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Re-exporting goods to Russia from third countries through Kyrgyzstan are to become more expensive due to a new rule implemented by the National Bank of the Kyrgyz Republic (NBKR). The new protocol prohibits banks from making payments for goods intended for foreign countries without actual delivery to the territory of Kyrgyzstan. The rule came into force on September 25 and effectively closed the channel of transit payments for goods from third countries to Russia through Kyrgyzstan. The move is seen as a response to requests from international financial institutions. It might be instrumental in putting an end to Russia’s practice of avoiding Western sanctions imposed due to Russia's war in Ukraine. The new NBKR rule would also benefit the Kyrgyz economy, as re-exported goods must now be delivered to Kyrgyzstan and subject to Kyrgyz customs duties and taxes. According to Russian media reports, Russian importers have already encountered difficulties associated with the new requirement to transport goods through Kyrgyzstan, and the corresponding customs and tax costs, which makes re-export less profitable. The NBKR requirement does not extend to the Trading Company, established by the Cabinet of Ministers of the Kyrgyz Republic on August 23. Wholly state-owned, the company oversees trade flows involving Kyrgyz firms that re-export goods without physically delivering them to Kyrgyzstan. The Trading Company has the exclusive right to carry out trade operations without actual delivery to Kyrgyzstan. Companies that previously carried out trade without delivery to the Kyrgyz territory must carry out operations through the Trading Company. Also, the NBKR rule does not apply to deliveries made through e-commerce marketplaces for personal use.
On September 12, the Central Asia-Jiangsu Trade Center, a multifunctional platform showcasing exports from Kazakhstan, Uzbekistan, Tajikistan, and Turkmenistan, opened in Nanjing, the main city of Jiangsu Province in eastern China. According to the Kazakh Ministry of Trade and Integration, the operation of the Center in Jiangsu Province, known for its developed infrastructure, will facilitate access to the huge Chinese market for all five Central Asian countries. Plans are now in place to launch a similar multifunctional center in Kazakhstan’s capital, Astana, to showcase Chinese and Kazakh goods. Official statistics show continued growth of trade turnover between Kazakhstan and China. During the first seven months of this year, bilateral trade increased by 2.8% compared to the same period in 2023, and amounted to $16.8 billion. Between January and July 2024, trade between Kazakhstan and Jiangsu Province grew by over $1 billion, from $723.3 million to $1.758 billion. As reported by Kazakh Minister of Trade Arman Shakkaliyev, Jiangsu Province currently imports products, mainly from the industrial and agricultural sectors, worth more than $266 billion annually.
On September 12, the Kara-Suu checkpoint was reopened at the border between Kyrgyzstan and Uzbekistan. Located near the town of Kara-Suu in Kyrgyzstan’s southern Osh region, on the border with Uzbekistan’s Andijan region, the Kara-Suu crossing was closed 14 years ago. It has reopened amid the two neighboring states' improved political and economic relations. Speaking at the checkpoint's opening ceremony, Bakyt Torobaev, the Deputy Chairman of Kyrgyzstan’s Cabinet of Ministers, emphasized that its reopening will be beneficial to citizens of both countries. "Previously, many Kyrgyz and Uzbek citizens had to stand in lines at the Dostuk checkpoint to cross the border. The opening of Kara-Suu will solve the problem of queues when crossing the border. The opening of this checkpoint is an important step towards strengthening economic, social, and cultural ties between our countries and increasing tourist flows," Torobaev said. On the same day, the renovated Ken-Sai and Uch-Kurgan border checkpoints were opened between the Jalal-Abad region in Kyrgyzstan and the Namangan region of Uzbekistan. According to official statistics, more than 14 million people crossed the Kyrgyz-Uzbek border in 2023, and in the first eight months of 2024, this figure reached 11 million, 1.5 million more than in the same period last year. In 2023, trade between Kyrgyzstan and Uzbekistan amounted to $693.6 million. In the first seven months of 2024, it reached $428 million, a 6.7% increase compared to the same period in 2023. During a state visit to Uzbekistan back in July, Kyrgyzstan’s President Sadyr Japarov and Uzbek President Shavkat Mirziyoyev focused on measures to increase bilateral trade to $2 billion in the coming years and launch a “green-light corridor” for the transportation of agricultural produce between the two countries.
On 3-4 September, the Uzbek-Bulgarian Commission on International Road Transport met in Tashkent to discuss expanding bilateral cooperation in international freight transport by road and creating more favorable conditions for national carriers from both countries. As reported by the Uzbek Ministry of Transport, the agenda focused on increasing the volume of freight traffic to EU countries via Bulgaria, using the Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor, which connects China and Europe via Central Asia and the Caucasus. After the meeting, the parties exchanged additional permit forms for trucks entering their countries for the remainder of 2024, and agreed to increase the issue of mutual permit forms 15-fold in 2025. The Uzbek Ministry added that to enhance cargo transportation to EU countries, an agreement had been made with Romania to waive the requirement of permits from April 1, 2024.
Azerbaijan and Uzbekistan plan to cooperate on the construction of ferries. These ferries will be provided for Uzbekistan's needs, and the project will cost $150 million. Several measures are being suggested to expand the countries' cooperation in the transport and transit sectors. The joint construction of warehouse infrastructure is being mooted, as well as the creation of a joint venture to further develop transportation along the Trans-Caspian route. The Times of Central Asia previously wrote about the Uzbekistan-Azerbaijan business forum that was held in Tashkent on August 22. As a result of the forum, a portfolio of projects worth $2 billion was formed in energy, chemistry, mining, textile, agriculture, urban development, and other areas. Also, on May 1 this year, the energy ministers of Azerbaijan, Kazakhstan, and Uzbekistan met in Tashkent and signed a memorandum of cooperation to connect their countries' energy networks. The initiative's main goal is to study the means of connecting energy systems through a high-voltage cable installed in the Caspian Sea to export green energy from Azerbaijan, Kazakhstan, and Uzbekistan to countries of the European Union.
As reported by TASS, the head of Gazprom, Alexey Miller, announced that from January to August 2024, the company doubled its gas supply to Central Asia. According to Miller, the rapid economic and social development of the republics has opened up significant new opportunities for Gazprom, with gas supplies to Uzbekistan now at the highest possible level. "For example, the gas supply applications we submit for Uzbekistan are currently being fulfilled through the Central Asia Center gas pipeline at the maximum technical capacity, equivalent to the levels used during the winter season. This is the same level of supply we provided to Uzbekistan last winter when they experienced unusually cold weather,” stated Miller. Citing the fact that Kyrgyzstan’s gasification rate has doubled and continues to grow, he explained, “A lot of work has been done to reconstruct the gas transportation system of Kyrgyzstan. New gas transportation facilities have been built. But what is also important is Gazprom Kyrgyzstan has implemented socially significant projects in Kyrgyzstan, as is customary at Gazprom.” The Times of Central Asia previously reported that in June, Gazprom signed agreements for gas supplies to Kyrgyzstan and with Kazakhstan on the transit of Russian gas in the direction of Uzbekistan and Kyrgyzstan for the period 2025-2040. To ensure transit, a specially designated route based on the Central Asia–Center gas pipeline system will be expanded and implemented. In June 2023, Uzbekistan signed a two-year gas purchase agreement with Gazprom. Daily supplies amount to 9 million cubic meters, and annual supplies amount to almost 2.8 billion cubic meters. Supplies under this agreement began on October 7, 2023.
