● Political Developments
● Economic Developments
● India-Central Asia Relations
In St. Petersburg, sitting alongside President Vladimir Putin, Kazakh President Kassym-Jomart Tokayev pushed back against Moscow’s narrative of the Ukraine invasion, rejecting recognition for “quasi-states” like the Russia-backed, separatist-controlled regions of eastern Ukraine. He also vowed that Kazakhstan wouldn’t break international sanctions imposed against Russia over its actions in Ukraine. His remarks, made during an appearance with the Russian president at the St Petersburg International Economic Forum (SPIEF), amounted to a reaffirmation of Kazakhstan’s stance on Russia’s invasion of Ukraine, but some in the audience took it as a rather bold reassertion. The Kazakh president, meanwhile, also apparently refused to accept an order of merit of the Russian Federation named in honour of a saint of the Russian Orthodox Church, Alexander Nevsky. Accepting the order would have been a symbolic acceptance of a token of allegiance with Russia, though Tokayev has previously refused similar accolades from other countries. Tokayev’s perceived boldness was met with speculation from observers that the Kremlin was not going to like his “disobedience”, especially given how the Russia-led Collective Security Treaty Organisation (CSTO) in January showed support for Tokayev’s continued rule over Kazakhstan by deploying troops that helped quell the nationwide unrest that broke out in the country.
Another eyebrow-raiser of the SPIEF event was the Kazakh president’s choice to criticise Russian Duma deputies over past comments questioning the independence of Kazakhstan. He also stressed the importance of expanding trade and economic cooperation with other countries. Tokayev said that it was possible for traditionally friendly countries like China, India, and states in South and Southeast Asia to become major investors in the regional economies in the next decade. “China is already Kazakhstan’s principal economic and foreign trade partner. Over the last 15 years, this country has invested more than $22 billion into our economy.’’ But Tokayev’s clarification in public to his host Putin was a bold re-statement of its position, adopted as Kazakhstan tries to walk a diplomatic tightrope as its ally Russia wages war in Ukraine. His comments raised hackles in Russia, where MP Konstantin Zatulin responded with thinly veiled threats against Kazakhstan’s territorial integrity.
A Consultative Meeting of Heads of State of Central Asia was held in Cholpon-Ata, Kyrgyzstan on July 20-21. Presidents of the 5 countries participated. The meeting took place just weeks after several dozen people were killed in Tajikistan and Uzbekistan after security forces clamped down on anti-government protests in their respective autonomous regions, Gorno-Badakhshan and Karakalpakstan respectively. But Russia — the main strategic and trade partner in the region — has since been considerably weakened by the war in Ukraine and the crippling sanctions imposed by the West because of the conflict. The leaders exchanged views on strengthening the interaction of the states of Central Asia in a joint response to the challenges and threats to regional security. They discussed the prospects for expanding cooperation in order to ensure sustainable economic growth of the states of the region, and also of further strengthening the cultural and humanitarian interaction of the states of Central Asia. They signed documents aimed at strengthening friendship, good neighborliness and cooperation between the countries of the region.
Presidents of the 5 littoral states of the Caspian Sea— Kazakhstan, Iran, Turkmenistan, Azerbaijan and Russia — met in Ashgabat to discuss further development of the Caspian Sea. They also considered the current international situation and geopolitical processes worldwide. The fact that the summit was scheduled at all despite the raging conflict in Ukraine — and that Russian President Vladimir Putin took time out to attend it — testified to the high importance of the event. One of the key points of the Final Communiqué of the Summit was the reiteration of their position about the total exclusion of the armed forces of all extra-regional powers from the Caspian Sea (which primarily meets the geopolitical interests of Russia and Iran.) The leaders also focused on the Caspian transport communications and agreed that the region could become a hub for the East-West and North-South corridors.
