BISHKEK (TCA) — The Publisher’s note: Throughout the 19th and 20th centuries, Central Asia was the scene of intense geopolitical struggle and the Great Game between the British and Russian Empires, and later between the Soviet Union and the West, over Afghanistan and neighboring territories. Into the 21st century, Central Asia has become the area of a renewed geopolitical interest, dubbed the New Great Game, largely based on the region’s hydrocarbon and mineral wealth. On top of that, the region now is perhaps the most important node in the implementation of China’s One Belt, One Road initiative through which Beijing aims to get direct access to Western markets. Every week thousands of news appears in the world’s printed and online media and many of them may escape the attention of busy readers. At The Times of Central Asia, we strongly believe that more information can better contribute to peaceful development and better knowledge of this unique region. So we are presenting this Weekly Digest which compiles what other media have reported on Central Asia over the past week.

KAZAKHSTAN

Kazakhstan sells its first ever euro bond

Kazakhstan is looking at expanding the geography of its borrowing, with plans also including yuan-denominated securities

Nov 7 — “Kazakhstan has sold a dual tranche transaction consisting of €525mn of a 1.55% eurobond due in November 2023 and €525mn of a 2.375% bond due in November 2028. The combined order books exceeded €3.3bn compared to the €1.05bn allocation. The move marked the first time ever that a euro-denominated transaction came from the Kazakh sovereign. The Central Asian country is among many emerging market nations that have switched to euros due to the growing gap between US and European interest rates.” READ MORE: http://www.intellinews.com/kazakhstan-sells-its-first-ever-euro-bond-151560/?source=kazakhstan

Kazakhstan: MPs take aim at ArcelorMittal Temirtau

Lawmakers say that ArcelorMittal Temirtau is skirting its obligations by outsourcing low-skilled work to employees of unrelated companies, which enables the company to avoid paying additional payment for certain kinds of work

Nov 8 — “Parliamentarians in Kazakhstan’s usually somnolent legislature have accused a major foreign investor of using legal loopholes to exploit workers and economize on salaries. On November 7, a group of Majlis deputies reportedly addressed the prime minister and the general prosecutor with pleas to file an investigation into employment practices at ArcelorMittal Temirtau.” READ MORE: https://eurasianet.org/kazakhstan-mps-take-aim-at-arcelormittal-temirtau

Goldman Sachs Follows China Into Kazakhstan

Kazakhstan is the Central Asia buckle of China’s Belt and Road initiative and the Astana International Exchange could become a financial hub in the region

Nov 8 — “It’s not for the long freezing winters or the haute cuisine, but Goldman Sachs is heading to Astana, the capital of the ex-Soviet republic of Kazakhstan. Goldman announced on October 1 that it was joining the Astana International Exchange (AIX). Kazakhstan’s reformist-minded financial market is the first of its kind in Central Asia and counts the Shanghai Stock Exchange and China’s Silk Road Fund as shareholders, and the Nasdaq as a technology partner.” READ MORE: https://www.forbes.com/sites/kenrapoza/2018/11/08/goldman-sachs-follows-china-into-kazakhstan/#3bf6dc807869

Kazatomprom IPO to test-drive Kazakhstan’s privatization plan

The government of Kazakhstan is planning to privatize state-owned stakes in a number of major companies, including the national uranium company

Nov 9 — “Kazakhstan’s national uranium company Kazatomprom said, on October 15, that it was ready to go public by selling a portion of its issued shares on the London Stock Exchange and on the trading platform of the Astana International Financial Center (AIFC). The AIFC was officially launched without much fanfare in January 2018.” READ MORE: https://timesca.com/index.php/news/20473-kazatomprom-ipo-to-test-drive-kazakhstan-s-privatization-plan

KYRGYZSTAN

To achieve ambitious goals, Kyrgyzstan seeks international assistance

The President hopes that international partners would provide possible assistance in the implementation of ambitious goals pursued by Kyrgyzstan

Nov 4 — “Corruption hinders economic development and the attraction of foreign investment in Kyrgyzstan. Anti-corruption measures taken by the State are fragmented and uncoordinated, and staff replacement does not make anti-corruption measures more effective. Frequent replacements of key persons in Kyrgyzstan’s state bodies create difficulties in the effective implementation of donor programs.” READ MORE: https://timesca.com/index.php/news/26-opinion-head/20451-to-achieve-ambitious-goals-kyrgyzstan-seeks-international-assistance

