Economic Developments - March 2019

Turkmen President in a meeting with King of Bahrain invited Bahraini companies to participate in implementation of the Turkmenistan-Afghanistan-Pakistan-India gas pipeline (TAPI). It was noted that construction of TAPI gas pipeline is proceeding at a brisk pace. 

Turkmen foreign minister during his visit to Pakistan to conclude the Host Government Agreement (HGA) on Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline with Pakistan declared that Turkmenistan plans to build transport and energy corridor between Pakistan and Turkmenistan and wants to lay an optic-fibre network parallel to TAPI pipeline and then to China. ADB is facilitator and coordinator for the project. It is proposed to lay a 56-inch diameter 1,680 KM pipeline with design capacity of 3.2 billion cubic feet of natural gas per annum (Bcfd) from Turkmenistan through Afghanistan and Pakistan up to Pak-India border. Civil works of project have already commenced in Afghanistan after the project’s ground breaking (Afghan section) was held last year.

Foreign trade turnover of Uzbekistan in January-February 2019 was US$6.39 billion which was higher by 25.4% on an annualized basis. Exports reached US$3.03 billion (growth of 20.4%), and imports reached US$3.35 billion (growth of 30.3%). Foreign trade surplus totalled US$319.2 million. During this period, exports of goods and services were US$513.7 million more while imports increased by US$779.6 million than in corresponding period of previous year.

International Monetary Fund (IMF) has forecast GDP growth of 5.5% in Uzbekistan in 2019 due to investment boom in the country. Exports are however likely to weaken. Growth in 2020 will be 6%, which is also associated with investment demand. Imports of investment goods rose from US$4.5 billion in 2017 to US$7.5 billion by end of 2018. Inflationary pressure on Uzbek economy in 2019 could increase, the consumer price index could increase 17-18% due to rising energy prices, wages in social sector and taxes.

International rating agency S&P Global Ratings has confirmed long-term and short-term sovereign credit ratings in foreign and national currency of Kazakhstan at level of BBB-/A-3. The agency expects the country’s sovereign and external balance to remain viable.

First Central Asian Economic Forum was held in Uzbekistan with participation of region’s Government representatives. The forum’s theme was “Central Asian Cooperation: Prospects for Mutually Beneficial Development”. 

Boston Consulting Group has outlined a US$170 billion foreign direct investment potential for Central Asia over next ten years, with up to $70 billion in non-extractive industries.

Oil production in Kazakhstan was 1.88 million barrels per day (bpd) on average in January-February, 2019. This slightly missed the target under a global deal with OPEC whereby Kazakhstan was required to produce only 1.86 million bpd.

The Fergana region of Uzbekistan is slowly growing into a global tourist attraction owing to its historical monuments, places of worship, modern buildings, and nature. This year it plans to increase the number of tourists visiting the region to 1 million people. It is planned to implement 58 projects with private investments, bank loans and foreign investments in order to further develop tourism potential and infrastructure.

Asian Development Bank (ADB) has signed a US$11.5 million loan agreement with Baikonur Solar LLP for expansion of solar power in Kazakhstan. Scope of work includes design, construction, commissioning, operation, and maintenance of a 50 MW solar power project with grid integration. The solar project is expected to generate 73 GWh hours of electricity per year.

 

March 30, 2019

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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.