Page 357 – The Times Of Central Asia

03 Mar 2025

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Development of a Maritime Fleet in a Landlocked Country

March 4, 2025
By Times of Central Asia

It may come as a surprise to some, but despite being a landlocked country far from any ocean, Kazakhstan is actively developing its maritime fleet. The country recognizes that to play a significant role in maritime transport across the Caspian Sea, Kazakhstan must enhance the competitiveness of its commercial fleet, alongside improving coastal infrastructure and services. This initiative not only generates revenue for Kazakh transport companies and contributes to the national budget but also safeguards the country’s foreign trade.

Kazakhstan has set an ambitious goal to establish a regional transit hub based on its Caspian Sea ports, Aktau and Kuryk. It is attracting major international players to develop its logistics services and integrate Kazakhstan into the global trade and transport network. However, the development of the national commercial fleet is lagging. The shortage of a strong fleet means Kazakhstan struggles to compete with the maritime industries of other Caspian nations.

It is no secret that most maritime transport between the ports of Aktau/Kuryk and Baku is currently handled by the Azerbaijan Caspian Shipping Company, one of the largest maritime transport operators in the region. The company owns more than 50 transport vessels and over 110 specialized ships and plans to implement a large-scale investment program to modernize its fleet by 2029.

Meanwhile, according to Kazakhstan’s Bureau of National Statistics, 263 maritime vessels are registered in the country. However, more than 70% of these vessels are over 25 years old. The aging fleet and weak presence in the maritime transport market prevent Kazakhstan from increasing its share in global supply chains, meaning most of the profits from freight transport go to foreign carriers. The longstanding principle discussed in Kazakhstan’s transport sector — “Our Cargo – Our Port – Our Fleet”— could enable domestic transport companies to earn up to 30% more through logistics-related revenue.

According to World Bank estimates, by 2030, cargo transportation via the Trans-Caspian International Transport Route is expected to reach 11 million tons. The Concept for the Development of Kazakhstan’s Transport and Logistics Potential until 2030 forecasts that the volume of containerized transit cargo along this corridor from China will grow by at least 40,000 TEU (twenty-foot equivalent units) in the next five years.

Over the past decade, Kazakhstan’s domestic tanker fleet has significantly reduced its oil transport operations, as most of the country’s crude oil is now transported via pipelines. However, a recent drone attack on the Caspian Pipeline Consortium’s (CPC) largest oil pumping station and a subsequent statement from “Transneft” warning that this could lead to a 30% reduction in Kazakhstan’s oil exports highlight the urgent need for an alternative maritime route for oil transport. This would help maintain stable oil production in the country’s fields.

Accelerating the modernization and expansion of Kazakhstan’s national fleet will integrate the country into the regional transport and logistics system, reduce dependency on foreign vessels, and protect foreign trade from volatile freight market conditions — especially given ongoing geopolitical uncertainties in the region.

A key initiative expected to strengthen Kazakhstan’s maritime fleet is the “Caspian Integrated Maritime Solutions”, a joint venture between “KazMunayGas” and “Abu Dhabi Ports Group”. This company provides maritime services for oil and gas projects and cargo transportation across the Caspian and open seas, and plays a role in developing Kazakhstan’s export and transit routes. Most importantly, it will invest in expanding the country’s maritime fleet. The joint venture’s strategic plans and investment commitments will depend on existing cargo volumes. However, despite numerous discussions of this issue on various platforms, as well as the existence of plans, including the development of the trans-Caspian international transport corridor, the solution to the problem remains only on paper.

Another crucial issue is the construction of a domestic shipbuilding and repair facility in Kazakhstan; the government has plans to develop its own shipbuilding and maintenance industry. This will enable Kazakhstan to design vessels suited to the Caspian’s unique conditions, such as low draft and high cargo capacity — critical issues given declining water levels in the Caspian Sea. The shallowing of the sea is already preventing ships from being fully loaded, reducing transportation efficiency and increasing costs.

By the end of 2024, Kazakhstan’s maritime transport sector moved 2.8 million tons of cargo — 2.1 times more than in 2023. Freight turnover reached 1,581.4 million ton-kilometers, increasing 1.8 times compared to 2023.

03 Mar 2025

Central Asia, Kyrgyzstan, Business & Economy, Kyrgyzstan Business & Economy, Kyrgyzstan Features

Kyrgyzstan to Issue $1.7 Billion in Eurobonds for the First Time

March 3, 2025
By Anton Chipegin

The Ministry of Finance of Kyrgyzstan has summarized its 2024 financial results and outlined its plans for 2025. According to Finance Minister Almaz Baketaev, the country’s recent financial policies have played a key role in rebuilding the economy.

First-Ever Eurobond Issuance

For the first time, Kyrgyzstan is preparing to issue Eurobonds worth $1.7 billion with a 10-year maturity period. The bonds will be denominated in U.S. dollars, euros, Chinese yuan, UAE dirhams, Hong Kong dollars, and the Kyrgyz som.

