Kyrgyzstan’s preparations to join a Russia-led economic bloc are proceeding at breakneck speed.
Wholesale changes to dozens of regulations are sailing through Kyrgyzstan’s parliament as a December 23 deadline for signing Eurasian Economic Union accession documents approaches.
The legislature can play host to stormy debates when it wants to, but when the subject is the finer details of the tax code and trade policy, it appears MPs can’t really be bothered. The amendments legislators are passing may have far-reaching implications for the local economy, however.
Moscow, upon whom Kyrgyzstan’s dependence grows by the day, has now confirmed it will provide up to $1.2 billion over the next two years to ease the country’s entry into the Customs Union and Eurasian Economic Union (which includes Armenia, Belarus, Kazakhstan and Russia), after Russia’s State Duma ratified the package November 26. Kyrgyz policymakers had talked up the aid package with little by way of confirmation from the Kremlin. The first $100 million, a grant, should be disbursed before the end of this year.
According to Russia’s state-run TASS news agency, the money:
…is designed to develop cooperation in [the] agro-industrial sector, the sewing and textile industries, processing, mining and metallurgical industries, transport, housing construction, development of entrepreneurship and infrastructure. A special development fund is going to be set up in the form of an international organization. Its status, functions, structure and rules of functioning will be defined in a separate agreement.
A former mayor of Kyrgyzstan’s second-largest city faces criminal charges connected to his time in office, local media are reporting.
The state prosecutor issued an arrest warrant for Melisbek Myrzakmatov on abuse of office charges November 28. With less than a year before elections to the Kyrgyz legislature next fall, some will see the charges as politically motivated. Myrzakmatov, who has pledged to run for parliament, is believed to be abroad, although exactly where is the subject of speculation.
Myrzakmatov shot to infamy in June 2010 as Osh’s mayor during ethnic violence between Kyrgyz and Uzbeks that left hundreds dead. Described by the International Crisis Group as a “cruel and unyielding young nationalist,” Myrzakmatov, who remains very popular with many ethnic Kyrgyz in the country’s south, did little to prevent the violence; some believe he had a role in instigating it.
Myrzakmatov held his position for almost five years, from January 2009, before the violent change of government in Bishkek, to December 2013. For much of that time, Osh resembled a recalcitrant fiefdom, only nominally subordinate to authorities in Kyrgyzstan’s capital, Bishkek.
A meeting of CIS government heads over the weekend came and went with little media attention, an indicator both of the lack of importance prime ministers are accorded in the former Soviet Union and of the organization’s general redundancy.
Conceived to keep the newly independent states of the former Soviet Union together in a loose confederation, the Commonwealth of Independent States (CIS) had lost much of its mojo even before one-time member Georgia departed in 2008 and fresher affiliations – such as the Shanghai Cooperation Organization and Moscow’s Eurasian Economic Union – began gathering geopolitical prominence.
The CIS now includes Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan and Uzbekistan as full members, with Turkmenistan and Ukraine as participants. As Russian President Vladimir Putin said in 2005, the organization is best conceived as “a civilized divorce” between former partners, in spite of periodic and half-hearted attempts to turn it into something more.
For that reason, even the CIS Summit of Heads of Government on November 21 and 22 in Ashgabat had a damp squib feel to it. Although Turkmen President Gurbanguly Berdymukhamedov was there to greet delegates and hold bilateral talks, the Turkmen, Azeri and Uzbek delegations were formally represented by their respective deputy prime ministers. Ukraine and Moldova, meanwhile, sent ambassadors to head up low-key delegations.
Iran, it seems, was calling Turkmenistan’s bluff earlier this summer when Tehran said it no longer needs gas from its northern neighbor. Now a top official says Tehran will keep buying.
That is good news for Turkmenistan, which is so dependent on its main gas customer, China, that it is starting to look like a client state.
Iran is committed to increasing its own domestic gas production to up to a billion cubic meters per day by 2017, a target one industry analyst thinks is possible but unlikely within such a tight timeframe. But supplying Iran’s northern regions with domestic gas is complicated by its lack of infrastructure. So, since 1997, Iran has bought gas from Turkmenistan to service its north, and sold its own gas abroad.
Deputy Oil Minister Hamid Reza Araqi said this week that his boss and Turkmen President Gurbanguly Berdymukhamedov had met in Ashgabat this month to hammer out a new purchase agreement. According to regional news agency AKIpress, the meeting happened November 7.
“The deal makes it possible to raise the amount imported from Turkmenistan in cold months of the winter; starting in the beginning of the current year, Turkmenistan has exported 24-25 million cubic meters of natural gas to Iran [daily],” said Araqi, in comments carried in English by Iran’s Mehr news agency on November 19.
The agreement contains a provision to increase this to 30 million cubic meters daily, he added.
For Kyrgyzstan observers, reports that kerosene is being stolen from a Russian airbase and illegally sold on the open market will hardly surprise. But it is still embarrassing.
Last week Kyrgyz authorities formally began investigating why a truck stopped leaving the Kant Airbase last month was found carrying 13 tons of stolen kerosene.
