Economic cooperation with the Turkic States is entering a new practical stage

Ahead of the 13th Summit of the Organization of Turkic States, scheduled to be held in Ankara, economic cooperation within the OTS is acquiring new substance. Alongside trade and investment, industrial cooperation, transport corridors, digital infrastructure, artificial intelligence and co-financing mechanisms are emerging as practical areas of engagement.

What new opportunities do these developments create for Uzbekistan, and in which areas are economic relations within the Organization of Turkic States (OTS) evolving?

We discussed these issues with Latofat Burieva, a leading researcher at the Center for Economic Research and Reforms.

– The Organization of Turkic States (OTS) has enormous economic potential, as reflected in its combined GDP and foreign trade turnover. Yet trade among member states remains limited relative to that potential. What should the main priorities be in the future, and what opportunities could differences in the Turkic states’ economic structures create?

– Today, the Organization of Turkic States covers a significant economic space connecting Central Asia, the South Caucasus and Türkiye with European markets. By the end of 2025, the combined nominal GDP of the OTS countries amounted to approximately $2.3 trillion, while their GDP at purchasing power parity exceeded $6.2 trillion. Their aggregate foreign trade turnover surpassed $1.2 trillion.

These figures indicate a large market for expanding economic cooperation. At the same time, mutual trade among OTS countries remains limited relative to their overall economic potential. The next stage of cooperation is therefore increasingly focused on moving beyond the simple expansion of trade toward deeper industrial cooperation, lower transport costs and the financing of joint investment projects.

Differences in the economic structures of the OTS countries provide a foundation for such cooperation. Türkiye has a substantial manufacturing base in machinery, automotive production, electrical engineering, textiles and chemicals. Kazakhstan and Azerbaijan, in addition to their energy resources, hold significant positions in metallurgy and petrochemicals. Uzbekistan is developing its textile and garment industry, electrical engineering, automotive, chemical and food industries, as well as non-ferrous metallurgy. Kyrgyzstan’s capabilities in light industry and agriculture also provide an additional basis for expanding shared production chains.

In this context, the economic outcome of integration within the OTS will increasingly depend not only on the volume of mutual trade, but also on the extent to which enterprises in member countries integrate into one another’s production chains.

– What role do the Turkic states play in Uzbekistan’s foreign trade, and what qualitative changes have been observed in recent years in Uzbekistan’s exports and imports within the OTS, particularly in the composition of traded goods?

– For Uzbekistan, economic relations with the Turkic states have become an important component of foreign trade diversification.

In 2025, Uzbekistan’s total foreign trade turnover reached $81.2 billion, including $33.8 billion in exports and $47.4 billion in imports. Among the country’s major trading partners, turnover with Kazakhstan amounted to $5 billion, while trade with Türkiye reached $3 billion.

Kazakhstan and Türkiye alone account for roughly one-tenth of Uzbekistan’s total foreign trade. When economic relations with Kyrgyzstan, Turkmenistan, Azerbaijan and Hungary are also taken into account, the OTS space represents a distinct and sizeable regional market for Uzbekistan.

Exports have played an important role in recent trade growth. In 2025, Uzbekistan exported $1.5 billion worth of goods and services to Kazakhstan, $1.1 billion to Türkiye and $771.1 million to Kyrgyzstan.

The composition of trade also points to qualitative changes in economic relations. In 2025, industrial goods accounted for 28.2% of Uzbekistan’s exports to OTS countries, machinery and transport equipment for 19%, food products for 11.1%, chemical products for 10%, and services for 12.7%. On the import side, food products represented 22.8%, mineral fuels 20.3%, industrial goods 18.1%, and machinery and transport equipment 12.9%.

This structure highlights two important features. First, Uzbekistan’s exports to the OTS market are not limited to raw materials, with industrial goods, machinery and equipment accounting for a substantial share. Second, the presence of energy resources, industrial goods and equipment in imports indicates that mutual trade with OTS countries is also closely linked to domestic production processes.

For this reason, alongside trade turnover, the depth of industrial cooperation is becoming an increasingly important indicator of future economic relations.

– Despite trade growth, you have noted that significant untapped potential remains. Available data suggests Uzbekistan could increase its exports to OTS member states by nearly $3 billion. Which markets represent the largest share of this potential, and what key challenges must Uzbek exporters overcome to realize it?

– According to estimates by the Center for Economic Research and Reforms, Uzbekistan has the potential to increase exports to OTS countries by an additional $2.7 billion. The largest share is the Turkish market, at $1.8 billion. Additional export potential is estimated at $500 million for Kazakhstan, $200 million for Hungary and $100 million for Kyrgyzstan.

