• KGS/USD = 0.01144 0%
  • KZT/USD = 0.00196 0%
  • TJS/USD = 0.09217 0.55%
  • UZS/USD = 0.00008 0%
  • TMT/USD = 0.28615 0.14%
  • KGS/USD = 0.01144 0%
  • KZT/USD = 0.00196 0%
  • TJS/USD = 0.09217 0.55%
  • UZS/USD = 0.00008 0%
  • TMT/USD = 0.28615 0.14%
  • KGS/USD = 0.01144 0%
  • KZT/USD = 0.00196 0%
  • TJS/USD = 0.09217 0.55%
  • UZS/USD = 0.00008 0%
  • TMT/USD = 0.28615 0.14%
  • KGS/USD = 0.01144 0%
  • KZT/USD = 0.00196 0%
  • TJS/USD = 0.09217 0.55%
  • UZS/USD = 0.00008 0%
  • TMT/USD = 0.28615 0.14%
  • KGS/USD = 0.01144 0%
  • KZT/USD = 0.00196 0%
  • TJS/USD = 0.09217 0.55%
  • UZS/USD = 0.00008 0%
  • TMT/USD = 0.28615 0.14%
  • KGS/USD = 0.01144 0%
  • KZT/USD = 0.00196 0%
  • TJS/USD = 0.09217 0.55%
  • UZS/USD = 0.00008 0%
  • TMT/USD = 0.28615 0.14%
  • KGS/USD = 0.01144 0%
  • KZT/USD = 0.00196 0%
  • TJS/USD = 0.09217 0.55%
  • UZS/USD = 0.00008 0%
  • TMT/USD = 0.28615 0.14%
  • KGS/USD = 0.01144 0%
  • KZT/USD = 0.00196 0%
  • TJS/USD = 0.09217 0.55%
  • UZS/USD = 0.00008 0%
  • TMT/USD = 0.28615 0.14%
08 February 2025

Viewing results 1 - 6 of 1812

Powering the Green and Economic Revolution: An Interview With Andi Aranitasi, Head of the EBRD in Uzbekistan

As the Head of the European Bank for Reconstruction and Development (EBRD) in Uzbekistan, Andi Aranitasi plays a key role in driving the country’s economic transformation. Under his leadership, the EBRD has expanded its investments in key sectors such as energy, infrastructure, and private enterprise, supporting Uzbekistan’s shift toward a more open and sustainable economy. With a focus on green energy, digitalization, and financial reforms, Aranitasi’s efforts contribute to the nation’s long-term development and integration into global markets. In 2024, the EBRD set an investment record in Uzbekistan by signing off on 34 projects worth €938 million (US $960 million). The country once again became the leading recipient of the Bank’s funding in Central Asia, with 55% of the Bank’s investments going towards green economy projects. The EBRD has supported Central Asia's first renewable hydrogen facility by providing a $65 million financing package to a joint venture of ACWA Power and Uzkimyosanoat, which will help to decarbonize the fertilizer production sector in Uzbekistan. The Bank also organized an A/B loan of US$ 226 million for developing, designing, constructing, and operating a 200MW solar photovoltaic power plant and a 501MWh battery energy storage system (BESS) in the Tashkent region. This is one of the most significant EBRD-supported BESS projects in the economies where the Bank operates. Its sovereign loan of $66.4 million to the National Electric Grid of Uzbekistan (NEGU) will support the construction of a 230 km 500 kV transmission line in the Navoi region. This project will help to eliminate bottlenecks in the grid, reduce electricity outages, and facilitate the integration of renewables. The EBRD’s sovereign loan of $238 million, meanwhile, will help rehabilitate a key road and build a bridge across the Amu Darya River in the Khorezm region, thus contributing to sustainable transport connections. The country’s financial sector attracted over €300 million from the EBRD through trade finance limits and loans to local financial institutions. It offered credit lines and risk-sharing agreements to such domestic lenders as Hamkorbank, Ipoteka Bank, TBC Bank Uzbekistan, and Uzbek Leasing International. Special attention was paid to the development and support of SMEs, including those needing energy efficiency improvements and owned and managed by youth and women. The EBRD also increased its equity investment in TBC Uzbekistan, the country’s first digital bank. Additionally, the EBRD and the government of Uzbekistan agreed to work jointly on the successful privatization of one of the country’s largest state-owned lenders, Asakabank. In 2024, the EBRD’s Advice for Small Business program in Uzbekistan launched 60 projects, increasing its outreach to domestic SMEs. Half of these were with women entrepreneurs, and over 40% were in rural areas. More than 80,000 entrepreneurs nationwide were reached through specialized training, networking, online outreach, and knowledge-sharing events. Throughout 2024, the EBRD was actively engaged in policy dialogue with the national authorities, which facilitated the approval of several key legal acts, such as laws on privatization, the electricity market, and subsoil use. TCA spoke with Andi Aranitasi. TCA: The EBRD has been involved...

