In Kazakhstan in recent years, Caspian Bank has been offering a service to its customers. The service is that, if applied for online in advance, customers can use facial recognition to obtain "cartomatThe new bank card can be obtained within 60 seconds from a machine called "The Bank of Kazakhstan". Kazakhstan, where many other digital transformations are taking place, is expected to become a UNE-Government Development Rankingand ranked 28th out of 193 countries. Uzbekistan is also moving toward digitization, and other Central Asian countries are beginning to do the same.

On the other hand, the January 2022 event in Kazakhstanprotest demonstrationThere are also concerns about the use of the latest digital technology to suppress political opposition and to reign in instability, as seen in the governments blocking Internet access and installing surveillance camera systems capable of facial recognition in major cities.establishmentand others. There are concerns about further privacy violations, such as obtaining messages in personal messaging applications.

As these examples illustrate, Central Asia is currently undergoing a rapid digital transformation with the introduction of the latest technologies into government and commercial services. While the triggers for this transformation vary, the recent pandemic of the novel coronavirus has played an important role in accelerating the transition to digital technology. However, Central Asia's digital transformation also coincides with a global trend toward technological development that predates the pandemic response. Governments in Central Asia are seeing digital transformation as a way toeconomic growthThe company believes that the new system will promote the efficiency of national governance and improve the quality of life of its citizens.

This paper explores digitization and its shortcomings, focusing on the current situation in Central Asian countries.

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

Central Asia and Digital Transformation

The current state of affairs in Central Asia began to form in 1991, when the countries gained independence from the Union of Soviet Socialist Republics. During the Soviet era, agriculture was the main industry in these regions, and the industrial sector included either specialized enterprises to complement the industrial activities of Russia, Ukraine, and Belarus, or, after independence, companies from the Soviet production chaindisconnectedIn the 1990s, governments of then emerging economies sought to attract foreign investment to the mining sector, given the region's rich reserves of gas, oil, rare metals, and uranium. In addition, governments and companies sought ways to develop industry beyond its role in the former Soviet Union. The industrial base was used to establish a multinational corporate sector, such as the auto industry, through joint ventures involving companies such as Toyota, Daewoo, Kia, and General Motors.

However, a major obstacle to industrial development was the overly bureaucratic and corrupt system of government that had persisted since the Soviet era. The development and introduction of modern technology was seen as a good opportunity for Central Asian countries to improve the efficiency of their bureaucracies and public sector operations and to address corruption and tax evasion. The concentration of state power in these countries meant that they were less likely to respond to protracted debate and opposition from parliaments and civil society institutions, which was one of the drivers of rapid digital transformationreasonwere. On the other hand, these states were not the only ones to have political activistssurveillanceThe digital technology was also used to quickly neutralize them.

The countries of Central Asia have made great strides in digitization in the three decades since their independence. Several countries are now positioned similarly to Western high-income countries in global ratings in terms of governance and economic digitalization. For example, the 2022Gabtec index(*1), Uzbekistan ranked 43rd in the world in the public services sector, placing it in Group "A," which is considered a "Govt. Tech Leader."

Kyrgyzstan and Tajikistan are similarly digitizing their socioeconomies, although they face unique challenges. On the other hand, the closed and autocratic countries ofTurkmenistanare lagging behind other countries in digitization. The following section looks at the situation in each country, with the exception of Turkmenistan.

Kazakhstan

The launch of Kazakhstan's "e-Governance" (*2) in 2005 was an important step in the country's public administration.eventThis was the first of its kind in the world. This transformative move was intended to leverage digital technology to enhance government services, streamline bureaucratic processes, and increase the efficiency of public service delivery. However, the government services for citizens were formallystartIt took another 10 years to achieve this goal. The introduction of e-government services for filing tax returns, obtaining permits and licenses, and paying government dues has made the state bureaucracy more efficient.

For example, a marriage application through a government websiteintroductionSince 2022, Kazakhstan citizens no longer have to go to the town hall, prepare documents, or stand in long lines when they want to enroll. Now, with just a few clicks on a website, they can go to the appropriate page of the government service and submit the necessary application.

