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Central Asian Economies to See Continued Growth in 2024 and 2025

The latest economic outlooks from the European Bank for Reconstruction and Development (EBRD) and Asian Development Bank (ADB) project continued economic growth in the five Central Asian countries in 2024 and 2025. According to the latest edition of the EBRD’s Regional Economic Prospects report, Kazakhstan’s economy will grow by 4% in 2024, with upside from public spending to restore flood-affected infrastructure and housing. The trade, transport, warehousing, services, and IT sectors were the main growth drivers for Kazakhstan in the first half of the year. The EBRD forecasts that in 2025, the country’s real GDP will likely grow by 5.5% amid the planned expansion of the Tengiz oil field. The Asian Development Bank’s (ADB) Asian Development Outlook (ADO) September 2024 projects 3.6% growth of Kazakhstan’s gross domestic product (GDP) this year, slightly lower than the bank’s previous forecast of 3.8% in April 2024. The reason is a weaker service expansion in the first half of the year, lower oil outputs, massive spring floods, and a slowdown in investment. ADB forecasts Kazakhstan’s economic growth to accelerate to 5.1% in 2025. The government of Kazakhstan anticipates the country’s economic growth at 5.6% in 2025. The EBRD report forecasts Kyrgyzstan’s GDP growth to reach 9% in 2024 before moderating slightly to 7% in 2025. The country’s growth potential stems from the expansion of tourism, investment in infrastructure, and gold exports. Both remittances and real wages have remained elevated, helping retail and wholesale trade grow. ADB projects 6.3% growth for Kyrgyzstan in 2024 and 5.8% in 2025. Kyrgyzstan’s Ministry of Economy forecasts economic growth of 6.3% in 2024 and 6% in 2025. Kyrgyzstan’s Minister of Economy, Daniyar Amangeldiev, has explained why the economic forecasts from international financial institutions sometimes differ from those of the Kyrgyz Ministry of Economy. According to Amangeldiev, the forecasts differ because international financial organizations often do not take into account specific measures and actions that the government plans, each of which would potentially impact the country’s economic growth. He added that international forecasts can be skeptical, based on data that may not reflect all the government's actions. According to the EBRD report, Tajikistan’s GDP growth is projected to reach 8% in 2024 and 7% in 2025. Hikes in public-sector salaries, pensions, and minimum wages drove domestic demand in the year's first half, boosting the retail and wholesale trade sectors. The resumption of precious and semi-precious metal exports increased public infrastructure spending, and fixed capital investment was a major growth factor. However, fluctuations in remittances from Tajik labor migrants working in Russia present a significant downside risk for the Tajik economy. ADB forecasts Tajikistan’s economy to grow 6.5% in 2024 and 2025. The EBRD report says Turkmenistan’s economy has shown stability in recent years, citing investment in public infrastructure projects, production facilities, and fixed capital investment as key growth factors. Launching a new single window for export-import operations has improved Turkmenistan’s customs efficiency and simplified transit procedures, enabling higher freight turnover. This has led to the expansion of the country’s transportation sector. The EBRD forecasts...

Economy heroin Opium Drug Trafficking Agricultural produce Women's rights Taliban Afghanistan

Navigating Challenges: The ICG Reports on Taliban Drug Ban and Its Global Implications

