Strategy - The Times Of Central Asia

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Uzbekistan’s Economic Transformation and Future Goals Take Center Stage

Uzbekistan’s economic progress and future ambitions are in focus as the Indian magazine Business Central Asia dedicates its latest issue to the country’s development. Highlighting key points from President Shavkat Mirziyoyev’s address to the Legislative Chamber of the Oliy Majlis, the feature showcases Uzbekistan’s achievements and ambitious goals for the years ahead. The article highlights Uzbekistan’s remarkable economic transformation. Since the early 2000s, the country’s economy has doubled, surpassing the $100 billion mark. By 2024, per capita income is expected to reach $3,000, while exports have grown to exceed $25 billion for the first time. Gold and foreign exchange reserves have also seen substantial growth, surpassing $40 billion. Looking to the future, the Uzbekistan-2030 strategy outlines ambitious targets to further accelerate economic growth. The plan envisions increasing GDP to $160 billion, with a projected $110 billion milestone this year. If current growth rates are sustained, Uzbekistan’s economy could reach $200 billion by 2030, significantly improving living standards and the overall quality of life for its citizens. Ensuring macroeconomic stability is a key priority in the government’s roadmap. Over the next five years, Uzbekistan aims to sustain annual growth of 6-7%, expand the private sector’s share of the economy to 85%, and launch large-scale public-private partnership projects. The feature also emphasizes Uzbekistan’s long-term economic resilience. According to the World Bank, the country is poised to rank among the top three fastest-growing economies in Europe and Central Asia in 2024, further validating its development strategy. Uzbekistan’s leadership remains committed to maintaining growth momentum while addressing structural reforms. With a strong focus on sustainable development, the government’s policies aim to enhance economic opportunities and ensure inclusive growth for all segments of the population.

Economy Strategy Economic Growth GDP Economic Reforms Forecast

S&P Global Ratings Predicts 5.6% Annual Growth for Uzbekistan Through 2027

S&P Global Ratings has reaffirmed Uzbekistan’s long-term sovereign credit rating at BB, forecasting strong economic growth averaging 5.6% annually from 2024 to 2027. This growth will be driven by public investment and private consumption. While rising public and external debt presents some risks, S&P expects fiscal and current account deficits to narrow after peaking in 2023. Economic Projections Uzbekistan’s gross general debt is projected to reach 39% of GDP in 2024, a level considered moderate by global standards. Most of this debt originates from official creditors under concessional terms. The agency’s stable outlook reflects robust growth prospects, balanced against challenges posed by debt accumulation. The country’s economy expanded by 6.6% in the first nine months of 2024, fueled by sectors such as construction, trade, and communications. Investments continue to play a pivotal role, with Uzbekistan maintaining one of the world’s highest investment-to-GDP ratios at 34%. Key investment areas under the “Uzbekistan - 2030” strategy include energy, transport, agriculture, and tourism. Diversification and Energy Goals As part of efforts to diversify energy sources, Uzbekistan is targeting 40% green energy by 2030. Saudi Arabia’s ACWA Power has pledged $7.5 billion in investments for electricity projects. The government is also expanding exports of critical resources such as copper, gold, silver, and uranium to boost revenue streams. Opportunities and Risks Despite challenges such as low GDP per capita and reliance on remittances, Uzbekistan benefits from a young workforce and rising foreign investment. However, risks remain, including potential sanctions on companies linked to Russia and difficulties in creating sufficient jobs. In 2024, remittance inflows - primarily from Russia, along with Germany and South Korea - increased by 35%, providing a significant economic boost. Trade with Russia also grew by 26%, and Uzbekistan signed a two-year gas import contract with Gazprom. Meanwhile, the government is taking steps to mitigate the risks of secondary sanctions stemming from its trade ties with Russia. Broader Context These developments align with Uzbekistan’s long-term economic strategies while highlighting both opportunities and vulnerabilities. S&P’s latest forecasts reaffirm the country’s growth trajectory, supported by strategic investments and economic reforms, yet underscore the importance of managing debt and external risks.

