Regional Relations - The Times Of Central Asia

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Central Asia Expands Trade and IT Cooperation with Afghanistan Amid Regional Growth Plans

The Central Asian countries continue to develop their trade relations with Afghanistan, a crucial factor in the region's economic growth and resilience against economic and political challenges. Afghanistan's key trade partners in Central Asia are Uzbekistan, Turkmenistan, and Kazakhstan. While Tajikistan and Kyrgyzstan play a smaller role, they still contribute by exporting electricity and agricultural products to Afghanistan. Afghanistan is Uzbekistan's fifth largest export market. Over the past five years, trade turnover between the two countries has grown by nearly 1.5 times, reaching $866 million in 2023. Currently, 550 enterprises with Afghan investments operate in Uzbekistan, with 443 being fully Afghan-owned. Joint projects span industries such as food production, construction materials, agriculture, tourism, and textiles. Recently, Uzbekistan and Afghanistan signed business agreements worth $4.5 million between their private sectors. For Turkmenistan, the most significant project involving Afghanistan is the TAPI gas pipeline. President Berdimuhamedov recently directed the government to accelerate the development of the Galkynysh Gas Field and expedite the TAPI pipeline's construction. The state company Turkmengas has already completed a 214-kilometer section on Turkmenistan's territory, fully preparing it for operation. This project is a key component of the country's socioeconomic development and investment program for 2025. Additionally, Turkmenistan is poised to become a transport hub for international corridors passing through Kazakhstan, particularly the North-South and Middle corridors, as well as the Lapis Lazuli corridor, which connects Turkey, Georgia, Azerbaijan, Turkmenistan, and Afghanistan. Although Kazakhstan does not share a border with Afghanistan like Uzbekistan and Turkmenistan, it remains an active trade partner. The Times of Central Asia has previously detailed trade relations between Astana and Kabul, highlighting Kazakhstan’s potential not only for expanding trade but also for entering Afghanistan’s IT market. The Afghan news portal AVA Press notes Kazakhstan’s role in regional stability and economic development. It also mentions Kazakhstan’s humanitarian aid to Afghanistan, including earthquake relief in 2023 and food assistance in 2024. The article touches on Afghanistan’s IT sector challenges and Kazakhstan’s potential role in addressing them. Afghanistan lags in IT development and relies on imported technologies, but Kazakhstan, recognized for digital transformation, could be a valuable partner. Kazakhstan’s e-government model, including the eGov platform, serves as an example of how digital services can improve governance and infrastructure. Choosing Kazakhstan as an IT partner is seen as a strategic decision based on the country’s internationally recognized digital achievements, strong economic ties, and mutual trust.

Jackson-Vanik and Kazakhstan: One Step Away from Repeal

The U.S. Senate has confirmed Marco Rubio as Secretary of State, raising hopes among Central Asian leaders - particularly in Kazakhstan - that his recent comments regarding the Jackson-Vanik amendment may soon translate into concrete action to repeal this outdated policy, which continues to hinder mutual trade. Passed in 1974 as part of the Trade Act under President Gerald Ford, the Jackson-Vanik amendment was designed to penalize countries with non-market economies that restricted emigration, particularly targeting the Soviet Union. The amendment specifically sought to pressure the USSR to allow its Jewish population to emigrate freely, while also protesting the suppression of Judaism and other religious practices. The amendment achieved a measure of success by 1989, when the Iron Curtain fell and Soviet Jews were permitted to emigrate in large numbers, primarily to Israel and the United States. However, the policy remained in place, even after the dissolution of the USSR, applying to the newly independent Central Asian republics despite their vastly different political and economic landscapes. On January 15, Rubio delivered a nearly five-hour confirmation speech during a Senate hearing for his nomination as Secretary of State under the Donald Trump administration. Among the topics discussed was the Jackson-Vanik amendment. Senator Steve Daines specifically asked Rubio for his position on the amendment, emphasizing that its repeal could normalize U.S. trade relations with Kazakhstan and Uzbekistan. Rubio described the amendment as “an absurd relic of the past,” asserting that it no longer serves any meaningful purpose in pressuring Central Asian countries on human rights. He warned that continued use of such measures could push nations like Kazakhstan and Uzbekistan closer to Russia’s sphere of influence. Rubio singled out Kazakhstan, noting that the country had “successfully met the conditions” to transition to a market economy, as evidenced by its accession to the World Trade Organization several years ago. He pledged to work with lawmakers to repeal the Jackson-Vanik amendment, signaling a shift in U.S. policy toward fostering deeper economic ties with the region. Why Central Asia Was Left Behind The continued application of the Jackson-Vanik amendment to Central Asia can be partially explained by the differing domestic policies of its key players - Kazakhstan and Uzbekistan. Under Nursultan Nazarbayev, Kazakhstan quickly abandoned Soviet-era restrictions on emigration and took steps to promote religious tolerance and interfaith harmony. By contrast, Uzbekistan under Islam Karimov maintained many of the Soviet Union’s repressive practices, including restrictions on religious minorities. This disparity in policies contributed to Washington’s perception of the region as monolithic and resistant to reform, discouraging efforts to lift the amendment. Recent Developments and Challenges In recent years, there have been efforts to lower trade barriers between the U.S. and Central Asia, particularly through initiatives like the B5+1 dialogue, which aims to attract greater Western investment to the region. However, the Jackson-Vanik amendment complicates these efforts, as countries must secure an annual waiver from the U.S. President to maintain normal trade relations. Kazakhstan has emerged as the frontrunner in advocating for the amendment’s repeal. An...

