Pannier and Hillard’s Spotlight on Central Asia: New Episode Coming Sunday
As Managing Editor of The Times of Central Asia, I’m delighted that, in partnership with the Oxus Society for Central Asian Affairs, from October 19, we are the home of the Spotlight on Central Asia podcast. Chaired by seasoned broadcasters Bruce Pannier of RFE/RL’s long-running Majlis podcast and Michael Hillard of The Red Line, each fortnightly instalment will take you on a deep dive into the latest news, developments, security issues, and social trends across an increasingly pivotal region. This week, the team will be discussing the China-Kyrgyzstan-Uzbekistan railway with special guest, Almaty-based journalist for Radio Free Europe/Radio Liberty (RFE/RL), Chris Rickleton.
Welcome to Turkmenistan? President Says He Wants International Tourists to Visit
Turkmenistan, one of the world’s most closed countries, is hosting an international tourism conference this week.
The “TurkmenTravel – 2026” event in the capital of Ashgabat aims to attract foreign visitors to a country that is generally difficult to visit because of tight controls, including required letters of invitation and the need to have licensed guides. While some travel agencies aim to address those challenges for tourists, Turkmenistan remains a little-understood country and lags far behind regional countries such as neighboring Uzbekistan in terms of infrastructure and accessibility for travelers.
But the three-day tourism conference, which ends on Thursday, could be a tentative sign that Turkmenistan wants to open up, selectively, and within the limits of a tightly controlled system that restricts the internet and other sources of information for its citizens.
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Ashgabat Arch of Neutrality; image: Stephen M. Bland[/caption]
Across Central Asia, governments increasingly treat tourism as both an economic sector and a tool of international image-building. Turkmenistan now appears to want some of that attention, but on its own carefully managed terms.
The event was a priority for Turkmenistan’s government. President Serdar Berdimuhamedov delivered a message of encouragement to the participants and said tourism was growing in the Central Asian country whose stated policy is one of neutrality in international affairs. Statistics on tourism growth and other metrics are hard to come by in Turkmenistan, however.
That makes the message from Ashgabat especially striking: a state known less for openness than for control is publicly promoting tourism growth while offering little transparent data to show how far that growth has actually come.
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Kunya-Urgench- The ancient Nejameddin Kubra and Sultan Ali Mausoleums; image: Stephen M. Bland[/caption]
“Permanently neutral, Turkmenistan places great importance on expanding international cooperation in this area,” the president said. He noted collaboration with the U.N. World Tourism Organization and other international institutions.
For years, Turkmenistan’s image abroad has rested less on mass tourism than on mystery: the white-marble capital, vast desert landscapes, major Silk Road sites, and a political system that has often kept outsiders at a distance.
In Ashgabat, that mystery is part of the experience from the start. White marble towers rise in regimented lines, fountains splash into largely empty spaces, and broad avenues can feel strangely still. The city is visually extravagant but tightly controlled, with an atmosphere that can leave visitors unsure whether they are in a showcase capital, a stage set, or both.
Berdimuhamedov listed some of Turkmenistan’s attractions: Ancient Merv, Nisa, and Kunya-Urgench, the Bereketli Garagum and Gaplaňgyr nature reserves, desert ecosystems, and the elaborate architecture in Ashgabat.
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Ashgabat - A row of marble towers in the Berzengi district; image: Stephen M. Bland[/caption]
Cordula Wohlmuther, regional director for Europe of U.N. Tourism, was one of the listed speakers at the tourism conference. The agenda for the event included a session titled “How to promote Central Asian culture on the world stage.”
One company, Asia Odyssey Travel, portrays Turkmenistan as a destination that hasn’t been explored by tourists in the way many other countries have. Among the adjectives it uses to describe the country is “surreal.”
The real test, though, is not conference branding but whether Turkmenistan becomes easier to enter, easier to navigate, and easier to understand from the outside. Until then, any tourism push will look selective rather than transformative.
