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World Bank Report Highlights Poverty and Inequality Challenges in Kazakhstan

The World Bank has released its Kazakhstan Poverty and Equity Assessment 2024, urging policymakers to adopt pro-poor fiscal policies, improve education quality, and enhance climate resilience to address poverty and inequality in the country. According to the report, Kazakhstan’s poverty reduction has slowed in recent years despite significant progress since the early 2000s. “Between 2006 and 2021, economic advancement significantly improved living standards and reduced poverty rates in Kazakhstan. However, economic growth has slowed since 2014, and the pace of poverty reduction has fallen. The COVID-19 pandemic exacerbated these challenges, highlighting the need for resilient and inclusive economic strategies presented in this report,” said Andrei Mikhnev, World Bank Country Manager for Kazakhstan. Kazakhstan’s economy has grown exponentially since 2006, with an average annual growth rate of 4.7 percent. This growth helped lift 5.9 million people out of poverty, reducing the poverty rate from 49.5 percent to 8.5 percent. However, the report identifies three phases of Kazakhstan’s poverty reduction journey: 2006-2013: Rapid poverty decline driven by strong economic growth. 2014-2016: Reversal during the economic downturn, raising poverty rates. 2016-2021: Resumed poverty reduction but at a slower pace The report highlights that Kazakhstan’s middle-class households with a low probability of falling into poverty grew 2.5 times, reaching 67 percent of the population in 2021 compared to 26 percent in 2006. However, this expansion has stagnated since 2013 due to slower structural transformation and productivity growth. Income inequality has also increased. The Gini index, a measure of inequality (0 = perfect equality, 100 = extreme inequality), rose from 24.3 in 2015 to 26.4 in 2021, driven by faster income growth among high-income households. Although fiscal policies, such as taxation and social spending, have mitigated some inequality, the report recommends making fiscal measures more progressive and pro-poor to maximize their redistributive impact. Poverty rates in rural areas (11.4 percent) remain significantly higher than in urban centers (6.6 percent). The southern Turkistan region now accounts for a disproportionate share of the poor population. Alarmingly, poverty has become more concentrated among children and large families, with children comprising 40 percent of the poor in 2021, up from 27 percent in 2006. The report underscores the critical role of human capital investment in achieving long-term poverty reduction and growth. While access to education in Kazakhstan is nearly universal, significant disparities in quality and outcomes persist. The Human Capital Index indicates that children in Kazakhstan achieve only 53–64 percent of their productivity potential, with regional and socio-economic inequalities exacerbating the issue. Climate-related shocks present additional risks, particularly for rural and vulnerable populations. The report calls for targeted investments in infrastructure and social transfers to build resilience against these challenges. To reduce poverty and inequality, the report suggests: Enhancing fiscal policies through progressive taxation and better-targeted social transfers. Improving education quality and outcomes, particularly for disadvantaged groups. Building resilience to climate shocks by investing in infrastructure and providing targeted support to low-income households. The report concludes that sustained policy reforms will be essential for Kazakhstan to maintain economic progress,...

Economy Legislation taxes statistics small and medium businesses

Small Businesses Employ Over Half a Million People in Kyrgyzstan

Small and medium-sized enterprises (SMEs) play a vital role in Kyrgyzstan's economy, employing 585,000 people and contributing significantly to various sectors, according to the National Statistical Committee (NSC). As of 2024, Kyrgyzstan has 18,139 registered small businesses paying taxes. SMEs are particularly active in agriculture and manufacturing, with private entrepreneurs producing 65% of the country’s agricultural output and 26% of its industrial goods. Additionally, much of the hotel and restaurant industry is owned and operated by medium-sized private businesses. Most of these enterprises are concentrated in the Bishkek and Chui regions, where 80% of the country’s small and medium-sized businesses operate. The Kyrgyz government has taken steps to encourage entrepreneurs to operate transparently and contribute to the formal economy. In the summer of 2024, the voluntary patent system was abolished and replaced with a requirement for businesses to use cash registers. To incentivize compliance, businesses with an annual turnover of up to KGS 15 million ($170,000) are exempt from taxes if they purchase cash registers, submit reports to the State Tax Service, and pay insurance and pension contributions. For businesses with a turnover between KGS 15 million and KGS 30 million ($340,000), a reduced tax rate of 0.5% on turnover is applied. Small and medium-sized businesses are not only a backbone of Kyrgyzstan’s economy but also a key source of job creation. Government initiatives to formalize SME activity and simplify taxation are expected to further bolster the sector’s growth and contribution to the national economy.

statistics Artificial intelligence Digital Technologies Digitalization Science

Kazakhstan Leads Central Asia in AI Readiness

According to IMF data analyzed by Ranking.kz, Kazakhstan ranks as the leading Central Asian country in global artificial intelligence (AI) readiness, while Uzbekistan and Tajikistan are at the bottom of the regional standings. The AI readiness index, which covers 174 countries, evaluates factors such as digital infrastructure, human capital, technological innovation, and legal regulation. It draws on data from the World Bank, the International Labor Organization, and other sources. Kazakhstan ranks within the top 50 countries for AI readiness, holding 48th place with an index score of 0.55, just behind Russia, which ranks 47th. McKinsey & Company has noted Kazakhstan’s use of AI to enhance public services, particularly through geographic information systems and spatial data. For instance, Kazakhstan has employed a statistical model that integrates geographic, demographic, and economic data to assess infrastructure needs across 6,293 villages, identifying 3,500 villages with the highest potential to cover 90% of the rural population. This approach enables the government to deliver essential services and infrastructure more effectively to rural areas. Following Kazakhstan in 48th place, with a noticeable gap, is Kyrgyzstan (99th with 0.43). Tajikistan ranks 123rd with an index of 0.37, and neighboring Uzbekistan is in 131st place with an index of 0.35, placing it last among Central Asian and EAEU countries. Turkmenistan was not included in the IMF index.

