Strategy - The Times Of Central Asia

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The Taliban and its Neighbors: An Outsider’s Perspective

This is part two of a piece of which part one was published here. The topic of a regional approach to solving Afghanistan's problems is increasingly being discussed in various expert and diplomatic circles. The International Crisis Group (ICG), a reputable think tank whose opinion is extremely interesting as part of an "insider vs outsider" set of viewpoints, writes about this in particular. A report from ICG entitled "Taliban's Neighbors: Regional Diplomacy with Afghanistan" is one of the first works to summarize the role and place of the region as regards the situation around Afghanistan. In the voluminous work, the authors touch upon almost all aspects - issues of diplomatic recognition, security, terrorist activity, trade and economic relations within the region, water issues and others. In their conclusions, ICG analysts point out that many steps towards regional cooperation aren't related to Western donors, but European countries should nevertheless be interested. Europeans in particular would benefit from a stable, self-sufficient region that isn't a major source of illegal drugs, migrants or terrorism. But sanctions and other Western measures designed to show disapproval of the Taliban are obstacles to a more functional relationship between Kabul and the countries of the region. Significant progress depends on Western support - or at least tacit acquiescence. While such practical steps need not lead to recognition of the Taliban regime, they will contribute to regional peace and security. However, experts are concerned that the emerging regional consensus is directly dependent on security and stability issues in Afghanistan - if regional neighbors feel that the government cannot restore order within Afghanistan's borders and contain transnational threats, the consensus may well collapse. If that happens, regional countries may be tempted to choose sides in another intra-Afghan civil conflict, repeating the destructive pattern of past decades. At the same time, experts believe that the first step toward improving regional security cooperation would be to cool down the rhetoric on all sides and get regional players to agree on security issues, even if they have different priorities. Security information sharing within the region also suffers because the Taliban have yet to build a trusted dialog. They lack credibility because of their complete denial of certain threats. Meanwhile, countries in the region and the world are guided by inflated estimates of militant numbers. The ICG's assessments of the security threats posed by Islamic State Khorasan Province (ISKP) are broadly in line with the consensus - in some ways, the growing concern about ISKP is paradoxical due to the fact that the overall level of violence associated with the group has declined over the past two years. The question of whether ISKP could become a more potent transnational threat in the future remains open. So far, its operations outside of its original territory near the Afghanistan-Pakistan border have been limited. On the other hand, ISKP continues to attract recruits from different parts of Central and South Asia and encourages attacks outside Afghanistan - arguably making it the most dangerous armed group in...

Finance Kazakhstan Banking Central Asia Economy Strategy

Over 90% of Economically Active Kazakhstanis Have Loans

Lyazzat Usenbekova, director of consumer protection at the Association of Financiers of Kazakhstan, conducted calculations to find out what percentage of Kazakh citizens have debt obligations, concluding that "more than 90% of those who actively participate in the economic life of the country bear the burden of credit obligations on their shoulders." Usenbekova specified that this percentage applies to those who are indebted to credit organizations. At the same time, the structure of loans reveals interesting details: according to her data, almost a third of citizens take out loans for relatively small amounts, meaning no more than 500,000 tenge ($1,115). However, they account for only 1.7% of the total loan portfolio of individuals. Meanwhile, 5% of Kazakhs have debts over 10 million tenge ($22,290), and their share in the total volume of loans accounts for 42.3%. "It may seem that loans for large sums are a cause for concern, but before issuing such loans, clients are carefully checked for their ability to pay, their debt load and other aspects," Usenbekova emphasized. Usenbekova also looked at the category of loans under 300,000 tenge, suggesting they are probably for consumer needs. "Such loans are often interest-free and, with proper borrower discipline, should not cause serious difficulties with repayment," she explained. But there is no perfect picture yet, Usenbekova stated, stressing the need to improve people's financial literacy and their responsibility to their debts. Majilis (lower chamber of parliament) representative, Tatyana Savelyeva assessed the prospects of enacting changes envisaged by the draft law on minimizing risks in lending and protecting borrowers' rights. "We are likely to see real results in a few years, when these innovations begin to operate. For example, in debt regulation. By then we will be able to objectively assess their effectiveness," Savelyeva opined. The proposed bill to protect the rights of borrowers provides for a ban on the transfer of debts to collection agencies within 24 months of the start of delinquency and for debt settlement procedures that exclude fines, penalties and commissions.

