Pakistani Prime Minister Nawaz Sharif rounded off an energy-themed jaunt across Central Asia on May 22 in Bishkek, where he spoke about electricity exports to his energy-starved nation two days after visiting Turkmenistan to discuss a troubled gas-pipeline project.
The trip demonstrated Pakistan’s limited leverage in its dealings with Central Asia and, publicly at least, did not produce much of substance.
In Ashgabat, Sharif called on partners to “intensify work” on the long-stalled Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline. In his meeting with Turkmenistan President Gurbanguly Berdymukhamedov on May 20, Sharif called TAPI a “project that would bring benefits to the entire region.”
But the pipeline, which would traverse Afghanistan and has been on the drawing board since the mid-1990s, may cost over $10 billion. With no commercial investor so far, initiative rests with both Turkmenistan, the would-be-supplier, and the main export market, India. Delhi must decide if its own energy deficit warrants pushing a link that many see as risky and expensive.
Neither president mentioned either the hoped-for 2017 TAPI completion date, or the more pessimistic projection of 2020 mentioned in late April by Afghan President Ashraf Ghani. (Many say both timelines are still pipedreams.)
Kyrgyzstan took another halting step toward joining the Moscow-led Eurasian Economic Union on May 21 when President Almazbek Atambayev signed an accession treaty into law.
The other four members must still approve the impoverished Central Asian state’s membership (a process that is largely seen as a formality), and Bishkek must finish upgrading its border checkpoints to EEU standards before Kyrgyzstan becomes a formal member. But Atambayev was in a jubilant mood.
“Today is a wonderful day for us. Today [I am] signing the law ratifying international agreements on Kyrgyzstan’s accession to the Eurasian Economic Union. In this way, we complete all the internal governmental procedures for entering one of the biggest economic unions in the world,” Atambayev said on May 21 in comments carried by his website.
Kyrgyzstan first formally applied for membership two years ago and has been speaking about joining for four. Accession has dragged for so long that confusion over whether Kyrgyzstan is yet a member has reigned in recent weeks. It is still unclear how long it will take for Kyrgyzstan to upgrade its checkpoints.
In his remarks, Atambayev celebrated a “a new phase of development” for his country, while warning that the “journey will not be easy.” For years, thousands of Kyrgyzstanis have survived by re-exporting Chinese goods to other former Soviet republics. Those goods now face higher import tariffs. Kyrgyzstan’s economy must “restructure in a very short space of time,” Atambayev acknowledged.
Central Asia faces a gloomy economic outlook for the rest of this year and into next, battered by the tanking Russian economy and low commodity prices, according to a regional outlook released by the International Monetary Fund (IMF) on May 19. Several countries face double-digit inflation.
“The region has been hit by two major external shocks: the oil price and the slowdown in the Russian economy,” Juha Kahkonen, deputy director of the IMF’s Middle East and Central Asia department, told a briefing in Almaty as the forecast was released.
Growth slowed last year and is set to decrease “much more significantly” this year, he said, before recovering “only slightly” next year.
All the Central Asian states are feeling the pinch of the slump in Russia, “which has close linkages with the region through remittances, trade, and foreign direct investment,” the IMF pointed out.
Energy exporters (Kazakhstan, Turkmenistan, and Uzbekistan) and importers (Kyrgyzstan and Tajikistan) alike are suffering: exporters are battling falling revenues from the drop in global oil and gas prices, while importers are feeling what Kahkonen described as “only a very small beneficial impact” from lower prices because of the long-term nature of their energy import contracts in which prices are set.
Falls in prices for other commodities (gold in the case of Kyrgyzstan and aluminum for Tajikistan, for example) are also biting.
Kyrgyzstan, Tajikistan and Uzbekistan are also suffering from a drop in labor remittances from Russia, as migrants lose their jobs and the dollar value of remittances falls because of the depreciation of the ruble. This is causing weaker domestic demand in remittance-dependent economies.
The “sex school” in Kyrgyzstan’s capital that EurasiaNet.org profiled last year has moved to a bigger facility and opened a branch in neighboring Kazakhstan.
The Jade Gift School’s new location on Bishkek’s Bokonbaeva Street includes a larger gymnasium, where men and women learn to exercise muscles used during intercourse. There’s also now a separate room for theoretical instruction, such as courses on sexual fantasy and “playing the flue” – the school’s metaphor for oral sex. The school now also offers yoga, weight training, and customized workout trainings.
