Page 606 – The Times Of Central Asia

09 Dec 2024

Central Asia, Home, Uzbekistan, Tajikistan Business Economy, Tajikistan, Kyrgyzstan, Kazakhstan, Uzbekistan Business & Economy, Business & Economy, Kazakhstan Business & Economy, Kyrgyzstan Business & Economy, Features

Central Asia’s Economy Expands Fourfold Over Two Decades, Outpacing Global Growth Rates

December 9, 2024
By Sadokat Jalolova

Over the past two decades, the gross domestic product (GDP) of Central Asia has grown fourfold in real terms and sevenfold in nominal terms, according to Evgeny Vinokurov, Deputy Head of the Eurasian Development Bank (EDB).

Vinokurov highlighted significant improvements in the region’s economic landscape. Over the same period, population mobility has tripled, and incoming investments have surged by more than 17 times. Vinokurov emphasized that the last two years have underscored Central Asia’s status as an economically attractive and strategically important region.

Positioned at the heart of Eurasia, Central Asia boasts strong transport and transit potential, a growing consumer market, and expanding opportunities for investment. Despite external challenges, the region’s economies have displayed remarkable resilience, maintaining steady growth and weathering global shocks effectively.

Between 2022 and 2023, Central Asia’s economies grew at an average annual rate of 4.8%, significantly outpacing the global average of 3.4%. This makes the region’s growth rate 1.4 times faster than the global average. Vinokurov projected that Central Asia’s nominal GDP will surpass $500 billion in 2024.

Despite these achievements, Central Asia faces complex challenges that require regional collaboration. Key issues include:

— Lack of access to the sea: Geographical isolation limits trade and economic integration.
— Climate and environmental risks: These pose threats to sustainable development.
— Water and energy management: Disjointed policies among countries hinder efficiency and sustainability.

Vinokurov stressed the importance of joint efforts to address these challenges. Coordinated development of water and energy resources, renewable energy, and the Eurasian transport framework can yield cost-effective and efficient solutions.

Central Asia’s impressive economic growth over the past 20 years reflects its potential as a key economic and transit hub in Eurasia. While the region faces significant challenges, collaborative solutions and investments in infrastructure and sustainability could unlock further growth and prosperity.

09 Dec 2024

Home, International Affairs, Kazakhstan International Affairs, Features, Kazakhstan Featurees

Kazakhstan, Xinjiang, and Hong Kong Forge Trilateral Partnership to Boost Trade, Investment, and Connectivity

December 9, 2024
By Sergey Kwan

Kazakhstan, China’s Xinjiang Uyghur Autonomous Region (XUAR), and the Hong Kong Special Administrative Region have agreed to establish a joint mechanism for trilateral cooperation. The agreement was reached on December 5 during a meeting in Urumqi, Xinjiang, attended by Kazakhstan’s Vice Prime Minister Serik Jumangarin, XUAR Party Committee Secretary Ma Xingrui, and Hong Kong’s Secretary for Commerce and Economic Development Algernon Yau.

At the meeting, Ma Xingrui underscored Xinjiang’s strategic role as a bridge connecting Kazakhstan with Hong Kong and the broader Belt and Road Initiative. Highlighting Kazakhstan as a critical transport hub linking Europe and Asia, and Hong Kong as a global trade and logistics center, Ma proposed developing a framework for collaboration. The suggested mechanism would focus on boosting investment and strengthening cooperation in key sectors, including finance, energy, agriculture, logistics, and cultural exchanges such as education, healthcare, tourism, and scientific research.

Vice Prime Minister Jumangarin proposed establishing a Kazakhstan-Xinjiang-Hong Kong Cooperation Council to create actionable strategies for enhancing investment, trade, and economic ties. He suggested hosting the council’s inaugural meeting in Kazakhstan next year. Jumangarin also highlighted China’s significant investment in Kazakhstan, noting 145 joint projects worth $38 billion and 5,000 joint ventures currently operating in the country. He invited businesses from Hong Kong and Xinjiang to collaborate on establishing production facilities in Kazakhstan, particularly for the deep processing of agricultural raw materials.

“Kazakhstan is a major exporter of grain and oilseed products, with growing livestock exports,” Jumangarin said. “We encourage businesses from Hong Kong and Xinjiang to partner with us in producing value-added food products.”

