Central Asia Digest by Ambassador Ashok Sajjanhar

Ambassador Ashok Sajjanhar
Advisor, Central Asia, Ananta Aspen Centre
Former Ambassador of India to Kazakhstan, Sweden and Latvia

JUNE 2018| VOL 03 ISSUE 06| MONTHLY
H I G H L I G H T S 

Political Developments



● Economic Developments

● India-Central Asia Relations

Political Developments

Kazakhstan’s parliament passed a bill that would retain the authority and control of President Nazarbayev in national and international affairs even if he decides to retire as president. This legislation is seen as a potential check on power of any future president, should Nazarbayev decide not to seek re-election. The law would bestow constitutional status on the country’s consultative security council — which currently issues recommendations — while affirming Nazarbayev’s right to chair the body for as long as he lives.

Kazakh President Nazarbayev has said that China’s great progress and its development achievements are in accord with the core interests of Kazakhstan, and that it is expecting more Chinese investment. Nazarbayev called China “the closest and most reliable friend and partner” of Kazakhstan. According to Nazarbayev, Chinese investment in Kazakhstan has exceeded USD16 billion since Kazakhstan’s independence in 1991. There are over 1,200 Chinese companies operating in the country. Regarding growing prevalence of Chinese language in Kazakhstan, Nazarbayev noted that Chinese has become second foreign language taught in many Kazakh universities.

During his first visit to USA, President Mirziyoyev of Uzbekistan and President Trump renewed the bilateral strategic partnership in order to pursue shared interests and address emerging challenges. They discussed Uzbekistan’s progress on implementing important reforms, enhancing trade and investment, and addressing regional security situation, including developments in Afghanistan.

Sapar Isakov, former Kyrgyz Prime Minister under Atambayev is being investigated over his role in overhaul of a power plant in Bishkek. Critics of the project contend that contract was improperly granted to Chinese-owned company TBEA and that costs were artificially inflated. Isakov said that he is in shock and will fight to prove his innocence. Kyrgyz MPs are keen to review all credit agreements with China including large ones like construction of Datka-Kemin transmission line, as well as North-South alternative road. China is the biggest creditor and investor in Kyrgyzstan. Bishkek owes USD1.7 billion to Export-Import Bank of China, which is 41.3% of Bishkek’s total foreign debt. This drama is playing out against backdrop of a behind-the-scenes battle for political influence between President Jeenbekov and his predecessor Almazbek Atambayev. Isakov is widely regarded as a staunch Atambayev ally and efforts to prosecute him are seen as a move to target Atambayev.

Security services in Kyrgyzstan charged Kulmatov, a recently fired head of customs service with corruption, broadening an ongoing campaign of pressure against top officials who served under former president Atambayev. Kulmatov is accused of corruption while serving as mayor of Bishkek. Kulmatov said the investigation against him “has a political subtext.”

Inaugurating the meeting of SCO Security Council Secretaries, Chinese President Xi Jinping said that with membership of India and Pakistan, SCO had gained more potential for cooperation and more expectations from international community.

Kazakh police detained several people who were protesting the use of torture and politically motivated imprisonment in many cities across the country. People appear to have rallied in response to a call by opposition movement Democratic Choice of Kazakhstan (DVK), which a Kazakhstan court in March declared “extremist” and banned.

In recent months, ethnic Kazakhs who moved from China have become increasingly exasperated at fate of relatives and friends who stayed back. They are worried about widely documented repression of ethnic Kazakh, Uyghur and Kyrgyz minorities by Chinese authorities. Around 1.5 million ethnic Kazakhs live in China, and some complain that Astana is not doing anything to help them. Kazakhstan has been notably mute as it appears to be motivated by unwillingness to spoil relations with China. It was recently revealed that Kazakhstan’s government had approved a three-day visa-free regime for Chinese nationals to visit Kazakhstan. The move elicited strong objections among Kazakhs on social media.

Kyrgyzstan appears to be waging a major battle on its soil against alleged members of “international terrorist organizations.” In less than 12 months, there have been at least 28 security operations that resulted in apprehending suspects connected to terrorist groups in Syria and Iraq.