The International Crisis Group, an NGO focused on analyzing conflicts, has reported that “After the Taliban's severe restrictions on women's rights made the regime odious to much of the outside world, the narcotics ban offers a rare opportunity to work with the new authorities on a pressing issue for the benefit of all sides.” Drugs from Afghanistan are a universal problem affecting all regions of the world except for Latin America, with Central Asia remaining one of the main routes for Afghan drugs on their way to Russia and Europe. The so-called “Northern Route” passes through Tajikistan and Uzbekistan, then to Kyrgyzstan and Kazakhstan before reaching the Russian and European markets. Turkmenistan also plays an important role as a transit country for drugs, but on the “Balkan route.” The drug threat from Afghanistan to the five Central Asian republics is not simply a political narrative used by the governments of these republics for their own political purposes. There is a risk of political instability, criminality, corruption, social degradation, and damage to human health as a result of drug trafficking from Afghanistan. Additionally, the elimination of Afghan drug production and trafficking is a key issue in the fight against terrorism, primarily against the Islamic State, as drugs are one of the main sources of income for these groups. In April 2022, hopes for a resolution to this problem appeared following the ban on opium poppy cultivation imposed by the Taliban. Papaver somniferum, commonly known as the opium poppy, has been cultivated in Afghanistan since at least the early twentieth century. The history of opium production is detailed in the Global Illicit Drug Trends report by the United Nations Office on Drugs and Crime (UNODC). Besides the history of opium production, the report provides an overview of measures taken by states in their attempts to regulate and control the drug. Opium began to dominate world drug markets in the early 1980s, after the “April Revolution” and the Soviet invasion of Afghanistan, when the state began to lose control of rural areas, and agriculture itself began to decline. As the UNODC points out, by 1989, opium production was firmly established as the country's main source of income - Afghanistan had become a narco-state. The civil war continued, and the opium economy became firmly entrenched in the country during the 1990s. The first fall of the Taliban in 2001 and the formation of a republican government failed to change the situation due to the newly formed state still having no control over the regions. As a result, its counter-narcotics measures were not effective. It should be noted that only the Taliban managed to reduce drug production. According to the UN, since the Taliban's 2023 ban, opium crops in Afghanistan have declined by 95%, and opium prices have reached record levels. However, many experts wonder if Afghanistan will be able to continue with its chosen policy. Can the new Afghan authorities alone continue to confront the drug threat, and what should be the role of...

Economy Migration Employment Bishkek Migrants officials

Kyrgyz Authorities Urge Migrants to Return Home From Russia

Kyrgyzstan's presidential spokesperson Askat Alagozov has urged Kyrgyz citizens who have gone to work in Russia to return and work at home. However, only some people share the government's position on the issue. Alagozov noted that the country desperately needs construction and textile workers. “Of course, the salary you expect will be the same as what you get in Russia. But, most importantly, it is better to work in your homeland and near your family. Come and work in your own country,” Alagozov wrote on social media. Alagozov published the Ministry of Labor and Social Development hotline number, where citizens can get help with employment. In comments to the post, citizens noted that salaries in Russia are higher than in Kyrgyzstan. A migrant in Russia receives an average of 80 to 200 thousand KGS ($950 - 2,350), while in Kyrgyzstan, the average salary is 30 to 50 thousand KGS ($350 - 600). “90% of Kyrgyz migrate to buy an apartment. Working here [in Kyrgyzstan], it is impossible to buy a house. The most important factor is migrants' need for housing,” one of Alagozov's followers said. As of August 1, 57,500 unemployed citizens were registered at the labor exchange. According to the National Statistical Committee, registered unemployment decreased by 21% over the past year. The Ministry of Labor and Social Development also claims that more than 230,000 citizens across the country have been employed over the past few years, while 58,000 have received vocational training. Meanwhile, workers registered at the labor exchange told The Times of Central Asia that the Kyrgyz labor market is not as good as the authorities make it out to be. To earn money, people have to take any job offered. “We are standing here on Lev Tolstoy Street, and everyone in Bishkek knows you can find workers if you come here. People here take on any work: construction and landscaping, concrete work, unloading, and transport work,” said a construction worker named Ulukbek. Permanent work is hard to find in the city, he said. “I can earn 1,500-2,000 KGS (US $18) daily, but not always, and sometimes you don't make any money. There is a mafia here; no one will give you a good job for nothing. There is massive competition in the warm seasons. In summer, people stand on both sides of the road, and there is more business to be had,” Ulukbek explained. Talk of a shortage of qualified construction workers in Kyrgyzstan began during the recent construction boom.

