The World Bank has released yet another dire economic forecast for Tajikistan, predicting that the downturn in Russia and devalued ruble will push down labor migrants’ remittance transfers by 40 percent this year (in dollar terms). Unemployed young men are expected to return home in droves.
Job-poor Tajikistan is the world’s most remittance-dependent state; the migrants’ transfers account for the equivalent of 49 percent of GDP. This year and next are going to be especially hard for the millions of Tajikistanis who have been lifted out of poverty in recent years by their relatives’ transfers from Russia.
Up to half of working-age men, most of them under 30, have sought work abroad, mostly in Russia. Twenty-five percent are expected to return home this year, putting enormous social pressures on one of Central Asia’s most fragile states.
Some key takeaways from the May 25 report:
Declining remittances would significantly reduce disposable incomes in Tajikistan, forcing the poorest and the lower middle class to cut non-priority expenditures, including those on social services, such as education and health. Reintegration of returned migrants will be difficult given the limited jobs available, mismatched skills, and competition from youth entering the labor market. Returnees are likely to lack awareness of employment and business opportunities, and related legislation—employment information and services are both inadequate.
Ukraine and Moldova are restricting Russian military access to the breakaway territory of Transnistria, where Russia maintains about 1,500 troops.
Last week Ukraine's parliament voted to suspend military cooperation with Russia. And while much cooperation was of course already suspended, throughout the current crisis Russia has been able to use Ukrainian territory to supply its troops in Transnistria, a slender territory on Ukraine's western border. No longer.
Russia responded defiantly: "The Ministry of Defense is left with no other option than to supply Russian forces with all the necessities by air bridge, with military-transport aircraft," said Yuriy Yakubov, a senior Russian MoD official in an interview with Interfax after the Ukrainian vote. "The Russian contingent will be supplied under any circumstances."
A member of the Russian Duma committee on defense, Vladimir Komoedev, added: "We have to think now how to act, to find ways. We shouldn't throw out Transnistria and Moldova."
Turkmenistan’s President Gurbanguly Berdymukhamedov solidified his role as the isolated country’s “protector” and leading equestrian on May 25, unveiling the first gold-plated statue of himself.
Officials say the 21-meter statue, cast in bronze and covered in 24-carat gold leaf, was built to satisfy public demand. It is named “The Protector,” for Berdymukhamedov’s adopted title, and features the strongman with his right hand outstretched and a dove perched upon it. Some have ridiculed it for bearing an uncanny resemblance to a statue of Peter the Great in Russia’s second city, St Petersburg.
Berdymukhamedov is not famous for originality. He has persistently built his own cult of personality while dismantling that of Saparmurat Niyazov, the Turkmenbashi, who died in 2006 after scattering golden busts and statues of himself across the gas-rich nation.
Notably, Berdymukhamedov has relegated to the suburbs a statue of Niyazov that rotated to face the sun. He has also gradually phased out Niyazov’s Ruhnama, or “Book of the Soul,” which was required reading in schools and government offices.
In hindsight it is clear that these moves were less about dismantling an old cult and more about making space for a new one.
In recent years Turkmenistan’s pliant and obsequious parliament has bestowed horse-mad Berdymukhamedov with titles such as “Master Jockey-Mentor of Turkmenistan” and “People’s Horse Breeder.” He has also authored a range of books, on horses among other things, and elevated his father, Myalikguli Berdymukhamedov, to the status of a living demigod. (In a nod to Central Asian patriarchy, Myalikguli got a monument before his son – though it is not covered in gold.)
Pakistani Prime Minister Nawaz Sharif rounded off an energy-themed jaunt across Central Asia on May 22 in Bishkek, where he spoke about electricity exports to his energy-starved nation two days after visiting Turkmenistan to discuss a troubled gas-pipeline project.
The trip demonstrated Pakistan’s limited leverage in its dealings with Central Asia and, publicly at least, did not produce much of substance.
In Ashgabat, Sharif called on partners to “intensify work” on the long-stalled Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline. In his meeting with Turkmenistan President Gurbanguly Berdymukhamedov on May 20, Sharif called TAPI a “project that would bring benefits to the entire region.”
