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Kazakhstan’s Foreign Debt Increases by $4 Billion in Five Years With Russia Growing as Creditor

According to the National Bank of Kazakhstan, at the beginning of 2024 the external financial obligations of the republic reached almost $163 billion, whilst in 2019 this figure stood at $158.8 billion. The Netherlands are Kazakhstan's largest creditor with $42.6 billion owed, followed by the U.K. with $13.8 billion, and then Russia at $12.95 billion. Over five years, Kazakhstan's debt to Russia (+47.1%) and multilateral organizations (+28.5%) increased significantly. At the same time, the amount of debt held by legacy creditors decreased, including that held by the Netherlands (-12.9%), the U.K. (-37%), the U.S. (-7.4%), France (-4.3%), China (-20.7%) and Japan (-17%). Last December, the Asian Development Bank approved a $350 million loan to Kazakhstan. This was allocated to reform the country's financial management and increase the economy's resilience against external shocks. In February of this year, the World Health Organization, with the support of the World Bank, launched a Pandemic Fund project in Kazakhstan. For this purpose, the republic was allocated a grant totaling $19 million, as well as a multilateral grant of $27 million for three years. Earlier, former chief auditor of Kazakhstan, Natalia Godunova, criticized the use of international funds by government agencies, saying that the procedure is inefficient.

Economy Oil & Gas Central Asia Kazakhstan European Union Energy Russia

Kazakh-Owned Rompetrol, On Brink Of Collapse, Appeals To Tokayev

According to Romanian news portal gandul.ro, Rompetrol, which operates in oil refining, petrochemicals, and distribution in parts of Eastern Europe, is close to collapse. The stated reason is that Rompetrol top management -- which includes representatives of Kazakhstan's state energy company KazMunayGas (KMG), the majority owner of Rompetrol -- prioritize personal interests over the economic good of the company. The allegations are serious. KMG International, a group owned by Kazakhstan's national oil and gas company KazMunayGas, acquired the Rompetrol brand in 2007, strengthening its position as a key player in the Black Sea and Mediterranean region. It currently owns 55% of Rompetrol, with Romania's Ministry of Energy controlling just under 45%. The Kazakhstani company is accused of assisting Russia, which itself is trying to avoid sanctions imposed by the European Union (EU). Gandul.ro claims that it's possible to bring oil from Russia to be refined in Romania despite the embargo on Russian crude. Rompetrol CEO Ilyas Kuldzhanov has Russian citizenship, although he also registered Kazakh citizenship in Romania's National Trade Register to avoid possible EU sanctions. Gandul.ro published an open letter penned by some of the company's employees, which they sent to the Kazakh Government. The letter contains the following passages: "Dear Sirs, we are writing to you regarding current issues related to Rompetrol. At the beginning of this message, we apologize for using Google Translate to translate from Romanian to Russian and for remaining anonymous. We decided to remain anonymous because we fear reprisals from KMG management. We want to draw attention to the growing problems inside Rompetrol, because no one is interested in the future of the company. The company needs a radical change of management and new people with different perspectives at all levels, from the board of directors to the top management, with a vision in line with the goals. In terms of management, first of all we should mention Ilyas Kuldzhanov, an extremely incompetent person with no experience in managing large companies, Baurzhan Nurgaliyev (Operations Director), who until recently ran a company selling elevators in Astana, Saken Shoshanov, Baurzhan Nugumanov and other members of management. Appointments to management positions are made on the basis of the ethnic origin of the clan. Most of the new managers in Romania and Kazakhstan have been hired without any competition or selection, and have no experience or knowledge of how the corporation should operate. Note the price of oil and how diesel fuel was purchased in 2023 due to an emergency equipment shutdown at the Petromidia refinery. Why is this equipment not repairable? Why do accidents and explosions continue to occur? Because Rompetrol management is looking for contractors willing to pay commissions. We would like to inform you that similar messages will be sent to the Romanian authorities because the situation is critical." Rompetrol employees also create a disastrous picture of the company's behavior. In the letter they ask Tokayev to check how components and electricity are purchased for the plant -- questions that refer to expenditures of tens of millions...

Investments Energy Russia Kazakhstan China Oil & Gas Export/import Economy European Union

Will Europe Learn Lessons From Central Asian Gas Failures to Secure Oil Imports Bypassing Russia?

