Trade Preferences Pave the Way for Joint Production
Cooperation between the Eurasian Economic Union (EAEU) and the Gulf states is reaching a new level. Beyond mere growth in trade, an investment infrastructure is taking shape—one with the potential to transform the economies of Central Asia. This framework is built upon energy, logistics, industry, and financial collaboration. For Kyrgyzstan, this creates an opportunity to tap into Gulf capital via the EAEU’s common market.
On November 10, 2026, the Eurasian Development Bank (EDB) released a study on trade and investment between Central Asia and the member states of the Gulf Cooperation Council (GCC). The findings point to an acceleration in economic engagement between the two regions.
Between 2020 and 2025, trade turnover nearly quadrupled, rising from $1 billion to $3.9 billion. The Gulf’s share in Central Asia’s foreign trade has reached 1.7%.
Simultaneously, the stock of investments from Gulf nations has grown from $9.1 billion to $31.1 billion—a 3.4-fold increase over six years. The additional trade potential by 2030 is estimated at $4.9 billion.
The most significant shift lies in the structure of this engagement. Previously, trade was dominated by the supply of equipment and consumer goods; now, there is a growing share of investment directed toward industrial and energy infrastructure.
Notably, approximately 70% of this trade consists of imports from the Gulf, with the United Arab Emirates (UAE) accounting for 94% of the total trade turnover between the two regions. Uzbekistan and Turkmenistan account for approximately 85% of trade in Central Asia. This concentration highlights the potential for other states to increase their participation.
Structural shifts are also taking place in investment. The share of the electric power sector has grown from 2% to 34%, with cumulative investments in this industry reaching $10.5 billion. Solar and wind energy projects are providing the primary momentum.
It is significant that the investment expansion of the Gulf states coincides with the growth of Eurasian institutions. The Eurasian Development Bank (EDB) was established by Russia and Kazakhstan in 2006. It was subsequently joined by Armenia, Tajikistan, Belarus, and Kyrgyzstan, with Uzbekistan later becoming a member as well.
By mid-2026, the EDB’s cumulative investment portfolio had reached $22.1 billion, comprising 348 projects. The total value of projects involving the bank exceeds $64 billion, and their implementation has created more than 45,000 jobs.
A key feature of the EDB is the intergovernmental nature of its operations. The bank finances projects that strengthen economic ties between countries in the region. Its investment monitoring framework allows for the assessment of reciprocal investments and the development of new industrial linkages.
Investment institutions from the Gulf states employ a different model. The UAE relies on entities such as Mubadala, ADQ, and Masdar, alongside various international financial structures. Saudi Arabia channels its investments through the Public Investment Fund (PIF) and ACWA Power, while Qatar utilizes the resources of the Qatar Investment Authority and various sector-specific companies.
These entities invest not only within their own borders but also in energy, transport, and industrial projects across Asia, Africa, and Europe. Their international expansion generates long-term demand for access to new markets and infrastructure corridors.
Of particular importance is the agreement between the Eurasian Economic Union (EAEU) and the UAE. Signed on June 27, 2025, the agreement entered into force on October 6, 2026. It provides for the reduction or elimination of customs duties on more than 85% of the product nomenclature. At the same time, it regulates rules of origin for goods, technical barriers, and sanitary requirements.
This is no longer merely an isolated bilateral trade channel. The agreement opens the Emirati market to producers from all five EAEU member states. For the UAE, it expands access to the Union’s collective market.
Past experience demonstrates the consistent expansion of the EAEU’s external economic network. An agreement with Vietnam has been in effect since 2016. A trade and economic agreement with China—which does not include a free trade regime—has been in place since 2019. An interim agreement with Iran took effect in 2019, followed by a full-fledged free trade agreement that entered into force in May 2025. An agreement with Serbia has been in effect since July 2021.
The agreement with Singapore was signed in 2019 but has not yet entered into force. An interim trade agreement with Mongolia has been in effect since July 2026. The agreement with Indonesia was signed in December 2025; its entry into force is contingent upon the completion of the necessary procedures.