Kyrgyzstan Economy at Risk of Stagnation, Warns World Bank

The World Bank has released a new report on the economic development of Kyrgyzstan and the broader Central Asian region. While the report acknowledges that Kyrgyzstan’s economy is growing at a steady pace, it warns that this growth is insufficient to propel the country to the next stage of development. The report, prepared in collaboration with the Kyrgyz Ministry of Economy and Commerce, outlines a three-stage approach to advancing the national economy. According to David Knight, a leading economist at the World Bank, Kyrgyzstan should prioritize investment, the adoption of new technologies, and innovation. The World Bank also recommends that the government focus on improving education, strengthening the private sector, and reforming energy policy. "Kyrgyzstan's economy is currently showing strong indicators. However, these are not enough to facilitate a transition to the next level of development. As experience shows, it is only a matter of time before economic growth slows. The key question is whether the authorities can sustain momentum," Knight said. Ivaylo Izvorski, the World Bank’s Chief Economist for Europe and Central Asia, told The Times of Central Asia that Kyrgyzstan needs targeted investments — or "point injections" — in key sectors, particularly industry and energy. "Why is it so difficult to transition from middle-income to high-income status? One reason is that countries cannot simply shift from investment-driven growth to innovation-driven growth overnight. The right technologies must first be introduced into the economy, and only then can innovation take hold," Izvorski explained. The World Bank has also raised concerns about Kyrgyzstan’s energy sector, particularly its pricing policies. Despite recent increases in electricity and heating costs, World Bank experts argue that tariffs remain artificially low and heavily subsidized, which could hinder long-term development. "If electricity costs 10 cents per unit but consumers pay only 3 cents, it leads to waste and inefficiencies. State subsidies, the monopoly of state-owned enterprises, and market distortions continue to obstruct energy sector reforms," Izvorski said. The report also highlighted the need for education reform. The World Bank advises Kyrgyz authorities to raise educational standards, particularly in higher education, to support a more skilled workforce. To achieve this, universities and vocational schools should strengthen partnerships with industrial enterprises, while university funding should be tied to institutional performance.

Trump’s Trade Wars and Kazakhstan’s Economic Jitters

U.S. President Donald Trump is addressing his country's economic challenges with aggressive trade policies, threatening tariff barriers and demanding concessions from major economies. The Times of Central Asia explores whether these actions could deepen economic challenges in Kazakhstan and the broader Central Asian region. A New Round of Trade Wars In early February, the United States officially announced a 25% tariff on imports from Canada and Mexico, alongside a reduced 10% tariff on Canadian energy resources. Additionally, a 10% tariff was imposed on all Chinese imports. The justification given was to curb illegal immigration and drug trafficking. While Mexico and Canada managed to delay the new tariffs through negotiations, China responded swiftly with retaliatory measures. According to China's Ministry of Finance, Beijing imposed a 10% tariff on U.S. oil and agricultural machinery imports, and a 15% duty on coal and liquefied natural gas (LNG). Additionally, Chinese regulators launched an antitrust investigation into Google, further escalating tensions. Despite these developments, a resolution remains possible, though seemingly ever more distant. On February 3, Trump announced plans to speak with Chinese President Xi Jinping, but that call was then canceled following China's retaliatory measures. In a further escalation, on February 5, the US Postal Service said it has stopped accepting parcels from mainland China and Hong Kong until further notice. Meanwhile, Trump has also signaled plans to impose new duties on goods from the European Union. As of November 2024, China was the third-largest U.S. trading partner, accounting for 11.3% of total U.S. foreign trade. Mexico (15.4%) and Canada (13.8%) ranked first and second, respectively. In contrast, Kazakhstan and other Central Asian nations do not rank among the top 15 U.S. trading partners. Domestic Issues Outweigh External Pressures According to economist Aidarkhan Kusainov, Trump's trade policies are unlikely to have a direct impact on Kazakhstan and Central Asia. Speaking to The Times of Central Asia, Kusainov argued that domestic economic challenges far outweigh the influence of global trade wars. "Our economy faces significant internal distortions, making global trade wars a relatively minor factor. Inflation in Kazakhstan is not caused by external pressures but by rising fuel and utility costs, tax policies, and discussions about increasing value-added tax (VAT). Within a short period, the tenge’s exchange rate against the U.S. dollar has shifted from 490 to 530," he said. Kusainov further emphasized that if Kazakhstan's inflation rate were around 2%, any impact from global factors would be worth analyzing. However, with official inflation at 9% - and real inflation likely much higher - domestic issues are the primary concern. "Our economy is so small compared to the world's leading economies that its presence in the global market is nearly imperceptible. By economic volume, we are smaller than some Chinese provinces. Other Central Asian countries are even less integrated into global trade," Kusainov noted. He warned that only a large-scale global crisis could significantly impact Kazakhstan’s economy, potentially exposing internal vulnerabilities that the government can no longer mitigate. Inflation Risks Inflation remains a pressing concern in...

Kazakhstan Introduces Tax Incentives to Encourage Business Lending

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.

