Transport Infrastructure

Can Uzbekistan Challenge Kazakhstan as Leading Central Asia Logistics Hub?

Recent developments suggest that Uzbekistan is seeking to strengthen its position in regional logistics, potentially challenging Kazakhstan’s role as Central Asia’s principal transit hub. As geopolitical tensions increase, alternative transport routes are becoming increasingly important, and Central Asia stands out as a relatively stable region. Both Kazakhstan and Uzbekistan are investing heavily in expanding their transport infrastructure.

The key question, however, is how practical and commercially viable these new projects will prove to be. Which country will ultimately be able to offer faster, cheaper, and more reliable transport corridors?

Uzbekistan’s Plans

In early July, Uzbekistan presented proposals for expanding its transport and logistics infrastructure, as officials sought to make greater use of what they described as the country’s underdeveloped transit potential.

Officials noted that Uzbekistan occupies a strategic position connecting East and West. The country hosts approximately 4,000 kilometers (2,485 miles) of international transit corridors and has a railway network stretching 4,700 kilometers (2,920 miles).

Modern logistics centers and “dry ports” are being developed in Tashkent, Navoi, and Namangan. Navoi Airport already serves as an important cargo hub on Eurasian air routes. Authorities believe that construction of the China-Kyrgyzstan-Uzbekistan railway, together with the proposed Trans-Afghan Railway, could further strengthen Uzbekistan’s position within both regional and international transport networks.

Project planners argue that, once completed, these corridors will make Uzbekistan a key segment of the shortest overland route between the Pacific Ocean and Europe. They estimate that cargo transit times could be reduced to eight days, roughly three times faster than many traditional routes. That said, the statement provided no methodology or precise endpoints for the estimate; existing China-Europe rail services generally take considerably longer.

Officials also say access to Pakistan’s ports of Karachi and Gwadar would provide Uzbekistan with a gateway to the Indian Ocean and a shorter route to South Asian markets with a combined population of around 2 billion people. Gwadar is not yet connected to Pakistan’s main railway network, however, meaning that substantial additional infrastructure would be required.

Significant Shortcomings

Uzbek officials estimate that annual trade between China and Europe amounts to approximately $800 billion, while cargo volumes total between 120 million and 150 million metric tons each year.

The government estimates that attracting an additional 15-20 million tons of international transit cargo annually could generate $400-600 million in revenue, draw around $3 billion into logistics facilities, and create approximately 50,000 permanent jobs.

The presidential administration also said this could add 1.5-2 percentage points to annual economic growth, given that Uzbekistan currently captures only 1-2% of China-Europe freight – it did not explain how either figure was calculated.

Although transit cargo volumes reached 15.3 million tons in 2025, an increase of 54% compared with 2021, officials believe the country’s existing infrastructure could support significantly higher volumes.

At present, however, many border crossings lack sufficient capacity to process international freight efficiently.

Uzbekistan currently operates 27 logistics centers that meet international standards, with a combined handling capacity of 27.2 million tons. Yet only one of them qualifies as a top-tier facility. Class A automated warehouse capacity covers only 10-15% of current demand, while modern refrigerated storage and customs warehouses remain in short supply.

Logistics infrastructure is also concentrated primarily in and around Tashkent. Containerization rates remain relatively low, government information systems are not yet fully integrated with private logistics operators, and the sector’s overall level of digitalization continues to lag behind.

Kazakhstan’s Offer

Like Uzbekistan, Kazakhstan is a landlocked country. Over the past several years, however, it has developed into one of the principal transit hubs linking Asia and Europe. Freight traffic along the Trans-Caspian International Transport Route (TITR), or Middle Corridor, has increased almost sixfold since 2020, while total transit cargo reached 36.9 million metric tons in 2025. Even so, analysts continue to question whether the country can turn these gains into a lasting competitive advantage.

Kazakhstan is crossed by four major international transport corridors that form an extensive east-west and north-south network.

The Western Europe-Western China highway stretches 8,445 kilometers (5,247 miles), of which 2,787 kilometers (1,732 miles) run through Kazakhstan. The route links Russia’s Volga region with the Chinese port of Lianyungang, creating a land-based alternative to traditional maritime routes around Eurasia.

Kazakhstan is crossed by several major international transport corridors that form an extensive east-west and north-south network. The country has long benefited from its geographic position and has spent more than a decade expanding its transport infrastructure. Analysts argue, however, that roads and railways alone cannot guarantee competitive transit. Freight operators also require predictable tariffs, efficient customs procedures, and reliable border crossings.

One corridor has gained particular momentum in recent years: the Middle Corridor.

Its rapid growth has largely been driven by geopolitical developments. Russia’s invasion of Ukraine, Western sanctions against Moscow, and efforts by international businesses to diversify supply chains have significantly increased Kazakhstan’s importance as a transit country.

In 2025, Kazakhstan handled 36.9 million metric tons of transit cargo, 6.6% more than in 2024. Across the transport sector as a whole, including domestic and international freight, railways carried 320 million tons, an increase of 5.5%, while maritime transport handled 8 million tons, up 7%.

According to analysts, Kazakhstan is increasingly combining global transit flows with regional logistics, although it has yet to fully realize its potential. It still needs faster customs procedures, more predictable pricing, and better coordination with neighboring countries.

Without these reforms, analysts warn, Kazakhstan risks remaining merely a transit territory while much of the added economic value is captured elsewhere.

The evolution of the Middle Corridor illustrates both the opportunities and the remaining challenges.

In 2020, only about 800,000 tons of cargo moved along the Trans-Caspian route. By 2024, that figure had increased to 4.5 million tons.

Only a few years ago, the corridor was regarded as a niche alternative. Following the outbreak of war in Ukraine, however, the route connecting China with Europe through Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, and Turkey has become the principal established China-Europe corridor that avoids Russian territory.

