Category Archives: Central Asia & South Caucasus News

Tuleshov paid money to protesters, says Kazakh security committee

JULY 11 2016 (The Conway Bulletin) — Kazakhstan’s National Security Committee said that imprisoned businessman Tokhtar Tuleshov paid around $200 to each of the demonstrators that rallied in several Kazakh cities against proposed amendments to the land code in April and May. The Committee said that Tuleshov, in prison since Jan. 30, had organised the protests in 2015, in an effort to overturn the government.

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(News report from Issue No. 289, published on July 15 2016)

World Bank denies Uzbek forced-labour accusations

JULY 8 2016 (The Conway Bulletin) — The World Bank denied allegations that it was fuelling forced labour in Uzbekistan after local human rights campaigners complained about the indirect consequences of a loan from the World Bank’s financial arm to an Uzbek-Indonesian textile joint venture.

The complaint targets a $40m loan approved in December 2015 by the International Finance Corporation (IFC) to Indorama Kokand Textile (IKT), the Uzbek subsidiary of Indorama TBK, a Jakarta-based textile company.

The IFC said that it gave the loan to IKT because it has verified the company’s labour practices.

“[IKT] can trace its cotton supply to ensure it sources only from areas covered by third-party monitoring against child and forced labor,” IFC spokeswoman Elizabeth Price told Reuters.

IKT also refuted the allegations.

“Indorama Corporation has a strict policy of zero tolerance on use of any form of forced labor,” IKT spokesman Prakash Kejriwal said.

The claimants are three local human rights campaigners and one Uzbek alleged victim of forced labour. They said that this loan would reinforce the system of forced labour in the country.

“The IFC loan to IKT and support to commercial banks in Uzbekistan risks perpetuating the forced labor system,” the claimants said in their statement filed with the IFC.

The loan was issued to finance the expansion of the company’s textile plant in Kokand, east Uzbekistan.

The claim highlights the reputational problems of doing business in Uzbekistan for foreign countries. It will likely direct international attention to the issue of forced labour in the country’s cotton picking industry. Uzpahtasanoateksport, the state owned company responsible for the collection and the sale of cotton, is IKT’s sole supplier.

Since 2009, the United States has banned imports of Uzbek cotton and in 2013 it blocked a shipment of IKT cotton at the port of Los Angeles.

Indorama TBK owns 89.26% of IKT, while Uzbekistan’s Central Bank owns the rest.

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(News report from Issue No. 289, published on July 15 2016)

Briefing: Tajikistan’s Rogun dam project

JULY 15 2016 (The Conway Bulletin) — >>Right. Let’s get started. The Rogun Dam. What is it and what is it all about?

>>For Tajikistan and President Rakhmon, the Rogun dam project is vitally important. If it is ever built, and the plans have been knocking around since the Soviet era, the Rogun dam will be the tallest dam in the world at up to 335 m. It will also double Tajikistan’s power generation capacity. The problem is that the dam has proved highly controversial, domestically and internationally, and is also expensive to build.

>>Hang on. Slow down. This is a lot take on. So, Rogun is massive but why is it controversial?

>>It’s controversial because human rights group have accused the government of forcibly moving thousands of people away from the Vakhsh River valley, the area that will be dammed and flooded. The government has also imposed a Rogun dam tax on people to pay for the project. This has gone down badly with human rights groups. Externally, Uzbekistan, Tajikistan’s neighbour, hates the idea of the Rogun dam. It worries that the dam will divert water from irrigating its cotton fields.

>>How serious are Uzbekistan’s concerns?

>>Central Asia is a fragile region. If Uzbekistan is making threatening noises
towards Tajikistan, people need to take notice. Analysts and diplomats have spoken of water wars in Central Asia. I’m not saying that the Rogun dam is going to trigger a war but it is another pressure point that people need to watch.

>>Got it. So with all these obstacles and problems why is Tajikistan pushing for problems?

>>It’s become Rakhmon’s pet project. He probably has another five or ten years left in office and it really feels like he wants and needs the Rogun dam to be his legacy. It’s also become vitally important for Tajikistan’s electricity generation sector. Electricity is becoming an important export commodity for Tajikistan as it has signed up to be the main power generator for the so-called CASA-1000 project.

>>CASA-1000? What is that?

