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New run in Kazakhstan?

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On April 26 Kazakhstan will vote to choose the next president, as a way to respond to global economic and regional socio-political crisis. On February 25 Nursultan Nazarbayev took the decision to hold advanced poll, one year before the natural end of term of office, after that many state officials called for new election.

The proposal came from the Assembly of People of Kazakhstan (APK), an institutional body that represents ethnic groups of the country. Soon after, it was the presidential party Nur Otan to back the idea, followed by the Prime Minister and by the two houses of Parliament. Almost all political spectrum supported the initiative, with the declared intention to extend Nazarbayev’s mandate as president of the country, in order to let him, according to APK, “successfully steer the country in this period of global trials”.

The “Elbasy” (leader of the nation, as nominated in 2010 by the Parliament), in charge since the country gained independence in 1991, has not yet decided to take part in the election, but if he will do, in all likelihood he will receive a new mandate. Nazarbayev, indeed, still enjoys a widespread popularity in the country. In 2011 he was re-elected with an overwhelmingly majority and no real alternative from opposition emerged during the last years, due to the fact that the presidential bloc is still united.

However, even if at a first glance the call for early election seems to say nothing new about the Central Asian country, the events of the last days reveal much about the political choices of the last months.

With the decision to hold an advance poll, Kazakh political establishment intends to prevent the deterioration of national social climate and to breathe new life into economic reforms. Modernization and political stability are key issues for Kazakhstan, especially if we consider that these two elements act as forces of consolidation of a society characterized by a broad ethnic and religious diversity.

For this reason, the negative economic outlook expected for the next years is seen not only as part of difficult times that will come, but as a potential source of social and political destabilization for Kazakhstan.

In 2014 Kazakhstan’s economy grew less than expected and with a rate much lower than those registered in previous years. For 2015 national GDP is going to grow even slower, between 1% and 2%. Difficulties are related to the fall of oil price, that forced government to cut growth forecast, but they are linked also to a 19% devaluation of tenge and a less advantageous trade relation with Russia – Kazakhstan’s major economic partner – due to an even more pronounced devaluation of rouble (more than 40%).It caused problems to Kazakh companies and fostered speculations about the possibility of a new depreciation of national currency.

Even oil & gas sector will receive a strong impulse only from 2017, when Kazakh major oilfields of Kashagan and Tengizare scheduled to boost national production.

The slowdown in economic development was caused also by a more unstable political situation in the post-Soviet region, due to Ukrainian crisis and growing tensions between Russia and Western countries that led to the imposition of mutual economic sanctions.

Kazakhstan does not want to alienate itself from the West, but also has no wish to antagonise Russia, as prof. Anis Bajrektarevic states in his luminary book: ‘Europe of Sarajevo 100 years later’. He accurately states that “…the Gorbachev-Yeltsin Russia experienced the greatest geopolitical contraction of any major power in the modern era and one of the fastest ever in history”…and that Putin Russia is recuperating and rethinking Russia.

These events are assessed with a mesmerising concern by the government in Astana. Kazakhstan has cautiously promoted a moderate stance in inter-ethnic issue, especially in relation to the large Russian community residing in the north of the country. In fact, since the gaining of independence, the aim of Nazarbayev was the strengthening of social concord, in order to avoid the disintegration of a country which is home of 130 nationalities and 17 religious communities.

With the decision to hold a new election, Kazakh élite is giving a response to all speculations about its future, in particular those regarding territorial integrity and ethnic concord, put into question by foreign media and politicians during 2014. Moreover, election is aimed to assure the continuity of a policy directed to build a multi-ethnic and secular state and, at the same time, to send out a signal about the will to protect the political and territorial unity of the country.

So, it isn’t surprising that Nazarbayev, during his annual speech to the nation on November 11, confirmed that stability political and social concord are fundamental factors for Kazakhstan in order to overcome the next years. Without them – according to Kazakh president- even economic development could be at risk. It’s for this reason that in the speech of February 25, when he announced the new election, he talked of “unity” and “stability”.

In this perspective, it’s possible to consider that the need to keep social harmony and the control of economic development were the principal objectives taken into consideration for the decision to hold new election.

Economic development and social concord have been priorities present in the actual Kazakhstan, but now they acquires a new and stronger significance. The last year was marked by events that are part of world economic and geopolitical crisis that can produce their effects even in the internal affairs of the State.

In the past, economic development has been a mean to assure the survival of the country in a difficult post-soviet transition and to achieve the fundamental national interests. Nazarbayev has been successful in realising a huge economic growth, elevating the quality of life of Kazakhstani people and as a consequence, granting stability.

Therefore, election is seen as the opportunity to continue the programmed economic reforms and to implement the new ambitious plan NurlyJol, announced last year, a comprehensive program of investments aimed to revitalise and diversify country’s economy.

