Central Asia Digest | July 2022

HIGHLIGHTS

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

Political Developments

Kazakh President Kassym-Jomart Tokayev said on June 15 that Kazakhstan has no intention of breaking Western sanctions imposed on Russia over its invasion of Ukraine. In an interview with Russia’s Rossiya-24 TV channel, Tokayev said that previous comments by Kazakh officials that the sanctions would be respected were correct. “Sanctions are sanctions,” he said. “We cannot violate them, especially because we receive warnings about possible so-called secondary sanctions against our economy from the West if we violate the sanctions,” Tokayev added. “But I stress, we continue working with the Russian government, I would say in an intensified manner and reach necessary agreements, while not violating the sanctions,” he said. Stressing the fact that the Russian and other forces of the CSTO did not engage in any kind of peacekeeping operations, Tokayev noted that some people in Russia “misrepresent the whole situation” by claiming that Russia “saved” Kazakhstan and now Nur-Sultan must forever “serve and bow at the feet” of Russia. Tokayev said that this perception was “far from reality” as the CSTO deployment did not fire a single shot while in Kazakhstan and left within 10 days.

Kazakhstan held a referendum on 5th June after a gap of more than two and a half decades (since 1995 when the Kazakhstan constitution was initially adopted) paving the way for reform of the entire political system in the country. This unprecedented referendum was part of a drive to change its constitution in an era when other rulers of Central Asian republics are regularly accused of twisting the constitution to retain their monopoly over power.

The citizens of Kazakhstan overwhelmingly voted in favour of constitutional changes to inter alia strip its former leader Nursultan Nazarbayev of his “national leader” status which granted him lifetime privileges. 77% of voters backed the proposals of President Tokayev. The turnout for the referendum was over 68%. More than eight million Kazakh citizens cast their votes on the amendments. The referendum was designed to repudiate the legacy of Nazarbayev who led Kazakhstan for three decades. Tokayev had called the referendum after violent demonstrations in January left more than 230 people dead.

The most important out of the 56 amendments in the 33 Articles is the transition of the government from a super-presidential model, which existed under the former president, to a normal-presidential republic. Under these amendments, the president will be prohibited from having an affiliation with any political party during his tenure. This will also apply to the presidents and judges of all the courts, along with chairpersons and members of the Central Election Commission. The heads of the Supreme Audit Chamber will also have to follow the same policy. 

Emerging from the shadow of Nazarbayev’s era, where all power was concentrated in his hands, the country is moving towards flexibility and decentralisation.  It is the absence of special privileges for 81-year-old Nazarbayev that is the most eye-catching change to the constitution. Prior to January’s crisis, Tokayev was widely seen as ruling in the shadow of Nazarbayev and his super-rich relatives. Even after stepping down as president, Nazarbayev retained the constitutional title of “Elbasy”, or “leader of the nation” – a position that afforded him influence over policymaking regardless of his formal position. The new constitution excludes that status. Another amendment prevents relatives of the president from holding government positions – a clear nod to the influence of Nazarbayev’s family and in-laws, who lost powerful positions in the aftermath of the violence. 

President Tokayev pledged to make good on plans to push through democratic reforms in Kazakhstan, after a clear win in the referendum. Tokayev said that Kazakhstan has shown that it is united in building the new, just Kazakhstan. The changes approved will result in greater competition in Kazakhstan’s political system and expand citizen participation in state governance. The implementation of these reforms will contribute to the comprehensive transformation of the country’s state model with an influential parliament and an accountable government. 

Several reforms are being implemented in Kazakhstan despite the series of shocks that the country has gone through, including the Covid-19 pandemic and the January events. These measures are aimed at the deep democratisation and modernisation of the country’s political system and, ultimately, building a ‘’New Kazakhstan.’’ With changes in the constitution, the death penalty has been abolished. New punishments for violence against women and children have been introduced. A new media law will be developed, aimed at strengthening ties between NGOs and the state. The changes in the Constitution have a direct bearing on the protection of human rights and civil liberties in the country. With these changes, the status of the Commissioner for Human Rights would be strengthened constitutionally. The independence of the ombudsperson from the state bodies and officials as well as the guarantees of his/her inviolability would be secured. Also, the legal status and organisation of the ombudsperson’s activity would be regulated by constitutional law. These amendments were first proposed by Tokayev during his state of the nation address on 16th March 2022. 

