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Executive Summary

Kazakhstan has made significant progress towards creating a market economy since gaining its independence from the Soviet Union in 1991. It has attracted significant foreign investment to develop its abundant mineral, petroleum, and natural gas resources. As of October 2021, the stock of foreign direct investment (FDI) totaled $170 billion, including $40.4 billion from the U.S., according to official central bank statistics. Publicly available information indicates that U.S. investments in the hydrocarbons sector alone far exceed this official statistic.

While Kazakhstan’s vast hydrocarbon and mineral reserves remain the backbone of the economy, the government continues to make incremental progress toward diversification into other sectors.  The COVID-19 pandemic gave impetus to efforts by the Government of Kazakhstan (GOK) to remove bureaucratic barriers to trade and investment.  The GOK maintains an active dialogue with foreign investors through the President’s Foreign Investors Council and the Prime Minister’s Council for Improvement of the Investment Climate.  Kazakhstan is a member of the World Trade Organization (WTO) and the Eurasian Economic Union (EAEU).

Widespread civil unrest in January raised concerns about the country’s political and economic stability. President Tokayev has since assured foreign investors that the GOK will ensure a stable investment climate and meet its commitments to investors. He also pledged to reduce the outsized role of monopolies and oligopolies in the economy. President Tokayev announced political and economic reforms in March that may bring positive changes to the country’s investment climate by increasing privatization and combatting corruption.

Given Kazakhstan’s long border and extensive economic ties with Russia, Russian aggression against Ukraine and ensuing sanctions against Russia affect Kazakhstan’s investment climate. Some investors will likely be deterred from investing in Kazakhstan, while others may find Kazakhstan an attractive alternative to doing business in Russia. The GOK has expressed a commitment to complying with the western sanctions against Russia and has invited western investors to relocate from Russia to Kazakhstan.

Despite President Tokayev’s assurances, concerns remain that some of the underlying economic causes of the January unrest remain unaddressed and sanctions on Russia may exacerbate existing structural weaknesses to cause high inflation, currency devaluation, and logistical impediments to imports and exports. Despite institutional and legal reforms, corruption, excessive bureaucracy, arbitrary law enforcement, and limited access to a skilled workforce in certain regions continue to present challenges.  The government’s tendency to increase its regulatory role in relations with investors, to favor an import-substitution policy, to limit the use of foreign labor, and to intervene in companies’ operations continues to concern foreign investors.  Foreign firms cite the need for better rule of law, deeper investment in human capital, improved transport and logistics infrastructure, a more open and flexible trade policy, a more favorable work-permit regime, and a more customer-friendly and consistent tax administration.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 102 of 180
Global Innovation Index 2021 79 of 132
U.S. FDI in partner country ($M, historical stock positions) N/A N/A
World Bank GNI per capita 2020 $8,710


Kyrgyz Republic

Executive Summary

The Kyrgyz Republic remains a frontier market oriented towards higher-risk investors, but the government under President Sadyr Japarov has expressed its desire to attract greater, more diversified foreign direct investment (FDI) and to develop a green economy to contribute to sustainable economic growth. In 2021, the President traveled extensively to seek investment partners in different regions, and government officials attended several trade and investment expositions in the region and beyond. While the official attitude toward FDI is positive and by law there are no limits on foreign ownership or control, in practice foreign investors may be subject to greater scrutiny than domestic investors, and the country’s capacity to provide a sound enabling environment for investment still faces many challenges. The legal framework for foreign investment mostly corresponds to international standards, but enforcement of these laws and private property rights is weak, and criminal investigations of commercial disputes is not uncommon.

Mining has historically been the industry that attracted the most FDI to the Kyrgyz Republic but a dispute with its largest foreign investor may have damaged investor appetite for this sector. In May 2021, the Kyrgyz government raided the offices of Kumtor Gold Company, a local subsidiary of Canadian mining company Centerra Gold, and fined the Canadian firm $3 billion for alleged environmental damages caused by running the Kumtor gold mine. The national government subsequently took over the mine and pursued Centerra Gold for corruption, criminal violations, and environmental damage in national and international courts. In September 2021, the London Bullion Market Association suspended Kyrgyzaltyn, the state gold refiner, from its Good Delivery List over issues concerning delivery and the potential for fraud, while the sale of Kyrgyz gold still suffers transparency issues. With the creation of the “Heritage of the Great Nomads” national holding company, the government has also signaled it intends to play a greater role in the development of the mining and precious metals industries.  In April 2022, the Kyrgyz government and Centerra reached a conditional agreement by which the Kyrgyz government will take full control of the mine and give up its 26 percent stake in Centerra.

Still, other growing industries have attracted both domestic and foreign investor interest, including textiles, agriculture, education, franchising, and IT. Green investment is another promising area for potential investors as the Kyrgyz government increased its commitment to fighting climate change and sustainable development. In 2021, the Kyrgyz Republic joined the Global Methane Pledge and unveiled revised Nationally Determined Contributions (NDCs), which also opened many opportunities for foreign firms seeking to invest in industries such as hydropower, energy efficiency, and methane abatement.

