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EU uses energy for political purposes in relations with Russia

Dimitris Giannakopoulos

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The 10 most important things you need to know on Caspian Sea Region for Wednesday, May 27:

1Azerbaijan’s prestige on the international arena is growing. Statements on the occasion of Republic Day. Vladimir Putin: “Azerbaijan is confidently moving forward on the path of socio-economic, scientific, technological and cultural development. I note with satisfaction the high level of Russian-Azerbaijani relations, which are based on strong traditions of friendship, good neighborliness and mutual respect. I am confident that through joint efforts we will ensure further expansion of constructive political dialogue, development of productive cooperation in all areas. This is in the vital interests of the people of our countries, and serves the strengthening of international stability and security”. Barack Obama: “Since Azerbaijan`s independence, the United States has strongly supported the security and democratic and economic development of Azerbaijan. We do so because we value our bilateral relationship and appreciate our partnership in many areas, including in promoting the peaceful resolution of the Nagorno-Karabakh conflict, stability in Afghanistan, and European energy diversification.”

2“The world needs to realize that Russia plays an essential role in the global political process”, Kazakh President Nursultan Nazarbayev told Rossiya-24 television. “A country becomes a great power not because of its gas and oil riches… but because of its participation in global affairs in order to resolve problems that occur here and there in the world, to help promote peace around the world. Here, Russia’s role is indispensable, and the world needs to understand it. Russia has enough resources to cope with the repercussions of the Western economic sanctions.” he added.

3Tensions rise as Russia and Nato launch rival war games. About 250 aircraft and 12,000 servicemen will take part in Russian combat readiness drills over the Urals mountains and Siberia in what the country’s defence ministry has described as a “massive surprise inspection”. The snap exercises launched yesterday in Russia’s central military district began on the same day Nato launched its own long-planned exercises in the Arctic. About 100 aircraft and 4,000 servicemen will take part in “Arctic Challenge”, a Norwegian-led aviation exercise described as the “largest of its kind”. Dmitry Rogozin, the deputy prime minister with responsibility for defence, further raised tensions over the weekend when he joked on national television that “tanks don’t need visas”. The comment came in response to a question about US and EU sanctions and visa bans imposed on several prominent Russian politicians and businessmen. [Independent]

4Turkmenistan extends export of electricity. In order to increase the volume of electricity exported to Afghanistan, construction of an overhead transmission line with a voltage of 500 kilovolts is underway in Turkmenistan, which is currently in the final stage, said the message of the government of Turkmenistan May 27.“However, with the implementation of this ambitious project, the export of Turkmen electricity to Tajikistan and Pakistan via Afghanistan will become technically possible,” said the message.

5Kazakhstan’s energy sector is experiencing the growth in investments, according to a message from the analytical service, Ranking.kz. The analytical service said that since the start of realization of a program called “Tariff in Exchange for Investments” in 2009, the investments in the energy sector grew by over 2.5 times (264 percent). Among the sources for the investments to the fixed capital of Kazakhstan’s energy sector companies, two types of sources are distinguishable (they provided 87 percent of investments). These are the own funds of the market participants and the funds from the budget.

6“In Azerbaijan we don’t see an obstacle for bringing gas from Turkmenistan under the Caspian Sea”, Vitaly Baylarbayov, deputy Vice President of SOCAR told EurActiv online magazine in an exclusive interview. He was commenting on Russia’s possible obstruction of such a project, due to the unfinished delimitation of the Caspian Sea. “We recognize that the borders of the sectors between Azerbaijan and Turkmenistan have not been delimited,” he said. “But laying down a pipe doesn’t in any way interfere with the legal status. It doesn’t matter on which seabed the pipe is running, fees and taxes are not due offshore.”

7EU uses energy for political purposes in relations with Russia. Vladimir Chizhov, Russia’s envoy to the European Union, said on Wednesday that in its relations with Moscow the EU was doing exactly the same thing which Russia was usually accused of, namely using energy for political purposes.”There is every indication that the EU is trying to put into practice those things it used to accuse Russia of, namely the use of energy for political purposes,” said in an exclusive interview with TASS. “There is no other possible explanation for attempts to reduce Russia’s share in the EU’s energy balance at any cost,” he said. [TASS]

8Iran’s Foreign Minister Mohammad Javad Zarif has urged the Organization of Islamic Cooperation (OIC) to take serious action to deal with problems facing the Muslim world, particularly the ongoing war in Yemen.“The Organization of Islamic Cooperation should seriously address this important issue of the Muslim world and bring Yemeni groups to the [negotiating] table to end this disaster,” Zarif said in a meeting with OIC Secretary General Iyad Ameen Madani in Kuwait City, the capital of Kuwait, on Tuesday.

