In recent years in Kazakhstan, Kaspi Bank has been offering a service to customers. If they apply online in advance, they can use facial recognition to obtain a new bank card within 60 seconds from a machine called a “Kartomat.” Among many other digital transformations, Kazakhstan ranked 28th out of 193 countries in the UN’s E‑Government Development Index in 2022. Uzbekistan is also advancing digitization, and other Central Asian countries have likewise begun accelerating it.

At the same time, as seen during the protests that occurred in Kazakhstan in January 2022, there are concerns about using the latest digital technologies to suppress political opposition and quell instability. The government has shut down internet access and installed surveillance camera systems capable of facial recognition in major cities. Further privacy intrusions are feared, such as obtaining individuals’ messages within messaging apps.

As these examples show, Central Asia is currently undergoing rapid digital transformation driven by the introduction of the latest technologies into government and commercial services. The triggers for this transformation are varied, but recently the COVID‑19 pandemic has played a key role in accelerating the shift to digital technologies. However, Central Asia’s digitization also aligns with global trends in technological development that predate the pandemic response. Governments across Central Asia believe that digital transformation can promote economic growth, improve the efficiency of national governance, and enhance citizens’ quality of life.

This article explores digitization and its downsides while examining the current situation in Central Asian countries.

Kazakhstan bank mobile application (Kaspi Bank) (Photo: Yusui Sugita)

Central Asia and digital transformation

The conditions we see today in Central Asia began to take shape in 1991, when the countries gained independence from the Soviet Union. During the Soviet era, agriculture was the main industry in these regions, and the industrial sector consisted either of specialized enterprises that complemented the industrial activities of Russia, Ukraine, and Belarus, or raw‑material mines that, once cut off from Soviet production chains after independence, had little value on their own. In the 1990s, as newly independent states, the governments sought to attract foreign investment to the mining sector, given the region’s rich deposits of gas, oil, rare metals, and uranium. In addition, governments and companies looked for ways to develop industries beyond their roles in the former USSR. The industrial base was used to establish multinational sectors such as automobile manufacturing through joint ventures involving companies like Toyota, Daewoo, Kia, and General Motors.

However, a major obstacle to industrial development was an excessively bureaucratic and corrupt governmental system inherited from the Soviet period. The development and adoption of modern technologies were seen as an opportunity for Central Asian countries to increase the efficiency of the bureaucracy and public sector and to address corruption and tax evasion. Because state power was concentrated in these countries, there was less need to accommodate prolonged debate or opposition from parliaments and civil society institutions—one reasonmonitor and swiftly neutralize political activists.

Over the three decades since independence, the countries of Central Asia have made significant progress in digitization. Some rank alongside high‑income Western countries in global ratings for the digitization of governance and the economy. For example, according to the 2022 GovTech Maturity Index (Note 1), Uzbekistan ranked 43rd worldwide in the public services pillar and entered Group “A,” labeled “GovTech Leaders.”

Kyrgyzstan and Tajikistan are likewise advancing the digitization of their socioeconomic spheres, although they face unique challenges. Meanwhile, Turkmenistan, a closed and authoritarian country, lags behind others in digitization. Below we look at the situation in each country except Turkmenistan.

Kazakhstan

In 2005, the launch of Kazakhstan’s “e‑governance” (Note 2) was a major milestone in national administration. This transformative move sought to harness digital technologies to enhance government services, streamline bureaucratic processes, and increase the efficiency of public service delivery. However, it took another decade before administrative services for citizens were officially launched. With the introduction of e‑government services for tax filing, obtaining permits and licenses, and paying government fees, the state bureaucracy became more efficient.

One example is the introduction of marriage applications via the government website. Since 2022, citizens of Kazakhstan no longer need to visit offices, prepare paperwork, or wait in long lines to register a marriage. Now, with just a few clicks, they can go to the relevant page in government services and submit the required application.