Young Women Build Kyrgyzstan’s First Satellite

The construction and launch of Kyrgyzstan’s first CubeSat will cost up to $150,000

Nov 6 — “Reaching for the stars will no longer be impossible for girls and young women in Kyrgyzstan, who aim to build and launch the country’s first satellite before 2020. A dozen budding female scientists have been tinkering with computers, 3-D printers and soldering irons since March to build a CubeSat, which U.S. space agency NASA describes as being the smallest and cheapest satellite used for space exploration.” READ MORE: https://www.voanews.com/a/young-women-build-kyrgyzstan-s-first-satellite-/4647893.html

To Adapt to a Changing Climate, Kyrgyzstan Revives Its Nomadic Past

In Kyrgyzstan, the weather is always changing — now it’s colder in summer and warmer in winter

Nov 7 — “A PRELUDE TO the growing season, the last week of May usually marks the onset of summer in Kyrgyzstan, a mountainous Central Asian republic about the size of Nebraska. In preparation for the hotter months ahead, flock-owners gather their sheep and shave off their wooly winter fleeces. Farmers and herders make up a third of the country’s labor force, and their seasonal rhythms are essential to the survival of millions of people — and their animals.” READ MORE: https://undark.org/article/climate-change-kyrgyzstan-nomads/

In Kyrgyzstan, warming brings less water – and more conflict

Irrigation water is a real treasure and a source of potential conflicts in Kyrgyzstan and the entire Central Asia

Nov 9 — “In the Kyrgyz village of Kok Tal, it is the jarring sound of Bahadyr Mamatgapirov’s mobile phone that breaks the serenity of dawn. “Get here soon if you need water for your farm,” he abruptly tells one caller. Within moments it rings again. “Wake up and come take care of your water,” he insists. A small group of men emerge from the village, a cloud of dust pursuing their weary footsteps.” READ MORE: https://in.reuters.com/article/kyrgyzstan-water-climatechange/corrected-feature-in-kyrgyzstan-warming-brings-less-water-and-more-conflict-idINL8N1X34I1

TAJIKISTAN

Since Tajikistan’s President Asked…

The president of Tajikistan seems to have in mind a rosy picture of his impoverished country

Nov 3 — “On October 25, during a visit to the country’s northern Sughd region, Tajik President Emomali Rahmon called on the media to stop praising the authorities. “The impression is being created that everything is ideal, and we lack for nothing,” he said. Rahmon suggested an absence of criticism risks encouraging serious mistakes, and he urged television and radio broadcasters to “expose the defects of authorities and look for ways to correct mistakes.” READ MORE: https://www.rferl.org/a/since-tajikistan-s-president-asked-/29580475.html

Tajikistan: Rally in Pamirs ups the ante in confrontation with government

The situation remains tense in Tajikistan’s remote, and restive, Gorno-Badakhshan Autonomous Region

Nov 6 — “Residents in Tajikistan’s Pamiri town of Khorog mustered for a rare protest rally on November 6 in a demand for a deescalation of the security sweep targeting their region. Nerves in the Gorno-Badakhshan Autonomous Region, or GBAO, have been strained since a reported police shooting over the weekend that left at least two people wounded. A series of photos of the rally posted on social media showed what appeared to be many dozens or possibly a few hundred in attendance.” READ MORE: https://eurasianet.org/tajikistan-rally-in-pamirs-ups-the-ante-in-confrontation-with-government

U.S., Europe eye to purchase Tajik’s dried fruits

Due to international certification, foreign countries wish to buy dried fruits and nuts from Tajikistan

Nov 6 — “Dried apricots are a national pride in Tajikistan, as well as a kind of alternative currency. The production of dried apricots is simple but painstaking: first, the fruits are harvested, then they are fumigated with sulfur, dried for two days under the sun, then a bone is squeezed out of each apricot, they are dried again for two days, and only after that can they be packaged.” READ MORE: https://www.azernews.az/region/140385.html

TURKMENISTAN

Turkmenistan: Good things come to those who weightlift

In its ‘Akhal-Teke: A Turkmenistan Bulletin’, Eurasianet reviews the main news and events in the Central Asian country for the previous week

