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Middle Powers

Which Central Asian States Qualify as Middle Powers in 2025?

As global power shifts toward multipolarity, Central Asia’s states are emerging as active regional players. This article assesses which of the five republics—Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan, and Tajikistan—qualify as middle powers in 2025, based on economic strength, diplomatic reach, strategic capacity, and governance. Kazakhstan stands as the region’s only consolidated middle power, balancing fiscal stability, institutional reform, and multi-vector diplomacy. Uzbekistan is a rising aspirant, propelled by reforms but still reliant on external financing and centralized authority. The remaining states remain constrained by dependence and limited institutional depth. Together, they reflect a region increasingly capable of shaping, rather than merely absorbing, global and regional change. A comparative analysis of five Central Asian republics shows how far each has advanced toward this status. 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This article assesses which of the five republics—Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan, and Tajikistan—qualify as middle powers in 2025, based on economic strength, diplomatic reach, strategic capacity, and governance. Kazakhstan stands as the region’s only consolidated middle power, balancing fiscal stability, institutional reform, and multi-vector diplomacy. Uzbekistan is a rising aspirant, propelled by reforms but still reliant on external financing and centralized authority. The remaining states remain constrained by dependence and limited institutional depth. Together, they reflect a region increasingly capable of shaping, rather than merely absorbing, global and regional change. A comparative analysis of five Central Asian republics shows how far each has advanced toward this status. Economic Power Economic autonomy is a defining attribute of middle-power capability, enabling states to project influence, sustain policy independence, and finance external engagement. In Central Asia, dependence on Official Development Assistance (ODA) and remittances often reflects constrained fiscal capacity and limited domestic capital formation, while diversified, resilient economies underpin strategic autonomy. Key indicators—GDP per capita, credit ratings, debt sustainability, and export diversification—illuminate the region’s economic hierarchy. Kazakhstan stands as Central Asia’s only consolidated economic middle power. Resource-backed growth, a prudent fiscal regime, and a sovereign wealth fund (the National Fund of Kazakhstan) have anchored macroeconomic stability. With a “BBB” credit rating or equivalent from major agencies, Kazakhstan demonstrates sound debt management and policy credibility. Ongoing diversification efforts under the new economic policies—from renewables to financial modernization—aim to reduce hydrocarbon dependence and deepen integration into global supply chains. Its role as a trans-Caspian logistics hub enhances both strategic and commercial influence. Uzbekistan, by contrast, is an emerging frontier market propelled by post-2017 reforms in currency liberalization, taxation, and state-enterprise restructuring. Rapid GDP growth and expanding private-sector activity mark its trajectory toward fiscal autonomy, though continued ODA inflows averaging around $1.1 billion to 1.3 billion annually, primarily from the Asian Development Bank (ADB), the World Bank, and bilateral partners such as Japan, the United States, and the European Union, highlight its residual dependence on external concessional financing. To achieve genuine middle power status, Uzbekistan must roughly double its real economic output over the next decade, a scale of growth aligned with the shift...

Investment

Kyrgyzstan’s New Investment Law Favors Large-Scale Investors

Kyrgyzstan has enacted a new investment law offering substantial benefits to major investors, both foreign and domestic. Under the Law “On Investments in the Kyrgyz Republic,” investors who commit at least $10 million and possess a strong international reputation and track record in large-scale projects may now sign individual investment agreements directly with the Cabinet of Ministers, according to the National Investment Agency under the President of the Kyrgyz Republic. These agreements grant investors access to a suite of incentives, including tax and customs benefits, visa support for key personnel, and assistance with selecting and registering land plots for investment projects. The initiative aims to boost foreign direct investment by attracting high-caliber investors. President Sadyr Japarov signed the law on August 14, 2025. It is intended to create a more transparent and competitive investment climate and strengthen institutional protections for businesses. The legislation defines the state’s investment policy principles, guarantees the protection of investor rights, and introduces mechanisms to safeguard those interests. It also aligns with the presidential decree “On the National Development Program of the Kyrgyz Republic until 2026,” which sets out key national targets: Average annual economic growth of 5% GDP per capita of at least $1,500 Unemployment rate reduced to 5% Annual foreign direct investment inflow of at least 13% of GDP With this legal framework, Kyrgyzstan aims to position itself as a stable, predictable partner for investors and as an emerging hub for investment in Central Asia.

