As governments across Central Asia seek to diversify their economies, deepen regional integration and strengthen connections with global markets, two interlinked challenges have gained new urgency: the improvement of transport connectivity—particularly along the TransCaspian Transport Corridor (TCTC)—and the development of robust, transparent and investment-friendly governance frameworks for critical raw materials (CRMs). Recent OECD analyses highlight both the progress achieved and the challenges that remain in realising the region’s economic potential.
Making the Trans-Caspian Transport Corridor More Competitive
The Trans-Caspian Transport Corridor has emerged as a strategically significant route linking Central Asia to European and global markets. Governments have intensified efforts to modernise infrastructure, harmonise border procedures and digitalise customs systems, all with the aim of reducing transit times and attracting greater freight flows. Regional dialogue has helped ease longstanding border management issues, while reforms in trade facilitation are gradually improving the predictability and competitiveness of the corridor. While it is not yet – and will probably never be – a replacement for the northern route that runs via Russia, it is an increasingly viable alternative.
Yet bottlenecks remain. “Informal” fees, warehousing constraints, limited private investment and capacity challenges at key nodes continue to hinder the efficiency of the corridor. Longer-term risks, such as the declining level of the Caspian Sea, add to the need for proactive planning and regional coordination. Businesses operating along the corridor point to regulatory frictions, inconsistent standards, and insufficient intermodal links as barriers to realising the Corridor's full potential.
Policy makers therefore face a dual challenge: continuing to invest in high-quality infrastructure and strengthening the “soft connectivity” that underpins efficient, cross border movement of goods. Improved interoperability, the adoption of international standards, and targeted public-private collaboration will be critical to unlocking further gains. Above all, there is a need for better co-ordination at the highest level: countries along the corridor are moving ahead rapidly, individually or in groups, but for the corridor to work seamlessly, it will need co-ordination of investments, procedures, data-sharing and operations from one end to the other.
With freight volumes rising and new investments underway, the TCTC remains a vital component of a more resilient and diversified regional connectivity landscape, but much more must be done to realise its potential.
Leveraging Central Asia’s Critical Raw Materials Potential
Parallel to connectivity ambitions, Central Asia’s endowment of critical raw materials offers a major opportunity for economic growth. Kazakhstan, the Kyrgyz Republic and Uzbekistan hold substantial reserves of key minerals—including manganese, chromium, copper, titanium —positioning them as important partners in global supply chains for low-carbon technologies.
However, the region’s mining sectors are far from fully developed. Limited geological exploration, outdated reporting systems and regulatory uncertainty have discouraged private investment. Historical disputes, the dominance of state-owned enterprises (SOEs) and gaps in transparency continue to constrain investor confidence. Encouragingly, governments are updating legal frameworks, improving data collection and signalling a stronger commitment to international reporting standards.
Adherence to Responsible Business Conduct (RBC) principles is growing, with reforms aiming to address corruption risks, improve occupational safety and strengthen community engagement. Nonetheless, the high concentration of SOEs and their blurred regulatory roles present governance challenges. Weak separation between state ownership and regulatory functions creates risks of conflicts of interest, while public procurement processes remain vulnerable to opacity.
Environmental governance is also evolving. All three countries have introduced frameworks for environmental impact assessments and strategic planning, but sector specific objectives for emissions, water use and waste management are still limited. Legacy mining waste, including radioactive tailings, represents a persistent environmental and social risk that requires sustained investment and oversight.
As the CRM sector expands, its role in public revenue mobilisation will become increasingly important. Yet tax incentives, preferential regimes and Base Erosion and Profit Shifting (BEPS) practices undermine fiscal fairness and reduce the benefits accruing to citizens. Governments are gradually aligning tax policies with international standards and investing in enhanced audit capacity, but further progress is needed to close legislative loopholes and strengthen oversight of cross border transactions.
Moving forward
For policy makers, the message is clear: Central Asia has the assets and momentum to achieve deeper regional integration, stronger global linkages, economic growth and diversification. By continuing to modernise connectivity infrastructure, improve regulatory transparency, strengthen environmental safeguards and close tax governance gaps, governments can unlock the full potential of both the TCTC and the region’s valuable CRM resources.