Four of the five Central Asian states have failed to meet basic fiscal transparency standards, according to the U.S. State Department’s latest Annual Fiscal Transparency report. The study does not appear to affect whether a country receives U.S. government funding, however.
In addition to ascertaining whether countries meet State’s minimum standards (such as publishing receipts and expenditures in publicly available national budget documentation and bidding and contract information for natural resource extraction), the study assesses progress—or lack thereof.
Published by the Office of Monetary Affairs since 2008, the report only includes “those governments it anticipated would receive bilateral allocations of assistance” in fiscal year 2014. The latest version of the report was released January 14.
This year, Kazakhstan, Tajikistan, Turkmenistan and Uzbekistan were all judged to have made “no significant progress” toward meeting minimum fiscal transparency standards, joining 35 other countries in that category. Overall, 50 fell below the minimum-standards threshold.
Kyrgyzstan, which has harnessed international assistance from USAID and other donors to improve public access to state budgets was judged to have met minimum transparency standards for the second year running.
In 2012, Tajikistan made significant progress toward the benchmark. It has slipped over the last two years, however.
Turkmenistan and Uzbekistan, which routinely rank at the bottom of Transparency International’s Corruption Perception Index, have never glittered in this report.
Whether or not Vladimir Putin bribed Uzbekistan, as a Bishkek newspaper claims, it is welcome news all around that Uzbek gas is once again flowing into southern Kyrgyzstan.
Kyrgyzstan is happy because 60,000 customers in a potentially restive part of the country aren’t relying on dung to heat their homes; Uzbekistan again has revenue from the cross-border gas trade; and Russia, whose energy giant Gazprom promised a constant supply of gas when it bought Kyrgyzstan’s gas distribution network last year, gets to save face.
But the sudden resumption of gas deliveries from Uzbekistan to Kyrgyzstan on December 30 begs two related questions: Why wasn’t a deal reached earlier, after Uzbekistan abruptly cut supplies last April? And what made the recalcitrant Uzbeks change their mind?
Kyrgyz newspaper Vechernii Bishkek, citing an unidentified Kyrgyz government source, claims it knows the answer to the second question.
The source told Vechernii Bishkek today that no less a figure than Russian President Vladimir Putin negotiated the gas deal during a December 10 meeting with his counterpart Islam Karimov in Tashkent. Karimov, according to this account, pushed Moscow to forgive $3 billion of Uzbek debt (oddly, that’s much more than the $890 million other media reported Uzbekistan as owing). In the end the Kremlin agreed to write off $865 million.
Tajikistan's armed forces are setting up a new base near the Afghanistan border in response to the apparent massing of fighters on the Afghan side of the border.
The base, to be called "Khomiyon," will be in the Kulyab region. "Tanks, armored vehicles and other weaponry" will be deployed to the base, which "units of all security structures of the country will be able to use for conducting maneuvers," reported RFE/RL, citing a source in Tajikistan's Ministry of Defense. While there is no "immediate threat" from the Taliban fighters apparently massing near the Tajikistan border, Dushanbe still chose to take "preventative measures," the official said.
(Technically, the facility is not a "base" but a "polygon," a Russian word suggesting something smaller than a base, though the report also noted that the polygon would operate "under the regime of a military base.")
An unnamed source in Tajikistan's State Committee on National Security (GKNB) told the Russian news agency TASS that "groups not controlled by Kabul" have massed on the Afghanistan side of the border.
"We are closely tracking the situation close to the border of Afghanistan, especially in the Badakhshan and Pyanj areas, where intelligence has noted a gathering of armed individuals, coming from various extremist and terrorist communities like the Taliban and the Islamic Movement of Uzbekistan," the source said.
Uzbekistan has accused Kyrgyzstan of violating its airspace with a drone, a charge Bishkek denies.
According to Uzbekistan's border service, on December 16 a drone flew into Uzbekistan's Ferghana Valley from Kyrgyzstan's Batken region. The drone was flying at an altitude of 200-250 meters, flew 7.5 kilometers deep into Uzbekistan, and after an hour returned to Kyrgyzstan. The drone had no identifying markings, but was white with a light blue tail, the border service said.
And Uzbekistan added a warning: The border service "officially announces that in the event of another violation of the air space of Uzbekistan, the Uzbek side reserves the right to take all necessary measures to defend the air space of the Republic of Uzbekistan."
Kyrgyzstan’s problems probably featured pretty low on Vladimir Putin’s to-do list when he traveled to Tashkent this week.
Some in Kyrgyzstan believe the Russian president, and only he, can end their country’s intractable disputes with its neighbor. There was hope, for example, that Putin could get Karimov to resume gas supplies to southern Kyrgyzstan.
Though Putin had a nice package of goodies for his Uzbek counterpart on December 10 – he wrote off most of Tashkent’s debt and showed support only a few months before Karimov is expected to stand for reelection – it is unclear what he got for Russia.
Per usual, Karimov ducked a press conference. And he did not publically opine on the elephant in the room: Tashkent’s future role, if any, in relation to Putin's Eurasian Economic Union.
One of the items supposedly on the agenda, however, was gas.
The standoff in the Fergana Valley directly involves Russia. Russia’s Gazprom had just taken control of Kyrgyzgaz in April when UzTransGaz said it had no obligation to supply Gazprom. Kyrgyzstan’s second-largest city has been without gas ever since.
The meeting failed to produce a breakthrough, Kyrgyz media reported.
Many analysts assume Uzbekistan is using gas to gain leverage over its poverty-stricken upstream neighbor as well as that neighbor's benefactor—Russia.
Russian President Vladimir Putin discusses weapons sales with his Uzbekistan counterpart Islam Karimov. (photo: Kremlin)
Uzbekistan appears to be increasingly relying on Russia for military equipment as the United States withdraws from Afghanistan without -- as Tashkent had hoped -- handing over some of its secondhand gear.
