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Kyrgyzstan and Turkmenistan to Increase Trade and Economic Cooperation

On July 25, Kyrgyzstan hosted the 6th meeting of the Kyrgyz-Turkmen intergovernmental commission on trade, economic, scientific, technical, and humanitarian cooperation, chaired by Kyrgyzstan’s Deputy Chairman of the Cabinet of Ministers—Bakyt Torobaev, Minister of Water Resources, Agriculture and Processing Industry, and Annageldi Saparov, Minister of Energy of Turkmenistan. The parties noted the sevenfold increase in trade turnover between Kyrgyzstan and Turkmenistan over the past four years and discussed means for further improvement. In 2023, bilateral trade totalled $64 million. Torobaev proposed opening a joint bonded zone in Turkmenistan to develop trade infrastructure and postal operations in e-commerce. He also noted that providing preferential tariffs for Kyrgyz cargo trucks through Turkmenistan's territory and simplifying the visa procedure for Kyrgyz drivers will significantly expand bilateral trade exchange. Due to their geographical locations, the parties emphasized that Kyrgyzstan and Turkmenistan have significant potential in the transport and logistics sector. In particular, the planned launch of a transport corridor from China through Kyrgyzstan and Uzbekistan to Turkmenistan, utilizing the Turkmenbashi seaport, will provide access to the Caspian Sea and the Russian Federation, opening up new economic opportunities for both countries. The meeting addressed the need to continue working on creating a Kyrgyz-Turkmen Development Fund as a mechanism for uniting the two countries' business sectors and stimulating the creation of joint ventures. The parties also discussed a project to build a Turkmen resort in Cholpon-Ata at Lake Issyk-Kul. The Kyrgyz government’s press service stated that the parties signed documents on Kyrgyzstan's import of Turkmen electricity in 2025 but did not disclose details.

Investments Export/Import Economy Industry

Foreign Investment in Beverage Production and Bottling Plant, Kazakhstan

On July 22, National Company Kazakh Invest announced its signing of a Memorandum of Understanding with the Vietnamese-Japanese joint venture LLP Mareven Food Tian Shan for the construction of a beverage production and bottling plant in the Almaty region. The plant, to be built in stages from 2025-26, will have four production lines with a 70,000 bottles per hour capacity, and an in-house warehouse with space for 15,000 pallets. A major investor in Almaty region's food production sector, Mareven Food Tian Shan has so far invested over 35 billion tenge in the country's economy, creating 690 jobs, 95% of which have been taken by locals. Emphasizing the importance of the initiative for Kazakhstan's economy, Yerzhan Yelekeyev, Chairman of the Board of Kazakh Invest, stated: "The investment project for beverage production and bottling in the Almaty region not only contributes to the development of local industry but also creates new jobs, positively impacting the socio-economic development of the region.” Nguyen Dinh Hien, Deputy General Director of Mareven Food Tian Shan, in turn, expressed his gratitude for Kazakh Invest's support and announcing the start of the third phase of the project, reiterated that the in addition to supplying the local market, the plant’s products will be exported to other Central Asian countries, Russia, Mongolia, and Afghanistan.

Industry

U.S. to Assist Kazakhstan in Rare Metals Exploration

In Astana on July 18, the U.S. Department of State and Department of Energy, in coordination with Kazakhstan’s Ministry of Foreign Affairs and Ministry of Energy, held the 2024 U.S.-Kazakhstan Strategic Energy Dialogue. The U.S. Embassy in Kazakhstan reported that the Dialogue deepened cooperation between Kazakhstan and the United States on the shared priorities of enhancing energy security, accelerating the clean energy transition and methane mitigation, and developing Kazakhstan’s critical minerals sector. Deputy Assistant Secretary Kimberly Harrington from the Department of State’s Bureau of Energy Resources and Deputy Assistant Secretary Joshua Volz from the Department of Energy’s Office of International Affairs co-led the U.S. delegation. U.S. and Kazakh energy and international affairs experts discussed the current progress and plans to reduce greenhouse gas emissions and sustainably mine and refine critical materials. They also discussed civil nuclear cooperation, renewable energy sources, energy security, and global nuclear security. The U.S. Department of State also signed a memorandum of understanding with the Kazakh National Geological Service and National Mining Company Tau-Ken Samruk to expand and diversify the supply chains of critical minerals. According to the National Geological Service, the main goal of the memorandum of cooperation is to explore the promising regions of Kyzylorda and East Kazakhstan to extract rare metals. With this memorandum, the U.S. Department of State will support Kazakhstan in financing geological exploration and providing technical expertise for these projects.

