International Affairs - The Times Of Central Asia

Viewing results 685 - 690 of 2359

Economy

Trump’s Trade Wars and Kazakhstan’s Economic Jitters

U.S. President Donald Trump is addressing his country's economic challenges with aggressive trade policies, threatening tariff barriers and demanding concessions from major economies. The Times of Central Asia explores whether these actions could deepen economic challenges in Kazakhstan and the broader Central Asian region. A New Round of Trade Wars In early February, the United States officially announced a 25% tariff on imports from Canada and Mexico, alongside a reduced 10% tariff on Canadian energy resources. Additionally, a 10% tariff was imposed on all Chinese imports. The justification given was to curb illegal immigration and drug trafficking. While Mexico and Canada managed to delay the new tariffs through negotiations, China responded swiftly with retaliatory measures. According to China's Ministry of Finance, Beijing imposed a 10% tariff on U.S. oil and agricultural machinery imports, and a 15% duty on coal and liquefied natural gas (LNG). Additionally, Chinese regulators launched an antitrust investigation into Google, further escalating tensions. Despite these developments, a resolution remains possible, though seemingly ever more distant. On February 3, Trump announced plans to speak with Chinese President Xi Jinping, but that call was then canceled following China's retaliatory measures. In a further escalation, on February 5, the US Postal Service said it has stopped accepting parcels from mainland China and Hong Kong until further notice. Meanwhile, Trump has also signaled plans to impose new duties on goods from the European Union. As of November 2024, China was the third-largest U.S. trading partner, accounting for 11.3% of total U.S. foreign trade. Mexico (15.4%) and Canada (13.8%) ranked first and second, respectively. In contrast, Kazakhstan and other Central Asian nations do not rank among the top 15 U.S. trading partners. Domestic Issues Outweigh External Pressures According to economist Aidarkhan Kusainov, Trump's trade policies are unlikely to have a direct impact on Kazakhstan and Central Asia. Speaking to The Times of Central Asia, Kusainov argued that domestic economic challenges far outweigh the influence of global trade wars. "Our economy faces significant internal distortions, making global trade wars a relatively minor factor. Inflation in Kazakhstan is not caused by external pressures but by rising fuel and utility costs, tax policies, and discussions about increasing value-added tax (VAT). Within a short period, the tenge’s exchange rate against the U.S. dollar has shifted from 490 to 530," he said. Kusainov further emphasized that if Kazakhstan's inflation rate were around 2%, any impact from global factors would be worth analyzing. However, with official inflation at 9% - and real inflation likely much higher - domestic issues are the primary concern. "Our economy is so small compared to the world's leading economies that its presence in the global market is nearly imperceptible. By economic volume, we are smaller than some Chinese provinces. Other Central Asian countries are even less integrated into global trade," Kusainov noted. He warned that only a large-scale global crisis could significantly impact Kazakhstan’s economy, potentially exposing internal vulnerabilities that the government can no longer mitigate. Inflation Risks Inflation remains a pressing concern in...

Trade

Uzbekistan and Afghanistan Sign $4.5M Trade Deal as Economic Ties Grow

Business representatives from Uzbekistan and Afghanistan have signed a $4.5 million trade agreement, Tasnim News reported on February 3. Afghanistan’s Ministry of Industry and Trade announced the deal, stating that it was signed by private sector representatives from both countries. Afghanistan is Uzbekistan’s fifth-largest export market. Over the past five years, trade between the two countries has grown by nearly 1.5 times, reaching $866 million in 2023. Currently, 550 Afghan-invested enterprises operate in Uzbekistan, 443 of which are fully Afghan-owned. Joint projects are ongoing in food production, construction materials, agriculture, tourism, and textiles. Beyond trade agreements, both countries are discussing broader economic cooperation. In August 2024, an Uzbek delegation led by Prime Minister Abdulla Aripov visited Afghanistan. During the meetings, both sides emphasized their goal of increasing trade turnover to $1 billion in 2024, with a long-term target of $3 billion. Officials stressed the need to tap into new economic opportunities on a mutually beneficial basis. As previously reported by The Times of Central Asia, in October 2024, Afghanistan’s Ministry of Mines and Oil signed a 10-year contract with an Uzbek company for gas exploration and production in the Tuti Maidan gas field in Jawzjan province. The project is expected to bring in about $1 billion in investment to the region’s gas sector.

