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Russia to Join Central Asia’s Unified Energy System

Russian Energy Minister Sergey Tsivilev has announced that the Russian and Uzbek energy ministries have agreed to connect the Russian “System Operator” to Central Asia's Unified Energy System (UES). The connection itself is expected to happen soon. Uzbekistan's Minister for Energy, Zhurabek Mirzamakhmudov, has commented that this move will ensure the security and stability of the energy system in the region. These measures are expected to allow prompt response to problems in energy supply and avoid interruptions. In addition, Inter RAO has announced that it is preparing to export electricity to Uzbekistan, with the start of supplies scheduled for this fall. Central Asia's Unified Energy System was created in the 1970s. It is managed by the coordination and dispatch center in Tashkent, and allows the balancing of seasonal fluctuations in demand for electricity and water needs during the irrigation period. It currently includes Uzbekistan, Kyrgyzstan, Kazakhstan and Turkmenistan. In May it became official that Tajikistan would join the system.

Latvia Coaches Central Asia on Borders While Hardening Russia Frontier

Last month, Central Asian border and law enforcement authorities on a training visit to Latvia got a look at the Baltic state’s border with Russia, which the Latvian government is fortifying because of tension over the Ukraine war.  Officials from Kazakhstan, Kyrgyzstan, Tajikistan and Turkmenistan met in the Latvian capital of Riga on August 27-29 to talk about how to secure their own borders and work together on trade corridors. The trip ended with a visit to Latvia’s 330-kilometer border to the east with Russia, where “conference participants got acquainted with the infrastructure, equipment and specifics of the border surveillance,” said an EU-backed agency that promotes Central Asian border security and is known by the acronym BOMCA. Unlike the Central Asian countries, Latvia is a NATO member that has provided military aid to Ukraine and considers Russia and Russian ally Belarus, with which it also shares a border (160 kilometers), to be adversaries. Latvia is preparing strongholds, anti-tank ditches and ammunition depots along its border with both countries.  The border buildup of Latvia, which was invaded by both Soviet and German forces during World War II before eventual Soviet occupation, differs from the experience of Central Asia’s former Soviet republics, which were formed in the 1920s and 1930s. Of those Central Asian countries, only Kazakhstan shares a border (at about 7,600 kilometers) to the north with Russia, which has longstanding security and trade relations with the region despite the often harsh legacy of Soviet rule.  Still, Latvia’s role as a leader of the 20-year-old European Union program to help Central Asia develop and integrate its border management systems comes at a fraught time for the Baltic country as it hardens its borders with Russia and Belarus. The Central Asian officials who inspected Latvia’s border with Russia last month also toured the Border Guard College of Latvia in the eastern town of Rēzekne, whose landmarks include an arch of the ruins of a castle that was mostly destroyed during fighting centuries ago.  A Russian military drone entered Latvian airspace from Belarus and fell in the Rēzekne region on Saturday, according to Latvian defense officials. Defense Minister Andris Sprūds said that air defense and electronic warfare development will “allow us to limit the operation of drones of various uses." Latvia has also grappled with illegal crossings by migrants coming from Belarus, which has denied Western accusations that it facilitated border breaches in order to put pressure on the European Union.  The EU-backed border training for Central Asia started long before Russia’s full-scale invasion of Ukraine in February 2022 and is designed to help Central Asian countries with their own challenges, which include drug smuggling and human trafficking. There are historical border disputes in Central Asia, but some have been moving toward resolution.  Currently, Latvia and neighboring Lithuania are hosting several months of training for Central Asian handlers of K9s, dogs that search for illegal drugs and explosives. Latvia, in turn, is getting its own help from allies. Earlier this year, the United...

New U.S. Ambassador to Turkmenistan Outlines Priorities For Cooperation

At her first press briefing in Ashgabat, the new U.S. Ambassador to Turkmenistan, Elizabeth Rood, outlined key areas of cooperation between the two countries. She paid particular attention to economic development and investment attraction. Rood emphasized that the U.S. Embassy intends to actively engage with Turkmenistan's government, private sector, and educational institutions to create new jobs and employment opportunities and diversify the national economy. Rood also emphasized four critical areas of work: combating climate change, economic sector development, security issues, and promoting fundamental freedoms. Regarding climate challenges, Rood emphasized Turkmenistan's role in mitigating climate change and welcomed President Serdar Berdymukhamedov's pledge to limit methane emissions. Ambassador Rood also emphasized the importance of supporting civil society in Turkmenistan, including upholding fundamental freedoms and combating forced and child labor. In addition, she expressed her intention to strengthen ties between the peoples of the two countries, noting her inspiration from the determination of Turkmen youth to learn exact sciences and the English language.

