Central Asia Digest | January 2022

HIGHLIGHTS

● Political Developments
● Economic Developments
● India-Central Asia Relations

Political Developments

During the visit of Uzbek President to South Korea, the two countries signed a joint statement on deepening the special strategic partnership, and some agreements related to health care, development, and foreign affairs cooperation for the 2022-2024 period, as well as memoranda related to developing dialogue on energy, smart city and smart farm developments, ICT, electric vehicles, and diversification of rare earth supply chains. This was Uzbek President’s second state visit to South Korea, the first having taken place in November 2017. South Korean President visited Uzbekistan in April 2019 when the two countries elevated their ties from a strategic partnership to a special strategic partnership. The two countries have made progress on a free trade agreement, with hopes to sign it in 2022. South Korea also expressed support for Uzbekistan’s pursuit of World Trade Organization membership. Uzbekistan started negotiations to join the WTO in 1995. In 2020, Uzbekistan resumed its pursuit of WTO membership, though in tandem with the Russia-led Eurasian Economic Union (EAEU). Perhaps the most lucrative aspect of the visit related to rare earth metals. The Korea-Uzbekistan research center on rare metals was established in April 2019. The two countries agreed to link Uzbekistan’s natural resources such as copper, tungsten and molybdenum with Korea’s advanced processing technologies, in order to jointly develop technologies for producing materials for advanced industries. This follows South Korea’s ongoing efforts to diversify sources of critical materials for its technology sector, evidenced by similar commitments of cooperation made with Kazakhstan earlier in 2021. The diversification would also benefit Uzbekistan.

A Kazakh delegation led by Trade and Integration Minister visited Kabul to discuss trade, transit routes, and other economic cooperation as well as political ties with the Taliban-led government. Taliban’s acting minister of industry and commerce said that efforts were under way to establish a bilateral chamber of commerce between the two countries. The two sides discussed resumption of direct flights. Kazakhstan delegation said that it was interested in expanding trade through Afghanistan to South Asia. The Kazakh delegation brought 500 kilos of medical supplies for humanitarian assistance to Afghanistan. Kazakh government officials have visited Kabul several times since Taliban took control in August, 2021. On one of these visits, Kazakhstan delivered 5,000 tons of flour and other humanitarian aid to Afghan people and offered to provide its domestically-developed QazVac vaccine against COVID-19. Kazakhstan, Turkmenistan and Uzbekistan have been in talks with the Taliban about future projects connecting Central Asia to South Asia through Afghanistan. None of the Central Asian states, however, have signaled their readiness to officially recognize the Taliban government. Trade between Afghanistan and Kazakhstan has dropped by 27%. Kazakhstan has been a traditional supplier of grain and flour to Afghanistan, with over half of all flour exports and more than 10% of grain exports marked exclusively for the Afghan market. According to the Kazakh minister, potential of exports to Afghanistan consists of 45 commodities worth US$360 million. Kazakh Minister also met with the Taliban’s acting deputy prime minister and the acting foreign minister.

Greater freedom to practice Islam, seek religious knowledge, and explore Muslim identity in Uzbekistan over the past five years has brought its own challenges. Among the foremost of those are greater numbers willing to leave Uzbekistan and join the ranks of foreign fighters and terrorists in Syria. Uzbek government was compelled to issue a statement asking the population not to listen to religious propaganda from popular ideological leaders who spread terrorist and extremism ideas among youth. The large number of arrests in recent months demonstrates a rise of suspected terrorists and sympathizers. Social media continues to be the medium for recruiting individuals, distributing materials, and maintaining contacts among groups.

US Assistant Secretary of State for South and Central Asian Affairs Donald Lu travelled to Uzbekistan and Kazakhstan on December 11-16. While in the region, the delegation participated in U.S.-Uzbekistan Strategic Partnership Dialogue and U.S.-Kazakhstan Enhanced Strategic Partnership Dialogue. These discussions, along with bilateral meetings with senior government officials were designed to expand cooperation on bilateral and regional issues including regional security, human rights, and trade. The delegation also engaged with members of civil society. As part of that engagement, they met with representatives of Jewish community to demonstrate solidarity in the face of rising global antisemitism and to discuss ways to counter it.

