Central Asia Digest | April 2019

Political Developments

Kazakh ruling Nur Otan party unanimously nominated interim President Kassym-Jomart Tokayev as its candidate for upcoming June 9 snap Presidential elections. Decision was made under leadership of former President Nursultan Nazarbayev. Tokayev will hence be the next president. At previous elections, other parties won only single-digit percentages of the vote. Nazarbayev described Tokayev as “the best suited candidate.” Tokayev had called snap elections for June 9, bringing forward the vote from 2020. Shares have risen 5% since Nazarbayev’s unexpected resignation. The election will ensure transit of power as quickly as possible and ‘’clear up any ambiguity’’ and uncertainty regarding decisions related to Kazakhstan’s socio-economic development. Tokayev has brought forward planned public-sector pay rises, ordered a drop in interest rates and claimed credit for postponement of unpopular plans to build a ski-resort at a beautiful spot near Almaty.

Kazakh President paid a state visit to Uzbekistan during which it was decided to establish an international trade and economic centre on border of the two countries. A joint statement was signed saying that parties intend to raise "multi-faceted cooperation to a qualitatively new level." Tokayev said that relations with Uzbekistan are a priority for Kazakhstan. Several intergovernmental documents were signed in the area of economy, investment, defence, migration, agreement on employment and protection of rights of migrant workers, as well as on cooperation in combating illegal migration and on cooperation between the two foreign ministries. Agreements were also signed between Ministries of Defence of Kazakhstan and Uzbekistan on cooperation in field of air defence, as well as on airfield and technical maintenance and protection of military aircraft. Presidents also discussed cooperation in science, technology, space, education, culture, art, tourism and sports, fuel, water and energy, transit and transport, imports and exports, cultural, humanitarian and youth collaboration. Trade turnover of Kazakhstan with Uzbekistan amounted to US$2.5 billion in 2018, which was 25.3% more than in 2017. The countries decided to increase trade turnover to US$5 billion by 2020. In addition to economic projects, the two presidents discussed international issues and peaceful settlement of situation in Afghanistan. They recognised that situation in Afghanistan increases security risks in the region and is cause for serious concern. The leaders noted that Central Asia should not be regarded as a simple transit corridor between Europe and Asia. 

During his visit to Russia, Tajik President Emomali Rahmon discussed key issues relating to bilateral relations and measures to further develop mutually profitable cooperation in political, trade-economic, and cultural-humanitarian spheres, as well as regional and international issues with Russian President Vladimir Putin. Rahmon stated that military-technical cooperation with Russia provides stability not just in Central Asia but beyond. Volume of trade turnover between two states in 2018 exceeded US$1 billion. On side-lines of meeting, a number of agreements were signed including in agriculture, logistics, trade, education and culture.

Although China and Russia appear to be happy with their current relations with Kazakhstan, probability of competition and confrontation is high as both vie for increasing regional power and influence. As China’s influence in Kazakhstan grows, thanks to its numerous BRI investment interests, Russia will want to keep Kazakhstan in its own orbit. As Russia reasserts itself on the world stage, it will do everything possible to prevent Kazakhstan from falling completely into Beijing’s arms. 

South Korean President Moon Jae-in paid an 8-day visit to Turkmenistan, Uzbekistan and Kazakhstan. These three countries are at center of South Korea's New Northern Policy that is aimed at enhancing economic and diplomatic cooperation with Central Asian and Eurasian countries, including Russia.  

In Turkmenistan Moon and his counterpart announced plans to boost bilateral cooperation in energy, infrastructure, sanitation, medicine, information, ICT, education, health, medical sectors, and environment.  In addition, they announced stronger cooperation in education and culture, including setting up of a branch of King Sejong Institute which offers classes in Korean language. Turkmenistan is making concerted efforts to develop its non-fossil fuel sector by partnering with South Korean companies. 25 agreements and memorandums of understanding (MOU) were signed including a four-year economic agreement, and an MOU on scientific and industrial cooperation. South Korea agreed to share its know-how in 5G network technology with Turkmenistan and contribute to its commercial satellite development plan. Moon is interested in connecting South Korea by pipeline to natural gas deposits in Turkmenistan and Russia, and to rest of Eurasia by rail. The two leaders lauded the Kiyanly Petrochemical Complex project, which was built and completed in October last year by a global consortium led by Korean corporations. They agreed to continue bilateral cooperation in energy plants.

In his meeting with Uzbek President, Moon discussed ways to boost cooperation in various sectors, including ICT, health and medical, public administration and defense technology. The Presidents agreed to upgrade their relationship to a special strategic partnership. Moon credited Mirziyoyev for “leading Uzbekistan into a new era” with a series of bold reforms. Trade between Uzbekistan and South Korea in 2018 was just over US$2 billion. Moon noted that Uzbekistan is strengthening its cooperation with neighbouring Eurasian countries while pushing for industrial diversification, currency market liberalization and foreign investment. He said that this is in consonance with South Korea's New Northern Policy that seeks to strengthen its cooperation with Central Asian countries under vision of peace and joint prosperity in Eurasia. Moon signed a package of deals reportedly worth US$12 billion in areas ranging from energy to healthcare, science, technology, and more. Leaders expressed interest in concluding a Korea-Uzbekistan FTA, to build upon burgeoning trade between them. Uzbekistan hosts several vehicle production units, most critically GM Uzbekistan, which was originally established as a joint Uzbek government and Daewoo facility.

