Although digitalization has been rapidly penetrating every aspect of our lives over the last decade, the pandemic has significantly impacted the acceleration of the speed at which digital transformations are taking place. The pandemic, by facilitating digital progress, also contributed to revising the paradigms of applicability and acceptance of digital processes [Singh et al., 2021]. Developing its digital agenda to a different extent, Central Asia was also affected by the challenges of the pandemic and ongoing digitalization processes. The paper discusses the efforts of Central Asian states in providing digital services by assessing their digital visions and infrastructure readiness.
The consequences of the pandemic that facilitated the process of digitalization all around the globe also pushed forward the aspirations of Central Asian governments to foster further their digital strategies. As a result, despite their moderate regional position on a global scale, Central Asian states had significantly advanced their digital technologies in various aspects of their society, business, and government.
At the regional level, despite being bypassed by global internet traffic, Central Asia attracts major regional players due to their interest in advancing digital connectivity and the growing needs of globalization. China promotes its Digital Silk Road strategy and aspires to expand its presence in Central Asia [Muratbekova, 2021]. The European Union has been promoting its digital connectivity and supporting the development of the digital economy in Central Asia, including through its EU – Central Asia Digital Connectivity initiative [Capacity4dev, n.d.]. The World Bank has been implementing its Digital CASA Regional Program, which is targeted to enhance internet connectivity and provide integrated digital infrastructure [Navas-Sabater, 2019]. The Eurasian Economic Union (EAEU) is carrying out its Digital Agenda until 2025, which aims to create a single digital economy between member states in order to expand sectoral and cross-sectoral digital transformation and advance its digital infrastructure and management of integration processes [Muratbekova, 2019]. Hence, the geographic location of Central Asia, along with its geopolitical importance in providing digital connectivity, allows for attracting investments for upgrading digital facilities, which the governments of Central Asia are taking advantage of.
At the national level, Central Asian states benefit to a different extent from regional stakeholders’ interests in providing digital connectivity to the region. However, growing global digitalization trends in combination with the pandemic demonstrated the critical need for developing national visions of digitalization and their up-to-date implementations.
Kazakhstan has been pioneering digitization in the region. The Digital Kazakhstan state program for 2018–2022, launched in 2017, aims to undergo a full digital makeover of the country. The program targeted to accelerate digital penetration by focusing on five key sectors, such as digitalization of economic sectors, transition to a digital state, implementation of the Digital Silk Road through the development of digital infrastructure, development of human capital, and creation of an innovation ecosystem. 23 projects were designed to assist the transformation towards a digital business [Primeminister.kz, 2018]. In order to further facilitate the penetration of digital services, the government launched the national project Digital Lifestyle (DigitEL) for 2021–2023.
As a result, Kazakhstan became among the top 30 most digitally advanced nations worldwide and continues its digital reforms. By 2022, 92.9% of the population had access to the internet, while the gap in internet availability between village and city residents had narrowed to only 4%. Internet speed was also increased to 22.1 Mb/s, which is 11.4% higher compared to 2021 [Sputnik, 2022]. The digital literacy rate of the population progressed to over 85.3% in 2021, in comparison to 77.3% in 2018 [24.kz, 2022]. In the global rankings, Kazakhstan is placed in 51st position in the ICT Development Index and 58th in the Networked Readiness Index [NCSI, 2023].
In terms of public services, the government has been working on digitalizing its services since 2008. At present, the level of provision of online public services has reached 93%, with plans to reach 100% by 2025. In virtue of these progresses, Kazakhstan had placed 28th in the UN E-Government Survey 2022 with the highest EGDI (E-Government Development Index) values, leading among the CIS countries [UN, 2022]. The advancement of digital services was also pushed by the digitalization of the banking sector, mostly led by innovative decisions by private banks, which in turn allowed for the easy provision of e-government services. The combination of digital transformation in the government and business sectors has transformed society towards a cashless economy, with more than 74% of transactions now being cashless [Er10.kz, 2023]. However, according to the interim assessment of the implementation of the Digital Kazakhstan program, despite large investments in digitalization, it is difficult to estimate the size of the digital economy due to insufficient approaches to measuring it. The uncompetitiveness of domestic information and communication goods in the domestic and foreign markets is another concern of the program since the large investments do not result in increased exports of digital products [Gov.kz, 2023]. Nevertheless, the government of Kazakhstan has ambitious plans to be among the top 20 in the UN E-Government Development Index, among the top 50 in the B2C (Business to Consumers) E-commerce Index, and among the top 40 in the ICT (Information and Communications Technology) Development Index by 2025 [Jibek Joly, 2022].
