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Eurasian Heart of Gold

Samantha Brletich

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What is the impact of Kumtor on Kyrgyzstan’s Gold Mining Sector?

Nationalization talks have started again in Kyrgyzstan about the ownership of Kumtor Gold Mine. Kumtor Gold Mine, operated and jointly owned by Canadian Centerra Gold via Kumtor Operating Company (KOC) and the Kyrgyz government, has always been a point of tension in the country. Marred by protests, both anti-Kyrgyz government and anti-Centerra, environmental controversy, and being the center of internal Kyrgyz political and social struggles, Kumtor remains Kyrgyzstan’s largest and the most profitable investment project and the country’s main economic asset.

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The Kumtor Gold Mine, the largest gold mine in Kyrgyzstan located in the Issyk Kul Province, is located 350 kilometers southeast from the capital of Bishkek and 80 km south of Issyk-Kul Lake. The mining operation is open-pit which uses surface mining to extract rocks and minerals. The mine has been in operation since 1997; the lifespan of the mine has been extended to 2023.

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The mine which is currently 100% owned by Canadian Centerra Gold (operated through Kumtor Operating Company or KOC) is a joint-stock company (JSC) which Kyrgyzstan via Kyrgyzaltyn owns “33% of the common shares or 77,401,766” and “as of March 1, 2012, Kyrgyzstan’s interests are estimated at $1.546 billion.”[i] Kumtor currently employs 2,617 Kyrgyz citizens (95% are full-time) out of 3,190 total employees. Kumtor accounts for 20% of Kyrgyzstan’s industrial sector and output and accounts for 8% of its GDP. With current dividends, Kyrgyzstan receives 11.3 million USD per year and KOC pays 108 million USD in taxes to the Kyrgyz government.[ii]

Ata-Meken has submitted a draft law on the nationalization of Kumtor. The last round of talks/negotiations about Kumtor took place 10 December 2014. Calls for nationalization emerged out of the failure to establish a joint-venture of the mine: “due to populism we have lost the chance to set up a joint venture [for Kumtor],” Kyrgyz President Atambayev said in a 1 December 2014 interview.[iii] The currently discussion would have Kyrgyzaltyn swap 33% of its holdings for 50% ownership of the joint venture company operating Kumtor, making ownership 50/50. Alternatively, the Kyrgyz nationalist political parties (Ata-Meken and Respublika) suggest Kyrgyzaltyn own 67% while Centerra holds 33% or Kyrgyzaltyn control 100% of the mine as advocated by Respublika.[iv]

The assertiveness of the Kyrgyz when negotiating mining contracts is due to the feeling that foreign companies operating the mines are not investing in local communities and are not promoting development in the region. This is partly because of past environmental accidents.

In May 1998, a truck toppled releasing 1700-1800 kg of toxic sodium cyanide into the Barskoon River. After the accident, local villagers reported illness (some deaths were reported by never fully linked to the cyanide spill—this is speculative) as the river is used for drinking and for irrigation. After the accident and the lackluster response by both Centerra and the Kyrgyz government, locals blockaded the roads to Kumtor and demanded that the contract be cancelled. This prompted more environmental safeguards such as immediate notification of a spill was to be implemented. Another incident occurred on January 20, 2000 where a KOC truck “carrying 1,500 kilograms of ammonium nitrate, used as an explosive at the mine, crashed, [and] spilling its contents.”[v] Kyrgyz authorities were not immediately notified of the spill.

Because of these accidents, there is concern about the use of land. The Kyrgyz Republic’s “Law on Subsoil” introduced in 1997 “governs relationships arising between the government and individuals and legal entities, and other states while using subsoil” and regulates mineral recovery (extraction), mineral deposits of economic significance, ownership of the subsoil and there within minerals.[vi] The Law states that subsoil is the exclusive property of the Kyrgyz Republic is under protection by the state. This law has been used to regulate mining activities and has been used to justify violations of environmental regulations including operations at Kumtor.

The “Law on Glaciers”—to prevent the degradation of glaciers that supply drinking water to many local villages—was passed by Parliament in April 2014, but was sent back by the President for revisions. The new law would require companies to pay for damages to the glaciers. The glaciers affected would be Davidov, Lysyi and Sarytor as KOC has put rocks on top of glaciers and removed parts of glacial ice violating environmental provisions of the project; Centerra has adjusted their operations to stop the acceleration of water.[vii] Lake Petrov is also in danger.

