The game of pass the parcel with one of Tajikistan’s rare industrial success stories has now led to a promising fertilizer plant being taken over by Chinese investors.
The lower house of parliament on December 14 ratified a deal between Tajikistan and China for Henan Zhong-Ya holding group to assume control of OAO Azot in a deal that will require the company to invest $360 million over the coming three years.
All in all, the deal is a sweet one for Henan Zhong-Ya. Azot will enjoy a tax holiday for a six-year period as it gradually ramps up production. The plant specializing in the production of carbamide, or urea, an organic compound used in fertilizer.
The plant has been standing idle since it was nationalized at the expense of Ukrainian tycoon Dmytro Firtash in 2014.
For the first 10 years of resumed operations, the plant will be 51 percent owned by the Chinese, while the remainder will be held by the Tajik government. The general director of the company will be Chinese.
Annual demand for carbamide in Tajikistan is around 360,000 tons, an amount it now imports at a cost of $50 million. The plant, which is situated in the southern Khatlon region, is slated to reach annual output of 200,000 tons of carbamide within the first two years.
Under the bilateral agreement, 30 percent of profits will go to the Tajik state and the rest to the Chinese partner.
There is a requirement, however, that half the employees must be Tajik nationals at the start to operations, and that this number must increase to 90 percent within 18 months.
Chinese premier Li Keqiang visits the Chinese embassy in Bishkek on November 3, inspecting the reconstruction after it was attacked by a suicide bomber in August. (photo: www.gov.cn)
China's prime minister, on a visit to Bishkek, called the security situation in Central Asia "complicated and severe" and promised to deepen security cooperation with Kyrgyzstan.
The Chinese premier, Li Keqiang, made the comments during a prime ministerial meeting of the Shanghai Cooperation Organization on November 2. The meeting took place as authorities continue to investigate an August suicide attack on the Chinese embassy in Bishkek, two months on it remains unclear who the organizers were or what were their motives.
The statements by officials from the two countries -- at least as they were reported by Chinese media -- suggested a China who was taking charge, and a Kyrgyzstan which was trying to keep China happy.
"Li expressed his hope that Kyrgyzstan will speed up the investigation and handling of the incident, provide support and assistance, and take necessary measures to ensure the safety of Chinese staff posted in Kyrgyzstan," the Chinese news agency Xinhua reported. Li also visited the embassy to check on the reconstruction.
Kyrgyzstan Prime Minister Sooronbay Jeenbekov in turn promised that Bishkek would "take all necessary measures to ensure the safety of the Chinese embassy and its staff" and "enhance cooperation with China in security law enforcement, fight the "three evil forces" of terrorism, separatism and extremism, and safeguard security and stability of the two countries and the region as a whole," according to Xinhua.
Intriguing figures on China’s natural gas purchases reported by Russian state news agency TASS and relayed by website Eurasia Daily has shed some light on Turkmenistan’s current economic woes.
In the first nine months of 2016, China reportedly increased its overall imports of gas by 26.5 percent on the previous year, up to 71.6 billion cubic meters. The average price it paid for the fuel was $228 per 1,000 cubic meters, according to data reportedly collated by China’s General Administration of Customs. That was apparently $100 less than Beijing was paying last year.
The cheapest gas of all, however, is coming from Turkmenistan, which reportedly sells its exports to China at a giveaway rate of $185 per 1,000 cubic meters. Turkmenistan sold China 23 billion cubic meters of gas over the reported period, accounting for 13 percent of what Beijing imported.
Australia was a far second to Turkmenistan as a gas supplier — 11.6 billion cubic meters shipped to China in liquified form at $220 per 1,000 cubic meters.
The takeaway here is that Turkmenistan is being badly pinched on its only serious export commodity.
And as the Chronicles of Turkmenistan points out, Ashgabat’s sale of gas to China is serving primarily to service multibillion loans issued by Beijing.
This might explain Turkmenistan routine but lackluster attempts to restore diversity among its buyers.
In the long-term there is the trans-Afghan TAPI pipeline — the prospects of which are subject of much skeptical analysis.
China has conducted its first-ever joint bilateral military exercises in Tajikistan, a sign of Beijing's increasing concern about instability in Afghanistan and the capacity of other regional countries to contain it.
