The ill-fated fourth strand of the Central Asia-China gas pipeline has again been put on hold amid apparent sagging demand for the fuel from Beijing, Russian media outlets have reported.
A Tashkent-datelined RIA-Novosti news agency report on March 2 cited unidentified sources as saying China National Petroleum Corporation and state-owned oil and gas company Uzbekneftegaz have agreed on an indefinite postponement on work to the Uzbek section of the route.
The projected 1,000-kilometer Line D is designed to start in Turkmenistan, cross Uzbekistan, Tajikistan, Kyrgyzstan and end in western China, and will, if ever completed, boost the overall annual transportation capacity of the Central Asia-China pipeline network to 85 billion cubic meters. This strand constituted a shorter but diplomatically far more complicated route than the already functioning Lines A, B and C, which also rise in Turkmenistan but cross only Uzbekistan and Kazakhstan.
The three completed strands of the Central Asia-China pipeline currently allow for the export of around 55 billion cubic meters of gas annually — an amount equivalent to one-fifth of China’s consumption. According to a breakdown of existing contracts and capacity outlined by CNPC, Lines A and B are able to carry 13 billion cubic meters of gas from the Chinese-run Amu Darya Project at Turkmenistan’s Bagtyyarlyk field and another 17 billion cubic meters of gas sourced by Turkmengaz itself. Line C is intended to supply a mix of gas from Turkmenistan (10 billion cubic meters), Uzbekistan (10 billion cubic meters) and Kazakhstan (5 billion cubic meters).
Central Asia has looked at Donald Trump’s election to the US presidency and some of it likes what it sees. The rest seems unbothered.
Kazakhstan’s President Nursultan Nazarbayev fired off a note of congratulations to his counterpart-to-be and suggested that Trump drop in for a visit.
“I believe that under your leadership, the United States will remain a mainstay in the preservation of stability, security and prosperity in the entire world,” Nazarbayev said in the statement.
The haste and palpable warmth of the statement are hard not to see as a ringing endorsement. Nazarbayev, like Russia’s Vladimir Putin, clearly see in Trump a figure untroubled by such trifles as the promotion of democracy and human rights.
When Hillary Clinton last visited Kazakhstan, in 2010, she made a point of raising the plight of a jailed human rights defender, Yevgeny Zhovtis, while also hailing Astana for its progress on human rights.
Maulen Ashimbayev, a member of parliament with the ruling Nur Otan party, predicted that Trump’s victory would prove beneficial to Kazakhstan by virtue of the prospect of improving relations between Washington and Moscow.
So far, the India-Russia railway project is not a fully rail-based route, rather a rail-sea-road-rail-shipment arrangement. Goods coming by rail from Mumbai will be ferried to the Iranian port of Bandar Abbas in the Persian Gulf, then carried north across Iran by rail to the city of Rasht. Trucks will carry the load to the Azerbaijani border town of Astara, and then a train will carry it to Moscow, said Javid Gurbanov, chairperson of Azerbaijan Railways.
Baku says the route, part of a north-south transit corridor, will carry 5 million tons of goods annually. For a smoother shipment, Iran and Azerbaijan are negotiating the construction of a rail link between the cities of Rasht and Astara. Iranian President Hassan Rouhani is due in Baku in August to discuss funding and technical matters. Azerbaijani officials say they may lend part of the estimated $900 million to Iran for the railway project.
Washington’s top diplomat traveled to Central Asia to kick-start a historic initiative to reinvigorate U.S. engagement with the region, but it was the unceremonious treatment of a reporter that is going to stick in the memory.
Activists had hoped in advance of John Kerry’s whistle-stop tour that human rights issues might feature prominently on the agenda. But talk of those was relegated to the sidelines — in public at least.
Instead, Kerry focused on prospects of security, energy and economic cooperation, which have long constituted core priorities for Washington.
The closest Kerry came to mentioning Central Asia’s poor human rights record in public was in remarks about “quality of governance and the strength of democratic institutions.”
“In Central Asia, as elsewhere, people have a deep hunger for governments that are accountable and effective,” he said at the meeting on November 1 in Samarkand, Uzbekistan, with foreign ministers from the region’s five former Soviet republics.
The U.S. State Department said in advance of the tour that this meeting would form the basis of a new diplomatic format, which it has dubbed C5+1.
“We should have no doubt that progress in democratic governance does lead to gains in every other field about which we are concerned and about which we are talking,” Kerry said.
The muted tone of those remarks will have come as a disappointment to many.
Central Asia faces a bleak economic outlook and policy-makers should prepare for the long haul as the shocks buffeting the region are likely to be enduring, the International Monetary Fund has said.
In Central Asia, “the situation and outlook are worse than for the world economy as a whole,” Juha Kahkonen, deputy director of the IMF’s Middle East and Central Asia Department, said at a briefing in Almaty on October 23. “This is because the region has been hit by three major external shocks.”
The IMF identifies the wave of external shocks as the fall in global prices for the commodities that Central Asia exports, which range from oil and gas to metals, repercussions from the recession-hit Russian economy, which the IMF expects to contract by 3.8 percent this year, and the shifts in major global exchange rates pressuring regional currencies.