9Tentative agreements, which could initiate the signing of a great peace agreement on the Armenian-Azerbaijani Nagorno-Karabakh conflict, may have been reached at the talks in Moscow between the foreign ministers of Azerbaijan and Russia, Fikrat Sadikhov, the political scientist, professor of Azerbaijan’s Western Universiy, told Trend.az. “Russia understands Azerbaijan’s value as a key player in the region, an important partner, with which it is beneficial to cooperate,” he said.

10Kazakhstan Opening Itself to Africa. Kazakhstan is working to expand its cooperation with African nations across the board, Kazakh Minister of Foreign Affairs Erlan Idrissov told a number of African journalists who participated in the recent Astana Economic Forum. “The African continent is not the same as it was earlier. Everything is changing now,” said Idrissov. “Our country intends to further widen its presence through sub-regional centres of the continent.” he added. Africa has significant natural resources and a huge market for different industrial and agricultural goods. According to some respected international research centres, in the 21st century the African continent will occupy a leading position by its economic development temps and can become the most important commercial partner and economic destination for Kazakhstani businesses. Experts believe if the current development temps are constant by 2025, some African countries will reach a status of a state with an average population income. [The Astana Times]

 

Journalist, specialized in Middle East, Russia & FSU, Terrorism and Security issues. Founder and Editor-in-chief of the Modern Diplomacy magazine. follow @DGiannakopoulos

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Palestinian Economy Struggles as Coronavirus Inflicts Losses

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An abrupt decline in economic activities and pressure on the Palestinian Authority (PA)’s finances have placed Palestinian livelihoods at high risks, as the impact of the Coronavirus (COVID-19) continues to hit the economy hard. After growth of a mere 1% in 2019, the economy is projected to contract by at least 7.6% in 2020. Beyond the immediate crisis, lifting restrictions on the development of digital infrastructure and fostering better regulations could play an important role in stimulating an already faltering economy.

With the COVID-19 pandemic in its third month, the crisis is affecting Palestinian lives and livelihoods. The Palestinian Authority has acted early and decisively to save lives. However, several years of declining donor support and the limited economic instruments available have turned the ability of the government to protect livelihoods into a monumental task. Hence, external support will be critical to help grow the economy during this unprecedented period,” said Kanthan Shankar, World Bank Country Director for West Bank and Gaza.

The new World Bank economic monitoring report* highlights critical challenges facing the Palestinian economy. The economy may shrink by at least 7.6%, based on a gradual return to normality from the containment, and by up to 11% in the case of a slower recovery or further restrictions. The PA’s fiscal situation is expected to become increasingly difficult, due to a decline in revenues and substantial increase in public spending on people’s medical, social and economic needs. Even with reallocations of some expenditures, the financing gap could increase alarmingly, from an already high $800 million in 2019 to over $1.5 billion in 2020 to adequately address these needs.

Even prior to the Coronavirus pandemic, more than a quarter of Palestinians lived below the poverty line. The share of poor households is now expected to increase to 30% in the West Bank and to 64% in Gaza. Even more striking is the youth unemployment rate of 38%, well beyond the Middle East & North Africa’s regional average. The economy’s potential remains confined by restrictions on the movement of people and goods. The report makes a case for developing a digital economy to help bridge this divide and create high-end jobs.

The digital economy can overcome geographic obstacles, foster economic growth and create better job opportunities for Palestinians. With its tech-savvy young population, the potential is huge. However, Palestinians should be able to access resources similar to those of their neighbors’, and they should be able to rapidly develop their digital infrastructure as well,” added Shankar.

The report emphasizes that digital infrastructure is foundational to the development of a digital economy. At a time when other countries are contemplating the use of 5G, the Palestinian territories are among the last places in the Middle East to launch 3G in the West Bank and 2G in Gaza. The operators are at a competitive disadvantage, facing restrictions on access to spectrum, sites for network coverage and import of certain telecom equipment. They compete against operators who can offer unlicensed 4G/LTE services in the West Bank and 3G in Gaza for those in proximity to Israeli networks (through pre-paid SIM cards).

The World Bank report recommends specific reforms to be made in collaboration with Israel, including the revival of the Joint Telecommunications Committee to resolve bilateral issues, agreeing on a timeframe for the allocation of 4G spectrum and ultimately 5G, lifting restrictions on equipment needed to introduce new technologies, and mitigating the effect of unauthorized telecom activity in the Palestinian territories.

