From the EBRD report: “The chart shows that Belarus, Armenia and Tajikistan (the latter predominantly through remittance flows) have the highest overall economic exposure to Russia. Such exposures are also significant for the Kyrgyz Republic, Moldova and Ukraine.”
As Russia’s economy goes, Central Asia’s follows. So it is no surprise that the current downward drift in Russia will hurt the region, potentially for years to come. Remittance-dependent countries like Kyrgyzstan and Tajikistan should be especially worried, the European Bank for Reconstruction and Development, a multilateral lender, says in a new report.
In its September regional assessment, the EBRD forecasts growth in Russia will come to a “standstill” in the coming months. Already pronounced, Russia’s economic slump is being exacerbated by the war in Ukraine and Western sanctions. The EBRD said Central Asia, and formerly communist countries more broadly, can expect “significant spill-over effects.”
New sanctions by the EU and U.S., which will dampen growth in Russia, “will negatively affect growth in the Central Asian countries.”
As in 2009, during the financial crisis, migrants and their dependents back home will be the first to feel the pain. Remittances from Russia to Central Asia fell in the first quarter of 2014 compared with the previous year, “for the first time since 2009, primarily due to the slowdown in Russia,” the EBRD said. “Particularly vulnerable are [the] Kyrgyz Republic and Tajikistan, where even a small drop in remittances from Russia is substantive, as remittances make up 29 percent and 49 percent of GDP respectively.”
A fall in remittances “may significantly dampen consumer demand in lower-income countries in the region.”
Russian President Vladimir Putin failed to score any major diplomatic victories at a summit of the Shanghai Cooperation Organization (SCO) in Tajikistan on September 12. The Kremlin appears eager to boost the six-state security bloc as its confrontation with the West over Ukraine drags on.
Putin used the Dushanbe summit – also attended by China’s Xi Jinping and the presidents of the four Central Asian members (Kazakhstan’s Nursultan Nazarbayev, Kyrgyzstan’s Almazbek Atambayev, Tajikistan’s Emomali Rakhmon, and Uzbekistan’s Islam Karimov) – to court international support for his policies in Ukraine.
Speaking after the summit, Putin said that the approaches of the SCO members on Ukraine were “identical and close.”
That looked like wishful thinking, however, given the evident concerns of his Chinese and Central Asian partners over Russia’s apparent military interventions and support for separatism in Ukraine.
Contending with separatist movements at home in Tibet and Xinjiang, China has always opposed what it terms “splittism,” while the Central Asian states – which, like Ukraine, have ethnic Russian minorities – are nervous of Russia’s regional saber-rattling.
The summit ended with the signing of a joint declaration containing a pro-forma call for “restoration of peace in Ukraine” (and a declaration of opposition to “unilateral and unrestricted” deployment of anti-missile systems, in a side swipe at the United States).
Gas-guzzling Kazakhstan – where the jeep has long since overtaken the horse as the favored means of transport – has been urged to save fuel, as a months-long gasoline shortage continues to distress drivers across Central Asia.
On September 2 Energy Minister Vladimir Shkolnik urged the people of his oil-rich country to cut back on consumption, suggesting carpooling and downsizing to small cars from the road-hogging jeeps his compatriots favor.
Kazakhstan is entering its third month of gasoline shortages, with long queues forming in many cities at filling stations, some of which have unilaterally imposed rationing.
The minister’s remarks caused a storm of protest on social media, as Radio Azattyq reported, prompting users to question if Shkolnik would be driving his neighbors to work and wonder where all the oil their country pumps is going, if not into their tanks.
As with so many of Kazakhstan’s economic woes these days, the answers to Kazakhstan’s fuel conundrum lies over the border in Russia, where rising prices mean Kazakhstani importers can no longer afford to buy fuel to sell at home.
This is due to the devaluation of the tenge in February, which has priced importers out of the Russian wholesale market, Aset Magauov, head of the Kazenergy industry association told Bnews on August 29. With prices at the pump controlled by the state in Kazakhstan, retail prices fell lower than wholesale prices in Russia, making imports uncompetitive.
Russia's Defense Ministry has announced plans to hold large-scale military maneuvers near the border with Kazakhstan. The announcement comes as relations between Moscow and Astana sink to their lowest level since the collapse of the Soviet Union, amid heightened regional tensions over the war in Ukraine.
