When the coronavirus pandemic struck in 2020, entrepreneur Amantur Asanaliev doubted whether or not his newly fashioned logistics firm, TLK Provider, would survive, not to mention thrive. Positive sufficient, the pandemic rapidly devastated many Kyrgyz companies buying and selling with China.
However six years on, a special black swan occasion – Russia’s full-scale invasion of Ukraine – has reworked Asanaliev’s trade and enormous elements of Kyrgyzstan’s once-teetering economic system.
“The sanctions towards Russia have turn into a brand new driver of the Kyrgyz economic system. If we used to ship three to 4 vans there each month, after the struggle started we might ship 15,” Asanaliev advised The Diplomat.
Within the first years of the invasion, Russia was the endpoint for many of the consignments that Asanaliev introduced in from subsequent door China.
As many international locations and firms eschewed or pared down direct commerce with Russia, Kyrgyzstan – a member of the Moscow-led Eurasian Financial Union – become an enormous forwarding hub for all types of products heading north.
Now, Asanaliev has principally stopped working with the Russian market, as native orders increase quickly to satisfy a multi-year building growth.
“Home market demand is rising, and the state has simplified customs clearance,” mentioned Asanaliev, utilizing a latest consignment of part elements for a shiny new playground at a mall for instance of the form of orders he now receives.
“Logistics in Russia could be tough, particularly within the winter. We’ve determined to give attention to Kyrgyzstan,” the entrepreneur mentioned.
A “Budding Asian Tiger” Beneath Sanctions Scrutiny
Kyrgyzstan’s GDP grew by 11 % in 2025 and round 9 % in 2024, with the World Financial institution projecting a settle down to six.5 % for this yr.
Commerce diversion isn’t the one factor driving the upswing in Kyrgyzstan, an economic system that for a lot of the final 35 years of its independence appeared to typically be one main disaster from collapse.
The nation’s solely notable commodity export is gold, which has benefited disproportionately from the sharpening geopolitical uncertainty. Spot costs have almost doubled within the first yr of Donald Trump’s second presidency in the USA after a bullish run in 2024.
Remittances from a whole bunch of 1000’s of Kyrgyz residents working in Russia have additionally risen sharply within the years coated by the Ukraine struggle, with wages for migrants rising on the again of acute labor shortages there.
For President Sadyr Japarov and his allies, that is all reasonably vindicating. Up to now, his five-year administration has principally attracted worldwide headlines for unfavourable causes, together with a crackdown on dissent that has introduced a once-democratic nation in step with its authoritarian neighborhood.
By the tip of final yr, although, Kyrgyzstan was being hailed by Bloomberg as Central Asia’s “budding new tiger economic system.”
“Our development charges are among the highest on the planet,” Azamat Akeneev, an economist who has suggested worldwide monetary establishments working within the nation, advised The Diplomat in an interview in late 2025.
“Complete logistics cities are being constructed. Internet earnings for the monetary sector was round 3 billion soms per yr ($34 million at present charges). Now they’re 40-50 billion soms.”
The native banking trade’s newfound power towards the backdrop of the Ukraine struggle has not gone unnoticed. Within the final yr, three mid-sized banks have discovered themselves focused with sanctions over alleged cooperation with Russian entities by both the EU or the UK.
The EU’s sanctions envoy David O’Sullivan is anticipated to go to Kyrgyzstan on the finish of this month, in what might probably be a showdown earlier than extra focused bans on exports come into play.
Some analysts have been calling for Brussels to get harder on Bishkek for some time. Robin Brooks, a senior knowledgeable on the Brookings Establishment, usually posts information on exponential spikes in exports to Kyrgyzstan from EU international locations, China, and South Korea on his X account. Brooks argues that the republic is usually “simply the title on the bill” and that the products by no means cross its borders.
The speedy growth of warehouse area in Kyrgyzstan – trendy logistics warehouses, identified within the trade as Class An area, have elevated at the least tenfold since 2022 – means that this isn’t at all times true. And that, in flip, implies that a lot of the brand new financial exercise inside Kyrgyzstan is reliant each on avoiding the form of secondary sanctions that Brooks advocates within the quick time period, and on continued curiosity in Kyrgyzstan as a commerce route in a hypothetical future the place Russia’s ties with the West have normalized.
“If Your Wages Haven’t Doubled…’”
For the second, many Kyrgyz residents are feeling ache regardless of the rising economic system. Official inflation is as soon as extra approaching double digits after cooling off in 2024. And few imagine that authorities statistics seize the size of the burden on shoppers.
One lady pensioner, Damira Jekshenova, 61, advised The Diplomat that her month-to-month pension has risen from 2,900 soms in autumn 2022 ($35 on the time) to 7,500 ($86 at present charges). However that also solely covers a sack of flour, a liter of cooking oil, a pack of tea, a kilogram of meat, and sufficient milk for the month.
“I don’t purchase medicines as a result of they’ve turn into so costly. Our youngsters purchase them for us,” Jekshenova mentioned.
Shaani, a 31-year-old schoolteacher, moved final yr from Bishkek to Orlovka, a small city 100 kilometers from the capital, as a result of the town has turn into unaffordable for academics.
“We are actually shopping for apples for 150 soms ($1.72) per kilogram in a area the place apples are grown,” Shaani, who most popular to make use of solely her first title, mentioned. “Housing has turn into so costly that half of my wage goes on hire, even right here in Orlovka. I don’t perceive how individuals in Bishkek feed their households.”
Certainly, common hire costs in Bishkek have risen over 30 % since 2022, with a two-bedroom house costing round $600 per thirty days now. The group-sourced value of dwelling platform Numbeo reveals costs to purchase new flats are round 40 % dearer in Bishkek than in neighboring Kazakhstan’s capital, Astana, regardless of common month-to-month incomes within the oil-rich nation’s capital being almost 40 % greater.
The IMF has warned that the Kyrgyz economic system could be working scorching, with productiveness enhancements and structural reforms failing to maintain tempo with speedy funding and job creation, a lot of which is coming – instantly or not directly – from the state. Though the federal government has boosted macroeconomic stability by increasing the tax base and mountain climbing utility tariffs, as an illustration, that’s scant comfort for individuals feeling the cost-of-living pinch.
Akeneev contends that removed from getting richer, Kyrgyzstan’s center class may even be shrinking considerably within the financial growth. “In case your wages haven’t doubled, then you could have most likely turn into poorer,” the economist mentioned.