Kazakhstan’s president visited Iran at the head of a high-ranking delegation to hold talks with his counterpart Ebrahim Raisi on issues of mutual interest. The two presidents signed a joint statement. Nine agreements were also signed on transit and transportation, scientific and cultural exchanges, agriculture and other fields. Speaking at a joint press conference Raisi claimed bilateral trade ties have increased in recent months, adding that the volume of transactions should reach $3 billion, which sounds far-fetched given the current figure of about $265 million. “We share a view that the presence of outsiders in the region would not create security or solve any problem in the region,” Raisi said, stressing that regional problems should be dealt with by the regional countries alone. Both sides are interested in using the transit capacity, and in this regard, the corridors that connect the east to the west and the north and the south are of special importance, he added. Stating that the two sides also had talks in the field of agriculture, which will lead to the improvement of relations between Kazakhstan and Iran, he said that the documents and agreements that were signed will help the progress of the two countries’ relations.
On July 14, Turkmen President Serdar Berdymukhamedov traveled to Uzbekistan for a state visit with the goal of discussing “mutually beneficial … cooperation on political, diplomatic, trade, economic, cultural and humanitarian issues.” This was Berdymukhamedov’s first visit to a Central Asian neighbor since taking over from his father in March, although he has already found time for trips to Iran, Russia and Saudi Arabia. Before the visit, on July 13, Uzbekistan’s Investment and Foreign Trade Ministry reported that investment and trade agreements worth $451 million had been sealed during an inaugural interregional forum held in Bukhara. No specifics were forthcoming. The two countries affirmed their intention to increase bilateral trade to $2 billion “in the near future.” The timely launch of two cross-border trading ports – Lebap-Bukhara and Dashoguz-Khorezm – are considered important to achieving this objective. However, Turkmen-Uzbek trade in the first quarter of 2022 fell by 17 percent as compared to the same period the year before. Bilateral trade for all of 2021 reached $882 million – a fact that makes the $2 billion objective decidedly ambitious. One area that might see more activity is trading in energy resources. Uzbek President Mirziyoyev said that Tashkent was interested in pursuing the import of electricity, natural gas and oil product supplies from Turkmenistan.
A meeting of foreign ministers of the Central Asian countries took place in Kyrgyzstan to discuss preparations including agenda of the meeting and drafts of final documents for the 4th Consultative Meeting of Heads of State of Central Asia in the country.
Citing the current situation in Ukraine, Kazakh Foreign Minister Mukhtar Tleuberdi appealed to all the countries that possess nuclear weapons to eliminate their lethal weapons by 2045. Tleuberdi said that the risk of Russia using nuclear weapons is too high and urged Kremlin to abandon the idea of using the deadly weapon against its neighbouring nation.
Commander of U.S. Central Command General Michael Kurilla met the President of Tajikistan Emomali Rahmon in Dushanbe, Tajikistan to discuss bilateral security cooperation between the two countries. He also met Minister of Defense and other senior defence officials and military commanders to discuss joint efforts to provide support for Tajik armed forces, strengthen borders, and address regional threats such as Afghanistan. The United States may let Tajikistan hold onto fleeing Afghan military aircraft donated by the U.S. after the withdrawal of American troops from Afghanistan last August. As Afghan forces fled the country during the Taliban takeover, many Afghan pilots flew dozens of military aircraft to neighboring Tajikistan. However, the Taliban demanded the aircraft be returned to Afghanistan. General Kurilla is reported to have stated that the United States is working with the Tajik government on how to best utilize the aircraft flown over by the Afghan Air Force, and their hopes are to give some or all to the Tajik government. General Kurilla reiterated that the aircraft will not be returned to Afghanistan, and the U.S. remains firm in its partnership with Tajikistan on the matter. “We admire Tajikistan’s leadership role in Central Asian security. Our enduring relationship with Tajikistan is historically strong,” General Kurilla stated during the meeting with Tajik leadership, reaffirming U.S. support for Tajikistan’s border security, counterterrorism, and counternarcotic operations.
Kazakhstan has been downgraded from Obstructed to Repressed by the CIVICUS Monitor. A “Repressed” rating is the second worst a country can receive and indicates that fundamental civic freedoms, including the freedoms of expression, association and assembly, are severely restricted. The CIVICUS Monitor is a research collaboration tool that rates and tracks respect for fundamental freedoms in 197 countries and territories. Kazakhstan has been downgraded to “Repressed” due to widespread violations of the freedoms of peaceful assembly, association and expression during the ‘Bloody January’ protests and in their aftermath. This downgrade comes ‘’on the heel of the rapid decline in civic space seen following the January events and is a culmination of a longer-term trend in which civic freedoms have deteriorated in Kazakhstan.’’
