Page 397 – The Times Of Central Asia

29 Jan 2025

Home, Kazakhstan, Kazakhstan Business & Economy

Kazakhstan Reports Record Grain Harvest of 26.7 Million Tons in 2024

January 29, 2025
By Sergey Kwan

Kazakhstan harvested 26.7 million tons of grain in 2024, marking its largest grain yield in 13 years, according to the Ministry of Agriculture. The latest figures, published on January 29, slightly revise the previously reported total of 26.5 million tons, gathered from 16.7 million hectares of farmland.

Kazakhstan is the largest grain producer and exporter in Central Asia, annually shipping 8 to 9 million tons of grain abroad, including 6.5 to 7.5 million tons of wheat. In 2024, exports reached 8.1 million tons.

For the 2025 season, Kazakhstan aims to export approximately 12 million tons of newly harvested grain. While traditional markets such as Central Asia, Afghanistan, China, Turkey, and Italy remain key destinations, Kazakhstan is also expanding into Azerbaijan, Iran, Pakistan, Indonesia, Brazil, and Malaysia.

Kazakhstan has already begun exporting grain from the new harvest, with 3.7 million tons shipped between September and December 25, 2024 – a 54% increase compared to the same period in 2023.

29 Jan 2025

Central Asia, Home, International Affairs, Kazakhstan, Kazakhstan International Affairs, Features, Kazakhstan Featurees, Kazakhstan Home

USAID Freeze Leaves Central Asian NGOs in Limbo

May 22, 2025
By Aliya Haidar

On January 20, U.S. President Donald Trump signed an executive order suspending funding for most foreign aid programs for 90 days. The move has raised concerns among non-governmental organizations (NGOs) in Central Asia, particularly in Kazakhstan, which has long benefited from U.S. assistance.

The order reads: “All heads of departments and agencies responsible for United States foreign development assistance programs shall immediately suspend new commitments and disbursements of development assistance funds to foreign countries and non-governmental implementing organizations, international organizations, and contractors pending a review of such programs for effectiveness and consistency with United States foreign policy to be conducted within 90 days of this order.”

Following this directive, U.S. Secretary of State Marco Rubio instructed all diplomatic and consular agencies to issue “stop-work orders” for nearly all active foreign assistance programs.

Impact on Kazakhstan and Central Asia

According to reports, the funding freeze is expected to affect university grant programs, entrepreneurial initiatives, gender diversity projects, and environmental efforts. The Trump administration has justified the decision by citing the need to reassess spending priorities.

Kazakhstan and other Central Asian countries have received U.S. aid for decades. USAID, in particular, has played a significant role in regional development. The agency’s website states:

“In Kazakhstan, USAID promotes the U.S. government’s Central Asia Strategy, which supports and strengthens the sovereignty and independence of Central Asian countries, both individually and collectively. It also promotes regional connectivity between Central Asia and Afghanistan, advances the rule of law and respect for human rights, and improves the climate for U.S. investment to foster greater regional stability and prosperity.”

Since 1992, USAID has funded projects in Kazakhstan focusing on economic diversification, energy, environmental protection, healthcare, and support for media and NGOs.

In addition to funding NGOs, USAID collaborates with KazAID, Kazakhstan’s foreign aid agency operating under the Ministry of Foreign Affairs.

Reactions from NGO Leaders

Denis Dzhivaga, director of the Kazakhstan International Bureau for Human Rights and Rule of Law (KIBHR), told The Times of Central Asia that the aid suspension had been anticipated.

“Such a measure was expected,” said Dzhivaga. “Even during the election campaign and Trump’s previous presidency, it was clear that he prioritized domestic policy over foreign influence. All NGOs working with USAID and receiving State Department assistance have received letters to halt projects.”

However, Dzhivaga noted that KIBHR has limited cooperation with U.S. agencies, so the impact on his organization will be minimal.

“In any case, this will negatively affect the NGO sector. The suspension is for three months pending an audit, but even USAID does not seem to know what will happen afterward. I don’t think U.S. assistance to Kazakhstan and Central Asia will stop entirely, but certain projects may be reconsidered – especially those related to discrimination, gender issues, and LGBT rights, as President Trump has already expressed opposition to such initiatives.”

Replacing U.S. funding with alternative grants will be challenging, he added.

“European donors are already struggling to finance Ukraine, so they are unlikely to allocate substantial funds elsewhere. Many U.S.-backed projects were valuable, though some USAID initiatives were controversial. There were questions about where the money was going, and in that sense, Trump’s skepticism is understandable.”

Dzhivaga also pointed out the logistical difficulties NGOs will face.

“Budgets are planned annually, and the current year has already begun. International organizations cannot instantly revise financial plans, so many NGOs will struggle in 2025. If Trump remains in office for the next four years, we can expect further cutbacks in areas his administration does not prioritize.”