The exercise took place in Gorno Badakhshan, the remote eastern end of Tajikistan that borders both Afghanistan and China. Tajikistan's Ministry of Defense reported that the exercise involved 10,000 troops, but that the Chinese contingent was only a "mobile company." A company usually contains 100-200 soldiers, so the Chinese presence was not overwhelming. The exercise reportedly involved armored vehicles, aircraft, and artillery, though it wasn't specified if any of those were Chinese.
Still, the exercise represented yet another step in China's growing military presence in Central Asia. This is the first time that China and Tajikistan have held drills bilaterally in Tajikistan. (Chinese troops did conduct exercises in Tajikistan in 2012, but those were under the auspices of the Shanghai Cooperation Organization and also included other troops from Kazakhstan, Kyrgyzstan, and Russia.)
“The exercise has shown that servicemen of the two countries are ready to provide support to each other in the fight against international terrorism in case of necessity,” Tajikistan Defense Minister Sherali Mirzo said at the October 24 closing ceremony of the exercise.
Last month, Tajikistan announced that China would build 11 border guard posts along the border with Afghanistan, as well as a border guard training center.
Kazakhstan troops march in the opening ceremony of the SCO Peace Mission 2016 military exercises in Kyrgyzstan. (photo: MoD Kazakhstan)
The Shanghai Cooperation Organization is conducting its first joint military exercises in Kyrgyzstan, just weeks after a suicide bomber attacked the Chinese embassy in Bishkek.
The 2016 version of the SCO's Peace Mission exercise kicked off on Thursday at the Edelweiss training center near Lake Issyk-Kul. As is often the case, the scenario of the exercise involves an "anti-terror" operation with considerably heavier firepower than is usually employed against terrorists. Chinese helicopters, for example, practiced using air-to-air missiles.
"The need to conduct such exercises is dictated by modern realities," said Colonel Ruslan Mukambetov, the Kyrgyzstan officer commanding the exercises. "They have repeatedly proven their relevance and significance amid the current international situation, both in the SCO area of responsibility and in the world at large... In addition to its direct purpose - the fight against terrorism, extremism and separatism - they also promote closer military cooperation between our countries’ armed forces."
There seems to be some discrepancies in the reporting of how many troops are involved: The official Chinese People's Liberation Army news site said that it was 1,100, while Mukambetov said it was 2,000. The Russian contingent is reportedly 500 strong, and the Chinese, about 300.
Investigators from the Shanghai Cooperation Organization are working on the case of the Chinese embassy bombing in Bishkek, which includes "Russian traces," a senior Russian security official said.
"Work on identifying the individuals who took part in the terror act in Bishkek continues with the coordination of SCO special services," said Sergey Smirnov, deputy director of Russia's Federal Security Service (FSB), at an SCO meeting in Almaty on Tuesday. "In this work, Tajik, Chinese, and Russian traces are being pursued."
A suicide bomber, whom Kyrgyzstan authorities described as a Uighur holding a Tajikistan passport, attacked the Chinese embassy in Bishkek in late August, killing himself and wounding three embassy employees. If the Uighur connection is confirmed, it would signify that the insurgency that the Uighurs -- a Turkic, Muslim people centered in China's northwest -- have been carrying out in China has expanded into Central Asia.
Smirnov's reference to "SCO special services" is unclear; he could be referring to special services of SCO member countries (which include China, Russia, Kyrgyzstan, and Tajikistan) or organs of the SCO itself, like the Regional Anti-Terrorist Structure. The former is not newsworthy but the latter would be, suggesting a deepening role of the SCO in regional security. But for now it seems more likely that Smirnov was referring to SCO member states, and phrased it that way because he was at an SCO meeting.
The chiefs of staff of the armed forces of Afghanistan, China, Pakistan, and Tajikistan watch military exercises in Urumqi. (photo: Inter Services Public Relations)
Afghanistan, China, Pakistan, and Tajikistan have set up a "Quadrilateral Cooperation and Coordination Mechanism" to jointly combat terrorism, further advancing security cooperation between the unlikely group of countries.
The chiefs of general staffs of the four armed forces met in Urumqi, China, on Wednsday and announced the formation of the mechanism, which will coordinate efforts on "study and judgment of counter terrorism situation, confirmation of clues, intelligence sharing, anti-terrorist capability building, joint anti-terrorist training and personnel training," according to a joint statement by the four sides.
