically, a C6+1 format carries significant implications for great-power competition with China. This is because Central Asia is so crucial to Beijing’s grand strategy. In its recently adopted 15th five-year plan, neighborhood diplomacy is listed as the top priority — ahead of relations with major powers or developing countries. Beijing seeks to build a “community with a shared future” with 17 neighboring states, including all five in Central Asia, to “create a favorable external environment” for national rejuvenation, as Foreign Minister Wang Yi has stated. For China, Central Asia is a vital “hinterland” for energy and resource security, and a buffer against maritime disruptions. The United States does not need to dominate the Eurasian Heartland or force Central Asian states to choose between Washington and Beijing. It simply needs to ensure that any Chinese westward access runs through a vast landmass of countries that maintain constructive relations with the United States. A C6+1 format helps shape that environment without confrontation. A stable Middle Corridor – the energy and trade route running through Central Asia, across the Caspian Sea and through Azerbaijan to Turkey and the Mediterranean – also benefits America's energy-hungry allies in Asia, such as Japan and South Korea. Both increasingly look to Kazakhstan as an alternative oil supplier as they seek to reduce reliance on the Strait of Hormuz. Several proposals have emerged for how to follow up on Trump’s engagement with the Central Asian leaders. At the November White House dinner, Uzbekistan’s President Shavkat Mirziyoyev suggested holding the next C5+1 summit in Samarkand, the ancient Silk Road hub, with Trump becoming the first sitting American leader to visit Central Asia. At a seminar in March, Kazakhstan’s Ambassador to the United States, Magzhan Ilyassov, proposed hosting the first C6 and United States Summit in his country’s capital, Astana. Both would be historic. But a meeting on the sidelines of the U.N. in New York this September would be the true low-hanging fruit. Furthermore, Kazakhstan, Uzbekistan and Azerbaijan are all members of Trump’s Board of Peace for Gaza reconstruction and are willing partners of the American leader. Deepening engagement through a C6+1 format reinforces his “peace through connectivity” narrative and adds coherence to the Board of Peace’s purpose. With Russia to the north, China to the east, and Iran, Afghanistan, Pakistan, and India to the south, the greater Central Asia region is emerging as the next frontline of great power competition – especially as countries seek alternatives to vulnerable maritime energy routes, a trend underscored by the severe disruption of shipping through the Strait of Hormuz. By strengthening trans-Caspian links through a C6+1 framework and building on initiatives like TRIPP, the United States can help the region diversify its partnerships and reduce over-reliance on any single power, advancing stability through expanded economic options rather than confrontation. The United States should use TRIPP as a springboard to pivot toward this critical region. A C6+1 summit at UNGA would be the simplest, most strategic way to begin. This is America leading through deals, not dominance — turning geography into opportunity. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of the publication, its affiliates, or any other organizations mentioned.
The Iran War Is Repricing Central Asia’s Connectivity
Europe’s aviation regulator has extended its current conflict-zone bulletin for the Middle East and Persian Gulf through April 10 and continues to advise operators to avoid Iranian and adjacent airspace at all altitudes. Reuters reported soon after that the squeeze on normal flight paths was pushing more traffic into narrower routes, notably over Azerbaijan and Central Asia. The Strait of Hormuz, meanwhile, has not returned to normal commercial use. A limited number of exempted vessels have crossed, but passage remains selective, politicized, and uncertain rather than routine. The question, consequently, is no longer only whether Central Asia has alternatives to single-route dependence but whether those alternatives remain commercially usable, taking into account the increased risk, delay, insurance, fuel burn, and congestion. What has changed is the cost of maintaining reliable connectivity. The Cost of Reliability The Iran conflict imposes higher operating costs on the wider Eurasian air corridor that is now taking displaced traffic. EUROCONTROL estimates that about 1,150 flights a day continue to be affected by re-routing linked to the Middle East crisis. These add roughly 206,000 kilometers of flying and 602 tons of extra fuel burn per day. Maritime trends are similar. In March, war-risk premiums in or near the Gulf had risen more than tenfold in some cases, with hull war premiums moving from about 0.25% of vessel value to as much as 3%. Air-freight rates on some routes rose by as much as 70% as shippers redirected urgent cargo away from disrupted sea lanes and restricted airspace. Higher surcharges and narrower margins for operational error can make routes lose commercial value even if they remain formally open. The wider macroeconomic setting has also made resilience more expensive. Higher oil prices make every detour costlier, raising