The 10 most important things you need to know on Caspian Sea Region for Monday, May 25
1Azerbaijani Foreign Minister Elmar Mammadyarov is in Moscow where he will hold talks with his Russian counterpart, Sergei Lavrov. The Russian Foreign Ministry said the two will discuss the conflict in the disputed Azerbaijani region of Nagorno-Karabakh and ways to strengthen bilateral ties when they meet on May 25. Strategic partnership between Russia and Azerbaijan is important both in terms of the bilateral cooperation and stability in the South Caucasus, Russian Foreign Minister Sergey Lavrov said. The economic relations between the two countries are developing, the trade turnover has reached its historic high and increased by 12 percent compared to 2014. Many Russian regions have relations with Azerbaijan, said Lavrov adding that preparations for the sixth Russian-Azerbaijani forum in Ekaterinburg are underway.
2Indonesia could soon be purchasing crude oil form Iran and tapping into the Middle Eastern nation’s oil fields. “The government is considering opportunities to buy Iranian crude directly,” said Dadan Kusdiana, spokesman for the Ministry of Energy and Mineral Resources. The United States government and the European Union have blocked the import, purchase and transport of Iranian crude.But Indonesia could soon join other countries in Asia, such as China, India and Japan, and start buying oil from Iran. (Jakarta Globe)
3Azerbaijan and Russia have reached an agreement to hold a joint military exercise in Caspian Sea. Nearly ten surface ships and vessels will take part in the exercise. During the consultations, the representatives of the military delegations agreed to hold an exercise on joint actions to protect marine economic objects in the Caspian Sea in the central part of the sea in September of 2015.
4In 2015 Kazakhstan may increase its grain exports to Iran five times thanks to the Uzen-Bereket-Gorgan railway launched in December 2014, President Nursultan Nazarbayev said when speaking at the annual Astana Economic Forum. The 900-km-long railway link constructed through concerted efforts of the nations involved and launched early December 2014 runs from the Kazakhstan’s steppe across Turkmen Karakumy desert to the mountainous Gulistan province in the North of Iran. The project was bolstered by the Asian Development Bank and the Islamic Development Bank.
5Wary of Russia, Europe now tiptoes when it comes to expansion: “In the final declaration agreed on Friday, E.U. leaders recognized the “aspirations and European choice” of their neighbors but offered nothing more. Former Soviet countries that had entertained hopes of joining the European Union as full partners now feel they are being shut out. The newfound caution hands the Kremlin a victory as pressure eases slightly in the Ukrainian crisis. European advocates of a more open-armed approach toward former Soviet nations warn that concessions will only encourage Russia to be more aggressive with its neighbors in the future.” Writes Michael Birnbaum for The Washington Post.
6Invest in Kazakhstan 2015 the official publication of the Government of the Republic of Kazakhstan – is a definitive guide to foreign direct investment, looking at the wide range of opportunities across all major industrial and financial sectors, and how they can be harnessed to efficiently maximize long-term returns. The publication will provide an in-depth view of Kazakhstan’s business environment, with an extended section on Kazakhstan’s key oil and gas industry, as well as a focus on the areas of mining and minerals, construction, power and renewable energy, transport and infrastructure, agriculture, ICT, banking and finance, healthcare, tourism, and education.
7Azerbaijan became the leader of the International Fund for Cooperation and Partnership of the Black Sea and the Caspian Sea (BSCSIF). Chingiz Abdullayev became the new president of the Fund. The change of the leadership of the structure took place on May 23 in Baku during the 14th session of the General Assembly and the Board of Directors of the BSCSIF. The BSCSIF is an international non-governmental non-profit organization, established on March 4, 2009 by the initiative of President of Azerbaijan Ilham Aliyev and Romanian President Traian Basescu.
8Turkmenistan has unveiled a gold-leafed statue of the president in a gesture intended to burnish the leader’s burgeoning cult of personality. The 21-meter monument presented to the public Monday consists of a statue of President Gurbanguly Berdymukhamedov atop a horse mounted on a towering pile of marble. Berdymukhamedov, nicknamed Arkadag (the Protector), won the presidential election in 2012 with a landslide 97 percent in a vote criticized by election monitoring groups.