Obstacles Facing Uzbekistan’s Routes

Geopolitical upheaval is making the Middle Corridor increasingly important. The World Bank estimates that investment and operational reforms could halve transit times and increase traffic across the Caspian to 11 million tons by 2030, approximately three times the 2021 level. It nevertheless expects the route to remain primarily regional, with transcontinental freight accounting for less than 40% of its traffic.

Uzbekistan’s proposed alternative routes face obstacles of their own.

Official construction of the China-Kyrgyzstan-Uzbekistan railway began in December 2024. In an interview with Exclusive.kz, Kyrgyz economist Murat Musuraliyev questioned whether the railway would attract significant volumes of transcontinental freight. He argued that its most natural market would be cargo destined for southern Kyrgyzstan, Uzbekistan, Tajikistan, and eastern Turkmenistan.

Musuraliyev pointed to the difficult terrain and the additional border procedures involved in extending the route farther west. The line through Kyrgyzstan requires extensive tunneling and bridge construction, particularly around the high-altitude Torugart Pass. He described the established route through Kazakhstan as more competitive because Chinese freight can pass directly into Kazakhstan before reaching the Caspian. By contrast, cargo using a southern route could encounter several additional borders, depending on its destination. Musuraliyev estimated that each crossing could add another day to the journey.

The outlook for the route through Afghanistan also remains uncertain.

The Trans-Afghan railway has yet to move beyond planning and feasibility work. Its implementation faces major challenges, including financing and the need to construct extensive new infrastructure across Afghanistan. Security conditions and the international status of the Taliban government could further complicate investment.

Competition Benefits the Region

The growing competition between Kazakhstan and Uzbekistan is positive for Kazakhstan’s economy, according to Kazakh political analyst Dosym Satpayev.

Investors are attracted by the region’s stability. Satpayev recalled that in the 1990s, some analysts compared Central Asian countries with Afghanistan or the Balkans.

Since 2018, the region’s heads of state have held regular consultative meetings. In Satpayev’s view, this development is connected to changes in Uzbekistan’s foreign policy.

Following the death of Uzbekistan’s first president, Islam Karimov, and the rise to power of Shavkat Mirziyoyev, the country opened itself more fully to external engagement.

“This is also an advantage for Kazakhstan. Uzbekistan has become an economic competitor for us. It is important for the region to have such a strong economic player nearby,” Satpayev said in an interview on the YouTube channel of Armanzhan Baitassov.

He also believes that the conflict in the Middle East is increasing interest in overland transport routes, especially the Middle Corridor. According to Satpayev, around 80% of the relevant transit passes through Kazakhstan, with goods transported by rail from China and then transferred to ships at the Port of Aktau.

Healthy competition is therefore beginning to emerge in the region and could accelerate the full implementation of alternative transport routes.

For now, Kazakhstan retains the stronger position. Its railway network already carries Chinese freight to the Caspian, while Uzbekistan’s most ambitious routes remain under construction or at the feasibility stage. Uzbekistan could eventually draw more traffic southward, but its proposed eight-day journey between the Pacific and Europe remains a highly ambitious projection.

Water Management

UN: Uzbekistan Makes Major Progress in Reducing Water Stress, but Challenges Remain

Uzbekistan has recorded one of the world’s fastest reductions in water stress in recent years, according to a new United Nations case study on the country’s water-management policies. The study points to efforts to conserve water, modernize irrigation, and expand regional cooperation. It also warns that Uzbekistan remains under pressure from climate change and rising water demand, while environmental damage linked to the Aral Sea disaster continues to affect the country.

The study, prepared by UN-Water, examines how Uzbekistan managed to reduce water withdrawals while maintaining agricultural production and economic development. The report describes the country’s experience as particularly relevant for other water-stressed regions and countries seeking practical solutions to increasing pressure on freshwater resources.

Water has long been one of Uzbekistan’s most strategic resources. Much of the country consists of arid and semi-arid landscapes, while agriculture remains heavily dependent on irrigation. The challenge has become even more urgent as climate change affects water availability across Central Asia.

According to the UN report, Uzbekistan’s level of water stress increased steadily until 2017. Since then, the country has undertaken large-scale reforms aimed at reducing water consumption and introducing more efficient technologies. These efforts have produced measurable results.

In 2017, Uzbekistan’s freshwater withdrawals reached 169% of its total renewable freshwater resources. By 2021, that figure had fallen to 122%. Although still above sustainable levels and considerably higher than the regional average of 69%, the reduction of 47 percentage points within four years represents one of the most significant improvements recorded globally under Sustainable Development Goal 6, which focuses on clean water and sanitation.

Data cited by the report show that total freshwater withdrawals declined from 58.9 billion cubic meters in 2017 to 42.5 billion cubic meters in 2021. Most of the reduction came from agriculture, where irrigation withdrawals fell from 53.7 billion cubic meters to 38.5 billion cubic meters during the same period.

The UN attributes much of this progress to strong political commitment. According to the report, water management has become a national priority supported at the highest levels of government.

UN-Water notes that water-efficiency goals have been incorporated into several development programs. These include the 2017-2021 Action Strategy and the New Uzbekistan Development Strategy for 2022-2026. The goals also appear in the Uzbekistan-2030 strategy.

Among the government’s targets are the introduction of water-saving technologies such as drip irrigation, sprinkler irrigation, and laser land leveling across all cultivated land by 2030. Authorities also aim to save up to 15 billion cubic meters of water annually, reduce irrigation losses by 25%, and fully digitize the management of 200,000 water intake points.

The report identifies the expansion of water-saving technologies as one of the most important factors behind the country’s progress. Uzbekistan has combined financial incentives, soft loans, and subsidies with training programs for farmers and water specialists. According to UN-Water, this approach has helped reduce investment risks and encouraged wider adoption of modern irrigation systems.