Another digital service made available to Kazakhstan's citizens in 2023, the limited liability company (LLP)Registrationquickly and easily. Through the bank's mobile application, users log in using biometrics (e.g., fingerprint or facial recognition) and select the "LLP Registration" service. After filling in all the required fields and signing the application form, the user is instantly notified of the start of business activities. The system will automatically notify the national revenue statistics authorities and open a bank account for the new LLP at the same time.

The justice system has also been affected by digitization: in 2017, theSupreme Court Situation CenterThe launch of the "Supreme Court of Justice" has enabled the Supreme Court to remotely monitor all trials in the country. In addition,Mobile ApplicationsThe "courtroom" system allows those appearing in court to submit the necessary documents online and participate in the courtroom remotely.

Kazakhstan, International Conference on e-Governance (Photo:Ton Zijlstra / Flickr [CC BY-NC-SA 2.0 Deed])

Kazakhstan's postal service (KazPost.) began reforming in June 2014:QazpostThe digital transformation of the government industry is also a key factor in thecasein the United States. This state-owned enterprise was to be able to provide modern, customer-oriented postal services. The plan included the modernization of the postal reception offices, the introduction of a postal management center, a mail tracking service, and an SMS notification system. Customers could also use the post.kz service, an online branch of Kazpost, to locate accessible post offices, change mail delivery addresses, calculate delivery charges, pay for various services, and send money.

In recent years, the fintech and e-commerce sectors have also rapidly gained momentum. Statistics show that the national80%are active users of online banking, with more than 14 million people accessing online services through remote banking systems. In addition, online stores offer a wide range of products and services, and delivery services have greatly simplified online shopping. According to the National Bureau of Statistics, e-commerce in the country will reach a record high in 2021.US$230 million equivalentreached 8.41 TP3T, an increase of 8.41 TP3T over the previous year.

At the same time, Kazakhstan faces challenges in digitizing its economy. Inadequate infrastructure may prevent people from accessing the Internet at high transmission speeds. For example, of the 363 municipalities in eastern Kazakhstan, 105 have only wired connections to the InternetAccesscannot be done.

The rapid spread of digital technology is also accompanied by increased risks such as cyber-attacks and data breaches. Many companies have yet to recognize the importance of protecting personal data: in 2018-2020, Kazakhstan will have more than 11 million records and payment information related to personal data.disclosureThe first time, the company was in a position to do so.

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

In addition, legal regulations have not kept pace. The "Act on the Protection of Personal Data andexistenceThe country lacks provisions for the protection of personal data of minors and a system for managing biometric and other private information. Furthermore, Kazakhstan has adopted the "On the Protection of Individuals with regard to the Automatic Processing of Personal DatapactThere are challenges in sending personal information across the border to Kazakhstan because the country is not a member of the "United States of America (U.S.)".

On the other hand, there are cases where digital technology is misused for the benefit of the authorities. Kazakhstan is a "sergek (SergekThe company has installed more than 13,000 surveillance cameras capable of facial recognition, known as "face recognition" cameras, throughout the country.Pegasus Spy Scandal(*3), it has been confirmed that the government has used Internet surveillance software to track journalists and key business executives. Since the current system allows for domestic intelligence agencies and the Ministry of Information to report to the government, data analysis from social media can also be used for preemptive measures against anti-government activities.meansThe first two are the following.

Uzbekistan

Large-scale digitization efforts in Uzbekistan began in 2012, when the government approved the "Comprehensive Program for the Development of the National Information and Communication System." This was followed by the launch of a unified portal for government services in 2013.Internet portals OneID system, which enables personal identification and facilitates access to a wide range of services from government agencies to private companies.

Recent progress in digital transformation in Uzbekistan is evident in trends in international assessments of digitization. For example, the Government Artificial Intelligence Readiness Index, established by the British organization Oxford InsightsrankingUzbekistan rose from 158th to 79th between 2019 and 2023 in the

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

In addition, there are plans to enhance the digitalization of Uzbekistan, with the aim of achieving a share of e-government services of 100%, i.e., all government services will be available online. The introduction of an electronic system of IDs for identification purposes has already begun, and plans for a "citizen's digital passport" and a "digital authority" are also underway.