Green Silk Road Bilateral Cooperation Green economy Economy China

Kazakhstan and China Move to Green Cooperation

Kazakhstan’s International Center for Green Technologies and Investment Projects and the China-SCO Technology Transfer Center have signed a Memorandum of Understanding to develop joint projects in green technologies. The signing occurred at the Kazakhstan-China trade and economic cooperation forum, "Golden Bridge to Green Cooperation," held in Beijing last week. The forum discussed the Green Silk Road initiative, a key element of China's Belt and Road Initiative that aims to promote sustainable development and support global efforts for green transformation. Speaking at the forum, Kazakhstan's Minister of Trade and Integration, Arman Shakkaliyev, emphasized the importance of the Green Silk Road initiative for the sustainable development of Kazakhstan, China, and the global community. "The transition to carbon neutrality requires a comprehensive approach. green investments, greening trade corridors, and working towards a carbon-neutral economy are key aspects of our strategy," Shakkaliyev said. He also noted Kazakhstan and China's ambitious plans to expand economic cooperation and achieve a bilateral trade turnover of $80 billion, with a focus on investments in agriculture, new energy, automotive manufacturing, and the production of high-value-added products. According to Shakkaliyev, in 2023, China invested about $2 billion in Kazakhstan, 16.4% more than in 2022, and the total volume of Chinese investments in the Kazakh economy has now exceeded $25 billion. He also emphasized the potential of switching to electric vehicles and using green technologies in cargo transportation to improve environmental performance and increase the efficiency of trade corridors.

Economy Climate Change USAID Environmental Awareness Climate Emergency IMF Climate Change Adaptation Strategy

Climate Crisis May Drastically Reduce Production in Central Asia

Central Asia may face serious economic losses due to climate change, which may reach a 6.5% annual decline in production by 2060. These figures were announced by Bo Li, Deputy Managing Director of the International Monetary Fund (IMF), at the “New Economic Challenges for Long-Term Development” forum. According to Bo, the Caucasus and Central Asia region is particularly vulnerable to climate change. Soaring temperatures and increasing frequency of droughts and floods are reducing crops, destroying infrastructure, and lowering living standards. “According to IMF estimates, if no action is taken to slow down climate change, Central Asia will lose up to 6.5% of its output annually by 2060,” Bo said. He noted that possible losses could be reduced with joint actions such as reducing carbon emissions, transitioning to a green economy, and adapting to changing climate conditions. As an example, Bo noted the efforts of Kyrgyzstan, that has already started to increase electricity tariffs and reduce energy subsidies, allowing the country to adapt to climate challenges and create new jobs in the “green” sector. Many Central Asian countries are taking steps to reform the energy sector and introduce “green” technologies. For example, Kazakhstan is actively cooperating with several countries to develop renewable energy and reform the energy sector. One key example is the partnership with the United States under the USAID Power Central Asia program. This initiative supports Kazakhstan and other Central Asian countries in modernizing energy markets, introducing clean energy, and encouraging private investment in renewable energy. Uzbekistan is undergoing a major reform of its energy system to reduce subsidies and promote renewable energy. The country plans to increase the share of renewable energy to 25% by 2030, which includes solar and wind energy projects. These measures will help Uzbekistan improve energy efficiency and reduce carbon dioxide emissions. In Tajikistan, USAID is implementing the Power Central Asia program, which supports energy cooperation in the region and encourages using renewable energy to help reduce dependence on fossil fuels and modernize energy systems.

Fitch S&P credit rating Moody's Government Economy

Kyrgyzstan Signs Agreement with Leading Ratings Agencies

The Kyrgyz Ministry of Economy and Commerce has signed an agreement with the ratings agencies S&P (Standard and Poor's) and Fitch. In a statement, the ministry said: "To build the republic's potential in the international arena and to enter international markets, it is necessary to cooperate with the three big international rating agencies: Moody's, S&P, and Fitch." This week, Minister of Economy Daniyar Amangeldiev met with representatives from S&P and Fitch and Oppenheimer Europe Ltd's investment bank. Oppenheimer Europe Ltd. will act as a consultant for work with the rating agencies. The parties discussed the prospects of strengthening cooperation and joint work in assessing credit risks and Kyrgyzstan's investment attractiveness. “The parties expressed readiness to work on actively assigning and improving long-term rating. This will create prerequisites for strengthening the confidence of partners and investors”, the agencies commented. Rating agency representatives informed Kyrgyz officials about the need to assign a credit rating and the stages of entering international capital markets. In 2015, the Ministry of Economy of Kyrgyzstan signed an agreement with rating agencies Moody's and Standard and Poor's, giving the country an international credit rating for the first time. In 2016, the Kyrgyz authorities rejected the services of Standard and Poor's, for unnamed reasons. In May 2024, Moody's raised Kyrgyzstan's credit rating from negative to stable. Contrary to the agency's forecasts, Kyrgyzstan's economy and budget indicators have been virtually unaffected by Western sanctions imposed on Russia, the country's largest trading partner.