Getting reliable economic information out of Turkmenistan is difficult at the best of times, so if the gas-rich country is on the verge of a crisis, the secretive leadership is unlikely to drop any hints.
But a number of recent reports suggest that the effect of falling energy prices is being magnified by limited official information.
Opposition-minded news websites Alternative News Turkmenistan and Chronicles of Turkmenistan have reported long queues stretching out of currency exchange bureaus in recent days. The panic, note both outlets, is based on a rumor that the manat is about to be significantly devalued again.
The manat already fell 19 percent on New Year’s Day, falling from 2.85 to 3.5 manats against the greenback. The rumors point to an alarming 4.5 to the dollar. According to the Chronicles of Turkmenistan:
In recent days queues have been forming at various banks from early in the morning. In the regions, only 40-45 people are able to obtain the dollars at each bank, even though the queues extend to 200 or more people. Then the [people in the queue] are informed that there are no more dollars for the rest of the day.
Passports are required at the point of exchange. Each person can obtain no more than $1,000 in a single day.
Russia's post-Soviet security bloc will work to build up the capacity of other member states to produce substitutes for Ukrainian weaponry, the bloc's top official announced.
The Collective Security Treaty Organization will strengthen its commission on defense industry cooperation and focus its efforts on "import substitution." That term has become a buzzword over the last year in Russia as the country scrambles to replace products it can no longer buy as a result of Western sanctions. Here, though, the focus is Ukrainian weaponry, said CSTO Secretary General Nikolay Bordyuzha at a January 30 press conference in Moscow.
The commission will be led by Dmitry Rogozin of Russia, who is now the chief government defense industry official in Russia. The effort "will allow us to take into account and maximally use all the existing possibilities in CSTO countries for manufacturing military equipment which had previously been produced on the territory of Ukraine. The activities of this commission will be focused primarily on implementing this program of import substitution," he said.
"There are possibilities in Kazakhstan. And today, by the way, we are having substantive discussions regarding two factories' possibilities in this program of import substitution. There are also possibilities in Belarus, in Armenia there are very serious possibilities, in Kyrgyzstan, you know, there are several factories."
Georgian soldiers undergo U.S. Marine Corps training at the Vaziani training base in 2013. Vaziani is one of the possible locations for a NATO training base to be set up in Georgia this year. (photo: U.S. Marine Corps)
NATO's planned military training center in Georgia will start operations this year, a senior alliance official said on a visit to Tbilisi.
"Starting this year, we aim to hold periodic military exercises here in your country, with NATO Allies as well as with other interested NATO partners," said NATO Deputy Secretary General Alexander Vershbow at a January 30 speech in Tbilisi.
The exercises will be held at a "Joint Training and Evaluation Centre," the establishment of which NATO and Georgia announced last September. A location for the center still hasn't been determined, but one of the items on Vershbow's agenda in Georgia was to scout out locations; Civil.ge reported that one of the candidates sites he visited was the Vaziani training range near Tbilisi.
"This will be the most visible element of a NATO presence in Georgia. The Centre could host live and simulated training and certification for Allied and partner military units, in particular for units committed to the NATO Response Force," Vershbow said. "And it could also host exercises and training in support of our Connected Forces initiative."
But much remains uncertain about the center. According to Civil.ge, Vershbow said that NATO and Georgia "have yet to “flesh out the goals and purposes of the center," and that it's still not clear whether the center will host only command exercises (i.e. officers on computers) or field exercises with soldiers.
A private militia to combat ISIS and the Taliban has been formed in northern Afghanistan, as Afghan and Central Asian officials continue to debate to what extent there is an ISIS presence in the region.
It's not clear how serious the new anti-ISIS militia is: "several dozen" members announced its presence at the provincial council office in Mazar-e-Sharif this week, according to a report by Khaama Press. But they claim to have 5,000 people ready to fight ISIS and the Taliban, and if nothing else they have a keen instinct for PR: their uniforms are the tricolor of Afghanistan's flag -- red, green, and black -- and their name is "Marg," or "Death."