Market size alone, however, is insufficient to ensure export growth. Product quality, mutual recognition of standards, certification procedures, transport costs, delivery times and access to trade finance all directly affect exporters’ competitiveness.

Opportunities are particularly substantial in agriculture and food products. The combined agricultural market of the OTS countries is estimated at around $72 billion. For Uzbekistan, promising export categories include fruit and vegetables, processed food products, textiles, electrical equipment, construction materials, mineral fertilizers, copper products and polymers.

The concentration of a large share of the export reserve in Türkiye and Kazakhstan is also economically significant. Türkiye offers both a sizeable domestic consumer market and access to European and Mediterranean markets. Kazakhstan, due to its geographical proximity, shared transport networks and production linkages within Central Asia, remains a natural partner for cooperation with Uzbek enterprises.

In this sense, realizing the $2.7 billion export reserve requires a coordinated approach across industrial, logistics and trade policies.

– Alongside expanding trade ties, investment flows to Uzbekistan from OTS member states have also risen significantly. How much investment has been attracted in recent years, and what qualitative changes are foreign direct investment and joint industrial projects bringing to the development of long-term economic cooperation between our countries?

– Alongside trade, investment flows from OTS countries into Uzbekistan have also increased substantially.

Between 2017 and 2025, investment attracted from OTS countries into Uzbekistan exceeded $11.5 billion. In 2025 alone, investment amounted to $3.8 billion. Türkiye was Uzbekistan’s largest investor among OTS countries, with $2.4 billion. Investment was concentrated primarily in manufacturing, energy, agriculture, construction and logistics.

As of April 2026, Uzbekistan was home to more than 4,500 enterprises with capital participation from OTS countries.

The growing number of such enterprises points to a qualitative shift in economic relations. A trade transaction ends once a product crosses the border, whereas direct investment creates longer-term links between economies through capital, technology, employment, local suppliers and export channels.

The expansion of joint industrial projects within the OTS can therefore provide an additional foundation for further growth in mutual trade.

For example, components produced in one country may be used to manufacture finished goods in another and subsequently exported to a third market. In such a case, trade statistics reflect an underlying integrated production chain. Differences in the specialization of the Turkic economies create opportunities for precisely this type of cooperation.

– Turning to the Turkic Investment Fund, its authorized capital has risen to $600 million. Its main strength, however, is its ability to mobilize additional financing from other financial institutions. What tangible benefits are these co-financing mechanisms currently providing to Uzbekistan’s businesses?

– One of the most significant institutional developments in the OTS economic architecture has been the transition of the Turkic Investment Fund to practical operations. In 2025, its authorized capital was increased from $500 million to $600 million. Uzbekistan’s share amounts to $100 million.

The Fund’s economic significance extends beyond its own capital. Its broader potential lies in using these resources to mobilize financing from other international financial institutions.

On 17 June 2026, the Turkic Investment Fund and the Islamic Corporation for the Development of the Private Sector, part of the Islamic Development Bank Group, signed an agreement on an Islamic co-financing program of up to $50 million. The program is intended to finance small and medium-sized enterprises through local financial institutions in Azerbaijan, Kazakhstan, Kyrgyzstan, Türkiye and Uzbekistan.

Another practical model emerged on 1 July. The Turkic Investment Fund signed an agreement to provide up to $10 million in financing to KMF Bank in Kazakhstan, while the European Bank for Reconstruction and Development committed up to $50 million. The combined resources are intended to expand lending to micro, small and medium-sized enterprises.

These two examples point to an emerging trend. Rather than functioning solely as an institution that directly allocates its own resources, the Fund could develop into a platform for mobilizing international financial resources for projects across the OTS region.

This approach could help mobilize investment substantially exceeding the Fund’s $600 million capital base. This mechanism is particularly relevant for industrial cooperation, transport, energy, digital infrastructure and small business projects.

– Logistics and transportation costs are key factors in the competitiveness of Uzbekistan’s exports. Given the country’s landlocked position, how are the Middle Corridor, new railway connections, and digitized border and customs procedures helping Uzbekistan’s businesses facilitate trade?

– Transport costs and delivery times remain another major factor affecting trade within the OTS region. Because Central Asian countries lack direct access to seaports, logistics costs significantly affect export competitiveness. In this context, the Trans-Caspian International Transport Route – the Middle Corridor, which runs across the Caspian Sea through Azerbaijan, Georgia and Türkiye toward European markets – is becoming an important infrastructure component of economic cooperation within the OTS.

For Uzbekistan, this route’s importance is increasing with the construction of the China – Kyrgyzstan – Uzbekistan railway. Connecting the new railway with the Caspian route could expand Uzbekistan’s participation in the East-West logistics chain linking China, Central Asia, the Caucasus and Europe.