Export/Import Investments Finance Economy Industry Government

Kazakhstan Reports Steady Economic Growth in First Half of 2024

On July 15, the Ministry of the National Economy of Kazakhstan announced the result of the country’s economic development for the first half of 2024. In the period January-June, the gross domestic product (GDP) increased by 3.3%, compared to 3.2% in the same period last year. The production of goods rose by 3.6%, and the services sector grew by 3.3%. Compared to last year, the economic growth rate slowed in H1 of 2024. This was caused by the economic impact of extreme flooding during the spring, which had a limiting effect on the development of most sectors. The floods resulted in reductions in trade, transport and logistics in ten regions. Oil production also decreased by 1.6%. In the first half of this year, industrial production was one of the main engines of economic growth, the volume of which increased by 2.8%. There was steady growth in multiple sectors of industrial production. Mechanical engineering grew by 9.4%, metallurgy by 8.3%, the chemicals industry by 5.3%, pharmaceuticals by 14.8%, and the furniture industry by 28.3%. The volume of construction work also increased by 8.6%. In January-June, 4.6 million square meters of housing in new apartment complexes were commissioned, 5.9% more than in the same period last year. Agricultural production increased 3.4% in January-June, and transportation and warehousing services grew 7.3%. Investments in non-resource sectors of the economy were also on the rise. Fixed capital investment increased in the manufacturing industry (by 9.4%), information and communications (2.4-fold), scientific and technical activities (58%), transport (33.7%), education (24.1%), financial operations (22.1%), and real estate transactions (4.5%). In June, annual inflation fell to 8.4% compared to 9.5% in January. In the period January-May, Kazakhstan’s foreign trade turnover amounted to $55.3 billion. Exports grew by 1.8% to $32.5 billion, including exports of processed goods, which increased by 0.8% to $10.5 billion. Imports amounted to $22.9 billion, down 7.2%, meaning the positive trade balance was $9.6 billion, an increase of $2.3 billion or 32.4% year-on-year. Since the beginning of the year, Kazakhstan’s international reserves have also increased by $5.4 billion and exceeded $101.3 billion as of July 1. This includes the assets of the National Fund, which increased by $1.4 billion to a total of $61.4 billion. The gold and foreign currency reserves of the National Bank also increased by $4 billion to $39.9 billion.

Nuclear safety Nuclear Energy Industry Strategy Economy Security Russia Energy Investments

Nuclear Race: Will Central Asia Build a Nuclear Power Plant?