Immediate Consequences

Kazakhstan is already experiencing the effects of the funding freeze. On January 26, students enrolled in the ‘English for Journalists’ course received the following notice:

“Dear students, please be advised that the project has been suspended, including all regular classes and extracurricular activities, online and offline, until further notice.”

Similar concerns have arisen in neighboring Kyrgyzstan. Askar Davletbayev, an ecologist at the Institute of Biology under the Kyrgyz Academy of Sciences, emphasized that nearly all environmental programs in the country rely on external funding.

“Ninety percent of our environmental projects are supported by USAID – research, legislation, everything. The Kyrgyz government has limited funds, so both NGOs and ministries turn to external donors. Most projects will likely shut down. For example, I received USAID and UNDP funding to restore [Asian goitered] gazelle populations. I purchased and bred the animals, but now I don’t know where we’ll find the money to continue.”

Legal Challenge to the Aid Freeze

There may still be a reprieve for Central Asian NGOs. A court in Washington has temporarily blocked parts of the Trump administration’s plan to freeze federal aid.

District Judge Lauren L. Alikhan ruled that the executive order could not be enforced until at least February 3, citing the risk of irreparable harm.

“The government does not fully understand the scope of the programs affected by this decision,” Judge Alikhan stated.

For now, NGOs in Kazakhstan and Central Asia remain in limbo, awaiting further developments as the U.S. reevaluates its foreign aid commitments.

29 Jan 2025

Home, Kyrgyzstan, Kyrgyzstan Business & Economy

More Kyrgyz Labor Migrants Head to the UK

January 29, 2025
By Sergey Kwan

The number of Kyrgyz citizens working as seasonal agricultural laborers in the UK has continued to rise, reaching 8,131 in 2024, up from 5,200 in 2023 and 1,492 in 2022. These figures were announced by Kyrgyzstan’s Minister of Labor, Social Security, and Migration, Ravshanbek Sabirov, during a January 28 meeting with the British Ambassador to Kyrgyzstan, Nicholas Bowler.

Expanding Labor Migration Cooperation

The meeting focused on Kyrgyz-British cooperation in labor migration. Minister Sabirov requested the ambassador’s assistance in increasing the quota for Kyrgyz seasonal workers and reducing additional fees associated with British visa applications.

Ambassador Bowler acknowledged the discipline and reliability of Kyrgyz migrant workers, noting that they return home in the same numbers as they arrive, complying with UK immigration laws.

Economic Impact and Employment Conditions

According to Minister Sabirov, remittances from Kyrgyz workers in Britain’s agricultural sector are expected to exceed $100 million. He emphasized that even with a relatively small workforce, these remittances significantly contribute to Kyrgyzstan’s economic growth.

The Kyrgyz Ministry of Labor’s Center for Employment of Citizens Abroad, which oversees seasonal labor placements in the UK, reports that Kyrgyz workers receive a wage of £11.44 per hour and are guaranteed a minimum of 32 hours per week.

In Britain, most Kyrgyz migrants are employed on strawberry farms.

Shift Away from Russia

For the past 30 years, Russia has been the primary destination for Kyrgyz labor migrants, with estimates ranging from 500,000 to over a million. However, Russia’s economic downturn, stricter migration policies, and increasing hostility toward Central Asian workers have prompted many Kyrgyz migrants to seek alternative destinations.

As a result, more Kyrgyz workers are heading to Kazakhstan, Turkey, Germany, South Korea, the United States, and Great Britain, reflecting a broader shift in Kyrgyzstan’s labor migration patterns.

29 Jan 2025

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

Kazakhstan Bans Export of Gasoline and Diesel Fuel

January 29, 2025
By Vagit Ismailov

Kazakhstan has officially banned the export of gasoline and diesel fuel by road and rail, according to a government decision that came into effect on January 29, 2025.

The restriction is outlined in amendments to the joint order “On Some Issues of Export of Oil Products from the Territory of the Republic of Kazakhstan,” which were approved by the Minister of Energy, the Chairman of the National Security Committee (KNB), and the Ministers of Finance and Internal Affairs.

Scope of the Ban and Exceptions

Under the new regulations, the export of petroleum products – including to member states of the Eurasian Economic Union (EAEU) – is prohibited via road transportation.

“Introduce a ban on the export of gasoline, diesel fuel, and certain types of petroleum products from the territory of the Republic of Kazakhstan, including to the EAEU member states, by road transport,” the official statement reads.

However, the government has outlined several exceptions:

Lubricating oils may still be exported.
Fuel contained in vehicle gasoline tanks is permitted for export, provided it meets factory specifications.
Aviation fuel may be exported for scientific research, additive testing, laboratory studies, and industrial production, subject to government approval.
Petroleum products designated for humanitarian aid are exempt from the ban during the period from September 29, 2024, to March 29, 2025.

In addition to road transport, railway exports are also restricted, with limited exceptions. Gasoline exports within the framework of state-approved plans, as well as fuel deliveries for humanitarian aid and disaster relief efforts, will be permitted between February 1 and March 29.