17th meeting of the Astana Peace process that aims to find a solution to the decade-long crisis in Syria took place in Nur-Sultan. Iraq, Jordan, and Lebanon also took part in the talks with the status of “observers.” UN Deputy Special Envoy for Syria also attended. The talks addressed several issues such as current situation in Syria, delivery of humanitarian aid, resumption of work of Syrian Constitutional Committee in Geneva, exchange of prisoners, release of hostages, as well as search for missing persons. Despite several countries attending the talks, the West was noticeably absent. The Astana talks on Syria were initiated in 2017 with Turkey, Russia, and Iran as guarantors to bring a solution to the Syrian crisis. The UN estimates that at least 350,000 people have been killed in the Syrian conflict.

Iran is keen to strengthen its relations with Turkmenistan. Iranian President called his Turkmen counterpart to discuss ways to further promote economic and trade ties. Given that Turkmenistan and Iran were until recently at loggerheads over Tehran’s unpaid gas bills, this high-level communication is noteworthy. The foreign ministers of the two countries got on a follow-up phone call soon after. Iranian Foreign Minister expressed the hope that the Turkmen President will visit Iran in 2022.

Kazakhstan’s parliament has passed a bill that would abolish the death penalty, a measure that, if signed by the country’s president, would mark a significant policy change for Central Asia’s largest country. This will result in the harmonization of national legislation with its international legal obligations.

At an international scientific conference titled “Leadership. Stability. Progress” held in Nur Sultan on the occasion of the 30th anniversary of Kazakhstan’s independence, leading foreign politicians praised the initiatives of Kazakhstan’s First President Nursultan Nazarbayev aimed at international cooperation and his decision to abandon the nuclear arsenal. Gerhard Schroder, ex-Federal Chancellor of Germany, said that “in politics, it is important to have a relationship of trust, and even more important to have a close cooperation between civil societies,” referring to the good economic relationship between Germany and Kazakhstan and his personal close connection to Nazarbayev since 2001. “If the heads of the states know each other well, it will be easier to bridge the gap between them,” he added. Ján Kubiš from Slovakia, ex-OSCE (Organisation for Security and Co-operation in Europe) Secretary-General and Special Envoy of the UN Secretary-General on Libya, shared his impressions on Kazakhstan steadily pursuing the course of multipolar diplomacy and international engagement for the benefit of its people. “I remember that 30 years ago many analysts expressed doubts about the very existence of Kazakhstan as a stable and united country. They were proven wrong. Thanks to the vision and persistent commitment of President Nursultan Nazarbayev, who accepted the challenge of reforming the economic, social, and political systems of the country for building a modern, stable, and prosperous Kazakhstan today, centered on the needs of its people,” said Kubiš. Among the many political initiatives of Nazarbayev, Kubiš highlighted the first president’s decision to close the Semipalatinsk nuclear polygon, chairpersonship at the OSCE in 2010, non-permanent membership in the United Nations Security Council in 2017-2018, as well as humanitarian assistance to Afghanistan which included receiving Afghan students. According to Kubiš, Kazakhstan continues to actively engage with the international community in efforts to overcome the new, rising challenges facing the world such as the spread of international terrorism and extremism, climate change, the Aral Sea problem, and COVID-19.

Kyrgyzstan held six elections and referenda in a little more than a year: a parliamentary election in October 2020, a presidential election and a constitutional referendum in January 2021, local council elections and one more constitutional referendum in April 2021, and local council elections in July 2021.

Economic Developments

Over the 30 years of its independence, Kazakhstan has attracted more than US$380 billion in foreign investment, which makes it the largest per capita recipient among the CIS countries. The ongoing repercussions of COVID-19 pandemic resulted in a dramatic global slowdown in transboundary investment flows – a decrease of 35% worldwide in 2020 – but Kazakhstan has since bounced back, thanks to a stimulus package of US$4.1 billion in 2020. In the first half of 2021, foreign direct investment in the country amounted to US$11.1 billion, a 30% increase over the same period in 2020.
 
Kazakhstan’s economic growth reached 3.8% in 11 months of 2021 raising hopes that the country’s economy will rebound soon to pre-pandemic levels. Growth in real sector was 2.9% and service sector grew by 3.9%. Foreign trade turnover was $82.2 billion, including exports of $49.1 billion while imports made up $33.1 billion, reaching a positive trade balance of $16 billion.

