In terms of statistics, unless they are the rosy government sort, Tajikistan often appears to be on the edge of an abyss. But somehow the poorest country to emerge from the Soviet Union chugs on.
So a grim World Bank report out this week probably does not indicate imminent collapse. But it is unnerving to see that almost every macroeconomic indicator suggests trouble ahead. And Tajikistan’s latest predicament coincides with a push from Moscow to join Russia’s new Eurasian Economic Union.
Tajikistan’s economic dependence on Russia is, as economists have long warned, a liability—and not only because it gives Moscow enormous influence. “The possible spillover effect from the Russian slowdown onto the Tajikistan economy is estimated to be one of the largest in the [Europe and Central Asia] region: a 1 percentage point reduction in the growth of Russia’s GDP would reduce growth in Tajikistan by the same amount,” says the October 27 report, “Tajikistan: Moderated Growth, Heightened Risk.”
For starters, over a million Tajiks, or about one-half of working-age Tajik men, labor in Russia, usually in menial jobs. Their transfers are worth about half of Tajikistan’s GNP, making it the most remittance-dependent country in the world.
But as the Kremlin sacrifices Russia’s economy for its Ukraine policy, which has caused a new low in relations with the West, the resulting downturn is hurting the ruble and Tajikistan’s economy at large. An ailing ruble buys fewer dollars to send home.
An airline out of the rambunctious Russian republic of Chechnya was planning to launch flights from Crimea to Armenia next month, but Yerevan, ever image-conscious, now seems hesitant to be the only direct, regular international destination for trips from the Russian-annexed peninsula.
Armenia’s aviation regulators late last week refused to authorize flights run by Grozny Avia between the Crimean capital of Simferopol to Yerevan.
International airlines are avoiding Russian-occupied skies over Crimea. Russia’s Aeroflot operates direct flights to Crimea from Moscow, with most flights for this month largely sold out.
Armenia’s Civil Aviation Agency cited unspecified errors in Grozny Avia’s application as the reason for its refusal to allow the flights, RFE/RL reported. The refusal is not conclusive and Grozny Avia can technically reapply, but some believe that Armenia is trying to avoid further miffing Ukraine, already upset over Yerevan’s backing the right to self-determination of the Crimean people.
The former head of the Civil Aviation Agency, Shagen Petrosian, said that allowing such flights would also significantly damage Armenia’s reputation and could possibly lead to international sanctions, epress.am reported.
Russian President Vladimir Putin speaks to the Valdai discussion group. (photo: Kremlin)
Russian President Vladimir Putin accused the United States of sponsoring terrorism in Russia and Central Asia,
Putin spoke October 24 at the annual meeting of the Valdai Club, where foreign policy experts from around the world gather to talk about Russia. Although its major themes were previewed by Foreign Minister Sergey Lavrov a few days before, the Russian website slon.ru said that the speech "could confidently be placed in the same rank as the 2007 Munich speech" (his first substantial criticism of the U.S. and the unipolar world it led) and was "the most anti-American speech Putin has given since coming to office 14 years ago."
The entire speech is fascinating, and certainly will be studied as much as the Munich speech or his post-Crimean annexation speech by those trying to figure out Russia's foreign policy. But one section of this speech is of particular interest to Bug Pit readers:
The web page for Russia's joint SCO/BRICS summits next year in Ufa..
Russia's Foreign Minister, Sergey Lavrov, gave a tour d'horizon of his country's rapidly evolving foreign policy, including some of the most explicit hints to date that the country is reorienting away from Europe and toward Asia -- especially China.
In an October 20 speech to members of the country's ruling party, United Russia, Lavrov addressed familiar topics like the need for a multipolar world and perfidy of the West. But in the past Russian officials tend to elide the details of what an alternative to the Western-led world would look like.
Particularly striking in Lavrov's speech was the attention given to China. This was in his introduction:
The realignment, or, I would even say, the deconcentration of the global balance of forces, is a hallmark of our time. Most clearly, this can be seen in the greater economic power and increasing political clout of the Asia-Pacific Region. These countries have largely assumed the role of a driver of global economic growth, a role which was traditionally performed by the United States,Western Europe and Japan. As we can see, China achieved the greatest success on this path and, according to the latest report issued by the International Monetary Fund, has for the first time become the world’s largest economy in terms of purchasing power parity Based on the findings of the IMF experts, the seven largest so-called “emerging economies,” including our country, outdid the seven industrialized Western countries in terms of combined GDP. That’s a totally new picture of the world that does not fit into the centuries-old notion of Western dominance in the global economy, finance and politics.
Twenty five years ago, he said, "We used to do big, complex NATO exercises in all environments, but the world has changed. We haven’t been doing as many of those in the last 10, 15 years. But I think Ukraine has told us we need to up our game and I think that’s the plan in the near future.”
Hudson was apparently at the Pentagon to discuss with U.S. Navy officials how to beef up NATO's naval forces. “Six or seven destroyers … isn’t going to defeat a complex enemy,” he said. “But it will sustain a theater, ... it will put all the connectivity into a region in place so that the follow-on forces can deliver.”
One wonders what sort of scenario would entail a NATO "defeat" of Russia. The U.S. has already stepped up its rotation of ships into the Black Sea and has promised to do more. Vice Adm. Hudson also said last month that NATO would increase its presence in the Baltic Sea, as well. (That plan has no doubt been given new currency as a result of Sweden's claims that a Russian submarine has been snooping around its waters.)