These measures are especially important because agriculture remains Uzbekistan’s largest water user. According to data from the Food and Agriculture Organization of the United Nations cited in the report, agriculture accounts for about 92% of all water withdrawals. Municipal use accounts for about 5%. Industry accounts for around 3%.

The scale of water consumption remains substantial. Freshwater withdrawals amount to roughly 42.9 billion cubic meters annually, equivalent to nearly 3,500 liters per person per day. The report describes this figure as exceptionally high for a country experiencing water stress and argues that continued conservation measures remain essential.

The challenge is closely linked to one of the world’s most severe environmental disasters, the disappearance of the Aral Sea.

The report recalls that the Aral Sea was once among the largest inland bodies of water on Earth. Decades of excessive water withdrawals for irrigation dramatically reduced its size, leaving behind the Aralkum Desert across the former seabed. The consequences continue to affect public health, ecosystems, and economic development throughout the region.

UN-Water notes that the environmental impacts remain visible today. Water-related ecosystems are under growing pressure, while river flows have declined significantly.

According to data from the UN Environment Programme, river flow in Uzbekistan decreased by more than 10% between 2017 and 2021 compared to the 2000-2019 baseline. During the same period, the extent of permanent surface water declined by more than 20%.

Reduced water availability also affects water quality. As rivers and lakes contain less water, pollutants and sediments become more concentrated. The report warns that increasing turbidity can damage irrigation systems, reduce reservoir capacity, and lower hydropower generation.

Water management in Uzbekistan is further complicated by geography. All of the country’s major river basins are transboundary, meaning they cross national borders and depend on cooperation with neighboring states.

The Amu Darya, Syr Darya, Zarafshan, and Chirchiq rivers all originate partially or entirely outside Uzbekistan. The country also shares important groundwater resources with neighboring countries.

As a downstream nation, Uzbekistan depends heavily on water originating in upstream states. This reality has made regional cooperation a key component of national water policy.

The report highlights major improvements in relations between Uzbekistan and its neighbors over the past decade. Joint commissions and working groups have been established with neighboring countries, while cooperation has expanded in areas ranging from hydropower development to groundwater management and irrigation infrastructure.

Uzbekistan participates actively in regional institutions such as the International Fund for Saving the Aral Sea and the Interstate Commission for Water Coordination. The headquarters of several regional water organizations, including the Amu Darya and Syr Darya Basin Water Organizations, are located in Uzbekistan and receive financial support from the country.

The report points to Uzbekistan’s growing role in international water diplomacy. Uzbekistan and Kazakhstan are the only two Central Asian countries that are parties to both the UN Water Convention and the UN Watercourses Convention. Uzbekistan has also joined the Protocol on Water and Health.

One issue receiving increasing attention is Afghanistan’s construction of the Qosh Tepa Canal.

The canal, being built upstream from the Amu Darya since 2022, is expected to divert a significant amount of water from the river system. According to the report, the project has increased pressure on Uzbekistan to accelerate water conservation measures.

Rather than pursuing confrontation, however, Uzbekistan has sought cooperation with Afghanistan. UN-Water notes that Tashkent is working with Afghan authorities to promote more efficient and sustainable use of shared water resources despite the absence of formal regional water agreements involving Afghanistan.

The report also highlights progress in drinking water and sanitation services. According to 2024 data from UNICEF and the World Health Organization, 98.6% of Uzbekistan’s urban population has access to safely managed drinking water. In rural areas, the figure stands at 77.7%.

Overall, 98% of the population uses improved drinking water services. About 80.9% of water is supplied through centralized systems, while the remainder comes from non-centralized sources. Sanitation coverage has also expanded. Safely managed sanitation services now reach approximately 75% of the population. Interestingly, the report notes that rural areas perform better than urban areas in this category, with coverage reaching 86% compared to 63% in cities.

Despite this progress, the report says Uzbekistan still withdraws more water than can be replenished sustainably. Climate change and population growth are likely to add further pressure. Agricultural demand and environmental damage will also require continued reforms and investment in the years ahead.

UN-Water presents Uzbekistan as an example of how sustained policy support and technological upgrades can reduce water stress under difficult conditions. The report also points to the role of financing and international cooperation in carrying out those reforms.

For a country in one of the world’s most water-stressed regions, the experience has relevance beyond Uzbekistan. It offers a practical case for Central Asia and for other regions facing growing pressure on freshwater resources.

Tax Policy

Uzbekistan Bank Data Plan Sparks Privacy and Tax Debate

A draft government resolution that would establish unified rules for information sharing between banks and tax authorities has triggered widespread public debate in Uzbekistan, with supporters describing it as a necessary step to combat the shadow economy while critics warn it could weaken constitutional protections for banking privacy.

The proposal, published for public discussion by Uzbekistan’s State Tax Committee, aims to regulate how banks provide information to tax authorities. According to the committee, the document does not introduce new powers for tax officials or abolish bank secrecy. Instead, it seeks to define the procedures, deadlines, formats, and electronic methods for exchanging information already permitted under existing legislation.

The proposal attracted significant attention after some media reports suggested it would allow tax authorities to gain broad access to citizens’ bank accounts and deposits. Responding to the growing discussion, the State Tax Committee issued a public explanation, arguing that these interpretations do not accurately reflect the draft’s content.

“The draft does not grant tax authorities new powers, does not abolish bank secrecy, and does not provide free access to the bank accounts of citizens or businesses,” the committee said. It stressed that banks would continue to provide information only in cases established by law.

The committee pointed to Article 134 of the Tax Code and the Law on Bank Secrecy, which already allow banks to share information related to taxation with state tax authorities under specific legal procedures. It also emphasized that any information received by tax authorities is itself protected as tax secrecy and cannot legally be disclosed or used for purposes other than tax administration.

Officials further argued that similar information-sharing mechanisms exist in many countries, including members of the Organisation for Economic Co-operation and Development (OECD). Uzbekistan has also joined the Global Forum on Transparency and Exchange of Information for Tax Purposes, requiring the country to develop clear and transparent rules in this area.

