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Forecast

Opinion – Storm Clouds Over Kazakhstan: Oil Slump and Global Risks Threaten Economic Stability

The persistent decline in Brent crude prices is the latest sign of a looming 'perfect storm' for Kazakhstan’s economy, the largest in Central Asia. With the mining sector comprising nearly half of its GDP and oil as a cornerstone resource, the nation’s economic stability is facing a cascade of potential shocks. Oil Prices and Budget Vulnerability Kazakhstan is grappling with significant economic headwinds amid forecasts of a global recession and declining energy prices. In April 2025, OPEC+, including Kazakhstan, unexpectedly agreed to raise oil production by 411,000 barrels per day, pushing prices below $65 per barrel. Given the country's reliance on hydrocarbon exports, such price drops jeopardize state revenues. Analysts say Kazakhstan needs oil prices to remain above $42.30 per barrel in 2025 to maintain fiscal stability. However, the threat extends beyond oil. As energy journalist Oleg Chervinsky noted on his Telegram channel, global commodity prices across the board are falling, a signal that recession is imminent. “The bad news for Kazakhstan is that prices are dropping not only for oil but for all raw materials,” Chervinsky wrote. “JP Morgan estimates the global recession probability at 60%. Even though oil and gas are exempt from Donald Trump’s new tariffs, the broader protectionist policies could fuel inflation, curb growth, and escalate trade tensions”. Trump's Trade War and Kazakhstan President Donald Trump’s sweeping tariffs are designed to limit low-cost imports and incentivize domestic production. Kazakhstan has been hit with a 27% tariff, the highest among the Central Asian nations. Its strategic location within China’s Belt and Road Initiative positions it as a potential re-export hub, prompting higher trade scrutiny. Kazakhstan’s Ministry of Trade and Integration has downplayed the immediate economic impact, noting that U.S.-bound exports account for less than 5% of total trade, and the country still holds a $1 billion trade surplus with the U.S. While the direct fallout may be limited, the broader implications of a global trade war could severely strain Kazakhstan’s economy. If a global recession takes hold, demand for Kazakhstan’s key exports, oil, uranium, and metals, will drop, dragging prices down further. Currency Pressures and Investor Retreat With shrinking export revenues, the tenge faces devaluation, leading to inflation, rising import costs, and weakened consumer purchasing power. In addition, recessions typically dampen foreign direct investment, especially in emerging markets like Kazakhstan, where perceived risk grows amid uncertainty. The China Factor The U.S.-China trade conflict is another critical variable. Trump’s strategy aims to undercut Beijing’s economic strength, but for Kazakhstan, China is its largest trading partner, representing over 15% of foreign trade. A slowdown in China would reduce demand for Kazakhstani raw materials and transit services. Such a downturn could also jeopardize President Kassym-Jomart Tokayev’s ambition to establish Kazakhstan as a vital trade corridor between China and Europe. While the Belt and Road Initiative is unlikely to collapse, reduced cargo flows would strain state revenues. China is also the primary buyer of Kazakhstan’s copper, aluminum, and ferroalloys. Any industrial slowdown there immediately impacts Kazakhstan's export volumes. Converging Risks Taken...