Nov 6 — “Ashgabat, the capital of Turkmenistan, is hellbent on earning a reputation as Central Asia’s premier venue for sporting events. In that spirit, it is now hosting the 2018 World Weightlifting Championships. Adulation-hungry President Gurbanguly Berdymukhamedov seized the opportunity in characteristically showy style to draw more attention to himself.” READ MORE: https://eurasianet.org/turkmenistan-good-things-come-to-those-who-weightlift

The tragic tale of Turkmenistan’s missing poet

Batyr Berdyev went from diplomat to prisoner in one of the world’s most oppressive states. Now his poems, smuggled out of jail, have been published in English

Nov 6 — “How do over 121 people just disappear? In Turkmenistan, the answer is “all too easily”. Turkmenistan is one of the least free places in the world; a Stalinoid, paranoid state that to the outsider most closely resembles North Korea; leader cults, parades and vicious repression.” READ MORE: http://littleatoms.com/tragic-tale-turkmenistans-missing-poet

Turkmenistan threatens Belarusian company with international arbitration

A giant Belarusian-built potash plant in Turkmenistan is producing much less products than it should, which caused discontent of the Turkmen leader

Nov 6 — “The president of Turkmenistan has ordered his government to file arbitration proceedings against a Belarusian company that built a giant but woefully under-performing $1 billion potash fertilizer plant. Gurbanguly Berdymukhamedov’s instructions are striking as Belarus is one of a very select club of nations with which Turkmenistan has steady and regular economic relations.” READ MORE: https://eurasianet.org/turkmenistan-threatens-belarusian-company-with-international-arbitration

UZBEKISTAN

Cabernet Mirziyoev: Uzbek President Sets Sights On Making World-Class Wine

President Shavkat Mirziyoev wants to uncork the Fergana Valley’s winegrowing potential once again

Nov 5 — “The bounteous vineyards of the Ferghana Valley once created a wine that had Marco Polo singing their praises. Or so the story goes. “Samarkand, Bukhara, and other magnificent cities are places decorated with gardens and vineyards,” one source quotes the 13th-century Venetian explorer as saying, although the quote could be apocryphal. “I had to drink wine from the local population…and it amazed with its excellent quality.” READ MORE: https://www.rferl.org/a/cabernet-mirziyoev-uzbek-president-sets-sights-on-world-class-winemaking/29584135.html

Unexpected problems to delay launch of Uzbekistan’s first mountain resort?

Uzbekistan’s ambitious mountain ski resort project faces problems with local infrastructure

Nov 7 — “Andorran PGI Management, managing the project of the Amirsoy Mountain Resort – the first ski resort in Uzbekistan, faced a number of problems, namely the lack of electricity and roads, Uzbek media reported. According to the Uzbekistan 24 TV channel, there are problems with the lack of a normal road access. The only road to the resort turns to slush in rainy weather.” READ MORE: https://www.azernews.az/region/140525.html

Frozen French Fries plant in Uzbekistan first in Central Asia

The first potato processing plant in Central Asia will start production of frozen french fries this month in Uzbekistan

Nov 7 — “Potato company Agrover in Uzbekistan will start industrial production of frozen french fries and potato flakes this month, according to news media in the region. The plant with a capacity 20,000 tonnes of finished product per year is the first potato processing plant in Uzbekistan, in fact, the first such plant in all of Central Asia.” READ MORE: https://www.potatopro.com/news/2018/frozen-french-fries-plant-uzbekistan-first-central-asia

Pride and fears for Uzbekistan’s ‘Louvre of the Steppes’

The Friends of Nukus Museum, a Dutch-registered charity that has provided thousands of dollars in support to the museum annually since 2001, is expected to disband at the end of this year

Nov 8 — “More than 50 years after its founding, the Nukus Museum of Art in Uzbekistan’s remote Karakalpakstan region still startles and charms visitors in the spirit of its eccentric late founder. But having survived Soviet censorship and predatory foreign art dealers in the 1990s, some fear the world’s second-largest collection of Russian avant-garde art, faces a fresh threat.” READ MORE: https://borneobulletin.com.bn/pride-and-fears-for-uzbekistans-louvre-of-the-steppes/

