Central Asia Digest by Ambassador Ashok Sajjanhar
H I G H L I G H T S
● Economic Developments
● India-Central Asia Relations
According to a UN Report, over a million people are allegedly being held in a secretive network of extrajudicial, political re-education centres in Xinjiang region of China. Several thousand of the 1.5 million Kazakhs who live in Xinjiang are interned in such camps. Unlike Uighurs, many of whom face cultural and religious repression, Kazakhs had long moved freely between China and their country. That freedom disappeared recently. Kazakh nationals with relatives missing in Xinjiang have been forthright in expressing anxiety. In recent months, Kazakhstan risked China’s wrath by refusing to deport Sauytbay, an ethnic Kazakh woman of Chinese citizenship, who confessed to crossing the border illegally to join her family. Dependent on China’s economic largesse and seeking a pivotal role in its trillion-dollar trade and Belt-Road infrastructure initiative, Kazakhstan is reluctant to make inconvenient demands.
Kazakhstan has refused to grant asylum to Sauytbay, the ethnic Kazakh-Chinese national, who has spoken out against her work in Chinese internment camps for ethnic Muslims. It is expected that appeal will be filed against the decision. There is mounting pressure from public to protect fellow Kazakhs in China’s Xinjiang region. China has broadly denied such allegations, claiming a “great tragedy” has been averted in Xinjiang. Beijing has said Xinjiang faces a serious threat from Islamist militants and separatists who plot attacks and stir up tensions between Uyghurs and Chinese.
First joint meeting of Ministers of Internal Affairs of 4 Central Asian states – Kyrgyzstan, Kazakhstan, Tajikistan and Uzbekistan – was held in Kyrgyzstan. Meeting was held in this format for the first time to build regional cooperation, renew and intensify friendly and good neighborly relations. Discussions on fight against organized crime, drug and weapons trafficking, international terrorism, cyber extremism and cyber terrorism as well as ensuring public security in border areas were held.
There are nearly 3,000 Central Asian militants that have been trained to fight in Syria and Iraq either asISIS affiliated (mainly Tajik and Kazakh fighters) or in Qaedist al-Nusra Front (mainly Uzbek and Kyrgyz fighters). Islamic Movement of Uzbekistan and Jamaat Ansarullah terrorist groups were both established in Central Asia.
Interaction-2018 drills of CSTO Collective Rapid Reaction Forces took place in Kyrgyzstan. They involved more than 1,600 troops from six countries: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan, and also about 300 pieces of military hardware and 40 aircrafts and helicopters.
Head of Commonwealth of Independent States (CIS) Anti-Terrorism Center stated that IS is establishing a new foothold in region to form a new “caliphate” while planting new sleeper cells and invigorating existing ones.
He said the group was currently recruiting, training and reactivating armed cells in Europe, Central Asia, Southeast Asia and Russia. IS has recruited many Pashtuns, Tajiks, and Uzbeks since starting its Khorasan affiliate…………………………………………………………………………………………………………Economic Developments
Kazakhstan accounts for more than 70% of all investment coming to region. In first six months of 2018, agreements were reached by Kazakhstan to implement 69 new projects with large investors, including ten multinational companies from China, Turkey, United States, UAE, UK and European Union.
It was stated at Kazakhstan Global Investment Forum in London that Kazakhstan is an “overlooked powerhouse” and one of world’s next big investment destinations. Several billion pounds of inward investment is expected to enter Kazakhstan over the next five years. Kazakh Invest stated that it had prepared 70 specialist projects across agriculture, chemicals, mining and metallurgy, engineering, retail, tourism, and energy, offering opportunities for international investors.
European Bank for Reconstruction and Development (EBRD) has approved a new strategy for Uzbekistan, for next five years. This strategy reflects recent changes in political and macroeconomic environment of the country. This is dictated by a large-scale reform program launched by government at end of 2016 aimed at moving towards a more open, integrated market economic model, improving international relations, strengthening rule of law and judicial independence, achieving currency regulation liberalization. The new EBRD strategy for Uzbekistan recognizes the need to strengthen country’s democratic institutions, expand the role of civil society, provide greater freedom to media and promote women’s entrepreneurship.