Kazakhstan Transport Central Asia Export/import Economy Strategy

New Freight Port in Iraq Offers Kazakh Companies Long-Term Prospects

The Association of Kazakhstan Freight Railway Carriers is reporting that an Emirati company, AD Ports, is planning to build a new port and economic zone. The area that the company has identified for the zone is located to the south of the Iraqi city of Basra; if the project goes ahead, it will be an alternative to Egypt's Suez Canal in transcontinental freight shipping. "AD Ports (an Abu Dhabi-based port and logistics operator) has signed a preliminary agreement with the state-owned company managing Iraqi ports to establish a joint venture," commented the Kazakh freight association. According to them, AD's plan, centering on the new port called Grand Faw, is to create a corridor for Asian-European trade, bypassing the Egyptian city of Suez. The Grand Faw Port is set to become one of the largest in the Middle East, with terminals for handling containerized, bulk and liquid cargo. The corridor is expected to be ready by 2038. In Kazakhstani it is believed that the project is promising, but extremely costly. "We should not forget that all land logistics corridors are more costly than sea corridors. That's why Kazakhstan has such problems with logistics -- it has no access to the sea. Even if the Suez Canal is closed and the Panama Canal shoals [becomes shallow], sea transport will be more profitable. Yes, alternatives are needed. However, I would not count heavily on the new project," economist Andrei Chebotarev told The Times of Central Asia. Chebotarev referenced Kazakhstan's plan to build the North-South transport corridor. A new logistics route alternative to Suez would be a good addition; however, so far the UAE hasn't included Kazakhstan in its plans. Due to the recent attacks by Yemen's Houthi rebels on vessels in the Red Sea, the volume of maritime traffic through the Suez Canal has decreased, which in turn has increased demand for freight transport via multimodal routes.

Investments Energy Transport Kazakhstan Central Asia China Export/import Economy Strategy

Tokayev Celebrates Kazakh-Chinese Economic Ties at Boao Forum

Kazakh President Kasym-Jomart Tokayev was feted as guest of honour at the 23rd Boao Asian Forum (BFA) : "Asia and the World: Common Challenges, Common Responsibility." He was joined at the opening ceremony of the plenary session in the Chinese province of Hainan by: Chairman of the BFA Board of Directors Ban Ki-moon, Chairman of the Standing Committee of the National People's Congress Zhao Leji, President of Nauru David Adang, Prime Minister of Sri Lanka Dinesh Gunawardena, Prime Minister of the Commonwealth of Dominica Roosevelt Skerrit, Chairman of the international non-governmental organization "Council of Elders" Mary Robinson, Secretary General of the OECD Matthias Kormann, and Director General of the UN's World Intellectual Property Organization (WIPO) Daren Tang. In his address to the forum, Tokayev made reference to the fact that against the backdrop of escalating world conflicts, there is tension in international trade and an assumption that the growth rate of global GDP will be the lowest in the past 30 years. However, Asia's role in this sphere is increasing, and the region is projected to provide 60 percent of global GDP growth this year. Global trade giants located in Asia are now attracting more and more foreign investment on account of Asia being home to the world's leading technology centres, responsible for 70 percent of patent developments. "Of the expected $30 trillion growth in middle-class consumption by 2030, only $1 trillion is expected to come from Western economies. Collectively, all these factors point to the so-called 'Asian Renaissance," stated Tokayev. He then emphasized the role of the current forum to demonstrate the advanced achievements of the region: "Kazakh-Chinese relations are based on an effective partnership that has made Kazakhstan China's main trade and economic partner in Central Asia. Kazakhstan accounts for half of Chinese trade and investment in the region. Last year, trade turnover between Kazakhstan and China reached a historic record of $41 billion. In 2023, the volume of cargo traffic between our countries increased by 22% to almost 30 million tons." The Kazakh president also mentioned that 80 percent of all land transportation between China and Europe is carried out through Kazakhstan, noting the role of the "One Belt, One Road" project in the creation of modern multimodal, environmentally safe and sustainable infrastructure in the region. With regard to the economic success of the Kazakh Republic, he drew attention to the fact that the country's economic growth of 5.1 percent last year almost exceeds the projected growth rate of the world economy twofold. Plans were outlined for further developments in the field with reference to an open-door policy, abundant resources, and liberal market reforms, aimed to create a favourable ground for mutually beneficial cooperation with China. Tokayev reported that his country is becoming increasingly attractive to investors due to measures to improve the fiscal and monetary system, market reforms, and a price-competitive economy. He also called on the world community to ensure equal opportunities for all countries: "The huge Asian bond market with its huge market capitalization...

Industry Strategy Economy Export/import Investments Kazakhstan Central Asia China

