This week, the media in the region covered several important summits and state visits, such as Kyrgyzstani President Sadyr Japarov’s visit to South Korea and Kazakhstani President Kassym-Jomart Tokayev’s attendance at the One Water Summit in Riyadh and the Doha Forum. They also reported on Tajikistan and Kyrgyzstan finalizing the demarcation of their shared border. Several outlets noted the introduction of new restrictions on migrant labor in Russia, while multiple sources also reported on the EDB promising $500 million towards constructing the Kambar-Ata 1 HPP. Finally, some media organizations noted the discovery of a significant new mineral deposit in Kazakhstan.
Kyrgyzstani President Sadyr Japarov visited South Korea this week. Source: Daryo
Diplomatic events
Tajikistan and Kyrgyzstan have demarcated the final disputed parts of their border (Daryo). On December 4, the heads of the State Committees for National Security of Tajikistan and Kyrgyzstan, Saimumin Yatimov and Kamchybek Tashiyev, met in Batken, Kyrgyzstan, to finalize the agreement. Although formal talks regarding the delimitation of the border began in 2002, disputes over irrigation and unauthorized border crossings occasionally spilled over into violence. Since the last outbreak of violence along their shared border in 2022, both men have led negotiations to resolve the dispute. Thus far, several working groups have been tasked with drafting the required documents and agreements to delimit the border. The parliaments and presidents of both countries must now ratify the agreements.
On December 5, the Prime Ministers of Kazakhstan and Kyrgyzstan, Olzhas Bektenov and Akylbek Japarov, attended the 12th Intergovernmental Council between the two countries (24.kg). Both leaders noted the progress in bilateral relations over the past year. Earlier this year, the two countries concluded a treaty on deepening and expanding allied relations. They also reached an agreement on the construction of the Kambar-Ata HPP. The two leaders emphasized the trade growth between both countries, with total trade turnover increasing by 38% between 2019 and 2023. In the first nine months of this year, bilateral trade turnover reached $1.2 billion (Kazinform). They also discussed how to increase bilateral trade to $3 billion by 2030, as set out by the heads of state (24.kg). More specifically, they considered how to advance e-commerce and remove trade barriers. Both sides examined future projects, such as a new logistics park on the state border, a ferroalloy plant at Tash-Kumyr, and the rebuilding of border infrastructure. Alongside the 12th intergovernmental council, a Kazakhstani-Kyrgyzstani business forum was held. Overall, businesses from both countries signed $8.2 million worth of commercial agreements (AKIpress).
On December 3, Kazakhstani President Kassym-Jomart Tokayev arrived in Riyadh, Saudi Arabia, to attend the One Water Summit (The Astana Times). The 16th session of the Conference of the Parties to the UN Convention to Combat Desertification (UNCCD COP16) also occurred alongside the summit. The summit aims to address global water challenges and governance. France, Kazakhstan, and the World Bank co-organized the summit with the cooperation of Saudi Arabia. Addressing the summit, President Tokayev announced plans to hold a regional climate conference in 2026 (The Astana Times). He also called for measures to strengthen water security, pollution control, and disaster resilience. Finally, he proposed establishing a partnership between global research centers to combat glacier loss. On the sidelines of the summit, Kazakhstan’s Ministry of Water Resources and Irrigation, the French Development Agency (AFD), and the French Bureau of Geological and Mining Research (BRGM) agreed to cooperate in preserving Lake Balkhash (The Astana Times). The deal includes the provision of a $1.42 million loan to develop water management systems in the lake. They will also conduct a large-scale study of the basin to create a master plan for preserving the lake until 2040. The study aims to optimize the operation of the Kapchagai dam to ensure water levels in Balkhash remain stable. In recent years, there have been growing doubts over the viability of Lake Balkhash as water levels have begun to decline.
Kazakhstani President Kassym-Jomart Tokayev visited Qatar to attend the Doha forum and discuss various investment projects with Qatari business leaders (Kazinform). He met with representatives of Nebras Power and Power International Holding (PIH) to discuss energy exploration opportunities in Kazakhstan (The Astana Times). During these meetings, he noted the recent agreement between Nebras Power and Samruk-Energy to construct a 300 MW HPP at Semipalatinsk and that Kazakhstan aims to increase the share of renewables in its energy mix to 15% in the coming years. PIH is currently building a gas processing plant in Kashagan, a new line of the Beineu–Bozoy–Shymkent pipeline, the Aktobe–Kostanay gas pipeline, and a steam and gas turbine plant in the Kyzylorda region. President Tokayev also met with Qatar’s Emir, Sheikh Tamim bin Hamad Al Thani (The Astana Times), and attended the Doha Forum (The Astana Times). He also spoke at the forum and highlighted the growing importance of middle powers and the crucial role played by the UN in global politics.