In his first summit meeting with new Kazakh President Kassym-Jomart Tokayev, the leaders agreed to greatly boost their countries' bilateral ties, economic cooperation and people-to-people exchanges. They signed a new agreement called "Fresh Wind" or cooperation in various new areas including ICT, agriculture, healthcare, culture, transportation and infrastructure. Visit marked 10th anniversary of strategic partnership between South Korea and Kazakhstan. Moon said that bilateral trade doubled between 2017 and 2018 and reached US$4 billion. Moon asserted that going beyond the current cooperation in trade, investment, infrastructure, it is necessary to promote collaboration to expand future growth engines, including IT, innovative industrial technologies, healthcare, medicine and space.

According to reports, Moon “obtained guarantees” from the three Central Asian states he visited for 24 projects (5 in Turkmenistan, 15 in Uzbekistan and 4 in Kazakhstan) worth US$13 billion.

Kyrgyz President Sooronbai Jeenbekov has stated that China is a close neighbour, reliable friend and strategic partner of his country. He said this at handover ceremony of a hospital built with Chinese help in Osh.

Afghan Foreign Minister and Kyrgyz President discussed bilateral cooperation in Bishkek. Kyrgyz President hailed Afghanistan as a very good friend and promised long-term cooperation in bringing peace and promoting human resource capacity of Afghanistan. Afghan FM called for implementation of CASA-1000 and China-Kyrgyzstan-Uzbekistan-Afghanistan railway project.

Russian Defense Minister stated that a Russian military contingent needs to be deployed in Tajikistan near the border with Afghanistan to prevent infiltration of Daesh terrorists to Central Asia and Russia. 

Turkmenistan has replaced North Korea in bottom place in Reporters sans frontières (Reporters Without Borders) 2019 World Press Freedom Index ranking of 180 countries. It has fallen from the 178th position it held in 2018.

 

Economic Developments

Turkmenistan is offering public-sector office employees street-sweeping work as an alternative to complete dismissal as part of an ongoing downsizing of its government. Among those asked to consider this occupation are state accountants, economists and engineering staff. Reports throughout last year indicated that stretched government finances had prompted public sector agencies in Turkmenistan to cut their workforce.

ADB has commended Uzbekistan on its reform agenda and management of country’s transformation to a market-based economy. ADB confirmed its strong support for government’s development and reform agenda and expressed confidence in the country’s economic prospects. ADB is preparing a new 5-year Country Partnership Strategy (CPS) for Uzbekistan to establish a stronger foundation for inclusive, diversified, and sustainable economic growth, improving governance and institutional capacity, and promoting regional cooperation and connectivity. 

Russian Ambassador to China has said that Russia wants more integration between ‘Belt and Road Initiative’ and Central Asian economic and security groups. Ambassador denied there was a growing anti-Chinese sentiment among the Russian public and said the two countries should combine their resources instead of competing with each other. He said that China’s engagement in Central Asia is mainly economic. Rather than a threat, Russia regarded Beijing as a force to boost regional economies. He added that Chinese engagement in Central Asia does not hurt Russian interests.

 

India-Central Asia Relations

Raksha Mantri (RM) Nirmala Sitharaman participated in meeting of Defence Ministers of Shanghai Cooperation Organisation countries. In addition to SCO Defence Ministers meeting and joint call on Kyrgyz President, RM also met Chief of General Staff of Armed Forces of Kyrgyzstan where wide-ranging discussions on bilateral defence cooperation, training, capacity building, military technical cooperation and assistance to Kyrgyz Level II Field Hospital for UN deployment were held. She delivered a speech on behalf of all Defence Ministers. In meeting with Russian Defence Minister, issues of defence cooperation including military technical cooperation were discussed. In her meeting with Chinese Defence Minister, many issues including exchange of defence delegations, military training and joint training were discussed.

Kazakhstan has approached Bombay Stock Exchange (BSE) for assistance in implementing start-up models at Kazakh Stock Exchange. BSE said that it can provide necessary support, training and technology in consultation with Ministry of External Affairs. Some initial talks have taken place so far. In addition, success of BSE-promoted India International Exchange at Gift City in Gujarat is also of interest to Kazakhstan. Usually, BSE provides training and other help to exchanges of other countries on friendly basis. BSE provides necessary support in consultation with Gift authorities and MEA.

