Kyrgyzstan's massive loss at an arbitration court this month has encouraged speculation that the country's only significant foreign asset – its stake in a Canadian gold mining company – is up for grabs.
On July 2, a tribunal in Moscow awarded Toronto-listed Stans Energy Corp $118.2 million in damages in a dispute over the Kutessay-II heavy rare earth elements mine in Kyrgyzstan’s Talas Province. Stans acquired a 20-year license to the mine in 2009, which the Kyrgyz parliament recommended the government annul in 2012. (Stans has alleged that powerful Chinese interests in Kyrgyzstan bribed parliamentarians to revoke the license in order to help Beijing maintain control over the lucrative rare earths market.)
Canada’s National Post reports that Stans has few options because Kyrgyzstan, one of the poorest countries in Asia, does not have that kind of cash lying about. So Stans could seek to seize Kyrgyzstan’s shares in Toronto-listed Centerra Gold, which, in turn, owns Kyrgyzstan’s largest industrial asset, the Kumtor Gold Mine. From the National Post’s financial pages:
It is highly unlikely that Kyrgyzstan will respect the ruling and pay out any cash. That leaves Stans the option of securing verdicts against one or more of the state’s foreign assets. And a logical one to go after would be Kyrgyzstan’s 32.7% stake in Centerra, currently worth almost $500 million.
An exchange of fire between troops on a disputed section of the Kyrgyzstan-Tajikistan border reportedly left at least one dead and several injured on July 10. Tensions have risen sharply again in this volatile part of the Fergana Valley after negotiations over a controversial road construction project fell apart earlier this week.
According to the Kyrgyz Border Service, about 30 Tajik citizens were trying to build a water pipeline from Kyrgyz territory to the Vorukh exclave, a parcel of Tajik territory surrounded entirely by Kyrgyzstan. Kyrgyz border guards demanded they stop, the Tajiks threw stones and eventually troops from the two sides exchanged fire.
According to the Tajik-language service of Radio Liberty, citing a local doctor in Vorukh, one Tajik national (apparently a civilian) died and five were injured in the exchange of fire. Dushanbe’s Asia-Plus news agency reports seven wounded. Tajikistan's Foreign Ministry says the Kyrgyz border guards picked a fight, shot without warning, and that the Tajik border guards did not fire a single shot.
Later in the day, the Kyrgyz Border Service said Tajik border guards had opened fire on another Kyrgyz checkpoint, this time with mortars and grenades.
That’s the lesson after a Chinese company appears to have bested a Russian one for the right to turn Kyrgyzstan’s main civilian airport into a strategic aviation “hub” for freight and passenger flights connecting Europe and Asia.
The Chinese maneuver would not have surprised anyone in a country where China is building almost everything, except that Kremlin-controlled energy giant Rosneft appeared to have had the deal to remodel Bishkek’s Manas International Airport in the bag. On February 19, Putin ally Igor Sechin, Rosneft’s chairman, and Kyrgyz First Deputy Prime Minister Djoomart Otorbaev (now prime minister), signed a memorandum on Rosneft’s interest in the airport and its lucrative fuel-distribution contracts.
Fast forward five months and both Russian and Taiwanese media are reporting that Beijing Urban Construction Group will invest $1 billion in the makeover, a figure similar to the Rosneft deal. China Machinery Engineering Corporation will sign a $300 million deal for the country’s second airport, in the southern city of Osh—another asset that had interested Rosneft.
"So far these are memorandums of intention, but in the near future the fully planned projects will be ready," Kommersant quoted Kyrgyz Economics Minister Temir Sariyev as saying on July 4. The reports do not mention what share in the airports the Chinese will get.
In the corner of a small pizzeria in central Bishkek, an experiment is unfolding. Central Asia’s first and only bitcoin ATM converts dollars into the world’s most popular cryptocurrency. The machine – which looks like one of the city’s ubiquitous electronic pay terminals – offers a way to convert hard currency into a digital medium that is increasingly used in online transactions.