It’s possible to say that, due to international turbulences, for Kazakhstan the vote of this year assumes a great relevance in order to show the commitment for both stability and modernization in a country that in the last two decades has assumed a key-role in Central Asian region and also in the global arena.

Indeed, thanks to its “multi-vector” foreign policy, Kazakhstan succeed to impose itself as a reliable international player, acting as protagonist in Eurasian integration projects, cultivating strategic partnership with Russia and China and establishing closer ties with West and EU, as confirmed by the recent Enhanced Partnership and Cooperation Agreement signed in Brussels.

Whether Nazarbayev will be candidate (as is highly possible) or not, the strategic goals of the country are not going to change. The great challenge for Kazakhstan is to confirm and strengthen the results obtained since independence.

In a period of political and economic turbulence, the maintenance of stability could be an important result not only for Kazakhstan and its ruling class, but also for the entire region.

Central Asia

Productive Employment Needed to Boost Growth in Tajikistan

MD Staff

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Tajikistan will need to create enough jobs to maximize productivity of the country’s increasing working-age population and spur economic growth, says a new Asian Development Bank (ADB) report.

In its new Asian Development Outlook (ADO) 2018, ADB projects Tajikistan’s gross domestic product (GDP) growth to reach 6% in 2018 and 6.5% in 2019. GDP growth for the country stood at 7.1% in 2017. ADO is ADB’s annual flagship economic publication.

“Tajikistan has a young population and the percentage of working-age people is projected to continue rising to 2030. In many countries, this has led to higher growth from a ‘demographic dividend’,” said Pradeep Srivastava, ADB Country Director for Tajikistan. “But for Tajikistan to benefit from such a dividend, it needs to undertake structural reforms to improve the investment climate, increase human capital and skills, and let entrepreneurship flourish to create productive jobs for the workforce.”

Despite Tajikistan’s economy growing at an average of about 7.2% from 1997 to 2016, the country is not creating enough productive jobs for its growing working-age population, which grew by 3% annually from 1991 to 2016. However, employment only rose by 0.7% annually over the same period. The report notes the need for structural reforms to improve the country’s business climate—for example, reducing and consolidating the number of inspection bodies, creating a healthier banking sector to facilitate lending, and streamlining procedures for issuing construction permits, paying taxes, and enforcing contracts.

The report also highlights the importance of strengthening local value chains and helping small and medium-sized enterprises improve their productivity and earnings to promote job creation. Assessing demand for various skills and using that information to improve job training can match workforce skills to market demand.

ADB’s growth forecasts for Tajikistan in 2018 comes on the back of expected fiscal tightening from the government to address the high ratio of public debt to GDP, which will likely constrain public investment, and a weak banking sector curbing private investment. The slight recovery in growth projection in 2019 is based on expected gains in the country’s manufacturing and mining sectors, as well as strengthened remittances.

Inflation is forecast to accelerate to 7.5% in 2018—reflecting higher liquidity spurred by potential sizable bank recapitalization, public salary and electricity tariff hikes, and modest somoni depreciation—before easing back to 7.0% in 2019. In 2017, inflation reached 6.7%.

ADB is celebrating 20 years of development partnership with Tajikistan in 2018. To date, ADB has approved around $1.6 billion in concessional loans, grants, and technical assistance to the country. ADB and Tajikistan’s development partnership, which began in 1998, has restored and built the country’s new transport and energy infrastructure, supported social development, expanded agricultural production, and improved regional cooperation and trade.

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Central Asia

ILO Reports Important Progress on Child Labour and Forced Labour in Uzbek Cotton Fields

MD Staff

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A new International Labour Organization report to the World Bank finds that the systematic use of child labour in Uzbekistan’s cotton harvest has come to an end, and that concrete measures to stop the use of forced labour have been taken.

The report Third-party monitoring of measures against child labour and forced labour during the 2017 cotton harvest in Uzbekistan is based on more than 3,000 unaccompanied and unannounced interviews with a representative sample of the country’s 2.6 million cotton pickers. It shows that the country is making significant reforms on fundamental labour rights in the cotton fields.

“The 2017 cotton harvest took place in the context of increased transparency and dialogue. This has encompassed all groups of civil society, including critical voices of individual activists. This is an encouraging sign for the future. However, there is still a lag between the sheer amount of new decrees and reforms being issued by the central government and the capacity to absorb and implement these changes at provincial and district levels,” says Beate Andrees, Chief of the ILO’s Fundamental Principles and Rights at Work Branch.

The ILO has been monitoring the cotton harvest for child labour since 2013. In 2015, it began monitoring the harvest for forced labour and child labour as part of an agreement with the World Bank.

Interviews carried out by the monitors took place in all provinces of the country and included cotton pickers and other groups which are directly or indirectly involved in the harvest such as local authorities, education and medical personnel. In addition, a telephone poll of 1,000 randomly selected persons was conducted. Before the harvest, the ILO experts organized training for some 6,300 people directly involved with the recruitment of cotton pickers.

