ALMATY — Central Asia is growing fast: Kazakhstan is expanding at around 5%, and Uzbekistan is exceeding 6%. Yet beneath these headline figures lies a more familiar economic reality, where exports remain heavily concentrated in commodities, productivity outside resource sectors is still limited, and much of the growth continues to be driven by the state rather than by a dynamic private sector.
The fireside chat at GITEX AI Central Asia & Caucasus on May 4, moderated by The Astana Times’ Aida Haidar focused on how the region’s diversification efforts are perceived from the outside by investors. Photo credit: The Astana Times
These contradictions framed a discussion I moderated at GITEX AI Central Asia & Caucasus on May 4, during a fireside chat titled Redefining Growth: Diversification in a Volatile World with Economic Development Counsellor for Central Asia at the United Kingdom (UK)’s Foreign, Commonwealth & Development Office Charlie Morris about how the region’s diversification efforts are perceived from the outside, particularly by governments, investors, and partners who are being asked to engage with its next phase of growth.
AI ambitions: a regional game or going solo?
While Central Asia’s economies remain rooted in commodities, the region is simultaneously positioning itself within the global AI landscape, a shift that introduces both opportunity and new constraints, particularly given that AI infrastructure is highly energy-intensive. Kazakhstan’s ambitions to develop a “data valley,” alongside Tajikistan’s vast hydropower potential, suggest that energy could become an unexpected strategic advantage in the AI economy, raising the question of whether countries should pursue these ambitions independently or as part of a coordinated regional effort.
Morris emphasized that collaboration is essential, not only in the context of emerging technologies but also in more traditional areas such as regional energy systems.
“When it comes to AI and tech more generally, I think you have a huge amount of ambitious, young, educated, talented people who are building some fantastic companies. But ultimately, from the UK perspective, from the perspective of talking to investors and companies here, people want to engage with the region,” he said.
The region’s combined population, approaching 100 million, is one of its most significant yet underutilized advantages, particularly from an investor perspective, where scale often determines attractiveness.
“That’s exciting. That’s something that people can understand. Dealing with smaller markets is more difficult,” Morris said.
However, this potential remains constrained by fragmentation, as Central Asia still operates more as a collection of individual markets than as a unified economic space, limiting its ability to fully leverage that scale.
The ‘boring’ foundations of growth
Despite the growing emphasis on AI strategies and large-scale investment announcements, Morris pointed to a less visible but more decisive layer of economic reform: improving the everyday business environment and institutional efficiency.
“To give you an example, you can attract an investment for a big AI data center, that’s great. But it’s also really hard for your businesses to get licenses to operate, to pay their taxes, to set up offices, all of these just really basic, but ultimately still quite difficult things. You’re not going to get the piece of reform that you want because your economy is being held back. So you might get one of those big shiny announcements, but some of that is often more boring,” he said.
These structural constraints, while less visible than headline investments, ultimately determine whether economic transformation is sustainable.
Investor optimism — with reservations
While Central Asia is often described as a region of untapped potential, Morris offered a more grounded assessment, noting that although economic growth is real, its underlying structure remains a concern for investors.
“So when it comes to economic growth, I think there’s no doubt consistently you are seeing real kind of genuine economic growth here. That is happening, that is not a lie. But the question is, what is that growth? What actually underlies it? I think sometimes in those examples, you’ll see it’s mostly still more state-driven approaches rather than real entrepreneurial private sector level for export-led manufacturing in Central Asia,” he said.
According to him, private investment will be essential to long-term growth, but its pace remains uneven across the region.
“I think in some of the cases where it’s happening slowly, people are still worried about investor protection. Investors ultimately want to know that they can get their money in easily, they’re going to be able to make a profit, and they can take their money out. That’s what investors care about,” Morris said.
The AI illusion and economic reality
As the conversation turned to the future, Morris also highlighted what he sees as a common misconception among policymakers globally: the belief that AI can serve as a universal solution to structural economic challenges. At the same time, he acknowledged that governments in Central Asia have demonstrated significant commitment and momentum in developing AI strategies.
“I think Kazakhstan is an obvious example of a government that is having some really impressive action and reform. So there is lots and lots of excellent reform that’s happening already,” he said.
However, he stressed that technological ambition must be accompanied by deeper structural transformation.
Looking beyond the current AI narrative, Morris pointed to sectors often overlooked in discussions of future growth, yet that have historically played a central role in economic transformation.
“Tech is really important. I think tech exports are even more important. But we should also remember some of those basic things like increasing productivity of agriculture, farming, focusing on manufacturing. Those things still matter to the overall growth story. Тhere is plenty that AI and tech can do to increase innovation and productivity within those sectors to make them even more competitive,” he said.