The Pakistan President in his meeting with the visiting Turkmen Foreign Minister emphasized the need for early completion of the TAPI gas pipeline project. He said that Pakistan is committed to early completion of the TAPI pipeline project.
 
The Taliban government in Afghanistan has been in financial trouble since last few months. It accidentally transferred US$8,00,000 into the bank account of the Afghan embassy in Tajikistan. After realizing its mistake, it asked the embassy to return it. However, the authorities in Tajikistan, who are staunch critics of the Taliban, rejected any possibility of returning the money.

Kyrgyzstan justified its seizure in May 2021 of the Kumtor Gold mine, which accounted for 12.5% of GDP in 2020, by citing Canadian company Centerra Gold’s alleged violations of environmental laws and safety norms. Kyrgyzstan is now pushing for an out-of-court settlement of this dispute. Centerra in May kicked off arbitration against the Kyrgyz government. A Kyrgyz court imposed US$3.1 billion fine on Kumtor Gold Company (KGC), which operates the 550,000-ounce gold mine, after ruling that the firm had violated environmental laws by placing waste rock on glaciers. Centerra froze the government’s stake when it seized the mine, meaning it does not have voting rights, nor is it entitled to dividends. The latest stand-off between the two sides began shortly after Sadyr Japarov came to power in Bishkek following violent riots in October, 2020.
 
Iran announced the launch of a second power transmission line from Turkmenistan, which will increase electricity imports and reduce fuel consumption in Iran in winter by one million liters per day. Agreement has been reached to increase the supply of Turkmen electricity to Iran. In January-November 2021, electricity production in Turkmenistan increased by 12% and its exports increased by 36%.

Iran’s ambassador to Turkmenistan said that Iran’s exports to the latter increased six-fold in terms of tonnage and value in the last two years. He added that since the beginning of the year, no products had been returned from Turkmenistan to Iran, and return of a recent shipment was because the product had become stale. This had nothing to do with toxins. He said that no goods leave the country without quality control and quarantine. Earlier, some media outlets said several countries including Turkmenistan had returned Iranian products because they contained high levels of pesticide residues.
 
Plans for a pipeline to bring natural gas from Turkmenistan across the bottom of the Caspian Sea and on to Europe have been on the drawing board for a quarter of a century. The project never progressed to the construction stage due to factors such as the earlier bad relations between Turkmenistan and the country where the proposed pipeline would exit the Caspian Sea, Azerbaijan, the undefined legal status of the Caspian, and fellow Caspian littoral states Russia and Iran raising concerns about possible environmental damage. The first two issues have now been cleared up. In the meantime, the price of natural gas in Europe has been regularly topping $1,000 per 1,000 cubic meters in recent weeks, and there are concerns in European Union countries that Russia, which supplied about 43% of the EU’s gas imports in 2020, is gaining undesirable leverage in dealings with Brussels due to EU dependence on Russian gas. That has some in Europe taking a fresh look at old projects for the diversification of gas imports.

Turkmenistan has been recognised as country with the slowest internet in the world, with users needing almost a full day to download a movie. Turkmenistan, with a speed of 0.50 megabits per second (Mbps), was the slowest of all 224 countries surveyed, with it taking just over 22 hours and 34 minutes to download a movie file with a size of five gigabytes. That puts the isolated Central Asian country behind even war-torn nations such as Yemen, South Sudan, Somalia, and Afghanistan, the report showed.

India-Central Asia Relations

The Third India-Central Asia Dialogue (India-CAD) was held in New Delhi on 18th-20th December, 2021. Foreign Ministers of the five Central Asian states viz Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan visited India at the invitation of their Indian counterpart External Affairs Minister (EAM) Dr S Jaishankar to participate in this Dialogue.

Connectivity, Afghanistan, Covid-19 and trade dominated the discussions at the Dialogue. In addition to strengthening bilateral cooperation and promoting regional security, the Central Asian countries would like to balance the growing dominance of China in the region. EAM said the leaders got together to discuss “a truly inclusive and representative government (in Afghanistan), the fight against terrorism and drug trafficking, ensuring unhindered humanitarian assistance, and preserving the rights of women, children, and the minorities”.

