Opinions - The Times Of Central Asia

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Bilateral Trade

Turkmenistan’s Gas and Türkiye’s Plans to Become a Gas Hub

A series of ongoing political consultations between Turkmenistan and Türkiye continued on 25–26 April, as a Turkmen delegation led by Deputy Minister of Foreign Affairs Ahmet Gurbanov visited Ankara, hosted by Turkish counterpart Burak Akçapar. Beyond the regular bilateral agenda of political-diplomatic, trade-economic and cultural-humanitarian cooperation, the two sides emphasized the implementation of bilateral agreements reached at the third Antalya Diplomatic Forum in early March, particularly the prospects for cooperation in the energy sector. On 1 March 2024, Turkmenistan and Türkiye signed two documents — a memorandum of understanding (MoU) and a letter of intent — aimed at strengthening cooperation in the natural gas sector. In theory, this seems to be a positive development for the two countries as well as for Europe. The two possible routes for Turkmen gas to reach Türkiye and Europe are (1) via the Caspian Sea and Azerbaijan, and (2) through Iran's existing pipeline infrastructure via a gas swap agreement. Neither one is likely to happen soon. The project to export Turkmen gas to Europe through a shore-to-shore high volume pipeline, at 31 billion cubic meters per year (bcm/y) is no longer alive after various parties have failed to realize it over the past quarter-century. It was bruited when it was announced that Turkmen President Serdar Berdimuhamedov planned to visit Brussels in late 2023 (which ended up not happening) and definitively killed when the initiative by American company Trans-Caspian Resources (headed by a retired U.S. ambassador to Turkmenistan) failed to persuade Ashgabat to construct short low-volume (8–11 bcm/y) "Platform Option" pipeline in the Caspian Sea. Gas "swaps" and Türkiye’s ambitions The idea of a "Turkish gas hub" arose from Russia's search to depoliticize trade between Gazprom and European firms by facilitating a platform where Gazprom's origination of the gas would be obscured and anonymized. Buyers and sellers could meet through Turkish intermediation. Türkiye, however, seeks to draw advantage by imposing the condition of long-term contracts with Gazprom for gas sales at below-market prices. This would guarantee a role for the Turkish intermediaries and, moreover, ensure for them a profit margin through mandatory service fees. "Swap" operations mean an exchange of gas amongst Turkmenistan, Iran and Azerbaijan; however, this would involve only a few billion cubic meters. Even if all participants agree, several questions still remain: Will swap transactions be profitable, given the price of gas in Europe? Even if Iran agreed to a Turkmen gas swap, would Tehran execute the agreement in good faith? In fact, Tehran would prefer to offer its own gas to Turkish and European markets, rather than transit competitive Turkmen gas through his territory. In addition, the gas that Azerbaijan produces for export already has contracted buyers under long-term agreements. Azerbaijan would be interested in the Turkish gas hub only if it should in future produce surpluses of gas that cannot be sold under long-term contracts. Then, such surpluses could be sold at a gas hub under short-term contracts, assuming that transit and profitability are guaranteed. Challenges to Türkiye’s...