Hong Kong’s Secretary for Commerce, Algernon Yau, emphasized the city’s status as the world’s third-largest financial center and a global aviation hub connecting over 200 destinations. He welcomed Kazakh enterprises to register in Hong Kong, highlighting the city’s strong ties with ASEAN countries, which could provide Kazakh companies with expanded access to those markets.

In a separate meeting, Jumangarin and Ma Xingrui discussed plans to double trade turnover between Kazakhstan and Xinjiang. XUAR is Kazakhstan’s largest trading partner among Chinese regions, accounting for nearly half of the bilateral trade volume. In 2023, trade between Kazakhstan and XUAR grew by 62%, reaching $20.3 billion. During the first nine months of 2024, trade increased by another 22.46%, reaching $17.67 billion. Both sides are working toward the goal set by the presidents of Kazakhstan and China to raise overall trade turnover to $100 billion.

Another key topic was the development of river transportation as an alternative to road and rail routes. Kazakhstan proposed creating a multimodal transit corridor through Russia, Kazakhstan, and China using the transboundary Irtysh River, with initial freight traffic volumes projected at 2–2.5 million tons. Additionally, a potential route along the transboundary Ili River was discussed, linking the Kazakh city of Konayev with the Chinese city of Yining.

The agreements reached at the trilateral meeting represent a significant step toward closer collaboration between Kazakhstan, Xinjiang, and Hong Kong. With plans to enhance trade, investment, and infrastructure development, the partnership holds great potential for strengthening economic ties and connectivity across the region.

09 Dec 2024

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

Uzbekistan’s Gold Reserves Drop by $1.7 Billion in December

December 9, 2024
By Sadokat Jalolova

Uzbekistan’s international reserves declined in November, with the Central Bank of Uzbekistan reporting a decrease of $1.7 billion, or approximately 3.9%, bringing the total reserves to $41.5 billion as of December 1.

The country’s gold reserves, which form a significant part of its international assets, saw a decrease in value by $623 million—from $33.4 billion to $32.7 billion—despite a slight increase in the physical volume of gold to 12.3 million troy ounces.

Meanwhile, assets in freely convertible currency dropped by $1.04 billion in November, reaching $8.2 billion. This decrease is mirrored in the cash held in foreign accounts by the Central Bank, which also fell by $1.04 billion to $8.08 billion. Of this, $370.1 million is held in accounts with other central banks and the International Monetary Fund (IMF), while the remaining $7.7 billion is distributed among foreign financial institutions.

In contrast to the decline in gold and currency reserves, the value of securities purchased by the Central Bank rose slightly, increasing by $101.3 million during the same period.

Uzbekistan’s international reserves had reached a record high of $39.15 billion as of September 1, a peak since the country began disclosing reserve data in 2018. While November’s decline marks a significant drop, the reserves remain above the levels recorded earlier in the year.

The fluctuation in Uzbekistan’s reserves reflects changing global market conditions and highlights the dynamics of managing gold and foreign currency assets. As the Central Bank navigates these challenges, the stability and long-term outlook of Uzbekistan’s financial reserves remain areas to watch closely.

09 Dec 2024

Central Asia, International Affairs, Kazakhstan, Business & Economy, Kazakhstan Business & Economy, Kazakhstan Home

Kazakhstan and China Digitalize Customs Procedures on Middle Corridor

December 9, 2024
By Sergey Kwan

Kazakhstan Temir Zholy (KTZ), Kazakhstan’s national railway company, has announced the digitalization of customs declaration procedures for transit cargo along the Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor, at the border between Kazakhstan and China.

In collaboration with Global DTC, KTZ Express – a subsidiary of KTZ – has launched the Tez Customs digital platform. This system transitions customs operations to a paperless format, reducing processing time to just 30 minutes after a train’s arrival at the border station.

The platform enables preliminary preparation of documents, automatic registration, and issuance of transit declarations. These capabilities optimize logistics processes, enhance transparency at all stages of customs clearance, and significantly reduce the time required for customs operations.

Since May 2024, Tez Customs has fully automated customs clearance processes for transit cargo along the China–Central Asia route via Kazakhstan, specifically along the Altynkol-Saryagash section. In October 2024, its scope was expanded to include cargo transported along the Middle Corridor.