All of Central Asia has been watching these changes with interest as these are designed to consolidate the final transition from a super-presidential form of government to a presidential republic with an influential parliament and an accountable government. These reforms are aimed at establishing a more resilient, diversified, and equal economy that ensures opportunities for all citizens, a fairer society and a more vibrant, dynamic and competitive political system.

President Tokayev has also called for higher taxes on the extractive industries and on high-income individuals. The changes will provide Kazakhs the right to directly appeal to the Constitutional Court for a review of normative legal acts. This is designed to strengthen systemic human rights activities and supreme supervision over the observance of the rule of law in the territory of the country on behalf of the state.

For some activists, many of the constitutional changes, such as greater judicial independence, don’t go far enough. Nor, according to them has the president done enough to hold to account those responsible for the killing of some 200 protesters in January.

The European Union (EU) has welcomed the final result of the referendum in Kazakhstan. EU also welcomed the decision to consult the population directly and to invite OSCE/ ODIHR to monitor the Referendum. 

Tokayev said on June 6 that he had created an interdepartmental commission for the repatriation of capital illegally spirited out of the country. He similarly pledged to return illegally privatized assets into state ownership.

A joint press conference was organized during the visit of Tajik President Emomali Rahmon to Iran with his Iranian counterpart President Ebrahim Raisi. Both leaders expressed interest in expanding cooperation in security and aligning their efforts to deal with the situation in Afghanistan. “The two countries believe that the presence of outsiders in the region has not, and will not, provide security in any way, and that regional issues should be discussed and settled through talks between officials and heads of state of the region itself. Raisi said that “Iran and Tajikistan agree on the issue of Afghanistan and that an inclusive government should be formed in this country that represents all parties, groups and ethnic groups. Both countries also want stability and security in Afghanistan and throughout the region, and consider the presence of terrorists in this country very worrying.” The Tajik president mentioned the strengthening of cooperation in the fight against terrorism, drug trafficking and organised crime as other agreements reached during the visit, adding that “bilateral cooperation as well as cooperation between the two countries within the framework of regional and international organisations can help address common concerns of the two countries in these areas.” A total of 17 documents in political, economic, trade, transportation, investment, new technologies, environment, sports, energy, judiciary, education, research and tourism spheres were signed between the two countries. At a meeting with the Tajik president, Iran’s Supreme Leader Ayatollah Ali Khamenei referred to the “expansion of terrorism” in Afghanistan as Iran-Tajikistan’s “mutual concern”, calling on Afghan officials to form an all-inclusive government to resolve the issue.

Tajik President Emomali Rahmon on his visit to Uzbekistan signed “a historic” declaration with Uzbek President Shavkat Mirziyoyev on strengthening friendship and alliance. The two presidents also inked a number of documents including agreements to create new transit corridors and agricultural clusters and entering the markets of third countries. Bilateral agreements provide opportunities for cooperation between entrepreneurs of the two countries in mining and processing of iron powder, textile sector as well as the supply of primary aluminum to Uzbekistan. They also announced the launch of a train connection between the capital cities of the two countries from June 20.

Pope Francis commended Kazakhstan’s contribution to the promotion of interfaith harmony and interreligious dialogue during his May 31 meeting at the Vatican with Kazakhstan’s Deputy Prime Minister – Minister of Foreign Affairs Mukhtar Tileuberdi. Pope Francis reaffirmed his intention to attend the VII Congress of Leaders of World and Traditional Religions scheduled for Sept. 14-15 in Nur-Sultan, saying that Kazakhstan has been a reliable partner of the Vatican in Central Asia. He welcomed the political and economic reforms initiated by President Tokayev to build a New Kazakhstan.

United States Assistant Secretary of State for South and Central Asian Affairs Donald Lu visited Kazakhstan on May 27 as part of his Central Asia tour from May 23 to May 27. Emphasizing the progressive development of civil society and the positive dynamics in the socio-economic development of Kazakhstan, Lu outlined the U.S. Administration’s support for the political reforms initiated by President Tokayev. While in Nur-Sultan, he also met with civil society leaders to discuss Kazakhstan’s reform agenda, and efforts to strengthen human rights protection and advance women’s empowerment.