>>It’s the World Bank-backed project to build a power transmission network from Tajikistan to Pakistan. It will cost around $1.2b, cross Afghanistan and be operational, if it all goes to plan, by 2019. The challenge is both security and power generation.CurrentlyTajikistan, and to a lesser extent Kyrgyzstan, doesn’t have the capacity to generate enough power to meet its CASA- 1000 commitments. That’s where Rogun comes in.

>>And the financing? This seems to be an expensive project just when the region is trying to deal with a financial crisis. Where is the finance coming from?

>>Good question. We’re not entirely clear. We’ve only been told that it is a mix of government funds and private investment. Who the private investors are and what their motives are is unknown.

>>I see. So what next?

>>Well, the Tajik government awarded a $3.9b contract to Italian builder Salini Impregilo to start construction work on the dam. We’re still waiting for work to begin but Salini Impregilo has said it will kick off soon. This has been a stop-start project so actually seeing the diggers go in and the workers start to build the dam is important. If this does happen, it’ll dominate news headlines for years to come.

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(News report from Issue No. 289, published on July 15 2016)

Norway closes its embassy in Kazakhstan to save money

ALMATY, JULY 13 2016 (The Conway Bulletin) — Looking to cut costs Norway closed its embassy in Astana, a blow to Kazakhstan’s self-image as an important international diplomatic player.

Norway’s embassy in Astana had been its only diplomatic mission in Central Asia since it opened in 2009. Now, a single Norwegian diplomat in Oslo will be responsible for Central Asian affairs.

Last December, Astana was listed among four other embassies for closure. These were Sofia (Bulgaria), Lusaka (Zambia) and Harare (Zimbabwe).

Norway’s foreign ministry said cutting the four embassies would reduce its diplomatic presence in the world to 83 countries.

“The ministry must adapt to the changes that are taking place in the world, taking into account the resources available to run missions abroad,” the ministry said in a note.

Norway’s income is reliant on revenue from oil and gas sales. Energy prices have halved in the last two years.

A Kazakh foreign ministry spokesman declined to comment.

With Norway’s departure there will now be 64 embassies in Astana. Norway’s exit is also a blow to Kazakhstan’s international image in the run-up to EXPO-2017 in Astana.

Just weeks ago, Kazakhstan secured a much-coveted non-permanent seat at the UN Security Council for 2017-18 and it proudly hosted a summit of the OSCE in 2010. Indra Over- land, research professor at the Norwegian Institute of International Affairs told The Conway Bulletin that a mix of international crises and lack of interest has driven Norway away from Kazakhstan.

“The general Norwegian engagement in Central Asia has gone down, because of factors such as the European refugee crisis and the Ukraine crisis,” Mr Overland said.

“The lack of interesting projects available for the Norwegian oil company Statoil in Kazakhstan and Turkmenistan also contributed [to the waning engagement].”

In 2013, Norway’s Statoil aban- doned the Abai offshore oil project after a lengthy negotiation with Kazakhstan’s state-owned Kazmunaigas.

Now the only city with a Norwegian embassy in the Central Asia/South Caucasus region is Baku. Statoil, the part-state owned Norwegian energy company, still operates projects in Azerbaijan.

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(News report from Issue No. 289, published on July 15 2016)

Kazakhstan’s C. Bank bets against sterling

JULY 8 2016 (The Conway Bulletin) — Kazakhstan’s Central Bank chief Daniyar Akishev said he bet against the sterling ahead of Britain’s referendum to leave the EU, commonly known as Brexit. As he expected market volatility in the aftermath of the vote, Mr Akishev said the Central Bank opened a long position to sell off part of its sterling holdings, effectively gaining from the post-Brexit plunge of the British currency against the US dollar.

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(News report from Issue No. 289, published on July 15 2016)

Armenia and Iran agree to 90-day visa-free regime

JULY 10 2016 (The Conway Bulletin) — Iran’s government said it had abolished a visa regime with Armenia, giving a potential boost to relations and trade between the two neighbours.

Armenia and Iran had said they wanted to scrap visa requirements in June, when their foreign ministers met in Tehran. At a cabinet meeting headed by President Hassan Rouhani, the Iranian government finally adopted the new visa-free regime.