In recent weeks, Tajikistan’s government has cracked down hard on the restive region, which borders China and Afghanistan, and which tried to break away from Dushanbe in 1992. At least 17 people were killed and over 200 arrested during what the authorities call “an anti-terror operation”, with a communications blackout limiting information coming out of the region. Critics, however, argue that the real aim of the crackdown was to crush local leaders, who in the past have resisted President Emomali Rakhmon’s rule.
The first freight train carrying Kazakhstan’s sulphur cargo destined for Europe arrived in Iran at the Iran–Turkmenistan border. President Ebrahim Raisi, along with the visiting Kazakh President Tokayev launched the Kazakhstan–Turkmenistan–Iran (KTI) transit corridor, also called the Southern Caspian Sea Corridor to Europe via Turkey. Just a week before Tokayev’s visit to Tehran, President of Turkmenistan, Serdar Berdimuhamedow, also visited Tehran, signing bilateral agreements for advancing economic cooperation, especially in transit and transportation sectors as well as oil and natural gas. Amid the disruption in international trade and transport routes caused by the Russia–Ukraine war and Western sanctions on Russia, Iran has seen a sudden rise in its importance as a transit and transport hub connecting China and Central Asia to Europe, and also Russia with India along the International North–South Transport Corridor (INSTC). As Russia is focused on its war in Ukraine, Tehran fears the United States taking advantage of ‘security vacuum’ in Central Asia. It is, therefore, actively advocating collective regional efforts to deal with terrorism, as well as drug-trafficking threats from Afghanistan.
The trade turnover of non-primary goods of Kazakhstan in January – May this year reached $25.3 billion, which is 20.4 percent higher than in the same period of the previous year ($21.0 billion). The export of non-primary goods from Kazakhstan increased by 34.7 percent in five months, averaging $9.7 billion. In turn, the import increased by 12.9 percent, averaging $15.5 billion. The growth is driven by an increase in the import of such non-primary goods as automobile bodies, medicines packaged for retail sale, ferrous metal products, parts, accessories for cars and tractors, engines internal combustion with spark ignition, telephones, and air conditioning units. Kazakhstan’s main trading partners in non-primary goods are Russia (export – 17.9 percent, import – 37.2 percent), China (export – 19.9 percent, import – 23.5 percent), and Türkiye (export – 7.5 percent, import – 2.9 percent).
Moving shipping containers from China through Russia to the European Union had become an important component of Beijing’s Belt and Road Initiative (BRI), but Russia’s conflict with Ukraine and the subsequent Western sanctions have forced China to search for alternatives. Faced with the economic fallout of trade disruptions after five months of war, many freight forwarders that move Chinese goods are looking further south to move rail-cargo across Central Asia, the Caucasus, and Turkey to Europe, despite several logistical problems with the route. The main alternative is the roughly 6,500-kilometer network of roads, railroads, and ports stretching across Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, Turkey, and into Europe known as the Trans-Caspian International Transport Route (TITR). According to the TITR Association, cargo shipments across Central Asia and the Caucasus are expected to reach 3.2 million metric tons in 2022, a six-fold increase over the previous year. The route also received a boost in April when Maersk, one of the world’s largest shipping corporations, canceled new bookings through Russia and started a train service along the Middle Corridor, which was joined by the Finnish company Nurminen Logistics in May. Since then, multiple governments along the route — from Turkey to Romania to Azerbaijan to Georgia to Kazakhstan — have met to discuss further investment and deepening cooperation This included a state visit to Ankara in May by Kazakh President where he discussed the future of the route with his Turkish counterpart. Kazakhstan has announced plans to invest more into its ports along the Caspian Sea and its state-run railway operator Kazakhstan Temir Zholy reported that terminals along its western coast have already doubled their shipping volume. Chinese officials have also moved to simplify transport, with deputy minister of China’s General Administration of Customs saying that Beijing is improving its customs procedures at the Alashankou and Khorgos land ports on its border with Kazakhstan that would lead to increased volumes of goods being sent by rail. Concerns largely stem from higher costs and more complicated logistics on the southerly route.