freight charges, power costs, and production costs across the region’s trading partners. Even where Central Asian cargo does not move through Iranian waters, the same pattern is still present. Asian policymakers were already confronting a combined oil-price and currency shock at a moment when roughly 80% of the oil shipped through Hormuz normally goes to Asia. The World Bank’s March food and nutrition security update notes that around 20% of global oil supplies and about one-third of global fertilizer trade transit the Strait of Hormuz. Urea prices, for example, surged by nearly 46% month on month between February and March 2026. Importers in Central Asia, as well as in Europe and the South Caucasus, remain under pressure from higher household food costs and tighter producer margins. The price of resilience is now showing up in increased costs for farm inputs, food costs, and household budgets. How the Burden Falls Kazakhstan remains the best placed in the region to absorb the shift. The CPC pipeline still carries about 80% of Kazakhstan’s oil exports; oil income contributes 52% of the state budget. Earlier disruptions had constrained Kazakhstan to reroute 300,000 tons of crude, and the country continues to rely on supplementary outlets such as Ust-Luga, the Baku–Tbilisi–Ceyhan pipeline, and China when its main system is stressed. For Kazakhstan, higher oil prices cushion part of the blow, but it still has to pay more to keep redundancy commercially credible. Turkmenistan’s proximity to Iran increases its notional strategic relevance. It also makes the country immediately more vulnerable to interruption. Prices for key Iranian goods in Ashgabat have jumped sharply as cross-border trade dried up; some Iranian products are now selling for 50% to 70% higher, and some staples have doubled. The World Bank explains that Turkmenistan, as a landlocked country, depends on workable external connectivity in its search for diversification. Uzbekistan offers the clearest example of the general trend in Central Asia at large. According to a January statement by President Shavkat Mirziyoyev, the competitiveness of national manufacturers had already declined because the cost of transporting Uzbekistan goods to Europe had doubled amidst the geopolitical situation. In March, the World Bank approved a $200 million transport project and said Uzbekistan’s road capacity would need to expand by around 500% by 2030 to accommodate projected freight growth. Routes also have to remain stable and inexpensive enough to preserve export margins and delivery reliability. Kyrgyzstan and Tajikistan are less able to turn the shock to advantage. The Eurasian Development Bank reported in February that remittance inflows to Kyrgyzstan reached a record $3.5 billion in 2025, equal to 15.4% of GDP and up 16.8% from 2024. World Bank data put Tajikistan’s remittance ratio at 47.9% of GDP in 2024. About 80% of Tajikistan’s fuel imports came from Russia in 2025, and Iran remains a link in the North-South corridor through which Tajikistan reaches Persian Gulf ports. Higher oil prices and regional instability are thus likely to raise shipping costs, lengthen delivery times, and intensify inflationary pressure. In the smaller Central Asian economies, the repricing of connectivity has less to do with corridors and more to do with household budgets, as they affect fuel, food, freight, and purchasing power. Beyond Route Multiplication The shock changes the adaptation problem. Corridor multiplication alone no longer suffices. What is required is greater reliability through customs modernization, digitization, lower border friction, and more dependable transit administration. In Tajikistan, for example, a web-based, computerized customs management system developed by UNCTAD to automate, manage, and modernize international trade procedures, called ASYCUDA World, was deployed nationwide on October 1, 2025. It replaces the old customs system by automating, managing, and modernizing international trade procedures with 24/7 electronic submission of cargo manifests and customs declarations. This has already lowered average clearance times for imports and exports well below baseline. Likewise, the CAREC Advanced Transit System (CATS) and Information Common Exchange (ICE), a digitally harmonized regional initiative supported by the Asian Development Bank to modernize and simplify customs transit, has been implemented. Officials from Azerbaijan, Georgia, Turkmenistan, and Uzbekistan met in Tashkent in April to review conformance testing and agree further transit scenarios for rollout. The implications of the Iran conflict and Central Asia’s response extend well beyond the region. For the European Union, they bear on whether east-west diversification beyond Russian routes can remain commercially credible. For China, they affect the cost and reliability of westbound overland connectivity. For Turkey, they raise the value of the trans-Caspian and South Caucasus corridor system linking Anatolia more tightly to Central Asia. For the United States they reinforce the strategic case for route pluralization and lower dependence on any single maritime chokepoint. The Iran war has ceased merely to stress-test Central Asia’s southern corridors. It is now raising the price of resilience across regional connectivity systems as a whole.