It also calls on the PA to act on developing a comprehensive strategy for the sector, establishing an independent regulator and prioritizing the passing of a new telecommunications law in line with international best practice. The role of the donors is vital to provide support for the institutional development needed in the telecom sector, help with innovative financing schemes to mitigate the political risks and increase private sector investment.

*The report will be presented to the Ad Hoc Liaison Committee (AHLC) during a virtual meeting on June 2, 2020. This will be a policy-level meeting for development assistance to the Palestinian people.

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How to promote the resilience of the food production sector during a pandemic

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A scientific roundtable, organized through a webinar, gathered food regulators and representatives of the food production sector from Asia, Europe, South America and the Middle East. It was co-hosted by the International Union of Food Science and Technology (IUFoST), the Sustainable Food Systems Division of the United Nations Industrial Development Organization (UNIDO) and the Food Risk Analysis and Regulatory Excellence Platform(PARERA) of Université Laval, Québec, Canada. 

The roundtable enabled participants to share perspectives of the food production sector and  food regulators on the challenges they face, some of the solutions they have developed and the lessons learnt as part of their efforts to prevent the disruption of food production and to contribute to maintaining the safety of products and consumer confidence.

The roundtable highlighted key enablers to the food supply chain’s ability to cope with the pandemic, in particular the ability to adapt to the constraints of limited transportation and to diversify suppliers by introducing more local and/or regional providers, and to prevent and mitigate food and ingredient shortages while encouraging and supporting the local production sectors minimally affected by the consequences of the pandemic. 

Participants highlighted the importance of collaboration and partnerships established amongst regulators and between regulators and food producers to support each other in the development and dissemination of guidance related to COVID-19 mitigation measures and how they can be adapted and applied in the context of food production settings. The development of innovative solutions to execute food regulatory functions such as remote audits, inspections and assessments have contributed to limiting the constraints associated with the current pandemic. 

The roundtable concluded with agreement on the need to continue investments to address food production sector deficiencies, such as making available more localized processing operations in order to create more opportunities for the primary production sector and to contribute to its resilience. It also highlighted the need to further examine food supply chains towards a better redistribution between global and local/regional supply, while supporting additional efforts towards innovative operationalization of food regulatory requirements and functions by regulators and food producers alike.

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ADB, JICA to Strengthen Collaboration to Help Asia in Fight Against COVID-19

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Asian Development Bank (ADB) President Masatsugu Asakawa and Japan International Cooperation Agency (JICA) President Shinichi Kitaoka today reaffirmed their commitment to strengthen collaboration to assist ADB’s developing member countries (DMCs) in their response to the novel coronavirus disease (COVID-19) pandemic.

“ADB and JICA have a long history of collaboration and partnership in a number of key areas including supporting DMCs to accelerate progress toward achieving universal health coverage (UHC) and cofinancing on quality infrastructure,” said Mr. Asakawa. “COVID-19 poses serious health, social, and economic threats to the region. It is important that we find ways to enhance our collaboration, including cofinancing, to help developing member countries address the pandemic.”

In their call, the two presidents discussed the economic and social status of Asian and Pacific economies in the wake of the pandemic and their organization’s respective assistance packages.

ADB announced a $20 billion assistance package on 13 April to address the needs of its DMCs as they respond to the COVID-19 pandemic. The package includes $13 billion for quick and affordable budget support to help DMCs counter the severe macroeconomic impacts arising from the pandemic with countercyclical expenditure with the focus on the poor and the vulnerable. Some $2.5 billion of the package is available as concessional and grant resources, and about $2 billion is earmarked for loans and guarantees to the private sector to rejuvenate trade and supply chains. ADB will expand its technical assistance to DMCs in designing, improving, implementing, and monitoring health and other sector actions against COVID-19.

JICA is preparing a COVID-19 crisis response emergency support loan program to strengthen countries’ capacity to respond to COVID-19 and revitalize economic activities in those hit hard by the pandemic. Its assistance will be provided as standalone loans or cofinancing with multilateral development banks, including ADB.

ADB and JICA have a strategic partnership to cofinance $10 billion in quality public infrastructure investment between 2016 and 2020. The two organizations also established in 2016 the $1.5 billion Leading Asia’s Private Sector Infrastructure (LEAP) Trust Fund to promote private financing for infrastructure development, including through public-private partnerships.

The two organizations are also collaborating at country and regional levels in the areas of health security, UHC, and specific health issues concerning the elderly under a partnership signed in May 2017.

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