Despite these assurances, the proposal quickly became one of the country’s most discussed regulatory initiatives.

One of the most controversial provisions concerns peer-to-peer (P2P) transfers. Under the draft, banks would report cases where an individual’s bank card or electronic wallet receives transfers totaling at least 500 times the base calculation amount during a calendar month from people other than close relatives. The measure is intended to identify cases where personal bank cards are allegedly being used for unregistered commercial activity.

Economist Otabek Bakirov criticized the proposal, arguing that it contradicts constitutional guarantees protecting banking secrecy. Referring to Article 41 of Uzbekistan’s Constitution, he noted that the confidentiality of bank operations, deposits, and accounts is guaranteed by law.

Bakirov also recalled that previous attempts to introduce similar monitoring of P2P transactions had been abandoned following constitutional reforms. “I hope this attempt will also fail,” he wrote, calling on parliament, the Central Bank, the Ministry of Justice, the Ministry of Economy and Finance, journalists, and the public not to remain silent during the discussion.

Public comments submitted during the consultation have echoed many of these concerns. According to a review published by Spot, many respondents argued that a government resolution, as a subordinate legal act, cannot limit rights guaranteed by the Constitution.

Several commenters also referred to Article 31 of the Constitution, which protects the privacy of individuals and family correspondence. They argued that mass monitoring of citizens’ financial transactions would amount to a restriction of constitutional rights, which, in their view, could only be introduced through legislation adopted by parliament and, in some situations, based on a court decision rather than by a government resolution.

Other legal concerns focused on Article 134 of the Tax Code. Critics argue that the current law distinguishes between automatic notification of technical information, such as opening or closing bank accounts, and detailed account information, including balances and transactions, which may be provided only upon an individual request concerning a specific taxpayer. Opponents say the draft risks replacing this individual approach with automatic reporting of financial transactions without a specific request or suspicion.

Former member of parliament Rasul Kusherbayev, who now serves as an adviser to the chairman of the parliamentary committee on ecology, warned that the proposal could damage public trust in the banking system.

“The path that destroys trust in banks is the wrong path,” he wrote. Kusherbayev argued that if banks begin regularly transferring information on citizens’ accounts and deposits to tax authorities, many people could lose confidence in the banking sector. “No matter how noble the goals may sound, initiatives that undermine people’s trust cannot be justified,” he said, while urging the Central Bank to maintain its previous position on protecting banking secrecy.

The State Tax Committee has rejected claims that the proposal threatens constitutional guarantees. In a second official statement, it reiterated that bank secrecy remains protected under the Constitution and the Law on Bank Secrecy. According to the committee, Article 11 of that law explicitly allows banks to provide information related to taxation to tax authorities under procedures established by legislation.

The committee also argued that the draft simply implements requirements already envisaged by law. It noted that Article 134 of the Tax Code specifically states that the procedures governing information exchange between banks and tax authorities should be approved by the Cabinet of Ministers.

Officials further linked the proposal to broader government efforts to reduce Uzbekistan’s shadow economy. The committee cited a presidential decree issued in December 2025 aimed at reducing the informal economy, as well as a May 2026 presidential roadmap that specifically instructed authorities to develop rules requiring banks to report large incoming transfers to individuals’ bank cards or electronic wallets, excluding transfers from close relatives.

According to the committee, the proposal is not intended to monitor ordinary transfers between family members, friends, or acquaintances, nor to target loan repayments or routine personal transactions. Instead, it says the focus is on situations where personal bank cards are systematically used as business accounts, allowing individuals to receive significant commercial income without registering a business or paying taxes.

The committee framed the issue as one of fairness. “The state must protect citizens’ banking secrecy,” it said. “At the same time, the state must also protect honest taxpayers.” Officials argued that businesses operating legally and paying taxes should not be placed at a disadvantage compared to those conducting commercial activities through personal bank cards outside the formal tax system.

The discussion has also moved from legal issues to governance and public confidence. Human rights lawyer Ozod Juraboev argued that international experience shows efforts to reduce the shadow economy usually work best when tax systems are simple and transparent enough for voluntary compliance. Additional layers of control, he said, are less effective than a system businesses can follow without unnecessary difficulty.

He also suggested that improving transparency in public spending is equally important.

“Before filling the budget, it is necessary to make clear how that budget is spent,” he wrote, arguing that citizens are more willing to pay taxes when they can clearly see how public money is being used.

The State Tax Committee has invited citizens, businesses, experts, and media representatives to submit comments on the draft. The committee says all proposals received during the consultation will be reviewed before the document proceeds further.