Russia’s Gazprom announced that it will resume next year imports of natural gas from Turkmenistanthat it stopped three years ago due to price disputes. Russia was once leading importer of Turkmen gas until it was displaced by China around beginning of decade. Relatively cheap imports of gas from Turkmenistan and other Central Asian countries enabled Russia to boost its exports to Europe. Before 2009, Turkmenistan exported more than 40 bcm of natural gas to Russia.
International Monetary Fund (IMF) has revised up its 2018 growth projection for Kazakhstan by 0.5% to 3.7%. Revision reflects stronger oil production, though “medium-term prospects remain subdued”. GDP growth in 2019 is expected to slow to 3.1%.
Regarding other Central Asian countries, Uzbekistan’s growth is expected to decelerate slightly to 5% in 2018 and 2019 from 5.3% in 2017.
Turkmenistan is expected to post 6.2% growth in 2018 and 5.6% in 2019, down from 6.5% in 2017. Figures are undermined by Turkmen government’s unreliable statistics.
Tajikistan’s growth will fall to 5% in 2018, down from 7.1% in 2017. In 2019, Tajik growth is expected to remain at 4%.
Kyrgyzstan’s growth is also seen slowing in 2018 to 2.8% compared to 4.5% in 2017. A recovery to 4.5% is anticipated for 2019.
Kazakhstan’s external debt decreased by US$2.2 billion in second quarter of 2018. As of July 1, Kazakhstan’s external debt is US$164.4 billion, or 96% of GDP.
2018 has been a good year for Kazakhstan’s National Fund, principally due to resurgence in price of oil. Over first nine months of 2018, payments to National Fund increased by 52% year-on-year in local currency terms. Without accounting for returns on investments, more than US$5.8 billion have been deposited in National Fund. Natural gas is generating considerable revenue. In first seven months of 2018, Kazakhstan earned US$1 billion from gas sales, a rise of 25% year-on-year. Main importer was China, which bought five times the quantity of Kazakh gas as it had the year before. Revenue generated increased eight-fold. Volume of gas export to China in 2018 is expected to be 5 bcm which could go up to 10 bcm in 2019.
Settlement of a long-standing dispute with partners in production-sharing agreement on Karachaganak gas condensate project will see Kazakhstan receive US$1.1 billion upfront and earn a greater portion of profits in future.
Sterling and Wilson, World’s leading solar EPC company, has announced its plans to enter Kazakhstan.Company is targeting EPC for Solar PV projects of capacity 200 MW in Kazakhstan till 2020. Kazakhstan aims to reduce its dependency on fossil fuel power generation to alternative energy. It plans to increase its share of renewable energy in electric power generation to 3% by 2020 and to 10% by 2030…………………………………………………………………………………………………………
India-Central Asia Relations
Uzbekistan President Shavkat Mirziyoyev, accompanied by a high-level delegation, paid a 2-day state visit to India to strengthen bilateral ties. This was his first visit to India since assuming office in 2016. 17 agreements were signed ranging from cooperation in defence, national security, agriculture, science, pharmaceuticals and technology, and a twinning agreement between historic cities of Agra and Samarkand. Both countries decided to work jointly and strive for a stable, prosperous and peaceful Afghanistan. Agreement was signed to create a Technopark of software and innovative products in Uzbekistan. Uzbekistan is interested in exchange of experience in e-governance. Agreement was signed on exploration and use of space for peaceful purposes. Mirziyoyev referred to strategic partnership with India as “one of the most important priorities” for Uzbekistan. Joint Statement issued after bilateral talks notes an impressive spectrum of cooperation covering “political ties, defence, security, counter-terrorism, trade and investment, science and technology, space, nuclear energy, information technology as well as cultural and academic linkages.” Of particular significance is the agreement on military training. It was agreed to establish an expert group to undertake a feasibility study for a preferential trade agreement by 2018 end. Both leaders emphasized on achieving target of bilateral trade of US$1 billion by 2020. Bilateral trade was US$235 million in 2017-18 and US$155.5 million in 2016-17.