Strategy Finance Banking Digitalization National Bank Digitization

Kazakhstan Prepares to Introduce Digital Currency

At this week's Central Asia Fintech Summit in Almaty, the Digital National Bank of Kazakhstan presented its vision for a digital version of the country's currency, the tenge. The digital tenge is an electronic version of Kazakhstan's national currency issued by the National Bank. It is designed to complement cash and non-cash forms of money by making financial services available in digital format. Digital tenge can be used for instant payments and transfers, settlements between individuals and businesses, and payment for goods and services through mobile banking applications. This currency is particularly useful in e-commerce, government services, financial technologies, and cashless settlements. It also supports the development of smart contracts, allowing for the automation of financial transactions. The introduction of the digital tenge promotes transparency in financial transactions and improves access to financial services in remote and rural areas. Advisor to the Chairman of the National Bank, Binur Zhalenov, said that the project is planned to be completed within five years. Some components, such as the digital tenge and a single QR in pilot mode, are already being implemented. Full implementation of the digital tenge, including the connection of all second-tier banks, is expected by 2025. Zhalenov noted that the platform is ready and operates based on the National Payment Corporation. In the coming years, it is planned to actively connect financial organizations and expand the digital tenge's capabilities. Last year, Zhalenov explained that using the digital tenge will require an existing banking app for one of the project participants. Thus, users will be able to link a digital tenge account to their current payment card without the need to install additional programs.

Renewable Energy Generation Strategy HPP Energy Infrastructure Energy Security

Kyrgyzstan Begins Construction of Another Small Hydropower Plant

The construction of a small hydroelectric power plant on the Ak-Buura River at the Papan reservoir in Kyrgyzstan’s southern Osh region has begun. The Ak-Buura River supplies water to Kyrgyzstan’s second-largest city, Osh. The Papan reservoir is located in the Papan Gorge, and the power plant will be constructed in the narrowest part of the Ak-Buura River valley. The small hydropower plant will have a capacity of 25 MW and will generate 103 million kWh of electricity per year. The project costs $27 million. "The construction of a small hydroelectric power plant at the Papan reservoir is another strategic step towards the country’s energy independence," Chairman of Kyrgyzstan’s Cabinet of Ministers Akylbek Japarov stated at the ceremony to launch the construction on October 5. In recent years, Kyrgyzstan has been working to expand its energy capacity by building small and large hydroelectric plants to address electricity shortages. Earlier this year, Kyrgyzstan constructed small hydroelectric power plants in Bala-Saruu in the northwestern Talas region and Kok-Art and Kainama small hydropower plants in the southern Jalal-Abad region. In 2023, Kyrgyzstan met 80% of its electricity demand, which totaled 17.2 billion kilowatt-hours. The remaining 20%, or 3.4 billion kilowatt-hours, was imported. Energy Minister Taalaibek Ibraev last week stated that despite an increase in water levels at Kyrgyzstan’s largest Toktogul hydroelectric power plant (HPP) reservoir this year, the country would still be facing an electricity deficit of about 3.9 billion kilowatt-hours. The positive is that Ibraev said in parliament on October 4 that there will be no scheduled blackouts this winter, as his ministry has done a good job preparing the power distribution system for the coming winter. The Energy Ministry has installed new and repaired all the existing transformers nationwide. In previous years, Kyrgyzstan practiced scheduled restrictions on electricity supply for several hours a day to save electricity during peak consumption hours in winter. The minister also announced that starting January 1, 2025, Turkmenistan will supply Kyrgyzstan with 1.7 billion kilowatt-hours of electricity.

