ASTANA (TCA) — The third New Silk Road Forum focused on the potential to create new infrastructure, energy and trade links through the Belt & Road Initiative (BRI) was organized in Zurich, Switzerland last week in partnership with the Swiss-Chinese Chamber of Commerce, Kazakh Invest National Company for Investment Support and Promotion reported on its website.

Continue reading

KABUL (TCA) — The European Union (EU) on September 23 announced it will contribute 25 million euros (about $29 million) in the form of a four-year grant to help Afghan children on the move and to end polio, Afghan broadcaster TOLOnews reported.

Continue reading

DUSHANBE (TCA) — Belarusian authorities have detained a Tajik former soccer player who was prevented from playing in Tajikistan several years ago because he wore a beard, his wife has told RFE/RL’s Tajik Service.

Continue reading

BISHKEK (TCA) — Relations between Uzbekistan and Tajikistan have turned from the most problematic in the region into a promising strategic partnership between two neighbors. We are republishing this article on the issue, written by Farkhod Tolipov*, originally published by the CACI Analyst:

Uzbekistan’s President Shavkat Mirziyoev’s state visit to Tajikistan on March 9-10, 2018, represented a “closure of the circle” in a series of trips since Mirziyoev was elected and proclaimed Central Asia as the new foreign policy priority for Uzbekistan. The visit marked the start of a thaw between these states. On August 17-18, Tajikistan’s President Emomali Rahmon made the first Tajik state visit to Uzbekistan in the entire period since independence. The two Presidents signed a long-awaited Treaty on Strategic Partnership, implying that Uzbekistan is now completely surrounded by strategic partners in Central Asia.

BACKGROUND: Throughout the post-Soviet era, relations between Uzbekistan and Tajikistan remained complicated, controversial, strained and stuck in a state of “no war, no peace.” Several factors affected interstate relations since the early 1990s. These include incomplete border delimitation; the establishment of a strict visa regime between the two states; nationalist sentiments; historical claims regarding the belonging of Samarkand and Bukhara; the construction of the Rogun Hydro Power Station (HPS) in the high mountains of Tajikistan; and political and personal animosities between Rahmon and Uzbekistan’s first President, Islam Karimov.

As a result, mutual trade dropped to less than $ 1 million; flights between Tashkent and Dushanbe were cancelled; and Tajik railway cargos transiting Uzbekistan’s territory were blocked. In August 2000, tensions escalated when terrorist groups entered Uzbekistan’s southern province from Tajik territory and Tashkent harshly blamed Dushanbe for its inability to prevent this incursion. The Rogun HPS drama remained the most significant stumbling block in the confrontation between Tashkent and Dushanbe.

Uzbekistan has pursued a policy of prestige vis-à-vis Tajikistan, whereas Tajikistan’s strategy has aimed for survival. Both proved to be unconstructive, since Tashkent and Dushanbe both lacked a preventive, good-will, systemic and win-win approach, and adhered to unilateralist strategies (see the 05/16/2012 issue of the CACI Analyst). This state of affairs poisoned not only relations between Uzbekistan and Tajikistan; it also had detrimental effects on regional affairs in Central Asia. Paradoxically, at the same time, the history and fates of the Uzbek and Tajik peoples have been so interrelated and intertwined for centuries that during his state visit to Dushanbe in June 2000, Karimov portrayed Tajiks and Uzbeks as one people speaking two languages.

Over time, however, even these two antagonists could not ignore Central Asia’s regional evolution. The peoples and countries of the region are more interdependent than they may seem, and more united than divided. Finally, Uzbekistan and Tajikistan understood the danger of crossing a red line in the growing tension between them and took the first steps away from this dangerous trend.

Already at the start of Karimov’s last year in power, 2016, the parties began discussing an eased visa regime and resumed flights between the two capitals – the two Presidents defined these problems as priority areas that should be addressed as soon as possible. These were just the first tokens of rapprochement between Uzbekistan and Tajikistan.

IMPLICATIONS: Karimov’s death in September 2016 became a symbolical “green light” for the construction of Rogun HPS; which the Tajik side began in a month. This time, the Uzbek side did not react in the predicted way, due to Mirziyoev’s altered regional stance, especially towards Tajikistan.