“I never expected this to become a full-time job,” confesses Jade Gift School founder and owner Rakhat Kenjebek kyzy, 31, describing how the school started out as a personal project rather than a business.
While working in China in the late-oughts, Kenjebek kyzy became acquainted with traditional treatments for women’s health. When she returned home, she started passing her knowledge around among friends. The circle of people seeking her advice grew wider and she eventually founded Jade Gift in 2011.
The school now employs three sales managers, a social media manager and five trainers. There are about 50 regular students; another 50 or so attend one-time events each month.
In this conservative country, many eschew talking openly about sex. But Kenjebek kyzy says some of her students are girls from religious families. Some confide that they attend classes because they are afraid their husbands will take second wives, she says. (Polygamy, though illegal, is increasingly common in Kyrgyzstan.)
Kyrgyzstan has finally found a developer for its Jerooy deposit, one of the largest untapped gold fields known in Eurasia. But an outstanding $549 million claim and a hostile local population mean Kyrgyzstan is still years away from seeing any gold emerge from the ground.
The State Geology and Mineral Resources Agency declared Vostok-geoldobycha had won the tender for the 97-ton Jerooy deposit on May 4. Vostok-geoldobycha – owned by Russian oligarch Musa Bazhaev, Russia’s 160th richest man according to Forbes – offered the minimum bid of $100 million.
As part of the deal, Vostok-geoldobycha takes responsibility for a $549 million arbitration claim lodged against Kyrgyzstan’s government by Kazakhstan-based Visor Holding, which is scheduled to be heard in Washington in November. A Visor subsidiary lost its license to the deposit in late 2010 when officials said the company had failed to begin production on schedule.
Vostok-geoldobycha, a daughter company of Russia’s Amur Zoloto, beat off interest from the state mining concern Kyrgyzaltyn, which had partnered on its bid with London-based Unity Gold. (Unity had set tongues wagging when it listed Jerooy as one of its projects before the bidding had even concluded.)
According to Reuters, the tender commission preferred Vostok-geoldobycha’s bid despite the fact that Kyrgyzaltyn came in with a slightly higher offer:
How long can Kyrgyzstan postpone its entry into the Moscow-led Eurasian Economic Union?
The plucky Central Asian state’s delays acceding to the protectionist bloc have become a curious subplot to the generally unsuccessful story of Eurasian integration thus far.
Acting Economics Minister Temir Sariev said on April 29 that Kyrgyzstan would likely not make the May 8 deadline President Almazbek Atambayev had promised to Moscow last December. May was already an extension on the January 1 deadline officials talked about throughout 2014. Instead, Kyrgyzstan will join by the end of May, said Sariev – who was named by parliament’s ruling coalition on April 29 as its candidate for premier.
Earlier, Sariev reported to Atambayev on “differences of opinion” with other EEU members – Armenia, Belarus, Kazakhstan and Russia – suggesting the parties are still haggling over Kyrgyzstan’s entry terms even though it signed accession papers long ago.
There are two sticking points, according to Sariev. First, Kyrgyzstan insists it continue to receive concessions on imports of Chinese construction materials. Second, it rejects EEU members’ demands it undertake additional sanitary inspections, above and beyond current EEU regulations, on its meat and produce.
A leading newspaper in Kyrgyzstan claims President Almazbek Atambayev’s administration has launched a frontal assault on critical media in the run-up to parliamentary elections this fall.
The embattled, opposition-minded Vechernii Bishkek, whose ownership is the subject of a protracted legal dispute, is under investigation by the secret police for accusing, in an April 17 statement, the president’s aids of attempting to seize the paper.
The State Committee on National Security, the GKNB – which answers to Atambayev – is evaluating if the paper’s statement contains “public calls for a violent overthrow of the constitutional order in the country,” Fergana.ru reported April 25, citing a GKNB press release. Rights lawyers complain the GKNB finds whatever it wants when it conducts such linguistic investigations of allegedly offensive documents.
In Vechernii Bishkek’s statement, the paper appealed to citizens not to remain indifferent to an expropriation bid they say is backed by Atambayev’s team, and which may eventually lead to owner Alexander Kim losing full control of the paper and its lucrative printing press.
