A Chinese company that has had a string of bad luck in Kyrgyzstan is not getting much support from the country's investment-hungry government—or from Russia.
China’s state-controlled Junda China Petrol Company runs a troubled but potentially strategic oil refinery in northern Kyrgyzstan. The problem now is that Junda doesn’t have enough crude to fuel its $430 million plant. And the regional oil producers, Kazakhstan and Russia, are unwilling to help.
Last week Kyrgyzstan’s Vice Prime Minister Valery Dil called Junda's decision to build a refinery without planning for crude supplies “ridiculous,” in quotes picked up by 24.kg.
"To build a huge refinery and not know where to get the oil, that’s ridiculous,” Dil said.
Those are not exactly welcoming words for a large foreign benefactor already struggling to find reasons to keep investing in perennially troubled Kyrgyzstan. In its short history, Junda itself has faced environmental protests and labor disputes, which one lawmaker claims are backed by opposition politicians bent on using the facility as a weapon in a political confrontation with the government.
Dil also confirmed that Russia and Kazakhstan have refused to supply crude tax-free, though his colleague, Economy Minister Temir Sariev, recently had been hopeful that Kyrgyzstan’s membership in the Russia-led Eurasian Economic Union would help solve this problem.
Central Asia’s two least-developed countries, Tajikistan and Kyrgyzstan, are both heavily dependent on Chinese investment these days. But now it appears Chinese investors are tiring of persistent uncertainty in Kyrgyzstan and are shunning the country in favor of neighboring Tajikistan.
Four of the five Central Asian states have failed to meet basic fiscal transparency standards, according to the U.S. State Department’s latest Annual Fiscal Transparency report. The study does not appear to affect whether a country receives U.S. government funding, however.
In addition to ascertaining whether countries meet State’s minimum standards (such as publishing receipts and expenditures in publicly available national budget documentation and bidding and contract information for natural resource extraction), the study assesses progress—or lack thereof.
Published by the Office of Monetary Affairs since 2008, the report only includes “those governments it anticipated would receive bilateral allocations of assistance” in fiscal year 2014. The latest version of the report was released January 14.
This year, Kazakhstan, Tajikistan, Turkmenistan and Uzbekistan were all judged to have made “no significant progress” toward meeting minimum fiscal transparency standards, joining 35 other countries in that category. Overall, 50 fell below the minimum-standards threshold.
Kyrgyzstan, which has harnessed international assistance from USAID and other donors to improve public access to state budgets was judged to have met minimum transparency standards for the second year running.
In 2012, Tajikistan made significant progress toward the benchmark. It has slipped over the last two years, however.
Turkmenistan and Uzbekistan, which routinely rank at the bottom of Transparency International’s Corruption Perception Index, have never glittered in this report.
For a landlocked country, Turkmenistan is getting into the seafaring spirit: Ashgabat’s new showpiece ferry Berkarar has been shuttling its way around the Caspian Sea – defined by geographers as an inland lake – making trips to both Azerbaijan and Russia so far this year.
The ferry was built in the Uljanik Shipyard in Pula, Croatia – which has produced ferries for the Caspian littoral states since communist times – and delivered to the reclusive Central Asian country in December. Ashgabat has also commissioned a second, smaller ship, Bagtiyar, which is scheduled to arrive this summer. They carry both freight and passengers.
Azerbaijani newswire Trend.az gushed about Berkarar’s latest voyage, from Turkmenbashi to the Azerbaijani capital: “The ferry impresses with its dimensions; it has a length of 155.8 meters, width of 17.5 meters, and height of 12.2 meters,” Trend reported on January 14.
Berkarar can carry “56 trucks loaded with 40-foot containers,” according to News Central Asia’s detailed report on the vessel.
So, provided there are enough goods to fill them, the ferries could help expand regional trade across the contested waters of the Caspian.
A Turkish company is currently modernizing Turkmenistan’s Turkmenbashi port, a commission that is expected to finish in 2017.
Persistent institutional chaos is undermining public confidence in Kyrgyzstan’s parliamentary republic as the country enters a new political cycle.
Observers fear parliamentary elections this November could destabilize and further fracture Kyrgyzstan, as officials – including the secretive coterie surrounding President Almazbek Atambayev – scramble to accumulate power.
Tajikistan has cast doubt over its willingness to continue hosting a network of leading charter schools inspired by U.S.-based cleric Fethullah Gülen.
This week Education Minister Nuriddin Saidov suggested that the Tajik government is planning to review the schools’ licenses, which are currently held by a company called Shalola. The schools – often known as “Gülen schools” or “Turkish schools” – adhere to the educational principles of Gülen’s transnational religious movement, which has been praised for its modern interpretation of Islam but also accused of bearing resemblance to a cult.
“The activities of Turkish schools in Tajikistan should be transformed; they need to work on a charitable basis. This is my position. Now we are working on this issue,” Saidov told journalists January 5.
While the schools (numbering 10, according to one count) in Tajikistan were initially free to attend, they now cost $1,000 dollars per year, according to RFE/RL’s Tajik service.