Security

Without Security, There Can Be No Development in Afghanistan

Indian author Arundhati Roy once said, “Either way, change will come. It could be bloody, or it could be beautiful. It depends on us.” Almost three years after Taliban’s resurgence to power in Afghanistan, there are practically no developments to highlight in its relations with the outside world. The situation remains at a dead end as the international community and the authorities in Kabul are stuck on intransigent issues, and as Afghanistan continues to face a humanitarian crisis. In the context of current geopolitical realities after the recent fall of its “democratic” regime, Afghanistan finds itself in a gap between the experiences of the past and a yet undetermined future. It has a unique opportunity to transcend its reputation as the “graveyard of empires” and determine its own fate while simultaneously integrating into the international community. How the de facto authorities in Afghanistan handle this opportunity will not only shape the future of the Afghan people and the region, but also influence the development of the entire global security paradigm. Currently, the Taliban have every opportunity to lay the foundation for a new model of regional and international security, which would allow them to create conditions for the return of Afghanistan to the system of normal international relations. But they need to act quickly. Rising tensions in the Middle East engage almost every global and regional power, and further escalation there will negatively affect the situation around Afghanistan. In this unpredictable geopolitical environment, the Taliban can either take the lead on new security arrangements or once again experience an undesirable worsening of the security situation that goes beyond their control. A path forward is possible with the Taliban acting responsibly at the helm It seems that since the Anglo-Afghan wars of the 19th century, the world has become accustomed to seeing Afghanistan as a place where global geopolitical steam can be let off. But the Afghan people deserve progress, and various outside actors have offered different proposals. What the Taliban need is a chance at a breakthrough where they are the key player and can take full responsibility. The international community needs to allow such an opportunity to serve as a “maturity test” with which it can gauge the Taliban. At this important juncture, the international community must support Afghanistan in determining its own future. If external actors continue to promote political blueprints, Afghanistan will once again become a site for proxy wars, an arena of rivalry and a fertile ground for old narratives about international terrorism and other threats. Slamming the Taliban for their democratic failings, on which they clearly do not share the outsiders’ perspectives, will not yield productive results. For its part, if Kabul is really seeking to be a key player in Asia and a regular participant in international affairs, and if it seeks to realize its significant geographic and economic potential, then it must start implementing practical initiatives involving regional countries and international organizations in a dialogue on security. Maintaining internal security and stability...

Uzbekistan Seeks to Expand Trade Horizons with Europe

- Opinion by Robert Cutler Uzbekistan's economic landscape has been evolving, with announcements of major reforms and international cooperation aimed at economic modernization and increasing its profile in global markets. Its partnership with the European Union (EU) has focused on critical raw materials. At the same time, Tashkent plans to reduce gas exports in favour of expanding petrochemical production and inviting foreign investment into its mining sector. In October 2023, the European Parliament (EP) had endorsed this policy direction by adopting a resolution on Uzbekistan based on a series of broad programmatic documents regarding Central Asia, including a previous Memorandum of Understanding (MoU) with Uzbekistan on energy cooperation. The EP also favorably mentioned the Enhanced Partnership and Cooperation Agreement (EPCA) concluded in July 2022 to "modernize" the EU's Partnership and Cooperation Agreement signed with Uzbekistan in 1999. A new MoU signed earlier this month by the European Commission’s Executive Vice-President Valdis Dombrovskis and Uzbekistan's Minister of Investment, Industry and Trade Laziz Kudratov foresees an ambitious intensification of the partnership. The agreement is touted as a step towards diversifying supply chains to Europe for critical raw materials (CRMs) required for the energy transition. The EU's strategic economic partnership with Uzbekistan The new MoU follows on the EU's 25 October 2023 agreement with Uzbekistan during the Global Gateway Forum. That agreement had confirmed that Uzbekistan, with its reserves of metals such as silver, titanium, and lithium, would join the so-called Critical Raw Materials Forum. However, a critical evaluation of the MoU shows that a lot of hard work will be necessary to realize its plans and promises. In fact, the MoU represents a list of possibilities for cooperation without a guarantee of follow-through. The new partnership focuses on a number of areas of potential collaboration. These may be grouped under three general categories: (1) integrating CRM value and supply chains and their resilience; (2) mobilization of funding; and (3) cooperation on production, research, innovation and capacity building. The MoU itself admits that further specific cooperation is required to establish an operational roadmap that would specify particular joint actions for implementation. This partnership is in line with the EU's Global Gateway Initiative, which seeks to mobilize up to €300 billion in investments by 2027, although the initiative has been criticized for largely being a re-packaging of previously established programs without significant new funding. As far as Uzbekistan is concerned, the big unspoken problem is the need to enhance the country's economic competitiveness in global markets. Uzbekistan's mineral resources exploration Only about 20 percent of Uzbekistan’s territory has been explored. Potential mineral resources are evaluated at US$5.7 billion, with the country’s explored reserves representing about US$1 billion of this amount. This unexplored potential represents a significant opportunity for further enhancing Uzbekistan's potential global competitiveness in the mineral resources sector, but only if transportation logistics can be economically put into place. According to the U.S. Geological Service, Uzbekistan also has reserves of other minerals - such as calcium, kaolin, rhenium and vermiculite...

