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29 Apr 2024
Central Asia, Uzbekistan, Local Politics, Business & Economy, Uzbekistan Business & Economy, Uzbekistan Local Politics

Uzbekistan Will Allow Gambling From Next Year

From 1 January 2025, gambling, lotteries and betting activities will be legal in Uzbekistan.

The National Agency for Advanced Projects will control the legal entities that will manage gambling activities in the country. Those management companies will pay a tax on revenue at the rate of four percent for five years. Under the regulations, the age limit will be set for gambling participants at 18 years of age, and companies must have a license to provide betting services and gambling platforms.

Despite the current bans, the population actively participates in games of chance — using foreign and illegal services. That means that participants risk falling prey to scammers, losing huge sums of money in the process. Crimes and suicides among gamblers are not uncommon. According to preliminary estimates, the state budget will receive about $6 million per year.

Earlier, the Uzbekistan Football Association’s press secretary, Davron Faiziev, spoke about the advantages of legalizing betting activities: “By banning betting activities, we lose a lot. First of all, a large flow of funds goes to other countries. This is why the decision was made — to legalize all this, to control and ensure clean activity in the future.”

In Faiziev’s opinion, gaming and betting companies can improve the situation in the sports sector of the country’s economy, as according to foreign experience, many betting offices are active sponsors of sports teams.

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Image: TCA, Aleksandr Potolitsy

29 Apr 2024
Central Asia, Tajikistan Justice, Lead Story, Tajikistan Life & Culture, Home, Tajikistan International Affairs, International Affairs, Tajikistan, Tajikistan Lead Story

Tajik Nationals Held in Moscow Airports as Russia Tightens Border Controls

More than a thousand Tajik citizens are being held in detention facilities at Moscow airports in unsanitary conditions and without access to hot meals, Tajikistan said on Sunday, a day after the government urged its’ nationals to temporarily refrain from traveling to Russia “unless absolutely necessary.”

Over the weekend, Russia disputed Tajik claims that it is targeting people from Tajikistan, saying it is intensifying anti-terrorism measures and that more rigorous checks of foreign citizens seeking entry are carried out “regardless of the nationality of the persons.”

The diplomatic back-and-forth, a rare show of discord between Russia and Tajikistan, comes amid a surge in suspicion and harassment among some Russians toward Tajik citizens after gunmen attacked the Crocus City Hall on March 22, killing more than 140 people.

Several Tajik suspects were among those initially detained, and Russia’s state-run agency, Tass said on Saturday that a court had ordered the arrest of a 12th suspect, a Tajik citizen living in a Moscow hostel. The Islamic State group, which claimed responsibility for the attack, has some Central Asian recruits, though their number is disputed.

“The situation with Tajik citizens stuck at Moscow airports remains difficult,” and restrictive measures are being applied “exclusively” to people from Tajikistan, the Ministry of Foreign Affairs of Tajikistan said in a statement.

By late Saturday, 954 Tajik citizens, including students in Russia on scholarships provided by the Tajik government, were in temporary detention at Vnukovo International Airport in Moscow, according to the ministry. It said 322 who waited for hours were allowed into Russia, but the Russian authorities reportedly planned to add 306 people to an “expulsion list,” and 27 have already been expelled. Dozens of Tajik citizens are also being held in poor conditions at the Zhukovsky, Domodedovo and Sheremetyevo airports in Moscow, according to the ministry.

Tajik diplomats and members of the diaspora in Russia are delivering meals to their detained compatriots. The embassy in Moscow has opened a 24-hour operational headquarters to help them. Tajikistan expressed its concern in a meeting last week after summoning Russian Ambassador Semyon Grigoryev to the foreign ministry in Dushanbe.

On Saturday, in a notice that it described as urgent, Tajikistan’s Ministry of Foreign Affairs urged citizens to “temporarily refrain from traveling to Russian territory by all types of transport unless absolutely necessary.”

More thorough checks by Russian law enforcement means that “at checkpoints across the state border, including at a number of airports, there are delays during passport control,” said Maria Zakharova, spokeswoman for Russia’s Ministry of Foreign Affairs. “The Russian side is taking comprehensive measures to resolve the current situation as quickly as possible. We count on your understanding.”

Zakharova said “no changes have been made to the list of grounds for imposing a ban on entry into the Russian Federation; there are no additional obstacles to crossing the state border by foreign citizens, provided they have all the necessary documents.”

