Political Developments
Elections to the Uzbek Parliament were held on 27th October. The 150 members of the Legislative Chamber are elected via parallel voting: half are elected in single-member constituencies via first-past-the-post voting, while the other half are elected via closed list proportional representation in a single nationwide constituency with an electoral threshold of 7% using the Hare quota. If less than one-third of eligible voters participate in an election, it will be considered invalid, and if no party crosses the electoral threshold for proportional seats, the elections for the proportional seats will be considered invalid. At least 40% of candidates must be women. Turnout at 75% decisively surpassed the 33% threshold needed for the election to be valid. All candidates came from the country’s five registered political parties, none of which are in opposition to the government of President Shavkat Mirziyoyev. All the parties crossed the minimum threshold of 7% and will be represented in the parliament. In addition to the Uzbek Liberal Democratic Party which supports President Shavkat Mirziyoyev and won the highest number of 64 seats in the Parliament, the other winners were 29 from the Democratic Party of Uzbekistan, 20 from the People’s Democratic Party of Uzbekistan, 21 from the Social Democratic Party, and 16 from the Ecological Party of Uzbekistan. The Uzbek Liberal Democratic Party increased its presence in the Parliament by 11 seats at the expense of most of the other parties.
Following Kazakhstan’s country-wide vote in favor of building a nuclear power plant in October, 2024, Russia’s state nuclear corporation Rosatom has begun a courtship of officialdom in Astana in apparent hopes of landing a contract to construct it. Since the vote, which saw more than 70 percent of Kazakhs cast ballots in favor of a nuclear plant to replace decrepit coal plants and lighten the country’s carbon footprint, Kazakh officials have nominally supported the creation of an international consortium—which may or may not include Rosatom—to build the plant, apparently thwarting Moscow’s long-held hopes of overseeing the project on its own. China, France, and South Korea have been consistently mentioned alongside Russia by Kazakh officials as possible contractors of the plant, which will be located on the shores of Lake Balkhash on the Kazakh steppes.
U.S. Secretary of State advanced shared interests with foreign ministers and representatives from the five Central Asian countries under the auspices of the C5+1 platform on the sidelines of the annual session of the UN General Assembly. Reflecting on the commitments made by U.S. and Central Asian leaders during the inaugural C5+1 Presidential Summit on September 19, 2023, the Secretary acknowledged significant steps taken since that landmark occasion including the C5+1 Critical Minerals Dialogue launch, the inaugural B5+1 Forum in support of U.S.-Central Asian business partnership, and others. Participants discussed steps toward enhanced regional security cooperation in pursuance of a shared vision for a peaceful Central Asia. The Secretary underscored the importance of upholding the United Nations Charter and its principles, including with respect to human rights, and C5+1 partnership that is grounded in respect for the independence, sovereignty, and territorial integrity of all states. The foreign ministers reaffirmed the importance of the “C5+1” regional platform for achieving common goals in the areas of security, including addressing transnational challenges, economic prosperity, and the promotion of human rights, including women’s empowerment, child protection, and the rights of people with disabilities.
In his Address to the UN General Assembly, Kazakh Foreign Minister shared Kazakh President Kassym-Jomart Tokayev’s vision of Central Asia’s role in the global geopolitical landscape. In particular, he noted that the region’s key priorities are the search for comprehensive approaches to solving critical issues in combating both traditional and new threats, as well as developing response measures. He also highlighted that the VI Consultative Meeting of the Heads of States of Central Asia, held in August in Astana, contributed to further strengthening of integration processes and economic connectivity in the region.
Kazakhstan has registered the highest score of 65 among the Central Asian countries in the 2023 ranking of countries based on the rule of law in the World Justice Report. The country’s ranking in terms of corruption, order and security, and civil justice improved. Uzbekistan was placed at 78th, with its indicators for order and security particularly high; the state is listed 17th in this category, with indicators for the absence of corruption also positive. Both Kazakhstan and Uzbekistan have improved their ranking by 2 points compared to last year. Kyrgyzstan, meanwhile, dropped one place to 103rd, whilst Tajikistan and Turkmenistan are not included in the rankings. The ranking is based on eight indicators across 142 countries, which include constraints on government powers, the absence of corruption, open government, fundamental rights, order and security, regulatory enforcement, civil justice, and criminal justice. Denmark, Norway, and Finland occupy the highest places on the list.
Kazakh Prime Minister Olzhas Bektenov declared that Kazakhstan’s economic trajectory remains strong, projecting the nation’s GDP to rise from US$321 billion in 2025 to US$498 billion by 2029. In the first nine months of this year, GDP increased by 4%, despite reduced oil production, with the agricultural sector growing by 11.4%, transport and trade by over 6%, and construction by more than 10%.