Kazakhstan Opens Pavilion in Uzbek-Afghan Border Trade Center

Kazakhstan’s Ministry of Trade and Integration has announced the opening of a trade pavilion showcasing Kazakh products at the Termez International Trade Center, located in the town of Termez, Uzbekistan, near the Afghan border. The pavilion is expected to serve as a strategic platform for promoting Kazakh goods in the markets of Uzbekistan and Afghanistan. The Termez International Trade Center is a crucial hub at the crossroads of Central Asian trade routes, facilitating significant trade flows between Uzbekistan and Afghanistan. Opened on August 29, the center was inaugurated by Uzbek Prime Minister Abdulla Aripov and acting Afghan Deputy Prime Minister Abdul Ghani Baradar. The facility includes retail spaces, hotels, a medical center, and other amenities. Notably, it supports transactions in multiple currencies, such as U.S. dollars, euros, rubles, and yuan. Afghan citizens can visit and conduct trade at the Termez center for up to 15 days without requiring an Uzbek visa. Kyrgyzstan has also secured a presence at the Termez International Trade Center. As The Times of Central Asia previously reported, on November 11, the Kyrgyz Ministry of Economy and Commerce acquired a trade pavilion, providing a strategic foothold to expand Kyrgyzstan’s influence in the markets of Uzbekistan and Afghanistan. Kazakhstan and Kyrgyzstan have both removed the Taliban from their lists of terrorist organizations, aligning with broader efforts by Central Asian nations to deepen trade and economic ties with Afghanistan.

Karakalpak Activists Facing Charges in Uzbekistan, Granted Asylum in the United States

The waiting, worrying, and wondering are finally over for four Karakalpak activists who were detained in Kazakhstan some two years ago, and faced possible extradition back to Uzbekistan. Zhangeldi Zhaksimbetov, Tleubike Yuldasheva, Raisa Khudaybergenova, and Ziuar Mirmanbetova received word on October 15 that they had been granted asylum in the United States. It ended more than two years of uncertainty that started with the unrest in Karakalpakstan on July 1, 2022. Karakalpakstan is part of Uzbekistan, but has a special status as a sovereign republic with its own parliament and constitution that allows the region to hold a referendum on seceding from Uzbekistan. Those unique privileges are also enshrined in Uzbekistan’s constitution, but in spring 2022 parliament proposed making amendments to the constitution. The main reason for the amendments was to change the presidential term from five to seven years so that incumbent President Shavkat Mirziyoyev, who was serving his second and constitutionally last term at the time, could extend his stay in power. However, the commission drafting the constitutional changes also dropped the articles referring to Karakalpakstan’s sovereign status and right to secede. Those rights were nominal as there was no chance Uzbek authorities would allow Karakalpakstan to fully govern itself or secede. Karakalpakstan accounts for some 37% of Uzbekistan’s territory, and also has large oil and natural gas reserves that have just started being developed in the past ten years. The special rights Karakalpakstan had might have been nominal, particularly since ethnic Karakalpaks make up only about one-third of Karakalpakstan’s two million inhabitants. But these distinctions, albeit it only on paper, were important to the Karakalpaks, and when the proposed amendments were published at the end of June 2022, tensions started rising immediately in Karakalpakstan. On July 1, Karakalpak community leaders went to apply for permission to hold a public meeting against the planned changes affecting Karakalpakstan. The group’s leader, activist and lawyer Dauletmurat Tazhimuratov, was detained. Word spread and a large group numbering at least several thousand gathered, protesting peacefully outside the administration building in the Karakalpakstan capital, Nukus. When police and security forces attempted to disperse the crowd, violence broke out, and when it was over and order finally restored, at least 21 people were dead and 243 injured. Nearly all the casualties were Karakalpaks, and police and security forces were accused of using unnecessary and indiscriminate force against the protesters. News of the proposed amendments, and the ensuing violence spread to the Karakalpak communities in other countries, notably to neighboring Kazakhstan, where, according to various estimates, anywhere from 50,000 to 200,000 Karakalpaks live. Most have Kazakh citizenship, but some simply work in Kazakhstan and remain citizens of Uzbekistan. Karakalpak activists in Kazakhstan followed events in Karakalpakstan in late June and early July 2022 and posted about it on social networks, sometimes with words of support for the protesters. After Uzbek authorities had restored order in Kazakhstan and arrested more than 500 people, Uzbek officials requested the Kazakh government detain Karakalpaks in Kazakhstan who had been...