Kazakh Ministry of Foreign Affairs and Kazakh Invest national investment company are conducting negotiations with 43 foreign companies that plan to relocate their businesses to Kazakhstan. Initially, Kazakhstan was interested in 265 companies. Since March it has been monitoring foreign companies that have publicly voiced their intent to leave the Russian market or close representative offices there. In the current geopolitical scenario unfolding around Russia, Kazakhstan, the largest economy in Central Asia, hopes to emerge as a new suitable location for companies that do not want to reduce their presence in the Eurasian region. On July 20, Kazakhstan hosted the opening of an assembly plant by Honeywell, the United States manufacturer of electronic systems and one of the foreign companies that decided to localize their production in Kazakhstan. Among other foreign companies planning to relocate to Kazakhstan are WEG, a Brazilian electrical equipment producer, TikTok social media platform, Australia’s Fortescue Metals Group and Carlsberg, a Danish brewing company. Kazakhstan says it is ready to adjust some aspects of the legislation that might be outdated for relocating companies.
Over 5 years, Uzbekistan’s trade with Central Asian countries increased 2.6 times, from $2.5 billion in 2016 to $6.3 billion in 2021. Uzbekistan’s exports to Central Asian countries increased 2 times — from $ 1.3 billion to $2.7 billion, and imports 3.2 times — from $ 1.2 billion. up to $3.7 billion. The volume of trade with Central Asian countries grew faster than the total volume of Uzbekistan’s foreign trade with the rest of the world, which increased by 1.7 times during the period under review, exports by 1.4 times, imports by 2 times. The share of Central Asian countries in the total volume of Uzbekistan’s foreign trade turnover increased from 10.2% to 15.1%, in exports — from 10.8% to 16%, and imports — from 9.6% to 14.5%. In addition, 2021 has become a record year in terms of trade with each of the Central Asian countries separately. Over 5 years, the volume of trade has multiplied with all Central Asian countries: with Kazakhstan — by 2 times, up to $ 3.9 billion, Kyrgyzstan — by 5.7 times, up to $ 952 million, Tajikistan — by 3 times, up to $ 605 million, Turkmenistan — by 4 times, up to $ 882 million.
India-Central Asia Relations
Raksha Mantri Rajnath Singh is likely to attend the SCO defence ministers meeting in Uzbekistan in late August. Defence ministers inter alia of Russia, China and Pakistan who are members of the SCO, are also invited.
External Affairs Minister Dr S Jaishankar attended the Shanghai Cooperation Organisation (SCO) foreign ministers’ meeting in Tashkent where he held bilateral talks with several of his counterparts. Speaking at the meeting he said that there is an urgent need to address the global energy and food crisis caused by disruptions from the COVID-19 pandemic and the Ukraine conflict. Chinese, Russian and Pakistani Foreign Ministers among others participated. Jaishankar also asserted that “zero tolerance” for terrorism in all its manifestations is imperative. He underlined the potential of the Chabahar port in Iran for the economic future of the grouping.
Speaking about the current global challenges, Jaishankar referred to the need for resilient and diversified supply chains as well as reformed multilateralism. He reiterated India’s position on Afghanistan and highlighted its humanitarian support to the war-torn country, including the supply of wheat, medicines, vaccines and clothing.
It was decided to grant permanent membership of the bloc to Iran and make Egypt, Qatar and Saudi Arabia its dialogue partners. The ministers also supported the applications of Bahrain and Maldives for the status of SCO dialogue partners.
The external affairs minister held bilateral meetings with his counterparts from Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan and also with the secretary general of the SCO.
After his meeting with the SCO Secretary General, Jaishankar said that India will continue to bring more ideas and initiatives to strengthen cooperation amongst SCO countries and that India’s Presidency next year will give a renewed thrust to these efforts.