Additional challenges to an enabling investment climate include a weak judiciary, lack of incentives for foreign investors, and a banking system highly dependent on the Russian financial system. The local currency, the Kyrgyz som, quickly depreciated against the U.S. dollar after the Russian invasion of Ukraine in February 2022, making not only imports more expensive but contributing to a drop in value of remittances that Kyrgyz migrant workers in Russia send home, which annually comprise roughly 30 percent of Kyrgyz GDP.

*Some information in the report may be subject to change upon date of publication and will be updated in the 2022 ICS. 

Table 1: Key Metrics and Rankings 
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 144 of 180
Global Innovation Index 2021 98 of 132
U.S. FDI in partner country ($M USD, historical stock positions) 2020 $29
World Bank GNI per capita 2020 $1,160

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy 
Host Country Statistical source* USG or international statistical source USG or International Source of Data: BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2020 $7.240 2020 $7,736
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data: BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2020 $6.4 2020 $29 BEA data available at
Host country’s FDI in the United States ($M USD, stock positions) 2020 $1.7 2020 $0 BEA data available at
Total inbound stock of FDI as % host GDP N/A N/A 2020 -4.5% UNCTAD data available at

*Source for Host Country Data: National Statistics Committee of the Kyrgyz Republic:;;;

Table 3: Sources and Destination of FDI 
Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions) 
Inward Direct Investment Outward Direct Investment
Total Inward $5,412 100% Total Outward $897 100%
Canada $1,683 31% Canada $878 98%
China $1,037 19% China $15 2%
Russian Federation $968 17% Tajikistan $2 0.2%
United Kingdom $380 7% Germany $1 0.1%
Kazakhstan $241 4% United Kingdom $0 0%
“0” reflects amounts rounded to +/- USD 500,000.

Host country data differs from IMF data due to differing methodologies. According to host country data, total inward FDI in 2020 amounted to 537.4 million USD.  In 2020 the incoming FDI from Canada was 154 million USD and from China is 136 million USD, according to the Kyrgyz National Statistical Committee. The total outward FDI was 939 million USD, according to the Kyrgyz National Statistical Committee; however, outward FDI to Canada reached 6 million USD and to China 592 million USD according to National Statistical Committee in 2020.


Executive Summary

Tajikistan is a challenging place to do business but presents potential high-risk, high-reward opportunities for foreign investors who have experience in the region, a long-term investment horizon, and the patience and resources to conduct significant research and due diligence.  At the most senior levels, the Tajik government continues to express interest in attracting more foreign investment. The government hosted an October 2021 investment forum to highlight its commitment to simplifying investment policies. Tajikistan’s ambassador to the United States – who formerly served as the head of the government’s Investment Committee – enlisted high-level government support for outreach to U.S. companies in 2021.  Nevertheless, the poorest of the Central Asian countries harbors few U.S. investors and remains an uncompetitive investment destination.

President Emomali Rahmon publicly emphasizes the need to foster private-sector-led growth, and attracting investment is prioritized in national development strategies. These strategy documents notwithstanding, authoritarian policies, bureaucratic and financial hurdles, widespread corruption, a flawed banking sector, and countless business and tax inspections greatly hinder investors. The government’s commitment to dedicate significant financial resources to the construction of the Roghun Dam hydropower plant creates pressure for the Tax Committee to enforce or creatively interpret arbitrary tax regulations on companies outside of the wide business interests of President Rahmon’s family in order to meet ever-increasing revenue targets.

Politics also play a role.  Remittances sent by Tajik labor migrants typically account for one-third of Tajikistan’s GDP, and the Russian Federation uses this leverage to ensure Tajik support for Russian foreign policy priorities, and/or to pressure Tajikistan into joining the Russian-led Eurasian Economic Union. Tajikistan is also saturated in opaque loans connected to China’s Belt and Road Initiative, and Chinese investments account for more than 60 percent of the country’s total Foreign Direct Investment.  Finally, despite Tajikistan’s 2013 accession to the World Trade Organization, the Tajik government has imposed trade policies to protect private domestic interests without notifying its partners, notably in the poultry, mining, and alcoholic beverage sectors.

The COVID-19 pandemic laid bare endemic transport and infrastructure challenges in landlocked Tajikistan, imposed by geography but exacerbated by political isolation as borders with Afghanistan (following the Taliban’s return to power) and the Kyrgyz Republic (following deadly April 2021 border clashes) remain closed. Tajikistan’s rigid economy represents another systemic barrier as analyses show growth is consistently driven by remittance-fueled consumption and exports are concentrated in mining, metals, and agriculture, making Tajikistan especially vulnerable to commodity shocks in world markets.