The period of almost half a year between Mirziyoev’s state visit to Tajikistan in March and Rahmon’s reciprocal visit in August saw a number of major breakthroughs: the visa regime was simplified; the transport connection between the two countries was restored; and the National University of Tajikistan and State University of Samarkand established cooperation. More than one million people have already crossed the Uzbek-Tajik border this year. During Rahmon’s visit, bilateral trade was announced to have increased to US$ 500 million in the near-term, with a projected increase of U.S.$ 1 billion – a direction signifying a major shift in overall bilateral relations as well as the existence of a real potential for broad trade and economic cooperation.

In March 2018, the Defense Ministries of the two states set up a cooperation plan for this year and signed an agreement on cooperation in the transit of special cargo and military contingents through their territories. As a follow up, during the August summit, Uzbek and Tajik border guards conducted joint military-tactical exercises on the site where the borders of Uzbekistan, Tajikistan and Afghanistan intersect.

In the course of Rahmon’s visit to Tashkent, the two sides signed 27 cooperation agreements relating to industry, standardization and certification, border crossing, recognition of education documents, geodesy and geology, agriculture and culture, among other. Both leaders, however, delicately bypassed the most sensitive issue – Rogun – instead announcing that the two states agree to construct two other hydropower stations on the Zarafshan River. Rahmon even stated emotionally that Tajikistan will never deprive Uzbekistan of its share of the Amu-Darya River’s water. Moreover, he advanced the initiative to provide Uzbekistan with drinkable water from Tajikistan’s high mountainous Sarez Lake.

This was indeed a historical summit, the significance of which must be understood in a broader perspective. The newly established strategic partnership between Uzbekistan and Tajikistan will have strategic implications not only for the two states concerned, but for the entire Central Asian region.

First, the very notions of “upstream” and “downstream” countries, which have divided the two countries over the Amu-Darya river flow, began to fade. More often than not, these simplistic notions have been used to statically describe the negative status quo, which has impeded a more positive and sophisticated approach to regional affairs. It is now obvious that the acute water sharing issue, which has kept the two states on opposite sides of the barricade, can be strategically revised in a win-win approach.

Second, the joint military exercises of Uzbek and Tajik border guards, which were conducted for the first time in the two states’ history, as well as the cooperation between their defense ministries also displayed a common vision of potential security threats stemming from outside the region. The sides demonstrated their will to deal with potential threats jointly.

Third, Tajikistan was the last, but not least, in Tashkent’s successful efforts aimed at revitalizing a friendly and cooperative environment in Central Asia. As a result, Uzbekistan is now surrounded by strategic partners. In turn, this falsifies another myth, namely that Tajikistan as a Persian-speaking nation would avoid deeper integration with the region’s four Turkic nations. Noticeably, the Tajik President expressed his support for the upcoming second consultative meeting of leaders of the Central Asian states, to be held in Tashkent in March 2019. In this context, the Presidents and mass media repeatedly used the term “rebooting” (perezagruzka) during the summit. Indeed, Uzbek-Tajik rebooting is, in fact, part of the overall rebooting of the entire regional order in Central Asia.

Fourth, the summit also has a geopolitical dimension. Hopefully, Tashkent and Dushanbe confirmed once again that there is no need for mediation by external great powers in mitigating tensions arising between the Central Asian states. The further consolidation of Central Asia’s five countries as a regional group will help promote their common regional interests on the international scene, especially given the susceptibility of this area to geopolitical turbulence.

CONCLUSIONS: After the summit, President Mirziyoev stated: “If you ask me whether any issues still remain unresolved in the relationship between our two countries, I answer ‘No’. Such issues no longer exist.” The two state visits – Mirziyoev’s to Dushanbe and Rahmon’s to Tashkent – were sufficient to raise the level of bilateral relations to a Strategic Partnership. The treaty finally laid the ground for comprehensive cooperation, mutual trust and friendship between these neighboring states and fraternal peoples. They have really come a long way from the mistrust and interstate tension between Karimov and Rahmon to rapprochement and finally to strategic partnership.

