Economic Developments - January 2017

Travel to Kazakhstan has been made visa-free for nationals of 45 countries including those from Europe, UAE and Western countries. India is not included in this list. This has been done to improve the investment climate and also to promote tourism to the country. Kazakhstan will host several major international events during the current year including EXPO 2017 in Astana and Winter Universiade in Almaty.
According to Global Passport Power Rank published by Montreal based Passport Index, Kazakhstan is placed at 56th position with its citizens being able to travel to 69 countries without visas. Russian passport is ranked 39th. Kyrgyzstan and Chinese passports share 66th place. Uzbek is on 70th and Turkmenistan passport on 75th place. India ranks at 78 with visa-free access to 46 countries. 

World Bank (WB) has allocated US$217 million to Tajikistan in 2017 to provide reliable electricity supply, improve irrigation, enhance disaster risk management, and mitigate impact of current economic slowdown. Currently World Bank is financing 23 projects in Tajikistan with a net commitment of US$369.3 million. The projects aim to support economic growth through private sector development, while also investing in improvement of public services such as education, health, municipal services and social protection.

Asian Development Bank (ADB) has allocated US$319 million for 2017-19 to Tajikistan, an increase of US$ 200 million from the earlier period for development of infrastructure. ADB has approved over US$1.5 billion in concessional loans, grants, and technical assistance to Tajikistan since 1998.

Tajikistan is actively examining merits and disadvantages of its possible accession to EEU. Tajik authorities maintain that its producers are not yet ready to manufacture goods that would meet the standards of EEU.

Kazakhstan cut its oil production by 20,000 barrels per day from January 1, 2017 to fulfill its commitments under the deal between OPEC and non-OPEC producers.

According to World Bank, during its 25 year partnership with Kazakhstan, the country has transitioned from lower-middle income to upper-middle income status. Since 2002, GDP per capita has risen six-fold and incidence of poverty has fallen sharply. In the latest Doing Business Report 2017, Kazakhstan ranks 35th out of 190 countries worldwide. Since 1992, World Bank has supported 45 projects for US$8 billion in Kazakhstan.

GDP growth rate in Turkmenistan was maintained at 6.2% in 2016. The growth rate increased by 1.2% in the industrial sector, 4.4% in construction, 10.5% in transportation and communication, 14.3% in trade, 11.6% in agriculture and 10% in services. GDP growth rate in Turkmenistan will amount to 6.5% in 2017 to 6.8% in 2018 and 7% in 2019. 

WB has increased its forecast for Kazakhstan's GDP growth by 0.3% to 2.2% for 2017. This will increase to 3.7% in 2018 and to 4% in 2019. In 2016 GDP growth hit 0.9% compared to 1.2% in 2015. Inflation in Kazakhstan slowed significantly to 8.5% in 2016 from 13.6% in 2015. Kazakhstan's central bank kept its policy rate unchanged at 12% on January 9, 2017 but said chances of more rate cuts have increased on account of inflation slowdown. Annual inflation is expected to slow to target range of 6-8% in January-February, 2017.

GDP growth of Uzbekistan will amount to 7.4% in 2017 as well as in 2018 and 2019 given stabilization of commodity prices. Uzbek GDP grew by 7.3% in 2016.

GDP growth rate in Turkmenistan will amount to 6.5% in 2017 and to 6.8% in 2018 and 7% in 2019.

In early January, 2017 Turkmenistan suspended gas supplies to Iran to pressure Tehran to clear its unpaid dues for earlier gas deliveries. Iran has threatened to take Turkmenistan to court for this action.
Uranium production in Kazakhstan, the largest producer of this mineral, will be cut by approximately 10% (2,000 tons) due to over-supply in the uranium market. Outlook for nuclear energy growth however continues to be strong.   

 

January 28, 2017

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About the Author

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.