Despite these challenges and risks to potential investors, Tajikistan is pursuing greater trade and investment links and has made modest progress on trade facilitation and tax reform to improve its investment climate in past years.  In 2021 authorities continued small steps towards compliance on intellectual property rights protections.  Should the government pursue an economic reform path, opportunities in energy, agribusiness, food processing, tourism, textiles, and mining could prove promising.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 150 of 180 
Global Innovation Index 2021 103 of 132 
U.S. FDI in partner country ($M USD, historical stock positions) 2019 $38 
World Bank GNI per capita 2020 $1,060 


Executive Summary

Turkmenistan is currently considered high risk for U.S. foreign direct investment due to endemic corruption, a weak commercial law and regulatory regime, opaque and onerous bureaucratic processes, and strict foreign currency controls. The government has not taken measures to incentivize foreign direct investment outside the petroleum industry and there is no significant U.S. FDI in the country. Turkmenistan has the fourth largest natural gas reserves in the world, though just outside the top ten largest natural gas producers. Almost all government revenue comes from the sale of natural gas, mostly to China, with a lesser dependence on export of petrochemicals, cotton, and textiles.

Strict foreign currency controls have resulted in a black-market exchange rate for dollars that averaged over five times the official rate in 2020-2021. This results in an inability to repatriate profits or to convert local currency to dollars to import supplies or equipment. It also distorts data, especially GDP, contributing to the widely held view that most economic indicators released by the government are unreliable.

The government often fails to implement or consistently enforce investment-related legislation. There are no meaningful legal protections against government expropriation of assets and there is no independent judiciary. Foreign companies typically pay significantly higher prices for services. Weak education and healthcare systems, as well as underdeveloped physical and telecommunications infrastructure are also challenges.

Turkmenistan’s status as one of the most restrictive and isolated countries in the world only grew during the pandemic; the country’s borders were closed for average Turkmen citizens, internal movement between provinces restricted, and regularly scheduled commercial air traffic completely stopped in March 2020 and continuing through publication in April 2022. International travelers, to include foreign workers in the construction, oil and gas industries, travel in and out of the country on charter flights.

The government often counts foreign loans as FDI, but there is little genuine FDI in the country. The government has promoted efforts to expand downstream petrochemical production, reduce greenhouse gasses, especially methane, improve energy and water efficiency, increase digitalization, and begin production of hydrogen.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 169 of 180
Global Innovation Index 2021 N/A
U.S. FDI in partner country ($M USD, stock positions) 2021 N/A
World Bank GNI per capita 2019 7,220


Executive Summary

Uzbekistan is a populous double land-locked country in the middle of Central Asia with an emerging lower-middle income economy. State-owned enterprises still dominate its industrial and financial sectors, and foreign trade centers on commodities. The declared goal of its current economic policy is to achieve sustainable growth and overcome underemployment and poverty as soon as possible. Fast growing external public debt limits the availability of public funds and loans to support economic growth, so attraction of private and foreign investment (FDI) has become a vital priority. Five years ago, the Government of Uzbekistan (GOU) launched a program of radical market reforms, with a focus on improving the business environment. Notable progress has been made so far in addressing a rage of systemic business regulation problems and overcoming the dominance of state monopolies, but more is yet to be done to completely unlock all benefits of FDI for the economy.

Uzbekistan has the potential to become a strong regional economy: a dynamic and entrepreneurial population, the largest in Central Asia; relatively good infrastructure; and a large potential consumer market. In the past, most FDI was directed into the oil, gas, and mining sectors. In recent years, however, there has been a trend towards increasing FDI in manufacturing, production and distribution of electricity, tourism, and banking. Such diversification was facilitated by positive changes in state regulation and the beginning of a privatization program. Further advancing privatization, as well as implementation of a long-expected capital market development policy, may create unique investment opportunities.

Over the past five years, the GOU has made efforts to improve the investment attractiveness of the country. The GOU has modernized its legislation through the adoption of the Law on Investments and Investment Activities and other acts that streamlined interactions of investors with the state, reduced the tax load, liberalized access to certain commodities, and started the privatization of major state-owned enterprises. As a result, the inflow of FDI has grown from about $2 billion in 2017 to over $8 billion in 2021.

The government’s efforts to attract funding for various development and social support programs contributed to sustained economic growth despite severe quarantine restrictions in 2020. With the removal of major pandemic restrictions in 2021, GDP grew 7.4 percent. Notable progress has been made in development of renewable energy capacity. Uzbekistan already attracted FDI to develop nearly 4,000 MW of solar and wind capacity and plans to build another 4,000 MW in generation capacity by 2026, which will increase the share of renewables to 25 percent and displace 3 billion cubic meters of natural gas usage annually. The GOU’s current environmental policy goal is to achieve a 35 percent reduction of greenhouse gas emissions per unit of GDP from 2010 levels by 2030.

At the same time, the GOU still attempts to channel foreign investments into predetermined import-substituting or export-oriented projects. In some cases, transparency is sacrificed for the urgency of investment. Pandemic-related challenges and the subsequent disruption of global of supply chains have slowed the progress of liberalization reforms because the GOU expanded the use of direct administrative control methods. Another restraining factor is the lack of experience among middle and lower-level government officials in working transparently and properly enforcing legislation that protects the rights of entrepreneurs.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 140 of 180
Global Innovation Index 2021 86 of 132
U.S. FDI in partner country ($M USD, historical stock positions) 2020 $90 million
World Bank GNI per capita 2020 $1,740
Investment Climate Statements
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The Lessons of 1989: Freedom and Our Future