Added to all those woes is the slowdown in China, a major trading partner and investor for the Central Asian states.
The IMF says that as a result, the region will experience slower growth than it has become accustomed to in recent years.
Kazakhstan — which is suffering from low oil and metals prices and struggling with pressure on its currency that has seen the tenge lose around half of its value since the central bank moved to a free float in August — is expected to see growth of just 1.5 percent this year, according to both IMF and government forecasts. That is down from 4.3 percent last year.
Nordic telecoms giant TeliaSonera is pulling out of the Eurasian region in the wake of a three year-long scandal over its business dealings in Uzbekistan that saw it accused of funneling illicit payments to associates of Gulnara Karimova, the disgraced daughter of President Islam Karimov.
The company will gradually wind down its operations in its Eurasia section, which includes the six former Soviet states of Kazakhstan, Uzbekistan, Azerbaijan, Georgia, Moldova and Tajikistan, as well as Nepal, and ultimately cease them altogether, it said in a statement on September 17.
The Swedish-Finnish company said it would focus instead on its telecoms business in Europe “within the strategy of creating the new TeliaSonera.”
“It is our belief that it is possible to do business in Eurasia which are [sic] both profitable and sustainable — but it is important to enter markets in a correct way,” it said.
When TeliaSonera entered Uzbekistan’s lucrative telecoms market, it allegedly used Karimova — at the time a major business player with telecommunications interests, but now under house arrest in Tashkent on corruption charges — as an intermediary.
TeliaSonera’s problems began three years ago, when a Swedish television station aired a report claiming the telecoms giant had made dubious payments to a shell company run by Karimova associate Gayane Avakyan in order to gain access to Uzbekistan’s market. That report sparked a major corruption investigation in Sweden that is ongoing to this day. The resignation of former chief executive Lars Nyberg and the dismissal of several senior company executives ensued the following year.
It appears that the Pentagon's propaganda outlet in Central Asia is going out of business. The recently passed U.S. defense budget bill eliminated funding for the Trans Regional Web Initiative, a program that published a variety of regional "news" websites, including Central Asia Online. American newspaper USA Today, which has done a lot of investigations into the TRWI, reports:
"None of the funds authorized to be appropriated for fiscal year 2014 for the Department of Defense may be obligated or expended for the Trans Regional Web Initiative," the annual defense law says. It makes an exception for a $2 million payment to pay for the termination of the program by the U.S. Special Operations Command (SOCOM) and to transfer some capabilities to other parts of the military.
EurasiaNet's David Trilling wrote the definitive piece on Central Asia Online for Foreign Policy in 2011, noting that its Uzbekistan coverage "has shown a disturbing tendency to downplay the autocracy's rights abuses and uncritically promote its claims of terrorist threats." He added that the website sometimes "downplays abuses even contrary to concerns expressed by the U.S. government.":
The number one topic of conversation among Washington's small band of Central Asia watchers -- and the much larger band of Central Asian Washington watchers -- is about what will happen to U.S. policy in the region after the U.S. pulls its forces out of Afghanistan. U.S. policy in Central Asia over the last decade has been so dominated by the war in Afghanistan that's it's hard to imagine any more what the U.S. interest in the region might be absent that. And a couple of recent discussions in Washington provide a view both of the public and the behind-the-scenes conversations that are going on about this -- and highlighted the huge divide between what the U.S. says officially about its future policies toward Central Asia and what it is really thinking about.
One discussion, at the think tank New America Foundation, featured newly appointed Deputy Assistant Secretary of State for South and Central Asia Fatema Sumar discussing "Regional Connectivity in South-Central Asia." As that title implies, it was all about the U.S.'s New Silk Road Initiative. The U.S.'s New Silk Road has taken enough beatings in this blog and elsewhere that there is little need to kick it when it's down. (Still, another takedown piece was published recently by Eugene Imas in The Diplomat, "The New Silk Road to Nowhere.") But one part of Sumar's presentation stood out:
A U.S. Congressional committee held a hearing on the "emerging threat of resource wars" in Central Asia, but failed to demonstrate that that threat was emerging, or even a threat at all.
The hearing was held by the House Subcommittee on Europe, Eurasia, and Emerging Threats and chaired by Representative Dana Rohrabacher who is bringing his idiosyncraticbeliefstoward the region to the committee's work since being appointed to chair it earlier this year.
Rohrabacher opened the hearing with a dark warning, that "increasing global demand for supplies of energy and minerals is sparking intense economic competition that could lead to a counterproductive conflict. ... A zero-sum world where no one can obtain the means to progress without taking them from someone else is inherently a world of conflict. When new sources of supplies are opened, as is the case with Central Asia, there is still fear that there is not enough to go around and thus conflict emerges." But other than the general observation that China and India were both growing a lot and both needed resources, how conflict may emerge from that situation was not explained.
There is an interesting piece posted recently on Foreign Policy’s website that highlights how authoritarian-minded leaders in Eurasia are becoming adept at leveraging thuggish behavior.
The article, titled “The League of Authoritarian Gentlemen,” is written by Alex Cooley, a Central Asia specialist at Columbia University. It examines the ways in which Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan have used the Shanghai Cooperation Organization (SCO) and the Commonwealth of Independent States (CIS) to stifle dissent.