AFGHANISTAN

How War and Politics Have Threatened Afghanistan’s Economic Prospects

Analyst believes that if the U.S. and its allies believe Afghanistan is not yet ready to withdraw from, they must take direct control of Afghanistan’s reconstruction and economy. Otherwise, they must pay for that country’s expenses until the cows come home

Nov 5 — “Thinking about Afghanistan’s economic prospects, I checked some figures and found that Afghans constitute about 2.3 percent of humanity. I also discovered that Afghanistan’s economy amounts to about 0.03 percent of the world economy. In terms of the global economic activity, Afghanistan’s is a drop in the ocean.” READ MORE: https://www.newsmax.com/finance/nasirshansab/afghanistan-economic-prospects-war/2018/11/05/id/889367/

Taliban tax collectors help tighten insurgents’ grip in Afghanistan

The Taliban has tended to take over two traditional Islamic levies: zakat, an obligation on Muslims to donate 2.5 percent of their income to the poor; and ushur, a 10 percent tax on harvests or produce taken to market

Nov 6 — “Every two months, Mohammaddin visits a tax collector in Chardara district, in northern Afghanistan, and is given receipts to show he has paid his tax and utility bills. The service is professional, he says, though the paperwork he receives does not bear the name of state-owned power company Da Afghanistan Breshna Sherkat, which provides the electricity, but instead carries the printed logo of the Taliban.” READ MORE: https://www.reuters.com/article/us-afghanistan-taliban-finance/taliban-tax-collectors-help-tighten-insurgents-grip-in-afghanistan-idUSKCN1NB19Y

Billions in aid to Afghanistan wasted, including money from Canada, U.S. agency finds

Endemic corruption makes foreign aid to Afghanistan inefficient

Nov 8 — “Billions of dollars in Western foreign aid to Afghanistan, including from Canada, has been lost to widespread waste, lax oversight and endemic corruption, a U.S. watchdog agency says. The U.S. Special Inspector-General for Afghanistan Reconstruction said in a report to Congress that aid money has gone to build medical clinics without electricity or water, schools without children and buildings that literally melted away in the rain.” READ MORE: https://www.theglobeandmail.com/politics/article-billions-in-aid-money-for-afghanistan-wasted-us-agency-finds/

Afghanistan: historic arena for great games

Analyst explains why has Afghanistan repeatedly remained victim of invasions, infighting and Great Games

Nov 8 — “During an intellectual discussion with a large number of regional and subject experts from Western and Central Asian Republics, I posed a question to the participants, “can someone comment why Afghanistan has repeatedly remained victim of invasions, infighting and Great Games?” No one came out with a clear reply; supposedly, not for the reason that they didn’t know the answer, but perhaps it could touch certain sensitivities and expose the truth behind ongoing endless war on terrorism in Afghanistan.” READ MORE: https://dailytimes.com.pk/319517/afghanistan-historic-arena-for-great-games/

WORLD

Central Asia Gassing Up China

Kazakhstan looks to increase its natural gas exports to China, while Turkmenistan may be gaining an old customer — Russia — back

Nov 7 — “Last month, KazTransGaz, Kazakhstan’s national gas company, and PetroChina International signed a five-year contract that aims to see Kazakh natural gas exports to China double to 10 billion cubic meters (bcm) per year starting in 2019. The five-year contract built on a one-year deal that expired on October 14, which sought to export 5 bcm to China.” READ MORE: https://thediplomat.com/2018/11/central-asia-gassing-up-china/

Towards a Central Asia and Caucasus trade bloc for Belt and Road

The ongoing trade war between the U.S. and China could create a huge opportunity for Central Asia countries which could increase trade and economic cooperation with Beijing

Nov 8 — “In the trade war with the U.S., China has clearly shown that it is willing to reject Pacific trade partners based on political over economic considerations. Beijing’s wider policy to develop industrial and agroindustrial capacity in Central Asia, the Caucasus and the Middle East means that these economies can use short-term structural changes in global trade dynamics to their longer term advantage.” READ MORE: https://timesca.com/index.php/news/26-opinion-head/20468-towards-a-central-asia-and-caucasus-trade-bloc-for-belt-and-road

KABUL (TCA) — The Taliban are not ready to negotiate with the Afghan government, a Taliban member said at talks in Moscow on November 9, RFE/RL’s Radio Free Afghanistan reported.