Thus, the Gulf states are becoming part of the Union’s broader system of external economic relations. However, the existence of an agreement does not in itself guarantee the establishment of joint production facilities; this requires investment projects, logistics, and coordinated industrial supply chains.
Examples of this model already exist. In Uzbekistan, Masdar’s portfolio includes nine energy projects with a total value of $4.2 billion and a combined capacity of 4.8 GW. Saudi-based ACWA Power is developing projects with a total value of $4.2 billion and a combined capacity of 2.5 GW, supplemented by 968 MW of energy storage capacity.
The transport component is developing in parallel. DP World is implementing a multimodal logistics terminal project in Tashkent. The first phase includes a container terminal with an annual capacity of 150,000 TEUs, while the warehouse complex will span 63,000 square meters.
For Central Asia, this means the creation of new connections to ports and international trade hubs. For the EAEU (Eurasian Economic Union), such facilities generate additional opportunities for transit and exports.
Kyrgyzstan also has the chance to become part of this investment process. Between 2020 and 2025, its trade with the Gulf states grew approximately ninefold, with turnover reaching $185 million. However, a significant portion of exports to the UAE consists of the re-export of electronics; mobile phones account for 80–87% of these shipments.
According to the Kyrgyz side, direct trade with the UAE reached $179.5 million in 2025, with exports totaling $124 million and imports amounting to $52 million. The primary export items remain mobile phones, computers, food products, and certain industrial goods.
This structure points to an important area for future development. Growth in trade turnover does not yet equate to a comparable increase in domestic production. Real economic returns will emerge through the expansion of processing, the food industry, and the manufacturing of high value-added goods.
Kyrgyzstan already has experience engaging with investors from the Emirates. The company Masdar has explored the construction of a 200 MW solar power plant. The parties have also discussed joint energy projects and the establishment of an investment holding structure with a capital of $100
Similar opportunities are opening up for other EAEU member states. Kazakhstan is developing cooperation with Masdar in the wind energy sector; a project in the Zhambyl region is set to have a capacity of 1 GW. By the end of 2025, investments from the Emirates into Kazakhstan had reached approximately $1.64 billion.
Armenia is expanding its cooperation with the UAE in the fields of trade, finance, and metallurgy. Specifically, a joint steel venture is being developed with the participation of the GTB Group and the Safe Group. Belarus has a separate agreement with the UAE covering trade in services and investments, which complements the broader Eurasian agreement on trade in goods.
Russia remains of particular importance within this framework. Trade turnover between Russia and the UAE reached approximately $12 billion in 2025. Russian exports include food products, metals, and petroleum products, while imports consist of equipment, components, and vehicles. Investments from both Russia and the UAE also span the logistics, finance, and real estate sectors.
Against this backdrop, several paths for future development emerge. The first involves maintaining a model primarily focused on raw materials and trade; while this increases turnover, it limits the localization of production and the associated technological benefits.
A second option entails the creation of joint ventures, the processing of raw materials, and the manufacturing of industrial goods. This approach requires cooperation between the Eurasian Economic Union (EAEU) and Gulf capital, supported by shared infrastructure. The result would be an increase in value-added output and industrial employment.
There is also an intermediate model: investment in energy and logistics without deep industrial localization. While this accelerates infrastructure development, a significant portion of the technological value remains outside the region.
Consequently, the primary criterion is not the total volume of investment attracted, but rather its contribution to productivity, employment, exports, and interstate cooperation. For Kyrgyzstan, participation in projects that link local production to both EAEU and Gulf markets is particularly significant.
The potential for cooperation depends on the ability to combine three key resources: the EAEU provides a unified market and legal framework, while the Eurasian Development Bank (EDB) serves as a regional investment mechanism. The Gulf states possess capital, technology, and international logistics platforms.
It is the coordinated application of these assets that transforms closer trade ties into Eurasian development. The next phase will no longer be defined by the number of agreements signed; rather, its success will be measured by the emergence of joint ventures, production chains, and sustainable export flows.
Text adapted by AI. Should it lack clarity, read the original RU-ver.
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