Meanwhile, citizens of Tajikistan are also experiencing problems with entry at land border crossings. More than a hundred cars carrying Tajik citizens are stuck on the Kazakhstan-Russia border, with Russian border guards claiming that the verification system is faulty. However, according to witnesses, the restrictions apply only to Tajiks. Migrants said the Russian authorities are interrogating each Tajik citizen individually, and checking their phones.

Despite an acute shortage of labor in Russia, the current situation of summary deportations and barred entry is developing against the backdrop of discussions on tightening the visa regime and further bans on employment for natives of Central Asia. Tajikistan relies heavily on remittances from migrants working in Russia, meaning the backlash against its citizens there could have dire economic as well as diplomatic implications.

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Ashgabat- The Presidential Palace and Ministerial buildings; image: TCA

29 Apr 2024
Central Asia, Opinion Head, Home, Turkmenistan, Turkmenistan International Affairs, Turkmenistan Business & Economy, Business & Economy

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

By Robert M. Cutler

 

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 gas hub plans

Building a successful gas hub requires careful planning, coordination amongst various stakeholders, and adherence to best practices in infrastructure development, market regulation and operations. It is also important to distinguish between physical and virtual gas hubs.

A physical gas hub is centered on a specific location with physical infrastructure for the storage, trading and transmission of natural gas. A virtual gas hub operates in a significantly different manner, without the need for such centralized physical infrastructure. Virtual gas hubs focus on the financial and contractual aspects of gas trading. They are a flexible and efficient evolution of industrial and market practices. Whereas a physical hub requires substantial investment in physical assets like pipelines, storage facilities and LNG terminals, a virtual hub leans on existing infrastructure and the digital marketplace.

Creating a genuine gas hub in Türkiye — whether physical or virtual — would require attracting more participants. That, in turn, would require significantly greater investments in information technology and cybersecurity. These two desiderata could be achievable with focused efforts and market reforms.  Three additional requirements, however, appear to be more challenging.

Firstly, the country’s regulatory framework would need liberalization and pricing transparency. The necessary policy reforms here would be significant. Especially for a virtual hub, Türkiye would need a fully liberalized and competitive gas market that ensures transparent and non-discriminatory access to its gas infrastructure. Progress has been made in this direction, but further reforms are necessary to align with the best practices implemented in established hubs, not least through the streamlining of permits.

Secondly, it would also be necessary to develop more-sophisticated financial instruments for gas trading. It is not clear that the country’s domestic financial, banking and insurance regimes are well enough coordinated and expertly balanced for this to be possible.  Investment in information technology and trading platforms is crucial. Türkiye does not at present have the technical and financial infrastructure to support extensive gas trading mechanisms, particularly risk-management tools.

Finally, and most problematically, although Türkiye’s pipeline network is connected with the European network, the creation of a genuine gas hub would require their deeper and more extensive integration. Accomplishing this is complicated by third-party factors beyond Türkiye’s control as well as the need for substantial investments.

For the time being, plans for gas cooperation between Turkmenistan and Türkiye, with overarching implications for Central Asia and Europe, will continue to remain as ambitious prospects.

 

Robert M. Cutler has written and consulted on Central Asian affairs for over 30 years at all levels. He was a founding member of the Central Eurasian Studies Society’s executive board and founding editor of its Perspectives publication. He has written for Asia Times, Foreign Policy Magazine, The National Interest, Euractiv, Radio Free Europe, National Post (Toronto), FSU Oil & Gas Monitor, and many other outlets. He directs the NATO Association of Canada’s Energy Security Program, where he is also senior fellow, and is a practitioner member at the University of Waterloo’s Institute for Complexity and Innovation. Educated at MIT, the Graduate Institute of International Studies (Geneva), and the University of Michigan, he was for many years a senior researcher at Carleton University’s Institute of European, Russian, and Eurasian Studies, and is past chairman of the Montreal Press Club’s Board of Directors.

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© Wanida Prapan

29 Apr 2024
Uzbekistan, Uzbekistan Environment, Uzbekistan Home, Uzbekistan Business & Economy, Uzbekistan Life & Culture

EU Gives Uzbekistan’s Agriculture Another Boost

On April 25 the European Union presented €6 million ($6.4 million) to the Uzbek government to support the country’s National Food Security and Healthy Nutrition Strategy. Alongside the grant the EU has also provided funds to help the Ministry of Agriculture to carry out its planning reforms.