It is unclear whether or not the environmental laws on glaciers or subsoil are genuine attempts to preserve the environment or are a way for the Kyrgyz government to extract concessions from foreign companies to increase their profits or holdings in a company.

There are also concerns how the mining and the chemical usages to mine the gold will affect the historic freshwater Issyk-Kul Lake. The Issyk-Kul Development Fund became part of the Kumtor operation and KOC/Centerra is required to provide 1% of its gross revenue to socio-economic development of regional sectors aligned with spending is based on government priorities. The fund was started in 2009 and since then 25 million USD was provided to the fund; 4.638 million USD was provided to the fund in 2012 alone. The fund has helped build schools, kindergartens, sports clubs, and irrigation infrastructure which has been impacted by the mining.

To mitigate any significant economic effects of the nationalization of Kumtor, additional gold mining operations exist at Ishtamberdy, Bozymchak and Taldybulak Levoberezhnyi mines. Ishtamberdy is Chinese operated, protested by Kyrgyz locals, and has experienced some controversy including Full Gold Mining JSC threatening to cease operations in September 2013. The mine was to begin production in the second quarter of 2013 creating 600 permanent jobs.[viii]

Bozymchak mine would produce mainly ore and would produce 0.8 to 0.9 tons of gold. Kazakhstan’s Kazakhmys incurred an impairment charge in 2012 of $162 million USD against Bozymchak which reveals a higher operating risk in Kyrgyzstan as the company had to reduce its goodwill.[ix] The first shipment of the concentrate from Bozymchak to Kazakhstan was expected to occur in November 2014.[x] The mine was said to have completed construction in late 2013 providing 600-700 permanent jobs. Taldybulak Levoberezhnyi, an Open Joint Stock Company, is expected to be in operation until 2026: 60% belongs to Altynken (purchased by Chinese Superb Pacific Limited Company in Sept 2011) and 40% belongs to the Kyrgyz government. At the Taldybulak Levoberezhnyi, production was not expected until June 2014 according to AKIPress. In October 2012, locals picketed the headquarters of the mine in Orlovka, Kyrgyzstan. The protesters disputed the “Chinese company’s illegal sacking of Kyrgyz citizens and polluting of the local environment.”[xi]

There are also gold deposits that could be exploited including Makmal and Togolok but they are not as profitable. The Makmal gold mine was once extremely profitable. Operations at Makmal began in 1986 and excavated until 1996 producing 21.47 tons of gold. The mine is in past producer stage and its life has been extended to 2016. Geological reserves after 1996 were estimated at 20 tons of gold. [xii] Mining operations at Togolok will produce 800 jobs and its probable reserves are estimated at 86 tons in the mine deposit and the surrounding area.[xiii]

There are multiple promising gold deposits/sites are Karator, At-Bashy in the Naryn region, containing 5.5 gold reserves and the “Buchuk” gold reserve of 15-20 tons. Shambasei gold resource, a low-risk high-margin project, in Southern Kyrgyzstan has an estimated defined gold reserve of “2.5 million [tons] at 3.4g/t, or 277,000 ounces of gold.”[xiv] Karakazyk in the Chon-Alay district in the Osh region would produce 200-300 kg per year producing 100-120 jobs for the local workforce. These identified sites combined produce less gold and revenue than Kumtor and would provide fewer jobs.[xv]

The nationalization of Kumtor must be mitigated by the countries’ other mineral sectors such as copper, ore, silver, iron and tungsten. To remain economically competitive within the Eurasian Economic Union, Kyrgyzstan must develop sustainable economic and mining practices as the Kyrgyz economy is susceptible to many supply shocks; reliance on Kumtor is too heavy. By developing other sectors of the economy, Kyrgyzstan is shielding itself from a possible economic meltdown. If nationalization were to occur, would the Kyrgyz government be able to support the projects developed by the Issyk-Kul Development Fund? Poor development in the financial sector has led to poor governance of the situation prompting protests that have shut down or suspended operations.