Through Mirziyoev’s efforts, Central Asia is being reshaped as a region. Tashkent’s regional policy confirms once again that Uzbekistan is a key country in Central Asia and that the ultimate success or failure of regional integration depends to a decisive degree on Uzbekistan. Of the various links and interactions between and among Central Asian states, the Uzbek-Tajik relationship has remained the most problematic. It is now vitally important to build on the new and promising strategic partnership.

* Dr. Farkhod Tolipov holds a PhD in Political Science and is Director of the Research Institution “Knowledge Caravan”, Tashkent, Uzbekistan

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

Chinese investors eye Kazakh market as TCM becomes increasingly popular in Central Asia

Traditional Chinese medicine is becoming more popular in Kazakhstan and Central Asia

Sept 19 — “Kazakhstan, the Central Asian country where Chinese leaders put forward the Belt and Road initiative, is now witnessing the popularization of traditional Chinese medicine (TCM). The rising popularity is mostly thanks to the wider acceptance of TCM, as local perceptions of healthcare have shifted from being treatment-focused to prevention-driven, which is in line with TCM philosophy. While a number of domestic TCM manufacturers aim to tap Kazakhstan’s huge market, industry insiders are warning of several hurdles in terms of legal application and cultural acceptance.” READ MORE: http://www.globaltimes.cn/content/1120227.shtml

Why Kazakhstan should stop worshipping Tesla and Uber

Kazakhstan started by solving internal problems rather than importing Western solutions. The basis for this development was the country’s transformation program “Digital Kazakhstan”

Sept 19 — “Imagine a country about five times the size of France with a population density of only six people per square kilometer. One could walk thousands of miles across the vast steppes without encountering a single human settlement. This country, Kazakhstan, is the largest country in Central Asia. 70 percent of Kazakhstan’s GDP is revenue from the sale of mineral resources such as oil, gas, and coal.” READ MORE: https://thenextweb.com/world/2018/09/18/kazakhstan-should-stop-worshipping-tesla-uber-resource-dependency/

Disney to develop more projects with Kazakhstan

Walt Disney, along with other world-famous film studios such as Paramount Pictures, 20th Century Fox and Warner Bros, will be ready to cooperate closer with Kazakhstan once the Kazakh Parliament passes the law “On cinema”

Sept 21 — “Walt Disney’s Commonwealth of Independent States’ (CIS) office is enthusiastic about Kazakhstan’s draft law “On cinema” and plans to cooperate with the country by assisting filmmakers and the local dubbing industry, said the company’s Director General Marina Zhigalova-Ozkan during the Sept. 15 roundtable at the Almaty Film Festival’s business site.” READ MORE: https://astanatimes.com/2018/09/disney-to-develop-more-projects-with-kazakhstan/

Kazakhstan: Government saves bank owned by ex-presidential chief of staff

The government in Kazakhstan has saved another troubled, private bank at taxpayers’ expense

Sept 22 — “Kazakhstan has once again acted to rescue a troubled bank torpedoed by the devaluation of the national currency, the tenge. This time, the lender happens to be controlled by one of President Nursultan Nazarbayev’s closest allies.” READ MORE: https://timesca.com/index.php/news/20282-kazakhstan-government-saves-bank-owned-by-ex-presidential-chief-of-staff

KYRGYZSTAN

Feminist song draws supporters and death threats in Kyrgyzstan

Pleas for civility and respect in a musical video of a female songwriter in Bishkek have been drowned by rage over her clothing

Sept 18 — “A feminist manifesto sung by a 19-year-old Kyrgyz student has rekindled debates over women’s rights in Kyrgyzstan. The spectrum of public reaction has ranged from a supportive social media campaign to death threats, the artist says. The Kyrgyz-language song, entitled Kyz (“Girl”), was released some two months ago, but the video appeared only on September 13.” READ MORE: https://eurasianet.org/feminist-song-draws-supporters-and-death-threats-in-kyrgyzstan

Kyrgyzstan: Entrepreneurs, tired of inspections and barriers, leave for other countries

The President and businesspeople discussed how to remove the factors that impede the development of entrepreneurship in the country