Meeting of SCO-Afghanistan Contact Group took place in Beijing at level of deputy foreign ministers of member countries, SCO Secretariat and SCO RATS Executive Committee. Participants discussed ways of Afghan settlement, development of situation in and around Afghanistan, and priority tasks for establishing cooperation between SCO and Afghanistan.

Speaking to his Uzbek counterpart, Russian Defence Minister reportedly said that militants from Syria are relocating to Afghanistan. Intensification of military cooperation between Russia and Uzbekistan was one of the main subjects of discussion between him and Uzbek President. He said that Russia is ready to modernize Uzbek army with latest equipment, including air defence systems, as well as train Uzbek soldiers.

Deputy Prime Minister and Minister of State for Defence of Qatar met with Kazakh Defence Minister in Astana. Talks dealt with development of bilateral relations in defence, military and military industries, exchange of military and security expertise, and latest regional developments.

Russia has signed a new contract with Kazakhstan to deliver four Mi-35 transport and attack helicopters.

Discussions between Kazakh Foreign Minister and Special Envoy of President of Maldives and Minister of Environment and Energy focused on bilateral cooperation and mutual support of initiatives of the two countries within international organizations. Hope was expressed that Maldives will soon join Statute of Islamiс Organization for Food Security which was initiated by President Nazarbayev during Kazakhstan’s chairmanship of UN Security Council. Maldivian Minister asked Kazakhstan’s support for candidacy of Maldives as non-permanent member of UN Security Council in 2019-2020.

Pakistan organised a meeting of Legal Experts Group of Shanghai Cooperation Organisation-Regional Anti-Terrorist Structure (SCO-RATS). This was the first meeting under umbrella of SCO organised by Pakistan since it joined the Organisation last year. A 3-member Indian team also participated.

………………………………………………………………………………………………………..Economic Developments

Exchange-rate stability is helping tame annual inflation in Kazakhstan. Inflation rose to 18% in mid-2016 after devaluation of Kazakh currency but is now down to 6.5%. These trends have improved Kazakhstan’s economic risk profile. However, Kazakhstan is far from a convincing long-term prospect, with, according to experts, no improvement in political or structural risk indicators and deteriorating capital access. Kazakhstan’s risk score has fallen by more than 10 points since 2007, despite periodic improvements. In their most recent economic-outlook reports, both Asian Development Bank (ADB) and International Monetary Fund foresee GDP growth slowing to 3.2%, primarily due to a weaker industrial sector and lack of progress on the USD9 billion diversification and modernization programme known as Nurly Zhol, devised to wean the country off its oil and gas dependency.

Russian Prime Minister met his Tajik counterpart in Dushanbe and discussed issues of economic cooperation and Tajikistan’s integrated development, as well as work on ongoing projects such as Sangtuda HPP-1.

A group of militants killed five workers of Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline and kidnapped another in Afghanistan’s Kandahar province. First phase of construction of TAPI project to transport gas from Turkmenistan through Afghanistan to Pakistan and India by 2019 has been completed. Second phase began in February and involves construction of 816 km of pipeline through five troubled Afghan provinces including Kandahar to Quetta in western Pakistan.

Turkmenistan is hopeful of securing all necessary funding to complete construction of the USD8 billion TAPI pipeline within the next few months. Turkmenistan is building the pipeline to diversify its gas exports which mostly go to China. Turkmenistan hopes to open the pipeline next year, although security risks have raised doubts about its completion on time.

European Bank of Reconstruction and Development (EBRD) and ADB are extending finance of USD50 million to construct a 50 MW solar photovoltaic (PV) project in Kazakhstan’s Baikonur region. Chinese company Risen Energy signed a deal recently with EBRD for financing a 63 MW solar project in Kazakhstan.