Investment

Kyrgyzstan Sees Rising Pakistani Investment Amid Expanding Economic Partnership

Foreign direct investment (FDI) from Pakistan in Kyrgyzstan has more than doubled over the past five years, rising from $2 million in 2020 to $4.6 million in 2024, according to the National Investment Agency. A sharp spike occurred in 2023, when Pakistani FDI reached $6.9 million, reflecting growing interest from Pakistani businesses in the Kyrgyz market. “Kyrgyzstan and Pakistan demonstrate stable, positive dynamics of cooperation. The number of joint projects in agriculture, energy, trade, and the digital economy is expanding every year. We see high potential for further deepening of the partnership,” said Farkhat Iminov, Director of the National Investment Agency. Expanding Sectoral Cooperation On August 6, Iminov met with Marwan Alex Ayyash, Deputy Head of Mission at the Embassy of Pakistan in Kyrgyzstan. The Pakistani side expressed interest in developing cooperation in Kyrgyzstan’s mining sector, particularly in gold, tungsten, copper, and granite deposits. Earlier, on July 28, Kyrgyzstan and Pakistan held the fifth meeting of the Intergovernmental Commission on Trade, Economic, Scientific, and Technical Cooperation. The key outcome was the signing of a Memorandum of Understanding between Kyrgyzstan’s National Investment Agency and Pakistan’s Investment Board. The agreement aims to implement joint projects and expand cooperation in priority sectors including tourism, energy, agriculture, industry, transport, and logistics.

Foreign Investment

Kyrgyzstan Sees Continued Growth in Foreign Direct Investment

Kyrgyzstan continues to show steady growth in attracting foreign direct investment (FDI), with figures exceeding pre-pandemic levels. According to the National Statistical Committee, FDI reached over $1 billion in 2024, and the positive momentum has continued into 2025. In the first quarter of 2025, Kyrgyzstan attracted $288.3 million in direct investment, up 44% compared to the same period in 2024. The National Statistical Committee categorizes investments as coming from either Commonwealth of Independent States (CIS) countries or non-CIS countries, with volumes from both sources remaining roughly comparable. Among non-CIS nations, China maintained its position as Kyrgyzstan’s largest investor, contributing $66.3 million during the first quarter. Among CIS countries, Russia led with $56 million, while Kazakhstan remained a key regional partner with nearly $50 million invested from January to March 2025. Other CIS countries contributed considerably smaller amounts. Turkey also continues to play a significant role, investing $62 million in Kyrgyzstan’s production sector. Other notable contributors include the Netherlands, with $23.8 million. Uzbekistan demonstrated marked growth, following the signing of a bilateral agreement on the demarcation of certain border areas and water resources. Uzbek investments reached more than $5 million in the first quarter of 2025, up sharply from $237,000 in all of 2024. India likewise recorded a surge in investment, increasing from $91,000 in 2024 to $1.9 million in the first three months of 2025, an almost 2,000% rise. Bishkek remains the country’s most attractive destination for foreign investment, drawing more than $525 million in 2024. The Chui region ranks second, driven by the expansion of factories and processing enterprises with foreign participation. The manufacturing sector continues to be the primary target for foreign investment, followed by financial intermediation and insurance. Additional capital is flowing into mineral extraction, trade, and equipment repair.

