Page 463 – The Times Of Central Asia

10 Dec 2024

Central Asia, Uzbekistan, International Affairs, Local Politics, Uzbekistan Business & Economy, Business & Economy, Uzbekistan International Affairs, Uzbekistan Local Politics

UK Supports €12.6M Deal to Boost Exports to Uzbekistan’s Copper Producer

December 10, 2024
By Sadokat Jalolova

UK Export Finance (UKEF) has guaranteed a €12.6 million ($13.25 million) loan to the Almalyk Mining and Metallurgical Complex (AMMC) in Uzbekistan. The loan will refinance the purchase of fully automated vehicles from the Scottish multinational company Weir and marks UKEF’s first agreement in Uzbekistan.

The loan, provided by the International Bank, aims to support Weir’s exports to AMMC, one of Central Asia’s largest copper production facilities.

“UK businesses are increasingly keen to bring their goods and services to this dynamic market – and UKEF is here to help buyers in Uzbekistan seize this opportunity,” said Tim Reid, CEO of UKEF.

Strategic Importance of Copper

The UK Department of Business and Trade reports that nearly 90% of UK imports from Uzbekistan consist of non-ferrous metals, metal ores, and slag. Copper, a vital material for construction and green technologies such as solar panels and electric vehicles, is in increasing demand. Global copper requirements are projected to grow by an additional one million tons annually until 2035.

The UKEF-backed deal reflects the UK’s commitment to enhancing machinery exports and supporting the global supply chain. In 2023, total trade between the UK and Uzbekistan reached £381 million, with specialized machinery ranking as the fourth most-traded category.

Sustaining Production at Almalyk

UKEF’s financial backing is crucial for sustaining production at AMMC by ensuring access to capital from a trusted supplier. The partnership highlights UKEF’s broader role in facilitating growth opportunities for UK businesses in Central Asia’s dynamic market.

10 Dec 2024

Central Asia, Local Politics, Kyrgyzstan, Business & Economy, Kyrgyzstan Local Politics, Kyrgyzstan Business & Economy

Kyrgyzstan Eyes Digital Currency to Modernize Financial System

December 10, 2024
By Anton Chipegin

The National Bank of the Kyrgyz Republic (NBKR) has announced plans to launch a digital national currency, the digital som. The financial regulator expects the initiative to bolster the country’s financial sector and enhance public administration.

New Opportunities

The NBKR envisions the digital som transforming Kyrgyzstan’s financial landscape and increasing cashless transactions. One major advantage is improved control over budget spending. Additionally, the digital currency will allow payments even in areas without Internet access – crucial for remote regions with limited connectivity. Using simple technologies such as QR codes and mobile applications, citizens will be able to make quick and convenient payments for goods and services.

“The monopoly of central banks to issue money is already ending. Anyone with a computer can create cryptocurrencies and various coins. We are keeping pace with this trend,” noted Akylbek Japarov, Chairman of the Cabinet of Ministers. He added that the Ministry of Finance plans to issue digital currency by 2025, allocating up to 27 billion KGS ($314 million) for digital bonds, treasury bills, and gold-backed coins.

Under the government’s plan, the digital som will coexist with traditional cash and non-cash currencies. Authorities have devised mechanisms to facilitate its integration into the financial market. Commercial banks connected to the system will receive digital soms in their digital wallets, while equivalent amounts will be debited from their accounts with the National Bank. Transfers of digital soms between individuals will occur via existing banking infrastructure.

Digital Stability

The NBKR aims to integrate the digital som into the financial system by the end of 2026, with prototype testing scheduled for early 2025.

Experts highlight the potential benefits despite some challenges. Economist Nurgul Akimova explained to Times of Central Asia that the Central Bank’s digital currency will feature robust security measures, including advanced cryptography to prevent fraud and ensure confidentiality. State control over issuance will ensure stability and reliability, distinguishing it from electronic money, which can be vulnerable to bank bankruptcies.

Digital currency also offers new opportunities for public administration, particularly in taxation. Akimova noted that programmable features could automate tax deductions and other payments to the state, fostering trust and simplifying interactions between citizens and the government.

“For the digital som to succeed, it must be widely accessible and easy to use, complementing existing financial instruments,” Akimova added. “Drawing on global experience and our unique national context, digital currency could become a universal means of payment for everyone. This marks a step toward a more modern, inclusive, and sustainable financial system in Kyrgyzstan.”

Challenges Ahead

However, certain hurdles remain. Akimova pointed out that introducing the digital som to international markets could pose difficulties, as cross-border payments in digital currencies will require the approval of other states.

10 Dec 2024

Central Asia, Uzbekistan, Uzbekistan Business & Economy, Business & Economy

Young Uzbek Men Dominate Russia’s Migrant Workforce in 2024

December 19, 2024
By Sadokat Jalolova

A recent analysis by the “Migrant Service” platform has outlined the profile of the average migrant worker in Russia for 2024. According to the study, the typical migrant is a 28-year-old married man from Uzbekistan, residing in or near Moscow.

The survey, which included approximately 63,000 participants, revealed key demographic trends among migrant workers in Russia. Most respondents identified as Muslim men aged 28, though the age range spanned from 18 to 37 years.

Uzbekistan Leads Migration Statistics

The majority of migrant workers in Russia come from Uzbekistan, accounting for 55.4% of the total. Tajikistan follows with 39.89%, while Armenia, Kyrgyzstan, Belarus, and Kazakhstan collectively contribute 4.82% of the migrant population.

“For migrants, family and children are the highest priorities,” the analysts noted. This focus is reflected in remittance patterns: 67% of respondents send money to their families once a quarter, and 41% remit more than 50% of their income.

