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Water Management

Uzbekistan Joins World Bank’s “Water Forward,” Aiming to Reach 1 Billion People by 2030

The World Bank Group has launched a new global platform aimed at improving water security, as Uzbekistan continues to expand cooperation with international financial institutions on infrastructure development. In a statement released on April 15, the World Bank announced the launch of “Water Forward,” an initiative developed in partnership with multilateral development banks and other institutions. The platform aims to improve access to reliable water services for 1 billion people by 2030 by aligning policy reforms, financing, and international partnerships. For Uzbekistan, where water management remains closely tied to agriculture and regional climate conditions, such initiatives come as the country continues to modernize its infrastructure and attract international financing. Earlier, on March 23, the World Bank’s Board of Executive Directors approved a $200 million project to upgrade transport infrastructure in Uzbekistan’s Surkhandarya region. According to the bank, the project is intended to improve connectivity, support economic activity, and enhance access to services in the southern part of the country. “Water is foundational to how economies function. When water systems work, farmers produce, businesses operate, and cities attract investment,” World Bank Group President Ajay Banga said. “Our task now is to align reform, financing, and partnerships to deliver reliable water services at scale.” According to the World Bank, around 4 billion people globally experience water scarcity, despite water supporting health systems, agriculture, energy production, and an estimated 1.7 billion jobs. Weak regulations, unclear policies, and underfunded utilities have slowed investment in many countries, particularly in developing economies. The new platform will focus on country-led “water compacts,” under which governments set priorities for reforms, strengthen institutions, and outline investment strategies for the sector. Fourteen countries have already announced such compacts, while additional agreements are expected. The initiative also brings together a wide range of financial institutions, including the Asian Development Bank, the European Bank for Reconstruction and Development, and the Islamic Development Bank, to coordinate funding and technical expertise. The World Bank said it aims to help deliver water security to 400 million people directly, with partner contributions expected to raise the total to over 1 billion.

Economic Growth

Why Strong Economic Growth in Central Asia Masks Underlying Risks

Central Asian countries are significantly outperforming the global average in GDP growth, largely due to differing economic models across the region. However, rapid expansion does not remove deep structural vulnerabilities. As early as March, data showed that the combined economies of Central Asian countries grew by nearly 7% in 2025 compared to the previous year. The World Bank estimates regional growth at 6.2%, while the Eurasian Development Bank (EDB) places it at 6.6%. These calculations include Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan; Turkmenistan is excluded due to limited statistical transparency. By comparison, growth rates in advanced economies are much lower. The EDB expects around 1.6% growth in the U.S. and approximately 1.1% in the eurozone in 2026, while China’s economy is projected to expand by about 4.6%. Nevertheless, experts note that the region’s economic outlook remains complicated by high inflation, income inequality, and continued dependence on external factors. Investment activity and domestic demand have been the key drivers of growth, according to the EDB. Kazakhstan recorded its highest growth in 13 years (6.5%), with industry leading the expansion: mining grew by 9.4% and manufacturing by 6.4%. In 2026, the non-resource sector is expected to play a greater role. Kyrgyzstan has led the region in GDP growth for the third consecutive year: GDP grew by 11.1% in 2025 and by 9% in January 2026. In Uzbekistan, GDP increased by 7.7% in 2025 (up from 6.7% a year earlier), supported by investment, trade, services, and construction. Tajikistan’s GDP rose by 8.4% in 2025, matching the previous year’s performance. Growth continues to be driven by expanding industrial production and strong domestic demand. Early 2026 data suggest this momentum is holding. Uzbekistan’s Record In April, the World Bank highlighted Uzbekistan’s resilience to external challenges and strong growth dynamics. According to its updated report, the country’s 2025 GDP growth was revised upward by 1.5 percentage points to 7.7%. The outlook is 6.4% for 2026 and 6.7% for 2027. Key drivers include high global gold prices, investment inflows, expanded lending, and ongoing structural reforms. Rising household incomes have also played an important role, supported by remittances, which increased by 37% last year to reach $18.9 billion. By the end of 2025, Uzbekistan ranked among the fastest-growing economies in developing countries in Europe and Central Asia, alongside Kyrgyzstan and Tajikistan. The region as a whole is experiencing its highest growth rates in 14 years. At the same time, analysts point to persistent structural constraints, including a large public sector and the dominance of state-owned enterprises, which hinder private sector development. External risks, including geopolitical instability and potential disruptions in energy and fertilizer supplies, remain significant. In 2025, Uzbekistan’s GDP exceeded €133 billion, compared to approximately €56 billion nine years earlier. Over the same period, GDP per capita rose from about €1,750 to around €3,220, nearly doubling average income levels. Investment in fixed capital increased by more than 15% year-on-year in 2025, while export value grew by over 33%. Persistently high global gold prices played a major role: export...