The results confirm that the large majority of the 2.6 million cotton pickers engaged voluntarily in the annual harvest in 2017 and that there is a high level of awareness in the country about the unacceptability of both child and forced labour. The report confirms earlier findings that the systematic use of child labour in the cotton harvest has ended though continued vigilance is required to ensure that children are in school.

Instructions have been given by the Uzbek national authorities to local administrations to ensure that all recruitment of cotton pickers is on a voluntary basis. In September 2017, an order was given withdrawing certain risk groups (students, education and medical personnel) from the harvest at its early stage.

Moreover, cotton pickers’ wages have been increased in line with recommendations by the ILO and the World Bank. The ILO recommends that the government continues to increase wages and also addresses working conditions more broadly to further attract voluntary pickers.

Last September, Uzbekistan President Shavkat Mirziyoyev spoke before the United Nations General Assembly in New York where he pledged to end forced labour in his country and underscored his government’s engagement with the ILO. In November 2017, at the Global Conference on the Sustained Eradication of Child Labour in Argentina, Uzbekistan also pledged to engage with independent civil society groups on the issue.

The ILO Third-Party Monitoring (TPM) project in Uzbekistan will now focus on the remaining challenges, particularly the need for further awareness raising and capacity building, which varies between provinces and districts. It will ensure that all those involved in recruitment will have the information and tools needed to ensure that cotton pickers are engaged in conformity with international labour standards.

The monitoring and results from a pilot project in the area of South Karkalpakstan also show that cotton picking economically empowers women in rural areas. The cotton harvest provides many women with a unique opportunity to earn an extra cash income which they control and can use to improve the situation of their families.

The ILO TPM Project is funded by a multi-donor trust fund with major contributions by the European Union, United States and Switzerland.

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Central Asia

Kazakhstan Launches Online Platform for Monitoring and Reporting Greenhouse Gases

MD Staff

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An online platform for monitoring, reporting and verifying emission sources and greenhouse gases (GHG) was officially launched today by the Ministry of Energy of the Republic of Kazakhstan and the World Bank.

The platform is an essential element of the National Emissions Trading System of Kazakhstan, which was launched in 2013 as the country’s main instrument to regulate domestic CO2 emissions and to drive the development of low-carbon technologies. Today, the National Emissions Trading System of Kazakhstan covers all major companies in the energy, oil and gas sectors, mining, metallurgical, chemical and processing industries.

Since 2014, the World Bank Trust Fund Partnership for Market Readiness has provided technical assistance to Kazakhstan in supporting the implementation of the National Emissions Trading System of Kazakhstan and related climate change mitigation policies.

“Kazakhstan’s emissions trading system is the first of its kind in the Central Asia region,” said Ato Brown, World Bank Country Manager for Kazakhstan. “With support from the Partnership for Market Readiness, the country has made a great effort to develop policy options for mid- and long-term emissions pathways and to develop an action plan on GHG emissions reductions by 2030. The World Bank will continue to support the Government during the crucial stages of policy implementation.”

The platform enables Kazakhstan’s major emitters to transmit and record data on GHGs emissions, as well as trade online. The National Allocation Plan, adopted in January 2018, sets an emission cap for 129 companies for the period 2018-2020. Per the national allocation plan, quotas have been allocated until 2020.

“The electronic platform undoubtedly proves the evolution of the Kazakhstan emission control system, which will allow the monitoring, reporting and verification system to be upgraded to a much higher level,” said Sergei Tsoy, Deputy General Director of JSC Zhasyl Damu.

GHG data is confirmed by accredited bodies for verification and validation and transferred to the Cadastre using an electronic digital signature. To date, there are seven verification companies accredited in Kazakhstan, with five more in the process of accreditation.

The platform was developed by JSC Zhasyl Damu with the support of France’s Technical Center on Air Pollution and Greenhouse Gases. The system is administered by JSC Zhasyl-Damu, while the beneficiaries are the Climate Change Department and the Committee for Environmental Regulation and Control of the Ministry of Energy of the Republic of Kazakhstan.

Background

Kazakhstan is one of the largest emitters of GHG in Europe and Central Asia with total annual national emissions of 300.9 MtCO2e in 2015. The energy sector accounts for 82% of total GHG emissions, followed by agriculture (9.6%) and industrial processes (6.4%). More than 80% of produced electricity in Kazakhstan is coal-fired, followed by natural gas (7%) and hydro power (8%).

Kazakhstan proposed as its Nationally Determined Contribution (NDC) an economy-wide reduction of GHG emissions of 15% from 1990 emissions levels by 2030. Kazakhstan ratified the Paris Agreement in November 2016 and committed itself to the fulfilment of the proposed target as its first INDC. The objective will contribute to sustainable economic development as well as to the achievement of the long-term global goal of keeping global temperatures below 2 degrees Celsius. 

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