Chinese State Councilor and Foreign Minister Wang Yi visited Kazakhstan for 4 days for the third C5+1 meeting with his counterparts from the five Central Asian states as also to mark the 30th anniversary of establishment of diplomatic relations of China with these countries. Wang met President Tokayev and Deputy Prime Minister and Foreign Minister Mukhtar Tileuberdi to discuss bilateral ties. He said that the state visit of Chinese President Xi Jinping to Kazakhstan scheduled for autumn will give a powerful impetus to the development of Kazakh-Chinese relations. He added that China supports President Tokayev’s reform agenda. 

Readout of Wang’s meeting with the Kazakh President said that Wang called on the region to “be on guard against attempts by outside forces to draw regional countries into major power conflicts and force them to pick sides.” Wang clearly had an audience beyond Central Asia in mind when he made this comment. The readout of the meeting from Tokayev’s office studiously avoided mention of Wang’s lecture. It focused instead on Wang conveying Chinese President Xi Jinping’s support for Tokayev’s domestic political agenda.

Wang met with his counterparts from Turkmenistan, Uzbekistan and Kyrgyzstan on the sidelines of this meeting. 

Wang Yi said: “We will continue high-quality cooperation within the Belt and Road Initiative, expand multifaceted cooperation, consider setting up a suitable financial mechanism and further broaden agreements on national currencies,” According to a Kazakh statement, the ministers stressed that the further expansion of multifaceted cooperation between the Central Asian countries and China “is an important factor in sustainable socio-economic development, maintaining peace, stability and security in the region.”

China and Central Asia plan to work, particularly in strategic areas such as security, transport and logistics, energy and industry, combating climate change, the green economy, the IT industry, health, education, culture, tourism and personal data security, among others. Wang said that the most important task of the current China + Central Asia (C+C5) meeting is the unanimous agreement to establish the heads of state meeting mechanism of C+C5. The meeting also adopted four outcome documents, including the Joint Statement on C+C5 Foreign Ministers’ Meeting, the Roadmap for the Implementation of the Consensus Reached at the Virtual Summit between China and Central Asian Countries, the Initiative on Deepening C+C5 Connectivity Cooperation, and the Data Security Cooperation Initiative of C+C5.

Tajikistan accused Kyrgyzstan of provoking a border clash, the latest in a series of armed confrontations between the two nations. The frontier between the two countries, both of which host Russian military bases and are closely allied with Moscow, is poorly demarcated. Tajikistan said Kyrgyzstan had broken an agreement not to send regular troops into border areas. In April, both nations agreed to pull back some forces from the frontier after border guards exchanged fire twice in a day. 

The latest international conference (Fourth Afghan Regional Security Dialogue) to discuss the evolving situation in Afghanistan and also review the response of the neighbouring and regional countries to the latest Taliban decisions, was held in Dushanbe, Tajikistan. National Security Advisors (NSA) from Tajikistan, India, Russia, Kazakhstan, Uzbekistan, Iran, Kyrgyzstan and China, with Pakistan abstaining, attended this Dialogue. It is believed that all the NSAs highlighted the need to find constructive ways to ensure peace and stability in Afghanistan and combating risks from terrorism emanating from the region and particularly ensure that Afghanistan doesn’t become a terror hub again. 

Proof of vaccination status and COVID-19 PCR tests for the Kazakh and foreign citizens for entering Kazakhstan are not required from June 8. The decision was taken due to the stabilization of the epidemiological situation in the country and worldwide.

US Secretary of State Antony Blinken met in Washington with Mukhtar Tileuberdi, the foreign minister of Kazakhstan. In the meeting, according to the State Department, Blinken confirmed the U.S. “commitment to minimizing the impact on allies and partners, including Kazakhstan, from the sanctions imposed on Russia.”

Former Foreign Minister of Uzbekistan and current Deputy Secretary of Security Council under President for Foreign Policy and Security Abdulaziz Kamilov has been appointed President’s Special Representative for Foreign Policy.