Kumtor protests were rooted in the need to address environmental concerns, contributions to the community, and perceived unequal revenue distribution and fueled by renewed nationalism and the assertiveness of the new post-Bakiev government. South African investors (Talas Gold Company) and Australian investors (Z-Explorer of Manas Resources) have met the same challenges as Canada’s Centerra. If these issues are not resolved, can cause widespread damage to Kyrgyzstan’s gold mining and damage Kyrgyzstan’s reputation as a reliable foreign business partner. Corruption in Kyrgyzstan is also a concern. According to Transparency International 2014 Corruption Perception Index rankings, Kyrgyzstan has a rank of 27 (0 is the most corrupt to 100 which is the least corrupt).

Kyrgyzstan would most likely be unable to run the mine itself: “[KOC] does not earn money on a daily basis. It receives financial support from Centerra for most of the year until it can sell gold and pay back all of its loans.” [xvi] Pay out would not be immediate and the government would have to put the money upfront to benefit the costs. Most of the workers that Kumtor employs would most likely stay unless the nationalization of the mine were to affect their wages and Kyrgyzstan lacks the workforce to replace Centerra’s sector specialists. If nationalized, there would be higher operating costs decreasing revenue. Other companies (or countries) might be interested in developing the mine, but would most likely face the same issues as Centerra Gold leading Kyrgyzstan to become more of a high political risk country.

 


[i] Kumtor Gold. 2013. FAQ: Kyrgyzstan and Centerra. http://www.kumtor.kg/en/about/faq/centerragold-and-kyrgyzstan/ (last accessed 29 December 2014).

[ii] Gullette, David and Asel Kalybekova. 2014. Agreement under pressure, Gold mining and protests in the Kyrgyz Republic. Friedrich Ebert Stiftung. http://library.fes.de/pdf-files/id-moe/10927.pdf (last accessed January 3, 2015). Page. 15.

[iii] Kg.24. 2014. Kyrgyz moves towards Kumtor nationalization. The Times of Central Asia. http://www.eng.24.kg/bigtiraj/173638-news24.html (last accessed 29 December 2014).

[iv] Gullette, David and Asel Kalybekova. 2014. Agreement under pressure, Gold mining and protests in the Kyrgyz Republic. Friedrich Ebert Stiftung. http://library.fes.de/pdf-files/id-moe/10927.pdf (last accessed January 3, 2015). Page. 15.

[v] Norlen, Doug. 2000. The Kumtor Gold Mine: Spewing toxics from on high. Pacific Environment and Resouces Center, September 2000. Bankwatch Web site. http://bankwatch.org/documents/kumtor_toxics_09_02.pdf (last accessed January 4, 2015). Page 2.

[vi] United Nations Economic Commission for Europe (UNECE). Law of the Kyrgyz Republic on Subsoil. United Nations Economic Commission for Europe Web site (UNECE). http://www.unece.org/fileadmin/DAM/hlm/prgm /cph/experts/kyrgyzstan/documents/law.on.subsoil.pdf (last accessed January 5, 2015)

[vii] Centerra Gold. 2012. Environmental and Sustainability Report 2012. Kumtor Gold. http://www.kumtor.kg/wp-content/uploads/2014/01/Eco2012_en.pdf (last accessed January 3, 2015). Page 28-29.

[viii] The State Agency on Geology and Mineral Resources of the Kyrgyz Republic. 2014. The mines of the Kyrgyz Republic. http://www.geology.kg/index.php?option=com_content&view=article&id=200&Itemid=242&lang=en (last accessed Jan 2, 2015).

[ix] Kazakhmys. 2013. KAZAKHMYS PLC HALF-YEARLY REPORT FOR THE PERIOD ENDED 30 JUNE 2013. KAZAKHMYS WEB SITE. http://www.kase.kz/files/emitters/GB_KZMS/gb_kzms_reliz_220813_en.pdf (last accessed January 3, 2015).

[x]The Times of Central Asia. 2014. Kazakhmys to start shipping concentrate from Bozymchak in Kyrgyzstan in November. http://www.timesca.com/news/9961-kazakhmys-to-start-shipping-concentrate-from-bozymchak-in-kyrgyzstan-in-november (last accessed December 30, 2014).

[xi] Trilling, David. 2012. Kyrgyzstan: Chinese Respond to latest mine attack. Eurasianet.org Web Site. http://www.eurasianet.org/node/66121 (last accessed January 2, 2015).