Military exercises involving 4,000 troops and 400 pieces of military hardware will take place in the southern region of Altay in mid-September, Major Dmitriy Andreyev of Russia’s Strategic Missile Troops said on September 3, as quoted by RIA Novosti.
Andreyev described the maneuvers – in which troops will practice repelling strikes by precision weapons and counteracting saboteurs – as part of the Strategic Missile Troops’ “training plan.” However, Kremlin-controlled RIA Novosti did not miss the chance to note that recent military maneuvers in other parts of Russia “have aroused the concern of Western countries in the context of the situation in Ukraine.”
The announcement came amid a chill in the usually warm Russo-Kazakh relationship. Kazakhstan is a close ally of Russia and a fellow member of the Customs Union free trade zone, which is set to become the Eurasian Economic Union (EEU) in January. The two presidents, Kazakhstan’s Nursultan Nazarbayev and Russia’s Vladimir Putin, generally enjoy an affable personal relationship, too.
However, Astana’s loyalty has been tested to the limits by Russian policy in Ukraine, and by Moscow’s heavy-handed attempts to dictate its own vision of the EEU on other members.
Russia's Vladimir Putin has issued an ukaz on authorizing an agreement to accept Armenia into the Eurasian Union, a planned back-in-the-USSR bloc, but this may or may not make Armenia's membership actually happen.
Armenia's membership in the Russian- championed Eurasian Union, and its already active element, the Customs Union, has long smacked of a Nordic epic song, with multiple characters and events putting the spokes in Armenia's wheel. Customs-Union members Belarus and Kazakhstan are Armenia skeptics, and generally less keen about the Kremlin's everyone-with-a-Soviet-past-is-welcome policy.
Putin's September 1 order, though, includes unnamed, "minor" changes to the terms of Armenia's membership. It is unclear if this refers to concessions on the Armenian-championed breakaway territory of Nagorno-Karabakh. Kazakhstan, with an eye to Turkic ally, Azerbaijan, which claims Karabakh as its own, strongly opposes Armenia's attempts to bring breakaway Karabakh into the Customs Union..
Recent statements by both Putin and Kazakh President Nursultan Nazarbayev, though moderated by courtesies, suggest a muffled disagreement between Moscow and Astana. Some believe that Russia's stance on Armenia and its campaign in Ukraine have contributed to the reported chill.
Nazarbayev said that he would quit the Eurasian Union if the terms of membership are changed or if the membership poses threat to Kazakhstan's independent statehood. Putin issued a reminder that Kazakhstan "had never had statehood" before Nazarbayev.
A few days after President Nursultan Nazarbayev said Kazakhstan could withdraw from the Russia-led Eurasian Economic Union, Russia’s president appeared to threaten Kazakhstan, stressing publicly that Kazakhstan benefits by casting its lot with Russia and fanning suspicions that all is not well between the two leaders.
Speaking at an annual, town-hall style meeting with university students and young professors on August 29, Vladimir Putin fielded a question about Kazakhstan’s post-Nazarbayev future and the likelihood of a “Ukraine scenario”—presumably, a power vacuum and civil conflict.
Because it is widely assumed that the questions are either vetted or planted, the exchange has invited plenty of scrutiny. While Putin’s answer was full of seeming praise for Nazarbayev, it also cast doubt on Kazakhstan’s durability as an independent state—a sensitive issue in Kazakhstan after Russia annexed Ukraine’s Crimea peninsula.
Events in Ukraine, including Russia’s support for rebels in the east, have already set many Kazakhstanis on edge – sparking fears that by joining the EEU Kazakhstan is tying the knot with an international pariah. They understand the obvious parallels: If Russia can seize Crimea under the pretext of protecting Russians, can it not seize northern Kazakhstan, home to large ethnic Russian communities? And if Russia can support insurgents against Kiev (a charge Moscow denies), can it not do the same against Astana? The propositions will sound even more ominous once Nazarbayev, a strongman who has established few mechanisms for a smooth transition of power, is out of the picture.
Even in one of the most liberal Central Asian cities, a little light homoerotica that would barely turn heads in New York or London can still spark furious debate, threats of lawsuits, and calls to the police.
The dispute is about an advertisement for an Almaty gay club that features two prominent 19th century cultural figures, Russian poet Alexander Pushkin and Kazakh composer Kurmangazy Sagyrbayuly, enjoying a passionate kiss (pictured). The club, Studio 69, happens to sit at the corner of streets named for Pushkin and Kurmangazy.