Russia’s FM: U.S. Interest in Central Asia’s Economy Could Harm Russia’s Development

Russia’s Foreign Minister Sergei Lavrov, during a question-and-answer session with students at Moscow’s MGIMO University in early September, noted that “a growing number of extra-regional actors,” including the United States, have taken an interest in fostering trade via the so-called Middle Corridor -- a route connecting Asia to Europe via Central Asia, bypassing Russia. Lavrov’s speech suggests that the U.S. interest in the economic future of Central Asia will negatively impact Russia's development. Lavrov noted that Russia maintains “warm and allied” relations with Central Asian nations, which are bound to Russia economically and strategically via several agreements, including the Collective Security Treaty Organization, the Eurasian Economic Union, and the Commonwealth of Independent States. He added that Russia “cannot prevent anyone from establishing deeper ties with other partners.” Lavrov couldn’t resist lashing out at the United States, saying the motives of American officials in Central Asia aren’t magnanimous. “When our partners and allies in Central Asia expand their relations with the West, I do not have the slightest doubt that they understand perfectly well that apart from pursuing its noble and transparent objectives, the West also seeks to undermine the Russian Federation’s influence there,” he said. The U.S. engages with Central Asia through the B5+1 process, which promotes Western investment by encouraging reforms to reduce trade barriers and streamline customs. Recently, Central Asian countries have signed agreements to improve trade regulation, and the U.S. has helped some countries upgrade their infrastructure. U.S. Ambassador to Kazakhstan Daniel Rosenblum has said in a statement: “In August ... the United States provided Kazakhstan’s Customs Service with advanced Dell Technologies Inc. servers to help make border procedures more efficient. “Adopting innovative technologies will streamline processes, enhance accuracy, improve transparency, and foster a business-friendly environment, attracting more investors and boosting economic growth,” Russia's war in Ukraine has weakened the Kremlin’s ability to pressure Central Asian states to follow its wishes. Russia depends on covert trade through Central Asia to bypass sanctions and get goods for its war. Meanwhile, China is supplying dual-use technologies to Russia and has overtaken Russia as the leading trade partner for Central Asian countries. In his remarks, Lavrov called China “a reliable partner” but didn’t mention it in the context of Central Asia’s growing trade dynamics.

Turkish Contractors Implement New Large-Scale Projects in Turkmenistan

The Turkish Ministry of Trade has reported that construction projects valued at $53.3 billion are being implemented in Turkmenistan; signifying Turkey's significant presence in this sector of the country. By comparison, the total value of projects implemented by Turkish contractors in Russia amounted to $102.3 billion, making it the largest market for the Turkish sector, whilst in Kazakhstan, its market share is  $29.5 billion. Statistics show that 13.9% of all realized foreign projects are related to the construction of highways, tunnels, and bridges, while 13.8% are for housing; 8.6% for power plants; 7.1% for shopping centers; and  6.6% for airports. In 2024, Turkish contracting companies completed 148 projects abroad worth $11.2 billion, while 433 international projects totaling $28.1 billion were completed last year. The average value of projects increased from $64.9 million in 2023 to $75.7 million in 2024. Following a meeting on September 2, between the National Leader of the Turkmen people, Gurbanguly Berdimuhamedov and Chairman of the Board of  Erman Ilydjak,  a new shopping center will be built in Ashgabat by Turkish company Rönesans Holding.

The Onset of “Friend-Shoring” in Central Asia

As Central Asia’s significance for global supply chains grows, the world’s major economic powers are seeking closer economic ties with the region’s countries. China, Russia, and the West all curry favor through investments and initiatives to bolster the region’s exports and secure their supply chains. Bordering China and Russia, Central Asia spans a land surface area corresponding to 87% the size of the entire European Union (EU). The region has a combined market of 76 million people and gross domestic product of 450 billion U.S. dollars. It is critical to global energy supply chains as it possesses 20% of the world's uranium reserves, as well as 17.2% of total oil and 7% of natural gas deposits. Kazakhstan produces over half of the EU’s critical raw materials,  i.e. substances used in technology which are subject to supply risks and are hard to replace with substitutes. In the first seven months of 2024, rail cargo across the Middle Corridor, a trans-Caspian trade route linking China to Europe, has increased 14-fold compared to the same period last year. As the region opens up and undergoes significant economic transformation, supply chains are increasingly directed there, sparking competition for control over its vast natural resources and production capabilities. Major economic powers are stepping in to strengthen bilateral ties to ensure reliable trade partnerships. These strategies, known as “friend-shoring,” aim to reduce geopolitical risks, enhance supply chain stability, and transform Central Asian countries into trusted allies by fostering strong bilateral relationships and deeper economic ties. China and Russia remain at the helm of regional activity China has been actively engaging with Central Asian countries through strengthening economic ties and building strategic partnerships. Through the Belt and Road Initiative (BRI), which aims to enhance infrastructure and trade connectivity across the region, China has helped strengthen the region’s rail network. China supplies equipment and invests in Uzbekistan’s electric vehicles, scooters, and leather production. Uzbekistan, in partnership with PowerChina and Saudi company ACWA Power, is also constructing the country’s first green hydrogen plant. Kyrgyzstan’s bilateral trade with China was up 30% in 2023 compared to 2022. This year, Turkmenistan has surpassed Russia in gas exports to China. In 2023, Kazakhstan's agricultural exports to China doubled to $1 billion compared to 2022, making China the largest importer of agricultural products from the country. Historically, Russia has been a major trading partner for Central Asian countries due to the Soviet legacy of a command economy, which established strong economic interdependencies that persisted in post-USSR period. While the region is aggressively diversifying its trade relationships, Russia is increasing gas supplies and energy infrastructure investments, specifically in renewables and nuclear facilities. Kazakhstan delivers most of its oil to Europe through Russia. Russian-led organizations, including the Eurasian Economic Union (EAEU) and the Commonwealth of Independent States (CIS), promote cooperation and economic integration with free movement of goods, services, and capital among member states. Russia's war against Ukraine has disrupted supply chains, but it has also opened up new trade opportunities, especially for Kazakhstan, as...