Page 267 – The Times Of Central Asia

21 May 2025

Cultural Heritage, Central Asia, Home, Uzbekistan, Life & Culture, Uzbekistan Features, Uzbekistan Life & Culture, Features

Uzbekistan Plans to Restore Khiva’s Outer Fortress, Draw Tourists

May 21, 2025
By Times of Central Asia

The walls of Dishan-Kala, the remnants of a 19th century fortress in the Uzbek city of Khiva, have been deteriorating for many years. Now the Uzbek government plans to restore destroyed sections of the walls, remove some nearby buildings that are cluttering the historical structure and turn the site into a major tourist attraction.

The goal is to transform Dishan-Kala, the outer fortress, into a landmark similar to Ichan-Kala, the walled inner town at Khiva that is a UNESCO world heritage site and home to multiple cultural sites, exhibition sites and artisan shops. Some 1 million foreign tourists and 3.5 million local people visited Ichan-Kala in 2024, and it is expected to draw 2 million foreigners and nearly 5 million domestic tourists by the end of this year, the Uzbek Ministry of Ecology, Environmental Protection and Climate Change said in a statement on Tuesday.

The new development campaign aims “not only to preserve Dishan-Kala but also to unlock and enhance its full tourism potential,” the ministry said.

Uzbekistan’s growing tourism industry depends in large part on its rich historical legacy in places such as Khiva, Bukhara and Samarkand, but the development of the industry has sometimes conflicted with concerns about the preservation of ancient sites. Last year, despite UNESCO’s concerns, Uzbekistan pushed ahead with plans for a big tourist complex next to the historical center of Bukhara, a jewel of medieval architecture in Central Asia.

In 2021, UNESCO’s world heritage committee referred to development and tourism pressures in Khiva. It also said it regretted the demolition of large areas of Dishan-Kala, noting that it had served as the residential neighborhood for the fortified inner city and that the links between the two parts of ancient Khiva should be strengthened.

Built in 1842, the fortress walls of Dishan-Kala are currently in a state of neglect. Some 2,000 meters of its 6,200-meter wall have been destroyed, and another 2,500 meters are in “critical condition,” the ecology ministry said.

“For many years, illegal constructions sprang up around the wall, leaving virtually no space for access or movement along its perimeter,” it said.

Photos of Dishan-Kala show trash and piles of debris alongside crumbling walls, in contrast with the well-maintained Ichan-Kala area. The plan is to remove 55 residential and other buildings near the Dishan-Kala walls and install parks, landscaping and a pedestrian alley.

21 May 2025

Central Asia, Uzbekistan, International Affairs, Kazakhstan, Kazakhstan International Affairs, Uzbekistan International Affairs

Cuts to USAID Leave Central Asia Facing Development Challenges

May 21, 2025
By Sadokat Jalolova

When American President Donald Trump announced a freeze and overhaul of his country’s foreign aid in early 2025, the move sparked concern across Central Asia. For more than three decades, the United States Agency for International Development (USAID) had been a key contributor to development in the region, supporting education, healthcare, agriculture, and environmental protection.

Support for Weaker Economies

USAID’s role was particularly critical in economically vulnerable countries like Kyrgyzstan and Tajikistan. Its sudden withdrawal now leaves local governments scrambling to compensate with limited domestic resources.

The cuts have not been uniform, but the overall impact has been profound. According to the Center for Global Development, Tajikistan and Kyrgyzstan lost 78 percent and 69 percent of their USAID-backed programs, respectively. In Kazakhstan, Turkmenistan, and Uzbekistan, nearly all aid programs were discontinued.

Foreign aid to the region has often reflected shifting geopolitical dynamics. In Uzbekistan, for example, support surged from $6 million to $40 million in 2016 following President Shavkat Mirziyoyev’s rise to power. Kyrgyzstan received $75 million in 2010 amid negotiations over the U.S. military base there. In contrast, aid to Turkmenistan fell to just $2.8 million by 2024.

Limited Time to Adjust

While Kazakhstan’s more robust economy allowed for a gradual reduction in U.S. assistance, American companies remain active in its vital oil sector. Yet the abrupt nature of the broader aid pullback has disrupted numerous projects with little warning. Health and education initiatives were halted, as were efforts to bolster trade and cross-border infrastructure, critical for Uzbekistan and Kazakhstan as they seek to deepen global economic ties.

Environmental initiatives also suffered. With Central Asia especially vulnerable to climate change, USAID had funded resilience-building programs focused on water access and renewable energy. These efforts have largely ceased, raising concerns among farmers and local communities who had come to rely on them.