According to zakon.kz, the reaction was mostly negative on social media, as people found irreverence toward their cultural heroes too difficult to swallow. "There is no limit to [my] outrage. How could [they] come up with something like this?” one user wrote.
Police told TengriNews they had registered an official complaint. And a descendant of Kurmangazy has threatened to sue for moral damages.
But some defended the poster (which riffs off of the famous image of East German leader Erich Honecker and the Soviet Union’s Leonid Brezhnev locking lips in East Berlin in 1979). "At least [there is] some creativity in the barren steppe of domestic works,” TengriNews quoted a local social media user as saying.
CSTO Rapid Reaction Forces drill in Kazakhstan. (photo: CSTO)
Russia and its allies are practicing military drills involving a "separatist" force supported by sympathetic co-ethnics across the border, trying to provoke the central government into a disproportionate use of force, justifying an invasion by the bordering country.
That scenario may sound a lot like what's going on in Ukraine. But in the ongoing exercises, Russia is on the otherside: fighting against the separatists, carrying out what might be called an "Anti-Terror Operation" to regain control of the border territory.
The exercises, of the Collective Security Treaty Organization's rapid reaction forces, took place this week in Kazakhstan, and involved about 3,000 soldiers from CSTO members Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. And the public description of the scenario for the exercises is much more detailed than it has been in past years, providing an intriguing look into what Russia (the dominant power in the group) sees as the threats it could be facing in its region.
The parallels to Ukraine are far from exact -- in the CSTO exercises, the conflict is in Central Asia and there is fighting on both sides of the border. And here, the separatists are supported by the West and are known as the "brown" forces, presumably an allusion to the fascists that Russia believes it's fighting in Ukraine. The scenario, published on the CSTO website, is worth quoting at length:
A joint operation [is undertaken] to localize an armed conflict on the territory of a CSTO member state, 'Karania,' which according to the scenario of the exercise, has appealed to the CSTO with a request for military assistance."
A Russian tank en route to victory in the 2014 international tank biathlon. (photo: mil.ru)
Russia hosted -- and won -- the second international tank biathlon competition, an event Moscow appears to be trying to turn into a major forum for military cooperation with friendly customers/potential weapons customers.
While last year's inaugural event featured just three other competitors -- fellow Collective Security Treaty Organization members Armenia, Belarus, and Kazakhstan -- this year saw an additional eight countries taking part: Angola, China, India, Kuwait, Kyrgyzstan, Mongolia, Serbia, and Venezuela.
Tank biathlon is about what you would imagine, a tank race combined with shooting; teams that miss targets have to do a penalty lap. Russia won (as it did last year), with Armenia coming second, China third, and Kazakhstan fourth -- at least according to the Russian tabulation of results. In the Kazakhstan Ministry of Defense's statement about the event, they said they got second, with China third and Armenia fourth. (The Russian sources compare the teams based on time, the Kazakhstan one on points; it's not clear what the relationship is between the two.)
At first blush, it seems Kazakhstan's strongman President Nursultan Nazarbayev likes to keep business in the family. A daughter heads his party in the rubber-stamp parliament; his sons-in-law held various official positions and became fabulously wealthy. So why is it not surprising that Kazakhstan is paying the wife of Nazarbayev’s most distinguished advisor, former British Prime Minister Tony Blair, hundreds of thousands of pounds for her legal services?
Citing an anonymous source, The Telegraph broke the story today. The paper describes Cherie Blair as known for her “ardent” defense of civil liberties and human rights. Kazakhstan is known for muzzling free speech and locking up critics. The contract with Mrs Blair’s law firm Omnia Strategy doesn’t concern those sensitive issues, however. Instead, the paper reports, Mrs Blair will review Kazakhstan’s “bilateral investment treaties.”
The first stage of the review, which was expected to take as little as three months, is worth £120,000 [$200,000], sources have told The Sunday Telegraph.
A second phase of the project is worth a further £200,000 to £250,000 for another three to four months’ work, it is understood. Omnia Strategy, which Mrs Blair set up in 2011, also has an option to complete a third stage of the legal project for the Ministry of Justice at a fee to be decided, according to the source.
Mrs Blair is understood normally to charge clients £1,150 an hour but will bill the Kazakh taxpayer at a reduced rate of £975 an hour if the Ministry of Justice, based in the capital Astana, continues to employ Omnia on the legal review into its third stage.