In his Opening Statement, EAM exhorted the Ministers to take the already robust ties to the next level by focussing on the 4 Cs: Commerce, Capacity Enhancement, Connectivity and Contacts. The 29-para long comprehensive and detailed Joint Statement issued at the end of the deliberations seeks exactly to achieve this.

On the bilateral front, the Ministers ‘’welcomed the signing of MoUs for implementation of High Impact Community Development Projects (HICDPs) for socio-economic development in Central Asian countries, based on grant assistance by India.’’ At the last Dialogue held virtually in October, 2020, India had offered a Line of Credit of US$1 billion for infrastructure development projects in Central Asian countries. The Ministers mandated their senior officials to hasten progress in this regard. Rapid and timely implementation of these projects would determine the success of the India-CAD initiative as it will instill confidence in the Central Asian States about India’s determination to reinvigorate the partnership.

While focussing on the optimum use of the INSTC as well as the Ashgabat Agreement to enhance connectivity, the Ministers stressed that ‘’connectivity initiatives should be based on the principles of transparency, broad participation, local priorities, financial sustainability and respect for sovereignty and territorial integrity of all countries.’’ This is an indirect but pointed reference to the deficiencies of projects undertaken by China under the BRI particularly with regard to issues of debt trap, non-transparency, unsustainability etc. Ministers also welcomed the proposal made by India last year to include Chabahar Port within the framework of INSTC.
 
The Ministers expressed their commitment to achieve the full potential of trade, especially in sectors like pharmaceuticals, information technology, agriculture, energy, textiles, gems & jewelry etc. They also focused on establishing direct linkages between the States of India and Regions of Central Asian countries, including through establishment of twinning/partnership relations between them. The Ministers encouraged the India-Central Asia Business Council (ICABC), established early last year, ‘’to promote business linkages and incentivize mutual investments.’’

Several areas like health-care, including medical tourism; pilgrimage, historical and cultural tourism; encouraging investment in tourism infrastructure etc. were identified for focused attention.
 
The Ministers agreed to collaborate in the area of defence and security and hold regular consultations among the National Security Councils of their countries to fight against terrorism and other emerging challenges in the region.

On Afghanistan, the Ministers inter alia emphasized the respect for sovereignty, unity and territorial integrity and non-interference in its internal affairs. This was a veiled dig at Pakistan. Ministers also decided to continue to provide immediate humanitarian assistance to the Afghan people. They ‘’reaffirmed the importance of UNSC Resolution 2593 (2021) which unequivocally demands that Afghan territory not be used for sheltering, training, planning or financing terrorist acts and called for concerted action against all terrorist groups.’’ They noted the broad ‘regional consensus’ on formation of a truly representative and inclusive government, combating terrorism and drug trafficking….and preserving the rights of women, children and other national ethnic groups. India should redouble its efforts towards Central Asia if it is to counter the ‘Great Game’ rivalries playing out in the region and reclaim its shared history with countries that are an important market, a source for energy, and also a bulwark against the threats of extremism and radicalization.

The Ministers reiterated their support for a permanent seat for India in an expanded UN Security Council. India invited the Central Asian countries to join the International Solar Alliance and the Coalition for Disaster Resilient Infrastructure.

The Joint Statement contains strong words condemning ‘’terrorism in all its forms and manifestations.’’ It contains the standard Indian language against ‘’providing safe haven, using terrorist proxies for cross-border terrorism, terror financing, arms and drugs trafficking’’ etc. and that ‘’ perpetrators, organizers, financiers and sponsors of terrorist acts must be held accountable and brought to justice.’’

Prime Minister Modi’s visit to the five countries in July, 2015 just after a year of forming a government in New Delhi had invigorated India’s bilateral ties with the individual countries as well as the region. The Third-CAD has imparted greater confidence and dynamism to these relations. 

