Industrial Development - The Times Of Central Asia

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Labor force

Kazakhstan’s Factory Expansion Faces a Skilled Labor Shortage

Kazakhstan plans to create tens of thousands of jobs at new factories, but lacks qualified workers. Around 200 industrial projects are scheduled to be launched in 2026, followed by new metallurgical, engineering, and chemical plants. The facilities can be built within a few years, but training the staff needed to operate them may take significantly longer. A 2025 estimate suggested the shortage of qualified workers in manufacturing, construction, and engineering-related fields could exceed 100,000. The projects planned for 2026 are worth a combined 1.7 trillion tenge, or approximately $3.6 billion, and are expected to create around 18,000 permanent jobs. The next wave of projects will require several thousand more workers. Seven new projects in ferrous metallurgy are planned for 2027–2028, creating more than 3,500 permanent jobs. Another six facilities in non-ferrous metallurgy are planned for the same period, creating more than 800 jobs. Behind those plans are facilities producing steel and ferroalloys, copper and aluminum products, trucks, road machinery, and chemicals. Kazakhstan is seeking to process more of its own raw materials domestically and export products with higher added value. For an economy that remains heavily dependent on oil, metals, and other commodities, the success of that policy will shape its prospects for further diversification. The Asian Development Bank has identified higher productivity and stronger human capital as important conditions for that transition. In March 2025, National Engineering Academy President Bakytzhan Zhumagulov said the shortage of qualified workers in construction, manufacturing, engineering and technical fields could exceed 100,000. Meanwhile, in April 2026, Science and Higher Education Minister Sayasat Nurbek warned that the gap between the specialists being trained and the needs of the economy was widening. The Ministry of Labor has pointed to another imbalance: on the Enbek electronic labor exchange in May 2025, demand for workers with mid-level qualifications exceeded supply by 16%. Tomorrow’s Factories and Today’s Labor Market The government is already trying to reshape vocational education. In 2025, 70% of state-funded college places were allocated to technical fields, including mechanical engineering, transportation, energy, IT, and construction. Kazakhstan operates a system for forecasting the economy’s labor needs, estimating demand by occupation, region, and industry several years ahead, taking into account both newly created jobs and the need to replace people leaving the labor market. These projections are intended to guide state-funded education and vocational training. The potential scale of future demand is substantial. A forecast published in 2025 estimated that the economy would require around 1.6 million workers over the following six years, including about 900,000 people with technical and vocational education. Demand for workers in skilled trades alone was estimated at more than 400,000. Construction, agriculture, and manufacturing were expected to be among the main employers. Yet the current labor market still reflects a fairly traditional pattern. Kazakhstan has a short-term vocational training program for unemployed people. Employers submit requests for the specialists they need and guarantee employment, while the state pays for their training. More than 11 billion tenge, approximately $23 million, was allocated to the...

opinion

Turkmenistan and the New Geopolitics of Silicon

Central Asia is not foreign to the emerging geopolitics of silicon and artificial intelligence (AI). Kazakhstan especially has made itself noticed, joining the US-led Pax Silica initiative in June and the Chinese-led World Artificial Intelligence Cooperation Organization (WAICO) in July. Kazakhstan is the only country participating in both initiatives, which is characteristic of Astana’s multi-vector diplomacy. Whilst other Central Asian states have joined WAICO, Turkmenistan, consistent with its permanent neutrality stance, has joined neither. Neutrality, however, does not prevent economic participation, and a case has to be made for Turkmenistan. Two Frameworks for International Cooperation Although both initiatives respond to the same underlying reality - the growing strategic importance of artificial intelligence - they differ in scope and emphasis. Pax Silica is built around the material and economic foundations of AI, focusing on securing and coordinating the physical supply chains that make computation possible and aiming implicitly to reduce reliance on China. WAICO, by contrast, is centered on the political and normative dimension of AI, prioritizing governance, safety standards, and international coordination, where Beijing could push its rhetoric in favour of open-source artificial intelligence as a model for AI development. Taken together, they reflect two complementary but distinct ways of structuring the emerging AI order: one rooted in industrial capacity and supply-chain control, the other in multilateral rules. On that matter, Turkmenistan's possible relevance does not lie in software, semiconductor fabrication or AI regulation, but much further upstream: silicon metallurgy. From Gas to Silicon Silicon is abundant in nature, but transforming it into industrial materials is an energy-intensive process. Quartz or quartzite is used to produce both silicon ferroalloys and silicon metal. Ferrosilicon is principally consumed by the iron and steel industries, where it serves as a deoxidizing and alloying agent. Silicon metal, meanwhile, is used in aluminum alloys and chemical production, while a small share is further purified into the extremely high-purity silicon required by the semiconductor industry. Ferrosilicon should not be presented as a material that goes directly into AI chips. But establishing competitive ferrosilicon production can constitute a first industrial step into the broader family of silicon metallurgy. And Turkmenistan has already begun considering precisely that. In 2020, the Turkmen authorities reported that the Ministry of Industry was studying the production of metallurgical-grade silicon using local resources. Practical tests had already been conducted using quartz sand, metal mixtures and petroleum coke, while the government presented the development of domestic mineral resources as part of a broader strategy of industrialization and export diversification. The ambition became more concrete in January 2024. Turkmenistan's Ministry of Industry and Construction Production launched an international tender for a feasibility study for a ferroalloy plant intended to manufacture ferrosilicon, silicon carbide, and technical silicon. A 2024 feasibility study for such a project envisions a plant in Balkan Velayat capable of producing 15,000 tons of FeSi75 ferrosilicon annually. The proposed complex would operate two 12,500 kVA furnaces. Rather than depending exclusively on domestic raw materials, the study envisages sourcing quartzite from nearby Iran and...