Kazakhstan will increase exports of uranium to India from 5,000 tonnes at present to 7,500-10,000 tonnes for a five-year period starting 2019. Signed during Prime Minister Modi’s visit to Kazakhstan in 2015, the previous five-year agreement for uranium supply will lapse this year. Kazakhstan accounts for 80% of uranium supplies to India. Apart from this, the two nations are also in talks for a deal on joint application of nuclear science in field of medicine.

A senior Representative of Astana International Financial Centre said that it is looking at strategic partnerships and investments from India. Apart from finance, AIFC is interested in knowledge sharing; helping develop the company and improving the shareholders’ value.  

A group of 20 media persons from the five Central Asian Republics visited India under a familiarization programme from 22-29 April 2019. The visit was fully sponsored by Indian Government. Programme included their interaction with their counterparts from various media houses such as Doordarshan, ANI, and PTI, meeting with government officials from various Ministries, Ambassadors of Central Asian countries in India and various business houses. They also visited several world-famous monuments like Taj Mahal (Agra), Akshardham Temple (New Delhi), and places like Film City (Noida). The visit was another step in strengthening centuries old ties between India and Central Asia.
 
Indian Ambassador to Uzbekistan left the country on completion of his tenure. He called on Uzbek President, PM, Foreign Minister prior to his departure. 

Indian Defence Secretary Sanjay Mitra met Defence Minister of Uzbekistan and discussed issues of bilateral cooperation.

Deputy Minister of Foreign Affairs of Kyrgyzstan and Secretary (West), MEA, met within the framework of Foreign Office Consultations in Bishkek. Wide range of issues related to political, economic, defence & security, cultural relations and cooperation under SCO were discussed. Forthcoming high level visits of Indian Prime Minister, Defence Minister and External Affairs Minister to Kyrgyzstan were also discussed. Secretary (West) called on the Kyrgyz Foreign Minister. 

Kazakh delegation for 3rd Consultative Meeting of Security Councils of Kazakhstan and India in India was led by First Deputy Secretary of Kazakh Security Council and included representatives of National Security Committee, Ministries of Energy, Digital Development, Defense and Aerospace Industry and Foreign Affairs. Indian delegation was led by Deputy National Security Adviser. Issues of international and regional security, countering terrorist threats and illegal drug trafficking, cooperation in military-technical sphere, as well as cooperation in field of information technology, energy, space, transport, etc. were discussed during the meeting. They prepared a roadmap for further cooperation.

Iran and 12 other countries, including India, Russia, Turkey, Tajikistan, Armenia, Azerbaijan, Belarus, Bulgaria, Oman, Kyrgyzstan, Kazakhstan and Syria, held two days of meetings in Tehran to coordinate work on the International North South Transport Corridor (INSTC). A 164-kilometer rail project linking the two Iranian cities of Qazvin and Rasht was inaugurated by President Rouhani. This line fills a missing link in the INSTC. Chabahar, the Iranian port being developed by India, can handle very large and heavy ships. India’s development of Chabahar marks an important connectivity project in Eurasia. Chabahar could be the starting point of INSTC. INSTC would facilitate import by India of minerals, metals, oil and gas from Central Asia to boost its manufacturing economy.

India proposed the creation of a joint venture for maintenance and production of spare parts for Soviet and Russian-origin equipment used by both India and Kazakhstan. Both countries feel that this project presents significant possibilities to cooperate.

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About the Author

Ambassador Ashok Sajjanhar

Former Ambassador of India to Kazakhstan, Sweden and Latvia; President, Institute of Global Studies and Distinguished Fellow, Ananta Centre

Ambassador Ashok Sajjanhar belongs to the Indian Foreign Service and has acquitted his responsibilities in the diplomatic service for 34 years. He was Ambassador of India to Kazakhstan, Sweden and Latvia and has worked in senior diplomatic positions in Indian Embassies/Missions in Washington DC, Brussels, Moscow, Geneva, Tehran, Dhaka and Bangkok and also at Headquarters in India. He negotiated for India in the Uruguay Round of Multilateral Trade Negotiations and in negotiations for India-EU, India-ASEAN and India-Thailand Free Trade Agreements.

He contributed significantly to strengthening strategic ties and promoting cultural cooperation between India and USA, EU, Russia and other countries.Ambassador Sajjanhar worked as head of National Foundation for Communal Harmony to promote amity and understanding between different religions, faiths and beliefs. Ambassador Sajjanhar has been decorated by Governments of Kazakhstan and Latvia with their National Awards and by Universal Peace Federation with Title of ''Ambassador of Peace.'' Currently Ambassador Sajjanhar is President of Institute of Global Studies, New Delhi. He writes, travels and speaks extensively on issues relating to international relations, foreign policy and themes of contemporary relevance and significance. He appears widely on TV panel discussions. Ambassador Sajjanhar is interested in reading, music and travelling. His wife Madhu is an economist and an educationist. They have a son and a daughter both of who are accomplished singers. Their son passed out of Yale University and their daughter is pursuing her PhD at University of Minnesota.