AZAL Plane Crash

Kazakhstan to Release Preliminary Report on Aktau Plane Crash in Coming Days

Kazakhstan’s Minister of Transport, Marat Karabayev, has announced that a preliminary report on the investigation into the crash of an Azerbaijan Airlines (AZAL) aircraft near Aktau will be published in the coming days. On December 25, 2024, an Embraer 190 aircraft operated by AZAL crashed approximately three kilometers from Aktau airport while attempting an emergency landing. The flight, en route from Baku to the Russian city of Grozny, was carrying 62 passengers and five crew members. Thirty-eight people were killed in the crash. Footage from the crash site shows significant damage to the fuselage, with some reports suggesting a pattern consistent with air defense missile fragment impacts. The aircraft had initially requested permission to land at Grozny airport before abruptly changing course toward Aktau. Among the possible causes under investigation are a missile strike, and electronic system malfunctions due to radio signal suppression in Grozny linked to Russian efforts to repel Ukrainian drone attacks. Initially, the possibility of a bird strike was also mooted. Kazakhstan is leading the investigation under the International Civil Aviation Organization (ICAO) Convention, as the crash occurred within its territory. Specialists from Azerbaijan, Russia, and Brazil, along with international aviation experts and representatives from Embraer, are involved in the inquiry. “The specialists need time to complete their work, and we will not provide comments until the preliminary report is published. However, I promise that the report will be released in the coming days,” Karabayev said at a press conference in Astana on Tuesday. The investigation is in its final stages, he added, noting that experts from Azerbaijan, Russia, Brazil’s Center for Investigation and Prevention of Aviation Accidents (CENIPA), and ICAO have all contributed. “I hope that in the near future, we will publish a preliminary report on our website,” the minister stated. Karabayev specified that the report will be made available on the website of the Civil Aviation Committee, which operates under the Ministry of Transport. The Brazilian CENIPA has completed its analysis of the aircraft’s black boxes, and the decoded data has been sent to Kazakh authorities. “The conclusions drawn from this analysis, and those published in the final crash report, are the sole responsibility of Kazakhstan’s investigative body,” CENIPA stated. According to ICAO regulations, a preliminary report should be issued within 30 days of an incident. In late January, Kazakhstan’s Deputy Prime Minister, Kanat Bozumbayev, expressed hope that the initial findings would be released by the end of the month, but no report has yet been published. “Specialists need time to complete the work. It is a very complex and meticulous process,” Karabayev reiterated in response to questions about the delay. As The Times of Central Asia previously reported, the plane crash has contributed to tensions between Azerbaijan and Russia.

Economic Cooperation

Iran Expands Economic Cooperation with EAEU and Kazakhstan

In recent years, Iran has strengthened its trade, economic, and transport ties with the Eurasian Economic Union (EAEU), an economic bloc comprising Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. In December 2024, Iran was granted observer status in the EAEU, joining Cuba and Uzbekistan as the bloc’s third observer state. This status allows Iran to attend EAEU meetings and access non-confidential documents but does not grant decision-making rights. A year earlier, in December 2023, the EAEU and Iran signed a full Free Trade Agreement (FTA), establishing duty-free trade for 90% of goods and covering more than 95% of mutual trade between the parties. According to official statistics, the EAEU plays a significant role in Iran's foreign trade. In 2023, the bloc accounted for 10.1% of Iran’s exports, making it Iran’s third-largest trading partner after China (30.4%) and Turkey (14.5%). [caption id="attachment_28237" align="aligncenter" width="800"] Image: Marko Bukorovic[/caption] Strengthening Ties with Kazakhstan Iran has also worked to deepen bilateral cooperation with EAEU members, particularly Kazakhstan. On January 30, Iranian First Vice President Mohammad-Reza Aref visited Almaty to attend a meeting of EAEU prime ministers. He also held bilateral talks with Kazakhstan’s Prime Minister Olzhas Bektenov, focusing on expanding trade, economic, agricultural, transport, and logistics cooperation. According to Kazakhstan’s Ministry of Trade and Integration, in the first eleven months of 2024, trade turnover between Kazakhstan and Iran reached $296 million, an 8.1% increase compared to the same period in 2023. Kazakhstan’s exports to Iran rose by 29.1% to $100.6 million. Bektenov described Iran as a friendly neighbor in the Caspian region and emphasized Kazakhstan’s interest in diversifying and increasing exports to Iran. The country has identified 60 types of goods worth over $132 million for potential export and is prepared to meet Iran’s demand for grain products, including wheat and barley. Expanding Transport and Logistics Cooperation Discussions also covered transport and logistics cooperation, with a focus on increasing cargo traffic along the North-South Corridor, which connects Russia, Kazakhstan, Turkmenistan, and Iran. Both sides expressed interest in expanding transit capacity and modernizing key port terminals in Kazakhstan (Aktau and Kuryk) and Iran (Anzali and Amirabad). The Iranian Vice President stressed the geographic and economic importance of the Iran-Kazakhstan partnership and reaffirmed both countries’ commitment to increasing bilateral trade to $3 billion annually.