Uzbekistan to Boost Development in Karakalpakstan

On January 10th, the President of Uzbekistan, Shavkat Mirziyoyev held a government meeting on the socioeconomic development of the Republic of Karakalpakstan, an impoverished autonomous region in the northwest of the country. In recent years, Karakalpakstan has made headlines as a politically volatile area which saw deadly unrest break out in July 2022. The region has also suffered acutely from the consequences of the Aral Sea ecological disaster. At the meeting, it was stated that over the past seven years, Karakalpakstan has undergone unprecedented changes. Twelve of the autonomous republic’s fifteen districts were formerly subsidized by the central government, but now they have begun to bring in revenues to the state budget. More than 5,300 projects have been implemented through investment. Forest plantations covering 1.8 million hectares have been sown on the desiccated bed of the former Aral Sea, and living conditions for 51,000 families have been improved. In Karakalpakstan, there are incentives and opportunities for doing business which are not available in any other parts of Uzbekistan - taxes on profit, turnover, land and property have all been lowered twofold, and social tax has been set at 1%. Over the past two years, seven decrees and resolutions have been adopted on the development of industry, agriculture, entrepreneurship, and the improvement of the infrastructure in mahallas (local neighborhoods) in Karakalpakstan, with a total of $400 million and 250 billion Uzbek som have been allocated for these purposes. Today, the population of Karakalpakstan exceeds two million, and every year 50,000 citizens enter the region’s labor market. At the meeting, the President emphasized the need to train them in modern professions, and provide them with gainful employment and decent conditions. In 2024, the government plans to attract $2.1 billion in foreign investment to the region. This injection of funds will help implement 206 projects in industry, 240 in the services sector, and 34 in agriculture, creating 13,000 jobs. The head of state pointed out that tourism can become a driver of economic growth in Karakalpakstan, and set the task of developing a program to kick-start tourism in the region, with a focus on environmental, ethnographic, and pilgrimage destinations. The establishment of a tourism cluster and attracting foreign experts to the local tourist industry were also discussed.

Regional Relations

Kazakhstan and Uzbekistan to Bring Mutual Trade to $10 Billion

On November 9th, Alikhan Smailov, the Prime Minister of Kazakhstan, made an official visit to Tashkent, Uzbekistan, for the 16th summit of the Economic Cooperation Organization. Prior to the event, he met with the President of Uzbekistan, Shavkat Mirziyoyev. During their meeting, Smailov extended warm greetings from the President of Kazakhstan, Kassym-Jomart Tokayev, and highlighted the strong strategic partnership between the two nations, based on trust and mutual understanding3. Smailov pointed out that "Uzbekistan is one of the largest trade partners of Kazakhstan. Our countries account for about 70% of all trade in Central Asia. At the end of last year, trade turnover increased by 30%, and for the first time reached the milestone of $5 billion. We are actively working to bring mutual trade to $10 billion”. Mirziyoyev reciprocated the sentiment, noting that the strategic agreements between Kazakhstan and Uzbekistan were being systematically realized across various sectors, including trade, transportation, and water management5. He added, “All issues we have are moving forward; I think there is not a single unresolved issue. In terms of trade, the projects we have agreed on with the President of Kazakhstan will help us reach new frontiers”. In line with these discussions, Arman Shakkaliev, Kazakhstan’s Minister of Trade and Integration, and Laziz Kudratov, Uzbekistan’s Minister of Investment, Industry and Trade, signed an agreement to regulate the activities of the International Centre for Industrial Cooperation “Central Asia”7. This center, set to be established on the border of the two countries, will house production sites, warehouses for goods and equipment storage, and transport infrastructure. The aim is to expedite cargo delivery and reduce logistics costs. The Industrial Cooperation Centre is expected to stimulate the creation of new production facilities and jobs, aid in the processing of agricultural and industrial products, and provide logistics services for goods transportation. It's hoped that the centre will enhance transport efficiency and expedite customs clearance processes. The signing of this agreement is a practical step towards the realization of the project. The launch of the Industrial Cooperation Centre is poised to serve as a catalyst for the further development of international trade and economic integration between Kazakhstan and Uzbekistan. It's also projected to contribute to increasing bilateral trade turnover to up to $10 billion.