Now, Iranians and Armenians will be able to travel visa-free between the two countries for stays of up to 90 days. This is particularly important for Armenia which is short of friends in the region. It has virtually no diplomatic and limited trade relations with two of its four neighbours — Azerbaijan and Turkey.

And Iran has said there is more room for cooperation with Armenia. After the lifting of international sanctions in January 2016, Iran said it wanted more integration with countries in the South Caucasus.

This week, Gazprom Armenia said that gas supplies via a pipeline across Georgia will stop for one month for scheduled repairs, a decision that will put Armenia’s power generation sector under stress.

Iranian officials immediately responded saying they were ready to pump more gas to Armenia to make up for the drop.

Iran sends gas to Armenia via a 140km pipeline completed in 2007.

For years, Iran and Armenia have said they want to increase the volumes of electricity and gas they exchange at the border and last month Armenian state-owned power distributor Electro Power Systems Operator said it will export around 1b kWh of electricity to Iran in 2016 from the Hradzan and Yerevan thermal power plants.

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(News report from Issue No. 289, published on July 15 2016)

Georgia-Russia road link closure hurts Tbilisi tourism

TBILISI, JULY 23 2016 (The Conway Bulletin) — The closure of a road that threads through the Caucasus mountains and connects Georgia to Russia for three weeks because of a landslide has hit tourism in Tbilisi, highlighting the importance of the neighbours’ only direct overland link.

Russian tourism in Georgia has increased steadily over the past eight years since a Georgia-Russia war over the breakaway region of South Ossetia. Many Russians drive to Georgia along the only road directly linking the two countries at the Kazbegi border.

The other two roads linking Georgia and Russia run through South Ossetia and Abkhazia, another breakaway region in Georgia. Both routes are closed off to Georgia.

Giorgi Bregadze, head of the research department at the Georgian National Tourism Administration, told the Bulletin that there had been a fall in the number of Russians crossing into Georgia through the Kazbegi border this year.

“Many Russians have changed their holiday plans because the road was closed,” he told the Bulletin.

And the impact in Tbilisi has been felt immediately.

Bariiat from Dagestan in Russia’s North Caucasus, said that scores of reservations at her guesthouse had been cancelled.

“Our neighbours are all complaining that Russian tourists are not arriving as usual”, she said.

For Russians looking to drive to Georgia for their annual summer holiday the only route is on a long detour via Azerbaijan.

After a two-week vacation in Georgia with his wife, Pasha had to drive back to Lermontov in the Stavropol region of southern Russia.

“Our return journey to Russia through Baku will be 1,000km longer than our outward journey,” he said.

The closure of the Upper Lars checkpoint has not only hit Georgia. Armenia has also complained that goods from Russia have been unable to get through because of the landslide.

Emergency workers have said that they expect the landslide to be cleared next week and the road re-opened.

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(News report from Issue No. 289, published on July 15 2016)

Poroshenko visits Azerbaijan’s capital

JULY 14 2016 (The Conway Bulletin) – Ukrainian President Petro Poroshenko flew to Baku to meet his Azerbaijani counterpart Ilham Aliyev and sign several cooperation agreements. This is Mr Poroshenko’s first visit to Azerbaijan since taking office in 2014. In the few past months, Ukraine and Azerbaijan have proposed to boost oil trade across the Black Sea.

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(News report from Issue No. 289, published on July 15 2016)

Coriant signs deal with Turkmenistan

JULY 12 2016 (The Conway Bulletin) — US and Germany-based telecoms network provider Coriant said it signed a deal with Turkmenistan’s ministry of communications to provide a new national backbone network for the country. The new network will connect all Turkmen cities and neighbouring countries. In the past, Coriant has also worked in Kazakhstan in partnership with Kazakhtelecom.

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(News report from Issue No. 289, published on July 15 2016)

Power production falls in Azerbaijan

JULY 8 2016 (The Conway Bulletin) — Electricity generation fell by 6% in H1 2016, compared to the same period last year Azerlight, the country’s main producer, said in a statement. The company did not justify the cut in production, which stood at 10.8b kWh. Should this trend continue, it could erode Azerbaijan’s electricity surplus. According to official statistics, consumption, on the other hand, continued to grow exponentially since 2010 at annual rates of 5-9%.

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(News report from Issue No. 289, published on July 15 2016)