Uzbekistan launched its Digital Uzbekistan 2030 strategy among the last in the region in 2020 and has made significant progress. The strategy targets the digitalization of regions and the digitalization of industries, and has its roadmap for implementation in 2020–2022. Digital Uzbekistan has five priority areas, such as the development of digital infrastructure, e-government, the digital economy, the national IT sector, and IT education. The importance of the digital agenda was also mentioned in the Development Strategy of New Uzbekistan for 2022–2026, which, among other goals, put the digitalization of the economy, industry, and society as a priority. Overall, the Uzbek government by 2026 intends to increase Internet penetration from 78% to 95% by advancing the IT infrastructure and communication networks; more than double the size of the digital economy to make it the nation’s economic driver; reach 70% digitalization of the industry, financial, and banking sectors; and reach 100% provision of e-government services [LexUZ, 2021; Khakimov, 2022].
By January 2022, Uzbekistan, in comparison to 2017, had increased its fiber-optic communication lines almost six times, the overall bandwidth speed of the Internet from 64.2 to 1800 Gbit/s, and the share of e-government portal services to 56% [Khakimov, 2022]. As a result, in the UN E-Government Survey 2022, Uzbekistan advanced its position from 87th in 2020 to 69th and recorded significant improvements in its EGDI values [UN, 2022]. However, internet penetration in the country was around 76.6% at the beginning of 2023, and the country ranks 95th in the ICT Development Index, indicating that basic ICT infrastructure still needs to be improved [Kemp, 2023; NCSI, 2023]. Low levels of e-services among small and medium-sized enterprises, along with low levels of digital literacy, slow down digitalization efforts as well [USAID, 2022]. The low level of fintech also results in a low level of cashless operations [Spot.uz, 2022]. Nonetheless, the Uzbek government is optimistic about furthering its digital capacity at the levels of government, business, and society, believing that by upgrading the digital economy, the country will be able to enter the upper-middle-income group by 2030 [Khakimov, 2022].
Kyrgyzstan distinguished its digital agenda within the national digital transformation program Digital Kyrgyzstan—2019-2023. The national program defined three major tasks: development of digital skills, digital transformation of state and municipal government systems, and digital transformation of priority sectors of the economy. Within the program, the roadmap, which was updated to an action plan, provides guidance for the implementation of digitalization in all sectors of the economy and society through initiatives and projects. By the end of 2023, the plan targets to provide 80% of public services online, digitalize 80% of government documents, increase interdepartmental electronic interaction via the “Tunduk” system, and advance Kyrgyzstan’s positions in international rankings [Gov.kg, 2023].
On top of that, foreign stakeholders support Kyrgyzstan in advancing ICT infrastructure and e-governance systems due to the country’s substantially lower development of ICT infrastructure. Among them is the World Bank-funded «Digital CASA-KR» project, which, despite its promised US$50 million funding, has been delayed for three years in its implementation. The project is intended to be a crucial infrastructure project with four parts: building communication lines, providing equipment, creating a digital code, and launching an awareness campaign for projects that have been completed [Kudryavtseva, 2022]. The “Support for the Digitalization Program in Kyrgyzstan” for the 2021–2023 initiative, which received 2 million euros in funding from the European Union, is another project that intends to help construct the digital policy and legal framework as well as strengthen digital capabilities. Its primary goals are closing the digital divide, creating e-services, safeguarding data, and improving cyber security [Gov.kg, 2021].
As a result of the mentioned initiatives, the Internet penetration rate in Kyrgyzstan reached 77.9%, while according to the Worldwide Mobile Data Pricing Ranking, it is the sixth-cheapest country in the world in terms of the cost of mobile internet [NCSI, 2023; Cable.co.uk, 2022]. Also, Kyrgyzstan is placed 109th in the ICT Development Index, 92nd in the Networked Readiness Index, and 81st in the UN E-Government Survey 2022 with high EGDI records [Kemp, 2023b; UN, 2022]. However, although the president has set strict timelines for all digitalization initiatives and the rise in worldwide rankings shows good tendencies, there is still overall persistent pessimism due to delayed digitization. In addition, the fintech industry’s shortcomings are demonstrated by the economy’s 46.6% share of non-cash payments, which also shows the level of digital penetration in the country [Akchabar, 2022].