That could impact how Kyrgyzstan’s estimated one million migrant workers transfer their earnings home, says the machine’s owner, Emanuele Costa, an Italian financial analyst. The World Bank estimates that last year migrant remittances totaled the equivalent of 31 percent of Kyrgyzstan’s GDP. Most of that money, several billion dollars, was transferred through expensive, fee-based services like Western Union and Zolotaya Korona. Costa, a former analyst with Goldman Sachs, sees bitcoin as a low-cost, secure and confidential alternative.
Bitcoin, invented by a group of anonymous Internet users in 2009, is the first and most prominent digital cryptocurrency to gain wide circulation. Not controlled by national governments or banks, bitcoin offers a peer-to-peer encrypted payment system that can be readily converted into cash or, increasingly, used in exchange for products or services. Fees, when they exist, are agreed upon by users and are usually nominal. Bitcoin’s value fluctuates based on supply and demand; one bitcoin is currently worth about $642.
Though Costa is a staunch believer in bitcoin’s potential, he admits that it faces some hurdles. Foremost is a lack of understanding.
Chinese workers in Kyrgyzstan are known for their stoicism amid rising xenophobia and appalling labor conditions. But something seems to have snapped this week for a crew of migrants toiling to build an oil refinery in the northern city of Tokmak.
According to Kyrgyz and Russian press reports, 39 Chinese migrants downed tools, blocked entry to the facility and took several Kyrgyz employees hostage on June 30. Police fired shots into the air to break up the protest, according to a police source.
Twenty-five of the migrants were working illegally, police say, and have been deported. The rest have been fined.
The riot coincided with payday and the Chinese appear to have felt shortchanged. According to Kyrgyz media outlet Knews, citing local police in contact with the refinery’s Chinese director, the migrants were angered that pay was being withheld to cover the cost of their transport from China.
The Chinese Embassy in Bishkek has not commented on the incident.
Tajik Foreign Minister Sirodjidin Aslov faces an awkward audience with his British counterpart, William Hague, in London today. Campaigners have pressed Hague to demand Tajikistan release a scholar working for a British university amid a sharp rise in anti-British sentiment in the Central Asian country.
It has been over two weeks since Tajikistan’s secret police, the GKNB, detained graduate student Alexander Sodiqov while he was conducting fieldwork on conflict resolution for Exeter University. Sodiqov reportedly faces up to 20 years in jail on treason charges, charges his colleagues call farcical. They and a number of MPs have pressed Hague to link Sodiqov’s freedom to any promises of British support for Tajikistan’s high-profile energy projects, such as the Rogun dam and the CASA-1000 electricity export line to South Asia.
“We hope that there will be a clear statement that British support for Tajikistan – including Rogun and CASA – is conditional on maintaining basic human rights and, specifically, releasing Alex,” said Nick Megoran, a lecturer at Newcastle University who is working with Sodiqov on the British-funded project.
Officials have said little about what they plan to do with Sodiqov. Amnesty International has labeled him a “prisoner of conscience.”
Tajik President Emomali Rakhmon has staked his legacy on the Rogun dam. From the National Museum of Tajikistan.
Two new reports should interest anyone following progress building the world’s tallest dam—Tajikistan’s 3,600-MW dream, Rogun.
The World Bank has released drafts of its long-awaited Rogun feasibility studies. They appear to give Tajikistan the green light to build Rogun, saying the dam is the best way to end the country’s crippling energy shortages. However, the economic model used to make the recommendation seems to assume a set of unlikely conditions, from financial reforms and improvements in Tajikistan’s insolvent electricity industry to a major breakthrough in relations with a prickly neighbor.
Meanwhile, in a second report, Human Rights Watch says the resettlement of 42,000 people whose homes will be destroyed or flooded by Rogun is not going as smoothly as the government has promised.
The World Bank studies look at technical, economic, environmental and social considerations for three potential heights. Overall, the Bank found the tallest Rogun option – 335 meters, the only one Tajik officials talk about – the most economical: “building a dam at the Rogun site is a lower cost solution to meeting Tajikistan’s energy needs than any of the alternatives.”