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 revenues from gold sales rose by more than 70%. According to President Shavkat Mirziyoyev, around five million people gained a stable source of income in 2025, and 1.5 million were lifted out of poverty. Consumer indicators also improved, with annual housing purchases reaching approximately 270,000 units and car sales hitting one million units. However, the World Bank warns that the next stage of growth may prove more challenging. “Since 2017, Uzbekistan has been considered one of the global leaders in economic reform. Future growth should be based on a strong private sector, accession to the World Trade Organization, and genuinely level playing conditions. Reducing state involvement where private companies can operate more efficiently will help attract investment and create better-quality jobs,” said World Bank economist Pinar Yasar. Inflation Holds Kazakhstan Back Kazakhstan remains the largest economy in Central Asia. The oil sector continues to drive growth, while manufacturing, particularly machinery and metallurgy, is gaining momentum, with new plants opening across the country. “This is primarily due to the stronger-than-expected impact of unlocking investment potential. In addition, industrial production is growing rapidly this year, largely thanks to government measures aimed at economic diversification,” said Aigul Berdigulova, senior analyst at the EDB’s Macroeconomic Analysis Center. However, inflation stood at around 12.3% last year, eroding purchasing power. Elevated interest rates continue to constrain household consumption. Kazakhstan’s economy remains heavily dependent on oil and gas, which account for up to 20-25% of GDP, more than 50% of exports, and a significant share of budget revenues. While this structure supports stability during periods of high commodity prices, it leaves the economy vulnerable to external shocks. According to Qazaq Expert Club analyst Saida Tleuleyeva, diversification potential lies primarily in developing processing industries, particularly petrochemicals. Even partial progress could increase value added by two to three times. Raising manufacturing’s share from 13-14% to 18-20% of GDP could significantly boost output and nearly double non-resource exports from $10-12 billion to over $20 billion. Transport and logistics are another key area. Development of the Trans-Caspian corridor is already increasing cargo volumes, with capacity nearing 5 million tons and plans to expand to 10 million. With sufficient investment, this route could become a stable source of foreign currency earnings. Significant potential also remains in the agro-industrial sector, given Kazakhstan’s vast land resources. Mechanical engineering is another underdeveloped area, as much of the equipment used in the extractive sector is still imported. Kyrgyzstan: Construction Boom and Mortgages In Kyrgyzstan, construction has been a major growth driver, expanding by 29%. This was fueled by a state mortgage program (“My Home 2021-2026”), which enabled large-scale housing development in Bishkek and other regions. This, in turn, stimulated related industries such as cement, brick, and finishing materials production. Investment in fixed capital rose by 18.2%, driven largely by domestic investors and public spending on infrastructure, including hydropower, roads, mining, and processing industries. Foreign investment increased by 17.5%. Amid economic growth, the average monthly nominal wage rose by 19.2%. Even after accounting for inflation, real incomes increased by 12% over six months, supporting strong consumer demand. Inflation remains above 8%. Analysts note that part of the economic upswing is linked to the reorientation of trade and logistics flows following Russia’s full-scale invasion of Ukraine. “For economies with chronic underinvestment, high growth rates often reflect a catch-up phase rather than a structural breakthrough. In such economies, growth of around 6% typically indicates convergence, whereas in developed countries, 1.5-2% is already considered high,” said Kubat Rakhimov, an infrastructure development expert. He added that GDP growth alone is not sufficient to assess living standards; more meaningful indicators include real disposable income and labor productivity. Tajikistan: Growth Across Key Sectors Tajikistan’s GDP grew by 8.4% in 2025, driven in part by high gold prices, its main export commodity. Significant investments were made in infrastructure, particularly the Rogun hydropower plant. Rising remittances from labor migrants have further supported domestic demand. For the second consecutive year, the economy expanded by 8.4%, reaching nearly $18 billion by the end of 2025. All three key sectors, accounting for about 70% of the economy, are growing: agriculture (23% of GDP), industry (22%), and trade (14%). Agricultural output increased by 9.5% year-on-year in 2025, with growth across major segments. Crop production, which generates two-thirds of sector revenue, recorded higher yields for all major crops. Turkmenistan: Limited Transparency Turkmenistan remains one of the most closed economies in the world, and available data is largely based on official statements and indirect estimates. In February, President Serdar Berdimuhamedov reported GDP growth of 6.3% in 2025. According to official figures, industrial output grew by 1.8%, trade by 9.6%, and agriculture by 7%. Investment increased by 6%, and around 7,000 jobs were created. Earlier, the country’s minister of finance and economy reported that GDP exceeded $68.7 billion in 2024. Persistent Risks Behind Strong Growth Despite strong headline growth, World Bank data highlights significant income disparities across the region. GDP per capita in Kazakhstan stands at around $14,154, compared to approximately $3,162 in Uzbekistan and about $2,420 in Kyrgyzstan. In the U.S., that figure exceeds $84,000. Experts warn that the current levels of Central Asian economic growth remain vulnerable to external shocks, including a slowdown in China, shifts in global demand for hydrocarbons and metals, and geopolitical instability. Analysts also forecast a cooling period as early as 2027, with GDP growth potentially slowing to 4-5%. For now, the region faces a critical challenge: converting rapid growth into sustainable productivity gains, rising real incomes, and stronger institutions. Only then can strong GDP figures translate into lasting improvements in living standards.