Also this week, a senior Russian defense ministry official visited Tajikistan where he invoked the growing terror threat. The official, Deputy Defense Minister Anatoliy Antonov, called Tajikistan "our outpost in the fight against terror." The officials discussed Russian aid to Tajikistan but no details were announced; Central Asia expert Arkady Dubnov told Nezavisimaya Gazeta (in a piece headlined "ISIS Tests Strength of Central Asia's Borders") that the purpose of the visit was to assuage concerns in Dushanbe about slow deliveries of the military aid Russia has promised Tajikistan.
The United States's donation of over 300 armored vehicles to Uzbekistan represents the triumph of realpolitik over the promotion of American values, Russian analysts argue.
Last week U.S. officials announced that they were donating over 300 Mine-Resistant Ambush Protected (MRAP) vehicles to Uzbekistan; it will be the biggest ever transfer of American military equipment to a Central Asian country. It was surprising in many ways: American military interest in Central Asia had appeared to be on the wane, and U.S. military aid to Uzbekistan -- one of the worst human rights violators on the planet -- was at a largely token level, with little apparent justification for Washington to change that.
In days since the deal was announced, the response from the region has been muted. No officials from Russia or Central Asia -- including Uzbekistan -- have commented on the deal. But among Russia's Central Asian analyst community, of course, the announcement was big news. Most saw it in terms of the U.S.'s desire to improve ties with Uzbekistan, turning the latter into an American foothold in the region.
Just because Russian officials haven't said anything publicly doesn't mean that they are indifferent, said Daniil Kislov, the Moscow-based editor of the Central Asia news website Fergana News. "The transfer of American equipment to Uzbekistan raised concern among officials in Moscow," he said in an interview with Svobodnaya Pressa; the headline of the piece was "The U.S. Will Encroach On Russia From the South."
A Chinese company that has had a string of bad luck in Kyrgyzstan is not getting much support from the country's investment-hungry government—or from Russia.
China’s state-controlled Junda China Petrol Company runs a troubled but potentially strategic oil refinery in northern Kyrgyzstan. The problem now is that Junda doesn’t have enough crude to fuel its $430 million plant. And the regional oil producers, Kazakhstan and Russia, are unwilling to help.
Last week Kyrgyzstan’s Vice Prime Minister Valery Dil called Junda's decision to build a refinery without planning for crude supplies “ridiculous,” in quotes picked up by 24.kg.
"To build a huge refinery and not know where to get the oil, that’s ridiculous,” Dil said.
Those are not exactly welcoming words for a large foreign benefactor already struggling to find reasons to keep investing in perennially troubled Kyrgyzstan. In its short history, Junda itself has faced environmental protests and labor disputes, which one lawmaker claims are backed by opposition politicians bent on using the facility as a weapon in a political confrontation with the government.
Dil also confirmed that Russia and Kazakhstan have refused to supply crude tax-free, though his colleague, Economy Minister Temir Sariev, recently had been hopeful that Kyrgyzstan’s membership in the Russia-led Eurasian Economic Union would help solve this problem.
Astana's ambitious plan to add a year to its school curriculum has been postponed indefinitely as lower oil prices and the recession in neighboring Russia batter Kazakhstan’s economy.
“Taking into account the situation, the question of the transition to a 12-year program must be postponed,” Education and Science Minister Aslan Sarinzhipov told journalists after a Senate session on January 22, TengriNews reports.
Sarinzhipov went on to explain how financial considerations were impacting the situation. “There are many factors, including financial possibilities. The government is now working on the head of state's instruction to prepare different scenarios for the economy. Proceeding from this situation, we have decided to put it [the program] on hold.”
The move to add a year to Kazakhstan's 11-grade system, a legacy from Soviet times, is seen as key to modernizing the education sector. The extra year would bring the country's system in line with international standards and enable external recognition of Kazakhstani secondary education qualifications.
