Central Asia: Kazakhstan, Uzbekistan and Their Neighbours

The economies of the five Central Asian countries, from Kazakhstan's oil to Uzbekistan's reforms, and their role between Russia, China and the wider world.

Central Asia includes five former Soviet republics: Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan and Tajikistan. All are landlocked, and several are double-landlocked, surrounded by other landlocked countries.

Kazakhstan

Kazakhstan, the largest in area and economy, is rich in oil, gas, uranium and metals. It is the world’s largest uranium producer. Oil revenue financed rapid growth in the 2000s, and it built a national oil fund. Like other resource exporters, it faces the challenge of diversifying away from commodities.

Uzbekistan’s reforms

Uzbekistan, the most populous with over 35 million people, was long one of the most closed economies in the region. After President Shavkat Mirziyoyev took office in 2016, it launched major reforms: in 2017 it freed its currency exchange rate, removing a large gap between official and black market rates. It eased business rules, reduced forced labour in the cotton harvest, and opened to foreign investment and tourism. Growth has been relatively strong.

Turkmenistan

Turkmenistan has one of the world’s largest natural gas reserves but remains highly closed and state-controlled, with limited reliable economic data.

Kyrgyzstan and Tajikistan

These smaller, mountainous countries are poorer and depend heavily on remittances from workers in Russia, as well as gold mining in Kyrgyzstan and aluminium and hydropower in Tajikistan.

Between powers

Central Asia sits between Russia, its traditional partner, and China, whose trade and Belt and Road investment have grown rapidly. Since 2022, some trade between Russia and other countries has been rerouted through Central Asia, and the region has sought new routes to Europe that avoid Russia, such as the “Middle Corridor” across the Caspian Sea.

Freeing Uzbekistan's currency

Before 2017, Uzbekistan's official exchange rate was far stronger than the black market rate, and businesses struggled to get foreign currency. When the government unified the rates in September 2017, the official value of the currency roughly halved overnight, but foreign currency became available legally. Investment and trade picked up, showing how currency reforms can unlock an economy.

Thinking Central Asia is one uniform region

The five countries differ greatly: Kazakhstan is an upper-middle-income resource exporter, Uzbekistan a reforming populous economy, Turkmenistan a closed gas state, and Kyrgyzstan and Tajikistan poorer remittance-dependent economies.

Key takeaways

Central Asia's five countries are all landlocked former Soviet republics.
Kazakhstan is rich in oil and the world's largest uranium producer.
Uzbekistan launched major reforms from 2016, including freeing its currency in 2017.
The region balances ties with Russia and China and seeks new trade routes.