The governments of Kyrgyzstan and the United States are set to sign an amendment to the Manas Transit Center’s leasing agreement that will enable the purchases of aviation fuel directly from a Kyrgyz state-owned enterprise.
In a boost for Kyrgyzstan’s economic revival efforts, Russia has abolished an export tax on fuel. Imposed during the last days of former president Kurmanbek Bakiyev’s administration, the Russian fuel tariff was widely seen as a trigger for political upheaval that buffeted Kyrgyzstan in 2010.
NATO, not the European Union, initiated the idea of inviting Uzbekistan’s controversial leader, Islam Karimov, to visit Brussels, according to an aide to European Commission President José Manuel Barroso. Karimov is scheduled to meet with NATO Secretary General Anders Fogh Rasmussen, Barroso, EU Energy Commissioner Günther Oettinger, as well as Belgian authorities, on January 24.
It’s going to be a gloomy year for financial authorities and householders alike in Kyrgyzstan if the macroeconomic predictions of a Bishkek-based think-tank bear out.
In December 2010, CAFMI surveyed leaders at 19 of Kyrgyzstan’s largest business and business associations including Kumtor, Gazprom Neft Asia, the Bishkek Business Club and the Chamber of Tax Consultants.
The respondents predict that business activity, confidence in the economy and purchasing power will decline. The only thing that is likely to increase is the number of job applicants per job, they said. Their forecast for what direction the consumer price index would move are equally unnerving. The cost of services could increase by 16.2 percent, industrial products by 14.4 percent, and groceries by a whopping 21.3 percent.
The potential for this burden on the average household to create problems for the new government is significant.
In December 2010 the cost of flour and bread rose by 25 percent when compared to December 2009, fruits a vegetables were 12.7 percent more expensive and meat 11.9 percent more expensive than the previous year, according to the Kyrgyz National Statistic Committee.
Seyitbek Usmanov, the director of research at CAFMI, told EurasiaNet.org the increases will mean real changes in the way people spend. Meat, he said, will be out of the question for some households now.
Uzbek President Islam Karimov will visit Belgium on January 24 to meet the President of the European Commission (EC), Jose Manuel Barroso, the Belgian authorities and officials at NATO HQ, a spokesman for the EC has confirmed.
But officials at the EU deemed the sanctions ineffective and they were lifted in 2008, a move which prompted sharp criticism from human rights organizations. A year later an arms embargo was also removed.
Within days of the arms embargo being scrapped, Uzbekneftegaz announced the EU was “ready to develop cooperation on mutually beneficial terms” with the state-owned gas and oil company.
Uzbekistan’s strategic importance continues to grow as US and NATO forces become increasingly reliant on goods delivered via the Northern Distribution Network, a logistics line stretching from Western Europe to the Uzbek-Afghan border.
However, Jose Manuel Barroso, seems to gearing up to meet as many
resource-rich but democracy-poor autocrats as he can in the month of January; by next Monday he’ll be able add Karimov to a list that includes Azerbaijan’s President Ilham Aliyev and Turkmenistan's President Gurbanguly
Berdymukhamedov.
A new tax dispute over fuel supplies at a strategically important air base in Kyrgyzstan is looming. US diplomats are concerned that potential wrangling could impede the war effort in Afghanistan.
Turkmenistan and the US are promising to enhance their already noteworthy level of military cooperation.
The head of US Central Command, Gen. James Mattis, made his first trip to Turkmenistan on January 11. According to the State News Agency of Turkmenistan (TDH), Mattis and President Gurbanguly Berdymukhamedov talked about global security, drugs, organized crime and terrorism.
Mattis reportedly said that the US intends to develop “versatile collaboration” with Turkmenistan which is viewed as a “dependable partner".
What new heights of cooperation might be reached, seeing as Ashgabat lets US military planes use it airports, refuels them tax free and will occasionally facilitate US troops in remote areas of the country?
In addition, by not taxing the Turkmen fuel which is exported to Afghanistan in support of Operation Enduring Freedom, Ashgabat has declined to collect a significant amount of revenue. Even when the US was paying top dollar for overflight and landing rights -- which it claims it is no longer doing -- the sum was miniscule compared to what Turkmenistan could pocket in fuel taxes.
This level of assistance must come at a price. Turkmenistan may well be a useful partner but it’s probably not a cheap one. “Sacred neutrality” is a high-maintenance concept.
Despite its long-avowed status as a neutral nation, Turkmenistan is playing an important supporting role for US and NATO forces fighting in Afghanistan. Washington and Ashgabat are both keen to keep Turkmenistan’s strategic role low-key, especially the financial aspects of cooperation.
Authorities in Kyrgyzstan appear to be laying the groundwork for a broad crackdown on perceived religious radicals, following January 4 firefights that left four law-enforcement officers and two alleged militants dead.