Construction

Kyrgyzstan Tops EAEU in Construction Growth Despite Labor Woes

Kyrgyzstan recorded the highest growth in construction activity among member states of the Eurasian Economic Union (EAEU) during the first half of 2025, according to data published by the Eurasian Economic Commission (EEC). Infrastructure Boom Drives Expansion Between January and May 2025, construction volumes in Kyrgyzstan nearly doubled compared to the same period in 2024. Last year, the sector had already grown by 38% year-on-year. Armenia followed with a growth rate of 29%, while Kazakhstan, Belarus, and Russia posted more modest increases of 15.4%, 12.3%, and 5.5% respectively. Across the EAEU, construction grew by an average of 6.8%. The primary drivers of Kyrgyzstan’s construction boom include extensive state and private investment in housing, infrastructure, and industrial development. The government has focused on building hydroelectric power plants, residential complexes, and administrative buildings. Notably, the state mortgage program offers housing loans at 4-8% interest rates, well below market levels. From January to April 2025, the Cabinet of Ministers allocated nearly $500 million toward housing projects, supplemented by $77 million in equity financing. To help stabilize construction costs, the government also classified cement as a socially significant good, subject to price controls. According to The Times of Central Asia, investment in housing, infrastructure, and social facilities rose by 62% year-on-year during the first four months of 2025, reaching approximately $800 million, the highest figure in recent years. The construction sector contributed an estimated 3% to Kyrgyzstan’s GDP growth in the first half of the year. Quality and Labor Concerns Persist Despite these achievements, concerns are growing over construction quality and labor shortages. Residents in major cities report poorly planned developments that lack supporting infrastructure, including roads and essential utilities such as water and electricity. Speaking to The Times of Central Asia, construction auditor Bakhtiar Kasymaliyev highlighted critical challenges in project execution. “We have serious problems with quality and professionalism,” he said. “There is a shortage of skilled concrete workers and bricklayers. They are in high demand. As a temporary solution, companies are bringing in labor from Pakistan, India, and Egypt, but most of them are unskilled. To improve quality, we need to attract qualified specialists from abroad.” According to Kasymaliyev, the labor shortage is already impacting project timelines and structural integrity, raising red flags amid the sector’s rapid expansion.

State Visit

Opinion: Mirziyoyev’s Historic Visit Opens New Era for Uzbekistan-Mongolia Ties

Uzbekistan’s President Shavkat Mirziyoyev embarked on a historic journey to Mongolia on June 24-25, marking a significant milestone in the relationship between the two nations. This landmark visit, the first of its kind in over thirty years since the establishment of diplomatic ties, signifies a new era of collaboration and potential growth in Central Asia. Accompanied by his wife, Mirziyoyev was warmly received in Ulaanbaatar by Mongolian Foreign Minister Batmunkh Battsetseg and a host of other dignitaries. Their arrival set the stage for discussions aimed at unlocking vast opportunities for multifaceted cooperation and development, reflecting a shared vision for a prosperous future. Despite the significant geographical distance that separates Uzbekistan and Mongolia, the two nations are witnessing a remarkable evolution in their bilateral relations. This burgeoning partnership spans several domains, including diplomacy, economics, transportation, culture, and humanitarian efforts. A pivotal moment in this relationship was marked by the recent inauguration of the Mongolian Embassy in Tashkent, which symbolizes a commitment to fostering closer ties. Additionally, the increased frequency of intergovernmental and interparliamentary dialogue reflects a shared ambition to enhance collaboration. The signing of 14 bilateral agreements further underscores a mutual desire to cultivate trust and strengthen the partnership, paving the way for a promising future. In recent years, the partnership between Uzbekistan and Mongolia has experienced a remarkable surge in trade and investment. This dynamic growth is underpinned by a robust and multifaceted cooperation that spans numerous sectors, showcasing the commitment of both nations to strengthening ties. Between 2018 and 2023, trade between Uzbekistan and Mongolia experienced a significant increase, rising by more than 8.8 times. This impressive upward trajectory has continued into the early months of 2025, with preliminary data indicating a sustained expansion. Uzbekistan exports a variety of goods to Mongolia, including vital agricultural and industrial products, while Mongolia has ramped up its livestock exports, enriching the trading landscape. The establishment of numerous joint ventures exemplifies, with many ventures operating in Uzbekistan featuring 100% Mongolian capital, primarily in the realms of trade and services. Both nations are actively identifying and pursuing opportunities for collaborative projects in critical areas, including logistics, agro-processing, and machinery manufacturing. A particular emphasis is placed on joint production initiatives in sectors such as leather, wool, and cashmere processing, as well as the fabrication of electrical equipment, machinery, and construction materials. Agricultural cooperation is also a key focus, with plans for joint clusters and projects aimed at the processing and production of meat, dairy, wool, and leather products. Enhancing transport interconnectivity and developing innovative logistics routes are prioritized, with a direct air service between the capitals anticipated to be in place by the end of the year. Cultural and humanitarian exchanges are being fostered through initiatives such as the Days of Uzbek Culture, which take place in Ulaanbaatar, and the return of Mongolian students to Uzbek universities. The recent meeting between the President of Uzbekistan and the President of Mongolia, Ukhnaagiin Khurelsukh, marked a significant step toward enhancing bilateral cooperation. Both leaders engaged in productive...