Another digital service made available to citizens in 2023 enables rapid and simple registration of a limited liability partnership (LLP). Through a banking mobile application, users log in using biometrics (such as fingerprint or facial recognition) and select the “LLP Registration” service. After completing all required fields and signing the application, they immediately receive a notification that they may commence business activities. The system automatically notifies the national revenue statistics authorities and simultaneously opens a bank account for the new LLP.

The judiciary has also been affected by digitization. With the launch of the Supreme Court Situation Center in 2017, the Supreme Court gained the ability to remotely monitor all court proceedings in the country. In addition, a mobile application enables participants in court cases to submit required documents online and join hearings remotely.

Kazakhstan, an international conference on e‑governance (Photo: Ton Zijlstra / Flickr [CC BY-NC-SA 2.0 Deed])

Kazakhstan’s postal service (Kazpost: Qazpost), whose reforms began in June 2014, is another example of digital transformation in a state industry. The state‑owned company aimed to provide modern, customer‑oriented postal services. The plan included modernizing postal acceptance points, introducing a mail management center, shipment tracking services, and an SMS notification system. By using the post.kz service, Kazpost’s online branch, customers can find conveniently located post offices, change delivery destinations, calculate postage, pay for various services, and transfer money.

In recent years, fintech and e‑commerce have also gained rapid momentum. According to statistics, 80% of the population actively uses online banking, and more than 14 million people access online services through remote banking systems. Online stores offer a wide range of goods and services, and delivery services have greatly simplified online shopping. According to the National Statistics Bureau, the country’s e‑commerce reached a record US$230 million in 2021, an 8.4% increase year‑on‑year.

At the same time, Kazakhstan faces challenges in digitizing its economy. Inadequate infrastructure can mean that high‑speed internet is not available. For example, of 363 municipalities in eastern Kazakhstan, 105 can only access the internet via wired connections.

The rapid spread of digital technologies also brings increased risks such as cyberattacks and data breaches. Many companies still do not recognize the importance of protecting personal data. Between 2018 and 2020, more than 11 million records containing personal and payment information were leaked in Kazakhstan.

Kazakhstan, a view of Astana (Photo: Ken and Nyetta / Wikimedia Commons [CC BY 2.0 Deed])

Legal regulations are also lagging. Although a Law on Personal Data and Its Protection exists, it is not sufficient, lacking provisions for protecting minors’ personal data and mechanisms to manage biometric and other private information. Furthermore, since Kazakhstan has not acceded to the Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data, cross‑border transfers of personal data to Kazakhstan face challenges.

There are also cases in which digital technologies are misused for the authorities’ benefit. Kazakhstan has introduced surveillance cameras capable of facial recognition known as “Sergek,” with more than 13,000 installed nationwide. As seen in the Pegasus spyware scandal (Note 3), it has been confirmed that the government used internet surveillance software to track journalists and top executives of major companies. Under the current system, reports flow to the government from domestic intelligence agencies and the Ministry of Information, so data analysis from social media also serves as a tool for preemptive measures against anti‑government activity.

Uzbekistan

Uzbekistan’s large‑scale digitization efforts began in 2012, when the government approved the “Comprehensive Program for the Development of the National Information and Communication System.” The following year, a unified portal for government services was launched. In 2016, citizens gained access to the portal’s OneID system, enabling personal identification and facilitating access to a wide range of services from government agencies to private companies.

Recent progress in Uzbekistan’s digital transformation is evident from trends in international evaluations of digitization. For example, in the Government AI Readiness Index ranking established by UK‑based Oxford Insights, Uzbekistan rose from 158th to 79th between 2019 and 2023.

Uzbekistan, a woman looking at a smartphone (Photo: Enric / Wikimedia Commons [CC BY-SA 4.0 Deed])

Furthermore, there are plans to strengthen Uzbekistan’s digitization, targeting 100% e‑government service coverage—that is, making all government services available online. The introduction of a system to digitize IDs for identity verification has already begun, and plans such as “digital passports for citizens” and “digital authority” are underway.