China’s growing presence in Central Asia—and Kazakhstan especially—has been accompanied by steady anti-Chinese sentiment. Beijing’s reputation has suffered amid protests and controversies surrounding investment projects, the treatment of local workers, and close relationships between local elites and Chinese players. In the past, Beijing and its proxies often ignored societal views on Chinese presence in Kazakhstan, relying instead on ties of trust with elites. But in recent years, especially after massive protests in January 2022, Kazakh society has taken on a greater influence over Astana’s actions, including in foreign policy. Beijing has adapted by starting to intensify its soft-power efforts, developing language courses, education, and people-to-people connections aimed at reaching more deeply into Kazakh society, beyond the tight elite circle on which Beijing long relied. Today, there is considerable evidence of China’s adaptability in the face of changing power-to-people dynamics in Kazakhstan and in Kazakh policymaking. Despite the significant increase in China’s economic power in Kazakhstan, anti-Chinese sentiments—deeply rooted in history—have not declined significantly. According to the Central Asian Barometer survey conducted in 2022 and 2023, about 70.5 percent of respondents had an unfavorable opinion of China (with 35.2 percent reporting “somewhat unfavorable” and 35.3 reporting “very unfavorable”). Although the TALAP research center found that Kazakhs’ overall perception of China is generally “above neutral, leaning positive,” it also reported that they hold particularly negative views of China as a source of culture and education. Beijing continues to safeguard its economic interests, but now it also promotes a more positive perception of China among Kazakhs. The Kazakh government too seeks to improve Beijing’s reputation among the people. In aJanuary commemoration interview, Kazakh President Tokayev urged Kazakhs not to harbor outdated fears of China, praising the country as a highly developed state and stressing the importance of cooperation with China to capitalize on the benefits of friendly relations and mutual trust.
Economic Developments
In 2023, Kazakhstan delivered nearly one million tonnes of oil to Germany through the Druzhba pipeline, one of the world’s longest oil pipelines. Kazakhstan is set to significantly increase its oil exports to Germany. Germany has requested Kazakhstan to more than double its oil shipments, raising the target to 2.5 million tonnes. Kazakhstan plans to export 1.2 million tonnes to Germany by the end of the year. Kazakhstan’s growing importance as a supplier follows Germany’s decision to halt Russian oil imports through the Druzhba pipeline in early 2023, in response to the EU’s sanctions on Russia after its invasion of Ukraine in 2022. These sanctions included a two-thirds embargo on Russian oil supplies.
Both Uzbekistan and Kyrgyzstan have now committed to starting construction work on the China-Kyrgyzstan-Uzbekistan (CKU) railway—mega infrastructure that was first conceptualised three decades ago—in October. However, restrained enthusiasm for the project from economically-pressured Beijing and continuing questions over finalising the financing plan for the investment—particularly if costs as compared to current estimates start to mount as is typical with such challenging projects—mean scepticism over prospects for the delivery of the CKU will not be easily dissolved. Kyrgyzstan had made its commitment to an October construction launch during the summer. Emphasizing the railway’s importance for the region, Kyrgyz President Japarov stated: “We call this project ‘the construction of the century.’ It will take economic cooperation between China and Central Asian countries to a qualitatively new level.” Currently, neither Kyrgyzstan nor Uzbekistan has a rail link with China, with Central Asia only having a connection to China through Kazakhstan. Kyrgyzstan and Uzbekistan also have no railway connecting the two countries. A trilateral project company has been established to oversee the construction of the CKU, with Beijing to cover 51% of construction costs and Kyrgyzstan and Uzbekistan 24.5% each. The entire CKU project is expected to cost $8bn and traverse more than 450 kilometres (280 miles). The most demanding stretch of the rail corridor for engineers will be in Kyrgyzstan where scores of tunnels and bridges must be built across mountainous territory. It is anticipated that the railway will transport 15mn tonnes/year of freight.
Kazakhstan plans to reduce oil production to “more than 88 million tonnes” this year from the previously planned 90.5 million tonnes. The final production figure will depend on weather conditions and the early completion of an overhaul at the Kashagan field.
China, through the Belt and Road Initiative (BRI), plays a central role in developing transit networks in Kyrgyzstan and Tajikistan, aiming to unify regional road infrastructure and facilitate Chinese exports. Chinese involvement provides economic benefits to Kyrgyzstan and Tajikistan but also gives China significant influence and increases its soft power in the region. Chinese companies dominate construction projects, often using Chinese funding, labor, and materials. While these infrastructure projects help Kyrgyzstan and Tajikistan build critical roadways, they also create dependency on China. Additionally, cost overruns, delays, and loan obligations often benefit Chinese interests more than local economies. China’s activities in Kyrgyzstan’s and Tajikistan’s transport sectors primarily benefit Chinese companies and provide Beijing with economic leverage while simultaneously providing soft power gains. The benefits of many Chinese-financed road projects built as part of the BRI are still uncertain. Some of these projects have become long-term construction projects, largely due to the missing of deadlines.