As an experimental phase, from July 2022 to December 2023, paper IDs will not be accepted at government agencies, banks, and other organizations.Not necessary.The company decided to do the same. Instead, citizens could use a digital version of their ID, with the same validity as a paper ID, through the exclusive OneID mobile app. In addition to passports and personal IDs, digital documents such as driver's licenses, vehicle registration certificates, marriage certificates, birth certificates, student IDs, and coronavirus vaccination certificates could be used.

However, there are also factors that are hindering significant digitization: first, the resources of small and medium-sized enterprises (SMEs) areLimitedThe first is that the digitalization process can be particularly difficult for SMEs because they have limited financial and human resources compared to larger companies. Second, digitization can be particularly challenging for SMEs because they have limited economic and human resources compared to larger firms.increaseThis is the fact that it will be necessary to Third, the speed of technological development is regulated by theNot keeping up.This is to say. Digital technology has developed so rapidly that relevant regulatory laws have not yet been enacted or applied. Due to this discrepancy, the digitalization of business is not easy.

Meanwhile, the government of Uzbekistan, like that of Kazakhstan, is using digital technology to suppress political activity and anti-government movements. For example, Khidirnazar Alakulov, a member of the opposition Truth and Progress party who has announced his candidacy for the fall 2020 presidential election, said he has been subjected to online trolling, surveillance, and other threats, including being interrogated, detained, and physically attacked by strangers.reportThe company is doing so.

Furthermore, in 2022, during protests in the Karakalpakstan region over a proposed constitutional amendment that would abolish the autonomy of the Karakalpakstan Autonomous Region, the Uzbek authorities blocked all information about the situation amid claims that police forcefully broke up the protest rally. Government Blocks Internet Communications in KarakalpakstandecisionThe flow of information in and out of Karakalpakstan has become very complicated because of the decision to

Kazakhstan, International Conference on Technology and Women Empowerment (Photo:UN Women / Flickr [CC BY-NC 2.0 Deed])

Kyrgyzstan

Digitalization in Kyrgyzstan is not as advanced as in Kazakhstan and Uzbekistan. The original small size of the economy and lagging level of development compared to these two countries have been cited as reasons for this, and the geographical factor of mountainous terrain is a more significant barrier. In addition, the limited size of the domestic market, regulatory constraints, and lack of affordable financing sources pose challenges to the implementation of e-government and the development of IT-related companies. As a result, Kyrgyzstan has to rely in part on the support of foreign countries and international organizations when implementing e-government.

For example, in 2015, the eGovernment Center established by Kyrgyzstan, with support from USAID and the Estonian Ministry of Foreign Affairs, entitled "Supporting Service-Oriented eGovernment Interoperability"Projectwas initiated. The main objective of the project was to enhance government services for citizens and businesses by leveraging Estonian know-how and experience. The project also included the establishment of a data control layer that would form the basis for e-government in Kyrgyzstan, as well as the training of civil servants and IT specialists. As a result of the project, in September 2018, the "Tunduk (Tunduk.The system, called the "National Data Exchange System (NDIS)," was established. By 2021, more than 165 million data transactions had taken place.

In a small country like Kyrgyzstan, which is in the process of growing economically, Internet access issues due to lack of infrastructure and cost remain a major obstacle to the digitization of the economy. in 2018, the World Bank announced a project development goal for Kyrgyzstan (PDO) was approved to increase Internet access at more affordable prices, attract private investment in the ICT sector, and strengthen the government's ability to provide e-government services. The initialbudgetwas US$50 million, with an additional US$7 million added in January 2024. The main goal of the project was to increase the country's Internet penetration rate by improving Internet accessibility; by 2023, the penetration rate was 781 TP3T. Specific factors contributing to this increase were the creation of 2,500 km of fiber-optic networks across the country and two cross-border fiber-optic links, as well as the establishment of a government cloud infrastructure.