Air Transport

Turkmenistan Airlines Extends Suspension of Moscow Flights Until March

Turkmenistan Airlines has extended the suspension of its Ashgabat-Moscow-Ashgabat flights until at least March, the airline confirmed on January 31, according to Interfax. No official reason was provided for the extension. Flights on this route were initially halted at the end of December 2024. At the time, the airline announced that there would be no flights between December 30, 2024, and January 31, 2025, but did not explain their decision. The Russian News Agency TASS has noted that Turkmenistan Airlines previously halted flights to Moscow in August 2023 due to safety concerns. That suspension followed a report from the Russian Defense Ministry stating that a Ukrainian drone had been intercepted in the Moscow region. Interfax, meanwhile, reports that Russia’s S7 Airlines has received approval to operate up to 14 weekly flights between Moscow and Ashgabat. Daily flights began on January 15, making S7 the only airline currently serving this route. In related news, as previously reported by The Times of Central Asia, Uzbekistan Airways has adjusted its flight routes to Europe, avoiding Russian and Belarusian airspace. The airline’s press service stated that this decision was based on recommendations from the European Union Aviation Safety Agency (EASA) and was not connected to the recent Azerbaijan Airlines crash.

Bilateral Relations

Exploring What’s Behind Iran’s Push in Tajikistan

As Turkey increases its influence among Turkic Central Asian nations, Tajikistan – the only Persian-speaking country in the region – is looking to Iran as a potential strategic partner. Dushanbe is aiming to significantly strengthen bilateral ties with Tehran, hoping that such a move will have a positive impact on its economy; but what are the Islamic Republic’s interests in Tajikistan? On January 15, Iranian President Masoud Pezeshkian paid an official visit to Dushanbe, where he met with his Tajik counterpart Emomali Rahmon. The fact that he led a delegation of the Iranian business community suggests that Tehran plans to increase its economic presence in the landlocked Central Asian state. In 2024, the two nations increased their trade volume by nearly 50% compared to 2023. The problem, however, is that their total trade turnover reached “only” $378 million, which is rather modest compared to the $1,12 billion trade volume achieved by Tajikistan and Russia in the first seven months of 2024. From 1995 to 2013, the Islamic Republic actively invested in the economy of Tajikistan, which led to the construction of the Sangtuda-2 Hydroelectric Power Plant and the tunnel at the Anzob Pass. However, between 2013-2021, economic relations between Tehran and Dushanbe deteriorated significantly. Now, Tajikistan hopes to see more Iranian investments in its economy. "Trade and the economy are among the priority areas of our bilateral relations. We voiced our interest in developing investment cooperation with the Islamic Republic of Iran,” Rahmon said at a press conference after talks with Pezeshkian. As a result of their summit, Tajikistan and Iran significantly deepened their bilateral ties by signing 23 memoranda of understanding in sectors such as trade, energy, infrastructure, cultural exchange, and security. Since Daler Juma, Tajikistan's Minister of Energy and Water Resources attended the meeting between Tajik and Iranian delegations, it is almost certain that energy was one of the main topics that was discussed. For Dushanbe, it is crucial to secure funding for the completion of the Rogun Hydroelectric Power Plant, the Istiklol tunnel (also known as the Anzob Tunnel), where the Iranian company Farob is engaged in the construction, as well as a number of small and medium-sized projects. For Tehran, the economic aspect of cooperation with Tajikistan is undoubtedly very important, although it seems to have other ambitions in the Central Asian state as well. “Iran’s primary interest in Tajikistan is related to cultural and religious bonds, as it sees the country as part of its Persian-Iranian-Islamic civilization,” Fereshteh Sadeghi, a Tehran-based journalist who has worked with Iran's Press TV and Al Jazeera English, told The Times of Central Asia. In her view, by maintaining a good political relationship with Dushanbe, the Islamic Republic can significantly strengthen these cultural connections. “Tajiks speak Farsi, love Farsi literature, and are said to be able to recite poems by Persian or Farsi-speaking poets from memory more easily than Iranians themselves can,” she explained, pointing out that religious aspect also plays an important role in Tajik-Iranian relations. Although Tajikistan is...