A key rail link extension project connecting Uzbekistan and Afghanistan could see collaboration between Beijing and New Delhi in a “China-India Plus” model enabling the two countries to cooperate in development and connectivity projects in other countries. Uzbek President is reported to have invited India to join the railway project during his visit to New Delhi. Afghanistan has welcomed both China and India for the venture. Mirziyoyev is keen to join the transit trade agreement signed by India, Afghanistan and Iran.
President Ram Nath Kovind paid a three-day visit to Tajikistan during which he held talks with his Tajik counterpart Emomali Rahmon, Speaker of Parliament, and Speaker of Lower House of Parliament. Tajik Prime Minister called on the president. Kovind visited the Tajik National University where he delivered an address on ‘Countering Radicalization: Challenges in Modern Societies’. He addressed members of Indian diaspora also. This was President Kovind’s first visit to Central Asia. Both countries agreed to work together to boost connectivity and fight against terror. Eight pacts were signed in fields of political relations, strategic research, agriculture, renewable energy, traditional medicine, space technology, youth affairs, culture and disaster management. Importance of Connectivity particularly of International North-South Transport Corridor (INSTC), Chabahar port and Ashgabat Agreement, for realizing full potential of Strategic Partnership and economic relations was emphasized by President Kovind. India offered a grant of US$ 20 million to Tajikistan for financing development projects. On Tajikistan’s request, India will undertake a feasibility study of solar projects in seven villages in the country. India will also provide two English language laboratories for Tajik Military.
External Affairs Minister Sushma Swaraj attended 17th Council of Heads of Government meeting of Shanghai Cooperation Organization (SCO) in Dushanbe, Tajikistan. Leaders exchanged in-depth views on current international and regional issues. Swaraj raised issue of terrorism as “most overwhelming threat to our common goals of development and prosperity”, adding that “governments must assume their national responsibility and cooperate with each other”. Participants reviewed situation in Syria, Afghanistan and Korean peninsula. Swaraj said that India stands committed to a peace process which is Afghan-led, Afghan-owned and Afghan-controlled, that can help Afghanistan emerge as a peaceful, secure, stable, inclusive and economically vibrant nation. She welcomed signing of Protocol of SCO-Afghanistan Contact Group on sidelines of Qingdao Summit. She said that India would be happy to co-host with Afghanistan, next meeting of the SCO-Afghanistan Contact Group in India. She affirmed India’s determination to work in SCO on environmentally friendly energy alternatives to ensure sustainable development. Kazakhstan proposed construction of Eurasian high-speed railway mainline on route Beijing-Astana-Moscow-Berlin. Swaraj met her Tajik counterpart and discussed enhancing bilateral relationship in development assistance, Science and Technology, IT, agriculture, defence and security, health and tourism. Addressing the Indian diaspora in Dushanbe, she said that she and Prime Minister Modi had visited all five countries in Central Asia. This is proof of India’s growing ties with nations in the region.
Raksha Mantri Nirmala Sitharaman paid a three-day visit to Astana at invitation of her counterpart. During the visit, she met Kazakh Defence Minister and Minister of Defence and Aerospace Industry. She visited National Defence University and saw Indian Military Art Room, established with Indian assistance. India-Kazakhstan Defence Cooperation includes military-technical cooperation, military education and training, joint military exercises, bilateral exchange of visits and cadet youth exchange programs. Over 200 Kazakh Defence Forces personnel have undergone military training in India till date. Both countries successfully conducted a company level joint military exercise ‘KAZIND-2018’ in South Kazakhstan, last month. India’s partnership with Kazakhstan in UN Peacekeeping reflects its desire to support Kazakhstan in its contribution to global peace. Contingents of both countries worked together over past one year to prepare for this joint deployment. Sitharaman discussed issues relating to defence production with Kazakh Minister for Defence and Aerospace Industry. Possibilities of joint production and/or co-production were discussed. She discussed regional developments with Kazakh Foreign Minister who appreciated India’s position and experience as a major force in UN Peace Keeping and contributor to peace building in various parts of the world.
Uzbekistan Airways will launch a thrice-a-week Mumbai-Tashkent direct flight shortly. Mumbai will become its third destination in India, after Delhi and Amritsar.
Central Asia Digest by Ambassador Ashok Sajjanhar
(The views expressed are personal)