Islamization

Balancing Secularism and Belief: Central Asia Grapples with Rising Islamization

Although the Central Asian republics officially uphold secular governance, they may be experiencing a subtle, creeping Islamization beneath the surface. While state-controlled media across the region maintain that religious movements are well-managed, occasional incidents suggest a growing divergence between official narratives and societal realities. One such incident recently drew attention in Kazakhstan, where a photo circulated online showing girls in burkas holding a Kazakh flag inscribed with Arabic script. The image prompted Mazhilis Deputy Yermurat Bapi to call on the government to intensify efforts against radical religious movements. “Our attention was drawn to the fact that the inscriptions on the flag in Arabic script were produced with a special printing tool. This is not just hooliganism or inappropriate behavior. It is a direct challenge to our society, our statehood, and our national traditions,” Bapi said. Citing "national interests, traditions, and culture," Bapi has previously campaigned for a ban on religious clothing, specifically hijabs and niqabs, in public places. On social media, proponents of a Central Asian caliphate have railed against national traditions, denouncing Nauryz, criticizing local costumes and instruments, and rejecting pre-Islamic cultural heritage. Since President Shavkat Mirziyoyev took office in 2016, Uzbekistan has cautiously liberalized its religious policy. However, strict state control persists. Imams must be approved by the Muftiate, unregistered religious groups are banned, and mosque inspections are routine. The state endorses the Hanafi madhhab as the “national form of Islam” and recognizes Naqshbandi Sufism as part of its cultural heritage. Salafi and extremist movements are actively suppressed, and while former “black lists” of suspected extremists are being revised, some religious prisoners are being rehabilitated. Islamic education is expanding through madrasas, Islamic colleges, and the Islamic Academy of Uzbekistan. Tajikistan has pursued an aggressive campaign to secularize public life. The Islamic Renaissance Party, once a legal political force, was banned in 2015 as “extremist.” The state restricts youth access to mosques, prohibits the hijab in schools and public offices, and has shuttered over 1,500 mosques since 2011. As previously reported by TCA, a 2024 law bans “foreign clothing” - widely interpreted as targeting Arabic attire, including the hijab - to promote national dress. Islam is framed as a cultural element within state ideology, with the Committee on Religious Affairs closely monitoring clerics. Kyrgyzstan is widely viewed as the most religiously open state in the region. Post-Soviet liberalization allowed Islam to grow organically, with little initial oversight. Today, numerous Islamic groups, including Salafis, operate within the country. Rural communities and youth increasingly identify with Islam. Private madrasas and Islamic NGOs are flourishing, and hijab adoption is on the rise. Though the government has begun tightening oversight following incidents of radicalization, Salafi influence continues to grow. By 2023, there were 130 Islamic educational institutions, including 34 madrasas for girls. In Turkmenistan, one of the world’s most closed societies, religious freedom is strictly curtailed. All religious activity is monitored, and Islamic institutions are intertwined with nationalist and presidential cult rhetoric, often referred to as “Turkmen Islam.” Unregulated Islamic movements and foreign...

opinion

Opinion: Kazakhstan Caught in the Crossfire of Caspian Pipeline Strikes

The developing peace process between Russia and Ukraine, initiated by U.S. President Donald Trump, offers a glimmer of hope for stability. Yet Kazakhstan finds itself in a difficult position, caught in the crosshairs of a conflict that continues to spill across its borders, at least economically. Over the past few months, the Caspian Pipeline Consortium (CPC), through which more than 80% of Kazakhstan’s oil is exported, has become the target of repeated drone attacks linked to the war in Ukraine. Despite a tentative ceasefire agreement, damage to CPC infrastructure continues. In mid-March, the Kavkazskaya oil depot in Russia’s Krasnodar region, part of the CPC system, suffered a major fire following a suspected Ukrainian drone attack. According to Reuters, the blaze lasted nearly a week before being extinguished, raising concerns about the vulnerability of energy infrastructure in the region. Western outlets have confirmed that the CPC’s Kropotkinskaya pumping station was targeted around the same period. S&P Global reported that drone strikes on March 18-19 damaged a key facility transferring oil from rail tankers to the pipeline system. Business Insider noted the attack caused serious financial disruption, particularly for CPC shareholders such as Chevron-led Tengizchevroil. Kazakhstani journalist Oleg Chervinsky has stated that the CPC was included in a ceasefire moratorium on mutual strikes, reportedly agreed upon by both sides. If accurate, the March attacks could suggest a violation of those terms. AP News has also highlighted ambiguity in the ceasefire framework, with Russia and Ukraine each accusing the other of non-compliance. The economic stakes for Kazakhstan are high. According to oil and gas analyst Olzhas Baidildinov, the CPC distributed $1.3 billion in dividends in 2024, with KazMunayGas, Kazakhstan’s national oil company, receiving an estimated $250 million, approximately $85 million of which was channeled into the state budget. At a time when Kazakhstan is still recovering from a budget deficit, further disruptions to CPC operations are more than technical, they threaten fiscal stability. Yet the response from Astana has remained subdued. Political analyst Andrei Chebotarev recalled that following an an earlier attack in February, the Kazakh Ministry of Foreign Affairs pledged to engage with its Ukrainian counterparts. What emerged from those talks remains unclear. Chebotarev also noted that Ukraine has yet to appoint a new ambassador to Kazakhstan, despite generally constructive relations. Fellow analyst Daniyar Ashimbayev has speculated that geopolitical rivalries may be at play, including competition with the Baku-Tbilisi-Ceyhan pipeline and Kazakhstan’s recent overproduction within OPEC+, though these claims remain unverified. In a brief official comment, Deputy Foreign Minister Alibek Kuantyrov confirmed that Kazakhstan remains in contact with Ukraine and that discussions are ongoing. Meanwhile, the Ministry of Energy has stated that Kazakh oil continues to flow through the CPC pipeline without restriction. Yet, for many observers, Kazakhstan’s measured diplomacy, perhaps aimed at avoiding antagonism with either side, is beginning to feel inadequate. As key infrastructure remains exposed to cross-border conflict, the case for a firmer and more public diplomatic posture grows stronger.