Economic Developments

The Kyrgyz President, Sadyr Japarov stated that work on the long delayed China-Kyrgyzstan-Uzbekistan (CKU) railway line will start in spring next year. The feasibility study will be completed this year. He said that there will be jobs and ‘’our economy will boom” noting that it has been 25 years since Kyrgyzstan wanted to build this railway. Delays have been created by logistical and technical difficulties as well as the high cost. Kyrgyzstan is mountainous and the line will need the boring of over 90 tunnels, while winter weather conditions are also difficult.  According to proposed plans, the total length of the CKU railway is about 523 kilometers, including 213 kilometers in China, 260 kilometers in Kyrgyzstan and about 50 kilometers in Uzbekistan. Uzbek officials have said that when completed, the railway will be the shortest route to transport goods from China to Europe and the Middle East, cutting the freight journey by 900 kilometers and saving seven to eight days in shipping time. The rail line will link the city of Kashgar in the Xinjiang Autonomous Region with Andijan in Uzbekistan. The lengthy delays suffered by the project reflect the difficulties the three countries have had in agreeing what gauge the track should have, what route it should follow and how it would be financed. China and Uzbekistan have argued that it should follow the shortest possible path, whereas Kyrgyzstan wanted a longer route that would link its population centres. China wanted to build a standard gauge track, whereas Kyrgyzstan and Uzbekistan use broad gauge, and so would be unable to connect their networks directly to the new line. A former Kyrgyz deputy transport minister said the project would probably cost around $8bn.

Rising costs and sanctions on Russia have lowered the profitability of oil exports for Kazakhstan’s state oil and gas firm KazMunayGas, which has been forced to accept discounts on its crude being carried via the Russian pipeline network.  It remains a vital crude oil artery for Kazakhstan, accounting for two-thirds of the country’s crude oil exports. However, after the Western sanctions against Russia over its invasion of Ukraine, Kazakhstan has had to accept discounts on the crude it sells as buyers have generally shunned exports out of Russia. Kazakhstan is now rebranding the name of its crude to KEBCO (Kazakhstan Export Blend Crude Oil) to avoid being associated with crude from Russia when it loads exports from Russian ports. Kazakhstan exports are not under sanctions, but buyers have been cautious about the origin of crude loading from Russian ports.

Uzbekistan has started building a $5bn railway across Afghanistan to link up with Pakistan’s seaports in a project promoted by the three countries. The project is being driven by Uzbekistan, which wants to establish itself as the main transit hub between Central and South Asia. 

The city of Mary, Turkmenistan on May 27 hosted an international conference on the trans-Afghan TAPI natural gas pipeline. The purpose of the event was mainly for speakers – who represented the governments of Turkmenistan, Pakistan and Afghanistan – to wax lyrical about what great social and economic benefits the project will bring to the region. But there is little sign of progress on the ground. As far as new investment goes, an Ashgabat-based news website stated that the Asian Development Bank had “expressed readiness to invest $1.1 billion into the implementation of TAPI.” In March, though, a Pakistani energy official noted that the ADB had paused involvement in TAPI until such time as the Taliban regime in Kabul achieves international recognition, which is not likely to happen any time soon.

A newly created government body charged with reviving Kyrgyzstan’s industrial sector boasted last week that it had signed a preliminary deal with a Chinese company to set up a $200mn joint development fund. There are lofty ambitions for this investment project dubbed the Kyrgyz-Chinese Fund. One plan outlined in the memorandum of understanding (MoU) is to build a plant churning out 10,000 electric cars per year. The MoU also discusses collaboration on renewable energy, e-commerce, artificial intelligence and military-purpose drones. The fund will eventually be worth $1bn, the Kyrgyz state-run industry regeneration agency, Kyrgyzindustriya, said in a statement. But nobody involved appears overly concerned that neither party in the joint venture – both of them freshly minted entities – appears especially experienced in those or any other areas of industry.

Kyrgyzstan’s Foundation on Directing State Property (MMBF) says it has confiscated the luxury compound of jailed former President Almazbek Atambaev. Atambaev’s lawyers say the confiscation was done without informing their client and therefore illegal. 

Pakistan International Container Terminal (PICT) in the Port of Karachi has facilitated the country’s first shipment from Uzbekistan. From Uzbekistan, the shipment was transported by land to the terminal before being prepared for export to India. PICT hopes this development will encourage other countries to leverage Pakistan’s trade route. For the port, this was an “operational milestone.”