On December 1, the 5th China-Central Asia Foreign Ministers’ meeting occurred in Chengdu (AKIpress). The Foreign Ministers reaffirmed their countries’ commitment to deepening dialogue, expanding trade, and strengthening cooperation. they also touched on regional security issues, transportation and logistics, and the climate and environment during their deliberations.
Kyrgyzstani President Sadyr Japarov visited South Korea last week (Daryo). During the visit, President Japarov and South Korean President Yoon Suk Yeol agreed to elevate their countries’ relationship to a comprehensive partnership. Both leaders also discussed economic, environmental, and energy cooperation. President Yoon Suk Yeol welcomed President Japarov’s support for the Korea-Central Asia cooperation initiative, or K-Silk Road. Both sides focused on environmental cooperation, with Japarov inviting South Korea to attend the “Bishkek+25” global mountain summit next year. They also considered collaboration in the education sector. Following their talks, both leaders signed a Joint Statement on the establishment of a Comprehensive Partnership, a Framework Agreement on Climate Change cooperation, a Framework Agreement on Economic Development Cooperation for 2025-2029, and a series of Memoranda of Understanding (MoUs) in various sectors, including education, digital development, trade, energy, forestry, and post-harvest agriculture, among others.
Migration
Tver Oblast has announced that from 2025, it will expand the number of sectors off limits to foreign labor from 36 to 82 (Asia Plus). Under the new rules, foreign migrants will be prohibited from working in energy and water supply, waste collection, agriculture, vehicle manufacturing, and computer manufacturing. In 2024, bans were introduced in the retail, education, healthcare, and financial services sectors. The cost of a work permit for Tajikistani migrants will also rise by 39.4% in 2025. The regional authorities have emphasized that these measures aim to create jobs for locals. These changes come amid rising anti-migrant sentiment in Russia following the Crocus City terrorist attack. This week, Mikhail Matveyev, a member of the State Duma, attributed the rouble’s depreciation to the remittances of Central Asian migrants (The Times of Central Asia). He argued that migrants removed substantial sums from the Russian economy, fuelling demand for foreign currencies and weakening the rouble. As Central Asian countries refused to process payments through Russia’s Mir system, they had to withdraw money in dollars to send home. His statement follows a sharp depreciation in the rouble’s value over the last week.
Investment
The European Bank for Reconstruction and Development (EBRD) announced it will provide €267 million to the Kazakhstan Electricity Grid Operating Company (The Times of Central Asia). The loans will enable them to construct approximately 600 kilometers of 500 kV transmission lines. The initiative is part of the EBRD’s efforts to assist Kazakhstan achieve carbon neutrality by 2060. The new transmission lines will help integrate 12 GW of renewable energy into the power system by 2030. Previously, the country’s power grid was divided into three sections. The EBRD helped connect the southern and northern sections, but the western section remains isolated. The initiative will complete the unification of the system by financing the construction of the 500 kV Karabatan-Ulke power line along the Atyrau-Aktobe motorway.
At a press conference in Almaty, the chairman of the management board of the Eurasian Development Bank, Nikolai Podguzov, stated that the bank will allocate $500 million towards the construction of the Kambar-Ata 1 HPP in Kyrgyzstan (24.kg). He also offered to partner with the World Bank, which is updating the project’s feasibility study. Overall, the project is expected to cost between $3 and $4 billion. The Kambar-Ata 1 HPP is crucial to Kyrgyzstan's future energy infrastructure. In recent years, like many countries in the region, Kyrgyzstan has struggled with energy shortages, with President Japarov even declaring a state of emergency in the country’s energy sector.
Uzbekistan has received $220 million in concessional loans from China’s Export-Import Bank (Eximbank) to reconstruct irrigation systems in four regions (Kun). The project will focus on the Bukhara, Namangan, and Surkhandarya regions, with $160 million invested. Kashkadarya region will also receive $60 million. CITIC Construction and China CAMC Engineering are the principal contractors for the project. In recent years, efforts to improve the region’s water infrastructure to guarantee future water sustainability and security have intensified.
Between January and October 2024, Uzbekistan received $12.6 billion in remittances, a 34% increase compared to the same period in 2023 (Kun). $9.8 billion, or 78% of the remittances, came from Russia, a rise of 35%. Other countries that contributed significantly include the United States, South Korea, Turkey, Kazakhstan, and the United Kingdom. The Central Bank attributed this rise to wage growth in key countries, especially Russia. Organized recruitment of migrants also rose due to greater opportunities in Europe and elsewhere.