South Caucasus

As Azerbaijan Pushes Back Against Moscow, Central Asia Watches

The recent diplomatic escalation between Azerbaijan and Russia appeared to have run its course in April, after Moscow agreed to pay compensation over the Azerbaijan Airlines crash in Kazakhstan. Instead, the dispute has entered a new phase, and its implications now reach beyond the South Caucasus. On July 6, Azerbaijan’s Ministry of Foreign Affairs summoned Russian Ambassador Mikhail Yevdokimov and handed him a formal note of protest over what Baku described as a Russian drone strike on a fuel station owned by Azerbaijan’s state energy company SOCAR in Ukraine’s Mykolaiv region on the evening of July 5. The Azerbaijani Foreign Ministry said the attack on SOCAR facilities in Ukraine was not an isolated incident. It cited previous strikes on the company’s gas distribution compressor station and oil depot in Odesa, which caused material damage and injured employees. Baku also pointed to earlier damage to the Azerbaijani embassy building in Kyiv and the honorary consulate in Kharkiv, calling on Moscow to investigate and comply with its obligations to protect civilian infrastructure and diplomatic missions. At the same time, Shusha — known to Armenians as Shushi, retaken by Azerbaijan during the 2020 Karabakh war, and still regarded by many Armenians as occupied — hosted an international conference devoted to what participants described as Russia’s “colonial policy,” the “Circassian genocide,” and the situation of non-Russian peoples within the Russian Federation. The conference declaration called on Moscow to “recognize its historical crimes, abandon its chauvinistic policies, and end the forced recruitment of ethnic minorities into the war against Ukraine.” Experts from Azerbaijan, the United States, France, Lithuania, Poland, the Czech Republic, Germany, Israel, Türkiye, and Georgia attended the conference. None of the Central Asian republics was represented. That absence was telling. Central Asian governments may be distancing themselves from Moscow in certain areas, but they remain reluctant to participate in openly anti-Russian political initiatives. For Astana, Tashkent, Bishkek, Dushanbe, and Ashgabat, the question is not whether Russia’s position has weakened, but how far they can move without provoking pressure from Moscow. For Central Asia, the dispute is not a distant quarrel in the South Caucasus. Azerbaijan is now a central link in the westward routes that Kazakhstan, Uzbekistan, Turkmenistan, and Kyrgyzstan are trying to strengthen as alternatives to Russian territory. The Middle Corridor runs from China through Central Asia, across the Caspian Sea, and onward through Azerbaijan, Georgia, and Türkiye to Europe. Any deterioration in Azerbaijan-Russia relations therefore has practical implications for Central Asian transit, energy, and diplomatic room for maneuver. The first major rupture in relations between Baku and Moscow came after Azerbaijan Airlines Flight J2-8243, traveling from Baku to Grozny, was damaged by Russian air-defense fire over Russian territory on December 25, 2024. The aircraft later crashed while attempting an emergency landing near Aktau, Kazakhstan, killing 38 people. Azerbaijan blamed Russia and demanded an apology, accountability, and compensation. Relations deteriorated further in June 2025 following the detention of ethnic Azerbaijanis in Yekaterinburg and reports of torture. The most prominent victims were the Safarov brothers, Huseyn and Ziyaddin, whose brother Sayfaddin Huseynli publicly alleged they had been tortured. In response, Azerbaijani authorities raided the offices of Sputnik Azerbaijan and detained several Russian citizens. In October 2025, during a meeting with President Ilham Aliyev in Dushanbe, Russian President Vladimir Putin acknowledged that Russian air defenses were responsible for striking the Azerbaijan Airlines plane. In April 2026, Moscow and Baku announced an official settlement that included compensation. The agreement appeared to close one of the most damaging episodes between Baku and Moscow since Azerbaijan’s independence. But Baku evidently sees matters differently. Azerbaijani officials view the strikes on SOCAR facilities in Ukraine and the damage to Azerbaijani diplomatic buildings as evidence that tensions with Moscow continue, even after the AZAL settlement. Member of Parliament Rasim Musabayov told journalists that several SOCAR facilities in Ukraine had already come under Russian attack. “We summoned the ambassador and delivered a protest note. I doubt Moscow will change its behavior because of this, but Azerbaijan has done everything required under diplomatic procedure. I do not believe this happened because it was an Azerbaijani facility; had it been a Kazakh one, the same thing would likely have happened. Given Russia’s broader attacks on civilian infrastructure, where people, including women and children, are dying, making a major issue solely over material damage may not be appropriate. Nevertheless, what needed to be said has been said,” Musabayov noted. The diplomatic protest should not have come as a surprise to Moscow. Two weeks earlier, Azerbaijan had already taken a step that further strained relations. An Azerbaijani court sentenced eight Russian citizens to prison terms ranging from three to four years on charges of large-scale drug trafficking. All eight had been detained in the summer of 2025 amid the sharp deterioration in bilateral relations. At that time, the Azerbaijani authorities arrested a group of Russian citizens that included IT specialists, entrepreneurs, and tourists. Their case became another symbol of the widening political dispute, with Russian and independent outlets reporting that some of the defendants denied any connection to drug trafficking. So far, Moscow has not publicly responded to Baku’s latest diplomatic démarche. Escalating the confrontation, however, would not be in Russia’s interests. Azerbaijan serves as a key rail transit route for Russian exports to Armenia, including grain, fertilizers, aluminum, buckwheat, and anthracite coal. On July 6, the first train carrying 30 railcars loaded with 1,026 tons of propane departed from the Bilajari station near Baku en route to Armenia. This transport angle is where the South Caucasus and Central Asia meet. A disruption in Russian-Azerbaijani transit would not automatically threaten the Middle Corridor, but it would remind Central Asian governments that every westward route passes through contested geopolitics. Kazakhstan has made container growth along the Trans-Caspian route a priority, Uzbekistan is looking more closely toward the Caucasus and the Black Sea, and Turkmenistan’s Caspian position gives Ashgabat a direct stake in the corridor’s future. None of these countries wants a confrontation with Moscow, but each wants alternatives. The attack on SOCAR facilities may therefore have served merely as a catalyst for a new round of diplomatic escalation. The deeper driver appears to be growing engagement by the European Union and the United States. European Commission President Ursula von der Leyen visited Baku on July 1 and announced up to €200 million in grant funding for transport, energy, and digital projects across the South Caucasus, along with a separate €20 million program for local communities in Armenia and Azerbaijan. The initiative links peace-building with infrastructure, a formula that matters to Central Asia as much as it does to the Caucasus. For Central Asia, this follows the EU’s launch of a connectivity platform intended to mobilize up to €2 billion for links between Europe and Central Asia through the Black Sea and the South Caucasus. Washington has added its own signal: U.S. President Donald Trump has invited Azerbaijan, Kazakhstan and Uzbekistan to the G20 Summit in Miami on December 14-15, 2026. Central Asian governments are unlikely to follow Baku into open confrontation with Moscow. Labor migration, security cooperation, energy infrastructure, and trade still impose real constraints. Their absence from the Shusha conference underlined that caution. But caution should not be mistaken for immobility. Like Azerbaijan, the Central Asian states are expanding their options through the EU, the United States, Türkiye, China, and intra-regional cooperation. External engagement with the South Caucasus has clearly intensified. Russia, increasingly preoccupied with military operations in eastern Ukraine and pressure from sanctions, risks losing ground in a region it has long regarded as part of its sphere of influence. Central Asia may not be next in the same dramatic fashion, but it is already part of the same process. Azerbaijan is moving faster and louder; Central Asia is moving more carefully. The direction, however, is increasingly visible.