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DUSHANBE (TCA) — The Islamic State (IS) group has claimed that one of its “fighters” was responsible for starting the deadly prison riot in northern Tajikistan on November 7, RFE/RL’s Tajik Service reported.

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ASTANA (TCA) — Five Kazakh men have been imprisoned over a bus fire that killed 52 Uzbek citizens in Kazakhstan in January, RFE/RL’s Kazakh Service reported.

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ASTANA (TCA) — The government of Kazakhstan is planning to privatize state-owned stakes in a number of major companies, including the national uranium company. We are republishing this article on the issue, written by George Voloshin:

Kazakhstan’s national uranium company Kazatomprom said, on October 15, that it was ready to go public by selling a portion of its issued shares on the London Stock Exchange and on the trading platform of the Astana International Financial Center (AIFC). The AIFC was officially launched without much fanfare in January 2018. It was later inaugurated by Kazakhstani President Nursultan Nazarbayev on the eve of his birthday and the 20th anniversary of the founding of his country’s current capital, Astana, both of which fall on July 6. The Astana International Exchange has a few registered members but no shares are currently traded, with all trading in equity and bonds taking place on the Almaty-based Kazakhstan Stock Exchange, instead. In 2015, Nazarbayev signed into law a special piece of legislation granting AIFC residents long-term tax breaks, hassle-free work permits and other perks. The brand-new financial center has a court of arbitration and a court of appeal, each staffed with Western-born judges and using English common law in what is the first extraterritorial application of foreign laws in Kazakhstan (Kursiv.kz, October 15; Mir24.tv, July 5; Sputniknews.kz, January 1).

If Kazatomprom becomes a public company, it will be only the second major uranium miner in the world, after Canada’s Cameco, to obtain such a status. Kazakhstan’s sovereign wealth fund Samruk Kazyna, whose assets account for about 60 percent of national GDP, intends to dispose of up to a quarter of all shares outstanding (issued shares minus those held in treasury). Regardless of how many shares are eventually subscribed, it will remain the majority shareholder and will continue to exert effective control over company operations. According to further announcements made on October 31, Kazatomprom’s management values the whole company at between $3 billion and $4 billion. Initially, it plans to sell not more than 15 percent of the shares offered under the IPO to outside investors, including at least one fifth within the AIFC. The trading of global depository receipts (GDR) in London should commence on November 13, to be followed by the start of trading in GDRs and common stock in Kazakhstan several days later (Kazatomprom.kz, Informburo.kz, October 31; Kapital.kz, October 24).

The global uranium sector is a highly concentrated industry, and Kazatomprom just happens to be the world’s largest producer of uranium, a strategic metal used for both civilian and military purposes. Last year, its output from wholly and jointly owned enterprises reached 12,100 tons, equivalent to 20 percent of the world total. Unlike most other producers that rely on good relations with foreign governments for continued access to their reserves, Kazatomprom has its entire resource base of approximately 300,000 tons located in Kazakhstan alone. In 2017, it had total sales of $907 million, down from $1.1 billion the year before, although its net profit rose year-on-year from approximately $300.8 million to some $375.2 million. Kazatomprom CEO Galymzhan Pirmatov confirmed in mid-October that his firm would pursue a transition from volume-based to value-based, market-driven production as a way of enhancing shareholder value. In December 2017, the company made public its decision to slash output by a fifth over a three-year period amid global uranium glut weighing heavily on profitability (Kazatomprom.kz, October 31, 2018; Total.kz, October 15, 2018; abctv.kz, December 21, 2017).

The partial privatization of Kazatomprom is part and parcel of a major state asset sale program that started taking shape during 2015. The Kazakhstani government had previously unsuccessfully tried to attract ordinary citizens into public markets through the so-called People’s IPO initiative (see EDM, March 3, 2011). The state-owned oil transportation company KazTransOil, a subsidiary of the national oil and gas operator KazMunayGas, became the first participant in late 2012 by selling a 10 percent stake. However, the People’s IPO had been definitively terminated by 2016 because of limited popularity with retail investors and steady losses incurred by the courageous few. In early 2018, National Economy Minister Timur Suleimenov reiterated plans to sell government-owned stakes in both Kazatomprom and the national air carrier, Air Astana, by 2019. No updates have been available of late, though, with regard to either Air Astana or other flagship companies slated for partial privatization, such as Samruk Energy, Kazakh Railways or Kazakhtelecom (Abctv.kz, July 5, 2018; Zakon.kz, March 26, 2018; Forbes Kazakhstan, November 15, 2015).