Rule of Law

Kazakh News Publisher Says New Media Law Does Little for National Press

Kazakhstan's new law "On Mass Media," recently passed by its lower house of parliament (the Mazhilis), has agitated the country's reporters. In an interview with The Times of Central Asia, Dzhanibek Suleyev, the publisher of several news sites, remonstrates that the law should have been more supportive of the national press. An aspect of the law that has caused heated discussions is the Ministry of Foreign Affairs' new right to deny accreditation to foreign journalists "in case of a threat to the national security of the Republic of Kazakhstan." A few months ago the Ministry of Foreign Affairs didn't renew or refused to issue accreditation to 36 correspondents of the news website Azattyq, the Kazakh affiliate of the U.S. Government's Radio Free Europe/Radio Liberty (RFE/RL). No explanation was given for this rejection, and Azattyq has filed a lawsuit in court. Suleyev explained: "It is clear that the state wants to protect itself and society as much as possible from extremist publications and the spread of deviant morality, but what is proposed for those who simply do their work honestly, every day? We like to impose restrictions, but what about support? I think that if the state were to expand the field of cooperation, the press would be less critical." "Apparently, the state authorities have such an ambiguous opinion of Azattyq. In addition, the lack of accreditation clearly does not prevent 'going on the air,' the audience has access to the materials. I do not think that denial of accreditation to foreign media will become a mass phenomenon. The New York Times or leading sports publications and channels will hardly be denied accreditation. You have to understand that from the point of view of the state, there are ordinary media, and there are structures engaged in propaganda and counter-propaganda, and this should be taken into account," Suleyev explained. Suleyev said that the establishment of a one-year statute of limitations for media materials is a positive development, as it protects journalists' rights. It was initially proposed to set the term at three years from the date of publication. "It is good that it was reduced to a year, three years of limitation is the death of the publication. Of course, I would have liked to reduce the statute of limitations even further, but thanks for that. If journalists are always afraid of the court, how can they work? Because of the long statute of limitations, editorial offices need to keep archives, video, audio and documents, not everyone can do this. Besides, with a long statute of limitations, it is easier to settle scores with the press, to get unwanted people closed down," he said. Suleyev was happy to see more television programs in Kazakh. The new law aims to increase the amount of Kazakh-language and domestic content on television and radio. From 2025 at least 55% of TV and radio programs should be broadcast in Kazakh, rising to 60% from 2027. Retransmission of foreign TV and radio channels will be reduced to 10%...