RFE/RL says the schools’ domestic critics tend to associate them with “Pan-Turkism,” while supporters argue that they offer an education far superior to that at Tajikistan’s impoverished state schools, which are among the worst in the former Soviet Union. Instruction is in English, Russian and Turkish. Tajik social media users claim that many officials place their children in the secular Gülen schools.
It is not clear what precisely Shalola and its schools have done to offend Tajikistan’s aid-dependent and graft-prone government.
Whether or not Vladimir Putin bribed Uzbekistan, as a Bishkek newspaper claims, it is welcome news all around that Uzbek gas is once again flowing into southern Kyrgyzstan.
Kyrgyzstan is happy because 60,000 customers in a potentially restive part of the country aren’t relying on dung to heat their homes; Uzbekistan again has revenue from the cross-border gas trade; and Russia, whose energy giant Gazprom promised a constant supply of gas when it bought Kyrgyzstan’s gas distribution network last year, gets to save face.
But the sudden resumption of gas deliveries from Uzbekistan to Kyrgyzstan on December 30 begs two related questions: Why wasn’t a deal reached earlier, after Uzbekistan abruptly cut supplies last April? And what made the recalcitrant Uzbeks change their mind?
Kyrgyz newspaper Vechernii Bishkek, citing an unidentified Kyrgyz government source, claims it knows the answer to the second question.
The source told Vechernii Bishkek today that no less a figure than Russian President Vladimir Putin negotiated the gas deal during a December 10 meeting with his counterpart Islam Karimov in Tashkent. Karimov, according to this account, pushed Moscow to forgive $3 billion of Uzbek debt (oddly, that’s much more than the $890 million other media reported Uzbekistan as owing). In the end the Kremlin agreed to write off $865 million.
A major Pakistani newspaper has argued that the long-stalled Turkmenistan-Afghanistan-Pakistan-India gas pipeline (TAPI) is unlikely to be built anytime soon. The link is increasingly vital to Turkmenistan’s ambitions of being an independent force in the regional gas market, and reducing its dependence on its main buyer, China.
But while all four countries have signed off on the project, there are a number of reasons it may not come to fruition, according to Dawn, one of Pakistan’s largest English dailies.
There had been excitement in recent months that after years of talk, TAPI was entering the business stage. On the back of a four-country steering committee assisted by the Asian Development Bank in November, Turkmen President Gurbanguly Berdymukhamedov noted in December that “there is now no doubt that [TAPI] will be realized, moreover in the very foreseeable future.” European major Total and Malaysia’s Petronas are rumored to be interested in building the pipeline.
But referring to the same steering committee meeting held in Ashgabat, Dawn notes the very earliest gas could be expected to flow is 2019, three years later than anticipated, and potentially too late for India.
Given this delay, India has indicated revisiting its plan to be a part of the project; whether it would really need the gas from Turkmenistan after 2018 is questionable because it is already a major player in the Singapore LNG futures trading.
Turkmenistan rang in the New Year by dramatically devaluing its national currency, the manat, and introducing a steep levy on the price of petrol.
The scale of the devaluation – comparable to the 19 percent devaluation of the tenge in Kazakhstan earlier in the year – comes as all Central Asian economies are feeling the downturn in Russia, where the ruble lost 45% of its value against the dollar in 2014. But it is still somewhat surprising because Turkmenistan’s is the region’s economy least dependent on exports to its former colonial master.
AFP reported January 1 that the Turkmen central bank had published a rate of 3.50 manats to the dollar, down from the 2.85 that had held since 2009—a devaluation of 18.6 percent. The government has not commented.
Noting that a liter of popular 95-octane petrol had also jumped overnight – from 0.62 manats to 1 – The Chronicles of Turkmenistan, a news blog run by Turkmen exiles, feared significant inflation would follow.
After three years of negotiations, Kyrgyzstan has signed up to join the Moscow-led Eurasian Union, a protectionist post-Soviet economic club that some fear will allow the Kremlin to reassert political influence in its former backyard. But in what has become a tradition, Kyrgyzstan’s actual accession will be delayed yet again.
Kyrgyz President Almazbek Atambayev signed on the dotted line at a Moscow meeting of the Eurasian Economic Council December 23 along with his counterparts from Armenia, Belarus, Kazakhstan and Russia.
Atambayev was in high spirits after signing, waxing lyrical about the benefits of regional integration.
“I’d like to emphasize that today is December 23. I am a person that sometimes lends a lot of credence to things, dates, signs of destiny, lets say. Yesterday, December 22, was the shortest day and the longest night [of the year] and today, December 23 is the day when light starts to defeat night. It seems very significant. I am confident that even in these difficult times, things will be a lot easier for all of us if we are friendly with one another and help one another,” Atambayev said, to what looked, on camera, like sniggers from Russian President Vladimir Putin and Belarus’s Alexander Lukashenko.
More importantly, Atambayev confirmed that Kyrgyzstan would not be ready for full membership in the Eurasian Economic Union – which fellow aspirant Armenia will join on January 1 – until the anniversary of the Soviet Union’s 1945 victory over Germany on May 9. All year officials have said Kyrgyzstan will join on January 1, when the Customs Union becomes the Eurasian Economic Union (EEU).