Recall that when this idea was first publicly broached in March, Russian analysts reacted with some alarm, calling it a "Central Asian NATO" representing an unprecedentedly bold move by China into Central Asian security while excluding Russia. (Some Russian media then blamed this blog for fomenting discord between China and Russia by reporting on those analysts' comments.) Thus far there seems to be no further comment from the Russian government or press on this development.
The four representatives also observed a Chinese military exercise at Korla. "Exercise encompased a very effective neutralization of a terrorists' base in a remote mountainous region employing all the modern aerial and ground equipment and gadgets. [Chief of Army Staff of Pakistan] appreciated [the People's Liberation Army] troops for their skills and enhanced abilities to counter all categories of terrorism," according to a Pakistani military press release.
An adviser to American presidential candidate Donald Trump has criticized United States policy in Central Asia as unnecessarily antagonistic, giving a rare glimpse into what a Trump presidency could mean for U.S. relations in the region.
The adviser, Carter Page, spoke Thursday in Moscow, and the main theme of the talk was that Russia and China have more successfully pursued their interests in Central Asia because they deal on the basis of “respect, equality and mutual benefit.” That, he argued, was one of the reasons for the flourishing of the Shanghai Cooperation Organization in Central Asia.
Page contrasted that with the American approach, which he said was characterized by books like "Chaos, Violence, Dynasty," and "Predatory Regimes." (He was referring, apparently, to academic monographs by Eric McGlinchey and Scott Radnitz.) This, Page argued, was evidence of "nakedly emotional approaches to news, often involving expressions of opinion and lacking verification of factual assertion" which typified "mainstream western discourse" on Central Asia.
The heads of state of the SCO member states at their 2016 summit in Tashkent. (photo: president.uz)
The Shanghai Cooperation Organization's summit concluded with few concrete results and plenty of reminders that the group's members have different visions for where the would-be non-Western bloc should be heading.
At the SCO's 15th anniversary summit in Tashkent, there were plenty of vague declarations about the desirability of greater economic cooperation and stepping up the fight against terrorism, but no new initiatives as to how that might be achieved.
The concrete results of the summit were so meager that Russian President Vladimir Putin was reduced to touting the new SCO Youth Card, "which would offer students discounts on travel, accommodation, and visits to museums and other cultural and historical sites in the member countries."
The much-discussed accession of India and Pakistan as full members of the SCO progressed with the signing of a memorandum of obligation. "We hope that our partners will complete these steps as soon as possible, in time for our next meeting in Kazakhstan," Putin said in his speech. Putin also pushed for Iranian membership: "We think that now that the Iranian nuclear issue has been settled and the UN sanctions lifted, there are no obstacles in the way of a positive assessment of Tehran’s membership application."
Uzbekistan President Islam Karimov greets his Chinese counterpart Xi Jinping upon the latter's arrival to Uzbekistan for the SCO summit. (photo: president.uz)
As the 15th summit of the Shanghai Cooperation Organization is set to start on Thursday in Tashkent, the group is poised to continue its growth, with two new members and five new partners. The group's purpose, however, remains unclear, with its diverse members apparently unable to agree on a consistent agenda.
The biggest headline after last year's summit was that India and Pakistan were invited to join the organization as full members, the first expansion since the group was founded. (The SCO currently consists of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan.)
But on the eve of this year's summit, it's not clear what the timetable for their accession is. Their final accession should take place next year, Yuriy Ushakov, a senior adviser to Russian President Vladimir Putin, said. "The process of accepting India and Pakistan into the SCO will enter the final stage and we expect that at the next summit in Kazakhstan, India and Pakistan will be finally admitted into the SCO ranks," he said.
A senior Indian diplomat suggested that the timetable may be looser and hinted that it is dependent on the desires of current member states. “We need to work out what we need to do … As far as India’s pace of accession at the SCO being a function of Russia, China and the four countries of Central Asia, I would say we see ourselves as following fairly flexible multilateralism. So we are quite happy to engage in multiple processes. We have been working with other members of SCO on several other fields,” said the diplomat, Sujata Mehta, at a press conference Wednesday.