Sept 19 — “Kyrgyzstan should create a competitive economy applying innovative technologies and open to attract investments, Kyrgyz President Sooronbai Jeenbekov said at a meeting with representatives of the business community on September 17.” READ MORE: https://timesca.com/index.php/news/26-opinion-head/20270-kyrgyzstan-entrepreneurs-tired-of-inspections-and-barriers-leave-for-other-countries

In Kyrgyzstan, Babanov Cases Losing Steam

Former presidential hopeful Omurbek Babanov was the subject of two highly political investigations, one of which has now been suspended

Sept 20 — “At least one of the two criminal cases levied against former presidential contender Omurbek Babanov have been dropped, according to local media. Babanov, who served as prime minister from December 2011 to September 2012 during the first year of Almazbek Atambayev’s presidency, later joined his Respublika party with Ata Jurt and headed the faction in parliament. In early 2017, Babanov was nominated by his party to run for the presidency that following October.” READ MORE: https://thediplomat.com/2018/09/in-kyrgyzstan-babanov-cases-losing-steam/

Fear and loathing in Kyrgyzstan: how the LGBTQI community is fighting back against rising discrimination

LGBTQI people remain easy targets in Kyrgyzstan, with nowhere to turn for recourse

Sept 20 — “In September 2014, I visited Kyrgyzstan for the first time, to speak at the PEN International Congress in the capital, Bishkek. We had to keep our panel, which argued for the repeal of “anti-LGBTQI” (Lesbian, Gay, Bisexual, Transgender, Queer and Intersex) legislation that restricts the right to freedom of expression, secret. A few months earlier, the Kyrgyz parliament had introduced a bill that copied Russia’s legislation against “gay propaganda”, with additional jail sentences for people who “promote homosexual relations” through the media, so we feared that the entire Congress could be shut down if the authorities found out about it.” READ MORE: https://www.opendemocracy.net/od-russia/juliet-jacques/fear-and-loathing-in-kyrgyzstan

TAJIKISTAN

THIS DAM COULD CAUSE THE WORLD’S WORST NATURAL DISASTER AND IMPACT 5 MILLION

Tajikistan’s Lake Sarez is stunning, but some experts say it’s a ticking time bomb

Sept 14 — “In its very first moments of existence, the Usoi dam claimed the lives of an entire village. It was formed during a 1911 earthquake that saw the Usoi settlement buried by a massive landslide that blocked the Murghab River and formed Tajikistan’s Lake Sarez. At roughly 1,860 feet, the Usoi dam is the world’s highest natural dam. Lake Sarez is isolated now, but in 1911 it was even more so: It took six weeks for news of the disaster to reach civilization. Today there are at least 30 villages in the Bartang Valley, and more scattered across surrounding areas. And they’re all in mortal danger.” READ MORE: https://www.ozy.com/acumen/this-dam-could-cause-the-worlds-worst-natural-disaster-and-impact-5-million/88749

Time’s Up For Tajik Sex Pests

Catcallers in Dushanbe now face the prospect of up to two weeks in jail, community service, and the humiliation of having their pictures plastered on police websites as a warning to others

Sept 15 — “Women have grown accustomed to being harassed by strange men on the streets of Dushanbe: “Is your mom looking for a son-in-law?” “I’m speechless.” “Hey, $100 girl.” Overtures can range from unsolicited “compliments” to personal insults to physical assault. Whatever the case they are not welcomed.” READ MORE: https://www.rferl.org/a/time-s-up-for-tajik-sex-pests/29491776.html

Tajikistan: What is going on in the Pamirs?