A Russian Su-27 fighter, soon to be based permanently somewhere in Belarus. (photo: mil.ru)
Russia has chosen a new location for its air base in Belarus and pushed back the date of its establishment by a year.
Russia has been talking about establishing an air base in Belarus since last year, which would be its first post-Soviet military facility in the country, but the details keep changing. In June 2013, Russia said it would set up the base near Lida "within months." In August 2014, Russia's air force chief Lieutenant General Viktor Bondarev said that the base would be located instead in Baranovichi (and denied that Lida had ever been the plan), and would open in 2015.
But this week, Bondarev again addressed the question of the base, and said it would now open in 2016 and would be in Babruysk, in eastern Belarus. (Lida and Baranovichi are both in the western part of the country.) “The airbase of the Russian and Belarusian Air Force will be created in 2016. Su-27 fighter jets will be based there,” Bondarev told reporters.
The ruble vs the tenge over the last 12 months. The sharp change in February indicates the first tenge devaluation. Since then, the ruble has continued to slide, again putting pressure on the tenge. xe.com.
As the price of oil falls, and as Russia’s Central Bank struggles to keep the ruble from hitting a new record low each day, Kazakhstan’s currency is facing pressure on two fronts. The major oil producer, whose economy is tightly linked to Russia’s, already sharply devalued the tenge once this year. But facing these new challenges, can the Kazakh National Bank hold its currency stable? And can Kazakhstan keep its books balanced?
Higher output and weaker global demand have pushed the price for benchmark Brent crude to $83 per barrel, its lowest in four years, down 27 percent since June. Oil, Kazakhstan’s chief export, is still above the government’s fiscal breakeven point of $65.5 per barrel, as calculated by the IMF. But it is below $90.6, where Kazakhstan faces a balance of payments deficit that puts further downward pressure on the currency. Moreover, trade with Russia is down 22 percent this year.
Kazakhstan’s “tenge weakened in forward markets last week, responding to a drop in the price of oil and sliding ruble,” Halyk Finance, an Almaty-based investment bank, said in an October 13 note. “The weakening of the Russian ruble and falling oil prices are the main fundamental reasons of the tenge weakening in forward markets.”
Russia is Kazakhstan’s main trading partner. And because of the falling price of oil, and the effect of sanctions the West has imposed on Moscow for meddling in Ukraine, the Russian currency has fallen nearly 20 percent this year. That has put the ruble-tenge exchange rate back where it was just before the tenge devaluation (see chart).
Lawmakers in Kyrgyzstan have voted overwhelmingly to adopt a tougher version of Russia’s so-called “gay propaganda” law. The Kyrgyz version mandates jail terms for gay-rights activists and others, including journalists, who create “a positive attitude toward non-traditional sexual relations.”
The vaguely worded bill passed its first reading on October 15 with a vote of 79 to 7, AKIpress reported (the 120-seat legislature is rarely full). During a meeting last week to discuss the bill, one lawmaker said the draft is not tough enough and proposed to increase sentences from up to one year to three. If it passes two more readings, the bill will go to President Almazbek Atambayev – a staunch Russia ally – for his signature.
One of the bill’s authors, Kurmanbek Dyikanbayev, often sounds as if he is repeating Kremlin talking points. Dyikanbayev told Radio Azattyk last week that he sponsored the bill to protect Kyrgyzstan’s “traditional families.” He also blames Western democracy for moral degeneracy and for encouraging homosexuality.
Bishkek-based LGBT-rights organization Labrys, whose advocacy would be outlawed by the bill, notes that the legislation contradicts numerous human-rights provisions in Kyrgyzstan’s constitution. Nika Yuryeva of Labrys said she fears the bill will encourage more violence against the LGBT community.
While in Baku Shoigu met with President Ilham Aliyev and his counterpart, Defense Minister Zakir Hasanov. Shoigu's delegation included Viktor Chirkov, the Russian navy's top commander, and the discussions appeared to be heavily focused on Caspian naval issues. "Everything connected with the Caspian is important to Russia," Shoigu said.
The two sides agreed to carry out joint naval exercises next year, and Russian newspaper Kommersant has reported that Azerbaijan is interested in buying Russian Bal-E coastal missile systems.
Particularly intriguing was the notion of a "collective defense" system: "We proposed the consideration of the creation of a collective security system in the Caspian region... the first step could be to create a council of naval commanders and to prepare a five-sided agreement on preventing incidents on the Caspian and in the airspace above it," Shoigu said.
The Russian government has criticized a NATO plan to construct military training facilities in Georgia, while coming under fire itself for hosting a NATO facility on Russian soil.
When NATO announced last month that it would set up a range of expanded cooperation programs with Georgia, including joint training facilities, the reaction from Moscow was inevitable. On October 8, Russia's foreign ministry issued a statement expressing “concern in connection to the Georgian media reports about plans to deploy military infrastructure on the territory of Georgia in the interests of NATO.... Such actions would create threat to emerging stability in the Transcaucasus region."
Left unmentioned was the increasingly uncomfortable fact that Russia itself hosts a NATO cargo transit facility in Ulyanovsk. It was set up in 2012 to help NATO forces get equipment to and from Afghanistan, and even then it was somewhat contrary to Russia's consistent anti-NATO rhetoric. Then-Russian ambassador to NATO Dmitry Rogozin -- one of the leading producers of that anti-NATO rhetoric -- was put in the unlikely position of defending the facility, saying it would only involve harmless items like toilet paper and Mars bars.