ASTANA – Relations between Kazakhstan and Uzbekistan, the largest economies of Central Asia, are expected to receive another boost. President of Uzbekistan Shavkat Mirziyoyev will travel to Kazakhstan on Aug. 7 for an official visit.
Mirziyoyev and Tokayev shake hands during Mirziyoyev’s official visit to Kazakhstan in December 2021. Photo credit: akorda.kz
According to Mirziyoyev’s press office, the visit will include negotiations with President Kassym-Jomart Tokayev and the first meeting of the Supreme Interstate Council. The discussions will focus on the current issues pertaining to the partnership, including expanding cooperation in trade, industry, transportation and logistics, energy, agriculture, and water management.
A solid package of documents aimed at strengthening bilateral relations is expected to be adopted.
Frequent high-level contacts
The partnership between the two neighbors has intensified over the past years, with frequent high-level visits.
In addition to informal visits to attend high-level summits, the latest being the Shanghai Cooperation Organization summit, Mirziyoyev was on a state visit to Kazakhstan in December 2021. This was when he and President Tokayev announced that bilateral ties would elevate to a new level—from strategic partnership to alliance.
One year later, Tokayev traveled to Tashkent for a state visit. During the visit, fifteen documents were signed.
$10 billion in trade in the coming years
According to the Kazakh government data, Kazakhstan and Uzbekistan account for 57% of all trade in Central Asia.
The Bureau of National Statistics indicated that last year’s trade turnover between the countries reached $4.4 billion, with exports equaling $3.1 billion and imports – $1.3 billion.
Trade was slightly higher at $4.9 billion in 2022. With some fluctuations, trade is growing. In the first five months of 2024, the volume exceeded $1.5 billion.
Kazakhstan’s major export items to Uzbekistan include wheat, metal products, automobiles, flour, petroleum products, and copper ores and concentrates. Meanwhile, Uzbekistan exports cars, fruits and vegetables, ethylene polymers, bricks, tiles, coated flat-rolled products, and nitrogen fertilizers to Kazakhstan.
Kazakhstan and Uzbekistan have set a goal of increasing their bilateral trade turnover to $10 billion in the coming years, reflecting the strengthening economic ties between the two Central Asian nations.
The two countries have been focusing on enhancing cooperation in various sectors, including energy, agriculture, and manufacturing.
According to the Kazakh government, industrial cooperation envisages the implementation of 69 projects worth $3.1 billion with the creation of more than 14,700 jobs.
As of today, 12 joint projects worth $217 million have been implemented, creating nearly 4,500 jobs. Three investment projects worth $178 million are currently being implemented. One of the major projects is an electrometallurgical plant in the city of Taraz with a capacity of 500,000 tons of steel products.
At an informal meeting in Khiva in April, Tokayev and Mirziyoyev expressed support for initiatives aimed at strengthening regional cooperation, including the establishment of a joint venture between their railway administrations. This partnership is designed to facilitate freight transportation along the China-Kazakhstan-Uzbekistan route, which is expected to enhance bilateral trade and increase the volume of transported goods.
The agreement also includes the mutual provision of freight terminals at the Kazakhstan-China border and within Uzbekistan, which are anticipated to significantly boost cargo shipment capacity. By enhancing trade and transportation infrastructure, the project aims to create favorable conditions for increased freight traffic, especially towards the south.
Central Asia International Center for Industrial Cooperation
The Central Asia International Center for Industrial Cooperation is another significant collaborative initiative between Kazakhstan and Uzbekistan aimed at bolstering economic ties and fostering regional development.
The center, which spans 100 hectares in the Turkistan Region in Kazakhstan and Syrdarya Region in Uzbekistan, is designed to create additional incentives for joint productions. It will house various production sites, warehouses for storing goods and equipment, and transport infrastructure. This will speed up cargo delivery and reduce logistics costs.
In November 2023, Kazakhstan’s Minister of Trade and Integration, Arman Shakkaliev, and Uzbekistan’s Minister of Investment, Industry, and Trade, Laziz Kudratov, signed an agreement on regulating the center’s activities.
In February, the working group in charge of establishing the center met at the Gulistan customs post in Uzbekistan’s Syrdarya Region. The working group is chaired by Kazakh Vice Minister of Trade and Integration Kairat Torebayev and Uzbek Deputy Minister of Investment, Industry and Trade Khurram Teshabaev.
At the meeting, the administrations of Turkistan and Syrdarya regions signed a roadmap for the implementation of the project. Global Textile, one of the leading textile companies in Uzbekistan, signed a memorandum of cooperation with TCL gr, the Kazakh investor in the project. The Uzbek company will launch the first investment project at the center to produce finished textile products.
The technical launch of the industrial cooperation center is slated for the fourth quarter of 2026, while the official opening is scheduled for the first half of 2027.
Water and energy nexus
Water and energy issues are crucial in the cooperation between Kazakhstan and Uzbekistan due to the interdependent nature of water and energy resources in Central Asia.
Kazakhstan and Uzbekistan both rely on the Syr Darya and Amu Darya rivers for water. These rivers originate in upstream countries, the Kyrgyz Republic and Tajikistan, and flow through Uzbekistan before reaching Kazakhstan.
Increasingly problematic water issues, including because of climate change, coupled with burgeoning industrialization and population growth, have strained these vital resources.
A cooperative approach is therefore seen as vital to prevent severe consequences.
“Today, in Central Asia, the issue of access to water is very acute, exacerbated by climate change. The consumption of water resources is increasing with population growth, rapid urbanization, and active industrial development. From 2018 to 2023, the urban population in the region increased from 9.5% to 16%. According to the UN, by 2030, the urban population will exceed the rural population, and by 2050, the gap will increase by 46%—to 57 million people,” said Akramjon Nematov, first deputy director of the Institute for Strategic and Regional Studies under the President of Uzbekistan Akramjon Nematov, at the recent Kazakh-Uzbek Expert Council meeting in Astana.
He pointed out that as the population and economy grow, the demand for energy is also rising.
“Currently, electricity trade satisfies only 2.5% of the demand. This is only 40% of the interconnection capacity in the region. This insignificant volume of trade is due to the lack of a market platform and the poor regional network management, aging infrastructure, and weak coordination,” he said.
Kazakhstan and Uzbekistan contribute to Central Asia’s prosperity
Experts say increased cooperation between the two countries is a major factor contributing to Central Asia’s stability and prosperity.
Kazakhstan and Uzbekistan, the two largest economies in Central Asia, are playing pivotal roles in shaping the region’s economic landscape. With their diverse economies and strategic initiatives, they are driving growth and development across Central Asia.
“At the same time, our economies are not standing still – they are transforming and showing significant growth. For example, in five years – from 2018 to 2023 – Kazakhstan’s GDP increased by $80 billion, from $179.34 billion to $259.29 billion, and Uzbekistan’s GDP by $38 billion, from $52.87 billion to $90.9 billion,” said Aidar Kurmashev, head of the Asian Studies Department at the Kazakhstan Institute for Strategic Studies (KazISS).