The Foreign Ministers along with EAM and NSA Ajit Doval also called on Prime Minister Narendra Modi. PM underscored the potential of enhancing economic cooperation between India and Central Asia, and the role of connectivity in that regard. PM emphasised the importance that India attaches to its long-standing relations with Central Asian countries, which are part of its ‘extended neighbourhood’. He underlined the importance of maintaining cultural and people-to-people contacts between India and Central Asia given the popularity of Indian films, music and yoga in the region. The foreign ministers briefed the PM on deliberations at the India-CAD that focused on trade and connectivity, development partnership and regional developments, including the situation in Afghanistan.
The recent developments in Afghanistan have reinforced the importance of Central Asian countries with three of them — Tajikistan, Turkmenistan and Uzbekistan — sharing borders with Afghanistan. India has common interests with Central Asian states as both are concerned about the threats of terrorism, extremism, and drug trafficking. India seeks an increased alignment in the region to dilute and deter any consequences which are unexpected or undesired. Central Asian Republics fear the impact of the export of radical Islam, terrorism and drugs into their own territories. India shares these anxieties with Central Asia.

The impact of the Taliban takeover of Afghanistan on regional security, post-pandemic recovery and steps to boost regional connectivity and trade were in focus at the 3rd India-CAD. EAM called for diversified supply chains and regional solutions to overcome the impact of the Covid-19 pandemic and bolster economic recovery. EAM called for a collective response to the challenges facing the region, and highlighted the inadequacy of existing multilateral structures to meet new and emerging threats. He assured the Central Asian leaders that India will be their steadfast partner. He highlighted the staunch resolve of India in fighting the pandemic and recalled New Delhi’s support to 90 countries including Tajikistan and Uzbekistan by supplying vaccines. He appreciated the global support extended to India during the second wave of the pandemic when Kazakhstan and Uzbekistan also pitched in to give India much needed medical aid.

India is in discussion with the five Central Asian States to invite their Presidents jointly as Chief Guests to the Republic Day celebrations in 2022 to mark 30 years of establishment of diplomatic relations. This would be similar to the visit of ten ASEAN leaders in 2018. An announcement to this effect could be made after concurrence is received from all the countries.

In addition to participating in the India-Central Asia Dialogue, the Tajik foreign minister Sirojiddin Muhriddin paid a bilateral visit to India from 17th-20th December, 2021. This visit assumes significance because Tajikistan has emerged as one of the strongest critics of the Taliban regime in Kabul and is the only Central Asian country not to have any interaction with the Taliban. Its position on Afghanistan is very similar to that espoused by India. Tajik Foreign Minister met with Speaker of Lok Sabha who praised the current state of inter-parliamentary relations and stressed the need for further expansion, strengthening the legal framework, revival of the inter-parliamentary friendship group and exchange of official delegations to discuss the priority issues of mutual interest and reciprocal trust between the two friendly countries. Tajik Foreign Minister emphasized importance of further deepening relations between the parliaments of the two countries to facilitate expansion of cooperation in the political, economic, trade and health care, exchange of experience, as well increase of educational scholarships.

EAM met his Tajik counterpart during the latter’s visit. The Ministers exchanged views on expanding bilateral cooperation in energy, connectivity, trade, security and capacity building. EAM spoke about common concerns over developments in Afghanistan and said India was looking forward to easier travel with Tajikistan through recognition of vaccine certificates. EAM thanked Tajikistan for the “tremendous support that you gave us during the evacuation of Indians from Afghanistan in August and September”. Tajik FM thanked India for the ‘’Made in India’’ Coviid-19 vaccines. The two sides discussed the security situation in the region besides exchanging views on strengthening ties in areas of trade, investment, energy, culture and education. Tajikistan has assumed renewed importance for India following the Taliban takeover of Afghanistan. With India once having a military base in Farkhor (now home only to a hospital) as well as a stake in the airbase in Ayni, the region is key to India’s strategic presence in Central Asia. EAM visited Tajikistan three times in 2021. Defence Minister Rajnath Singh and National Security Advisor Ajit Doval visited Tajikistan in June for SCO meetings. From the Tajik side, the secretary of the National Security Council visited India in February and again in November for the Regional Security Dialogue.