Energy Security

Central Asia’s Fuel Squeeze Becomes a Winter Energy Security Problem

Central Asia’s fuel squeeze is moving from filling stations into winter planning. Governments are now tracking gasoline and diesel, gas pipelines, coal deliveries, power imports, jet fuel, and emergency repair crews. Seasonal fuel and power stress is familiar across the region, but the current pressure - tied to Russia, the main supplier for several regional fuel flows - has arrived early. Russia’s own fuel crisis has sharpened the risk. Ukrainian drone attacks and repair work have cut refinery output, while export limits have pushed more Russian supplies back into the domestic market. Reuters reported queues, regional restrictions, and gasoline above 100 roubles a liter at some independent stations. President Vladimir Putin acknowledged the strain on June 28. “You are well aware that problems for drivers and for businesses persist,” he said, adding that “the harvest depends on” keeping seasonal fuel schedules for farms. For Central Asia, Russian shortages travel through contracts, rail slots, import prices, and public nerves. Kyrgyzstan is among the most exposed. The country consumes about two million tons of fuels and lubricants each year, and almost 95% comes from Russia, according to Deputy Energy Minister Nasipbek Kerimov. “Due to the lack of adequate oil and gas production, we remain a country dependent on imports,” Kerimov said. Bishkek has asked Russia, Kazakhstan, Belarus, Azerbaijan, Uzbekistan, and Turkmenistan for help securing supplies. That dependence is now impacting households, farmers, and small transport firms. The cabinet has capped pump prices and set a subsidy mechanism through September 30. Kerimov said importers were seeing offers at several prices, but promised that “there should be no shortage on the domestic market.” Oil traders put AI-92 stocks at 30 to 45 days, while diesel remained available for harvest work. Kyrgyzstan is trying to buy time through domestic refining. The modernized Junda refinery in the Chuy Region has been pressed to raise gasoline output to 24,000 tons a month soon, then 50,000 tons a month by the end of 2026, with finished products directed to the domestic market. Those gains would help, but Russian supply still sets the pace. Uzbekistan has the Bukhara and Fergana oil refineries, the Altyaryk unit of the Fergana refinery, and the Uzbekistan GTL complex, but demand has still moved faster than domestic supply. In January-April 2026, gasoline imports reached 568,700 tons, worth $327.1 million, more than double the same period in 2025. Local refineries produced 417,500 tons over those four months. A shift away from AI-80 gasoline has also pushed drivers toward AI-92 and AI-95. The pressure reached the exchange in late June. AI-92 gasoline climbed to a record 13.919 million soums per ton on June 29, about $1,160, after an 11.8% rise since the start of the month. Jet fuel has become an issue, too. Uzbekistan Airways reduced some Russia flight frequencies in June, citing aviation fuel shortages and higher costs. Tashkent is now preparing for winter in concrete volumes. On July 6, President Shavkat Mirziyoyev reviewed measures for the 2026-2027 autumn-winter season. The plan includes replacing 53.7 kilometers of defective main gas pipelines, repairing 77 compressor-station gas pumping units, supplying 325,700 tons of liquefied gas, and creating a 120,000-ton motor gasoline reserve for December and January. Thermal power plants are projected to receive 4.161 million tons of coal. Uzbekneftegaz is also due to repair 90 processing units. Tashkent has discussed oil, gasoline, jet fuel, and refinery feedstock supplies with Russian energy companies. Kazakhstan enters the crunch with more domestic refining capacity, but cheap fuel creates its own problems. Kazakhstan’s low pump prices encourage cross-border outflow, especially when neighboring markets pay more. On July 4, Prime Minister Olzhas Bektenov was told that 593 attempted exports of petroleum products, totaling more than 40,000 liters, had been prevented at road checkpoints since the start of the year. Mobile teams stopped another 61 attempts over two days, involving more than three tons in extra tanks and canisters. Gas planning has joined the security picture. On July 7, Bektenov said Kazakhstan’s domestic gas consumption had reached 20 billion cubic meters last year. The government says 13.1 million people have access to gas and wants gasification to rise from 64.2% to 80%. Bektenov ordered weekly monitoring of gas processing plants at Kashagan, Karachaganak, and Zhanaozen. “We must ensure a long-term balance between the industry’s resource capacity and the needs of the economy,” he said. Electricity adds another layer of stress. Kyrgyzstan recorded its highest summer daily power use on June 29, when consumption reached 47.112 million kilowatt-hours, compared with about 40 million on the same date in 2025. The system expects consumption of 19.6 billion kilowatt-hours in 2026, with domestic generation at 15.7 billion. Imports of about 4 billion kilowatt-hours are expected from Kazakhstan, Turkmenistan, Uzbekistan, and Russia, mainly in the autumn and winter. Kazakhstan generated 123.1 billion kilowatt-hours in 2025, and consumed 124.6 billion. Tajikistan has fewer buffers. Diesel shortages appeared in Dushanbe in early July, with prices rising by 1.5 to 2 somoni in two days. Some filling stations ran out, while others limited sales to 20 liters per vehicle. On July 6, Tajikistan’s economic authorities held a government-level meeting on fuel supply and price regulation. The agenda covered petroleum products, liquefied gas, import diversification, crude oil processing at domestic facilities, and monitoring to prevent artificial retail price increases. Across Central Asia, the squeeze is taking different forms: Kyrgyzstan is looking for new suppliers, Uzbekistan is building reserves, Kazakhstan is tightening controls, and Tajikistan is watching prices. Low and controlled prices protect families, but they push fuel toward borders. Import dependence keeps pumps open, but it leaves governments exposed to refinery outages abroad. Gasification can ease pressure on coal and power, but it also raises winter demand for gas. Electricity imports can fill a gap, but cold weather turns small deficits into public risk. Central Asia’s fuel squeeze has become a winter energy security problem long before the first cold snap. The region needs gasoline at filling stations, diesel for trucks and farms, gas for homes, coal for power plants, and electricity imports when demand peaks. For households, the labels mean less than the outcome. Heat, light, and transport must hold through December and January.