The Chinese Embassy in Bishkek has called on the Kyrgyz government to end a weeks-old protest that has blocked a strategic road and stranded over 300 trucks near Kyrgyzstan’s border with China. Protestors are demanding the release of a nationalist politician awaiting trial on embezzlement charges.
“Drivers don’t have enough food, the weather conditions threaten their vital security. The Chinese side is worried about the condition of its citizens and asks the Kyrgyz side to take the necessary measures to address the issue and assist in ensuring the safety of [Chinese] citizens,” Interfax quoted the Chinese Embassy as saying this week.
About a hundred protesters have been blocking the main road through southern Kyrgyzstan’s Alai region since May 27, demanding authorities move Kyrgyz parliamentarian Ahmatbek Keldibekov of the nationalist Ata-Jurt Party from pre-trial detention to house arrest. Keldibekov, who is charged with corruption dating to his time as head of Kyrgyzstan’s State Tax Committee, was arrested and stripped of parliamentary immunity last November. If found guilty, he faces more than 10 years in prison. He denies the charges, describing his arrest as politically motivated. Keldibekov had earlier lost his position as parliamentary speaker during a scandal that appeared to tie him to Kyrgyzstan’s most notorious mob boss.
Though Keldibekov’s supporters have rallied several times since his arrest, the ongoing roadblock is their most sustained effort yet to draw attention to his case.
Tajik authorities have allegedly paraded University of Toronto researcher Alexander Sodiqov, who disappeared three days ago, on television in an apparent attempt to discredit him and an opposition politician. Friends and colleagues are growing increasingly concerned that Tajikistan’s heavy-handed authorities may be trying to make an example out of Sodiqov to discourage others from examining tensions between Tajikistan’s authoritarian government and minorities in the restive eastern province of Badakhshan.
Sodiqov, a 31-year-old Tajik national who lives in Canada, disappeared in Khorog on June 16 while carrying out academic fieldwork on civil society and conflict resolution in Central Asia. Tajikistan’s unaccountable and American-backed secret police service, the GKNB, initially confirmed it had detained Sodiqov and accused him of carrying out “subversion and espionage” – a charge it will be difficult for them to walk back. The GKNB has since refused to discuss Sodiqov's whereabouts.
Citing an anonymous Khorog resident, Tajikistan’s independent Asia-Plus news agency reported on June 18 that Sodiqov appeared twice on local state television looking confused, once the previous evening and once early on June 19. The resident told Asia-Plus that Sodiqov’s speech appeared to have been edited to discredit the opposition and a religious leader.
Hard-drinking Kazakhstan is moving to curb alcohol abuse by extending a ban on late-night alcohol sales.
The new bill banning retail sales between 9 p.m. and noon was signed into law by President Nursultan Nazarbayev on June 18. The rules extend an existing late-night ban on alcohol sales (including beer) and will hit retail outlets which do a roaring trade in late-night booze sales. Restaurants, bars, and nightclubs will not be affected.
The law also bans alcohol sales altogether at filling stations as well as education and health institutions, but moves by parliamentarians to ban sales at markets and stadiums as well failed.
Kazakhstan raised the legal drinking age from 18 to 21 in 2009. The new bill doubles fines for selling liquor to under 21s to a maximum of $1,200 (with the revocation of an offender’s license to sell alcohol).
The government says the bill is aimed at curbing excessive alcohol consumption, for which Kazakhstan rates 34th worldwide, according to a World Health Organization survey of 188 countries released in May.
Each person in Kazakhstan aged over 15 imbibes on average 11.3 liters of alcohol a year, almost double the global average of 6.2 liters, the report said—although the government has questioned the WHO’s methodology.
The report found the prevalence of “heavy episodic drinking” (defined as consuming at least 60 grams or more of pure alcohol on at least one occasion in the past 30 days) to be 7.8 percent in Kazakhstan. Among drinking males the prevalence stood at 30 percent. Some 8.9 percent of males and 1.9 percent of females have drinking disorders in Kazakhstan, according to the report.
The WHO singles out Kazakhstan as one of 11 countries with the “most risky patterns” of drinking.