Despite loud statements and reports, alternative routes for transporting oil from Kazakhstan and Central Asia to Europe remain only intentions. The desire of the EU to diversify its hydrocarbon suppliers is running into internal bureaucracy and a lack of understanding of how things work in Central Asia, which is in fact seeking to ship its energy in different directions. Lost gas To start, it is worth recalling the Turkmenistan-Russia gas dispute of 2009. Before that, Gazprom bought gas from Central Asian countries at the border, swapping some volumes of domestic supplies with Kazakhstan, Turkmenistan and Uzbekistan, and buying gas at prices lower than EU export rates. Gazprom explained this practice rather simply: there is no economic sense in transporting the gas through Russian territory, so at the border the price cannot be European (minus transportation) – this gas was consumed in Russia or supplied at preferential prices to Ukraine, while Russian gas was sent to Europe. In 2008, Turkmenistan produced 70.5 billion cubic meters (bcm) of gas, exporting 47 bcm, with an increase in production and exports planned for 2009. According to the Energy Institute, gas consumption by European countries in 2022 amounted to 498.8 bcm, meaning Turkmenistan alone, assuming export volumes stabilized at 50 bcm per year, could cover 10% of Europe’s needs. That amount, 50 bcm of gas, is the annual consumption of Switzerland, Sweden, the Czech Republic, Greece, Portugal, Slovakia, Slovenia, Bulgaria, Croatia, Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, Luxembourg, Norway and North Macedonia combined. However, Turkmen gas would never reach Europe. When an agreement on the volumes and prices of gas purchases by Gazprom failed to be reached, 15 years ago, on April 9, 2009, there was an explosion and fire on the eastern branch of the Central Asia-Center (CAC) gas pipeline, at CAC-4. Subsequent negotiations to resume the transport of Turkmen gas between Russian President Dmitri Medvedev and Turkmen leader Gurbanguly Berdimuhamedov, which took place in September 2009 in Moscow, could not resolve the dispute. All these years, the media and European leaders have been talking about building the so-called Nabucco gas pipeline, which was to go from Central Asia, along the bottom of the Caspian Sea, through Azerbaijan and on to Germany and Austria. Its design began back in 2002. Note that by 2009, had the project been energetically implemented, Nabucco could have been built and the first deliveries would have begun. In 2022, gas consumption in Germany and Austria amounted to 77.3 bcm and 7.9 bcm, respectively, meaning supplies from Central Asia could cover at least half of their needs. This seemed like the perfect opportunity for a large-scale gas pipeline. The Central Asian countries wanted to supply gas to Europe via alternative routes, receiving European prices for their commodities, and Europe could have significantly diversified its gas imports. Another player, however, was closely watching Europe’s red tape and indecision – China. Hidden dragon China understands how to work with Central Asia, and in 2007 construction of the first line of...

European Union Education Central Asia Economy Uzbekistan

Uzbekistan to Participate in International TALIS Study for First Time in 2024

At a press conference on 1 April, the Information and Mass Communications Agency announced that Uzbekistan is to participate in the Organization for Security & Cooperation in Europe's (OECD) Teaching and Learning International Survey (TALIS). Referencing the alarming rise in mental stress amongst teachers across the educational sector, Laziz Khojakulov, head of the Ministry of Preschool and School Education’s Department of Strategic Development and International Ratings, stated, “Not only in Uzbekistan, but all over the world, teachers have social and emotional problems." He then noted two measures being taken by the ministry to address the issue. "First of all, there are international TALIS studies, starting from the public education systems and continuing to the preschool and school education system, in which the attitude of teachers toward their profession and the effects on it are studied. This is something new to us. Secondly, we plan to sign up to a joint project to work on the socio-emotional conditions of teachers in the direction of continuous professional development in cooperation with the UNESCO organization.” The ministry also plans to introduce special training courses for teachers to overcome mental stress and tension. In a statement to Kun.uz, Sardor Rajabov, deputy minister of Preschool and School Education, confirmed that 210 of Uzbekistan’s schools have been selected to take part in the TALIS survey for the first time in April and May of 2024. The worldwide TALIS study focuses on pedagogical and professional practices of educators, school administrators, and staff members, and also works within educational environments in schools to provide analysis on issues drawn from consistent and trustworthy data. The OECD has been conducting its study since 2008, with surveys conducted every six years.