Earlier, The Times of Central Asia reported that the government was working on issuing European and American bonds, though at the time, the Ministry of Finance had not provided specific details. Now, the scale and scope of the plan have been confirmed.

“This issuance will be aimed at implementing priority projects in the energy sector,” said Umutzhan Amanbayev, director of the Central Treasury at the Ministry of Finance.

Investment and Economic Growth Strategy

The Ministry of Finance believes that Kyrgyzstan’s stable budget surplus, improving economic indicators, infrastructure development, and large-scale reforms continue to enhance its position in global financial rankings, attracting greater attention from international investors.

The Treasury has emphasized that strengthening the country’s financial and economic foundation will require:

Effective budget policies
Improvements in the social sector
Increased foreign investment

These measures, officials argue, will help sustain economic growth and ensure long-term stability.

Growing Role in Financial Markets

Kyrgyz authorities have begun actively engaging with international financial markets to attract investment. In 2024, the government issued green bonds to fund environmental projects. Additionally, Kyrgyzstan is working on integrating its stock exchange with those of the Eurasian Economic Union (EAEU) countries.

The recent decision by S&P Global Ratings to assess Kyrgyz government securities has further bolstered interest in the country’s financial instruments, enhancing the appeal of Kyrgyzstan’s sovereign bonds.

03 Mar 2025

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

Kazakhstan to Expand Oil, Gas, and Green Energy Production in 2025

March 3, 2025
By Sergey Kwan

The Ministry of Energy of Kazakhstan has released its 2024 fuel and energy sector report and outlined its plans for 2025. The country aims to increase crude oil and natural gas production while expanding renewable energy capacity.

Oil Production and Refining

In 2024, Kazakhstan produced 87.7 million tons of crude oil. Oil refining met the target of 17.9 million tons, while the production of:

Oil products reached 14.5 million tons (exceeding the plan)
Liquefied gas totaled 3 million tons
Petrochemical products amounted to 540,000 tons

In 2025, the country aims to boost crude oil production to 96.2 million tons, driven by the expansion of production at the Tengiz field and continued development at Karachaganak, Kalamkas-Sea, and Khazar.

Natural Gas Expansion and Infrastructure

Kazakhstan produced 59 billion cubic meters (bcm) of natural gas in 2024 and plans to increase output to 62.8 bcm in 2025.

As of last year, 61.8% of Kazakhstan’s population had access to natural gas supplies. The government plans to expand gasification efforts in 2025 through the completion of major gas pipelines and distribution stations.

Growth in Renewable Energy and Electricity Generation

Kazakhstan generated 117.9 billion kWh of electricity in 2024, with 7.58 billion kWh (6.4%) coming from renewable energy sources (RES).

In 2025, the country will implement nine new RES projects with a total capacity of 455.5 MW, further increasing the share of green energy and reducing the carbon footprint of Kazakhstan’s energy sector.

03 Mar 2025

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Kazakhstan’s PM Bektenov Gives Major Construction Firms Tax Ultimatum

March 3, 2025
By Dmitry Pokidaev

Kazakhstan’s Prime Minister, Olzhas Bektenov, has accused the country’s two largest construction companies, Bazis and BI Group, of tax evasion. The State Revenue Committee later substantiated these claims, notifying the firms of additional taxes amounting to KZT 16.5 billion (over $32 million).

Business Fragmentation

The allegations against the developers emerged during a meeting between Bektenov, National Economy Minister Serik Zhumangarin, and Finance Minister Madi Takiyev.

Takiyev explained that many Kazakhstani businesses exploit legal loopholes by dividing their operations into multiple legal entities to minimize tax obligations. He cited examples from the hospitality industry, where bars, kitchens, and karaoke sections within a single venue are registered as separate businesses, or where each floor of a hotel is owned by different individual entrepreneurs.

This practice enables businesses to evade value-added tax (VAT). Once a company’s revenue reaches the KZT 78 million ($155,500) VAT registration threshold, it ceases operations and is replaced by a new legal entity.

“To reduce payroll taxes, businesses remove employees from their staff, register them as individual entrepreneurs, and then contract them as external service providers. This lowers tax liabilities, shifts social responsibility from the employer to the entrepreneur, and significantly reduces payroll tax contributions,” Takiyev explained.

According to his figures, Kazakhstan currently has 2.3 million registered taxpayers, but only 8% (137,000) are VAT payers due to this loophole. Additionally, 81% of all businesses operate under a simplified tax regime, with 85% of them reporting an annual income below KZT 15 million ($29,900).

“An analysis has shown that transactions between these tax schemes doubled over the past year, from KZT 5 trillion to KZT 10 trillion. In other words, while generating hundreds of billions in revenue, these businesses pay negligible taxes,” Takiyev stated.

He noted that such schemes are prevalent not only in the service sector but also in real estate development.

Final Warning

Bektenov explicitly named companies under scrutiny.