The Shanghai Cooperation Organization (SCO) is set for its second expansion with Iran to be added as its newest member at the upcoming summit in Samarkand on 13-14 September under the Uzbekistan Presidency. Samarkand summit is expected to have agreements on connectivity and high-efficiency transport corridors and a roadmap for local currency settlement among member states. India will take over the SCO presidency from Uzbekistan after the Summit. It is expected that with Iran’s accession to the SCO, India’s push for connectivity in the Eurasian region through INSTC (International North South Transport Corridor) and Chabahar port will get a boost. India’s recent decision to conduct international trade in national currencies will also complement and contribute to increasing trade with the Eurasian region. Varanasi has been selected as the SCO’s first “Tourism and Cultural Capital”, a rotating title it will hold till next year coinciding with India’s Presidency. Under this plan, each year, a city of cultural tradition of a member country that will assume the rotating Presidency of the organization will receive the designation to emphasize its importance.
During his visit to India, Uzbekistan’s deputy PM Khodjaev met commerce minister Piyush Goyal for the Intergovernmental Commission, with a focus on agriculture, textiles, and leather, among others. Khodjaev also met the Union agriculture minister Narendra Tomar. The two countries aim to increase their bilateral trade by over two times to over $1 billion. However, connectivity has been an issue, which they hope to resolve via the Iranian port.
Minister Piyush Goyal said that good relations with Uzbekistan are key to India’s vision of an integrated extended neighbourhood. Minister Goyal said that India is keen to have a vibrant people-to-people relationship with Uzbekistan. He stated that the two countries need to take the relations forward in newer areas like technology, digital payment solutions and investment in start-ups. The minister emphasised on the need to identify new drivers for ambitious growth in bilateral trade. He stressed the need for an integrated approach for regional connectivity and cooperation. Goyal underlined seven emerging areas of cooperation between the two nations namely Digital Payments, Space Cooperation, Agriculture and Dairy, Pharma, Gems and Jewellery, MSME and Inter-regional cooperation. He said that despite the COVID pandemic, interactions and trade had increased in the last few years. Bilateral trade between India and Uzbekistan rose from USD 247 million in 2019-20 to USD 342 million in 2021-22, a growth of 38.5 per cent.
India and Uzbekistan have agreed to do a pilot container cargo shipment from Tashkent to India, using a hybrid land-sea route via Iran’s Chabahar Port. Indian minister Sarbananda Sonowal met Uzbekistan’s visiting Deputy Prime Minister and minister of investment & foreign trade, Jamshid Khodjaev to finalise the agreement. Both the countries agreed that this new vista may unlock future possibilities of a Trans Caspian Multi Modal Transit Corridor between Central Asia and South Asia regions. Ever since Russia’s invasion of Ukraine, talks of augmenting trade via the International North South Transport Corridor (INSTC) have gained momentum. The route, which hinges on Iran’s Chabahar Port as a key pillar, is India’s bid for faster and smoother trade with Russia, Europe and Central Asian economies.
India and Uzbekistan are also exploring trade opportunities in traditional medicine. The ministry of AYUSH will send a team of professionals to Uzbekistan to support creating a roadmap to rejuvenate & develop their traditional medicinal practices.
India participated in a two-day conference hosted by Uzbekistan in Tashkent to discuss the situation in Afghanistan. Attended by about 20 nations, India was represented by joint secretary in the Ministry of Exterior Affairs, responsible for Pakistan, Afghanistan and Iran, J P Singh. Objective of the conference was to promote stability, safety and post-conflict reconstruction in Afghanistan.
On July 13, Iran reported that a Russian cargo goods train undertook a maiden trip from Russia to India the previous day. 39 containers of construction material were transported to Mumbai’s Nhava Sheva port. A slightly alternative north-south route involving Turkmenistan that is also under development would see goods shipped across the Caspian to a state-of-the-art port in Turkmenbashi, then loaded onto trains rolling toward Chabahar.
The government of Kazakhstan introduced visa-free entry regimes for citizens of China, India, and Iran on 7 July 2022. Citizens of these countries will be permitted to enter Kazakhstan without a visa for a maximum period of 14 days for limited activities.