A modern transport corridor, however, consists of more than roads and railways. Border procedures, permits, customs declarations, consignment notes, and cargo tracking systems also affect transportation time and cost. Digitalization has therefore become an important component of OTS transport policy.

The e-Permit electronic permit system is being implemented among the organization’s member states. At the 9th Meeting of OTS Ministers of Transport, held in Bishkek on 23 April 2026, a memorandum was also signed on introducing the e-CMR electronic international consignment note.

At the May summit in Turkistan, the President of Uzbekistan noted that the e-Permit system had been fully launched with OTS member states and proposed linking the Middle Corridor with the China – Kyrgyzstan – Uzbekistan railway, developing a simplified customs corridor, and digitalizing data exchange and cargo tracking processes.

If these mechanisms are integrated into a single system, the OTS region could develop a logistics environment that facilitates both the physical movement of goods and the digital flow of accompanying documents and data.

The economic effects can be measured in concrete terms – shorter border crossing times, lower administrative costs and greater predictability of delivery schedules for exporters.

– Beyond traditional transport corridors, the Digital Turkic Corridor and the use of artificial intelligence are emerging as key priorities. What new opportunities could integrating physical and digital infrastructure across the region create for Uzbekistan’s economy?

– On 15 May, the informal summit in Turkistan on “Artificial Intelligence and Digital Development” placed particular emphasis on digital infrastructure, innovative technologies and the practical application of artificial intelligence.

Uzbekistan proposed developing the concept of a “Digital Turkic Corridor”, aimed at connecting data centers across the region through high-speed communication channels.

Additional initiatives included establishing a strategic cooperation network in artificial intelligence, organizing a Technology Forum in Tashkent, and expanding technological cooperation among participating countries.

There is a clear connection between transport and digital integration. While the Middle Corridor facilitates the movement of goods, the Digital Turkic Corridor could accelerate the movement of data.

As a result, two parallel types of infrastructure may develop across the OTS region – physical and digital.

The first encompasses roads and railways, ports, logistics centers and customs infrastructure. The second includes data centers, telecommunications networks, cloud computing, artificial intelligence infrastructure and digital services.

Their integration could support the expansion of e-commerce, digital logistics, fintech, cross-border services and digital production management.

– While cooperation within the OTS once focused mainly on summits and bilateral agreements, dedicated institutions are now emerging across the financial, transport, and digital sectors. Why is it important for businesses that these mechanisms reinforce one another?

– Another feature of the changes taking place within the OTS is the emergence of permanent mechanisms for economic cooperation. While cooperation previously relied largely on summits of heads of state, intergovernmental meetings and bilateral agreements, dedicated mechanisms are now taking shape in finance, transport and the digital economy.

The Turkic Investment Fund is establishing a mechanism for financing investment projects. E-Permit and e-CMR are digitalizing transport documentation. The Digital Turkic Corridor initiative is intended to connect information infrastructure across participating countries. The economic value of these institutions lies primarily in their ability to complement one another.

For an Uzbek company seeking to enter the Turkish market, for example, lower customs tariffs alone are insufficient. The company also needs financing, certification, transport services, digital documentation, efficient payments and reliable logistics.

The effectiveness of integration will therefore depend not only on reducing trade barriers, but also on developing the broader infrastructure that supports trade.

– The Ankara Summit and the new strategy for the coming years are expected to elevate these ties to a new level. What overall conclusions can be drawn about the future of cooperation within the OTS?

– Preparations are underway for the 13th OTS Summit in Ankara. On 8 September, OTS Secretary General Kubanychbek Omuraliev and Turkish Foreign Minister Hakan Fidan discussed the summit’s organizational and substantive aspects, as well as its expected outcomes.

The discussions also covered another important document – the OTS Strategy for 202-2031, which is expected to define the organization’s strategic framework and priority areas for the coming period. In this context, the Ankara Summit may become an important milestone for the next stage of economic cooperation within the OTS.

The trend of recent years is increasingly clear. While the initial emphasis was largely on expanding trade volumes, economic relations are now becoming more closely linked to investment, transport infrastructure, financial institutions and digital technologies.

For Uzbekistan, the next task is to translate the existing $2.7 billion in additional export potential into actual trade, expand joint production chains with OTS countries, reduce transport costs and use new financial mechanisms to support private-sector projects.

Accordingly, the criteria for assessing economic integration within the OTS are also evolving. Trade turnover and investment volumes remain important indicators, but they are increasingly complemented by delivery times, logistics costs, industrial cooperation, joint projects, digital services and mobilized private capital.

This shift, from trade in goods to an interconnected system of production, transport, finance, and digital infrastructure, is increasingly defining the new economic substance of cooperation among the Turkic states.

Interviewed by Mohigul Qosimova, UzA