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Shadow Economy

Kyrgyzstan Reports Decrease in Shadow Economy

Kyrgyzstan’s non-observed (shadow) economy, excluding the agricultural sector, accounted for 19.2% of GDP in 2023, marking a 1% decrease from 2022’s 20.2%, according to the latest data from the National Statistical Committee. The Committee attributes this improvement primarily to reductions in shadow activities within key sectors: wholesale and retail trade and motor vehicle repair by 0.5%, construction by 0.4%, and transportation and cargo storage by 0.2%. Historical data reveals a steady decline in the shadow economy’s share of GDP over recent years, estimated at 20.4% in 2021, 20.1% in 2020, and 22.8% in 2019. Shadow economic activities in Kyrgyzstan are concentrated in sectors such as trade, car repair, transportation, construction, processing industries, hospitality, and various services. Discrepancies persist, however, in shadow economy estimates. In January 2024, Minister of Economy and Commerce Daniyar Amangeldiev noted that international financial institutions assessed Kyrgyzstan’s shadow economy as comprising 60% to 70% of GDP. He explained this divergence by citing differences in methodologies used by the National Statistical Committee and international organizations to calculate the informal economy's size. Although the National Statistical Committee has yet to publish its shadow economy assessment for 2024, Minister Amangeldiyev recently highlighted the positive impacts of a shrinking shadow economy. He credited it, alongside growing trade volumes, with contributing to Kyrgyzstan’s GDP growth last year. For context, the U.S. Department of Commerce’s International Trade Administration estimates Kyrgyzstan’s informal economy at 25% to 72% of GDP, underscoring the challenge of accurately quantifying this sector.

Society

Marriage Trends in Kazakhstan: What Young People Value Most

The Research Center “Youth” has published a survey examining the perspectives of young Kazakhs on marriage and divorce. Ranking.kz analysts analyzed the main points of this research, shedding light on the preferences and values of the younger generation in Kazakhstan. According to the survey, 78% of respondents view formal marriage registration as essential, while only 15% accept civil unions. When selecting a life partner, key considerations included age (53.9%), appearance (45.4%), and nationality (39.4%). Notably, factors such as mutual love and moral values were cited by fewer than 1% of participants. Gender-Based Preferences Women prioritized their partner's age, financial stability (30.6%), career prospects (22.9%), and even gender (18.7%). Men, meanwhile, focused on their partner's physical attractiveness and youth but also emphasized the social status of the future spouse's family (17.1%) and lineage (24.6%). Trends in Marriage and Divorce Kazakhstan has seen a decline in its marriage rate, dropping from 9.9 marriages per 1,000 people in 2013 to 5.7 in the first half of 2024. Analysts attribute this to the smaller generation born between 1995 and 2000, which tends to marry later in life. The average age at first marriage has increased from 26.7 years in 2003 to 27.8 years for men in 2023, and from 23.9 years to 25.2 years for women. Divorce rates have fluctuated over the past 20 years, correlating with marriage statistics. Between 2013 and 2018, over 51,000 divorces were registered annually. However, this number dropped to 40,200 in 2023, before rising again in the first half of 2024 - 2.3 times higher than during the same period in 2023. Causes of Divorce The survey identified adultery (61%), physical violence (51%), and substance abuse (48%) as the leading causes of divorce. Women were more likely to cite physical (62.1%) and psychological (37.7%) violence, as well as gambling addiction (37.1%). Men highlighted personality incompatibility (36%) and lack of love (30.2%). The Kazakhstan Institute of Public Development (KIPD) corroborated these findings, adding a lack of mutual understanding (24%), interference from parents (10.4%), infertility (11%), and cohabitation with relatives (5.6%) as additional factors. Despite these challenges, 14% of respondents stated that divorce is unacceptable under any circumstances.

