Asian Development Bank focuses on Central Asia

The Asian Development Bank (ADB) is significantly increasing its involvement in Central Asia and the Caspian Basin. Billions in aid for Kazakhstan, Tajikistan and Azerbaijan indicate that the bank is primarily looking to drive forward the expansion of the so-called Middle Corridor - the trade route between China and Europe that bypasses Russia.

On March 2, the ADB announced financing of up to 5.4 billion US dollars over the next four years following a meeting between its President Masato Kanda and Kazakhstan's President Kassym-Shomart Tokayev. The money is intended to support Tokayev's modernization programme, in particular the digitalization of the economy and administration. Kazakhstan is a key country for the Middle Corridor.

"The ADB is committed to supporting Kazakhstan's development priorities that promote sustainable and inclusive economic growth," said Kanda, according to a statement from the bank.

Just two days later, Kanda also pledged support for Tajikistan of up to 1.1 billion US dollars for the period 2026 to 2028. The money is intended to promote the development of a more dynamic private sector and create new jobs.

At the end of last year, the ADB had already pledged up to 2.5 billion US dollars in aid to Azerbaijan for the years 2026 to 2029. The aim is to support the country's development priorities and develop Azerbaijan into a regional hub for connectivity, trade and energy between Central Asia and Europe. The country is considered the western gateway of the Middle Corridor towards the European Union.

Border crossings and customs as a bottleneck

In addition, the ADB is working on a technical assistance package to modernize border crossings in Central Asia and the Caucasus. The project aims to simplify customs procedures along the trade routes and shorten transit times. The plan received approval in principle at the end of February.

The scale of the new commitments becomes clear when looking at previous aid: Kazakhstan has received a total of 7.7 billion US dollars in loans, grants and technical assistance since joining the bank in 1994. Tajikistan has received just under 3 billion US dollars since 1998. The sums now announced therefore mark a significant intensification of the commitment.

Geopolitics at play

The expansion of ADB aid comes at a time when the United States is also increasing its economic and diplomatic interest in Central Asia. One of the aims behind this is to promote regional networking and improve access to critical raw materials.

However, it is not just about infrastructure. According to the ADB, it also wants to deepen economic policy coordination between the countries of Central Asia. In an analysis published in January, the bank wrote that the countries need to move from demand-driven to productivity-oriented growth. This would require reforms that strengthen governance, promote private investment and deepen economic and financial integration.

A bank with great political weight

The Manila-based Asian Development Bank has 69 member states. The largest shareholders are the USA and Japan with just over 15 percent each. China, India and Australia follow with shares of around 6 percent each.

More commitments for Central Asia could follow soon. At the beginning of May, the Uzbek city of Samarkand will host this year's ADB annual meeting - an obvious place for new announcements on the region.

This article was written in cooperation with our partner bne intelliNews