European Union Uzbekistan Education Water crisis

Uzbekistan, EU Team Up to Train Local Ecology Specialists Amid Central Asia’s Water Crisis

The European Union (EU) Delegation in Uzbekistan has provided financial assistance to modernize the Koshkopyr College of Water Management and Land Reclamation, located in the Khorezm province. The college was renovated within the framework of a project called Development of Employment Skills in Uzbekistan's Rural Areas. As part of the renovation, workshops, classrooms and laboratories have been updated, with wiring and lighting replaced. The renovation of the college started in April 2022 with an allocated budget of more than €1 million, said Dildora Tangriberganova, deputy rector for education and training. "All workshops and training laboratories of the college were modernized and updated. We received 16 new computers and all the furniture necessary for classrooms. We expect to receive equipment for laboratories and workshops soon," Tangriberganova told the Times of Central Asia. The Koshkopir College of Water Resources and Land Reclamation, established in 1989, trains specialists in such areas as hydromelioration (hydrological engineering), vehicle maintenance, animal husbandry, automation and computer science in water management, and other specialties. Currently the college has 221 students. The administration of the educational institution noted that the updated material and technical base will prove helpful for students in mastering their future professions. The joint EU-Uzbekistan rural-development program has been in effect since July 2020. Its goal is to improve education in the agricultural and irrigation spheres. The total budget of the four-year project is €9.6 million. The water crisis remains an acute problem in Central Asian countries, including Uzbekistan, as the landlocked region has no direct access to the world's oceans. Experts believe that in 2030, the volume of freshwater shortage in Uzbekistan will reach 7 billion cubic meters - and by 2050 it will double, according to a report by Gazeta.uz. Farmers consume the most water in the country. At the same time, 40% of water is wasted due to outdated municipal infrastructure. Experts emphasize that in the future, water scarcity will lead to higher prices for food products and increase the risk of diseases spreading.

Finance European Union Transport Kazakhstan Export/import

The Middle Corridor: How Kazakhstan is Carving its Niche in Europe-Asia Transport

In the aftermath of the pandemic and amid rising geopolitical tensions and sanctions – leading to the breakdown of traditional shipping and logistics chains – the need to develop new, alternative routes for trade has gained particular importance. One such route is the Middle Corridor, or Trans-Caspian International Transport Route, which has become a priority project for Kazakhstan and its neighbors. In this overview we look at the prospects for this multi-modal transnational route. The Trans-Caspian International Transport Route (TITR), or Middle Corridor, starts in China, passes through Kazakhstan, the Caspian Sea, Azerbaijan, Georgia and Turkey, before reaching Europe. Last year, more than 2.7 million tons of cargo was transported along the TITR, up 86% on 2022, whilst it is expected to carry 4 million tons this year. Drivers of growth This growth in volumes has been facilitated by the conflict in Ukraine and restrictions on the transport of goods through Russia, which previously represented the main land route connecting East and West. As a result, in 2022 the volume of container traffic via the TITR grew 33% year-on-year. In addition, amid the geopolitical tensions that have effected the safety of traversing the Suez Canal and the Red Sea – the central and shortest trade route between Asia and Europe – many shipping companies have been forced to go around the southern tip of Africa. This has led to an increase of 14-18 days in the delivery time of goods, as well as additional costs. Because of attacks by Houthi rebels, the number of container ships passing through the Suez Canal each week was down 67% year-on-year in 2023, according to the UN. Meanwhile, in the first two months of 2024, trade volumes along the route decreased 43%. According to data from the UN Conference on Trade and Development, last year the cost of transporting goods from Shanghai to European countries by sea roughly tripled. At the same time, shipping goods by rail from inland Chongqing to Europe was a third cheaper than by sea. Experts note that over the past decade, the total cost of transporting goods between China and Europe by rail has fallen 30%. All this opens wide opportunities for the further development of the TITR, which should be taken advantage of by countries along the route. Middle Corridor countries working together Today, to ensure safe and uninterrupted exports, as well as to attract more flows through Kazakhstan and other TITR countries, measures are being taken. Indeed, the route is considered a strategic initiative for the development of the entire region’s transport potential. During a recent visit to Azerbaijan, Kazakh President Kassym-Jomart Tokayev said that in the future the volume of cargo transported via the TITR should increase to 10 million tons, which is to be facilitated now by both existing demand and technology. At the end of 2022, a roadmap for 2022-27 was signed to eliminate bottlenecks along the route in Kazakhstan, Azerbaijan and Turkey, while to boost the volume of cargo transported by rail a...