Beyond the Belt and Road: China’s New Playbook in Central Asia
In the Kyzylorda Region, near the town of Shieli, the silos and conveyor belts of a Chinese-backed plant rise out of the fine brown dust that dominates the landscape. It is the kind of project the Belt and Road was supposed to deliver in Central Asia: heavy industry, fixed capital, and a visible mark on the landscape. But it is also a reminder that China’s role in the region has become narrower, more contested, and less sweeping than the old rhetoric suggested. In photographs, the Gezhouba Cement Plant looks like a self-contained industrial island on the steppe. For nearby villagers, it became something else: a source of jobs and local prestige for some, but also of years of complaints about dust clouds and whether the state was quicker to defend a flagship Chinese-backed project than the people living beside it. Projects like the plant in Shieli also help explain why views of China across Central Asia remain mixed. Beijing is seen as a source of trade, investment, and technology, but that promise is tempered in some places by concerns over transparency, environmental costs, and who really benefits when a project arrives. China has become Central Asia’s dominant trading partner, but investment has not kept pace with the surge in commerce. The gap says a lot about how Beijing now works in the region: with a sharper focus on sectors that matter to its long-term influence. In 2025, trade in goods between China and the five Central Asian states reached $106.3 billion, up 12% year on year. Chinese exports to the region totaled $71.2 billion, while imports from Central Asia reached $35.1 billion. Trade has grown fast enough to reshape the region’s external balance, but long-term investment has been far more selective. Over 2005–2025, the five Central Asian states accounted for about 3% of China’s global overseas investment and construction total. The picture changes once direct investment is separated from trade and construction contracts. China’s FDI stock in the five Central Asian states stood at about $36 billion by mid-2025. Roughly 90% was concentrated in Kazakhstan, Uzbekistan, and Turkmenistan. The structure of that capital has also changed. Extractive industries still accounted for 46% of the portfolio, but manufacturing and energy together made up more than one third, and greenfield projects rose from 43% to 60%. China has not poured money into Central Asia on the scale once implied by early Belt and Road rhetoric. Instead, it has invested in sectors that strengthen its industrial position. Kazakhstan remains at the center of this relationship. It is China’s biggest commercial partner in Central Asia, and the main destination for Chinese capital in the region. Kazakhstan-China trade reached $43.8 billion in 2024. The country’s portfolio of projects with Chinese participation includes 224 ventures worth about $66.4 billion. Some are still at the planning stage, but the range of projects is telling. Recent developments have included a hydrogen energy technology innovation center in Almaty and a large wind farm with electricity storage. Kazakhstan still sells raw materials to China, but it also wants Chinese capital, technology, and industrial capacity at home. Uzbekistan, meanwhile, has become the fastest-moving part of the regional story. Over the past decade, Chinese FDI in Uzbekistan grew by $10.4 billion, lifting the country’s share of China’s Central Asian investment portfolio from 1% to 16%. Bilateral trade has also kept rising, with both sides setting a target of $20 billion. As of January 1, 2026, Uzbekistan had 5,044 companies with Chinese capital. That figure had risen to 5,257 by March 16, 2026. Uzbekistan wants more factories, more processing, and more export-oriented production, and Chinese firms have become central to that push. Kyrgyzstan and Tajikistan show a different pattern. Their economies are smaller and their bargaining power is weaker, but Chinese trade and investment are still deeply embedded in key sectors. In Kyrgyzstan, China held the largest share of foreign trade in 2025. Accumulated Chinese FDI in the Kyrgyz economy reached $2.1 billion at the end of 2025. In Tajikistan, the accumulated volume of Chinese investment had reached nearly $4 billion by early 2025, and about 70% of that total was direct capital. In both countries, Chinese money has gone into mining, infrastructure, energy, and