GDP State Budget Population statistics Demographics Public health

Aging Kyrgyzstan: Economic Challenges and Empowering Seniors

According to the National Statistical Committee of the Kyrgyz Republic, the country's population is aging quickly. Based on UN data, the agency predicts that the proportion of elderly people (65 and over) in Kyrgyzstan will significantly increase by 2030. According to the analysis, currently, 5.7% of the total population is elderly, and this figure may reach 8% by 2030. Speaking about the processes associated with an aging population, experts have highlighted social funds related to the payment of pensions, benefits, and other contributions to people who have finished their careers. Additionally, an aging population will produce fewer materials and public goods, and state tax revenues will decrease, which could lead to a decline in the country's standard of living. However, economist Kubanychbek Idinov sees this as a manageable problem. The 61-year-old believes that the increase in the average age is indicative of an improvement in Kyrgyzstan's standard of living. “The country's GDP is growing, and state budget spending on social projects is increasing. But we need to give pensioners more opportunities to work. This will be a great help to the revenue side of the budget. People who retire can work elsewhere. This allows them not to rely on their pensions alone, to have additional income,” Idinov told The Times of Central Asia. Most retirees in Kyrgyzstan continue to work. Idinov said they start small businesses or enterprises and pass on their experience to young people. According to official data, the country currently has about 150,000 working pensioners. “It is necessary at the state level to support trade unions' work in attracting retirees to work. It is possible to work at the level of local authorities. Then the issue of small pension growth will not be acute for people and the state,” Idinov said. On a related matter, Kyrgyz sociologists say that despite a slowdown, the country's population grew by almost half a million people (+7.8%) over the year. Kyrgyzstan remains the second-largest Central Asian country in terms of population growth after Tajikistan. “The increase in population, despite a slight decrease in the growth rate, is provided by the excess of births over deaths with a negative balance of external migration,” the report of the National Statistical Committee states. The large number of labor migrants returning home is also helping to combat the decrease in the number of able-bodied people. In 2007, experts from the UN Demography Department suggested evaluating countries as those with an old population if more than 7% of its citizens are over 65 years old.

statistics Global Outlook Army Defense Armed Forces

Uzbekistan Leads in Central Asia’s Military Strength Rankings

U.S. News recently published its list of the world’s strongest militaries, with Russia, the U.S., and Israel in the top three. The Times of Central Asia reviewed this rating in the Central Asian countries section. Uzbekistan ranks 19th globally in military strength, the highest in the region. However, U.S. News ranks the country 74th out of 78 in its “Best Countries” category, citing an economy still largely driven by cotton. Uzbekistan remains a major global player in cotton, as the fifth-largest exporter and seventh-largest producer worldwide. Kazakhstan, Central Asia’s largest economy, ranks 22nd for military strength and is noted for its vast reserves of fossil fuels, uranium, and other minerals. Much of Kazakhstan’s economic growth has been oil-driven, and the country ranks 83rd on the “Best Countries” list. U.S. News ranked countries based on cultural influence, entrepreneurship, heritage, openness to business, quality of life, and social purpose. In a separate ranking, the Global Firepower Military Index for 2024 lists Kazakhstan as Central Asia’s top military power, placing it at 58th worldwide. Uzbekistan has fallen by three places since last year’s rankings — the only country in the region not to show an improvement — and is now in the 65th position. In the bottom half of the table, Turkmenistan lies in 83rd place, while Kyrgyzstan is 100th. Global Firepower puts Tajikistan in 107th place, making it the region’s weakest army.

Economy Government statistics Export Economic Growth

Kyrgyz Economy Is on the Rise

Government statistics and independent analysts note growth in almost all sectors of the Kyrgyz economy The most significant increase is recorded in the construction sector, which in turn, has positively impacted other sectors, such as industrial production, agriculture, and foreign trade. Speaking to The Times of Central Asia, macroeconomics expert Nasirdin Shamshiev remarked: “This year, due to favorable weather, twice as many beets, and one and a half times more barley and wheat were harvested. Due to the high rate of construction of small hydropower plants, the energy sector is also showing good growth. In addition, the production of construction materials has increased, and textile production is growing. Exports for the first eight months of 2024 increased by 13.5%, and imports by 8.1%." According to Shamshiev, the good economic dynamics were influenced by several factors: the strengthening of fiscal rules, fighting corruption and illegal financial flows, and a balanced monetary policy. Earlier, Kyrgyzstan' president Akylbek Japarov, held a meeting of the Cabinet of Ministers, during which the socio-economic development results for the first nine months of 2024 were summarized. According to Japarov, Kyrgyzstan's GDP grew by 8.4%. However, gold exports, traditionally the economy's leading revenue-generating sector, have declined this year; a situation previously reported by The Times of Central Asia with reference to a decline in production at Kumtor, the country's largest gold mine. According to the Prime Minister's information, 37% of the growth in the construction sector provides an increase in industrial production in Kyrgyzstan. Data also shows that over the past year, following the launch of the Chinese oil refinery Junda near Bishkek, the production of refined petroleum products almost doubled. Hailing the success of recent ventures, Japarov stated: “The growth rate of our economy is nothing short of encouraging. We are now implementing the Leap of the Leopard program and approaching our set ambitious goals and objectives."