The recent government reshuffle and strengthening of military presence in Tajikistan’s remote Gorno-Badakhshan Autonomous Region indicate that President Rahmon’s government is extending its control of this potentially restive area

Sept 21 — “For around a week, reports have been trickling out of Tajikistan’s remote eastern Pamir region of a looming security crackdown by government forces. The first public hints that not all was well emerged on September 15, when President Emomali Rahmon stated during a visit to Khorog, the capital of the mountainous Gorno-Badakhshan Autonomous Region, or GBAO, that he was growing fed up with lawlessness in the province.” READ MORE: https://timesca.com/index.php/news/20279-tajikistan-what-is-going-on-in-the-pamirs

TURKMENISTAN

Turkmenistan: Planes, grain and automobiles

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

Sept 19 — “After a long hiatus, Turkmenistan has rejoined the community of nations that buy grain from Kazakhstan. According to Astana-based state news agency Khabar, the sales have amounted to 100,000 tons since the start of the year. The purchases are an implicit admission that Turkmenistan is not as self-reliant as it would like. Import substitution is the cornerstone of Turkmenistan’s economic model, but in reality the government struggles to meet demand for even basic staples.” READ MORE: https://eurasianet.org/turkmenistan-planes-grain-and-automobiles

Turkmenistan Should Immediately End Practice of Enforced Disappearances

Turkmenistan still has an appalling human rights record

Sept 20 — “For the first time ever, Turkmenistan has accepted many of the recommendations made by almost 20 states during its Universal Periodic Review, including those related to enforced disappearances, a persistent and grave violation in the country. Human Rights Watch and the Prove They Are Alive campaign welcome this development.” READ MORE: https://www.hrw.org/news/2018/09/20/turkmenistan-should-immediately-end-practice-enforced-disappearances

Photos of chicken mockups at counters of Ashgabat bazaars

Crisis-hit Turkmenistan is experiencing shortages of some food products, and instead of real chicken, mockups filled with cotton wool are displayed at some retail outlets

Sept 20 — “On 19 September “Chronicles of Turkmenistan” reported that fake counters with chicken mockups had appeared in Ashgabat bazaars. Our correspondents managed to take photos of them. There are official retail outlets of the poultry farm “Gush toplumy” which occasionally sell cheap chicken drumsticks at 8 manats per kilo (the photo features the queue lining up for them).” READ MORE: https://en.hronikatm.com/2018/09/photos-of-chicken-mockups-at-counters-of-ashgabat-bazaars/

UZBEKISTAN

Uzbekistan’s president rebrands his administration, but keeps stalwarts

Along with political and economic reforms, Uzbekistan’s President has made some changes in his administration in an effort to redistribute executive powers and make the country’s governance more effective

Sept 15 — “The president of Uzbekistan, Shavkat Mirziyoyev, issued a decree, on August 27, changing the official name of the 27-year-old “Presidential Executive Office” (Devon in Uzbek and Apparat Russian) to the “Presidential Administration.” Along with the new name, the Administration saw some personnel changes and possibly limitation of powers of certain advisors. Overall, these reforms are largely superficial as the Presidential Administration inherited not only the same departments and functions from the Executive Office, but maintains all the major stalwarts of the previous government structure.” READ MORE: https://timesca.com/index.php/news/20256-uzbekistan-s-president-rebrands-his-administration-but-keeps-stalwarts

Uzbekistan: Land of a thousand shrines

Uzbekistan boasts hundreds of holy places and shrines attracting pilgrims from home and abroad

Sept 16 — “Uzbekistan has aspirations to become a second Mecca, a destination for pilgrims from all over the world. Central Asia’s most populous country boasts a wealth of well-preserved mosques and shrines in famous silk road cities like Samarkand and Bukhara. For millions of Uzbeks these are sacred places. But for the Uzbek government they also represent an opportunity to boost tourism as the country opens up after decades of isolationist, authoritarian rule.” READ MORE: https://www.bbc.com/news/world-asia-44685414

Double discrimination: why Uzbek women in Kyrgyzstan are a minority within a minority

In the aftermath of Kyrgyzstan’s 2010 revolution, the country’s Uzbek minority population has seen their position worsen — and Uzbek women have been marginalised most of all

Sept 17 — “Echoes of the 2010 conflict between Kyrgyz and Uzbeks continue to be heard in the Osh region in southern Kyrgyzstan. The four days of clashes between the two communities left hundreds dead and thousands injured, and came on the heels of the violent change of government in the country in April 2010. Today, it is clear these events have strengthened nationalism and re-traditionalisation among the Kyrgyz people.” READ MORE: https://www.opendemocracy.net/od-russia/zhyldyz-frank/double-discrimination-in-kyrgyzstan