Government

Power Shifts in Central Asia: The Unpredictable Path of Leadership

European Union Commissioner for International Partnerships Josef Sikela has concluded his tour of Central Asia, a visit conducted against the backdrop of global geopolitical turbulence. Unlike previous engagements, where European officials often criticized the region’s leadership for a lack of democratic progress, Sikela refrained from making demands on local governments. Historically, Europe has accused Central Asian states of authoritarianism and the entrenchment of long-serving leaders. However, the idea that power is uniquely permanent in the region is increasingly questioned. Critics point to Western examples, such as Angela Merkel’s 16-year tenure as Germany’s chancellor, and alleged electoral manipulation within the EU, such as in Romania, where elections were annulled after an undesired candidate’s victory. Meanwhile, in Central Asia, even presidents once considered “eternal” have eventually left office, sometimes peacefully, sometimes under turbulent conditions. Kyrgyzstan: The Unpredictable Outlier Kyrgyzstan is often described as a "democratic exception" within Central Asia, yet its history is marked by political instability and frequent leadership changes, arguably more so than in many of the world’s most conflict-prone regions. The country’s first president, Askar Akayev, held power from 1990 to 2005. Though re-elected three times, his rule ended in March 2005 when protests erupted over parliamentary election results that heavily favored pro-government candidates. Demonstrators stormed the Government House in Bishkek, prompting Akayev to flee. Reports, though unverified, claimed he was smuggled out wrapped in a carpet. Following Akayev’s ouster, Kurmanbek Bakiyev took power, but his rule ended in 2010 after violent unrest. His downfall was allegedly facilitated by Kazakhstan’s intelligence services, and he later found political asylum in Belarus under President Alexander Lukashenko. Since Bakiyev’s departure, Kyrgyzstan has continued to experience political turbulence. Presidents Almazbek Atambayev (2010-2017) and Sooronbai Jeenbekov (2017-2020) both left office under pressure. Atambayev’s tenure saw a diplomatic fallout with Kazakhstan, while Jeenbekov resigned in 2020 amid protests over parliamentary elections. His successor, Sadyr Japarov, remains in office, but whether he will complete his term is an open question. Uzbekistan: Reform Within Limits Islam Karimov, Uzbekistan’s first post-Soviet leader, ruled for over 26 years before his death in 2016. While he maintained a strictly centralized government, his tenure was also marked by violent crackdowns, most notably the Andijan uprising in 2005, which resulted in a Western diplomatic fallout. His successor, Shavkat Mirziyoyev, has introduced some reforms, loosening restrictions on civil liberties and the economy. However, the fundamental structure of state control remains intact, with opposition movements still tightly monitored. Kazakhstan: From Nazarbayev to Tokayev Kazakhstan’s transition from Nursultan Nazarbayev to Kassym-Jomart Tokayev is often described as managed succession rather than a genuine power shift. Nazarbayev, who led Kazakhstan for nearly three decades, officially stepped down in 2019, yet retained significant influence until the January 2022 unrest, which forced him to relinquish much of his remaining power. These protests, initially sparked by fuel price hikes, rapidly escalated into anti-government riots. While official accounts describe the unrest as an attempted coup orchestrated by figures within Nazarbayev’s inner circle, critics suggest Tokayev used the crisis to consolidate power....