Kazakhstan’s Potential to Overtake China in Production of Rare-Earth Metals

Kazakhstan has become a major participant in the international race for the extraction of valuable rare-earth metals or rare-earth elements (REEs). According to an https://asiatimes.com/ interview with international development expert Javier Piedra, the republic can not only compete with China -- but even overtake it in terms of production. Mr. Piedra, a financial consultant and former representative of the U.S. Agency for International Development (USAID), reported that China currently controls 70% of the global production REEs. He also explained that because of China's tense relations with the West, Kazakhstan was in an advantageous position to develop its domestic industry in the sector. In a report by the Asia Times, Piedra stated, "Kazakhstan could be on par with China in mining such rare earth elements as scandium, yttrium and 15 lanthanides, which are used in the production of computers, turbines and cars." European and American investors are actively seeking opportunities to develop the industry outside China, and the republic's subsoil, rich in rare metals, can provide a highly valuable resource to industries such as technology and manufacturing. In addition to Western countries, India also stands to benefit from the extraction of Kazakhstan's rare earth elements and according to the Indian business press,the republic could already cover India's demand for REEs. The REE potential of Kazakhstan has been known since 2010 but was largely ignored by foreign investors in preference to developing their businesses in China. Extraction of REEs is an expensive and financially risky business. Exploration for deposits is similarly costly and markedly time consuming. However, the strategic importance of rare metals is growing. As claimed by Piedra in the Asian Times, everything may well change; "Western governments should identify alternative suppliers, including Kazakhstan, to reduce possible risks for investors and the likelihood of supply disruptions." The U.S. and the European Union (EU) are now poised to invest heavily in large-scale mining projects and are exploring alternative supply channels. Today, all consumption of yttrium and scandium in the United States depends on imports -- and the EU imports 98% of its rare metals from China. . Last September, New York hosted a presidential summit at which representatives from Kazakhstan, Kyrgyzstan, Turkmenistan, Uzbekistan and the U.S. discussed the exploration and production of critical rare metals. Mr. Piedra believes that Kazakhstan is ready to benefit from its reserves of REEs but mining would first need to be updated to meet current environmental requirements. Care would also be required when choosing potential investors. "Astana will be wary of diplomats, foreign consultants and miners with an outdated view of the world and unfounded geopolitical ambitions. Central Asian countries will discourage attempts to penetrate them 'through the back door.' Such tricks may have worked in the 90s, but not now," warned Piedra via Asia Times. Meanwhile, Kazakhstan's authorities continue to explore opportunities to utilize rare-earth deposits. Last November in Astana, Kasym-Jomart Tokayev and Emmanuel Macron discussed the extraction of strategically important minerals, and last month an alternative dialogue was held between the presidents of Kazakhstan and the...

Central Asia Kyrgyzstan Strategy

Kyrgyzstan Joins the International Maritime Organization (IMO) Despite Being a Landlocked Country

The Secretary General of the International Maritime Organization (IMO), Arsenio Dominguez announced its newest member state of Kyrgyzstan at a meeting on ship systems and equipment, according to the IMO's press service. Political scientists and economists in Kyrgyzstan note that, despite the fact that the country is landlocked, this is an important event for the economy in terms of access to world markets for export of domestic products. "If we join this organization, it means we start playing on the world market of transportation of people and goods by seas and oceans. Joining IMO opens the way for us to legally start our own merchant marine fleet," political scientist Denis Berdakov told the Times of Central Asia. An important point in Kyrgyzstan's IMO journey came in 2021, when Iranian authorities allocated Kyrgyzstan a place in the port of Bandar Abbas on the Persian Gulf, meaning that goods from Kyrgyzstan could be shipped to Europe by sea. "The main task now is access to the sea. We have already said that we have two priorities - investments and exports. And for exports, we need to first solve logistics issues. Now the volume of trade turnover with China is growing. In addition, if the China-Kyrgyzstan-Uzbekistan railroad starts functioning, we should become a hub for cargo transportation. To do this, we need to create conditions for logistics companies," Kyrgyz Economy Minister, Daniyar Amangeldiyev said earlier. For those same reasons, AD Ports Group from the UAE signed an agreement with the Kyrgyz Government two years ago on the allocation of 300,000 square meters in the free economic zone called KEZAD (Khalifa Economic Zone Abu Dhabi) near Khalifa Port, which is the main seaport of Abu Dhabi. The Kyrgyz Ministry of Economy said this will allow duty-free exports from these ports to third countries, and now it will do so using its own ships. Gulf countries now buy meat, honey, nuts and other products from Kyrgyzstan. Local businessmen have repeatedly said they are ready to increase exports, and, as noted by the Ministry of Economy & Commerce of Kyrgyzstan, the republic is ready to increase exports to the UAE and. To date, the Kyrgyz Republic trades mainly with Eurasian Economic Union (EAEU) countries, but the potential for geographic expansion is great, especially given the robust opportunities for the re-export of Chinese goods. Using a combination of transport modes and goods, the Kyrgyz authorities can revive the ancient Silk Road route from China to Europe. Against the backdrop of the beginning of construction of the China-Kyrgyzstan-Uzbekistan railroad, Bishkek is thinking about transit of its goods by rail to Turkmenistan's Caspian Sea ports and beyond those to the ports of Russia and Iran. Kyrgyzstan became the 176th country to join the IMO. The organization last accepted Botswana into its ranks in 2021. According to the IMO charter, membership in the maritime organization is open to all states subject to compliance with the provisions contained in the maritime convention.