Civil Society Under Strain

Some governments in the region may quietly welcome the cuts, particularly those wary of foreign-backed NGOs. USAID frequently partnered with local civil society organizations and media outlets, entities that Central Asian authorities often view with suspicion. The loss of U.S. support has left these groups increasingly exposed to state pressure.

Tajikistan offers a telling case. In 2020, USAID partnered with the Aga Khan Foundation during the COVID-19 pandemic. But two years later, following unrest in the country’s Gorno-Badakhshan Autonomous Region, the government launched a crackdown on the foundation. This underscores how some aid programs, especially those linked to civil society, are perceived as threats.

Although USAID did not operate programs directly, its funding empowered local partners. With that backing gone, and less pressure from Washington, several Central Asian governments have tightened their control over independent organizations.

Seeking Alternatives

Replacing USAID’s role will not be easy. The European Union and countries such as France and Germany have long supported development in Central Asia, but their resources are stretched, especially with increased attention and funding directed toward Ukraine. Despite EU pledges of investment via the Global Gateway initiative, support for democracy, civil society, and human rights appears to be deprioritized.

China and Russia continue to provide aid in the region, but their assistance aligns with different values. Their programs rarely promote media freedom, gender equality, or civil society empowerment. While state actors may welcome this model, independent activists often view it with skepticism.

In Uzbekistan, this dynamic has contributed to the emergence of government-organized NGOs, which serve a controlled function in international cooperation. Critics argue this approach weakens efforts to foster an open and resilient civil society.

With USAID largely absent, Central Asia must now navigate a complex development landscape, balancing state control with the aspirations of its people.

21 May 2025

Business & Economy, Central Asia

New Report Predicts Surge in Islamic Finance Across Central Asia

May 21, 2025
By Sergey Kwan

A new report co-published by the Eurasian Development Bank (EDB), the Islamic Development Bank Institute, and the London Stock Exchange Group forecasts robust growth for Islamic finance in Central Asia. Titled “The Future of Islamic Finance in Central Asia,” the report was unveiled at the 2025 Annual Meetings of the Islamic Development Bank Group in Algiers, Algeria.

The study offers a comprehensive overview of the Islamic finance landscape across Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. While Sharia-compliant financing remains a relatively recent addition to the global financial system, having developed over the past three decades, it is becoming an increasingly significant component in the sustainable development strategies of Central Asian economies. All five governments are reportedly prioritizing the expansion of Islamic finance.

As of early 2024, the region is home to 18 Islamic banks and 14 non-bank financial institutions, including Islamic banking windows. The sector also features takaful (Islamic insurance) operators, microfinance institutions, Ijara (leasing) companies, and emerging Islamic FinTech ventures such as digital banks and wealth management platforms.

Total Islamic finance assets in Central Asia stood at $699 million at the start of 2024. According to the Islamic Finance Development Report 2024, Kazakhstan ranked 19th globally in terms of Islamic finance development, above the global average, and leads the regional market.

Projections in the report anticipate substantial growth. Islamic banking assets in Central Asia are expected to rise to $2.5 billion by 2028 and $6.3 billion by 2033. Kazakhstan is forecasted to remain the regional leader, followed closely by Uzbekistan, buoyed by favorable demographics, economic momentum, and the depth of national banking sectors.

The sukuk (Islamic bond) market is also poised for rapid expansion. Baseline forecasts suggest sukuk issuance could reach $2.05 billion by 2028 and $5.6 billion by 2033.

EDB Chairman Nikolai Podguzov highlighted the bank’s commitment to fostering this growth: “The further development of Islamic finance in Central Asia will expand financial inclusion and connect local businesses to the global Islamic market, contributing to regional economic growth. With the Islamic Development Bank Group’s support, the EDB has initiated the creation of an Islamic Window to finance projects in compliance with Sharia principles.” He added that key investment priorities will include energy, transport, social infrastructure, food security, and industry.

21 May 2025

Education, Kazakhstan, Kazakhstan Business & Economy

Kazakh Schoolchildren Offered Summer Job Opportunities

May 21, 2025
By Dmitry Pokidaev

Kazakhstan’s Minister of Labor and Social Protection, Svetlana Zhakupova, announced at a recent government meeting that the ministry is prepared to assist nearly 1.4 million schoolchildren aged 14 to 18 in finding summer employment.

Under the country’s Labor Code, minors are permitted to work under certain conditions, including a reduced schedule of no more than 24 hours per week. Importantly, such work must be undertaken outside of school hours.

“To facilitate employment, the following measures will be available to students during the upcoming summer holidays: selection of suitable vacancies through the Electronic Labor Exchange, online training programs, public works initiatives, and career guidance services,” Zhakupova stated.

The Electronic Labor Exchange, accessible via enbek.kz, now includes a dedicated section titled “My Summer Vacation”, which allows teenagers to register, upload their résumés, and search for job opportunities independently. For students under the age of 16, registration and the creation of a personal account must be handled by a parent or legal guardian.