Uzbekistan and the United States signed an agreement on mutual assistance in customs matters. The parties will enhance information exchange and combat threats, including money laundering. Currently, there is no legal framework for bilateral cooperation between the two countries. Over the past six years, trade between Uzbekistan and the US has grown by 48%. From January to August of this year, the trade turnover increased by 64%, reaching $613.6 million.
Exports of Kazakhstan’s key agricultural product – wheat – have plunged by almost 40 percent during the first eight months of 2024 over the previous year’s total for the same period. The price of Kazakh wheat is being undercut by Russia. Kazakh farmers exported just over 3 million tons of wheat during the January-August timeframe. The lower export volume is due in part to a comparatively modest harvest. But traditional buyers, including neighboring Central Asian states, Afghanistan, and Italy, have reduced their consumption of Kazakh wheat due to price dumping by Russia. Kazakh grain cannot compete with Russian grain, which is 1.5 times cheaper. “The quality of Russian grain is much higher, because Russian farmers use fertilizers, pesticides, update seeds and equipment more than ours,” cording to the concerned Kazakh Minister. Russia has added to the challenges by imposing a ban on imports of wheat and other products from Kazakhstan as of October 17, citing “phytosanitary safety.” Kazakh MPs say the ban is unjustified and are pressing the government to take up the matter with Russian authorities.
Kazakhstan demonstrated significant progress in the Global Innovation Index 2024 in which it ranked among the top three nations in Central and South Asia and improving its position in the global ranking from 81st to 78th. Enhancements were noted in several areas, including “Government Efficiency,” “Rule of Law,” “PISA Scale for Reading, Mathematics, and Science,” “Market Development,” “Ease of Doing Business,” and “Net Inflow of Foreign Direct Investment.”
Kyrgyzstan has recently shot to global fame as its extensive trade partnership with Russia has come under increasing scrutiny. It has reportedly emerged as a critical conduit for Russia to maintain trade with Europe despite ongoing sanctions. Kyrgyzstan’s exports to Russia skyrocketed from $393m (€352.8m) in 2021 to more than $1.07bn (€960m) in 2022, indicating a significant uptick in trade activities that facilitate Russia’s circumvention of sanctions. Kyrgyzstan has seen a staggering 953% increase in EU exports, primarily benefiting from its strategic position as a transit point. Kyrgyzstan is extremely dependent on Russia and has few alternatives for trade. Countries like Kyrgyzstan, Kazakhstan, and Armenia have become hubs for re-exporting goods to Russia. This is because trade within the Eurasian Customs Union (EACU) is not subject to mandatory customs declarations and inspections. The Brookings Institute identified countries like Germany, Poland, Lithuania, Italy, the Czech Republic and Serbia, as some of the countries whose exports to Kyrgyzstan have surged following the Russia-Ukraine war. As such, they could potentially be continuing to do trade with Russia through Kyrgyzstan.
Kyrgyz traders who send payments for goods to China and Europe have since September 25 been required to sign a guarantee that the products will arrive in Kyrgyzstan within 60 days. This move is aimed at safeguarding against the merchandise instead getting sent to Russia in a sanctions-dodge. Western capitals unsettled by booming trade flows seen in Kyrgyz data that do not match up with the size and requirements of the small Central Asian country’s economy have in the past year upped the pressure on Bishkek for action against “re-exports” to Russia that breach their sanctions on Moscow. Kyrgyzstan’s government has argued that it respects the sanctions but cannot feasibly stamp out all sanctions-busting activities pursued by third parties in the private sector.
India-Central Asia Relations
Uzbekistan and India signed a bilateral investment agreement (BIA) which guarantees full utilization of all investment opportunities created in Uzbekistan at the Uzbek-Indian business forum which was held in Tashkent under the co-chairmanship of Deputy Prime Minister of Uzbekistan and Minister of Finance and Corporate Affairs of India. Deputy Minister of Investment, Industry, and Trade of Uzbekistan, heads of ministries and agencies, as well as about 100 heads of major companies of the two countries representing agriculture, textile production, construction materials, automotive industry, chemical industry, electrical industry, pharmaceuticals, healthcare, information technology, transportation, and logistics took part in the forum. Trade between Uzbekistan and India doubled to US$800 million over the past five years. The figure reflected in 2023 a 30% increase compared to the previous year.