“We have a complete list of major businesses employing these tactics. Among them are well known construction giants such as BI Group and Bazis, as well as popular restaurants, fitness clubs, and other companies across various industries,” he said.

Bektenov issued a two-week ultimatum for these businesses to settle their tax arrears.

“If they fail to act, the government will use all available fiscal and law enforcement mechanisms. The conversation will be tough, but we are open to dialogue, if businesses are prepared to act fairly toward the state,” he warned.

By the end of last week, tax authorities had formally notified Bazis and BI Group of their outstanding obligations.

Bazis was instructed to correct tax filings for an undeclared KZT 4.6 billion ($9.2 million), while BI Group was found to have understated its taxable base and income by KZT 11.9 billion ($23.8 million).

The companies have been given an opportunity to amend their tax reports and pay the additional amounts before formal inspections begin. So far, neither developer has publicly responded to the accusations.

As previously reported by The Times of Central Asia, Kazakhstan is set to reform its tax system by raising the VAT rate from 12% to 16% and lowering the VAT registration threshold from KZT 78.6 million to KZT 15 million ($30,000).

03 Mar 2025

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Tajikistan Announces Preliminary Parliamentary Election Results; OSCE Absent

March 6, 2025
By Vagit Ismailov

Bakhtiyor Khudoyorzoda, the chairman of Tajikistan’s Central Commission for Elections and Referenda (CCER), has announced the preliminary results of the March 2 parliamentary elections to the Assembly of Representatives.

According to Khudoyorzoda, 4.71 million of the 5.52 million registered voters participated in the election, representing an 85.3% turnout.

The election results for party-list voting were as follows:

The People’s Democratic Party of Tajikistan secured the most support, receiving 2,435,541 votes (51.9%).
The Agrarian Party of Tajikistan garnered 986,887 votes (21%).
The Economic Reform Party of Tajikistan received 595,281 votes (12.7%).
The Socialist Party of Tajikistan obtained 248,064 votes (5.3%).
The Democratic Party of Tajikistan received 237,536 votes (5.1%).
The Communist Party of Tajikistan received 89,738 votes (1.9%), failing to meet the 5% threshold required for parliamentary representation.

Additionally, 50,895 voters chose the “against all” option.

As a result of the party-list vote count, the 22 parliamentary seats allocated through the national proportional system were distributed as follows:

People’s Democratic Party of Tajikistan – 12 seats
Agrarian Party of Tajikistan – 5 seats
Economic Reform Party of Tajikistan – 3 seats
Socialist Party of Tajikistan – 1 seat
Democratic Party of Tajikistan – 1 seat

The Communist Party of Tajikistan did not secure any seats.

In total, five of the six registered parties gained representation in the Majlisi Oli, Tajikistan’s parliament. The remaining parliamentary seats were allocated through single-mandate districts.

On February 6, 2025, the OSCE/ODIHR canceled a planned election observer mission, stating that the Tajik authorities’ failure to accredit the observers had “denied the people of Tajikistan an impartial and independent assessment of the elections.” A mission from the Shanghai Cooperation Organization, meanwhile, characterized the election as “transparent, credible and democratic.”

In the latest presidential elections, held in 2020, incumbent Emomali Rahmon won a fifth consecutive term, securing a purported 92.08% of the vote. Rahmon has been president since 1994, having previously led the country as Chairman of the Supreme Assembly from 1992 to 1994. TCA has previously reported on long prison sentences for Tajik opposition figures.

Elections to the National Assembly will be held on March 28, 2025.

03 Mar 2025

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Monument to Kyrgyz Writer Chingiz Aitmatov Unveiled in Rome

March 3, 2025
By Sergey Kwan

A monument honoring Chingiz Aitmatov, the renowned Kyrgyz writer, was unveiled at Villa Grazioli Park in Rome on February 27. Aitmatov (1928-2008) remains the most prominent figure in Kyrgyz literature. A writer, journalist, and diplomat, he gained international recognition for his works, which were written in both Russian and Kyrgyz.

The monument’s unveiling was initiated by the Embassy of the Kyrgyz Republic in Italy as part of ongoing efforts to promote Kyrgyz cultural heritage. This follows the inauguration of Kyrgyzstan Park in Rome during President Sadyr Japarov’s official visit to Italy in October 2024.

The white marble monument, created by Kyrgyz sculptor Alexey Morozov, seeks to capture the philosophical depth of Aitmatov’s literary legacy and his reflections on the fate of humanity.

The opening ceremony was attended by representatives from Italy’s Ministry of Culture and Ministry of Foreign Affairs, officials from the Rome municipality, members of the Italian media, and representatives from the diplomatic, academic, cultural, and business communities. Aitmatov’s family members were also present, along with representatives of Kyrgyz diaspora organizations from across Italy.

During the event, Kyrgyz Ambassador to Italy, Taalai Bazarbayev, expressed hope that the monument would serve as a lasting source of inspiration for future generations of both Kyrgyz and Italians. He emphasized the importance of preserving cultural heritage and the unifying power of art in fostering connections between nations.