Economic Developments - February 2019

According to World Bank, growth of Kazakhstan’s economy will decrease to 3.5% this year as oil production growth levels off and further fiscal consolidation efforts continue. Global growth slowdown could decrease remittances from Russia and Kazakhstan to Uzbekistan, Tajikistan and Kyrgyzstan. Kyrgyzstan and Tajikistan lead the region in share of remittances to GDP at 35% and 32% respectively.

China and Central Asia have been witnessing a boom in trade volume, especially in energy sector. In 2018, Central Asian countries exported 50 billion cubic meters of natural gas to China, a 30% increase from 2017.

Largest solar power station, not only in Kazakhstan, but also throughout Central Asia, with a capacity of 100 megawatts, was launched in Karaganda region near Astana in January, 2019. An international team of investors and specialists from Germany, Czech Republic and Slovakia executed the project. The plant uses 307,000 PV panels which cost $137 million.

Kazakhstan and Uzbekistan are planning to introduce a new common "Silk Visa" which will enable foreigners with a valid visa from either country to travel in both countries.  This "Asian Schengen" visa would increase trust between Kazakhstan and Uzbekistan and boost tourism of both countries. Tajikistan and Kyrgyzstan have also expressed interest in joining this project.

Turkmenistan has started building a $2.3 billion highway connecting its capital to the Uzbek border as part of a plan to diversify the economy by developing the logistics and transportation sectors. Turkmenistan wants to offer Uzbekistan, a major exporter of metals and agricultural commodities, access to Caspian Sea from where cargo can be shipped to Russia, Iran and Azerbaijan. 

Kazakhstan has attracted more than $300 billion in FDI since independence, making the country the leading investment destination in Central Asia. Over the past two years alone, foreign investors have brought over $20 billion to Kazakhstan’s economy.

EU Special Representative for Central Asia Peter Burian stated that Uzbekistan could become an economic leader of Central Asia and that EU is ready to support the country’s initiatives with grants as well.

 

February 28, 2019

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About the Author

Ambassador Ashok Sajjanhar belongs to the Indian Foreign Service and has acquitted his responsibilities in the diplomatic service for 34 years. He was Ambassador of India to Kazakhstan, Sweden and Latvia and has worked in senior diplomatic positions in Indian Embassies/Missions in Washington DC, Brussels, Moscow, Geneva, Tehran, Dhaka and Bangkok and also at Headquarters in India. He negotiated for India in the Uruguay Round of Multilateral Trade Negotiations and in negotiations for India-EU, India-ASEAN and India-Thailand Free Trade Agreements.

He contributed significantly to strengthening strategic ties and promoting cultural cooperation between India and USA, EU, Russia and other countries.Ambassador Sajjanhar worked as head of National Foundation for Communal Harmony to promote amity and understanding between different religions, faiths and beliefs. Ambassador Sajjanhar has been decorated by Governments of Kazakhstan and Latvia with their National Awards and by Universal Peace Federation with Title of ''Ambassador of Peace.'' Currently Ambassador Sajjanhar is President of Institute of Global Studies, New Delhi. He writes, travels and speaks extensively on issues relating to international relations, foreign policy and themes of contemporary relevance and significance. He appears widely on TV panel discussions. Ambassador Sajjanhar is interested in reading, music and travelling. His wife Madhu is an economist and an educationist. They have a son and a daughter both of who are accomplished singers. Their son passed out of Yale University and their daughter is pursuing her PhD at University of Minnesota.