Government’s Rationale for the Ban

The Ministry of Energy stated that the new restrictions aim to prevent fuel shortages in the domestic market.

The move comes amid discussions about phasing out state regulation of fuel prices. As The Times of Central Asia previously reported, the Kazakh government is considering a gradual liberalization of gasoline and diesel fuel prices to reduce price disparities with neighboring countries and curb the illegal export of fuel and lubricants.

29 Jan 2025

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

Kazakhstan Introduces Tax Incentives to Encourage Business Lending

February 4, 2025
By Dmitry Pokidaev

Kazakhstan’s draft Tax Code, set to take effect in 2026, proposes a differentiated corporate income tax (CIT) rate for banks, aiming to encourage business lending by making it more financially attractive than consumer lending or government securities investments.

The proposed changes were announced by Akylzhan Baimagambetov, Deputy Chairman of the National Bank of Kazakhstan, during a recent briefing. He explained that Kazakhstani banks currently derive income from three main sources:

Government securities, whose earnings are currently tax-exempt.
Consumer lending, taxed at 20% CIT.
Business lending is also taxed at 20% CIT.

As banks tend to prioritize consumer lending over business loans, monetary authorities are now restructuring tax incentives to alter this trend.

“The proposed approach is as follows: investments in government securities will now be subject to corporate income tax while lending to businesses will be taxed at a lower rate – 20% CIT. Meanwhile, all other income, including government securities and consumer lending, will be taxed at 25% CIT,” said Baimagambetov.

Possible VAT Increase to 20%

Another major tax reform under discussion is an increase in value-added tax (VAT) from the current 12% to as high as 20%.

“We have not yet finalized the VAT rate, but the proposed range is 16% to 20%. Our calculations show that a higher VAT rate would increase the average burden on businesses by just 4%, but the end consumer will certainly feel the price hike. Inflation may rise by up to 4.5%, and we need to mitigate this impact,” said Deputy Prime Minister Serik Zhumangarin.

To counterbalance the inflationary effect, the government plans to expand targeted social assistance, adjust salaries in state institutions, and increase pensions.

In addition, if VAT is raised to 20%, the government intends to reduce payroll taxes by 10% by eliminating the social tax and mandatory employer pension contributions.

“If we are not permitted to reduce these expenses, we will not increase VAT significantly – it’s a matter of checks and balances. We plan to submit our VAT proposal to parliament in the second half of February,” Zhumangarin added.

Lower VAT Registration Threshold and Expected Revenue Boost

Another key tax reform under discussion is a reduction in the VAT registration threshold from 78.6 million tenge to 15 million tenge. The government expects this change to increase tax revenues by 5-7 trillion tenge.

In 2024, Kazakhstan’s national budget collected 12.3 trillion tenge in taxes.

As The Times of Central Asia previously reported, the new Tax Code will also introduce a luxury tax on high-value goods such as yachts and cigars.

29 Jan 2025

Central Asia, Home, Uzbekistan, International Affairs, Uzbekistan Features, Features, Uzbekistan International Affairs

Uzbekistan Airways Reroutes Flights to Europe, Avoiding Russia and Belarus

February 19, 2025
By Sadokat Jalolova

Uzbekistan Airways has altered its flight routes to Europe, bypassing Russian and Belarusian airspace. The airline’s chairman, Shukhrat Khudoykulov, announced the decision at a press conference on January 28, according to local media reports.

Flights are now taking a more southern route through Azerbaijan and Turkey. The change took effect on January 20, 2025.

Reason for the Rerouting

The airline’s press service told Kun.uz that the decision was made based on a recommendation from the European Union Aviation Safety Agency (EASA) and was not related to the recent Azerbaijan Airlines crash.

“This is a recommendation from the European Aviation Safety Agency since we also serve European passengers,” the airline’s statement said.

The change comes in the wake of the Azerbaijan Airlines crash on December 25, 2024. The aircraft, which was flying from Baku to the Russian city of Grozny, crashed near Aktau, Kazakhstan. Of the 67 people on board, 38 died, while 29 survived.

Initial reports suggested that a Russian air defense system may have mistakenly shot down the plane during a Ukrainian drone attack on Grozny. A missile reportedly exploded near the aircraft, damaging its fuselage.

Kazakhstan, which initially led the investigation, has transferred the case to Brazil’s aviation safety agency (CENIPA). The findings have been sent back to Kazakhstan and are expected to be released soon.

Impact on Flight Times and Costs

In response to Repost.uz, Uzbekistan Airways clarified that the change was made as a precautionary measure and also to helps optimize flight routes.

The rerouting has increased travel distances. For example, the Tashkent-Munich flight, which previously covered 4,849 kilometers when flying through Russia, now spans 5,156 kilometers. This adds 30 to 40 minutes to flight times and raises operational costs for the airline.