border development. That gives Beijing more weight than the headline numbers suggest. Turkmenistan remains a special case because gas still dominates the relationship. Chinese capital is present, and Turkmenistan is one of the three countries that make up about 90% of China’s Central Asian FDI stock. However, the commercial picture is much more concentrated than in Kazakhstan or Uzbekistan. Trade turnover between China and Turkmenistan reached $10.6 billion in 2024, up 11% from 2023, but this growth is still built chiefly on one commodity. That leaves Turkmenistan more exposed to a single-channel relationship than its neighbors to the east and north. Trade and investment measure different kinds of power. Trade can rise quickly when Chinese goods are cheap, routes are open, and Central Asian markets need machinery, electronics, and consumer goods. Investment moves more slowly because it depends on politics, regulation, and returns. So even if Central Asia remains a modest part of China’s global capital map, parts of the region can still become deeply tied to Chinese demand, finance, equipment, and project delivery. This is why the old Belt and Road image of limitless Chinese spending no longer fits. Beijing’s overseas capital has become more disciplined, and the region has become more demanding. Central Asian governments want local jobs, more processing at home, and projects tied to energy security, manufacturing, and transport resilience. China wants secure supplies, export markets, and reliable overland routes across Eurasia. The overlap is strong, but not unlimited. Kazakhstan and Uzbekistan are both deepening links with other partners at the same time, including Europe, the United States, and the Gulf states. They want Chinese capital, but not exclusivity. That multi-vector outlook is now central to the region’s economic policies. In Central Asia, China’s presence can no longer be measured by the old Belt and Road spectacle. It is better read in the projects themselves: a cement plant on the edge of a village, a dry port at a border, a logistics complex taking shape outside Tashkent. The material footprint is real. It is just more focused, strategic, and more politically negotiated than the slogans once suggested.
Central Asia’s Climate Risks Could Cost Up to 130% of GDP by 2080
By 2080, climate change is expected to have a profound impact on the economies of Central Asian countries, with potential losses ranging from 20% to 130% of GDP. The most severe effects are projected for mountainous nations. These estimates were presented at a CAREC technology forum by Iskandar Abdullaev, a senior research fellow at the International Water Management Institute in Uzbekistan. According to Abdullaev, climate change is no longer solely an environmental issue but an increasingly significant economic factor. Key risks include droughts and water scarcity, floods, heatwaves, and glacier melt. The projected economic impact varies across the region. Tajikistan could face losses of between 80% and 130% of GDP, Kyrgyzstan 70% to 120%, Kazakhstan 40% to 80%, Uzbekistan 30% to 45%, and Turkmenistan 20% to 60%. Abdullaev emphasized that mountainous countries – Tajikistan and Kyrgyzstan – are particularly vulnerable, as climate change directly affects water resources. Glacier melt reduces river flows, creating challenges for both energy production and water supply. Droughts and extreme heat are already placing pressure on agriculture, with declining crop yields and reduced pasture productivity. Without adaptation measures, the region’s long-term sustainability could be at risk. Experts stress that mitigation and adaptation efforts are essential to reduce these risks. These include modernizing irrigation systems, adopting climate-resilient agricultural technologies, and expanding renewable energy capacity. This is not the only warning. According to the World Bank, natural disasters are already causing significant economic damage in Central Asia. Losses from extreme events, including floods and earthquakes, can reach up to 6% of GDP, with earthquakes alone accounting for up to $2 billion in damages. At the same time, countries in the region face substantial financing gaps following major disasters. In Tajikistan, this gap could reach up to $1.5 billion. Experts warn that climate change is likely to intensify these risks, further increasing the economic burden on the region.
