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Eurasian Connectivity Comes One Step Closer at the 2024 CAMCA Forum in Bishkek

The wider Eurasia region took another step towards cooperation and connectivity last week, as the 10th annual CAMCA Regional Forum was held in Bishkek. CAMCA – standing for Central Asia, Mongolia, the Caucasus and Afghanistan – is an initiative to accelerate dialogue between governments, private enterprises and media figures from these ten nations. Organized by the Washington, D.C.-based Central Asia-Caucasus Institute and the Rumsfeld Foundation, this year’s Forum – the first such event to take place in Kyrgyzstan – featured over 300 delegates across its two days, and presented insights from over 70 speakers. Attendees came from 25 countries in total. Professor Frederick Starr, the Central Asia-Caucasus Institute’s chairman, used his opening address to call on the countries of the region to start preparing for a future within a cohesive international bloc. Dr Starr reasoned that Russia and China, imperial powers that have traditionally had a controlling presence in Central Asia, may see their global influence wane in the coming decade. This would give the countries of Central Asia, and their neighbors, more space to create projects that serve their economies directly. A leading CAMCA regional project is the ‘Middle Corridor’ trade route, which bypasses Russia to transport goods more efficiently between Europe and China. Discussions are also taking place concerning the creation of single business and tourist visas for the whole Central Asia region. The importance of collaboration between countries in the Caucasus and Central Asia to mitigate the impact of climate change has never been so great. Addresses by senior members of the Kyrgyz government highlighted the progress that Kyrgyzstan has made since the administration of president Sadyr Japarov began its work in 2021. The country’s deputy prime minister Edil Baisalov reported that Kyrgyzstan is on track to double its GDP to $30 billion by 2030, while the minister for digital development, Nuria Kutnaeva, spoke about the rapid digitalization of the country’s government services. In a noticeably warm and collaborative atmosphere, the event nonetheless highlighted the barriers that prevent the ten countries from forming a tangible ‘CAMCA’ space in the present. A key goal is the harmonization of their legislation and policy directions; however, no delegates from Tajikistan could travel to Bishkek for the Forum, as otherwise solid relations between Tajikistan and Kyrgyzstan are still strained by a dispute over their common border. Likewise, Armenian voices were also absent this time, in light of several of the sessions featuring Azerbaijani speakers and talking points. The event featured only one guest from Turkmenistan. Even in these conflicts, however, Central Asian diplomacy is at work. The conflict on the Kyrgyz-Tajik border, mainly in Tajikistan’s Vorukh district, is being resolved through negotiations between the two countries’ governments, which would have been unthinkable even five years ago. Meanwhile, Kazakhstan is acting as a mediator between Baku and Yerevan in the aftermath of the war in Nagorno-Karabakh. Other topics on the agenda included security priorities for Central Asia, digital innovation in business, cooperation with Afghanistan, transitions in global energy markets, and infrastructure projects...

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Water Shortages in Kyrgyzstan’s Cities Despite Full Reservoirs

Due to a shortage, Kyrgyz authorities have banned the use of drinking water to irrigate cities' gardens and orchards. Implemented in Bishkek and Osh, the ban which operates during daytime hours, is set to run until the end of the summer. In a report to TCA, Erlan Timurov, chief public relations specialist for Bishkekgorvodokanal, the company in charge of drinking water in Bishkek, stated: "Every year, Bishkekvodokanal produces about 145 million cubic meters of drinking water, around 48m cubic meters of which are lost as a result of illegal connections to our networks and leaks caused by worn-out infrastructure" The situation is similar in southern Kyrgyzstan and in Osh, utility companies in the course of monitoring levels, regularly identify and cut off water supplies to those illegally connected to the system. "The average daily consumption of drinking water in residential areas increases fivefold in summer," explained Timurov. "Most of this increase is spent on watering vegetable gardens and filling swimming pools. As a result, some residents experience water shortages." Ironically, the water deficit is developing against a backdrop of overflowing local reservoirs caused partly by abnormal weather melting mountain glaciers. Under the circumstances, the Tien Shan High Mountain Research Centre at the Institute of Water Problems and Hydropower in Kyrgyzstan blames cities' water shortages on irrational use. "In the 1980s , collective and state farms universally introduced the so-called sprinkler system. Back then, 500 to 1,000 cubic meters of water were required to irrigate one hectare. Today, that has risen to 2 to 3 thousand cubic meters. The problem is that we have lost many technologies and do not know how to use water effectively," claimed the scientific center. Drip irrigation used worldwide, is now being introduced in Kyrgyzstan. However, because it's expensive, the percentage of Kyrgyz farmers using this type of irrigation is extremely small and the majority continue their habit of using drinking water in their fields, gardens, and orchards using outdated irrigation systems .

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Dreaming of Paris, Fighting for Power: Electricity in Central Asia