But the pipeline, which would traverse Afghanistan and has been on the drawing board since the mid-1990s, may cost over $10 billion. With no commercial investor so far, initiative rests with both Turkmenistan, the would-be-supplier, and the main export market, India. Delhi must decide if its own energy deficit warrants pushing a link that many see as risky and expensive.
Neither president mentioned either the hoped-for 2017 TAPI completion date, or the more pessimistic projection of 2020 mentioned in late April by Afghan President Ashraf Ghani. (Many say both timelines are still pipedreams.)
Russia announced this week that it has formally cut off the transit of NATO military cargo through Russian territory. But in theory, Moscow remains open to cooperation on Afghanistan: it annulled the agreement only after NATO quietly allowed the agreement to lapse after the formal combat mission in Afghanistan ended at the end of 2014. And the comparable military transit agreement with the United States remains in effect, though the Pentagon isn't currently using Russian territory for its Afghan transit.
On May 18, the Russian government announced that Prime Minister Dmitry Medvedev had signed a decree annulling the NATO transit agreement. Russia has allowed NATO countries to transport equipment to Afghanistan since 2008, and even allowed NATO to set up a controversial logistics facility in Ulyanovsk in 2012, though the latter, in the end, was rarely used.
In general, the transit routes through the former Soviet Union -- collectively known as the Northern Distribution Network -- have declined in significance over the last few years. The main reason is that Pakistan, which offers a much closer route to the sea from Afghanistan, has become a more reliable partner, making it a much more economical option and Russia and the rest of the NDN effectively a backup.
A court in Tashkent has ordered one of Uzbekistan’s few privately owned newspapers to close, accusing it of undermining the nation’s moral values.
The silencing of the Noviy Vek weekly is the latest blow to the beleaguered media in Uzbekistan, which watchdogs single out as having one of the world’s worst press-freedom records.
“The newspaper was closed down” by court order, Shakhriyor Mansurov, a spokesman for the government’s Agency for Press and Information – which brought the case – confirmed to EurasiaNet.org on May 21, the day after the ruling.
Noviy Vek could not be reached for comment, its telephones going unanswered on May 21. Its website was updated on May 21, but did not mention the case against the newspaper (which is published in print every Thursday).
Mansurov said he was unable to provide any background details to the case. But the Uzmetronom.com website – the only Uzbekistani-based outlet to mention the trial – reported that the government agency had accused Noviy Vek of publishing material “contradicting principles of moral development, shaping an incorrect notion of the socio-political situation in the country, and causing detriment to traditional values.”
The Agency for Press and Information, which had found these alleged violations in the Russian-language newspaper’s reporting, refused to hold the trial in Russian (as the defense had wished) on the grounds that its officials could not speak Russian, Uzmetronom.com said.
Kyrgyzstan took another halting step toward joining the Moscow-led Eurasian Economic Union on May 21 when President Almazbek Atambayev signed an accession treaty into law.
The other four members must still approve the impoverished Central Asian state’s membership (a process that is largely seen as a formality), and Bishkek must finish upgrading its border checkpoints to EEU standards before Kyrgyzstan becomes a formal member. But Atambayev was in a jubilant mood.
“Today is a wonderful day for us. Today [I am] signing the law ratifying international agreements on Kyrgyzstan’s accession to the Eurasian Economic Union. In this way, we complete all the internal governmental procedures for entering one of the biggest economic unions in the world,” Atambayev said on May 21 in comments carried by his website.
Kyrgyzstan first formally applied for membership two years ago and has been speaking about joining for four. Accession has dragged for so long that confusion over whether Kyrgyzstan is yet a member has reigned in recent weeks. It is still unclear how long it will take for Kyrgyzstan to upgrade its checkpoints.
In his remarks, Atambayev celebrated a “a new phase of development” for his country, while warning that the “journey will not be easy.” For years, thousands of Kyrgyzstanis have survived by re-exporting Chinese goods to other former Soviet republics. Those goods now face higher import tariffs. Kyrgyzstan’s economy must “restructure in a very short space of time,” Atambayev acknowledged.