Hungary’s Political Shift Puts Central Asia Partnerships Under Scrutiny
Hungary’s political transition following the defeat of Viktor Orbán’s party and his resignation as prime minister is drawing attention not only in the EU and the United States, but also in Central Asia, where Budapest has built growing energy and investment ties. The key question is whether the policy of cooperation with Central Asia developed under Orbán will continue under the new leadership. In recent years, under Orbán, Budapest has actively developed its Central Asian foreign policy, primarily driven by the desire to find alternatives to Russian energy supplies. That push reflects Hungary’s long-standing reliance on Russian oil and gas, which has shaped its search for alternative suppliers beyond Europe. Resource-rich Kazakhstan, Uzbekistan, and Turkmenistan became natural partners for diplomatic engagement. Orbán succeeded in building trust-based relationships with the presidents of the Central Asian republics, grounded in what Hungary’s Minister of Foreign Affairs, Péter Szijjártó, described as “sincere friendship” in an interview with Uzbek media. “In Hungary, we have always viewed Central Asia as one of the fastest-growing regions in the world, with enormous potential. Our efforts to build these relations did not begin today, but decades ago,” he said. Hungary became the first Central European country to sign a strategic partnership with Kazakhstan in 2014. Currently, the Kazakhstan-Hungary Business Council is in operation, along with a joint agricultural direct investment fund. In 2024, bilateral trade approached $200 million, and from January to August 2025, it grew by another 22.1%, exceeding $164.6 million. Hungarian investments in Kazakhstan’s economy have surpassed $370 million, while the current investment portfolio includes 16 projects worth about $700 million in engineering, agriculture, and logistics. These links also intersect with wider efforts to expand east–west transport routes through the Caspian region, offering Hungary indirect access to Central Asian energy and trade flows. In May 2025, Uzbekistan’s President Shavkat Mirziyoyev held talks with Orbán in Budapest, where both sides highlighted rising trade volumes and a joint investment portfolio of about $500 million. Hungary’s OTP Bank entered into Uzbekistan’s financial market in 2023, acquiring a 73.71% stake in Ipoteka Bank, becoming its principal owner and the majority shareholder of the country’s fifth-largest bank. As early as 2019, Hungary had intensified cooperation with Turkmenistan. After talks at the Turkmen Foreign Ministry, Szijjártó told the media that Hungary views Turkmenistan as an important country from the perspective of European security. “We very much hope that Turkmenistan’s gas resources will be integrated into the overall energy flow of Central Europe,” he said. However, uncertainty remains over whether this policy direction will continue under Orbán’s successor, Péter Magyar. Oil and gas analyst Oleg Chervinsky has suggested that political changes in Hungary could affect cooperation with Kazakhstan’s national company KazMunayGas (KMG). Chervinsky notes that, having secured a constitutional majority in parliament, Magyar has a mandate to “implement reforms in both foreign and domestic policy [which could] reshape the constitutional structure of the right-wing populist authoritarian system built around Orbán.” The analyst points to Hungary’s oil and gas company MOL Group, which in recent years has actively expanded cooperation with KMG, as a key pillar of this cooperation. “In addition to its partnership with KMG within Ural Oil & Gas LLP (the Rozhkovskoye field in West Kazakhstan Region), KMG and MOL signed a framework agreement for oil supplies to Hungary. The first shipment was dispatched in August 2025 from the port of Novorossiysk to Croatia, and then via the Adria pipeline,” Chervinsky noted, a route that allows crude shipped from the Black Sea to reach Central Europe without transiting Russian territory. “It is quite obvious that MOL will be reformed, including in terms of personnel, under Hungary’s new prime minister. What priorities will he set for the new management of the oil company?” However, most experts remain confident that the diplomatic nous of Kassym-Jomart Tokayev will make it possible to establish constructive relations with Hungary’s new leadership. Urazgali Selteev, director of the Institute of Eurasian Integration, said Kazakhstan typically maintains pragmatic relations regardless of political changes abroad. “The key point is that he is legitimate and elected by the people,” Selteev stated, noting that Hungary’s incoming prime minister understands the rules of international politics. Selteev added that Magyar “emerged from the existing political class... Therefore, there will be no abrupt or radical steps.” Magyar himself has indirectly confirmed this logic by expressing his intention to maintain pragmatic relations with Russia, according to reporting by Interfax. Like Orbán before him, he does not support Ukraine’s accelerated accession to the European Union. That position broadly aligns with existing Hungarian policy, suggesting continuity on key external issues despite the political transition. According to his party, Tisza, the issue of Ukrainian membership should be decided only after a referendum. For now, it remains unclear how far Hungary’s new leadership will adjust the foreign policy approach developed under Orbán. For Central Asian partners, the immediate question is whether existing energy, investment, and transport cooperation will continue without disruption.