Growing Demand for Migrant Labor

The survey also highlights the increasing reliance on Central Asian migrants to address labor shortages in Russia. This trend, as previously reported by the Times of Central Asia, has been exacerbated by Russia’s ongoing war in Ukraine, which has intensified the demand for additional workers.

10 Dec 2024

Central Asia, Kazakhstan Local Politics, International Affairs, Local Politics, Kazakhstan International Affairs, Kazakhstan, Business & Economy, Kazakhstan Business & Economy

Kazakhstan Building Five Cross-Border Trade Hubs

December 10, 2024
By Sergey Kwan

Kazakhstan is advancing plans to establish five cross-border trade and economic hubs, aiming to position the country as a key global transport and logistics center. The initiative was reviewed at a government meeting on December 10.

Strategic Hub Development

Minister of Trade and Integration Arman Shakkaliyev reported that significant progress has been made on the hubs, with rail and road links already in place. The planned hubs are:

The Khorgos Hub: Located on the border with China.
The Caspian Hub: Situated along the Trans-Caspian International Transport Route (TITR).
The Eurasia Center for Cross-Border Trade: Positioned at the border with Russia.
The “Central Asia” International Center for Industrial Cooperation: At the border with Uzbekistan.
The Industrial Trade and Logistics Complex: At the border with Kyrgyzstan.

Additionally, container hubs are planned for the ports of Aktau and Kuryk in the Mangistau region. Multimodal air hubs are also under development at airports in the cities of Astana, Almaty, Shymkent, and Aktobe.

Broader Economic Goals

Prime Minister Olzhas Bektenov underscored the strategic importance of these projects, emphasizing their potential to reduce transit times, boost industrial production, increase tax revenues, and create new jobs.

Bektenov highlighted that the network of hubs will form a unified trade and transport space with Kazakhstan’s key trading partners. “This will significantly increase trade turnover between the countries and strengthen strategic relations with neighboring states,” he said.

The prime minister also stressed the importance of leveraging major transport corridors such as the East-West, North-South, and Trans-Caspian International Transport Route corridors to enhance access to the markets of China, the Persian Gulf, the Caucasus, and Europe.

10 Dec 2024

Central Asia, Kazakhstan, Business & Economy, Kazakhstan Business & Economy, Features, Kazakhstan Featurees

National Bank of Kazakhstan Predicts Higher 2025 Oil Prices Than Bank of America

February 4, 2025
By Dmitry Pokidaev

The National Bank of Kazakhstan (NBK) has revised its forecast for 2025 oil prices, lowering the projected cost from $82.5 to $70 per barrel. Despite this adjustment, the NBK remains more optimistic than Bank of America, which recently reduced its 2025 oil price forecast to $65 per barrel.

Bank of America’s Forecast

Initially, Bank of America analysts projected Brent oil prices at $80 per barrel for 2025, aligning closely with the NBK’s earlier forecast of $82.5. However, last week, Francisco Blanch, head of global commodities and derivatives research at Bank of America, announced a significant revision, citing oversupply and reduced demand driven by the global shift toward cleaner energy sources and transportation. The new forecast sets oil prices at $65 per barrel.

NBK’s Adjusted Outlook

In its updated Monetary Policy Report, the NBK revised its oil price forecast for 2025 to $70 per barrel, compared to an average of $80.3 in 2024. The adjustment reflects weaker anticipated demand from China and OECD countries, coupled with slower global economic growth.

The NBK noted that “the relaxation of production restrictions by OPEC+ countries starting in 2025, alongside increased output from North and South America, will likely create a supply surplus in the oil market.”

External Influences

The U.S. presidential election results could also impact global oil dynamics. President-elect Donald Trump and his administration have pledged to sharply increase domestic oil production beginning in January 2025, aiming to reduce petroleum prices. Additionally, Trump has suggested a potential withdrawal from the Paris Climate Agreement, which could further incentivize support for U.S. oil companies.

For Kazakhstan, declining oil prices present significant fiscal challenges. According to the Ministry of Finance, the country collected 655.2 billion KZT ($1.2 billion) in mineral extraction tax (MET) from oil companies during the first 11 months of 2024. Oil export revenues contributed approximately 2 trillion KZT ($3.8 billion), bringing total budget revenues from the oil sector to over 2.3 trillion KZT ($4.4 billion) this year.

The potential reduction in oil prices could, therefore, have a substantial impact on Kazakhstan’s economy, particularly on its budgetary revenues derived from the oil industry.

10 Dec 2024

Central Asia, Uzbekistan, Life & Culture, Turkmenistan, Tajikistan, Kyrgyzstan, Kazakhstan

Kazakhstan Tops Central Asia with Region’s Highest Pensions

December 10, 2024
By Vagit Ismailov

Kazakhstan leads Central Asia in pension payments, with the highest average pension in the region, according to Kaktus.media. Kazakh citizens receive an average of approximately 89,275 KZT ($175.30) per month, as reported by the region’s statistical agencies.

Kyrgyzstan holds second place, with an average pension of 9,379 KGS ($108) at the end of 2023. Uzbekistan follows with an average of 1.2 million UZS ($93.40), while Turkmenistan ranks fourth, offering an average of 300 TMT ($85.60). Tajikistan reports the lowest pension payments in the region, where pensioners receive just an average of 370 TJS ($33.80) per month.

Kazakhstan has also announced measures to further support its pensioners. Beginning January 1, 2025, the country will implement an annual indexation of solidarity pensions by 8.5%. Additionally, basic pensions and social benefits will increase by 6.5% annually, a move designed to improve the welfare of retirees.