Bukhara Biennial

Bukhara Biennial Sets 2027 Dates and Names New Artistic Director

Organizers of the Bukhara Biennial have announced key details of its second edition: the event will run from September 3 to November 21, 2027, with architect and designer Kulapat Yantrasast appointed artistic director. The announcement was made at the Fondation Beyeler during Art Basel in Basel, Switzerland, placing the Uzbek cultural project before an international art and museum audience. What Is Known About the 2027 Concept Yantrasast will succeed Diana Campbell, who curated the first edition in 2025. The biennial’s organizer remains Gayane Umerova, chairwoman of the Art and Culture Development Foundation of Uzbekistan (ACDF). In 2025, artists were paired with Uzbek master craftsmen. The 2027 format will expand that model by involving local ecologists, scientists, and economists. The central theme will be the connection between art, urban space, and sustainable development. Bukhara as Venue Biennial projects will be housed in restored caravanserais, madrasas, hammams, city squares, and other historic sites, some of which are expected to open to the public for the first time. The aim is to place contemporary art within Bukhara’s historic urban fabric. The city holds UNESCO Creative City status in crafts and folk art, giving the biennial a venue with international cultural recognition. [caption id="attachment_51635" align="aligncenter" width="1280"] Image: bukharabiennial.uz[/caption] Who the New Artistic Director Is Kulapat Yantrasast studied architecture under Tadao Ando and founded the studio WHY Architecture in 2004. His recent projects include the reconstruction of the Michael C. Rockefeller Wing at New York’s Metropolitan Museum of Art, the ILMI Science and Innovation Center in Riyadh, and the Dib art museum in Bangkok. His studio is also working on the Department of Byzantine and Eastern Christian Art at the Louvre in Paris and the National Museum of India, which is expected to become the largest museum in the world. Yantrasast has previously worked with ACDF on When Apricots Blossom, shown at Milan Design Week in 2026. The First Edition The first Bukhara Biennial ran from September 5 to November 23, 2025, under the theme Recipes for Broken Hearts, curated by Diana Campbell. It drew 1.8 million visitors, more than half of them from Bukhara and other regions of Uzbekistan. Participating artists included Antony Gormley, Marina Perez Simão, Erika Verzutti, Subodh Gupta, Delcy Morelos, and Dana Awartani. [caption id="attachment_51636" align="aligncenter" width="1280"] Image: bukharabiennial.uz[/caption] Part of a Wider Cultural Strategy The Bukhara Biennial forms part of a wider ACDF program to expand Uzbekistan’s cultural infrastructure. The foundation is overseeing the Center for Contemporary Art in Tashkent, due to open on September 6, 2026, and the National Museum of Uzbekistan, designed by Tadao Ando. ACDF has also formed an international advisory board for the biennial, with members including Chris Dercon and Michael Govan. [caption id="attachment_51637" align="aligncenter" width="1024"] Image: bukharabiennial.uz[/caption] The Art Basel announcement suggests that Uzbekistan is positioning the biennial as a recurring international platform, while keeping Bukhara’s historic sites and local audiences at its center. In 2025, nearly two million people attended the event in the city’s restored historic spaces. For the 2027 edition, the challenge will be to retain that local base while building a broader international profile.

New Tashkent Airport

Uzbekistan Signs Contract for New Tashkent Airport, Construction to Run Through 2030

On June 17, 2026, on the sidelines of the 5th Tashkent International Investment Forum, Uzbekistan Airports and a consortium of investors led by Saudi Arabia’s Vision Invest signed a public-private partnership agreement to build and operate a new international airport in the Tashkent region. The project began with a ceremonial groundbreaking in October 2025, attended by President Shavkat Mirziyoyev. The June agreement is a practical next step: the project now has a signed contract, defined investor shares, and an approved construction schedule. The international consortium will handle construction and operation of the airport. Vision Invest holds 45%. Japan’s Sojitz Corporation holds 30%, and South Korea’s Incheon International Airport Corporation holds 15%. The remaining 10% belongs to state-owned Uzbekistan Airports. Under the agreement, the private partner will manage the airport for 35 years, until around 2065. The private investors are responsible for the passenger terminal and forecourt area. The state remains responsible for building and operating the airfield infrastructure, including runways and taxiways. Construction was formally authorized by Presidential Resolution No. 353, dated November 25, 2025. The new airport will be located in the Urtachirchik and Kuyichirchik districts of the Tashkent region, on a 1,310-hectare site. The first phase includes two 4-kilometer runways and a 208,000-square-meter passenger terminal. It also includes 98 aircraft parking stands, a fuel complex, and a modern air traffic control tower. Construction is scheduled from 2026 to 2030, with commissioning planned for late 2030. At full capacity, the airport will be able to handle up to 20 million passengers and process 129,000 tons of cargo per year. It will support up to 30 takeoffs and landings per hour and accommodate 62 aircraft at once. In the longer term, the terminal will be four times larger than Tashkent’s current airport and able to serve up to 46 million passengers a year. It will be supported by more than 40 jet bridges and 160 aircraft stands. The project is driven by passenger growth that the current airport can no longer accommodate. Over the past eight years, passenger traffic in Tashkent has tripled to 9 million a year and is expected to reach 24 million by 2040. The existing airport is designed for just 11 million passengers and sits within city limits, making expansion impossible. The current airport is projected to reach full capacity by 2029, after which it is expected to close once the new facility opens. The new airport will form part of a larger transport hub. The complex will connect directly to the Tashkent-Samarkand toll highway and to routes serving Andijan and Bostanliq. A dedicated high-speed rail station will be built on site, and shuttle services will link Tashkent with the new location. The first phase is estimated at $2.5 billion and is expected to attract about $3 billion in foreign direct investment. The airport has also been presented as the first in Central Asia built according to “green” construction principles. Preparatory work before the signing included environmental and social impact assessments in line with the requirements of international financial institutions. Plans were also prepared for relocating engineering utilities, and site preparation work has already begun. The Tashkent project is one of several planned airport developments. According to the fiscal strategy of Uzbekistan’s Ministry of Economy and Finance for 2026-2028, the country also plans to begin building new international airports in Bukhara and Urgench in 2026. The projects are part of a target to increase domestic air travel by at least 50%. With the partnership agreement signed, the project has moved from declarations to contractual obligations. It now has investors with defined shares and a division of responsibilities between the state and private partners. It also has a construction timeline from 2026 to 2030. The next test will be meeting deadlines, from site preparation to commissioning by the end of the decade.