Tokayev Outlines Economic Reforms and Calls for Revised Energy Contracts

On January 28, Kazakhstan's capital Astana hosted an expanded government meeting led by President Kassym-Jomart Tokayev. The event focused on the country's socio-economic development in 2024, but this year’s discussion carried broader implications, addressing both domestic and international concerns. Addressing Budget Constraints From the outset, Tokayev made it clear that a key issue for his government is the state budget’s financial shortfall. Analyst Gaziz Abishev noted on his Telegram channel that the problem is not just a lack of funds but a long-standing habit - dating back to 2003 - of addressing challenges by simply increasing spending. “There is no longer an oil windfall to revitalize the dry economy as there was 20 years ago,” Abishev wrote. Adding to the uncertainty, Kazakhstan’s oil revenues face potential disruption from Donald Trump’s stated intention to drive down global hydrocarbon prices. Tokayev outlined a range of measures to fill budget gaps, urging his government to take bold, unconventional steps. He called on officials to act in the country’s best interests without fear of pressure from the Anti-Corruption Service or public opinion. He also stressed the importance of depoliticizing economic partnerships, particularly with Russia and China, cautioning against allowing Russophobic or Sinophobic rhetoric to interfere with business deals. “Money must be attracted from abroad, and this is more important than ever. Without investment, we cannot sustain ourselves. Money doesn’t smell, but it disappears. We need to attract investment from all sides - within the law - without falling into populism. The future of the national economy, and to some extent the country as a whole, is at stake,” Abishev commented. Public Reaction to Tax Reforms Although tax reform was only the sixth of eight key points in Tokayev’s speech, it quickly became the most widely discussed issue among the public. Kazakhstan’s value-added tax (VAT) is currently 12%, with a sufficiency threshold of 78 million tenge ($150,937). The government is considering raising the VAT rate to 20% and lowering the sufficiency threshold to 15 million tenge ($29,026). If implemented, nearly all small businesses would become VAT payers, while the increased tax rate is expected to drive inflation. The government maintains that inflation will not exceed 4.5%, but Tokayev’s mention of “belt-tightening” has already led many to expect rising retail prices. To offset the burden on businesses, the government proposes eliminating mandatory employer pension contributions and reducing the social tax. However, Tokayev himself expressed reservations about cutting the social tax, emphasizing that regional governors (akims) need financial incentives. “Think again. I believe it would be wrong to deprive akims of incentives, especially financial ones. After all, the regions are the country. Find a solution. We will meet again to discuss these issues,” he told the government. The tax reforms will also be debated in Parliament, where the lower house is currently reviewing the draft of the new Tax Code. The government will have to negotiate with members of the Majilis and Senate over the VAT rate, sufficiency threshold, and other sensitive issues. Messages to Foreign Partners...

Migrants from Kyrgyzstan Anticipate Tougher Conditions for Work in Russia

A majority of Kyrgyz citizens believe that working conditions for migrants in Russia will deteriorate significantly in the near future, according to a recent survey by the FOCUS Alliance of Euro-Asian Sociologists. Survey Findings The survey results paint a grim outlook for migrant workers from Kyrgyzstan: 61.5% of respondents believe that conditions for migrant workers in Russia will worsen significantly. 14.7% think the situation will remain the same. 10.7% are confident that despite challenges, migrants will adapt. Only 4.4% are optimistic, expecting improved conditions for foreign workers. Another 8.9% found it difficult to predict the future of migrant labor in Russia. A similar sentiment was observed in Uzbekistan. According to the same survey: 35% of Uzbek respondents believe it will become impossible for migrants to find work in Russia. 28% believe the situation will remain stable. 22% are confident that migrant workers will overcome challenges. 6% expect conditions to improve. The survey, which included 1,433 participants, used a random sampling method with a margin of error of 3%. Stricter Migration Policies in Russia Russia has tightened its migration policies in recent months, with the State Duma passing multiple bills aimed at increasing oversight of foreign nationals. The crackdown on migration follows a terrorist attack at Moscow's Crocus City Hall, which reignited debates around national security and the regulation of foreign labor. Russian President Vladimir Putin emphasized that the interests of Russian citizens must take priority in drafting migration laws. He also stressed the importance of migrants adhering to local legislation and having knowledge of the Russian language. These developments reflect a growing trend in Russia to limit migration and impose stricter conditions on foreign workers. Kyrgyzstan’s Response Despite the challenges, Kyrgyzstan remains committed to labor migration as a critical aspect of its economy. Deputy Chairman of the Cabinet of Ministers Edil Baisalov reassured that the country will continue to export labor to Russia. Russia is a key destination for Kyrgyz migrant workers, with remittances from workers abroad making up a significant portion of Kyrgyzstan’s GDP. However, with stricter migration laws and a shifting labor market, the ability of Kyrgyz workers to sustain their livelihoods in Russia may face serious obstacles. The survey results highlight widespread pessimism among Kyrgyz and Uzbek citizens regarding the future of migrant work in Russia. Stricter migration policies and a focus on prioritizing Russian citizens are contributing to uncertainty for Central Asian migrant workers. While Kyrgyzstan continues to rely on labor migration to support its economy, adapting to the evolving conditions in Russia will require resilience and potentially new strategies to protect its migrant workforce.