South Korean company plans to produce electric cars in Uzbekistan

Uzbekistan is poised to become Central Asia’s leading manufacturer of electric cars

Sept 21 — “South Korean Rooper teikom Co. Ltd plans to start production of electric cars in Asaka, the company’s director, Sung Ying Song said, Uzbek media outlets reported. “The total cost of the project will be $2 million, and we plan to start manufacturing cars by the end of next year,” he told reporters. Chinese companies are actively seeking to cooperate with Uzbekistan in this direction. For example, the Changan Automobile Group reported that the company intends to organize the production of electric cars in the Fergana Valley.” READ MORE: https://www.azernews.az/region/137887.html

AFGHANISTAN

‘Live Free Or Die’: From Afghan Refugee To U.S. Political Hopeful

A 27-year-old Afghan refugee has won the Democratic Party primary for a seat in the state legislature and if she wins in the November general election, she would become the first former refugee to hold public office in New Hampshire

Sept 17 — “”Live free or die” is the official motto of the U.S. state of New Hampshire. It’s a mantra that resonates deeply with Safiya Wazir, an Afghan refugee who fled Taliban rule in the 1990s, resettled with her family in neighboring Uzbekistan, and is now a U.S. citizen vying to make political history in her adopted state.” READ MORE: https://www.rferl.org/a/live-free-or-die-from-afghan-refugee-to-u-s-political-hopeful/29494710.html

The Mafia That Threatens Afghanistan

Armed factions have overrun civil society in Afghanistan, but coming parliamentary elections offer a chance to root them out

Sept 19 — “Afghanistan will hold two crucial elections in the next seven months: a parliamentary vote in October and a presidential election in April. The outcomes could help sustain a steady course for the teenage democracy, and jockeying is under way among political factions. But a rise in organized political violence threatens to taint the elections and derail the nation’s progress toward stable governance.” READ MORE: https://www.wsj.com/articles/the-mafia-that-threatens-afghanistan-1537397750

My holiday with the Afghan mujahideen

In the late 1970s, John England, from High Wycombe, was befriended by his neighbour Rahmatullah Safi, originally from Afghanistan. In 1988, Rahmatullah invited John to visit a war zone in his home country and they embarked on an unconventional trip

Sept 20 — “John kept a diary and took photos of his three-week trip with Rahmatullah, self-publishing them in an e-book called Going Inside, for posterity and for his family and friends. The photos show a unique glimpse into life in Afghanistan 30 years ago. The two neighbours met when Rahmatullah moved into John’s street in 1978.” READ MORE: https://www.bbc.com/news/in-pictures-44469707

Afghanistan: Journalists dying in record numbers to report the war

Afghanistan is the deadliest country for the media workers in the world

Sept 21 — “Moments after Afghan journalist Samim Faramarz wrapped up his live report on the latest suicide attack in Kabul, a car bomb exploded just metres away, killing him and his cameraman Ramiz Ahmadi. Their colleagues at Tolo News choked back tears as they reported the deaths live on air — cracking open a divisive debate on how Afghan journalists should operate in such a dangerous environment.” READ MORE: https://www.financialexpress.com/world-news/afghan-journalists-dying-in-record-numbers-to-report-the-war/1321237/

WORLD

India’s Economic Opportunities in Central Asia

India is making economic inroads to Central Asia in attempts to counter the growing influence of China, and Pakistan, in the region

Sept 17 — “Shavkat Mirziyoyev, the new President of Uzbekistan, will pay a visit to New Delhi towards the end of this month, seemingly to give yet another shot for cementing strong economic ties with India. For the last two and a half decades, India has been citing obstructions of physical connectivity, Pakistan’s hostility and Afghan instability for its desultory attitude towards Central Asia.” READ MORE: https://idsa.in/policybrief/indias-economic-opportunities-in-central-asia-pstobdan-170918

EU counters China’s Silk Road Initiative

The adoption by the European Commission of a new ‘Connectivity Strategy’ linking Europe and Asia throws down the gauntlet to an increasingly assertive China, writes Bart Broer, a Research Fellow and Fraser Cameron Director of the EU-Asia Centre