Central Asia Recalculates as the Iran War Enters a New Phase
Central Asia’s first response to the Iran war was public and urgent. Governments organized evacuations, welcomed a ceasefire, and watched the Strait of Hormuz because the region’s trade routes, fuel costs, and food prices were already under pressure. The next phase looks different. Following the April 12 collapse of U.S.-Iran talks in Islamabad, Washington moved to block maritime traffic entering and leaving Iranian ports. That step does not formally close Hormuz to all shipping, but it pushes the crisis into a more serious phase for any country or company still treating Iran as a viable corridor.
That distinction is important in Central Asia because the region does not need a formal legal closure of Hormuz to feel the shock. It only needs insurers, banks, freight forwarders, airlines, and traders to decide that the southern option has become too risky for routine planning. That process was already underway. The route through Iran had come under strain in southern corridor traffic, food systems, and in the wider pricing of regional connectivity. A U.S. move against Iranian ports is likely to reinforce that view.
Official statements across Central Asia still reflect the ceasefire moment more than the latest escalation. On April 8, Kazakhstan’s President Kassym-Jomart Tokayev welcomed the truce and said he hoped it would support global trade and prosperity. Kyrgyzstan’s Foreign Ministry also welcomed the ceasefire and praised efforts to reduce tensions. Uzbekistan’s Foreign Ministry did the same, calling the truce an “important step toward de-escalating tensions,” and stressing that it should serve as a pathway to a broader political settlement. Tajikistan’s Foreign Ministry also welcomed the ceasefire agreement between Iran and the United States. Turkmenistan, meanwhile, had already taken a practical line, saying on March 4 that it was keeping all international checkpoints open and providing passage for foreign citizens, vehicles, and rail stock across the Turkmen-Iranian border. Since then, public messaging has lagged behind the latest escalation. By April 13, Qazinform’s foreign news flow had shifted to the failed Islamabad talks and Trump’s blockade order, while the latest publicly visible official positions elsewhere in the region still reflected the April 8 ceasefire. That does not mean backchannel diplomacy has stopped, but it does suggest that Central Asian governments prefer caution in public as the conflict shifts from direct strikes to pressure on shipping and trade.For the region, the economic logic is now clearer than the politics. Approximately 20% of global oil supplies and one-third of global fertilizer trade move through the Strait of Hormuz, while urea prices surged by almost 46% between February and March 2026. The World Bank’s April Europe and Central Asia Economic Update said growth in the developing economies of Europe and Central Asia is expected to slow to 2.1% in 2026, down from 2.6% in 2025, as the Middle East conflict, wider geopolitical tension, and trade fragmentation weigh on the region. Those pressures were already significant. The collapse of the main post-ceasefire diplomatic effort, followed by oil rising back above $100 a barrel, has made them harder to absorb.
Across Central Asia, higher prices do not bring gains for most of the region. Kazakhstan can benefit from stronger crude prices at the export level, and there is already discussion of whether it can supply more petroleum products to Asian markets. However, the broader regional picture is far tighter. Uzbekistan, Kyrgyzstan, and Tajikistan are all exposed to imported inflation through fuel, transport, and fertilizer channels. Even where shortages do not appear, margins tighten and household budgets worsen, turning a foreign war into a domestic economic problem.
Air routes show the same structural shift. On April 9, the European Union Aviation Safety Agency extended its conflict-zone bulletin for the Middle East and Persian Gulf through April 24. That leaves airlines with fewer safe and efficient corridors between Europe and Asia. Russian airspace remains unavailable to most Western carriers, and Iranian airspace remains extremely high risk. Therefore, traffic keeps moving toward the northern arc through the South Caucasus and Central Asia. That has already increased the strategic importance of Kazakhstan and Azerbaijan, and the latest escalation makes this shift look less temporary.
Central Asian governments have spent years trying to widen access to world markets through Iran, the South Caucasus, and, in some cases, Afghanistan and Pakistan. That strategy was meant to reduce dependence on northern routes and give the region more paths to global markets. With its 1,148-kilometer border with Turkmenistan, Iran still matters geographically. It still connects Central Asia to Gulf markets and the Indian Ocean. But geography does not keep a corridor usable if it is no longer insurable, financeable, and predictable. After the failure of talks in Islamabad and Washington’s move against Iranian ports, the southern route looks less like routine infrastructure and more like a contingency option.
That leaves Central Asia in a familiar but narrowing position. No government in the region wants to be pulled into a direct U.S.-Iran confrontation, but none can ignore what happens when the map of usable trade routes shrinks again. The practical answer is caution in public and recalculation in private. The first phase of the war brought evacuation plans, official statements, and visible coordination. The next phase is bringing something quieter and more important: a growing sense that the Iranian corridor may still exist on paper, but no longer belongs at the center of Central Asia’s planning map.