The China-Central Asia Gas Pipeline has delivered more than 400 billion cubic meters of natural gas to China over a period of more than 12 years.

There’s growing demand to use the shortest trade route, the Middle Corridor across Kazakhstan and the Caucasus, between China and Europe. The huge interest in the trade route between Europe and China, across Kazakhstan, Azerbaijan and Georgia, stems from the collapse in traffic along the Northern Corridor through Russia, following its invasion of Ukraine. 

The cost of living is on the rise in Central Asia just like it is around the world. COVID-19, severe droughts, supply problems caused by the pandemic, and, most recently, the war in Ukraine have all been contributing factors. For several months now, there have been reports of shortages and increased prices of food staples such as flour, rice, cooking oil, sugar, and in some parts, carrots and onions. And it’s not only food that is getting expensive. So are fuel, electricity, gas, and everything else. This inflation, of course, hits the most vulnerable in what are already lower-middle-income, remittance- and import-dependent economies. In Uzbekistan, for instance, where the government calculates the so-called “Plov index” to measure the cost of living, the average price of a portion of this traditional dish in Tashkent has gone up by almost 70 percent, or a dollar, since December 2019. This is a significant rise given that the average salary in the country is roughly $300.
It is expected that this year up to one million foreign tourists will visit Kazakhstan.

India-Central Asia Relations

During Iranian Foreign Minister Hossein Amir Abdollahian’s visit to India, India and Iran reaffirmed their commitment to continue cooperation on development of Chabahar Port as a transit hub for the region, including Central Asia. Delegates from both nations will meet soon to discuss operational aspects of the key port. The port has emerged as a commercial transit hub for the region. It is a more economical and stable route for landlocked Central Asia to reach India and the global market.

Kazakh Deputy Prime Minister & Minister for Trade Bakhyt Sultanov visited India to participate in the meeting of the Inter-Governmental Commission with his counterpart Minister of Petroleum and Natural Gas and Urban Development Hardeep Singh Puri. During his visit, he also unveiled the statue of the legendary Kazakh poet Abai Kunanbayuly in New Delhi. The inauguration ceremony was attended by Meenakshi Lekhi, Minister of State for External Affairs and Culture, and the heads of several diplomatic missions in India. The Deputy Prime Minister’s visit was focused on the development of trade and strengthening bilateral relations between India and Kazakhstan. A high-powered meeting between the visiting delegation and the Adani Group was held. Discussions focussed on collaboration in the areas of non-conventional energy, airports, infrastructure and mining. Kazakhstan is working on developing bilateral trade and commerce with India in areas of education, information technology, and healthcare.

Ms Meenakshi Lekhi on her visit to Kyrgyzstan, held talks with Foreign Minister Zheenbek Kulubaev during which the two sides took stock of the state and prospects of India- Kyrgyz relations. They also had an exchange of views on topical issues of regional and international importance. She called on the Prime Minister Akylbek Zhaparov and reaffirmed India’s commitment to be a reliable partner for the development of the Kyrgyz Republic. During the meeting, the sides discussed the development of Kyrgyz-India relations in trade, economic, cultural, humanitarian, scientific and educational spheres. She had fruitful discussions with the Minister of Culture, Information, Sports and Youth Policy Azamat Zhamankulov and signed the Cultural Exchange Program for 2022-2026. She met the representatives of the local Indian community and Indian students in Kyrgyzstan. She took part in special Yoga events as part of the ‘Azadi ka Amrit Mahotsav’ celebrations.

Delegations from all member countries of the Shanghai Cooperation Organisation (SCO) attended a meeting of the grouping hosted by India to deliberate on pressing security challenges, including threats of terrorism. The meeting extensively deliberated on regional security scenarios, including the situation in Afghanistan. India hosted the meeting in its capacity as chair of the SCO’s Regional Anti-Terrorist Structure (SCO-RATS). India assumed the chair of SCO-RATS on October 28 last year for a period of one year. In April, 2022, India hosted a meeting of counter-terror experts from the SCO countries.

Indian and Kazakhstan army personnel scaled the mountains Amangilde and Nursultan Peaks in Kazakhstan. Both sides exchanged valuable experiences and techniques during the summit.

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