Society

Global Ranking: Kazakhstan Has the Third-Highest Unemployment Rate in Eurasia

In the global ranking of unemployment rates for 2024, prepared by ILOSTAT, Kazakhstan placed 104th out of 187 countries with an unemployment rate of 4.8%. According to analysts from Energyprom.kz, the worst unemployment rates were recorded in Eswatini (34.4%), South Africa (33.2%), and Djibouti (25.9%), while Qatar boasted the lowest rate globally at 0.1%. In the Eurasia region Kazakhstan ranked third highest for unemployment, ahead of only Tajikistan (11.6%) and Azerbaijan (5.6%). The best performers in the region are Moldova (1.4%), Russia (2.5%), and Kyrgyzstan (3.3%). For context, the global average unemployment rate stood at 5%, with the Europe and Central Asia region slightly higher at 5.5%. The Bureau of National Statistics of Kazakhstan (BNS) reported that by the end of Q3 2024, the country had 448,600 unemployed individuals - 0.6% fewer than during the same period in 2023. The official unemployment rate was 4.6%, with parity between urban and rural areas. Family circumstances (100,200 cases), voluntary resignations (95,600 cases), and difficulties in finding employment (92,200 cases) were identified as the primary causes of unemployment. In terms of job-seeking durations: 127,500 individuals searched for less than a month. 113,300 sought work for one to three months. 124,600 for three to six months. 36,800 for six months to a year. 46,000 were unemployed for over a year. A small fraction of the unemployed (332 individuals) had already initiated entrepreneurial ventures or secured employment arrangements.

Finance

Kazakhstan Leads Central Asia in Anti-Money Laundering Efforts

The Basel Anti-Money Laundering Index (AML) has been released. It offers a comprehensive assessment of global efforts to combat money laundering. The index evaluates the risk of money laundering and financial crime across countries and regions, using 17 indicators across five domains to identify key factors that can heighten vulnerability. The indicators are updated annually and reviewed by an independent panel of experts to ensure relevance, methodology integrity, and access to current data. The Index does not measure the actual volume of money laundering activity. Instead, it focuses on the risk factors, scoring countries on a scale from 0 to 10 where 10 represents the highest risk and 0 the lowest. The Times of Central Asia examined this year’s ratings, focusing on the performance of Central Asian nations: Kazakhstan achieved a notable ranking of 111th out of 164 countries, with a score of 4.65. Uzbekistan followed, ranking 81st with a score of 5.27, while Kyrgyzstan placed 45th with 5.95 points. Tajikistan ranked 30th, scoring 6.45, and Turkmenistan recorded the region’s worst result, ranking 23rd with 6.71 points. Globally, the best results were observed in San Marino (2.96), Iceland (3.00), and Finland (3.07).

Deportation

Deportations of Central Asians from the U.S. Increased in 2024

U.S. Immigration and Customs Enforcement (ICE) has released its Fiscal Year 2024 Annual Report, detailing the agency’s accomplishments over the past year. The report highlights how ICE’s directorates and program offices met their mission objectives. Established in the aftermath of the 9/11 attacks, ICE is tasked with protecting the American public, ensuring public safety, and promoting national security. According to the report, ICE’s Enforcement and Removal Operations (ERO) deported 271,484 non-citizens with final orders of removal to 192 countries. This total includes 88,763 individuals charged with or convicted of criminal offenses, 3,706 known or suspected gang members, 237 known or suspected terrorists, and eight human rights violators. More than 30% of those deported had criminal histories, with an average of 5.63 convictions or charges per individual. ERO also assisted in identifying and arresting individuals wanted in their home countries for serious crimes, including terrorism and torture. The Times of Central Asia examined the report with a focus on Central Asian countries. In 2024, the US deported 572 Uzbek nationals - a dramatic increase compared to 88 in 2013, 21 in 2021, and 55 in 2022. Deportations of Tajik citizens also surged, reaching 77 in 2024 compared to only four annually in 2019, 2020, 2022, and 2023. Kazakhstan saw the deportation of 23 of its citizens this year, up from 14 in 2023. Deportations to Kyrgyzstan also spiked, with 69 individuals removed in 2024. By comparison, only three Kyrgyz citizens were deported in 2020, eight in 2021, one in 2022, and 14 in 2023. Meanwhile, deportations of Turkmen nationals remained low, but still showed an upward trend. In 2024, five Turkmen citizens were deported, compared to four in 2019, one in 2022, and three in 2023.

Poverty

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,...