Fuel Shortage

Uzbekistan Faces Fuel Shortage Pressure as Imports Rise

Central Asia is facing a new wave of tension in the market for fuels and lubricants. Shortages of gasoline, diesel fuel, and jet fuel have affected the entire region to varying degrees, but the situation is developing differently in each country. For Kyrgyzstan and Tajikistan, the problem is one of direct import dependence. Kazakhstan and Uzbekistan, which have their own production and refining capacity, are in a more stable position. However, rapidly growing domestic demand is increasingly tying them to imports. The Times of Central Asia previously reported that Kazakhstan is tightening domestic controls, building up reserves ahead of refinery maintenance, and considering fuel imports from China to protect its own market. Kyrgyzstan, meanwhile, has appealed to Azerbaijan, Belarus, Kazakhstan, Russia, Turkmenistan, and Uzbekistan for help in securing fuel supplies, as shortages inside Russia are placing additional pressure on the local fuel market. Uzbekistan’s refining system includes the Bukhara and Fergana oil refineries, the Altyaryk unit of the Fergana refinery, and the modern Uzbekistan GTL complex, which produces synthetic liquid fuels from natural gas. The system produces gasoline, diesel, jet fuel, oils, naphtha, bitumen, and liquefied gas.

From January through May 2026, Uzbekistan imported 642 million liters of gasoline worth $373 million. Import volume was 84% higher than in the same period last year, while import value rose by 85%. Imports now cover nearly half of domestic demand. Domestic gasoline production during the five-month period totaled 502,200 tons, equivalent to about 670 million to 678 million liters. Output has declined in recent years, falling from 1.33 million tons in 2023 to 1.2 million tons in 2025.

The pressure has also reached the domestic fuel exchange. In late June, AI-92 gasoline prices in Uzbekistan hit a record high, with one ton selling for 13.919 million soums. Since the start of June, prices have risen by about 11% to 12%. The steepest increase came in the first 10 days of the month. Supply on the exchange then fell sharply, from up to 7,700 tons in the first half of June to 1,600 to 2,400 tons in the second half. The price rise has already begun to affect retail fuel costs, especially in Tashkent.

One reason for the imbalance was Uzbekistan’s phased reduction of AI-80 gasoline under an environmental reform.

In May, Odil Temirov, deputy chairman of Uzbekneftegaz’s board for refining, said the Bukhara Oil Refinery would begin switching from AI-80 to AI-91 and AI-92 in November and December, with a full phase-out of AI-80 from the start of 2025. He said AI-80 accounted for 85% of output at the refinery, while AI-92 made up the remaining 15%, and that this ratio would begin to change in November. Demand quickly shifted toward AI-92 and AI-95, but domestic production has not yet adapted to the new consumption pattern.

Additional pressure came from events in Russia, which remains one of the key suppliers of gasoline, refinery feedstock, and aviation fuel. Reduced output at Russian refineries, caused by repairs and the aftermath of attacks on energy infrastructure, as well as Moscow’s export restrictions, have increased uncertainty for fuel importers in Central Asia.

The aviation sector has also shown signs of strain. On June 12, Uzbekistan Airways announced cuts to flight frequencies on several routes between Uzbekistan and Russia due to a shortage of jet fuel and rising costs. The changes affected some flights to Moscow and St. Petersburg. The company cited external factors but did not specify them. The jet fuel market is under pressure from rising global prices and Russian restrictions on jet fuel exports. The conflict in the Middle East has added further uncertainty. Tashkent has not officially confirmed a direct link between Russia’s measures and the flight reductions.

Uzbekistan’s government is already trying to reduce risks ahead of winter. The authorities plan to create a gasoline reserve of 120,000 tons to prevent shortages and sharp price increases. Uzbekistan is also discussing supplies of oil, gasoline, aviation fuel, and refinery feedstock with Russian companies, including Gazprom, Rosneft, and Gazprom Neft. The issue was raised at a meeting between Uzbekistan’s Deputy Prime Minister Jamshid Khodjaev and the heads of Russian fuel companies.

Uzbekistan is also becoming more dependent on imported gas. In the first quarter of 2026, domestic gas production fell by 15%, while gas purchases from abroad rose sharply. The issue may become more acute in winter, when gas and electricity consumption increase. Uzbekistan has already increased imports of Russian gas and is considering cooperation with Kazakhstan and Turkmenistan. Dependence on external supplies in such a sensitive sector creates an energy-security risk.

Central Asia’s fuel market may be entering a difficult period. Uzbekistan is now facing the same shortages of some fuels and lubricants seen elsewhere in the region.