Officials in Atambayev’s administration, the paper argues, are trying to silence independent media ahead of parliamentary elections this fall; presidential elections are due in 2017.
The offending statement alleges the current elite around Atambayev is adopting the rapacious habits of previous authoritarian regimes. It may be slightly hyperbolic at times, but one would be hard-pressed to find anything in the statement that threatens the government’s existence.
Special operations troops from SCO member state militaries at the opening ceremony of joint exercises in Tokmok, Kyrgyzstan. (photo: MoD Kazakhstan)
The China-led Shanghai Cooperation Organization is holding joint exercises with special operations forces from Russia, China, Kyrgyzstan, Kazakhstan, and Tajikistan -- and they're doing it at a military base in Kyrgyzstan that the United States spent $9 million to build.
The SCO exercises taking place this week involve 20-25 special operations troops from each participating country (all the member states except Uzbekistan, which typically sits out SCO military exercises). During the five-day exercise the troops will practice deploying to mountain areas, deploying from helicopters, seeking and destroying terrorist groups, rescuing hostages, and treating and evacuating wounded troops. Pretty standard stuff for a joint special operations exercise.
What makes this drill stand out is the site: the base of the Scorpions special operations unit in Tokmok, Kyrgyzstan. Readers may recall that this is the base that U.S. Central Command and the U.S. embassy in Bishkek spent $9 million to build. It's no wonder it was attractive to the SCO, given that a Wikileaked U.S. diplomatic cable from the opening ceremony of the base in 2009 described it as "the gold standard in Central Asian construction ... far exceeds any other facility the Kyrgyz currently have." The facility includes
"officer and enlisted housing, classroom training facilities, a multipurpose facility, a dining facility and shower/sauna complex."
New data show that Central Asian governments have been right to fear Russia’s economic crisis was heading their way: Remittances from migrant laborers are falling sharply, more than in any other region worldwide.
Migrant remittances are the largest single source of foreign currency in Tajikistan and an important factor in declining poverty rates throughout Central Asia in recent years. So the contracting Russian economy and stricken ruble – brought on by a sudden fall in oil prices and Western sanctions – have a direct impact on millions of the region’s laborers and their families back home.
“Overall, reduced remittances are likely to worsen standards of living in remittance-receiving countries, and the increasing number of returned migrants could put upward pressures on unemployment rates,” the World Bank said in a regular briefing on April 13.
Tajikistan – which sends approximately one-half of its working age males to labor in Russia – is the most remittance-dependent country in the world. Remittances account for the equivalent of 49 percent of GDP, according to the World Bank. In dollar terms, they fell 8 percent last year, largely in the fourth quarter, and are expected to decline another 23 percent in 2015.
Kyrgyzstan is the world’s second most remittance-dependent country, with remittances totaling the equivalent of 32 percent of GDP. Last year they fell 1 percent, but are expected to drop another 23 percent this year.
In Uzbekistan, where remittances total the equivalent of 11.9 percent of GDP, they fell 16 percent last year; they are expected to drop another 30 percent in 2015.
The new United States embassy in Kyrgyzstan continues to be the object of elaborate conspiracy theories in the Kyrgyz and Russian press, which now suggest that Washington is sneaking in equipment to help carry out a color revolution.
This conspiracy theory was kicked off by Kyrgyzstan newspaper Delo No., which reported that the U.S. flew in 152 tons of "unknown cargo" on a Ukrainian airplane. The cargo flew under the "diplomatic pouch," the mail service by which diplomats around the world can send mail without it being inspected by the receiving country.
"The situation in the world, and in our region especially, has recently become so explosive that any actions of the Americans should be regarded with suspicion. All the more so with American diplomats," the paper wrote. "And the diplomatic pouch of any country could theoretically be used to transport anything, including weapons. Before, the Americans in Kyrgyzstan had the possibility to get any cargo, into which the Kyrgyzstani authorities couldn't stick their nose, through their military base. Now there's no base, and the U.S. embassy was was unable to hide itself with the diplomatic pouch in the Manas civilian airport."
The paper puts forward two possible explanations for the secret cargo: one, that it is carrying cash in small denominations in order to pay protesters to carry out a "Maidan" in Bishkek. Another is that it is "espionage equipment for the enormous basements of the new U.S. embassy building in Bishkek."