As an experimental phase, from July 2022 to December 2023, government agencies, banks, and other organizations did not require presentation of paper IDs. Instead, citizens were able to use digital IDs with the same validity through a dedicated OneID mobile app. In addition to passports and personal IDs, driver’s licenses, vehicle registration certificates, marriage certificates, birth certificates, student IDs, and COVID‑19 vaccination certificates can also be used as digital documents.

However, several factors hinder large‑scale digitization. First, the resources of small and medium‑sized enterprises are limited. Compared to large companies, SMEs have constrained financial and human resources, making digitization particularly challenging. Second, there is a need for an increase in qualified specialists. Implementing digital tools requires support from experts with knowledge and skills in the digital field, enabling further development. Third, regulation has not kept pace with the speed of technological development. Because digital technologies have advanced so rapidly, the enactment and application of related regulatory laws remain insufficient. This mismatch makes business digitization difficult.

At the same time, like the Kazakhstani government, the Uzbek government has used digital technologies to suppress political activity and anti‑government movements. For example, Hidirnazar Allaqulov of the opposition “Truth and Progress,” who announced his candidacy for the fall 2020 presidential election, reported being subjected to online trolling, surveillance, and other intimidation, being interrogated and detained, and being physically attacked by unknown individuals.

Furthermore, in 2022, amid protests in the Karakalpakstan region over proposed constitutional amendments to abolish the region’s autonomy—and amid claims that police forcefully dispersed demonstrations—the Uzbek authorities imposed a comprehensive information blackout. The government’s decision to cut off internet communications in Karakalpakstan made the inflow and outflow of information from the region extremely complicated.

Kazakhstan, an international conference on technology and women’s empowerment (Photo: UN Women / Flickr [CC BY-NC 2.0 Deed])

Kyrgyzstan

Kyrgyzstan’s digitization is not as advanced as in Kazakhstan or Uzbekistan. Reasons include its originally smaller economic scale and lower level of development compared with those two countries, and its mountainous geography poses an even greater barrier. The limited size of the domestic market, regulatory constraints, and a lack of affordable financing create challenges for implementing e‑government and developing IT‑related companies. As a result, Kyrgyzstan has had to rely on support from foreign countries and international organizations when introducing e‑government.

For example, in 2015 the e‑Government Center established by Kyrgyzstan, with support from USAID and the Estonian Ministry of Foreign Affairs, launched a project titled “Support for Service‑Oriented e‑Government Interoperability.” The main goal was to strengthen government services for citizens and businesses by leveraging Estonia’s expertise and experience. The project included establishing a data control layer forming the foundation of Kyrgyzstan’s e‑government and training civil servants and IT professionals. As a result, in September 2018 a system called “Tunduk” was established. It is the linchpin for online data exchange between government and the private sector, aims to connect all state agencies, and seeks to complete the digitization of national services. By 2021, more than 165 million data transactions had been carried out.

In a small, developing economy like Kyrgyzstan, problems of internet access due to insufficient infrastructure and cost remain major obstacles to economic digitization. In 2018, the World Bank approved a Project Development Objective (PDO) for Kyrgyzstan aimed at increasing affordable internet usage, attracting private investment in the ICT sector, and strengthening the government’s capacity to deliver e‑government services. The initial budget was US$50 million, with US$7 million added in January 2024. The project’s primary goal was to raise the country’s internet penetration by improving affordability; by 2023, penetration had reached 78%. Specific factors included the creation of a 2,500‑km fiber‑optic network nationwide, two cross‑border fiber‑optic links, and the build‑out of a government cloud infrastructure.

After the COVID‑19 outbreak, e‑commerce in Kyrgyzstan also saw major growth. Advances in mobile payment systems and app‑based commercial platforms have been remarkable. The number of online shops increased significantly, and the range of commercial services accessible via the internet expanded (Note 4).

