Central Asia, a region that encapsulates the five countries of Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan, and Tajikistan, occupies a pivotal position on the Eurasian continentWith its unique geographical location surrounded by major economies including China, Russia, and the European Union, the region is increasingly becoming a key player in the global trade landscapeAs the Eurasian trade network continues to revive and diversify, these countries are rapidly integrating into global value chains, utilizing their roles as transportation hubs and emerging marketsThe economic prospects for Central Asia in 2024 show promise, with growth rates expected to outperform the global average, highlighting the region’s burgeoning potential.
According to the latest Global Economic Outlook report from the World Bank, 2024 is projected to be the first year of stable global economic recovery since the onset of the pandemic, with a predicted growth rate of 2.6%. In stark contrast, the economic growth predictions for Central Asian nations surpass these figures; Tajikistan is expected to grow by 7.2%, Uzbekistan by 6%, and Kyrgyzstan by 5.8%. These nations stand out as some of the most dynamic economies within Europe and Central Asia.
Kazakhstan, the largest economy in the region, continues to achieve substantial growth, maintaining a robust economic performance that eclipses its four counterparts
Over the first eleven months of the year, Kazakhstan recorded a GDP growth of 4.4%, supported by a remarkable expansion in various sectorsAgricultural output soared by 13.4%, demonstrating the sector's resilience, while trade and transportation also saw significant increases of 8.2% and 8.1%, respectivelyFixed investments rose by 3.1%, with non-oil sectors contributing to over 70% of this growth.
In Turkmenistan, Vice Prime Minister Khojamurat Geldimadov revealed that the GDP increased by 6.3% during the same period, driven largely by a 9.5% rise in trade, along with growth in agriculture, construction, and services, highlighting the diverse sectors contributing to the country’s economic landscape.
A key driving force behind the economic boom in Central Asia has been a concerted effort to bolster tourismWorld Bank Vice President, Antonella Bassani, notes that the rapid development of tourism is a substantial contributor to the region's economic growth
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The rebound of international tourism, reaching approximately 88% of pre-pandemic levels by the end of 2023, has resulted in sustained momentum in this sectorCentral Asian countries are making significant strides in enhancing their tourism frameworks, implementing measures for visa facilitation, developing tourism infrastructure, and launching innovative tourism projects to capitalize on the international tourism revival.
Parked at the forefront of these efforts is Uzbekistan, where President Shavkat Mirziyoyev has enacted numerous initiatives to enhance the country’s tourism appealThese measures include the establishment of twelve new tourist centers, simplifying tax regulations for tourism enterprises, and creating new circular routes for tourism resourcesUzbekistan has implemented a visa-free regime for citizens from 86 countries, significantly easing travel processesThe recent Tashkent International Tourism Fair attracted tourism representatives from countries such as China, Russia, Kazakhstan, and Malaysia, signaling the growing interest in Uzbekistan as a tourist destination
Uzbekistan’s Tourism Committee Chairman, Umid Shadiyev, reported a steady increase in foreign visitors, projecting arrivals to reach 10 million in 2024.
Kazakhstan has been equally proactive in investing in tourism, with fixed investments in the sector reaching 527.6 billion tenge in the first eight months of 2024, reflecting a 69% year-on-year increaseWith 148 investment projects in place by the end of the year, the sector is projected to create about 2,500 jobs and enhance the capacity to accommodate international touristsTourist accommodation facilities are expected to increase by 306, significantly bolstering the country's ability to host foreign visitorsIn 2024, over 11.5 million foreign tourists are anticipated to visit Kazakhstan, with revenue from accommodation facilities rising by 27% and consumer spending by foreign tourists rising to 4.1 billion tenge, marking a 13.4% increase.
The momentum does not stop at tourism; the China-Central Asia cooperation framework has proven efficient in solidifying economic ties between China and the five Central Asian nations
The continued collaboration under the Belt and Road Initiative and the Shanghai Cooperation Organization reflects a refined strategic partnership, characterized by enhanced mutual trust and frequent exchanges in trade and economic venturesThe establishment of the China-Central Asia Secretariat in March 2024 has accelerated the implementation of various economic agreements, fostering a higher quality of economic cooperation.
In the realm of energy cooperation, China and Central Asian countries are focusing on shared strategic objectives to confront the challenges and opportunities posed by green transformationCollaborative projects within the oil, gas, mining, power generation, and new energy sectors are unfolding, including the modernization of major energy facilities such as the Almaty photovoltaic power station and the Chirchik oil refineryThese investments play a crucial role in achieving carbon reduction goals and addressing global climate change, while simultaneously fostering sustainable development and economic growth.
Agricultural cooperation has also gained traction, with countries capitalizing on the potential for increased trade of agricultural and livestock products
Kazakhstan aims to tap into the Chinese market with eleven new enterprises slated for expansion, backed by a commitment to export 100,000 tons of grain and oilseedsFurthermore, Uzbekistan's "Central Asia Water-saving Irrigation Technology Research and Demonstration" project has successfully increased irrigation efficiency and crop yields, showcasing the potential for technological investments in sustainable agriculture.
In order to enhance connectivity within the region, a trilateral government agreement was signed between China, Kyrgyzstan, and Uzbekistan in June 2024 to advance railway construction projectsThe inauguration of the China-Kyrgyzstan-Uzbekistan railway project in December 2024 marks significant progress, representing a crucial step toward deeper economic integrationThe number of freight trains between China and Europe has surged, with statistics reflecting a historic record of over 8,000 trains in 2023 alone
The "Tianfu" cross-border bus service, launched in 2022, has also become a vital link, servicing key cities across the five Central Asian nations.
The fifth meeting of foreign ministers from the Central Asian countries on December 1, 2024, further established the China-Central Asia cooperation mechanism as a vital platform for regional collaborationThe ministers recognized the efficacy of this mechanism in promoting bilateral partnerships and expressed commitment to further strengthen strategic trust and collaborative endeavors to construct a shared community of destiny.
In conclusion, the Central Asian region embodies immense economic potential, marked by consistent growth even amidst global economic turbulenceSeveral factors contribute to the optimism surrounding the future of economies in this regionThe demographic dividend, characterized by a growing population with an increasing average age, coupled with enhancements in educational attainment, supports an expanding labor market and rising consumer demand, thus rendering Central Asia an attractive market for investment.
Moreover, deeper regional integration within frameworks such as the Eurasian Economic Union has fostered improved trade relations, setting the stage for enhanced cooperation in trade and reducing transaction costs