To most market watchers, the overdue privatization saga is a purely economic matter reflecting the Kazakhstani authorities’ desire to lessen the financial burden of clunky industrial giants while replenishing state coffers with overseas investors’ money. Besides the usual number crunching and fine-tuning of estimates of expected returns, foreign buyers are obviously attentive to domestic political developments. Recent reports of Royal Dutch Shell’s refusal to acquire a minority stake in KazMunayGas ahead of its own IPO currently scheduled for 2020—based on an analysis of the presidential son-in-law’s informal influence over the company—were a cold shower for the Nazarbayev administration. Another factor to take into account, however, is neighboring Russia, which has its own powerful uranium industry.
Historically, Russia has sought to prevent Kazakhstan from reaching beyond the mere extraction of uranium from the ground. A Kazatomprom operating under the constant scrutiny of markets would likely want to attain a higher valuation through diversification. It is unclear how favorably Rosatom will view such a strategy and to what lengths it may go to crush it in the initial stages (Regnum, October 9).

This article was originally published by The Jamestown Foundation’s Eurasia Daily Monitor

ASHGABAT (TCA) — The Asian Development Bank’s (ADB) Board of Directors has approved a $500 million loan to reinforce Turkmenistan’s transmission network, improve the reliability of the country’s power supply, and increase electricity exports to neighboring countries, the Bank said on November 8.

The National Power Grid Strengthening Project, which is the first project by any international financial institution in the power sector in Turkmenistan, will cover four of the country’s five regions and help establish an interconnected national transmission grid to improve reliability and energy efficiency of the network. It will also boost Turkmenistan’s capacity to trade electricity with Kazakhstan, the Kyrgyz Republic, Pakistan, Tajikistan, and Uzbekistan, and increase the volume of current electricity exports to Afghanistan.

“Turkmenistan has significant potential for increased electricity exports to neighboring countries, which can help propel its economic growth and development prospects,” said ADB Director of the Central and West Asia Department Mr. Ashok Bhargava. “Hydrocarbon rich Turkmenistan is crucial to address the region’s energy security and alleviate energy poverty in countries like Afghanistan where millions are still without access to electricity.”

Turkmenistan, the least populated country in Central Asia with about 5.7 million people, is one of the most energy rich countries in the world, particularly on fossil fuels. Turkmenistan is the 12th largest natural gas producer in the world and the 10th biggest oil producer in Asia and the Pacific. In terms of natural gas reserves, the country is ranked fourth globally after the Russian Federation, Iran, and Qatar. The government’s plan is to achieve strong and sustainable economic growth on the basis of efficient integration of the country in the world economy, with maximum diversification of its export potential. To meet its strategic objectives, it is essential that a robust, reliable, and efficient power transmission network is in place.

ADB’s $500 million assistance will finance the construction of about 1,100 kilometers (km) of new 110 kilovolt (kV), 220 kV, and 500 kV transmission lines in various areas in Turkmenistan and expand three existing substations. The project will also finance the construction of new substations, including 500 kV substations in Balkan and Dashoguz, as well as 220 kV substations in Ahal, Balkan, and Dashoguz.

“ADB’s assistance will ensure that the country has a strong backbone of power transmission infrastructure as well as technical knowledge and practices consistent with international best practices to support this expansion of electricity exports,” said ADB Principal Energy Specialist for Central and West Asia Mr. Sohail Hasnie. “A modern and strengthened network is the necessary first step for Turkmenistan to become a power house for Central Asia.”

The National Power Grid Strengthening Project will also improve project and financial management capacity of Turkmenenergo, the power utility of Turkmenistan, particularly in incorporating good practices on evaluation, investment decision-making, as well as higher safeguard requirements. A $1.5 million technical assistance from the Japan Fund for Poverty Reduction, financed by the Government of Japan, to improve energy efficiency and capacity will be administered by ADB.

The total cost of the project, which is expected to be completed by the end of 2023, is $675 million, with Turkmenenergo contributing $175 million.