To date, Tez Customs has processed over 54,000 transit declarations on the China to Central Asia route and more than 5,000 declarations on the TITR.

The Trans-Caspian International Transport Route serves as a critical link between China and Europe, passing through Kazakhstan and the Caucasus. More than 80% of all land cargo transported from China to Europe travels through Kazakhstan, according to Kazakh statistics.
During the first nine months of 2024, the volume of cargo transported along the Middle Corridor increased by 23% compared to the entirety of the previous year, reaching 3.4 million tons. Projections suggest that by 2030, this figure will rise to 10 million tons annually.

The digitalization of customs procedures via Tez Customs represents a significant advancement in the efficiency and transparency of transit operations on the TITR. This innovation reinforces Kazakhstan’s position as a vital transit hub for trade between China, Central Asia, and Europe, while also supporting the continued growth of cargo volumes along the Middle Corridor.

09 Dec 2024

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

Strategic Bypass Route Opens in Southern Kyrgyzstan

December 9, 2024
By Sergey Kwan

On December 6, Kyrgyzstan’s President Sadyr Japarov inaugurated a new bypass road around Uzgen, a historic city located 56 kilometers northeast of Osh, the largest city in southern Kyrgyzstan. The bypass is designed to alleviate traffic congestion in Uzgen by redirecting vehicles away from the city center. This development is expected to improve traffic flow, reduce travel times, and lower the risk of accidents on the former main route through the city.

Construction of the bypass began in January 2024. The project includes two significant bridges: a 197-meter-long bridge spanning the Kara-Darya River and a 77-meter-long bridge over the Jazy River. To address the needs of residents, the project also features underground crossings for pedestrians and livestock and access roads connecting nearby villages.

Speaking at the opening ceremony, Japarov emphasized that the Uzgen bypass is Kyrgyzstan’s first infrastructure project completed through a public-private partnership model. He reiterated the government’s dedication to expanding the country’s road network to enhance connectivity and boost logistics capabilities.

Japarov also outlined plans for additional road projects, including a proposed 150-kilometer route linking Almaty, Kazakhstan’s largest city, to Kyrgyzstan’s Lake Issyk-Kul. This new route would significantly shorten the current travel distance, providing a faster and more efficient connection between the two destinations.

While acknowledging the long-term nature of infrastructure investments, Japarov highlighted their critical importance for national and international development. He encouraged private investors, particularly domestic ones, to participate in upcoming road construction projects. If sufficient local investment is not secured, the government plans to seek foreign partnerships.

In his closing remarks, Japarov likened road infrastructure to the “circulatory system” of the state, underlining its fundamental role in driving economic growth. He noted that improved roads enhance regional logistics, foster trade, and promote tourism, all of which are vital for Kyrgyzstan’s development.

09 Dec 2024

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

Small Businesses Employ Over Half a Million People in Kyrgyzstan

December 9, 2024
By Anton Chipegin

Small and medium-sized enterprises (SMEs) play a vital role in Kyrgyzstan’s economy, employing 585,000 people and contributing significantly to various sectors, according to the National Statistical Committee (NSC).

As of 2024, Kyrgyzstan has 18,139 registered small businesses paying taxes. SMEs are particularly active in agriculture and manufacturing, with private entrepreneurs producing 65% of the country’s agricultural output and 26% of its industrial goods. Additionally, much of the hotel and restaurant industry is owned and operated by medium-sized private businesses.

Most of these enterprises are concentrated in the Bishkek and Chui regions, where 80% of the country’s small and medium-sized businesses operate.

The Kyrgyz government has taken steps to encourage entrepreneurs to operate transparently and contribute to the formal economy. In the summer of 2024, the voluntary patent system was abolished and replaced with a requirement for businesses to use cash registers.

To incentivize compliance, businesses with an annual turnover of up to KGS 15 million ($170,000) are exempt from taxes if they purchase cash registers, submit reports to the State Tax Service, and pay insurance and pension contributions. For businesses with a turnover between KGS 15 million and KGS 30 million ($340,000), a reduced tax rate of 0.5% on turnover is applied.

Small and medium-sized businesses are not only a backbone of Kyrgyzstan’s economy but also a key source of job creation. Government initiatives to formalize SME activity and simplify taxation are expected to further bolster the sector’s growth and contribution to the national economy.