Further funding of €20 million ($21.4 million) will be issued later this year and next, in support of Uzbekistan’s National Agriculture Development Strategy for 2020-2030.

The overall objective is the establishment of more market-orientated and sustainable agriculture and food sectors, and subsequently, the creation of more jobs and better access to safe and nutritious food for people in Uzbekistan.

“The agri-food sector is critical for Uzbekistan’s economy and is a major source of employment,” commented the EU’s ambassador to Uzbekistan Charlotte Adriaen. “Family-run or ‘dekhan’ farms produce most of the meat and vegetables consumed by Uzbek citizens. Our focus is therefore on those reforms that enable these farms to prosper, adapt to a changing climate, protect the environment, produce healthy food, and become part of local and global value chains. The grant funding together with other European Union initiatives such as GSP+ will also help to boost exports to the EU.”

The European Union is Uzbekistan’s main funder of developments in the agriculture and food sectors. Between 2020-2023 it provided grants totaling €32.5 million ($35 million).

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@presinent.uz

29 Apr 2024
Central Asia, Uzbekistan, Business & Economy, Uzbekistan Business & Economy

Uzbekistan Moves to Speed Up Privatization of State Property

Uzbekistan’s president Shavkat Mirziyoyev has signed a decree that will put up for auction shares in 247 state enterprises and 1,028 units of real estate. Initial public offerings (IPOs) and secondary public offering (SPOs) of 12 large enterprises are also to be held on the domestic stock market.

The Uzbek government is planning various incentives to speed up the sales. For example, if an asset is not sold within three months of the auction opening, its value will be phased down to 10% of the starting bid price. Lessees of state property will be able to buy the assets under contract directly at the appraised value, and those who purchase privatized state assets in installments will be able to pay just 15% of the purchase price in the first three months, and the rest only within the next 10 years.

Additionally, the privatization program provides for simplified sale of land plots located along international highways, as well as the sale and registration of land assets for the construction of commercial and service facilities along those roads.

Earlier this year Mirziyoyev criticized the slow pace of property privatization in the country and noted that it could bring 20 trillion sum ($1.5 billion) to the national budget. According to Mirziyoyev, many enterprises have artificially inflated their valuations to avoid transferring state assets to private ownership.

The Ministry of Health (39), Uzpromstroybank (27), the Ministry of Preschool and School Education (21), the Committee on Roads (17), the Ministry of Higher Education, Science and Innovation (14), Uzbek Postal Service [Pochtasi] (14), and the Ministries of Culture and Water Management (13 each) have the most unrealized assets that should be transferred to the docket for privatization.

Thanks to the incentives, significant revenues are expected from the sale of land to entrepreneurs through the auctions, which last year generated 1 trillion sum ($78 million) in windfall for the state budget.

Among the most significant objects privatized in recent years were the Kokand Superphosphate Plant, in which a foreign investor invested $40 million and increased production fourfold. Furthermore, the sale of state stakes in Ipoteka Bank ($324 million) and in Coca-Cola Uzbekistan ($252 million) netted significant cash injections for the government.

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akorda.kz

29 Apr 2024
Central Asia, Turkmenistan, Turkmenistan International Affairs, Turkmenistan Business & Economy, Kazakhstan, Kazakhstan International Affairs, Kazakhstan Business & Economy

Kazakhstan, Turkmenistan and Afghanistan to Cooperate in Freight Transit

On April 27, Deputy Prime Minister of Kazakhstan Serik Zhumangarin, Director General of the Agency of Transport and Communications of Turkmenistan Mammetkhan Chakiyev, and Minister of Trade and Industry of the Afghan Taliban government Nuriddin Azizi met in Kabul.

During negotiations, an agreement was made to develop more favourable and competitive tariffs for the passage of container trains from China through Kazakhstan and Turkmenistan to Afghanistan, and further afield to Pakistan, India, and Middle Eastern countries.

To support the initiative, Afghan businesses have been invited to use the Kazakh terminal in China’s Xi’an Dry Port to consolidate goods for transport by rail.

According to preliminary calculations, the delivery time for goods via the accelerated, uninterrupted route from Xi’an/Urumqi in China to Turgundi and Andkhoy in Afghanistan will be reduced to just 10-12 days, at a cost significantly cheaper than alternative modes of transport.

Since the Kazakhstan-Turkmenistan-Afghanistan route could also be used for transporting goods from Russia and Belarus to India and the Middle East, it provides added impetus for the development of the North-South transport corridor.

 

 

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