Economic Developments - March 2017

Real incomes of Kazakhstan’s population fell by 4.5% in 2016, the largest decrease in living standards over the past 16 years. This is on account of international economic slowdown, decline in global prices of energy and sluggish performance of Russian and Chinese economies, its main trading partners.  

Kyrgyzstan has temporarily suspended meat imports from China pending a joint inspection by EAEU countries to determine whether the imports will be allowed into the EAEU or not. EAEU countries will examine the quality of meat products, eggs and animals being exported by China. 

The 13th summit of Economic Cooperation Organisation (ECO) was hosted by Pakistan in Islamabad on 1st March, 2017. Presidents of Iran, Turkey, Azerbaijan, Tajikistan and Turkmenistan attended along with Prime Minister of Kyrgyzstan and Deputy Prime Minister of Uzbekistan. Afghanistan in view of its tense ties with Pakistan was represented by its Ambassador in Islamabad. China and the UN attended as special guests. Last ECO summit was held five years ago in Baku in 2012.

A quick look at the Islamabad Declaration issued at the end of the ECO Summit clearly reveals that it is the new momentum (and money) that China’s One Belt One Road (OBOR) is expected to bring that is raising expectations for  ECO’s prospects for greater trade integration in the near future.

Talking to Turkmen President Berdimuhamedow, Pakistan PM Sharif reiterated Pakistan’s strong commitment to cooperation with Turkmenistan in energy and transport infrastructure. He underscored the need for early operationalisation of TAPI (Turkmenistan-Afghanistan-Pakistan-India) gas pipeline project. Kyrgyz PM in his meeting with Sharif said that Kyrgyzstan is interested in obtaining access to Pakistan's Karachi and Gwadar ports.

The summit went largely unnoticed in international media. This is not surprising as over more than three decades of its existence; ECO has not achieved much in promoting economic integration and political coordination that its charter promises. However presence of several regional leaders in Islamabad was noteworthy.

Work on the 1,680 km Turkmenistan-Afghanistan-Pakistan-India (Tapi) gas pipeline project started in Pakistan on 3rd March, 2017. The project entered its practical phase in Pakistan after the process of initiating front-end-engineering-and-design (FEED) route survey was formally inaugurated. Pakistan expressed confidence that project would be completed “in time and on cost.”

On his first visit outside the country to Turkmenistan on 6-7 March, 2017, Uzbek President Shavkat Mirziyoyev said that existing ties between Uzbekistan and Turkmenistan are a vivid example of friendly, good neighborly relations. He was speaking in presence of Turkmen President at the opening of memorial complex to Uzbekistan’s first president Islam Karimov in Turkmenistan's Lebap province which borders Uzbekistan. The two Presidents attended the opening ceremony of road and railway bridges Turkmenabat-Farab over the Amu Darya River, which is an integral part of the New Silk Road international transportation corridor. They signed a strategic cooperation agreement aimed at increasing cooperation in fight against terrorism, Islamic extremism, and cross-border crime — including drug trafficking.

China National Petroleum Corporation (CNPC) and Uzbekistan’s Uzbekneftegaz have agreed on an indefinite postponement of work on the Uzbek section of Line D of the Central Asia-China Gas Pipeline. The ill-fated fourth strand of the Central Asia-China gas pipeline has again been put on hold amid apparent declining demand for the fuel from Beijing. This spells more bad news for Turkmenistan which at the moment has only China as its customer, having fallen out with Iran over the New Year. Line "D" of Turkmenistan-China gas pipeline network was to be more than just the largest of four pipelines connecting western China to gas fields in Turkmenistan -- it also would have been the largest single gas pipeline connecting Turkmenistan to any consumer state. Line D was supposed to carry 30 billion cubic meters (bcm) of gas annually to China. The line took a different route through Uzbekistan, Tajikistan, and Kyrgyzstan, and then into China. Work on this pipeline in Tajikistan and Kyrgyzstan has also failed to take off. 

The European Bank for Reconstruction and Development has signaled its readiness to restart work in Uzbekistan after a decade-long absence. The return got the green light at a board meeting on Wednesday following the death last year of Uzbek President Islam Karimov, whose authoritarian leadership and poor human rights record had effectively pushed the EBRD out of Central Asia's most populous nation.

The Girls’ Opportunity Index from Save the Children, the international charity, put Kazakhstan in 30th place – two above the United States and five ahead of Japan. Kazakhstan scored particularly well because of the higher proportion of women in Parliament. Women now make up 27% of those in the lower house – a major improvement on the 10% only 10 years ago.

Progress in the economy has been even more impressive. 44% of the country’s small and medium sized businesses are now run by women. With targeted support from the government, and international organisations such as the EBRD these numbers can be expected to increase.

Prime Minister Benjamin Netanyahu became the first serving Israeli Prime Minister to visit Kazakhstan, marking a significant milestone in the deepening strategic and economic relations between Israel and Kazakhstan. While serving as a significant model for Israel’s relations with Muslim-majority nations outside the Middle East, Israel has an additional critical stake in the relationship since Kazakhstan is the world’s largest producer of uranium and the first supplier to which Iran has turned to fuel its nuclear program.


March 30, 2017

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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.