International Finance Corporation (IFC), a member of World Bank Group, has signed a mandate with Uzbekistan to increase its renewable power capacity and encourage private sector investment in this sector. IFC will advise Uzbekistan and state-owned national power utility, Uzbekenergo, on structuring a public private partnership model to mobilize private sector experience and capital to construct and operate a 100 MW solar PV project. This will be first phase of a larger initiative to generate up to 1 GW energy from solar projects.

Implementation of the regional CASA-1000 project can bring Tajikistan an annual income of more than USD150 million. In addition, Tajikistan will receive income from transit of Kyrgyz electricity through its territory. Under the project, Tajikistan will export 70% electricity to Pakistan, and 30% to Kyrgyzstan. It will provide transit of 5 billion kWh of electricity from Kyrgyzstan and Tajikistan to Pakistan. Share of Tajik electricity exports will be 3 billion kWh. Analysts are not hopeful about implementation of project due to lack of cooperation between countries involved. Insecurity in Afghanistan is another hurdle for the project.

Regions of Uzbekistan and Turkmenistan were struck by a severe salt storm that lasted for three days. Winds lifted salt and toxic dust from the dried-out Aral Sea, leaving a layer over a large stretch of land. Aral Sea was dramatically drained by Soviet irrigation projects launched in the 1960s. Waste from weapons testing, plus pesticides and fertiliser have created toxic dust that causes many health problems in the area. Mortality rates are high as respiratory diseases, including drug-resistant tuberculosis, and various cancers are common.

Kazakh-Uzbek trade grew 50% in first quarter of 2018 compared to same period last year. The countries are working to increase trade to USD3 billion by end of 2018 and to USD5 billion by 2020. In 2018, the first Kazakh-Uzbek Interregional Forum will take place in Astana and first meeting of Business Council in Shymkent.

In a bid to facilitate Pakistani business community, Uzbekistan has simplified the visa procedure. Now it will provide visa to entrepreneurs within one day after submission of an online request.

………………………………………………………………………………………………………..
India-Central Asia Relations

Prime Minister Narendra Modi participated in the 18th SCO Summit in Qingdao, China on 9-10th June. This was the first Summit in which India participated after becoming a member of the Organisation in 2017. On side-lines of the Summit, PM Modi met Presidents of Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan and held discussions on further expanding bilateral cooperation. Uzbek President is expected to visit India shortly. Kyrgyzstan assumed Chairmanship of SCO at the conclusion of the Qingdao Summit.

Issues including regional security and cooperation among SCO members were discussed at meeting of SCO Security Council Secretaries in China. In discussions with Chinese NSA on side-lines of this meeting, India’s Deputy NSA said that India stands ready to work with China to implement the consensus reached by leaders of the two countries and enhance cooperation on law enforcement security. The two countries pledged to enhance cooperation on anti-terrorism and ensure stable bilateral relations. They discussed the security situation in Afghanistan as well as other issues of regional and international importance.

Indian and Kyrgyzstani alpine special forces troops conducted a two-week joint training exercise at Kyrgyzstan’s Military Base. The exercise included lectures and practical classes on tactical, mountain and fire training, as well as survival techniques in mountainous conditions. The exercise is second joint Indian-Kyrgyzstani military drill of 2018 and latest in a series of increasing bilateral military contacts over past seven years. A core concern of both militaries is development of military capabilities to battle terrorist groups in mountainous regions, a problem that both countries share: India in the Himalayas and Kyrgyzstan along its borders with Tajikistan and Uzbekistan. A second shared underlying premise is to broaden international contacts while lessening diplomatic isolation.

Indian Ambassador to Kazakhstan invited Kazakhstan to become member of the International Solar Alliance. He said that India can help in promoting renewable energy in Kazakhstan by bringing its expertise in solar and wind energy.

Sanjay Dutt, accompanied by leading lady Nargis Fakhri, visited Kyrgyzstan to shoot for his next film ‘’Torbaaz.’’

A 6-member delegation from Congress party led by Rajya Sabha member Anand Sharma took part in Shanghai Cooperation Political Parties Forum in Chinese city of Shenzhen. The delegation was invited by Central Committee of Communist Party of China.

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www.anantacentre.in

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