9“The Russian administration will have an opportunity to present the country as a leader of the non-western world. Presidency of the BRICS will allow Moscow to position itself as a participant of an association that offers an alternative to the global world order. In the company of the largest economy in the world (at least that is how the IMF estimates China’s GDP in relation to its purchasing power parity) and the dynamic leaders of South Asia, Latin America and Africa, Moscow can confidently say that it does not intend to return to the G8, even if it is suddenly invited back” writes Alexander Gabuev for the Russia Beyond the Headlines
10Azerbaijan awaits unambiguous and firm actions by the European Union to ensure that the resolutions of the UN Security Council on Nagorno-Karabakh conflict are strictly complied with and implemented, Azerbaijani Foreign Ministry said in its statement on the final declaration of Riga summit.“However, there are issues that cannot be a subject to compromise” he added.
World Bank Financing to Help Kazakhstan Unleash Full Potential of its Livestock Industry
The World Bank Board of Executive Directors approved today a $500 million loan for the Sustainable Livestock Development Program to support the development of environmentally sustainable, inclusive, and competitive beef production in Kazakhstan.
The program financing will support Kazakhstan’s state Agro-Industrial Complex Development program in improving veterinary services and animal recording systems, scaling-up a farmer-centric service delivery model, and improving agro-environmental policies for the sector.
Over a period of five years, the program aims to achieve a 10 percent increase in the share of public expenditure for sustainable beef production and processing, and a three-fold increase in the value of beef exports. In addition, around 20,000 small and medium farmers will be connected to export value chains.
“We are very happy to support Kazakhstan in developing its high-value export-oriented beef sector,” said Jean-Francois Marteau, World Bank’s Country Manager for Kazakhstan. “The country has a huge natural potential and favorable geographic position, which are conducive to export-oriented beef sector development. These can be utilized to benefit Kazakhstan’s long-term economic development goals, namely, diversification of exports and improving rural livelihoods. The Program is particularly important in a COVID-19 environment which is affecting employment countrywide.”
An export-oriented, high-value beef sector provides an opportunity for Kazakhstan to achieve its national development objectives, by mobilizing significant investments from domestic and foreign agribusiness firms and expansion of production by small and medium farmers.
A potentially competitive expanded resource base and geographical proximity to important consumer markets will also help attract private investment in meat processing, packaging, and logistics companies to Kazakhstan.
The program will promote green growth and sustainability policies aimed at promoting climate-smart practices for beef cattle production, reducing greenhouse gas emissions and improving the overall agri-environmental outcomes of the government’s beef sector support programs.
The five-year (2021-2025) implementation of the Sustainable Livestock Development Program for Results will be financed through a $500 million IBRD loan, which will be disbursed on the basis of Program-for-Results (PforR) – a financing instrument that links the disbursement of funds directly to the achievement of specific program results.
Turkey’s Rail Connectivity and Logistics will Improve with World Bank Financing
The World Bank’s Board of Executive Directors today approved a loan in the amount of EUR 314.5 million ($350 million equivalent) for the Turkey Rail Logistics Improvement Project. The project aims to reduce transport costs in selected rail freight corridors and to strengthen institutional capacity at the Turkish Ministry of Transport and Infrastructure (MoTI) to deliver rail freight connectivity and manage rail-enabled logistics centers.
The project will support delivery of last-mile rail and multimodal connectivity infrastructure at well-prioritized nodes of Turkey’s national railway network. These interventions will help revitalize the transport and logistics sector, and by extension, contribute to the sustainability of the cargo owners operating supply-chains in the project’s target corridors in the aftermath of the COVID-19 pandemic.
“Despite having economic geography and commodity specialization characteristics that are in-principle favorable to the use of rail freight, rail accounts for only 4% of Turkey’s transported tonnage, leaving a large share of freight to be moved by road. This leaves significant economic value on the table in terms of avoidable logistics costs and environmental externalities,” says Auguste Kouame, World Bank Country Director for Turkey. “The project’s investments will contribute towards more fully realizing rail freight’s potential in Turkey.”
The project will be implemented by the Ministry of Transport and Infrastructure’s (MoTI), and has three components:
Component 1 includes construction of railway branch lines and multimodal connections at priority network nodes, including Filyos Port, Çukurova Region Industrial Zones, Iskenderun Bay Maritime Ports, and at additional priority sites to be selected during implementation;
Component 2 includes feasibility studies, detailed engineering designs, environmental and social documentation, and construction supervision for rail last-mile connectivity infrastructure at additional freight nodes;
Component 3 focuses on Phase 2 COVID-19 response support, institutional strengthening, capacity building, and project implementation support, including technical assistance on uniformization of rail technical standards across the national rail network, support in preparation of a strategy document for rail freight sector performance improvement, and support to Turkish State Railways through development of an operational and management model for rail-enabled logistics centers.