Kyrgyz foreign minister described India as a strategic partner for all the Central Asian states. He noted security has a special place in this relationship and said Kyrgyzstan will collaborate on all measures to make the region safer. In his bilateral meeting with EAM, discussions took place on telemedicine, Information Technology, education and heritage. Kyrgyz Foreign Minister met with heads and representatives of Indian state and private companies during his visit. During the meeting, he outlined the measures taken by Kyrgyzstan to protect investments and support business, and also spoke about advantages of investing in the Kyrgyz Republic. It was decided to hold a business forum within the framework of the upcoming visit of President of Kyrgyzstan Sadyr Zhaparov to India.

EAM and Foreign Minister of Turkmenistan discussed implementation of the TAPI project. The US$10 billion TAPI pipeline will connect the Galkynysh gas field in southern Turkmenistan to Fazilka in western India, passing through the Afghan cities of Herat and Kandahar, Pakistani Quetta, and Multan to Fazilka. Length of the gas pipeline will be 1,814 km, with a throughput capacity of 33 billion cubic meters of gas per year (across Turkmenistan – 214 km, across Afghanistan – 774 km, across Pakistan – 826 km). TAPI construction began in 2015, while the ceremonial welding of the symbolic pipe joint on the border of Afghanistan and Turkmenistan took place in 2018. Construction in Afghanistan is however yet to begin.

Not evident in the joint statement are the differences between the CARs on how to proceed on Afghanistan. Russia has been balancing its relations with the Taliban through these republics. Tajikistan, which has strong ties with Russia, for instance, has a different, more confrontational approach to the Taliban than Uzbekistan and Turkmenistan’s conciliatory attitude. Moreover, all central Asian countries remain in discussions with Pakistan over developments in Afghanistan. That the Central Asian Republic (CAR) foreign ministers skipped an Organisation of Islamic Co-operation meeting in Islamabad to attend the Delhi meeting is a reaffirmation of India’s long-standing relationship with these countries.

While Moscow remains influential in the CARs, Beijing has recently built deep economic ties, including trade, which is valued around US$50 bn, apart from big investments in the region. The CARs are enthusiastic supporters of China’s Belt and Road Initiative. The Delhi joint statement sought to emphasise the difference between India and China by committing to connectivity initiatives on the basis of “principles of transparency, broad participation, local priorities, financial sustainability and respect for sovereignty and territorial integrity”. It is due to lack of connectivity that trade between India and the CAR is a poor US$2 bn. Chabahar in Iran could be an important factor in redressing this.

Iran has stated that it welcomes the Uzbek government’s approach to using the capacity of the Chabahar port. Iran made the remarks in the 2nd trilateral meeting of the Islamic Republic of Iran, India and Uzbekistan, which was held via video-conferencing. Tashkent has already shown its interest to join India and Iran to promote connectivity through the Chabahar port in the southwest of Iran, as part of the country’s efforts to improve and diversify access to sea routes for trade. Uzbekistan stressed that the volume of trade between Uzbekistan and India has increased significantly over the past year, adding that the Chabahar port can play an important role in facilitating transportation and logistics between countries in the region. 

Deputy Prime Minister and Minister of Investments and Foreign Trade of Uzbekistan had a video conference with the Indian Minister of Trade and Industry. They discussed the current state and prospects for the development of bilateral investment and trade and economic cooperation, the expansion of interregional interaction, the implementation of joint projects and issues related to the organization of bilateral events. They discussed the issue of organizing a visit to Delhi by a working group headed by Ministry of Investment and Foreign Trade to hold meetings with relevant ministries, government bodies and private companies of India to discuss issues of cooperation and develop practical proposals and initiatives, as well as develop a program of economic cooperation between Uzbekistan and India. They discussed the practical aspects of creating an Uzbek-Indian Joint Working Group on trade and economic issues and holding its first meeting in order to systematize tasks related to economic partnership between the two countries, and develop rational proposals for their accelerated solution. It was also decided that India will send a high level delegation to Chabahar in 2022 as it looks to boost its presence in the strategically located port. 

‘Tashakur Tajikistan’ (Thank You, Tajikistan), a non-fiction work by Niranjana Vanalli, Vice-Chancellor of Bengaluru North University, was released recently. A well-known columnist, writer and academic who held various positions in the University of Mysore before his current assignment, Prof.Niranjana, served as Director of Swami Vivekananda Cultural Centre, under Embassy of India in Tajikistan during 2018-19. He has penned his experience in this work which presents a positive picture of this country.

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