Now as Astana slashes its growth expectations and lowers budget revenue forecasts, the 12-year program has become an early casualty of the government's belt tightening.
This is not the first time that these reforms have been shelved. In 2011 the Education Ministry put back plans to add a year to the curriculum until 2015, citing a deficit of space and trained teachers.
The ministry piloted the 12-year model in 104 schools between 2011 and 2014 using experimental textbooks and teaching materials. The 12-year program was supposed to be fully implemented by 2020.
The International Monetary Fund has revised downward its forecast for growth in Central Asia and the former Soviet Union to account for dramatically lower oil prices and the shriveling Russian economy. The region’s poorest countries can expect sharply higher inflation.
The assessments are part of an economic update released January 21 in Washington.
For energy importers like Kyrgyzstan and Tajikistan, the IMF says, any gains from lower oil prices are overshadowed by weakness in Russia, Central Asia’s largest trade partner and the destination for millions of Central Asian labor migrants. The IMF projects Russia’s economy to shrink 3 percent this year due to “geopolitical tensions” (the Kremlin’s adventure in Ukraine) and sharply lower prices for its chief export, oil.
Already the Central Asian countries are reeling from the 45 percent drop in the value of the ruble against the dollar last year. Kyrgyzstan’s currency, the som, lost 17 percent against the dollar, even as the National Bank spent hundreds of millions of dollars defending it. Oil-exporter Kazakhstan devalued the tenge by 19 percent last February and another downward adjustment appears imminent. Turkmenistan’s manat dropped 19 percent on January 1.
Tajikistan spent over half its hard-currency reserves in 2014 defending the somoni, the Central Bank said this week. Yet the rumpled somoni still fell 11 percent and is bound to plunge further as remittances – which make up the equivalent of half of Tajikistan’s GDP – shrink.
The defense ministers of Russia and Iran, Sergey Shoigu and Hossein Dehghan, sign an agreement in Tehran. (photo: MoD Iran)
Russian Defense Minister Sergey Shoigu has made a rare visit to Tehran, where he and his Iranian counterpart promised "accelerated" military cooperation between the two countries.
Shoigu's visit was the first to Iran by a Russian defense minister in 15 years, and both sides played up the potential geopolitical import of the trip. "Iran and Russia are able to confront the expansionist intervention and greed of the United States through cooperation, synergy and activating strategic potential capacities," said Iranian Defense Minister Hossein Dehghan. "The visit to Tehran is a geopolitical movement towards an alliance between Russia and Iran," wrote Rossiya Segodnya analyst Aleksandr Khrolenko. "It's not just the development of military relations between the two countries, but a continuation of Russia's pivot to the East."
The two sides signed an agreement on defense cooperation, which called for joint exercises, port visits by naval vessels, and a joint fight against piracy in the Caspian. But those things were already going on, and it's not clear what new forms of cooperation might be in the works.
Astana is slashing growth expectations and cutting its budget revenue forecasts as Kazakhstan eyes its gloomiest economic outlook for years, sources in parliament report.
The government intends to cut this year’s GDP growth forecast to 1.5 percent (against its previous forecast of 4.8 percent) and reduce budget spending by a whopping $7 billion, sources in the ruling Nur Otan party told Vlast.kz following a presentation to parliament by National Economy Minister Yerbolat Dosayev on January 16.
Such growth would represent a significant slowdown on last year’s 4.3 percent, and would be Kazakhstan’s lowest since 2009, the height of the global credit crunch.
As President Nursultan Nazarbayev acknowledged last week, Kazakhstan is facing a litany of economic problems, from low prices for oil and metallurgical output to the knock-on effect of Western sanctions against Russia and pressures on the tenge as a result of the ruble’s precipitous fall.
The government is cutting the oil price on which its budget is based from $80 to $50 in its revised budget (which will have to be approved by parliament), Dosayev confirmed, after global prices dipped below $50 this month.