Turkmenistan Opens the Door a Little Wider to Europe
Turkmenistan has historically been a difficult partner to deal with. The Turkmen government’s isolationist policies run counter to deep cooperation with any foreign party, but the Turkmen authorities seem to now perceive that these policies are costing them opportunities and revenue. In one of the latest shifts in foreign policy, Turkmenistan appears to be warming up relations with the European Union, though currently, the EU has its own reasons to boost interaction with Turkmenistan. Let’s Meet For decades, the EU and many other countries and international organizations have gone through frustrating efforts to establish a reliable relationship with Turkmenistan. Ashgabat’s form of governance is based on a cult of personality, a supposedly infallible leader capable of protecting the country from the evils of the outside world. The UN recognition in December 1995 of Turkmenistan’s neutrality was used by its government to seal off the country. It would normally be easy for the rest of the world to ignore Turkmenistan. However, Turkmenistan possesses the planet’s fourth-largest proven natural gas reserves, and it is located on what is developing into a key global trade route. On March 20, the European Investment Bank’s (EIB) regional representative for Central Asia, Olivier Kueny, complimented Turkmenistan for its “ambitions in transport and… projects that reduce greenhouse gases.“ Kueny noted that, “with direct access to the Caspian Sea, [Turkmenistan] is a key node” of the Trans-Caspian International Transport Corridor (TITR). He hinted the EIB could be interested in investing in Turkmenistan’s “rail, road, rolling stock and port infrastructure [that] could help reduce the cost and time needed to move goods between continents.“ On March 26, Charlotte Adriaen, the head of the EU division for Central Asia and Afghanistan, met in Ashgabat with Turkmenistan’s Deputy Foreign Minister, Myahri Byashimova, to discuss energy cooperation. The two also reviewed EU programs for sustainable energy, trade, and digital connectivity. On the same day, there was also a “New Horizons for Connectivity, Investment and Sustainable Growth” Turkmenistan-EU business forum in Ashgabat. Turkmenistan’s Minister of Finance and Economy, Mammetguly Astanagulov, addressed more than 200 delegates attending the forum, telling them his country is ready to expand trade, transport, and energy cooperation with the EU. Astanagulov noted EU-Turkmenistan trade increased from $1.1 billion in 2024 to $2.1 billion in 2025. EU Ambassador to Turkmenistan Beata Peksa also spoke at the forum. She noted Turkmenistan’s growing role in global transport corridors between Europe and Asia and said the EU is seeking to work more closely with Turkmenistan on improving investment conditions in the country. Peksa also mentioned helping Turkmenistan improve regulatory frameworks and investment in modern technologies to increase efficiency in moving cargo. On April 1, Adriaen met with representatives from Turkmenistan’s State Service of Maritime and River Transportation at the Turkmenbashi International Seaport on the Caspian coast to discuss the port’s role in the TITR and projects at the Balkan shipbuilding yard. And on April 7, the European Bank for Reconstruction and Development (EBRD) co-sponsored an “Export Experience Exchange” conference in Ashgabat, the aim of which was to help Turkmen companies increase their presence in international markets. The Turkmen Leadership Goes to Europe On April 8, Gurbanguly Berdimuhamedov, the Chairman of Turkmenistan’s Halk Maslahaty (People’s Council), started a two-day visit to Austria. Berdimuhamedov was Turkmenistan’s president from late 2006 until 2022, during which time he built his own cult of personality. His predecessor, Turkmenistan’s first president, Saparmurat Niyazov, was officially referred to inside the country as “Turkmenbashi,” the “Leader of the Turkmen.” Berdimuhamedov was given the title “Arkadag,” or “Protector.” State media called him by this title for years before expanding it to “Hero Arkadag.” He stepped down as president in early 2022, making way for his son, Serdar, to be elected president in March that year. Apparently, the father missed being Turkmenistan’s leader, and one year later, the constitution was changed, making the Halk Maslahaty (People's Council) the supreme body and its chairman the supreme leader. The reason for Berdimuhamedov Senior’s presence in Vienna was not clear. Turkmen media confined their reporting of the visit to brief reviews of Austrian-Turkmen ties. But the visit to Vienna follows a visit to Germany in February. Arkadag first traveled to the United States. Reportedly, he was in Florida to discuss golf courses, tour local equestrian facilities, and hold some meetings with U.S. business representatives. He stopped over