[xii] Kyrgyzaltyn. 2011. Makmal Gold Mining Combinate. Kyrgyzaltyn Web site. http://www.kyrgyzaltyn.kg/en/filialy/63-kombinat-makmalzoloto (last accessed December 29, 2014).

[xiii] The State Agency on Geology and Mineral Resources of the Kyrgyz Republic. 2014. The mines of the Kyrgyz Republic. http://www.geology.kg/index.php?option=com_content&view=article&id=200&Itemid=242&lang=en (last accessed Jan 2, 2015).

[xiv]Proactive Investors. 2014. Manas Resources updates Shambesai gold resource to latest standard

http://www.proactiveinvestors.com/companies/news/58591/manas-resources-updates-shambesai-gold-resource-to-latest-standard-58591.html (last accessed January 3, 2015).

[xv] The State Agency on Geology and Mineral Resources of the Kyrgyz Republic. 2014. The mines of the Kyrgyz Republic. http://www.geology.kg/index.php?option=com_content&view=article&id=200&Itemid=242&lang=en (last accessed Jan 2, 2015).

[xvi] Gullette, David and Asel Kalybekova. 2014. Agreement under pressure, Gold mining and protests in the Kyrgyz Republic. Friedrich Ebert Stiftung. http://library.fes.de/pdf-files/id-moe/10927.pdf (last accessed January 3, 2015). Page. 10.

Samantha M. Brletich is a researcher and writer specializing in Central Asia and governance, security, terrorism, and development issues. She possesses a Master’s in Peace Operations Policy from George Mason University in Virginia, United States. She works with the virtual think tank Modern Diplomacy specializing in Central Asia and diplomatic trends. Her work has appeared in multiple publications focused on diplomacy and Central Asia respectively. She is currently an employee of the U.S. Federal Government.

Central Asia

Unjustified Hope of Iran’s Central Asia Policy

Uran Botobekov

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The Washington factor has been and remains, if not the main obstacle, then at least a deterrent to Iran’s strengthening in Central Asia over the past thirty years. The former Soviet Central Asian Muslim republics – Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan, and Turkmenistan – collectively known as the “Five Stans”, is a scene of the big game and intense rivalry. In view of geopolitical and geo-economic conditions, these countries have experienced ups and downs in collaboration with Iran. Amid the background of the intensifying Iranian crisis, this article presents a brief analysis of the cooperation between Iran and Central Asian countries, whose people are regional neighbors and have close linguistic, historical and cultural commonalities.

Iran’s “soft power” in Central Asia

After the collapse of the Soviet Union in 1991, Iran was among the first countries to recognize the independence of the five Central Asian republics, intending to spread its influence through cultural, historical and religious commonalities. The establishment of the first diplomatic relations fell on Iranian president Ali Akbar Hashemi Rafsanjani, who was identified in Central Asia as a relatively moderate leader. He was well aware that after 80 years of communist influence, these “Stans” secular regimes would not accept any Islamic ideology. Therefore, in the late 1990s, his government sought to consolidate the foundations of cultural and historical ties as a tool of “soft power” of Iran’s Central Asia policy.

The main executive body for promoting Iranian “soft power” in the region has become the Islamic Culture and Relations Organization (ICRO), a parastatal agency that is subordinate to the Ministry of Culture and Islamic Guidance. This organization was considered Iran’s de facto public diplomacy organization and is under the control of the Supreme Leader’s office. By opening Iranian cultural centers in all Central Asian capitals, it has sought to institutionalize elements and patterns of its Persian language and culture in the region. Today, leading Central Asian faculties sufficiently promote Persian language courses that are supported by the Islamic Republic embassies.

In the light of the objectives of the present study, particularly Tajikistan case is seen as a tool of Iranian ‘soft power’ to create a “bridge” between Tehran and Central Asia and become a regional leader. These two ethnicities are considered relatively close, sharing the same Persian roots and constituting the basis of the “Great Persian World.”

Accordingly, with the financial support of Iran’s government, Research Projects such as the Tajik-Persian Culture Research Institute, the “Alhoda” bookstores and “Payvand” magazine have also had an important role in the regional influence. In accordance with the agreement on cooperation in the field of higher education, Tehran funded Tajik students to study at Iranian universities, especially in the modern Persian language and literature. In addition, in 2009, the Iranian state-run Persian News Agency opened its first office in Dushanbe. Correspondingly, Iran was able to represent itself as the main defender and provider of Persian heritage to the Tajik nation. 