After the outbreak of the new coronavirus, e-commerce is also a big deal in Kyrgyzstan.growthThe Advances in mobile payment systems and app-based commercial platforms have been spectacular. The number of online stores has also increased significantly and the range of commercial services accessible through the Internet has expanded (*4).

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

Tajikistan

Tajikistan's digitization now provides its citizens with reliable broadband access that balances cost and performance more broadly than in other Central Asian countries, whileLate.Tajikistan. Tajikistan's mountainous location and its geography have long been an obstacle to the development of a robust digital connectivity infrastructure. The telecommunications sector's harsh business environment and high tax rates have slowed progress and held back private sector investment that could have improved both quality and performance.

As a result, Internet service in Tajikistan remains expensive and unreliable. The rising costs associated with Internet access and digital devices are also keeping many citizens from accessing the Internet, and by 2023, the population ofMore than halfare not using the Internet. On the other hand, digital literacy is also a problem. Although the government is trying to promote digitalization, citizens' daily lives are notNot pervasive.The following is a list of the most common problems with the

Despite these challenges, the number of e-commerce operators is growing in Tajikistan. This impetus is mainly due to the fact that banks and telecommunication companies have integrated e-commerce platforms into their extensive digital services. These companies are forming an environment that allows them to offer a comprehensive range of digital services through a single integrated application. In particular, Alif (Alifand Fumo (Humo.), a state-owned company, is actively promoting e-commerce by directly linking its marketplace to its online banking application and integrating payments, sales, and various services on a unified platform. For example, Babylon M (Babilon-Mhas launched its own app and boasts up to 50,000 active users.

These influential companies in the field of e-commerce play a pivotal role in facilitating and developing the growth of e-commerce companies, platforms and markets in Tajikistan (*5).

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

summary

As we have discussed, Kazakhstan and Uzbekistan are major catalysts for digitalization in Central Asia. Both countries boast strong government structures, and both have government-led digitalization efforts, particularly in optimizing bureaucracy through the introduction of e-government services. The government's focus on supporting the digitalization of small and medium-sized enterprises (SMEs) has led to more accelerated digitalization and enterprise development.

Conversely, Kyrgyzstan and Tajikistan lag behind other countries in Central Asia due to their immature economies, small populations, and harsh geography. Characterized by mountainous terrain, these two countries face additional obstacles in implementing infrastructure projects, let alone tackling costly digitization and improving Internet access. Kyrgyzstan relies on external assistance to achieve its digitization goals, seeking investment from foreign countries and international organizations. In contrast, Tajikistan has left much of its digitization to the private sector. As a result, digital online services have emerged independently of government direction and serve only a small portion of the population.

While digitization improves the comfort of the general public and addresses corruption in government institutions, it also provides governments with the means for potential human rights violations. As seen in Kazakhstan and Uzbekistan, methods such as Internet blocking and the installation of surveillance systems have proven convenient for governments in dealing with anti-government actions and protests. Intelligence agencies have found it easier to keep an eye on political activists by monitoring their interactions on messaging platforms.

In Central Asian countries, the need for digitalization is a central agenda item, driven by both government and social agendas. As pioneers in this digital transformation, Kazakhstan and Uzbekistan have successfully introduced and enhanced e-government services. Kyrgyzstan and Tajikistan, although facing some challenges and lagging behind other countries, have recognized digitalization as something that needs to be addressed urgently and are actively promoting e-government implementation for improvement. Progress may be incremental, but these countries are dedicated to advancing digitization in line with evolving global trends in digital technology and political governance.

note 1GABTECThe term is a combination of the words Government and Technology. The incorporation of digital technology into government to improve services.

note 2 (supplementary information)e-GovernanceGovernment aims to improve the efficiency of public administration through digital technology.

3 Pegasus Spy Scandal: Spyware called "Pegasus" developed by the Israeli NSO group infiltrates certain smartphones to obtain information without the owner's knowledge. Its use in many countries isconfirmationThe company has been

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

5 In fact, a number of small e-commerce markets have emerged in Tajikistan, including Gelos.tj, Magnit.tj, Usto.tj, and luhtak.tj.

Writer: Ilnaz Makhmutov

Translation: Minami Ono

Graphic: Yumi Ariyoshi