Economic Developments - July 2017

World Bank approved two loans totaling $294.9 million to Uzbekistan for projects in land reclamation and livestock sector. These funds will be allocated for 20 years, including a five-year grace period. 

Turkmen President invited business community of Uzbekistan to participate in the TAPI gas pipeline project. Uzbekistan was also offered to develop oil and gas fields on the Caspian shelf.

Inflation in Kazakhstan for first six months of 2017 stood at 3.7% compared with 4.6% in first half of last year. From January to June 2017, GDP grew by 4.2%. Production of goods grew by 6.2%, of services by 1.3% and collection of taxes by 0.3%. Foreign trade increased by 29.2%, amounting to $29.9 billion. Kazakh National Bank has forecast inflation rate to decrease to 6.5-7% in 2017, and enter the target range of 5-7% in 2018. Bank predicted that economic growth will accelerate to 2.2% in 2017 and to 4.7% for 2018. 

Russian Aircraft Corporation “MiG” signed an agreement with state-owned Kazakhstan Engineering for production of MiG-35 components, establish servicing and production centres in Kazakhstan and joint marketing of the aircraft. MiG-35 is one of stars of the MAKS 2017 air show held near Moscow from 18th to 23rd July. 

China will provide Tajikistan with a grant of $230 million to build a new parliament. This will bolster China's influence in the country. China already owns over half of Tajikistan's public debt viz $1.2 billion out of the country's total external debt of $2.3 billion, a share equal to around a sixth of GDP.

President Shavkat Mirziyoyev issued a decree detailing the construction of a new 1.2Mt/yr cement plant. The $204m unit will be built by 2019. An Uzbek-Chinese joint-venture will manage the project. Investment for the scheme will come from foreign direct investment and loans.

In a move presented as glorious and spectacular, oil companies from Russia (Rosneft), China (CNPC), Kazakhstan (KazMunayGas), Azerbaijan (SOCAR) and Italy (Eni) teamed up to form a consortium for exploration and exploitation of a new “giant” located in the heart of northern Caspian tectonic structure. The project when completed should prolong the position of Kazakhstan as a global-scale oil supplier from 2040 till 2080. 

Leaders of Pakistan, Tajikistan, Afghanistan and Kyrgyzstan met in Dushanbe to review the progress of $1.2 billion CASA-1000 project and vowed to take all measures for its early completion. Information from Dushanbe suggests that informal meeting between Ghani and Sharif did not go off well. Afghanistan appears to have stated that it would not allow hydroelectric transmission line to pass through Afghanistan into Pakistan unless Pakistan allowed Indian goods to be transported to and from Afghanistan via Wagah border. CASA-1000 project is scheduled for completion by 2018.

Uzbek Foreign Minister has stated that Uzbekistan is content with construction of Rogun hydropower plant in Tajikistan. But the national interests of Uzbekistan should be taken into consideration. According to him, Tajikistan and Uzbekistan should come to an agreement concerning the construction of Rogun HPP. Uzbekistan was strongly opposed to construction of Rogun HPP during presidency of Islam Karimov. Tajik President has promised that Tajikistan will never leave other countries without water.

 

July 31, 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.