As previously reported by The Times of Central Asia, approximately 1.8 million young people aged 15 to 28 were employed in Kazakhstan in 2024, a 0.6% increase over the previous year.

21 May 2025

Central Asia, Kazakhstan, Business & Economy, Kazakhstan Business & Economy

PepsiCo to Double Investment in Kazakhstan Plant, Triple Production Capacity

May 21, 2025
By Sergey Kwan

PepsiCo has announced plans to double its total investment in the construction of a snack production plant in Kazakhstan’s Almaty region, marking the launch of the project’s second phase. The expansion aims to triple the plant’s production capacity.

The announcement came during a meeting in Astana on May 20 between David Manzini, President of PepsiCo for Russia, Belarus, the Caucasus, and Central Asia, and Alibek Kuantyrov, Kazakhstan’s Deputy Minister of Foreign Affairs.

Construction of the first phase is currently underway with an initial investment of $160 million. Once fully operational, the facility, expected to be the largest snack production plant in Central Asia, will process up to 210,000 tons of potatoes annually and produce 70,000 tons of finished products. It is set to become a central hub in PepsiCo’s regional supply chain, serving both domestic and export markets across Central Asia. Production is scheduled to begin in spring 2026.

Manzini described the initiative as one of PepsiCo’s most significant investments and its first project of this scale in Central Asia. He noted that contracts have already been signed with 15 Kazakh farmers to supply potatoes, underscoring the company’s commitment to local sourcing. PepsiCo aims to transition entirely to locally grown chip-grade potatoes by 2035, actively integrating Kazakh farmers into its supply chain.

He also highlighted the importance of government support: “Launching a greenfield project of this scale in such a short timeframe is only possible with strong support from national and local authorities. Kazakhstan is creating favorable conditions for foreign investors, which enabled our decision to significantly expand our investment and project scope.”

21 May 2025

Business & Economy, Kazakhstan, Kazakhstan Business & Economy

Kazakhstan Invests in Science, But Economic Impact Remains Low

May 21, 2025
By Vagit Ismailov

Over the past five years, Kazakhstan has nearly tripled its research and development (R&D) spending, reaching $430 million in 2024. Despite this, science’s contribution to the national economy remains minimal, just 0.16% of GDP. This figure is among the lowest for countries striving toward technological advancement, according to analysts at Ranking.kz.

Almaty: Kazakhstan’s Scientific Hub

Nearly half of last year’s R&D spending was concentrated in Almaty, which accounted for 43.1% of total investment, equivalent to $186 million. Astana followed with 20.4% ($88 million), while other regions lagged significantly. In the Ulytau region, for instance, only $67,000 was allocated to scientific endeavors.

Almaty retains its status as the country’s scientific capital thanks to its concentration of research institutions. Of the 423 organizations engaged in R&D nationwide, 142 are based in the city. Almaty hosts major institutions such as the National Academy of Sciences, the Fesenkov Astrophysical Institute, the Institute of Seismology, and the Kazakh Institute of Oncology.

Human Capital and Scientist Salaries

Kazakhstan’s researchers are the backbone of its scientific sector. In 2024, spending on salaries for scientific personnel rose to $226 million, marking a 32.1% increase. Almaty employed 10,600 of the country’s 27,100 researchers, representing 39.2% of the national total. This figure has grown by 20% over the past five years.

A key metric of scientific engagement is the number of researchers per 10,000 employed persons. In OECD countries, this figure ranges from 40 to 238. In Kazakhstan, it stands at just 23.7. Almaty leads domestically with 83.2 researchers per 10,000 employed, underscoring its pivotal role.

State Dependency and Business Apathy

One of the major challenges facing Kazakh science is its overwhelming dependence on public funding. More than 77% of research financing in Kazakhstan comes from the state; in Almaty, this figure is 87.5%. In contrast, government contributions in developed countries average around 40%.

This imbalance limits commercialization potential, dampens private sector interest, and constrains technological progress. As noted in a national report on science, “knowledge and innovation in Kazakhstan are separated from the economy. The state’s task is to ensure that R&D results are incorporated into the real sector, to create demand for research, and to stimulate private investment in science”.

Alatau: A New Frontier for Scientific Growth

One proposed solution lies in the development of Alatau, a newly emerging scientific and innovation hub. Plans are underway to build a “science city” equipped with facilities for start-ups, technology parks, and manufacturing based on R&D. The area will form part of a special economic zone offering tax incentives and large-scale investment opportunities.

Combining Almaty’s intellectual capital with Alatau’s potential could catalyze the development of a knowledge-based economy and position Kazakhstan competitively in the global technology race.