Energy
Da Afghanistan Breshna Sherkat (DABS), Afghanistan’s electricity provider, has signed an agreement with Tajikistan to secure electricity imports for 2025 (Bakhtar News Agency). Afghanistan currently relies on electricity imports from neighboring countries, such as Tajikistan, Uzbekistan, Turkmenistan, and Iran. However, there has been growing interest in developing Afghanistan’s energy sector in recent years, and the country aims to enhance its domestic energy production capacity. In 2008, Tajikistan and Afghanistan signed an agreement that would see Tajikistan supply Afghanistan with electricity until 2028 (Asia Plus). A protocol is signed each year specifying the volumes for the year ahead. In the first ten months of the year, Tajikistan exported $102.4 million of electricity, $3.4 million less than last year. Currently, Tajikistan sends 80% of its electricity exports to Afghanistan and 20% to Uzbekistan.
Finance
Kazakhstan’s government announced that it was taking measures to stabilize its currency, the tenge (Interfax). On Monday, December 2, the tenge hit a record low of 520 to the dollar. In response, the Economy Ministry stated that it does not expect the country to default and that the necessary reserves are available. This year, Kazakhstan invested $1.5 billion in the Eurobond market, which enabled them to manage the national debt. They also noted that on November 19, the Ministry instructed quasi-state entities to sell 50% of their forex reserves to stabilize the tenge. The Ministry’s spokesperson attributed the collapse in the tenge’s value to the strengthening of the dollar, decreasing oil prices, and the fall in the rouble’s value caused by new Western sanctions against Gazprombank, which handles energy transactions. In last week’s bulletin, we reported that Kazakhstan’s National Bank sold $1 billion from its forex reserves to stabilize the tenge.
Kazakhstan’s Ministry of Trade and Integration has proposed a $60-per-ton export duty on more oil products to fill the gap in the state finances (Kursiv). The Ministry aims to expand the number of oil products subject to export duties, including cyclic and acyclic hydrocarbons, petroleum jelly, certain types of bitumen and bitumen mixtures, lubricants, solvents, additives, and biodiesel. As reported earlier, Kazakhstan is facing a sizeable budget deficit, with additional resources having to be diverted from the National Fund. Kazakhstan is also considering a tax hike for mining companies to compensate for the shortfall in state revenues. They are considering replacing the mineral extraction tax with a new royalties-based taxation system in the new tax code (Kursiv). This change in the tax code would also help the country attract more investment in the sector, as most countries calculate taxes based on the values of resources extracted or a company’s revenue. However, minerals processed domestically will be taxed lower than those exported unprocessed. The mineral extraction tax is levied on mining companies and varies depending on the resource extracted, production volume, and market price.
Mining
This week, Kazakhstani authorities announced the completion of exploratory work at a new rare earth metals deposit at Kuyrektykol (Kursiv). The Kazakhstani Minister of Industry and Construction, Kanat Sharlapayev, stated that according to estimates, the deposit could contain 800000 tons of minerals and 935400 tons of rare earth metals. However, preliminary data indicates that the site may contain double the amount of minerals. Exploration works are also underway at 12 other sites believed to contain rare earth metals. Global demand for rare earth metals continues to surge as they are essential to manufacturing semiconductors and electronic chips.
Agriculture
Kazakhstan’s agriculture sector, especially its grain trade, continues to experience difficulties and face stiff competition from Russia (Kursiv). Earlier, we reported how Russia had halted all grain imports from Kazakhstan due to alleged phytosanitary irregularities. Kazakhstan’s Food Contract Corporation (FCC), the government body that regulates the grain industry, indicated it intends to pull its investments in the Aktau grain terminal due to increased competition with Russia. Grain shipments from Aktau to Iran have declined dramatically as Russia has sought to redirect its grain shipments from Astrakhan to Iran. Russian grain has thus saturated the domestic and international markets. As a result, the FCC has been forced to sell grain at a reduced price despite having bought it at an inflated price. Logistical problems involving Kazakhstan Temir Zholy (KTZ) have also impacted grain exports. Chinese buyers have regularly noted the instability in grain deliveries from Kazakhstan over the last year, as KTZ has been forced to prioritize shipping other items, such as ore. Farmers will also be negatively affected in the coming year as its forward purchase program has been cut from $190 million to $76 million. Nevertheless, this week, at a meeting in Beijing chaired by Kazakh Agriculture Minister Aidarbek Saparov, Kazakhstani agricultural producers signed agreements with 10 Chinese companies worth $1 billion (The Astana Times). Ahead of the 2025 growing season, the Kazakhstani government has indicated it will provide $1.4 billion in finance for farmers to purchase essential equipment in an effort to strengthen the agricultural industry (Daryo).