Additionally, Iran has solidly invested in the Tajik economy, ranking itself as the second foreign investor after China. This was particularly seen during the rule of conservative president Mahmoud Ahmadinejad, who due to the growing confrontation with the West, preferred cooperation with the northern post-Soviet countries of Central Asia and the Caucasus. His government funded the construction of the Anzob/Istiqlol tunnel through the Pamirs, and the Sangtuda-2 hydropower plant. Alongside its economic support, the Tehran government has been trying to implement its own nuclear project and receiving political support from Tajikistan.

A single geographical territory in the past made these countries to have closer cultural, economic and political integration. Mahmoud Ahmadinejad sought to use the national-cultural identity as a starting point for creating a Union of Persian-Speaking Nations: Iran, Afghanistan and Tajikistan. Its first joint summit was held in Dushanbe onJuly 2006, when they decided to establish a jointly-run Persian-language TV channel called “Navrooz-TV”. Also Ahmadinejad’s initiative, the three states established the Economic Council of the Persian-Speaking Union in March 2008.

Regional Implications

The shift of political soft power is taking place at a time of intensified geopolitical uncertainty for Iran. Therefore, it is imperative to question whether Tehran’s ambitions to break out of international isolation was indeed successful. At first, the person spearheading this debate the most was none other than Afghanistan’s former president Hamid Karzai, when the U.S. and NATO forces ensured country’s military, economic and financial stability of the country. Therefore keeping excessive close ties with Iran would damage its connections with powerful western partners. Secondly, Russia’s President Vladimir Putin was negatively viewed at the new Persian Union as it has military and political leverage in Tajikistan. Consequently, Russia was firm in ensuring that Tehran would not strengthen its role in the region. Moreover, Iran’s activities in the Middle East, which caused inter-religious tensions between Sunni and Shia Islam, also affected the sentiments of Central Asian Muslims. Saudi Arabia, Iran’s historical rival, has taken active steps to reach out to Sunni Tajiks to bring them to its side. Over the past thirty years, the Gulf monarchy has spent billions of dollars on spreading radical Islam in the “Five Stans” and Iran’s retention.

Tit for tat

Relations between Tajikistan and Iran seriously deteriorated in 2015 as Tajik authorities accused Iran of supporting the opposition Islamic Renaissance Party of Tajikistan (IRPT), attempting a coup d’état in the country and training Tajik Islamic militants in Iran. Iran incurred Tajikistan’s profound rage in December 2015, when Iran’s top leader Ali Khamenei received IRPT leader Muhiddin Kabiri, who left the country due to political persecution of the authorities. Dushanbe saw the hand of Iran in a terror act on July 2018, in Danghara where 4 foreign tourists were killed. Notwithstanding, Iran has diplomatically rejected the accusation, which deteriorated the relationship between the two Persian-speaking states.

The growth of anti-Iranian sentiment, accompanied by demonstrations in front of the Iranian embassy in Dushanbe, putting an end to Tehran’s initiative in creating a Union of Persian-Speaking Nations based on close linguistic, historical and cultural commonalities. Due to the opposition of regional players and the absence of a broad Shia base, Iran failed to implement the project of the “Great Persia” in Central Asia, as it tries in the Middle East.

As a result of growing tensions, Iran significantly reduced investment in the Tajik economy and closed its economic and cultural offices in the north of Tajikistan. To hold on to its strong lineage of refuting sanctions, Tajikistan banned the import of Iranian food and goods “due to poor quality”, abolished a simplified way of obtaining visas for Iranians, and closed the branch of the Imam Khomeini Relief Committee.

After reaching the 2015 nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA), and partial withdrawal of the international sanctions, the Rouhani government sought to resume broken relations with the European Union, Japan, South Korea, and East Asia. The result of this policy was a significant reduction in Iran’s trade with all the countries of Central Asia since 2016. According to official data, trade between Tajikistan and Iran decreased substantially more than three times, while Iran’s trade with Kazakhstan and Kyrgyzstan experienced a significant loss in numbers.