Kyrgyzstan Weighs Nuclear Power as Rosatom Talks Advance
Kyrgyzstan is still in talks with Russia’s state-owned nuclear power company Rosatom about building a nuclear power plant (NPP) in Kyrgyzstan. But on March 3, Kyrgyz Deputy Chairman of the Cabinet of Ministers, Daniyar Amangeldiyev, was already speaking about conducting a national referendum on the construction of a nuclear power plant. It is clear why Rosatom is anxious to build the NPP, but it is less clear why Kyrgyzstan needs it. Kyrgyzstan’s Road to Nuclear Power Rosatom is active in Central Asia, receiving the contract to build Kazakhstan’s first NPP in June 2025. Uzbekistan had already signed a contract with Rosatom in May 2024, and in late March 2026, the first concrete was poured for the NPP that Rosatom is constructing in Uzbekistan. At first glance, Central Asia might not seem like an ideal market for nuclear power. But after Russia’s full-scale invasion of Ukraine in February 2022, Finland canceled its contract for Rosatom to build the Hanhikivi-1 NPP, and while several European countries are building or considering building NPPs, Hungary is the only country committed to partnering with Rosatom. With limited prospects for new contracts in Europe, Rosatom is likely to focus on securing additional deals in non-European markets to expand its already extensive portfolio. Kyrgyzstan’s Energy Ministry and Rosatom signed a Memorandum of Understanding for a small NPP in January 2022. The initial plan for Kyrgyzstan’s NPP was to build a small RITM-200N with a 55-megawatt (MW) capacity. In May 2025, Director General of Rosatom, Alexey Likhachev, said his company was offering Kyrgyzstan a modular NPP project that could generate anywhere from 110 MW to 440 MW using RITM-200N reactors, equivalent to two to eight units. In late March 2026, Likhachev said current talks with Kyrgyzstan were not only focused on the construction of a small NPP but also a medium-sized NPP. Kyrgyz Deputy Chairman of the Cabinet of Ministers Amangeldiyev said in June 2025 that Kyrgyz officials and Rosatom representatives were already looking at potential sites for the NPP. Reports about the planned NPP in Kyrgyzstan don’t mention the cost of construction, and it remains unclear how many and what size reactors will be installed. According to Uzbek officials, the six 55-MW units that Rosatom was initially contracted to build (the project has since changed) would have cost “less than $2 billion.” An Agreement or Not In March 2024, Kyrgyzstan’s Deputy Energy Minister Taalaybek Baygaziyev signed an agreement with Rosatom on the development and implementation of the NPP investment project. In September 2025, Altynbek Rysbekov was appointed Kyrgyzstan’s Deputy Energy Minister, and he said, “There is a possibility of building a (nuclear power) station, but no fundamental decision has been made yet.” However, Rysbekov’s further comments indicated he supported the idea of building an NPP in Kyrgyzstan, and he reconfirmed that the search for an appropriate site for the NPP continued. On April 3, 2026, Amangeldiyev said negotiations with Rosatom are continuing. “We are collaborating with Rosatom on infrastructure development and personnel training,” Amangeldiyev stated. “Only after that can we consider construction.” That was when Amangeldiyev added that Kyrgyzstan would hold a national referendum on the construction of the NPP before any final agreement was signed, thus following the same route as Kazakhstan. Does Kyrgyzstan Need Nuclear Power? Kyrgyzstan has suffered from electricity shortages since the country became independent in late 1991. In 2023, at the urging of Energy Minister Taalaybek Ibrayev, Kyrgyz authorities imposed a state of emergency in the country’s energy sector that would last until the end of 2026. That was later extended to last until 2028. Kyrgyzstan has huge hydropower potential, with most of the country’s domestically produced power coming from hydropower plants (HPP). Several years ago, Kyrgyzstan launched a program to build new HPPs. President Sadyr Japarov said in an interview in November 2025 that 41 small- and medium-HPPs would start operation in 2026 and 2027, and in 2028 another 1200-MW unit would be launched at the Kambar-Ata-2 HPP. He also mentioned other projects, such as the 1200-MW thermal power plant being built in northeastern Kyrgyzstan at Kara-Keche. “Once construction is completed, by 2028–2029, we will supply electricity without any restrictions. We will no longer import electricity,” Japarov said, adding that soon after this, Kyrgyzstan would be exporting electricity. Kazakhstan and Uzbekistan are helping Kyrgyzstan build the massive Kambar-Ata-1 HPP that will generate some 1860 MW. Officials are optimistic that the first unit at the HPP could be launched before the end of 2028. However, depending on hydropower as the effects of climate change become more pronounced in Central Asia might not be a long-term sustainable solution to power problems. The region is already recording reduced rainfall and melting glaciers. But Kyrgyzstan is also building wind farms and solar power plants. Energy Minister Ibrayev said in February 2026 that solar and wind projects were moving forward that would add 650 MW in the near future. Why Kyrgyzstan needs to have an NPP that adds, seemingly, at most 440 MW is not clear. And it will take some ten years before the NPP would start operation. Much of Central Asia lies in seismically active zones, and reports on the search for a suitable site for Kyrgyzstan’s NPP note that earthquake risk is a major consideration. Amangeldiyev’s remark about a national referendum seems to indicate a final agreement with Rosatom is near. But it is difficult to see why Kyrgyzstan needs this NPP with so many other environmentally-friendly options available.
Sunkar Podcast
Central Asia and the Troubled Southern Route