Energy Security Coal Industry Strategy Energy

Kyrgyzstan Plans to Stop Importing Coal and Electricity by 2027

Kyrgyzstan plans to abandon coal imports within the next two years and stop buying foreign electricity by 2027. Speaking at a parliamentary group meeting, Energy Minister Taalaibek Ibraev announced that the country is already preparing to meet these challenges by actively developing the energy sector's infrastructure. Ibraev emphasized that the problem with transformers, which was relevant earlier, will be solved next year. Repairs have already been carried out in all 56 RECs (district electric networks), and five spare transformers have been provided for each of them in case of emergencies. A tender has also been held for purchasing one thousand transformers worth $58 million, of which $25 million are loan funds, $25 million is a World Bank grant, and $8 million is a Swiss grant. In addition, 600 thousand new meters are planned to be purchased. These measures will significantly improve the reliability of the country's electricity supply. The minister also noted that the country's generating capacity deficit is 300 to 400 megawatts. To solve this problem, solar power plants will be launched, allowing the country to scale down electricity imports. In addition, Ibraev announced plans to refuse coal imports in the next two years. The country is developing projects to introduce alternative energy sources and ensure energy independence. Problems with transformers in Kyrgyzstan have been acute over the past few years due to worn-out energy infrastructure and equipment shortages. Many transformer stations needed modernization, resulting in power supply failures. The government initiated large-scale transformer replacement and repair projects in response to these challenges.

Energy Security Nuclear Referendum NPP Strategy Atomic Energy Referendum public opinion Nuclear Energy

Kazakhstan Awaits Results of Nuclear Referendum; Exit Polls Indicate a “Yes” Vote

Kazakhstan is awaiting the official results of a referendum on whether to build its first nuclear power plant, though exit polls showed “yes” voters were in the majority, according to state-run media reports. The project could ease chronic energy shortages and reduce reliance on coal-fired facilities but is fraught with concerns about costs, transparency, and the legacy of the human and environmental cost of Soviet nuclear weapons testing decades ago. Led by President Kassym-Jomart Tokayev, Kazakhstan’s political establishment has backed the idea of peaceful nuclear power as a way to move the country forward and the referendum appears aimed partly at giving people a sense of agency after the trauma of Soviet testing at Semipalatinsk. But some opponents allege that authorities restricted their efforts to organize a “no” campaign with detentions and other pressure designed to lock in an expected vote in favor. Officials results had not been announced as of early Monday morning. Voting at polling stations in Kazakhstan ended at 8 p.m. on Sunday and turnout among eligible voters was 63.87%, according to the Central Election Commission. The highest turnout was in the Kyzylorda region (82.48%) and the lowest turnout was in the city of Almaty (25.39%). Turnout in Astana, Kazakhstan’s capital, was 50.81%. “The precinct referendum commissions have begun counting the votes. The counting process at each polling station must not exceed twelve hours from the start of the count,” the commission said. Additionally, more than 7,358 Kazakh citizens voted at polling stations abroad, including in Asia, South America, Europe, and the United States, according to Roman Vassilenko, Kazakhstan’s Deputy Minister of Foreign Affairs. He noted at a briefing on Sunday night that the referendum had been monitored by observers from regional organizations, including the Shanghai Cooperation Organization, the Organization of Turkic States, and the Astana-based Conference on Interaction and Confidence-Building Measures in Asia. The heads of the observer missions said the referendum was “open, free, and legitimate, with no violations detected at any polling stations,” Vassilenko said. Kazakhstan also invited observers from the Organization for Security and Cooperation in Europe, but the OSCE declined to send a delegation “due to heavy workload,” reported the state-run Kazinform news agency. The OSCE sent a mission to observe a 2022 referendum on constitutional changes in Kazakhstan and concluded that it took place “in an environment short of genuine political pluralism.” One critic of the rules surrounding the nuclear referendum is Tamara Yeslyamova, editor-in-chief of the Uralskaya Nedelya, a newspaper that has sparred with the government over the years. A judge issued her with a fine for 110,760 tenge ($230) after she conducted video interviews about the referendum on nuclear power with half a dozen people on the street, the newspaper reported. It said the judge concluded that the interviews amounted to a public opinion survey; the law says such a poll can only be done by a state-sanctioned entity.