digital economy

Kazakhstan and China Launch IBI Digital Economy Hub in Almaty

Kazakhstan and China have opened the IBI Digital Economy Hub in Almaty, establishing a new platform aimed at expanding bilateral cooperation in digital trade, investment, industrial development, and cross-border logistics. According to Kazakhstan’s Ministry of Trade and Integration,the new hub is designed to serve as a focal point for cooperation in the digital economy, e-commerce, trade, investment, industrial collaboration, and transport and logistics between the two countries. The opening ceremony was attended by Vice Minister of Trade and Integration Aidar Abildabekov, along with representatives of government agencies from Kazakhstan and China, development institutions, national companies, financial organizations, and private businesses. Officials said the platform would help companies from both countries develop joint investment projects and connect with international partners. It is also intended to expand digital commerce and online services while improving cross-border supply chains. The hub will support industrial cooperation and transport and logistics projects. It will also help companies deploy technology and localize production, with better access to markets in both countries. A central component of the initiative is the development of a large high-tech industrial park, which is expected to be built in phases over the next five to eight years. Potential locations include the Zhambyl, Almaty, and Karaganda regions, as well as the Khorgos International Centre for Boundary Cooperation on the Kazakhstan-China border. Infrastructure investment in the project is estimated at $2 billion. Once fully operational, the industrial park is expected to generate more than $10 billion in annual economic activity, while the joint venture managing the project is projected to earn more than $1 billion in annual revenue. Between five and ten major industrial and manufacturing companies are expected to become anchor tenants. Speaking at the launch, Abildabekov pointed to record growth in bilateral trade. “Trade between Kazakhstan and China reached a record $48.7 billion in 2025. During the first five months of 2026, bilateral trade totaled $22 billion, up 27% year-on-year. Our task now is not only to increase trade volumes but also to improve their quality through digitalization, industrial cooperation, and the creation of modern production and logistics chains,” he said. Abildabekov described the IBI headquarters as an important addition to the digital infrastructure supporting international trade and investment. "We see this project not simply as an expansion of Chinese business in Kazakhstan, but as a contribution to the development of the country's digital ecosystem. The new platform will become an effective center for cooperation between government, business, and the expert community, helping implement joint projects and introduce advanced digital solutions," he added. China remains one of Kazakhstan’s largest trading and investment partners. According to the Ministry of Trade and Integration, Chinese foreign direct investment reached a record $2.826 billion in 2025, while cumulative Chinese investment in Kazakhstan since 1993 has exceeded $30.7 billion. The hub adds a commercial element to Kazakhstan’s technology ties with China. As previously reported by The Times of Central Asia, President Kassym-Jomart Tokayev offered Astana as the venue for the first meeting of the World AI Cooperation Organization...

Irrigation

Tajikistan’s Irrigation Plans Require Major Upgrades

Tajikistan has the potential to become the irrigation center of Central Asia but only if it undergoes extensive modernization. This conclusion comes from a joint report by the Eurasian Development Bank (EDB) and the United Nations Industrial Development Organization (UNIDO). Industrial and Economic Potential The report highlights Tajikistan’s capacity to develop into a regional production and maintenance hub for irrigation equipment. Key advantages include affordable electricity, a readily available labor force, and a strategic geographic location. These factors position the country to play a central role in an emerging regional irrigation cluster. The southern provinces of Khatlon and Sughd are identified as particularly promising for industrial development. Proposed projects include manufacturing facilities for plastic pipes and components for drip and sprinkler systems, alongside service centers for pump repair. Investment requirements for such facilities range from $3-5 million, with a projected payback period of just 2-3 years. However, the report underscores the pressing need to overhaul the existing infrastructure. Approximately 77% of Tajikistan’s irrigation systems require reconstruction. Of the country’s 720,000 hectares of irrigated farmland, nearly 60% must be restored. Additionally, 80% of pumping stations are considered outdated, and water losses due to technical inefficiencies reach 45%. Without significant upgrades, the system will likely struggle to meet growing climatic and demographic pressures. To support the irrigation sector’s long-term viability, the report calls for the annual training of at least 3,000 specialists. Training one professional to international standards costs between $1,200 and $1,800. The authors stress the importance of state investment in vocational education and greater collaboration between educational institutions and industry. Tajikistan as a Regional Logistics Bridge Tajikistan also has the potential to serve as a strategic logistics hub. Its southern regions could facilitate transport between Central Asia, Afghanistan, Iran, and Pakistan, cutting shipping costs and improving equipment access in remote areas. Realizing this vision will require a strong state role, including tax incentives, subsidies, and streamlined investment procedures. International donor participation is equally vital. Currently, nearly 90% of irrigation equipment used in the region is imported, adding up to 30% in logistics costs. While cluster-based industrial development has proven effective in other Central Asian countries, boosting enterprise productivity by 15-20% within two to three years, Tajikistan still trails behind. In contrast to Uzbekistan, which has over 90 cotton and textile clusters, much of Tajikistan’s agricultural output undergoes minimal processing. Regional Water Reform Needs $50 Billion The report concludes by emphasizing that water supply issues extend beyond Tajikistan. Across Central Asia, agriculture accounts for up to 80% of water usage. Losses from open canals reach 50%, and over 30% of irrigated land is affected by salinization. To address these challenges by 2040, the region will require $40-50 billion in investment for infrastructure upgrades, digitization, and a transition to closed irrigation systems. “Without urgent modernization of the irrigation system, the region risks facing serious water shortages, lower crop yields, and increased social instability,” the authors warn.