Ecology as Capital: Why Central Asia Needs a New Way to Value Land

If a mountain gorge is unique, its value will not necessarily increase after ten thousand apartments are built there. The opposite may happen: property prices rise while the value of the place itself declines.

Nature needs to be included in the economic equation of an investment project as one of its key assets.

Building a Property Does Not Mean Creating an Economy  

The difference between building a property and creating a local economy is particularly clear in tourism.

Turkistan is an example I often consider. A major infrastructure effort has been undertaken there, and projects of this kind clearly demonstrate the difference between developing a place and creating economic value from it.

You can build an airport, hotels, public squares, museums and roads. All of these create property and infrastructure. But a tourism economy begins to function when people have reasons to visit, stay for several days, spend money locally and come back.

A property ends at its front door. The local economy begins beyond it.

A strong tourism hub needs a wider ecosystem around it: gastronomy, a night-time economy, events, craft districts, routes, retail, entertainment, excursions, local brands and nearby communities.

First, we need to design how people will use and experience a place, and only then determine how many square metres to build. Key indicators include the length of a visitor’s stay and the amount of money they leave in the local economy.

Read more about how a natural resource can become part of a place’s economic model in our article:

Sea Breeze Uzbekistan: When Ecology Becomes an Economic AssetWhy Charvak’s future depends not only on what is built here, but on the value the natural resource creates for society, investors and the territory itself.mag.humodoc.com

How Much Tourist Spending Stays Local

To assess this effect, I would introduce the concept of a tourism revenue localisation coefficient.

For the local economy, the important question is not how much a tourist spends, but how much of that money stays within the destination. When a significant share goes to an international booking platform, a foreign airline and a handful of major operators, the destination attracts the tourist but does not capture the full economic benefit.

When planning a large resort, hotels should be developed alongside a local supply chain involving food suppliers, furniture and souvenir makers, guides, transport companies, craftspeople and restaurateurs.

A major investment project should become an economic anchor for small businesses around it. This can be achieved by reserving commercial space for local entrepreneurs, creating local supplier programmes, markets and food streets, and supporting farmers’ cooperatives.

Investment in a hotel can then benefit the economy of the wider area, rather than its owner alone.

When a Square Metre Makes a Place Less Valuable 

Mountains, lakes, steppes and other natural areas cannot be treated indefinitely as reserves of land for development. The quality of the natural environment often determines the initial value of a place.

You can add more square metres but lose the landscape, build more hotels but create water shortages, increase tourist numbers but overload roads, sewerage systems and the natural ecosystem.

As a result, property values may continue to rise for a while even as the value of the place itself declines.

Sensitive natural areas need environmental zoning, limits on tourism capacity, restrictions on development density, water-balance assessments, wastewater treatment facilities, waste management, public transport and areas where construction is completely prohibited.

This is how we preserve the asset on which the local economy is built.

Not More Tourists, but More Value 

For some natural areas of Central Asia, I believe the model of mass, low-cost tourism needs to be reconsidered.

A more effective model could be based on lower density and a higher-value tourism product. Premium tourism cannot be created simply by raising prices. Its value comes from the uniqueness of the place, architecture, environmental quality, service, gastronomy, safety, privacy, events, transport accessibility and a strong brand. Instead of competing for tourist numbers, we should consider revenue per visitor, length of stay and the pressure placed on the area. 

A destination can accommodate fewer people and achieve the same or greater economic return while placing less pressure on infrastructure and the natural environment. This approach is relevant to Lake Issyk-Kul, the mountain regions of Kyrgyzstan, Kazakhstan, Tajikistan and other environmentally sensitive areas.

Read more about the environmental risks of large-scale development, including the Asman project, in our article:

From New Tashkent to Alatau: Why Central Asia Is Building New CitiesA wave of entirely new city-building projects is sweeping across Central Asia. These are not just ambitious plans; they are a response to real challenges: overcrowded capitals, shortages of housing and infrastructure, and the need for economic modernisation.mag.humodoc.com

We do not need to maximise visitor numbers. We need to maximise the value of every visit.

Environmental Impact Before Investment Decisions 

Investors traditionally assess the cost of land and construction and projected revenue. I propose adding another parameter: the cost of environmental impact, assessed before an investment decision is made.

Water is particularly important for Central Asia. In a changing climate, large resort destinations cannot be planned on the assumption of unlimited water availability.

We have previously written about tourism pressure, wastewater, treatment facilities and the vulnerability of the lake:

Kyrgyzstan Begins Filming a Documentary on Saving Lake Issyk-KulThe project received the working title “Issyk-Kul - The Fragile Pearl of Kyrgyzstan” and is being created at the D. Sadyrbaev “Kyrgyztelefilm” studio under the NTRC of the Kyrgyz Republic, in connection with the presidential decree on urgent measures to protect the ecology of the lake. The project, with the working title Issyk-Kul – the Fragile Pearl of Kyrgyzstan, is being produced by the D. Sadyrbayev Studio of Kyrgyztelefilm, part of the National Television and Radio Corporation of the Kyrgyz Republic, following a presidential decree on urgent measures to protect the lake’s ecology.mag.humodoc.com

In my view, every major tourism project should have its own environmental and economic profile. It should account for water consumption, waste generation, energy use, transport demand, the development footprint, sewerage infrastructure and the project’s impact on the natural landscape.

These indicators need to be assessed alongside the financial ones. This approach protects the long-term value of the investment: a resort that destroys a lake, forest or landscape ultimately destroys its own most important asset.

What Central Asia Is Not Yet Counting 

We are good at calculating the value of resources beneath the ground, such as oil, gas, metals and minerals, but much less so when it comes to valuing what lies above it: mountains, lakes, climate, landscapes, architecture, historical heritage, gastronomy, crafts and cultural identity.

In an earlier interview with HD magazine, Maksat Chaky spoke about how Central Asia’s cultural heritage can become a contemporary international product:

Games That Have Outgrown Their PastThe World Nomad Games have evolved from national games into an international system of ethnosport. They began as a bold local experiment, and today they aspire to become a global cultural and sporting platform. What needs to happen next to ensure that the traditional element does not dissolve into a festival spectacle, but instead develops into a global industry in its own right?mag.humodoc.com

I am convinced that these are economic assets. We need to learn how to protect them, unlock their economic value and turn them into contemporary economic products.

The next stage of Central Asia’s development should begin by assessing the value of the territory itself and how that value will change as a result of development.