Iran’s nuclear agenda in the Central Asian multilateral cooperation

The “diplomatic quarrel” and a “trade war” between Tajikistan and Iran negatively influenced Tehran’s ambition to join the Shanghai Cooperation Organization. Even though Iran filed a formal application for membership in 2008, Tajikistan twice vetoed its admission and promptly placed its harsh posture against Iran. At the last SCO summit in the Kyrgyz capital Bishkek on June 2019, Russia and China firmly supported Iran and stated that the other members, despite the U.S. withdrawal from JCPOA, should respect the nuclear deal. Now that the temperature of tension between Tehran and Washington has reached its highest point, as the SCO has become one of the international platforms for Iranian President Rouhani, who accused the US of “serious” threat to regional and global stability.

Governments of the “Five Stans” seek to maintain a middle position on the Iranian nuclear issue, affirming the right of Iran to use nuclear technology for peaceful purposes. Today, as the Trump administration’s “maximum pressure” policy has cornered Iran and its economy has been in terrible pain, the new president of Kazakhstan, Kasymzhomart Tokayev, called for the resolution of nuclear contradictions through diplomacy. Being the country’s top diplomat and Prime minister in the 90s, Tokayev played a key role in eliminating Kazakhstan’s nuclear arsenal, inherited from the USSR, and gaining the status of a non-nuclear power. In the past, Kazakhstan has repeatedly called Iran to follow its example.

In addition, Iran and the Central Asian countries also cooperate within the framework of the OIC, the ECO and the CICA, whose platform Iran uses to accuse “American imperialism” and defend its nuclear ambition.

Conclusion

The ups and downs of bilateral and multilateral cooperation of Iran with the “Five Stans” over the past quarter-century have shown that Tehran failed to establish its zone of influence in Central Asia, in the same way as it has created Iranian proxy Shia groups in the Middle East. The main reason for Tehran’s inability to prove itself as an attractive economic partner in Central Asia is the US long-term strategy to contain Iran through economic sanctions and its confrontation with the West over its nuclear program. Therefore, despite the advantages of geographic, religious and cultural commonalities, Iran remains unable to open a “window” to Central Asia in conditions of international isolation and emerge as a regional power.

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Central Asia

Shifting Sands: Chinese encroachment in Central Asia and challenges to US supremacy in the Gulf

Dr. James M. Dorsey

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China and Russia are as much allies as they are rivals.

A joint Tajik-Chinese military exercise in a Tajik region bordering on China’s troubled north-western region of Xinjiang suggests that increased Chinese-Russian military cooperation has not eroded gradually mounting rivalry in Central Asia, long viewed by Moscow as its backyard.

The exercise, the second in three years, coupled with the building by China of border guard posts and a training centre as well as the creation of a Chinese security facility along the 1,300 kilometre long Tajik Afghan Border, Chinese dominance of the Tajik economy, and the hand over of  Tajik territory almost two decades ago, challenges Russian-Chinese arrangements in the region.

The informal arrangement involved a division of labour under which China would expand economically in Central Asia while Russia would guarantee the region’s security.

The exercise comes days after China and Russia operated their first joint air patrol and months after Tajik and Russian forces exercised jointly.

The “exercise represents a next step in China’s overall encroachment upon Russia’s self-proclaimed ‘sphere of influence’ in Central Asia,” said Russia expert Stephen Blank.

“Moscow has given remarkably little consideration to the possibility that China will build on its soft power in Central Asia to establish security relationships or even bases and thus accelerate the decline of Russian influence there,” added Eurasia scholar Paul Goble.

The perceived encroachment is but the latest sign that Russia is seeking to balance its determination to ally itself with China in trying to limit US power with the fact the Chinese and Russian interests may be diverging.

The limitations of Russian Chinese cooperation have long been evident.

China, for example, has refrained from recognizing Russian-inspired declarations of independence in 2008 of two regions of Georgia, Abkhazia and South Ossetia that recently sparked anti-government protests in Tbilisi.

China similarly abstained in a 2014 United Nations Security Council vote on a resolution that condemned Russia’s annexation of Crimea.

Meanwhile, Chinese dependence on Russian military technology is diminishing, potentially threatening a key Russian export market. China in 2017 rolled out its fifth generation Chengdu J-20 fighter that is believed to be technologically superior to Russia SU-57E.

Perhaps most fundamentally, Chinese president Xi Jinping opted in 2013 to unveil his Belt and Road initiative in the Kazakh capital of Astana rather than Moscow.