Economy

Kyrgyzstan’s Economic Boom or Bust? Calls for Inclusive Growth Persist

Kyrgyz President Sadyr Japarov declared late last year that the country’s economic growth had reached historic milestones, with GDP maintaining positive momentum. However, local economists remain skeptical about the broader impact of this growth. In 2020, Kyrgyzstan’s GDP stood at 639 billion KGS ($7.3 billion), according to official data. By the end of 2025, this figure is projected to reach 1.8 trillion KGS ($22 billion). Growth Without Inclusion In an interview with The Times of Central Asia, economist Nurgul Akimova acknowledged that the reported 9% GDP growth and the so-called “leopard’s leap” frequently mentioned by the government are positive developments. However, she stressed that for economic expansion to be meaningful for ordinary citizens, it must be inclusive. "Nine percent growth is not inclusive because it does not create additional jobs. The main drivers of our economic growth are construction, downstream industries, and the financial sector. These sectors do not contribute to improving human capital. In construction, for instance, a significant portion of costs goes toward imported building materials," Akimova explained. According to Akimova, Kyrgyzstan’s economy has followed an inertia-driven trajectory for the past 30 years, avoiding major shocks but also failing to achieve significant breakthroughs. She pointed out that if the garment sector were growing, it would have a greater impact, as it did 15 years ago when Kyrgyz-made clothing was exported to neighboring countries. "For example, a seamstress spends her income on education, healthcare, and consumption. By doing so, she contributes to the development of other inclusive sectors, benefiting society as a whole," Akimova said, adding that while the economy is expanding, it is not improving the welfare of citizens. A People-Centered Economy Akimova emphasized that economic policy should prioritize people’s wellbeing, as failure to do so could erode public trust in the government. She also criticized official comparisons of Kyrgyzstan’s economic growth with other countries, arguing that such assessments lack context. "Officials claim Kyrgyzstan is growing faster than others, but an economy that produces microchips and one that manufactures T-shirts are fundamentally different. These industries require distinct investment levels, equipment, and human capital." Kyrgyzstan’s economy is currently valued at approximately $14 billion. If the country were to sustain an annual 10% growth rate, as authorities suggest, GDP would increase by $1.4 billion per year. Akimova highlighted that this figure represents only 0.5% of Kazakhstan’s economic growth, 0.06% of Russia’s, and a mere 0.0006% of the United States’ GDP expansion. "When we hear claims that we are growing faster than others, we must consider the scale and complexity of economic processes," the economist concluded.

Middle Powers

Middle Power Policy in Global Confrontation Environment

The current polycrisis fundamentally damaged the whole architecture of the Modern World Order, in particular, the Economics and Global Governance. Global tensions peaked during the 2019 pandemic crisis, and the 2022 war in Ukraine not only reduced the post-Cold War dynamics of international cooperation but changed its very nature. The Global Risks Report, issued by the 2023 Davos World Economic Forum, explains that a polycrisis dominated by the cost-of-living crisis, climate crisis, and political instability threatens to reverse hard-fought gains in development and growth, “The biggest turmoil is geopolitical... We have already entered a multipolar world in which each region has its own issues and role in global politics” (Jeffrey Sachs, The New World Economy, January 10, 2023). The era of a favorable climate for international trade, investment promotion in emerging markets, and the liberalization of international cooperation—beginning with the breakdown of the socialist bloc—is likely coming to an end. We have now entered a poly-crisis in which multiple risks exert force equally. The increasing number and dynamics of these crises are of deep concern for global governance actors, as unresolved old threats are now compounded by new ones, creating additional difficulties. What is essential is the widening imbalance between crisis management and development in global governance. Global management today focuses primarily on crisis regulation while playing a diminishing role in development programs. This is evident in the financial resource allocation for the Ukrainian crisis and UN funds for sustainable development: total bilateral aid from the US and EU for Ukraine between January 24, 2022, and June 30, 2024, amounts to $75.1 billion and $39.38 billion, respectively. In contrast, as of January 2017, only 22 joint UN programs had been approved with a total budget of $69.36 million. Global governance priorities are increasingly skewed toward security, while the socio-economic component steadily declines due to rising global conflicts. We have entered a fragmented, polarized world that lacks consensus on many critical international issues. Globalization is taking on features of deglobalization. The war in Ukraine has divided the world into two camps—the Global North (Western nations) and the Global South (Eastern nations)—each with differing visions for the contemporary world order. This division now permeates nearly all aspects of international and national life. The return of President Trump’s Administration in January 2025 raises several new questions and expectations regarding the future status of global partnerships. The updated American strategy urgently requires a deep and comprehensive political and academic analysis. This includes recent US actions such as withdrawing from certain UN institutions (e.g., the UN Human Rights Council and the World Health Organization, with UNESCO possibly following), imposing trade tariffs among major global trading partners, and introducing other new initiatives. These changes have already become a reality. At the same time, we observe a decline of the United Nations' effectiveness in resolving the acute problems of Global Security and Sustainable Development. Consequently, new global development initiatives have emerged, spearheaded by the United States and the European Union (PGII), as well as China (GDI, GSI,...