Tajikistan approved its Concept of the Digital Economy in 2019, which has three stages of implementation for 2025, 2030, and 2040 years. The concept implies a gradual and phasal transformation of digitalization and has an action plan for each stage. It addresses a thorough transition to a digital economy, including, in the first stage, strengthening non-digital foundations, increasing IT capacity, developing a management model for digital transformation, creating an ecosystem for digital transformation, and modifying e-governance systems; and, in the second stage, ensuring communication and ICT infrastructure, cybersecurity, and the creation of data centers and pilot projects. The World Bank-funded Digital CASA project will also closely participate in the realization of all stages of the concept [Concept, 2019].
Tajikistan differentiates itself from the other Central Asian states with limited access to the internet and, accordingly, a low digital literacy level. In 2019, fewer than one in every hundred families (primarily in urban regions) had access to broadband, and only 35% had mobile internet. Similarly, less than 1% of enterprises offered digital services [Olters, 2021]. Dataportal estimates that as of 2023, around 40% of people had access to the internet, with only 10% of the population having social media accounts [Kemp, 2023c]. Limited access to the Internet and its services, along with the low level of digital literacy caused by infrastructural limitations, also hampers the growth of financial innovations, where about 90% of transactions are performed for cash withdrawals [Chorshanbiev, 2022].
For the advancement of the situation, the government has been working on the digitalization of industry, education, healthcare, transportation, and the banking sector. Gradual transformation efforts of the Tajik government have been seen in the UN E-Government Survey 2022, where Tajikistan advanced its position to 129th and entered the high EGDI group for the first time [UN, 2022]. Nevertheless, given the low penetration of the internet, not to mention high-speed internet, transformation towards digital services seems quite difficult to achieve, and the provision of e-government and fintech services that are essential for quick transformation of the economy also depends on basic infrastructural needs.
Turkmenistan has been implementing its digitalization within the framework of its Concept and Program for the Development of the Digital Economy in Turkmenistan for 2019–2025. The realization of the tasks of the program is divided into three stages: 2019, 2020–2023, and 2024–2025. According to the program documents, for the digitalization of the economy and advancement of business, investment, and public service capacities, the Turkmen government intends to transform its healthcare and education sectors towards digital provision, upgrade personnel capacity building, and increase the capabilities of e-government service. It also focuses on the improvement of technical possibilities and legislative frameworks, and raising digital awareness among personnel [Turkmenportal, 2021].
At the same time, Turkmenistan is known for having one of the lowest average broadband speeds in the world (median speed 2.45 Mbps), while the cost of an internet connection is the seventh most expensive in the world (US$ 14.27) [Kemp, 2023d; Cable.co.uk, 2022] Despite the fact that 80% of Turkmenistan’s population owned mobile phones in 2020, only 26% of them utilized the Internet, 2% of them made purchases online, and 1% had social media profiles [Zverintseva, 2023]. Dataportal estimates that by early 2023, internet penetration in Turkmenistan was less than 40%, with only 2.8% of the population using social media [Kemp, 2023d]. As a result, Turkmenistan, in the UN E-Government Survey 2022, stood at the 137th position among the 193 UN member states, with no data in other rankings [UN, 2022].
Notably, although the Turkmen government promotes its digitalization strategy, it strictly regulates internet development. To this end, by the end of 2022, 2.5 billion IPs were blocked in Turkmenistan out of about 4 billion IP addresses in the world [Zverintseva, 2023]. Hence, due to the need to launch digital transformations of essential sectors such as healthcare and education, especially e-government, the Turkmen government was forced to introduce its digital transformation visions. However, it is not clear how these ambitious plans will be implemented without a proper ICT infrastructure and sufficient internet penetration.
Figure 1. Progress of Central Asian states in the UN E-Government Survey
Source: Combined by the author based on the UN E-Government Survey 2018, 2020, and 2022.
In general, Central Asia, like any other part of the world, attempts to advance its economy through digitalization processes. Despite certain impediments, all Central Asian states are comprehensively working on advancing their mechanisms for increasing digitalization. The dynamics of Central Asian states in the UN E-Government Survey, which assesses the development based on the scope and quality of online services, the condition of the telecommunications infrastructure, and human capability (Figure 1), demonstrates that Central Asian states are working on advancing their digitalization.
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Note: The views expressed in this blog are the author’s own and do not necessarily reflect the Institute’s editorial policy
Dr. Albina Muratbekova is a research fellow at the Eurasian Research Institute of Akhmet Yassawi Kazakh Turkish International University. Albina holds a PhD degree in Oriental Studies from Al Farabi Kazakh National University. During her studies, Albina received fellowships from institutions in China, India, the USA, the UK, Germany, and Switzerland. Her primary research interests cover Central, East, and South Asian affairs; intraregional and interregional cooperation of Central Asian states; China-India relations; and Central Asian politics.