Kazakhstan

No Lessons Being Learned From Kazakh Floods, Says Political Analyst

Kazakhstan has been prone to flooding before, but the 2024 Kazakh floods have added a catastrophic page to the chronicles. Political analyst Marat Shibutov tells The Times of Central Asia that only extremely tough measures can motivate ministers and akims (local government executive) to actually work on flood prevention. The Floods Have Not Yet Peaked Areas and homes in many regions of Kazakhstan -- Atyrau, West Kazakhstan, Aktobe, Akmola, Kostanay, East Kazakhstan, North Kazakhstan and Pavlodar -- remain flooded. According to the Ministry of Emergency Situations, more than 113,000 people have been evacuated from the various disaster zones. The threat of another destructive wave of surface water still remains for major cities, even high-rise buildings are battling high in water in Atyrau, Petropavlovsk and Kostanay. Kazakh president Kassym-Jomart Tokayev has already visited the affected regions several times. According to local reports, people are now concerned not with punishing those responsible, but with paying fair compensation for lost housing, farms and livestock, and, most importantly, with creating an effective flood control system. In particular, residents of dacha (detached suburban) houses in Uralsk blocked the highway, demanding that the akim of the city include them in the list of those to be paid. If more floods occur it will be impossible to live in flood-prone areas. The only alternative is a radical revision of the requirements for residential zoning protective measures. Tokayev spoke about the responsibility for breached and unfinished dams and dikes, as well as the overlooked forecasts made by meteorologists about increased snowmelt and the threat of flooding not only from rivers, but also from the steppes in late March. For the lack of timely flood control measures, he announced a harsh reprimand to First Deputy Prime Minister Roman Sklyar and Minister of Water Resources and Irrigation Nurzhan Nurzhigitov. Local administrators weren't spared either, with harsh reprimands and warnings for incomplete official compliance to the akims of Aktobe, Kostanay and West Kazakhstan regions -- and a harsh reprimand to the akims of Atyrau, Akmola, Almaty, Pavlodar and Abay regions. According to official data from the Ministry of Emergency Situations, in 2024 to date seven billion tenge ($15.5 million) have been allocated just to local executive bodies for flood mitigation activities. In March 2024, 66 billion tenge ($147 million) was allocated to carry out work relating to combating emergency situations. From 2019 to 2023, the Emergency Situations Ministry's expenditures increased almost fourfold, to 264 billion tenge ($588 million). Over the past five years, over 762 billion tenge ($1.7 billion) has been allocated from the national budget. What exactly those funds were towards remains an open question -- possibly as part of ongoing criminal cases. Disasters of the Past It's not the first time that high water has caused irreparable damage in Kazakhstan. In Uralsk they still talk about a serious flood in 1942. In early May, the water level in the Urals reached 943 centimeters, and a 9-point storm raged on the river. Over 500 families were evacuated from...

How India is Becoming a Robust Soft Power in Central Asia

The middle-income trap, a pressing issue that has led to the stagnation of many successful developing economies, demands immediate attention. This trap, which occurs when a middle-income country can no longer compete internationally in standardized, labor-intensive goods due to relatively high wages, is a result of various factors, including countries most successful demographic characteristics. For instance, access to education has reduced birth rates due to an almost 100% literacy rate defined by 12 years of education. In the process, importing cheap manufacturing products has made local products uncompetitive. In such a situation, the country should have planned to upgrade current skill-based education to high-tech skills such as ICT, pharmaceuticals, etc. This shift to high-tech education holds immense potential for developing countries, offering a pathway out of the middle-income trap. Unfortunately, poor investment in developing high-tech education has led to an inadequate supply of a high-skilled workforce. Developed economies, such as the U.S. and a few European countries, are in an advantageous position to overcome such a trap due to their highly effective immigration policy. Developing countries, such as Brazil, Mexico, Argentina, the Philippines, and almost all Central Asian Republics, meanwhile, suffer. This will be further aggravated if the issue is not addressed urgently. Due to its geographic location and natural resource endowments, Central Asia, a diverse region with a mix of upper-middle and low-income countries, holds significant importance in the global economic landscape. Let's look at a specific case, such as Uzbekistan, a country whose population is growing at 1.3% per annum. Regarding age structure, the 0-14 age group makes up 30.1% of the population, the 15-64 age group 64.6%, and the 65-plus group constitutes just 5.3%. The country has achieved a high literacy rate, with 100% of the population completing 12 years of primary and higher secondary education. However, the country’s GDP per capita is relatively low, at US$ 3,209 (nominal term) and US$ 11,316 (PPP). The country's economy is dominated by the services sector, which contributes 48.4% to the GDP, followed by industry at 33.7%, and agriculture at 17.9%. The poverty line is set at less than US$ 3.2 per day, affecting 10% of the population. The country's labor force is distributed across sectors, with 25.9% in agriculture, 13.2% in industry, and 60.9% in services. The unemployment rate is 5.3%, and underemployment is a significant issue, affecting 20% of the population. The low supply of highly skilled workers challenges further increasing per capita income. The country will likely fall into this middle-income trap because it reaches a certain average income and cannot progress beyond that level. It seems helpful to mention some insights from this perspective. During Soviet times, the growth model of states was determined by their available resources, and Central Asia is rich in abundant resources. However, in most cases, primary resources were taken to other non-resource wealthy states for further value addition. So, the workforce was created in the respective states based on the concerned state's requirements. Workforce migration from one state to another was...