Mutual Investments on the Eurasian Continent: New and Traditional Partners
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Report
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Key conclusions
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Summary
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Presentation
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A new study by the Eurasian Development Bank (EDB) is a continuation of the report ‘EDB Monitoring of Mutual Investments — 2024’ published in December 2024 and dedicated to mutual investments in the Eurasian region (Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Mongolia, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan).
The EDB Monitoring of Mutual Investments is based on a database of mutual direct investments (MDI) from 2016 to 1H 2024. It is compiled on a “from the bottom up” basis by analyzing projects between the countries using comprehensive information from open official sources.
This report analyses MDI between 13 countries in the Eurasian region and external partner countries (China, Türkiye, Iran, Gulf states). The EDB estimates that investment stock reached $90.4bn by the end of H1 2024, up 6.4% from 2023.
China is the largest investor to the Eurasian region, with MDI stock of $58.6bn at the end of H1 2024 (64.8% of the total). It is followed by Türkiye ($12.3bn, 13.6%), UAE ($12.2bn, 13.5%), Iran ($3.2bn, 3.5%), Saudi Arabia ($2.3bn, 2.5%) and Qatar ($1.6bn, 1.8%).
Iran had the highest investment growth (2-fold since 2016), mainly in Azerbaijan (90% of investments). Türkiye has broad sectoral MDI diversification. Saudi Arabia and Qatar are new investors in the region, with their first investments in 2021 and 2024, respectively.
The main recipients of investment in the Eurasian region are Russia ($23.5bn, 26%), Turkmenistan ($17.5bn, 12.5%), Kazakhstan ($15.5bn, 11.1%), Mongolia ($10.3bn, 7.4%) and Uzbekistan ($8.8bn, 6.3%). Central Asia received 51% of all investments from China, Türkiye, Iran and the Gulf, or $46.2bn, up 25% from the 2022 level.
Outbound investment from the Eurasian region totalled $49.4bn, double the 2016 level. Türkiye receives 80% of all investments from the Eurasian region, a significant part of which comes from Russia.
Direct investment stock between the Eurasian region and external partner countries, $ bn
Source: EDB MMI database
China is increasing investments in energy and manufacturing. Traditionally, Chinese investment has been in the extractive industries ($36.2bn), but its share has fallen to 61.7% at the end of 1H 2024. Investment in the power sector has increased 2.1-fold in a year and a half to $4.1bn, of which 85% is in Uzbekistan. Investment in the manufacturing sector grew 8% over the same period to $11.8bn, the bulk of which is in Central Asia.
Gulf states are actively investing in the Eurasian region. The UAE leads the Gulf with investments of $12.2bn at the end of H1 2024, 90% of which is in Central Asia. Saudi Arabia has increased investments from $0.3bn in 2021 to $2.3bn in 2024, mainly in Uzbekistan's power sector. Qatar invested $1.6bn in Kazakhstan's telecoms for the first time in 2024.
Manufacturing and energy are displacing the extractive industries. The extractive industries account for 55% of all investment stock of $50bn, but its share has fallen from 65.4% in 2020. The manufacturing sector attracted $14.4bn and the power sector has grown 4.8 times since 2020, reaching $9.1bn at the end of H1 2024.
Greenfield projects are the main form of MDI. Investment in new businesses and infrastructure totalled $57bn, up 1.9 times from 2016. The share of such investments rose to 63%, driven by the growth of Central Asian economies and increased interest in projects in the energy, manufacturing and extractive industries.