Sept 19 — “The new strategy, released on Wednesday (19 September) will offer a different approach to that taken by Beijing with its flagship Belt and Road Initiative (BRI). The EU emphasis is on sustainability, proposing that investments should respect labour rights, not create political or financial dependencies, and guarantee a level playing field for businesses. Given the rapidity of China’s economic development in the past 30 years it has taken the EU some time to acknowledge the growing power and influence of Beijing.” READ MORE: https://www.euractiv.com/section/central-asia/opinion/eu-counters-chinas-silk-road-initiative/

ASTANA (TCA) — The government in Kazakhstan has saved another troubled, private bank at taxpayers’ expense. We are republishing this article on the issue, written by Almaz Kumenov, originally published by Eurasianet:

Kazakhstan has once again acted to rescue a troubled bank torpedoed by the devaluation of the national currency, the tenge. This time, the lender happens to be controlled by one of President Nursultan Nazarbayev’s closest allies.

On September 20, the government confirmed what has been reported for weeks, by revealing it has landed on the mechanism by which it will buy 450 billion tenge ($1.3 billion) worth of Tsesnabank’s agriculture-related credit burden. In a statement posted on the prime minister’s website, the government said this measure would “improve conditions for agricultural producers and also enhance the robustness of Tsesnabank by cardinally improving its credit portfolio.”

Return on credit given out to the agricultural sector has suffered intensely due to fluctuations in the rate of the tenge against the dollar. On September 21, the tenge hit 353 to the dollar, from a nadir of around 381 tenge on September 12, which itself was a major slump from the rate of 332 seen at the start of the year.

According to data from ratings agency S&P, almost half of Tsesnabank’s credit portfolio is composed of foreign currency-denominated loans. As part of the bailout blueprint, those loans will be converted into tenge and repayment periods will be extended.

That the news about the government’s intention to bail out Tsesnabank had been leaked ahead of time did not help matters. In early September, media reported that the lender was set to receive assistance worth 150 billion tenge ($407 million at the time). Media outlets covering the story noted at the time that this operation was being done behind closed doors and that the structure of the rescue was unknown. Both Tsesnabank and the National Bank refused to comment publicly on the situation.

In an oft-repeated pattern, unknown figures then began circulating rumors on social media and through messaging apps warning that Tsesnabank was on the verge of bankruptcy.

Despite reassurances from the bank to the effect that two-thirds of its outstanding loans had been paid off, clients began rushing to withdraw their savings. According to the lender’s figures, around 6 percent of deposits were withdrawn, and judging by the wave of online complaints, many were thwarted in their attempts to get a hold of their savings.

On September 17, S&P downgraded its assessment of Tsesnabank’s liquidity from “adequate” to “less than adequate.”

There is an intriguing broader political angle to the story. Tsesnabank is a part of the Tsesna Corporation — the majority of whose shares are held by the recently removed chief of the presidential administration, 64-year-old Adilbek Dzhaksybekov, and his son, Dauren Dzhaksybekov. Dzhaksybekov earlier this month left his post as presidential chief of staff in a move officially described as retirement. Some observers registered surprised that a 64-year-old would be scampering off to claim a pension while Nazarbayev, his 78-year-old boss, shows no immediate sign of wishing to leave his job.

It is not known if Tsesnabank’s woes had any role to play in the retirement decision, but the entire episode is distinctly awkward. The just-in-the-nick-of-time bailout comes despite assurances from Nazarbayev in April that no more underperforming banks would be saved at taxpayers’ expense. As the president had grumbled at the time, more than $9 billion has been shelled out by the authorities to save troubled banks — a predicament he blamed on ineffectual managers and senior shareholders’ alleged habit for salting away monies in offshore havens.

But having grandfathered one much-attacked rescue program, the authorities have found another means by which to keep banks afloat: the infusion of funds from the state pension pot. Speaking to the Senate in May, National Bank chairman Daniyar Akishev announced that second-tier banks could expect to receive more than $600 million from the Single Accumulated Savings Fund.