in Germany on his way back, and was reportedly there to discuss preparations for the 2026 FEI World Equestrian Championships in Aachen and an Akhal-Teke horse (Turkmenistan’s native horse) beauty contest scheduled to take place in the Netherlands. It is possible those were the only reasons the elder Berdimuhamedov made the trip, but it seems there must have been more to the visits that was reported. Certainly, in the last decade or so, when he was president, Gurbanguly Berdimuhamedov made very few foreign trips, and when he did, he was usually gone for less than 24 hours. A stopover in Germany and a visit to Austria two months apart are unusual for Arkadag. His son, President Serdar Berdimuhamedov, is going to Brussels sometime later this year. EU Ambassador Peksa announced the visit on February 17, and Turkmen media said the exact date of the trip was still being discussed. Signs of the Times The EU Global Gateway initiative will see 12 billion euros invested in projects in Central Asia in the coming years. Many of these projects focus on connectivity; others involve access to Central Asian energy resources. Turkmenistan spent some $1.5 billion on the construction of the Caspian port at Turkmenbashi city. The seaport opened in 2018 and can handle approximately 17 million tons of cargo annually. The volume of cargo currently transiting the port is far below capacity. The EU would like to see that increase and Turkmenistan become a key transit country in the TITR, also known as the Middle Corridor. A reliable railway, road, and maritime network in Turkmenistan would complement the similar trade network Kazakhstan has been developing to the north. As for energy cooperation, there is still only limited potential, though clearly, with the situation in the Strait of Hormuz threatening to cause huge gas and oil shortages, the EU would like to be able to import more hydrocarbon resources from Central Asia. Unfortunately, there is insufficient infrastructure to export large amounts of Turkmen gas or oil to the West. Turkmenistan does have a small oil tanker fleet in the Caspian that has alternated over the years between unloading in Russia and Azerbaijan, but its shipments are limited to tens of thousands of tons annually. Plans to build a Trans-Caspian Pipeline that could carry up to 30 billion cubic meters of Turkmen gas to Europe have made no real progress. The EU continually mentions the desirability of importing Turkmen gas, but the possibility still does not exist. Still, for Turkmenistan, now might be the time to inquire whether the EU still has an interest, and possibly a solution, and funding, for importing some of Turkmenistan’s vast hydrocarbon resources. Turkmenistan’s attempts to export its gas have been thwarted at almost every turn. Admittedly, much of the fault lies with Turkmenistan, as the government’s policy for years was that any party interested in buying Turkmen gas needed to build a pipeline to the Turkmen border. There were not many takers. China did build three pipelines from Turkmenistan and is now the only major gas customer Turkmenistan has. Iran built two pipelines, but neither is operating after Turkmenistan turned off the supplies almost a decade ago over unpaid Iranian bills. The Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline that aims to carry some 33 bcm of Turkmen gas is not much closer to being realized than it was 30 years ago when the idea first emerged. Turkmenistan has constructed its section leading from Turkmen gas fields to the Afghan border. But the TAPI section in Afghanistan is inching forward and at the moment only extends some 25 kilometers on route to the city of Herat. Months of fighting between Afghanistan and Pakistan suggest it will be many years before TAPI progresses any further than Herat, if the pipeline ever progresses at all. Turkmenistan has been trying to arrange swap agreements that would allow gas sales to Iraq, Turkey, and Azerbaijan, but all these deals involve Iran, and the current situation there indicates it could be many years before such agreements could be fulfilled. That leaves the transit of goods as Turkmenistan’s best chance of boosting state revenue. Increasing cargo shipments is certainly having a positive financial effect in Kazakhstan, where the government has embraced the rapid development of road, rail, and maritime infrastructure along the Middle Corridor. In light of the recent uptick in activity between the EU and Turkmenistan, it is interesting that Gurbanguly Berdimuhamedov made one other trip in 2026, to China in March. Turkmenistan literally cannot afford to remain walled off to the outside world any longer, and the Middle Corridor represents opportunity knocking on its door. Apparently, for once, Turkmenistan is opening the door, at least a little bit.
Sunkar Podcast
Central Asia and the Troubled Southern Route