During Russian President Vladimir Putin's visit to Tashkent this week, the big news was that Russia would forgive almost $1 billion of Uzbekistan's debt in order to free up new credits for Uzbekistan to buy Russian military equipment.
What equipment might be under consideration isn't yet known, but Interfax suggested that "because of the existing security threats in Uzbekistan, the country may be interested in purchasing helicopters, armoured vehicles, air-defence weapons and small arms made in Russia." Information about arms purchases by Uzbekistan are very hard to come by; the think tank SIPRI, the most authoritative source on arms sales around the world, doesn't list Uzbekistan as having bought anything in the last 12 years.
An anonymous source "close to the Russian delegation" told Deutsche Welle's Russian service that "during the negotiations in Tashkent the expansion of military-technical cooperation was discussed by the delegations in detail." And part of the reason, the source said, is that Uzbekistan isn't getting what it hoped for from the U.S.:
Russia's ruble became worth less than a Kyrgyz som for the first time on December 12. (xe.com)
The Russian ruble crossed a psychological barrier in Kyrgyzstan on December 12, becoming worth less than the som for the first time. Across Central Asia, the ruble’s slide is pushing local currencies to new lows. But they can’t seem to fall fast enough to keep a competitive advantage.
Central Asian economies are deeply dependent on Russia as an export market. When the ruble is weak, Central Asia’s exports are relatively expensive for Russian consumers. So, weaker local currencies benefit the region’s producers. Of course falling currencies also mean inflation, as the price of imported goods from outside the region shoots up—as does the cost of servicing foreign debt. The World Bank projects inflation in Kyrgyzstan this year to top 10 percent. In Tajikistan, food prices rose 10.5 percent in November alone, according to a Deutsche Welle report.
Regional security and domestic politics featured high on the agenda as Russian President Vladimir Putin jetted into Tashkent on December 10 for a meeting with Uzbekistan’s strongman leader, Islam Karimov.
Putin appeared both to be wooing Karimov for backing in his confrontation with Ukraine, and offering a show of support for the incumbent ahead of upcoming parliamentary and presidential elections in Uzbekistan.
It “goes without saying” that Tashkent is “one of [Russia’s] priority partners in the region,” Putin said, according to a Kremlin transcript. That he bypassed other Central Asian allies like Kazakhstan to pay a visit to Uzbekistan lent weight to his remarks.
Karimov responded with boilerplate compliments about how Moscow has “always been present in Central Asia, and that position has always been a stabilizing factor.” Notwithstanding isolationist Tashkent’s habit of holding Moscow at arm’s length, he added that “Uzbekistan has always been open to Russia and is open today.”
Karimov repeated his oft-voiced concerns about regional security threats emanating from Afghanistan following the drawdown of NATO troops this year, but the Ukraine conflict was the elephant in the room. In the Kremlin transcript, neither side mentioned it by name, but Karimov referred obliquely to the need to respond to “challenges” in the face of a “known confrontation,” while Putin noted laconically that neither Russia nor Uzbekistan was “indifferent to how the situation in the region as a whole develops.”
Putin took more interest in upcoming elections in Uzbekistan—the vote to the rubberstamp parliament on December 21, and the far more significant presidential election due in spring (in which Karimov has not stated if he intends to stand).
If Central Asia’s two poorest countries ever get around to building their massive but long-delayed hydropower dams, the facilities may be useful for a few decades. After that, they’ll be rendered obsolete by a fast-warming climate that is melting the region’s once-abundant glaciers and threatens to reduce precipitation sharply.
So suggests an alarming new World Bank report on the effects of climate change around the developing world.
“Turn Down the Heat: Confronting the New Climate Normal,” released in late November, offers just about everyone in Central Asia some bad news, especially the region’s megalomaniacal dam builders. In landlocked Eurasia, the temperatures are expected to rise “above the global mean land warming,” bringing a slew of unpleasant consequences, from decreased crop yields to contentious water shortages.
Effects like these are difficult to assess and prepare for even in places with relatively responsible and capable governments. How will they be dealt with by dysfunctional, near-sighted and volatile governments in impoverished, corrupt countries like Central Asia’s?
The 275-page report starts with the informed assumption that an increase in global average temperatures of 1.5 degrees Celsius by mid-century is unavoidable. It also looks at two more frightening, but plausible, scenarios: an increase of 2 degrees and 4 degrees. (Temperatures have already warmed by 0.8 degrees above pre-industrial levels.)
No matter which model they apply, forecasters predict a dramatic reduction in the size of Central Asia’s glaciers and amount of precipitation. That translates into a sharp decrease in the water flows the largely arid region can expect for hydropower and agriculture.
Senior United States diplomats have visited Tashkent for their regular consultations with the government of Uzbekistan, and in spite of continuing tension over Afghanistan and human rights, the Americans were unusually positive in their assessment of ties with Uzbekistan.
"Had a very productive meeting with President Karimov on the growing bilateral relationship and cooperation on regional and global challenges," tweeted Nisha Biswal, the U.S. Assistant Secretary of State for South and Central Asia. "Very impressed by the candid conversations with govt of Uzbekistan and civil society on subject of prison management and prison conditions," she added later. The delegation included 22 American officials from seven different government agencies.
Interestingly, in her public remarks Biswal appeared to have not uttered the words "human rights." The U.S. government has come under frequent criticism from human rights groups for overlooking the country's appalling record on human rights for the sake of strategic considerations. But U.S. officials nearly always meet with human rights activists when they visit the country, and at least mention the issue of human rights in their public statements. (Also unusually, while Biswal held a press conference in Tashkent the transcript wasn't released. The State Department didn't respond to a request for comment.)