In a smack-down to Georgia and Ukraine’s European aspirations, German Chancellor Angela Merkel said on May 21 that the two countries should not have expectations for a visa-free regime with the EU anytime soon.
Merkel’s comments came amid the European Union’s summit with its EU-curious neighbors in the Latvian capital, Riga. In the run-up to the summit, it was clear that the EU would not be granting a visa-waiver at this time, but Georgia and Ukraine expected to make significant progress toward such a waiver, as well as toward integration with the bloc.
As of early evening, Tbilisi had not yet responded officially to Merkel’s remarks. In comments earlier in the day in Riga, however, Georgian Foreign Minister Tamar Beruchashvili told Georgian reporters that Georgia has met with flying colors most of the EU’s requirements for a visa-free regime, and that it is “only a step “ away from heading toward receiving that status.
Kyiv’s reaction was not immediately available.
Georgia, Ukraine and Moldova are the main EU-enthusiasts among the six ex-Soviet republics courted by the EU under its Eastern Partnership Program. Moldova, Ukraine's southwestern neighbor, received its visa-free deal in 2014.
After the last Eastern Partnership in Vilnius, Lithuania, where Ukraine had pulled away from signing an association agreement with the EU, helping to set in motion a domestic conflict over Ukraine’s leadership, the bloc arrived at this next summit in Riga with far less enthusiasm for integrating the countries and to engage Russia in a full-on competition for the region.
Kazakhstan soldiers in southern Tajikistan for CSTO joint military exercises. (photo: CSTO)
Russia and several of its allies have completed joint military exercises on the Tajikistan Afghanistan border, which they say was necessitated by the worsening situation in northern Afghanistan.
The drills of the Collective Security Treaty Organization began last week and the first step was deploying the 2,500 troops, without prior notice, to the exercise site in Tajikistan's Khatlon province. According to the scenario of the exercises, "the situation on the Tajik-Afghan border seriously deteriorated. Armed groups invaded the territory of Tajikistan from the territory of Afghanistan. The Tajikistan armed forces together with other security structures carry out military operations to repel the invasion."
Military units from the various CSTO member states carried out individual tasks: Tajikistani aircraft carried out aerial reconnaissance and identified the position of "terrorist groups" numbering 700 people.
Then an Armenian special forces company reconnoitered the site on the ground, traveling with modified Nissan pickup trucks armed with machine guns. Then, various special forces units from Belarus, Russia, Kyrgyzstan, and Tajikistan advanced to "capture the militants' field commander and secure the withdrawal of the Armenian reconnaissance troops."
In the final stage, Russian and Kazakhstani bomber jets carried out air strikes on the militant positions, and drones identified targets for further artillery strikes.
Tashkent is reportedly restricting access to dollars for the business community, in the latest development to suggest that Uzbekistan’s government is facing a liquidity crisis.
The National Bank of Uzbekistan has “halted all convertibility operations for an unspecified period,” the Tashkent-based Uzmetronom.com website reported May 20, citing “information from reliable sources.” There was no confirmation on the website of the central bank, which EurasiaNet.org could not reach for comment.
These are the operations through which foreign and domestic companies convert their revenues earned in Uzbekistani sums into dollars, to repatriate earnings and pay for imports.
“Thus foreign investors and local entrepreneurs who depend on supplies from abroad (raw materials, parts, equipment and so on), who could still recently count on at least minimal levels of profit conversion within the limits of the quotas set for them, are now deprived of this opportunity,” remarked Uzmetronom.com (an unusually outspoken website which is believed to be close to Uzbekistan’s security services).
Investors regularly cite convertibility of sums into foreign currency and repatriation of revenues as the main barriers to doing business in Uzbekistan. Privately, businessmen report delays stretching into months to obtain permission from the central bank to convert sums to dollars, during which time they cannot access the funds since they are held in zero-interest accounts at the National Bank.
If confirmed, the suspension of currency conversion would be the latest indication that Tashkent is suffering from a shortage of dollar liquidity as it struggles under exchange rate pressures, caused in part by the depreciation of the Russian ruble (which has hit currencies across the region).