An internet cafe in the Kyrgyz capital (Photo: Vmenkov / Wikimedia Commons [CC BY-SA 3.0 Deed])

Tajikistan

Tajikistan’s digitization currently lags behind other Central Asian countries, even as it seeks to provide broad, reliable broadband access with a balance of cost and performance. Its mountainous geography has long hindered the development of robust digital connectivity infrastructure. The business environment in the telecommunications sector is harsh, with high tax rates, slowing progress and deterring private‑sector investment that could improve both quality and performance.

As a result, Tajikistan’s internet services remain expensive and unreliable. The rising costs of internet access and digital devices are driving many citizens offline, and as of 2023, more than half of the population was not using the internet. Digital literacy is also an issue. Although the government is trying to promote digitization, it has not penetrated daily life.

Despite these challenges, the number of e‑commerce operators in Tajikistan is increasing. This growth is driven mainly by banks and telecom companies integrating e‑commerce platforms into their broader digital services. These firms are creating an environment in which comprehensive digital services can be offered through unified applications. In particular, state‑owned companies such as Alif and Humo are actively promoting e‑commerce by directly linking marketplaces to their internet‑banking apps and integrating payments, sales, and various services on a unified platform. For example, Babilon‑M has launched its own app, boasting up to 50,000 active users.

These influential companies in the e‑commerce sector play a crucial role in promoting and developing the growth of Tajikistan’s e‑commerce companies, platforms, and marketplaces (Note 5).

University students taking a digital skills course in Tajikistan (Photo: UNDP Tajikistan / Flickr [CC BY-NC-SA 2.0 Deed])

Conclusion

As discussed, Kazakhstan and Uzbekistan are the main catalysts of digitization in Central Asia. Both boast strong government institutions and are pursuing government‑led digitization, particularly optimizing bureaucracy through the introduction of e‑government services. By focusing on supporting SME digitization, governments are accelerating digitization and fostering business development.

By contrast, Kyrgyzstan and Tajikistan lag behind other countries in Central Asia due to underdeveloped economies, smaller populations, and harsh geographical conditions. Characterized by mountainous terrain, these two countries face additional obstacles even in implementing infrastructure projects, let alone undertaking costly digitization and improvements in internet access. Kyrgyzstan seeks investments from foreign countries and international organizations and depends on external support to achieve its digitization goals. In contrast, Tajikistan has left much of digitization to the private sector. As a result, digital online services have appeared independently of government direction and are available only to a small share of the population.

Digitization improves convenience for ordinary citizens and helps address corruption in government bodies, but it also gives governments potential tools for human rights violations. As seen in Kazakhstan and Uzbekistan, methods such as internet shutdowns and the installation of surveillance systems are convenient for governments in dealing with anti‑government actions and protests. Intelligence agencies can more easily keep tabs on political activists by monitoring exchanges on messaging platforms.

In Central Asian countries, the need for digitization is a central topic, driven by both governmental and societal motives. As pioneers of this digital transformation, Kazakhstan and Uzbekistan have successfully introduced and strengthened e‑government services. Although Kyrgyzstan and Tajikistan face several challenges and lag behind, they recognize digitization as urgent and are actively promoting e‑government to improve. Progress may be gradual, but these countries are committed to advancing digitization in line with evolving global trends in digital technology and political governance.

Note 1: GovTech: A portmanteau of Government and Technology. The use of digital technology in government to improve services.

Note 2: E‑governance: Government aiming to improve administrative efficiency through digital technology.

Note 3: Pegasus spyware scandal: Spyware called “Pegasus,” developed by Israel’s NSO Group, is implanted into specific smartphones to obtain information without the owner’s knowledge. Its use in many countries has been confirmed.

Note 4: Popular domestic e‑commerce sites include Svetofor.info, Lalafo.kg, Kivano, Shoppix.kg, Max.kg, Azor, and Wildberries.

Note 5: In Tajikistan, numerous small e‑commerce marketplaces have emerged, including Gelos.tj, Magnit.tj, Usto.tj, and luhtak.tj.

Writer: Ilnaz Makhmutov

Translation: Minami Ono

Graphics: Yumi Ariyoshi