Employment

Kazakhstan Climbs 13 Positions in the World Bank Human Capital Ranking

Kazakhstan has significantly improved its position in the World Bank’s Human Capital Index Plus (HCI+), rising by 13 places to rank 42nd out of 161 countries by the end of 2025. The index evaluates human capital development, including health, education, and workforce skills, all of which directly influence economic growth and investment attractiveness. Charles McLean, founder of Borderless Consulting Group, shared his assessment of the factors behind this progress in an interview with Inbusiness.kz. According to McLean, Kazakhstan’s rise reflects not only quantitative improvements but also qualitative changes in the country’s socio-economic landscape. “Kazakhstan’s rise by 13 positions is a highly positive and significant signal for the country’s socio-economic development, primarily driven by reforms implemented by President Kassym-Jomart Tokayev,” he said. He noted that improved indicators point to the emergence of a healthier, better-educated, and more skilled workforce, contributing to higher productivity and supporting sustainable long-term growth. Stronger positions in international rankings also enhance investor confidence and reinforce economic resilience. McLean identified two main drivers of progress: education and healthcare. In education, investment has increased at all levels from preschool to higher education. Improvements in teacher training, the quality of school education, and the alignment of national testing systems with international standards have contributed to higher skill levels across the population. Positive changes are also evident in the healthcare system. Enhanced medical infrastructure, expanded preventive programs, and improved access to healthcare services have contributed to rising life expectancy and lower infant mortality. McLean also highlighted Kazakhstan’s shift toward a more integrated approach to human capital development. This includes the digitalization of educational institutions and the expansion of vocational training programs. Additional emphasis is being placed on developing professional skills, delivering both short-term employment gains and long-term improvements in labor productivity. “If the current course is maintained, Kazakhstan can not only strengthen its position but also become one of the leaders among emerging markets in terms of human capital development,” McLean said. Given current trends, he assessed further improvements in Kazakhstan’s position in the HCI+ ranking to be realistic. Continued investment in human capital is expected to drive productivity growth, improve living standards, and enhance the country’s global competitiveness.

Railways

Istanbul Strait Rail Project to Boost Trade Along Trans-Caspian Transport Route

On March 31, the World Bank approved a $2 billion loan for the Istanbul North Rail Crossing Project (INRAIL), aimed at strengthening railway connectivity across the Istanbul Strait (Bosphorus) and reinforcing Türkiye’s role as a key logistics hub linking Europe, Asia, and the Middle East. With the Baku-Tbilisi-Kars railway, Turkey serves as a key node in the Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor. The route connects China and Europe via Kazakhstan, the Caspian Sea, the South Caucasus, and Turkey. Turkey's major rail corridors passing through Istanbul, including the Middle Corridor, the Iraq Development Road, and the Turkey-EU corridor, are essential for international trade but currently face a significant bottleneck at the Bosphorus. INRAIL will involve the construction of a 127-kilometer electrified, high-capacity railway line providing a new overland rail crossing of the strait. The project will utilize the rail-ready Yavuz Sultan Selim Bridge and bypass central Istanbul, increasing both freight and passenger capacity while reducing logistics costs and improving reliability across national and intercontinental transport corridors, including the TITR. Once operational, rail freight capacity across the Bosphorus is expected to increase from approximately 3 million tons per year to as much as 50 million tons, significantly improving transit times, reliability, and predictability for freight operators. “By removing a critical rail bottleneck at the Istanbul Strait and enhancing the resilience and efficiency of rail infrastructure, Turkey is boosting its competitiveness and reinforcing its role as a logistics hub,” said Humberto Lopez, World Bank Country Director for Turkey. “INRAIL will also generate benefits for the wider region by connecting to international corridors such as the Middle Corridor and the Development Road, facilitating trade between Europe, Central Asia, and the Gulf.” The project aligns with Kazakhstan and Türkiye’s broader efforts to develop the Middle Corridor. In July 2025, Kazakhstan’s national railway operator, Kazakhstan Temir Zholy (KTZ), and TCDD Taşımacılık A.Ş. signed a cooperation agreement to enhance freight transportation along the TITR. The agreement aims to improve the route’s efficiency and competitiveness by launching regular rail services between Kazakhstan and Turkey, increasing freight volumes along the Baku-Tbilisi-Kars railway, and expanding cargo flows between China and Europe. KTZ has also held discussions with Mersin International Port, part of PSA International, on expanding cooperation to strengthen the Middle Corridor and develop more efficient multimodal logistics links between Asia and Europe. KTZ Chairman Talgat Aldybergenov reaffirmed both sides’ commitment to ensuring stable freight volumes and highlighted Mersin’s role as a strategic transshipment hub for the corridor. To further strengthen the logistics chain, Kazakhstan has proposed leveraging the potential of KPMC, a joint venture between KTZ and PSA International, which is already involved in developing multimodal services along the Xi’an-Istanbul route.