By doing so and by so far refusing to invest in railroads and roads that would turn Russia into a transportation hub, Mr. Xi effectively relegated Russia to the status of second fiddle, at least as far as the Belt and Road’s core transportation infrastructure pillar is concerned.

China’s recently published latest defense white paper nonetheless praised the continued development of a “high level” military relationship with Russia that is “enriching the China-Russia comprehensive strategic partnership of coordination for a new era and playing a significant role in maintaining global strategic stability.”

In a bid to ensure Russia remains a key player on the international stage and exploit mounting tension in the Gulf, Russian deputy foreign minister and special representative to the Middle East and Africa Mikhail Bogdanov this week proposed a collective security concept that would replace the Gulf’s US defense umbrella and position Russia as a power broker alongside the United States.

The concept would entail creation of a “counter-terrorism coalition (of) all stakeholders” that would be the motor for resolution of conflicts across the region and promote mutual security guarantees. It would involve the removal of the “permanent deployment of troops of extra-regional states in the territories of states of the Gulf,” a reference to US, British and French forces and bases.

Mr. Bogdanov’s proposal called for a “universal and comprehensive” security system that would take into account “the interests of all regional and other parties involved, in all spheres of security, including its military, economic and energy dimensions” and ensure the provision of humanitarian assistance.

The coalition to include the Gulf states, Russia, China, the US, the European Union and India as well as other stakeholders, a likely reference to Iran, would be launched at an international conference on security and cooperation in the Gulf.

It was not clear how feuding Gulf states like Qatar, Saudi Arabia, the United Arb Emirates and Iran would be persuaded to sit at one table. The proposal suggested that Russia’s advantage was that it maintained good relations with all parties.

“Russia’s contributions to the fight against  Islamic terrorist  networks  and  the  liberation  of parts  of  Syria  and Iraq  can  be regarded  as  a  kind  of  test for  the role  of  sheriff  in  a  Greater Eurasia” that would include the Middle East, said political scientist Dmitry Yefremenko.

Mr. Putin this week  asserted himself as sheriff by signalling his support for embattled former Kyrgyz president Almazbek Atambayev, a Putin crony who has been charged with corruption. Following a meeting in Moscow, Mr. Putin urged Mr Atembayev’s nemesis. president Sooronbai Jeenbekov, not to press charges.

At the same time, Mr. Putin, building on his visit to Kyrgyzstan in March, offered Mr. Jeenbekov a carrot.

Kyrgyzstan “needs political stability. Everybody needs to unite around the current president and to help him develop the state. We have many plans for cooperation with Kyrgyzstan and we are absolutely determined to work together with the current leadership to fulfill these plans,” Mr. Putin said.

Russia and Kyrgyzstan signed an agreement during the visit to expand by 60 hectares the Kant Air Base 20 kilometres east of the capital Bishkek that is used by the Russian Air Force and increase the rent Russia pays.

Mr. Putin further lavished his Kyrgyz hosts with US$6 billion in deals ranging from power, mineral resources and hydrocarbons to industry and agriculture.

Mr. Putin also allocated US$200 million for the upgrading of customs infrastructure and border equipment to put an end to the back-up of dozens of trucks on the Kazakh-Kyrgyz border because Kyrgyzstan has so far been unable to comply with the technical requirements of the Russia-led Eurasian Economic Union (EEU).

Uzbek president Shavkat Mirziyaev last month gave the EEU, that groups Russia, Kazakhstan, Kyrgyzstan Belarus, and Armenia,  a boost by declaring that Uzbekistan would need to join the trade bloc to ensure access to its export markets.

EEU members account for 70 percent of Uzbek exports.

Said Russia and Eurasia scholar Paul Stronski: “China’s deft diplomacy towards Russia — along with both states’ desires to keep the West out of their common backyard — has kept tensions behind closed doors. But with China now recognising it may need to strengthen its security posture in the region, it is unclear how long this stability will last.”

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Central Asia

Chimes from Tashkent

Sabah Aslam

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Located at the new center of global attraction for economic activity, Pakistan and Uzbekistan share a long string of relations. After the independence from the soviets, Pakistan was among the first countries to recognize it. In 1992, Pakistan established their first diplomatic sanctuary in Tashkent. Since then delegations from both the countries paid visits to each other.