The Uzbek-Indian Business Council and a bilateral committee on project implementation are playing active roles. As a result, trade turnover reached $756.5mn in 2023, growing by 9.4%. From January to August 2023, the figure rose to $585.3mn, a 31% increase. Indian direct investment during the first seven months of this year increased by 12% compared to the previous year. Investment is concentrated in sectors like medical centres, mining, construction materials, IT, and light industry. India is providing financial and technical assistance for infrastructure projects in Uzbekistan, with Exim Bank of India offering nearly $500mn in credit. Cultural and historical ties between the countries remain strong. India’s excellence in IT and education has also led to the establishment of branches of Indian universities in Uzbekistan, including Amity, Sambram, Acharya, and Sharda Universities, which specialise in technology and business.
The Eighth edition of India-Kazakhstan Joint Military Exercise KAZIND-2024 was held in Uttarakhand. The Indian Armed Forces comprising 120 personnel were represented by a battalion of the KUMAON Regiment of the Indian Army. According to the Defence Ministry, the Joint exercise aimed to enhance the joint military capability of both sides to undertake counter-terrorism operations. The Ministry also said that the exercise focussed on operations in the semi-urban and mountainous terrain. It will enable both sides to share best practices in tactics, techniques, and procedures for conducting joint operations. It will also enhance defence cooperation and facilitate the development of interoperability, bonhomie, and camaraderie between the two armies. The Kazakhstan contingent mainly consisted of personnel from the Land Forces andAirborne Assault Troopers. Kazind has been held annually since 2016, with the last edition taking place in Otar, Kazakhstan, from 30 October to 11 November 2023.
During the 79th session of the UN General Assembly, Foreign Ministers of India and Turkmenistan convened to discuss the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gaspipeline. The dialogue focused on the pipeline’s significance in fostering regional development. The ministers reviewed the TAPI project within the framework of energy cooperation, addressing the progress made in major infrastructure initiatives. They underscored the importance of organizing bilateral visits and advancing new joint projects to strengthen collaboration. In addition to energy discussions, the meeting covered trade-economic and cultural-humanitarian cooperation between the two nations. The ministers highlighted the preparations for the next meeting of the Intergovernmental Turkmen-Indian Commission, aimed at enhancing scientific and technological collaboration. The agenda also included discussions on the upcoming meeting of foreign ministers in the Central Asia + India format, which will further facilitate cooperation and engagement among the countries involved.
Tourism between India and Uzbekistan has seen substantial growth, with Indian visitors to Uzbekistan increasing from 4,834 in 2020 to over 45,000 in 2023. Uzbekistan is particularly eager to tap into the full potential of the INSTC and the Chabahar Port. Uzbekistan also recently dispatched its first cargo to India via the INSTC.
The Presidential Center of Kazakhstan hosted the international exhibition “Triptych on humanity, monuments and nature” from the collections of the Bihar Museum.The exhibition centers on the subject of the oneness of humanity, monuments and nature. The Bihar Museum is among the youngest and largest museums in India, located in the ancient city of Patna. Established in 2015, the museum, boasting over 40,000 exhibits, includes 10 sections, encompassing archeology, history, art and other areas, with valuable items from the ancient times to the present. During the event, a memorandum of cooperation and interaction between the Kazakh Presidential Center and the Bihar Museum, aimed at greater bilateral ties in art, was signed. This is the first time the art works of India are exhibited at the Presidential Center. The memorandum will further strengthen cultural cooperation and inspire for new projects.
The National Payments Corporation of India (NPCI) has indicated interest in the prospect of combining HUMO and UZCARD payment systems with the Unified Payments Interface (UPI) in Uzbekistan. In a meeting, NPCI representatives delivered a presentation on India’s digital payment systems, highlighting the distinctive attributes of the NPCI payment system, its widely used and user-friendly services, the newest technological advancements, and adherence to cybersecurity standards. The parties laid the groundwork for cooperation and sharing of know-how in the realm of cyber security development.
Osh International Airport has become the starting point for a new chapter in cooperation between Kyrgyzstan and India with the launch of the first international charter flight, Osh — New Delhi — Osh. The weekly Tuesday flight aims not only to improve transportation links but also to strengthen the economic and diplomatic relations that are important for both countries.
Uzbekistan Airways will now operate regular flights between Tashkent and Goa twice a week, on Wednesdays and Sundays. The new route offers citizens of Uzbekistan and travelers from neighboring countries convenient access to Goa’s popular beach destinations, while also providing Indian tourists from Goa and surrounding regions direct travel to Uzbekistan. Currently, Uzbekistan Airways and IndiGo operate a combined total of 16 weekly flights from Tashkent to India’s major cities, Delhi and Mumbai. With the addition of the new route to Goa, the total number of weekly flights between Uzbekistan and India has risen to 18.
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