The COP28 UN Climate Change Conference in December 2023 highlighted the important role of developing countries – which include the Central Asian republics – in reducing dependence on fossil fuels thanks to the use of cleaner, renewable energy sources. Indeed, Central Asia is believed to have something to offer the world in the fight against climate change, being home to numerous sources of clean energy, including solar, wind, and hydropower. The "electricity ring" Last year, fossil fuels accounted for 95% of the total energy supply in the five Central Asian countries, according to the UN. To meet their commitments under the Paris Agreement and the transition to a low-carbon and sustainable energy system, the region will need to make a giant leap from fossil fuels to renewable energy sources. The main issue is that this transition must be made by different electrical grids across Central Asia, most of which are linked to the Central Asian Power System (CAPS). CAPS, also known as the "electricity ring," is a joint power transmission network connecting Uzbekistan, Tajikistan, Turkmenistan, Kyrgyzstan, and some southern parts of Kazakhstan. It was created in 1960, with the aim of ensuring the reliable transmission of electricity and steady cooperation between the republics. The energy systems of these regions are united into a single structure, which allows for parallel operation even when individual sections of the grid go down, meaning that if one part of the ring goes down, the other parts continue to function, improving reliability and efficiency. This system plays an important role in ensuring energy security and promoting cooperation and interaction. The creation and maintenance of any power system requires coordinated work by all participants. In the past, some countries temporarily withdrew from CAPS for various reasons, but in most cases, they sought to resume cooperation and their link to the “electricity ring.” Blackout On January 25, 2022, consumers in the ring experienced a blackout. The lights went out almost instantly in the south of Kazakhstan (the city of Almaty, as well as Turkestan, Kyzylorda, Almaty and Zhambyl regions), in Kyrgyzstan (the cities of Bishkek and Osh and the Issyk-Kul region) and Uzbekistan (the city of Tashkent, the Fergana Valley and Syr Darya, Jizzakh, Samarkand, Navoi and Kashkadarya regions). The widespread power outage paralyzed transportation, shut down important social infrastructure, and spurred popular discontent in the three countries affected. The Kazakhstani pundit Petr Svoik, a former professional power engineer who ran a thermal power plant (TPP), described the blackout as an unprecedented event, noting, however, that the technology worked perfectly and that the sudden loss of 1,500 MW of electricity did not lead to any major consequences. The Kazakhstani energy system consists of two insufficiently connected parts – north and south. The north is actually a continuation of the Russian power system, part of the Russian “energy bridge” - though, of course, it also has importance for the whole of Kazakhstan - whilst the south is part of the Central Asian ring. Looking at the...

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Kyrgyz Banks Restrict Money Transfers to Russia

Several commercial banks in Kyrgyzstan have suspended work with Russian money transfer systems after the expansion of U.S. sanctions. Most cite as the reasons behind this decision both technical problems and exchange rate volatility. The RSK Bank, which occupies one of the leading positions in Kyrgyz financial market, announced that, “Due to technical works, the following money transfer systems (sending and receiving) are not working at the moment: Astrasend, Unistream, Contact, Zolotaya Korona, Sberbank-Online." The temporary suspension of services to send and receive transfers in rubles through the applications ‘Kompanion ’ and ‘Unistream,’ was also reported by Kompanion Bank. Mbank, among the most popular in the Kyrgyz market, joined suit, stating that, "Due to the exchange rate volatility and possible sharp fluctuations of the currency market, a temporary restriction on ruble accounts and cards has been introduced (replenishment, transfers, conversions). " Via its website, the bank confirmed its full protection of clients' ruble accounts. Five more Kyrgyz banks have now announced the introduction of restrictions on operations concerning dollar accounts and ruble/dollar conversion. As reported by TCA on June 13, new U.S. sanctions were imposed on the Moscow Exchange, the Russian National Clearing Center (NCC), and the National Settlement Depository (NSD).

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Pavel Durov’s Visit to Issyk-Kul Sparks Investment Hopes

Pavel Durov, the founder of Telegram and VK, has visited the Issyk-Kul region in Kyrgyzstan, generating significant interest amidst speculations about a potential investment in a large-scale project. The government are currently keen on attracting investment in the Three Peaks ski resort, and local authorities believe that his involvement could substantially enhance the potential of the project. Durov’s presence as an investor is seen as a strategic move that could attract additional capital and provide invaluable advertising support. Durov is traveling with Russian blogger Huseyn Gasanov, whom sources suggest could play a mediating role in the negotiations with the local authorities. The presence of Durov and Gasanov has not gone unnoticed by locals. The pair were recently spotted at the Petroglyphs Park in Cholpon-Ata, sparking rumors and excitement among residents. Many hope that this high-profile visit will lead to concrete investment plans and significantly boost the local economy.

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Kyrgyzstan Pays Russia $64 million for Stake in the Eurasian Development Bank

Kyrgyzstan has paid $64.7 million to Russia for a stake in the Eurasian Development Bank (EDB), according to Akchabar. Kyrgyzstan currently owns 4.23% of shares in the EDB. The country's share increased from 0.01% in 2023 after the redistribution of part of Russia's stake, which amounted to 321,151 shares in the bank's paid-up authorized capital. A decision to reallocate the shares was made by the EDB's Board of Directors on December 30, 2022. Following the distribution of securities in 2023, Kyrgyzstan's share in monetary terms, increased from $700 thousand to $64.7 million. In its report on the transaction, EDB stated: "On May 19, 2023, an agreement was made between the Government of Russia and the Cabinet of Ministers of Kyrgyzstan on the sale and purchase of part of Russia's share in the paid-in authorized capital of EDB. Signed on March 21, 2023, it came into force and Russia's share of $64 million was transferred to Kyrgyzstan. EDB does not participate in settlements between Russia and Kyrgyzstan on the transferred share in the bank's capital." It is important to note that today, Kyrgyzstan's share in the authorized capital of the EDB is almost entirely paid up. The republic has only $600 thousand in liabilities, payable in case of a bank claim. A similar situation has also been observed in Armenia. Tajikistan has paid 97% ($64.5 million) of its authorized capital to EDB, Belarus—just over 59%, and Russia and Kazakhstan, the largest shareholders of the international institution, about 16% ($678.8 million) and 24% ($565.2 million), respectively. At the end of 2023, the authorized capital of the Eurasian Development Bank amounted to seven million common shares with a par value of $1 thousand each. Each paid-up share carries a right to vote.