World Bank

World Bank Approves $200 Million for Road and Transport Reforms in Uzbekistan

The World Bank’s Board of Executive Directors has approved a $200 million project to modernise transport infrastructure in Uzbekistan’s Surkhandarya region, the institution said in a statement on March 23. According to the World Bank, the five-year initiative will focus on reconstructing a key section of the M41 regional road corridor while also supporting broader reforms in the country’s transport sector. The project is expected to contribute to job creation and stimulate business activity along the upgraded route. Uzbekistan’s transport sector currently accounts for nearly 8% of gross domestic product and employs around one million people. Its performance has improved in recent years, with the country rising from 129th to 88th place in the World Bank’s Logistics Performance Index between 2014 and 2023. However, rapid growth in the number of vehicles has placed increasing pressure on infrastructure, with officials estimating that road capacity will need to expand by about 500% by 2030 to meet rising freight demand. “Developing efficient and safe road and railway networks is essential to connect people to jobs, support domestic and international trade, and strengthen Uzbekistan’s overall competitiveness,” said Najy Benhassine, the World Bank’s Division Director for Central Asia. A central component of the project involves reconstructing a 91-kilometer stretch of the M41 highway in Surkhandarya, a region bordering Tajikistan, Kyrgyzstan, and Afghanistan. The existing two-lane road will be expanded into a four-lane highway. Once completed, it is expected to serve around 35,000 drivers and passengers daily and improve access to transport services for approximately 550,000 residents living in nearby communities. The project will also finance upgrades to road surfaces, safety features, and bus stops, as well as the construction and rehabilitation of around 180 bridges and drainage systems designed to reduce flood risks. These improvements are expected to shorten travel times, with average speeds projected to increase from 65 to about 90 kilometers per hour on interurban sections, and to reduce accidents along the route. In addition to infrastructure works, the World Bank will support the development of a National Multimodal Transport Strategy. The roadmap is intended to strengthen government capacity, improve coordination between different modes of transport, and promote more resilient and efficient logistics systems. Further support will be provided to Uzbekistan Railways, aimed at improving corporate governance, financial transparency, service planning, and its ability to attract private investment. The latest project builds on ongoing cooperation between Uzbekistan and the World Bank. In December last year, the institution approved a $250 million loan to support reforms in the country’s education system through the Edumkon programme, which aims to expand access to higher and vocational education for around 600,000 young people between 2026 and 2028.

Investment

Tajikistan’s Reliance on External Funding for State Investment Projects Is Growing

Tajikistan continues to implement a large-scale state investment programme. International financial institutions play a key role in financing these projects, however, while the government's own contribution remains limited. According to data from the State Committee on Investment and State Property Management, 82 state investment projects are currently under way in the country The total value of ongoing initiatives is estimated at approximately $4.67 billion. Of these, 55 projects are being implemented on a grant basis, five through loans, and another 22 have mixed financing. About $3 billion has already been allocated for procurement, works, and services related to the implementation of these projects. However, more than 70% of the funding is provided by just three international institutions. The World Bank remains the largest donor, contributing $1.725 billion (36.9%). It is followed by the Asian Development Bank with $914.7 million (19.5%) and the European Bank for Reconstruction and Development (EBRD) with $658.1 million (14.1%). Other investors include the Islamic Development Bank ($207.9 million), the Chinese government ($194.9 million), the Asian Infrastructure Investment Bank ($142.5 million), the German Development Bank ($129.3 million), and the European Investment Bank ($114.8 million). Against the backdrop of extensive external financing, Tajikistan’s own contribution remains small. The state is investing approximately $151.2 million, accounting for only 3.2% of the total. This means that the implementation of key infrastructure and social projects largely depends on international donors and lenders. At the same time, in 2025 Tajikistan managed to significantly increase capital inflows. Foreign investment reached approximately $7 billion, rising by nearly $2 billion (35.1%) compared with the previous year. The authorities hope to sustain this momentum by improving the investment climate, including through legislative updates. A key step was the adoption on May 14, 2025, of a new version of the law “On Investments and the Promotion of Investment Activity,” aimed at increasing the country’s attractiveness to international partners. The current development model allows Tajikistan to implement large-scale projects that would be difficult to carry out relying solely on domestic resources. However, this financing structure also increases dependence on external sources, making the economy more sensitive to the conditions set by international institutions and the global financial environment.