“Strengthened management and decision-making capacity at MoTI to promote multimodality, expand the use of rail freight, and improve the quality of rail freight services nationally will be the other benefits,” remarked Murad Gürmeriç and Luis Blancas, Task Team Leaders of the Project. “The project is expected to reduce transport costs, reduce emissions of greenhouse gases (GHGs) and local pollutants, and increased share of rail in the freight transport task of the corridors targeted by the project.”
The project is aligned with Turkey’s Country Partnership Framework (CPF) for FY18-FY21, which focuses on the three strategic objectives of growth, inclusion, and sustainability.The project will contribute to the growth focus area which has the objective of enhancing the competitiveness of selected industries. The project is also aligned with the WBG approach to supporting client countries in mitigating the impact of COVID-19 on their economies, firms and workers.
The impact assessment envisioned in Component 3 of this project will help mitigate the impacts of COVID-19 by supporting MoTI in diagnosing the medium- and long-term impacts of COVID-19 on multi-modal logistics of both the demand and supply sides, and helping design public, public-private, and/or private interventions – including interventions aimed at tackling behavioral and occupational aspects of risk prevention.
Second phase of the Nurek Hydropower Rehabilitation Project in Tajikistan
The World Bank’s Board of Executive Directors approved additional grant financing of $50 million from the International Development Association (IDA) for the second phase of the Nurek Hydropower Rehabilitation Project in Tajikistan. The Nurek Hydropower Plant (HPP) is the most important asset of Tajikistan’s energy system.
“The restoration of the generation capacity of the Nurek HPP is essential for ensuring energy security for the people of Tajikistan,” said Jan-Peter Olters, World Bank Country Manager in Tajikistan. “Especially in these difficult times, the combination of inherent climate benefits from this renewable source of energy and the ability to support job creation and incomes for the local population, including by their engagement in this large-scale rehabilitation process, makes this a critical investment for a fast and sustainable post-crisis recovery.”
The Nurek HPP, with an installed capacity of over 3,000 megawatts, generates about 50 percent of total annual energy demanded in Tajikistan. Operational at currently about three-quarter of its installed generation capacity, the HPP is undergoing its first major rehabilitation since its commissioning in 1972. Once completed, the rehabilitation will allow the Nurek HPP to increase electricity generation by about 300 million kWh, supporting the Government’s efforts to ensure that energy demand can be met even during the cold winter months.
At the same time, during summer, Tajikistan would be in a position to expand electricity exports from its hydro resources, including through the CASA-1000 transmission line and upon synchronization of the country’s electricity network with Central Asian Power System (CAPS). This would generate much-needed additional revenues for the sustainability of the power sector, thereby reducing pressures on the pace of tariff adjustments.
The first phase of the Nurek Hydropower Rehabilitation Project, financed by the World Bank ($225.7 million), the Asian Infrastructure Investment Bank ($60 million) and the Eurasian Development Bank ($40 million), was launched in March 2019. It has focused on rehabilitating three of the nine generating units, replacing and refurbishing hydromechanical equipment and the key infrastructural components of the power plant, replacing six auto-transformers that are used to evacuate the generated electricity, and enhancing dam safety with a special focus on protection against seismic hazards and floods.
Through a separate project, the World Bank is supporting Government’s efforts in strengthening the institutional capacity and financial viability of the open joint stock holding company Barqi Tojik (BT).
The project’s second phase will finance the rehabilitation of the remaining six generating units, the Nurek bridge, the powerhouse, and other key buildings, while strengthening the HPP’s capacity to operate and maintain the power plant.
Capacity building will be provided to Nurek HPP and BT to enhance dam safety monitoring and the operation and management of hydro facilities. With a total cost of $192 million for the project’s second phase, the Government of Tajikistan is currently finalizing its discussions with other development partners to secure the required additional resources.
Given Tajikistan’s long history of power outages, particularly during the cold winter months, the climate co-benefits, and the socio-economic development impact of using available hydro resources effectively, Tajikistan’s energy sector has been a priority area of engagement for the World Bank. Its current energy-related investments exceed $530 million.
These investments aim at supporting the sector’s sustainability, eliminating seasonal energy rationing, ensuring an affordable and stable electricity supply to families and businesses and much needed revenues from increased export of clean, non-fossil energy resources.
The World Bank Group’s active portfolio in Tajikistan includes 21 projects, totaling US$938 million that aim at helping Tajikistan to take advantage of emerging regional opportunities, transform its economy and improve the livelihoods of its citizens. Since 1996, the World Bank has provided US$1.9 billion in grants, highly concessional IDA credits, and trust fund resources.
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