The bond shared between the two countries, that lie in close proximity, is strengthened by similar eastern culture and fortified by the religious ties. This sharing of cultural and religious values is clearly visible in the national language of Pakistan which borrows thousands of words from Uzbekistani language. This nexus is now getting even stronger with the increase in co-operations in social and economic sectors.

Relations between both the states saw an unprecedented growth in recent times and this social integration is ever growing. During the last year only,

63events such as seminars, presentations and business forums were arranged for general public. Whereas, the Uzbek Embassy had a significant number of bilateral meetings with the top tier of business community including several associations and unions. The same sentiment was reciprocated by Pakistani side when more than 50 companies paid visit to Uzbekistan with the purpose of investment. There were a number of exhibitions, events and investment forums in Tashkent, Jizzakh and Bukhara. Eight different Pakistani companies participated in such events.

Uzbekistan and Pakistan have also been working on 38different joint ventures for launching import/export operations.

In economic sphere, Islamabad and Tashkent hold great trade potential. In just 2018, the mutual trade between both countries crossed USD 98.4 million’s mark, which means a raise of around 170%.Prior to 2018 in 2017 numbers of economic activity between two states were low and accounted for just USD 36.6 million.

In 2018 Pakistani export to Uzbekistan increased for 150% and amounted 66 million USD (in 2017 – 26 million USD).

Last year Ambassador of Uzbekistan to Pakistan Mr. Furqat A. Sidikov while addressing business community at Islamabad Chamber of Commerce and Industry expressed that trade volume between Pakistan and Uzbekistan has the potential to rise up to USD 1billion in next 5-6 years. It clearly signifies that both countries can provide enormous benefit to each other’s socio-economic segment. Pakistan has been exporting edibles like mango, citruses, raw and refined sugar. Furthermore, chemical products, pharmaceutical products, and leather and textile goods are major exports of Pakistan to Uzbekistan.

Uzbekistan is also a hub for petrochemical goods, cotton and silk goods. Its exports to Pakistan includes: leather raw materials, petrochemical products and mineral fertilizers, cotton yarn, cotton fiber, raw silk, plastic products, agricultural machinery, clothing, etc. Not only this, dry fruits and vegetables are also exported from Uzbekistan to Pakistan.

In 2018 Uzbekistan-Pakistan Business Council was established in Islamabad in order to facilitate and support the business community in two countries. Apart for this, several forums are also established in main cities of Pakistan to boost up the economic potential.

Accessibility remains a key subject in establishing people to people relations thus recognizing this flight route from Tashkent-Lahore-Tashkent was resumed in April of 2017. Both states also look forward to initiate new routes from Islamabad and Karachi as well. Earlier in May Uzbekistan’s Ambassador to Pakistan had a meeting with Chairman Senate of Pakistan to discuss the inter-parliamentarian cooperation between Pakistan and Uzbekistan. Sideways to expanding parliamentarian relations it was also discussed to further strengthen the cooperation on transport sector to provide uninterrupted route to trade of goods.

Both countries share many economical and regional platform and are member of Organization of Islamic countries (OIC), Shanghai Cooperation Organization (SCO), and Economic Cooperation organization (ECO)and others. Multiple times these platforms were used to freshen up the relations between two countries. Based on mutual trust both countries can have free trade agreements to amplify the relations between them.

Enormous potential lies in social, economic and political sectors on which both countries can work. Both countries can play a key role in bringing peaceful non-military solution to misery in Afghanistan as well as in the region. Pakistan needs to explore new avenues for cooperation with countries like Uzbekistan and extract the maximum benefit for itself.

Uzbekistan understands importance of Pakistan in keeping stability and prosperity of the whole South Asian region. Both countries are interested in continuing bilateral partnership on all key issues of the regional security and stability agenda, including the conflict resolution in Afghanistan and expansion of infrastructure, trade and economic ties between Central Asia and Pakistan.

Uzbekistan initiated logistic project that project will include the construction of the massive railroad transport corridor “Uzbekistan-Afghanistan-Pakistan”. In details, this corridor will compose the rail line “Uzbekistan-Mazarisharif” which has been already realized between Uzbekistan and Afghanistan as well as construction of new rail road “Mazari-Sharif-Kabul-Peshawar”. 

In perspective, full realization of this unique transport corridor, will make Pakistan as a Central regional trade hub between South Asian and Central Asian regions.

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