The answer to the question posed in the title remains uncertain. While Uzbekistan has plans to construct a nuclear power plant and Kazakhstan is set to hold a referendum this fall to gauge public opinion on building one, progress is sluggish. Tashkent has postponed the start of construction, and the issue sparks heated debate in Kazakhstan. The First Nuclear Power Plant in Central Asia Historically, Central Asia did host a nuclear facility. Located on the shore of the Caspian Sea in Kazakhstan, this was not a conventional nuclear power plant but a fast neutron reactor known as BN-350. The reactor was the core of the Mangistau Nuclear Power Plant, designed to transform the Mangyshlak Peninsula by providing energy to the city of Aktau (formerly Shevchenko) and powering large-scale desalination plants that supplied drinking water to the arid region. [caption id="attachment_20031" align="aligncenter" width="366"] BN-350[/caption] Operational from 1973 until its shutdown in 1999, the BN-350 reactor was decommissioned due to the allocation of U.S. funds for new desalination and heating equipment and the disposal of its remaining fuel. The extensive maintenance and decommissioning work on the BN-350 have given Kazakhstani nuclear physicists significant experience with such complex and hazardous technology. However, younger generations in Kazakhstan are largely unaware of the BN-350 reactor’s existence. Their knowledge of nuclear physics is often limited to the harrowing stories passed down about nuclear warhead tests at the Semipalatinsk test site and their devastating effects. Fear and Nuclear Power: Kazakhstan's Dilemma The societal fear surrounding nuclear energy in Kazakhstan is deeply intertwined with political concerns. For a long time, the leadership in Kazakhstan has hesitated to move beyond merely discussing the need for a nuclear power plant (NPP) to actually initiating the project. President Kassym-Jomart Tokayev recently announced that a referendum would take place in the fall of 2024. However, Ministry of Energy's officials avoided mentioning the word "referendum" until the last moment, previously asserting it was unnecessary. Public hearings were held last year in the village of Ulken, Zhambyl district, Almaty region, a proposed site for the nuclear plant. The Ministry of Energy’s press release stated that the local populace supported developing nuclear power, highlighting its significance for regional socio-economic growth. However, media reports revealed that the hearings were contentious, with opposing viewpoints almost disrupting the speech of Nurlan Ertas, the head (akim) of the Zhambyl district. Activists even displayed banners and posters against the plant's construction. Certain groups have exploited the population's fear of another disaster like Chernobyl. Additionally, the government has struggled to convince the public that nuclear technologies are becoming safer. In contrast, Europe now includes nuclear power plants in its list of green energy sources, similar to other renewable energy sources (RES). In Kazakhstan, renewable energy accounts for only 5% of the total energy produced. The introduction of NPPs could significantly enhance the country’s position in reducing carbon emissions. The government faces a growing electricity shortage that can be addressed either harmfully or fearfully. The harmful options are coal-fired thermal power plants...

Industry Bilateral Trade International Cooperation Transport and Logistics International investment

Uzbek Afghan Business Forum

On July 3, an Uzbek-Afghan business forum was held in Tashkent to coincide with the visit of an Afghan delegation headed by Minister of Industry and Trade Nuriddin Azizi. The major event, the forum was attended by heads of ministries and government agencies, industry, and over 1,000 business representatives from both countries. As reported by the Uzbek Ministry of Investment, Industry and Trade, Afghanistan is Uzbekistan's fifth-largest export market. In the last five years, trade between the two countries has increased almost 1.5-fold, reaching $866 million in 2023. Uzbekistan currently receives Afghan investment in 550 enterprises, 443 of which are wholly funded with Afghan capital. In his welcoming speech, Laziz Kudratov, Minister of Investment, Industry and Trade of Uzbekistan, highlighted several promising areas of cooperation, including diversifying the range of goods traded, and bolstering cooperation between producers and exporters with support of both countries’ respective departments and industry associations. The forum focused on initiatives to further develop mutual trade, such as the transition to round-the-clock border crossing operations, the establishment of trading houses, and the execution of major transport and infrastructure projects. Attention was drawn to the significant impact of more proactive engagement at the International Trade Centre in Termez on the Uzbek-Afghan border, where the creation of business-friendly conditions include a 15-day visa-free regime and tax-free zone. Nuriddin Azizi, Minister of Industry and Trade of Afghanistan, commended Uzbekistan's efforts to foster an environment conducive to bilateral trade, economic and investment cooperation. He also encouraged more proactive engagement between Afghan and Uzbek entrepreneurs by offering assurance of both sides' readiness to support new ventures and initiatives. The forum was complemented by the exhibition "Made in Afghanistan" which showcased the produce of 75 major Afghan companies from jewellery, textiles and food to electrical engineering, mining, transportation and logistics. The event concluded with the signing of several trade agreements in the chemical and agricultural sectors, as well as an agreement to establish a logistics centre. According to the Uzbek Ministry of Transport, Afghanistan is one of the key links in ensuring regional connectivity across Central and South Asia. In recent years, cargo transportation across Afghanistan has risen significantly and in 2023, the volume carried along the multimodal transport corridor Uzbekistan – Afghanistan – Pakistan increased 1.5-fold compared to 2021.