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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.

sustainable energy

Kyrgyzstan Seeks Climate Finance and Carbon Market Funding to Cut Emissions

Kyrgyzstan is preparing to sign a carbon project aimed at supporting the country’s transition to sustainable energy. The announcement was made by Energy Minister Taalaibek Ibrayev following a meeting with World Bank Country Manager for Kyrgyzstan Hugh Riddell on March 13. The initiative will be supported by the Transformative Carbon Asset Facility (TCAF), a World Bank trust fund designed to help developing countries introduce market-based carbon pricing mechanisms and attract private investment in low-carbon technologies. TCAF provides a hybrid financing model that combines climate finance with carbon market funding. Payments are made only after verified reductions in greenhouse gas emissions are achieved. The project is being implemented under the Innovative Finance for Resilient and Sustainable Energy Transition (iFIRST) program. According to Kyrgyzstan’s Ministry of Energy, it will use a results-based payment mechanism, meaning that emission reductions must first be measured and independently verified before financial compensation is disbursed. If the reductions are confirmed, Kyrgyzstan could receive up to $4.5 million in climate finance to support its commitments under the Paris Agreement. The initiative may also attract up to $5.5 million in additional funding through carbon market mechanisms. The project includes technical assistance grants of up to $1.5 million to strengthen the institutional capacity of government agencies, develop a national system for monitoring greenhouse gas emissions, and establish a national carbon unit registry. Officials say the initiative will help advance reforms in Kyrgyzstan’s energy sector, strengthen the country’s climate policy framework, and increase access to international climate finance. It is also expected to contribute to environmental sustainability, modernization of the energy sector, and reductions in greenhouse gas emissions. In July 2025, Kyrgyzstan’s Cabinet of Ministers approved the Concept for Achieving Carbon Neutrality in the Kyrgyz Republic. The strategy outlines a phased transition toward a carbon-neutral economy, focusing on key sectors including energy, transport, industry, agriculture, waste management, and forestry. The concept prioritizes reducing greenhouse gas emissions, expanding renewable energy, improving energy efficiency, restoring forest ecosystems, adopting innovative technologies, and integrating climate risks into national planning. The government views the initiative as a foundation for attracting climate finance, creating green jobs, and ensuring long-term environmental security. Under the strategy, Kyrgyzstan has pledged to achieve carbon neutrality by 2050 and reduce greenhouse gas emissions by 44% by 2030. Despite these ambitions, the country’s overall emissions remain relatively low, accounting for less than 0.032% of global greenhouse gas emissions. In October 2025, the Ministry of Natural Resources, Environment, and Technical Supervision published Kyrgyzstan’s first Biennial Transparency Report. According to the document, total greenhouse gas emissions in 2023 reached 19.38 million tons of CO₂ equivalent. Forests, soils, and other ecosystems absorbed 10.31 million tons, resulting in net emissions of 9.07 million tons. The energy sector remains the largest source of emissions, accounting for more than half of the total. Agriculture is the second-largest contributor, largely driven by livestock production. At the same time, emissions from transport, electricity generation, and heating have declined significantly since the early 1990s due to the adoption of cleaner technologies and...

Middle Corridor

The World Bank Backs Kazakhstan’s Rail Shortcut

On February 19, 2026, the World Bank Board approved an $846 million IBRD guarantee to help the state-owned railway company Kazakhstan Temir Zholy (KTZ) mobilize $1.41 billion in long-term commercial financing. The financing is linked to a KTZ reform program under the umbrella “Transforming Rail Connectivity in Kazakhstan (Middle Corridor Development)” initiative. The purpose is to expand rail connectivity and upgrade logistics on Kazakhstan’s segment of the Trans-Caspian International Transport Route (TITR, Middle Corridor). The Asian Infrastructure Investment Bank (AIIB) will add a $564 million co-guarantee that shifts the financing away from a classic sovereign-loan model and toward private credit backed by multilateral risk coverage. The Multilateral Investment Guarantee Agency (MIGA) presents this operation as part of a wider World Bank Group approach that pairs corridor capital expenditure with steps to strengthen the operator’s financial sustainability and commercial viability. The operation is structured as a two-part package. First, it finances a new 322.3-kilometer railway on a new segment between Mointy and Kyzylzhar in central Kazakhstan. This segment is meant to remove a major network detour, shorten the TITR route within Kazakhstan by 149 kilometers, ease congestion on heavily used sections, and support double-stack container operations. The line is planned with modern signaling and telecommunications, plus design provisions for later expansion and electrification. Second, it ties the construction to a reform program at KTZ, including tariff reform, exploration of alternative financing mechanisms, stronger financial and environmental management, and preparatory work for a potential initial public offering. The World Bank is structuring delivery through a Multi-Phase Programmatic Approach with the stated aim of tripling freight volumes and halving end-to-end transit times on Kazakhstan’s Middle Corridor segment by 2030. Why This Segment Matters for the Middle Corridor Inside Kazakhstan, the Mointy–Kyzylzhar line is a central connector in the Trans-Kazakhstan east–west trunk carrying traffic from the China-facing gateways at Dostyk and Khorgos toward the Caspian outlets at Aktau and Kuryk. Mointy itself is a pivotal junction where train paths, locomotives, and crews are redistributed across multiple directions; as a result, any congestion there propagates quickly into corridor-wide delays. In early 2025, President Kassym-Jomart Tokayev directed acceleration of the Trans-Kazakhstan corridor. KTZ says the expected benefits include decreased pressure on heavily used central segments, fewer locomotive changeovers at key junction points, and, on some routings, the potential to cut more than a day from transit time between the Chinese border and Aktau. The World Bank’s 2023 Middle Corridor study stressed that the corridor’s most durable growth driver is regional trade among the core corridor economies: China–Europe movements remain important, but they compete with multiple alternatives, above all maritime shipping. An infrastructure upgrade adds economic value only if it reduces variability at the handoff points where delays accumulate, including rail-to-port interfaces, Caspian coordination, and national borders. Relieving the domestic bottleneck in Kazakhstan is economically meaningful only insofar as it stabilizes arrival times to Caspian terminals, creates more room for dispatching, and helps logistics providers offer shippers more predictable end-to-end service along the TITR. The emphasis is...