Details about the October 7 incident that triggered the November 11 investigation are still scarce. The driver, who appeared to have entered the Kant base without documents, has not been identified in press reports.
It seems unlikely a theft from the heavily guarded base would be possible without the connivance of Russian soldiers stationed there, Ruslan Umarov, who is heading the investigation for the State Service for the Fight Against Economic Crimes, conceded on November 12. “We have a circle of suspects. Currently we are clarifying the market channels, buyers and suppliers. It is possible that military servicemen at the Kant Airbase are involved in the case,” Umarov is quoted as saying by several Kyrgyz news outlets.
Kant receives its kerosene, which it uses it to fuel fighter planes and other aircraft, from a Kyrgyz-Russian joint-stock company partly owned by Russian energy behemoth Gazprom: Gazprom Neft Aero-Kyrgyzstan. The company has friends in high places. Sapar Isakov, President Almazbek Atambayev’s chief foreign policy advisor, was formerly chair of the company’s board.
There is a good chance that economic jockeying between China and Russia in Central Asia will intensify in the coming months. For Russia, Chinese economic expansion could put a crimp in President Vladimir Putin’s grand plan for the Eurasian Economic Union.
Astana has promised to save Kyrgyzstan from near-certain energy crisis this winter, committing to supply over a billion kilowatt-hours of electricity and releasing several Kyrgyzstan-bound oil tankers stuck on the border between the two countries since April. But questions remain about the terms of the deal signed by Kazakhstan’s Nursultan Nazarbayev and Kyrgyzstan’s Almazbek Atambayev on November 7.
Chiefly, how will Kyrgyzstan finance the difference between the cost of the electricity it is buying from Kazakhstan and the low rates its own citizens expect to pay—lower, according to energy officials, than the cost of production?
In other words, Kyrgyzstan has agreed to pay Kazakhstan far more than it charges its citizens per kilowatt-hour. Most of the energy will be subsidized by the impoverished government, Nurbek Elebaev, director of Kyrgyzstan’s State Department for the Regulation of the Fuel and Energy Complex, told Vechernii Bishkek on October 31. (Note: $1 is about 58 soms at current rates.) He said:
It is worth noting that the cost of the imported energy is 5.13 soms for a kilowatt-hour. Accordingly, every kilowatt-hour will be subsidized [by Kyrgyzstan] by around 3 soms. Moreover, 5.13 soms is the cost of electricity up to the Kazakh border. The cost of transit from the border to the consumer will be borne by [Kyrgyzstan’s] energy company. How the company will cover the financial deficit will be decided by the government. The cabinet will need to borrow money. This tariff will apply to 1 billion kilowatt-hours of electricity. A further 400 million kilowatt-hours will be determined by an exchange in kind.
It has been a chastening few months for gas-rich Turkmenistan. Two long-standing energy buyers have indicated they will stop purchasing the country’s natural gas, potentially leaving Ashgabat dependent on Chinese demand.
With the arrival of November, the serfs trickle home from Turkmenistan’s cotton fields. But a culture of state employees being forced to labor in menial jobs continues throughout the year, says an annual monitoring report. As they wait for the fields to bloom again with “white gold,” low-skilled municipal workers such as janitors and security guards are obliged to do free housekeeping for Turkmen bureaucrats, and to travel to faraway cities to participate in cleanups for the state, the report alleges.
Turkmenistan’s Central Asian neighbor Uzbekistan is usually the focus of international flak for mobilizing its citizens – notably students – to harvest cotton each fall. But totalitarian Turkmenistan, which produces more cotton per person than Uzbekistan, is just as keen on exploiting its bloated public sector for field hands, according to the October 14 briefing, published by Alternative Turkmenistan News (ATN), a service run by Turkmen exiles who partner with Amnesty International and the Norwegian Helsinki Committee.
Drawing on domestic accounts, the second annual report provides an important insight into Turkmenistan’s labor market. It pays particular attention to Turkmenistan’s low-paid state employees who have limited means to defend their rights in a country where de facto unemployment is high and cowed government workers can be replaced easily.
As Uzbekistan continues the annual cotton harvest that is largely responsible for the Aral Sea’s demise, officials in Tashkent are boasting that a recent donor conference raised close to $3 billion to help save the endangered lake, once the world’s fourth-largest.
Verifying Uzbek government claims is never easy, and conference attendees are not hurrying to confirm or break down the impressive figure. But an event for the Aral Sea did take place in Urgench, a city not far from the Aral’s receding shoreline, on October 27 and 28. Addressing the conference via pre-recorded video, UN Secretary General Ban Ki Moon demanded better international coordination to “mitigate environmental catastrophe” reported uz24.uz, an Uzbek outlet. According to the independent Uznews.net, the conference was organized by the authoritarian state in conjunction with the International Fund for Saving the Aral Sea, a regional club, which critics say has done almost nothing since it was set up in 1993.
NASA satellite photos released in late August show that even a partial replenishment of the water-starved Aral is unlikely: The lake’s eastern tranche has completely dried up for the first time in history.