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What the world could look like in ten years after the Iran deal

Dimitris Giannakopoulos

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Welcome to the Caspian Daily, where you will find the 10 most important things you need to know on Caspian Sea Region. We appreciate ideas, reports, news and interesting articles. Send along to Caspian[at]moderndiplomacy.eu or on Twitter: @DGiannakopoulos

1“Diplomatic relations would be resumed. Iranian-European relations would improve as well. Iran could also have better relations with some Arab nations. This is the best-case scenario, but even here the Middle East doesn’t suddenly turn into Utopia. This dark scenario assumes that Iran won’t comply with the agreement and still develops a nuclear weapon. With diplomatic efforts shown to be fruitless or pointless, the future U.S. president will launch air strikes against the Iranian nuclear sites. Britain will participate in the attacks. The question, even now, is: What would Iran do in response to such strikes? The United States, Israel and Saudi Arabia have been involved for decades in a covert war with Iran. Republicans, Israelis and Saudis who are promoting direct military action against Iran need to know the difference between dancing with devil and boxing him” writes Riyadh Mohammed for The Fiscal Times.

2India, China, and Iraq have received the most weapons and military equipment in 2014 from Russia’s state-run Rostec company, according to the company’s annual report published on Wednesday.“The deliveries of military equipment were sent to 59 countries. The company’s main importers were India (25 percent), China (22 percent), Iraq (22 percent), Syria (5 percent), and Venezuela (5 percent). Geographically, the main exports of military equipment went to Asia (75 percent), Latin America (9 percent), and the Middle East (7 percent),” the report shows.The company’s annual report also reflects that military exports to the former soviet republics have drastically dropped to $370 million in 2014 from $1.5 billion in 2013.The company fulfilled 9,400 contracts in 2014; that is 54 percent more than in 2013.

3Russia’s Justice Ministry says it has issued warnings to 12 nongovernmental organizations that the Kremlin has deemed as “foreign agents,” saying the groups face “administrative liability measures” – fines severe enough to shut down almost any Russian NGO. A ministry statement on July 21 said all nongovernmental organizations receiving funds from abroad must indicate on all printed or distributed materials that the group “performs functions as a foreign agent.” It added that warnings were issued to the Memorial human rights center, Memorial’s information center, the Sakharov Center, For Human Rights, Transparency International’s Russian research center, the Committee Against Torture, and the Civil Assistance charity for refugees and internally displaced persons. It said warnings also were issued to the Siberian Press Development Institute, the Bellona-Murmansk environmental group, the Maximum support center for discrimination victims, the Resource Human Rights Center, and the St. Petersburg-based Civil Control rights group.

4Turkmenistan, Russia to mull prospects for expanding co-op. The third meeting of joint Turkmenistan-Tatarstan working commission on trade, economic, scientific, technical and cultural cooperation will be held July 23-24 in Ashgabat. It is planned to discuss the prospects for expanding the cooperation in the petrochemical sphere, energy, industry, transport, construction, agriculture, environmental protection, education, health care, sports and tourism. Russia tops the list of Turkmenistan’s largest foreign trade partners. In recent years, Turkmenistan has intensified the cooperation with such largest regions of Russia as Tatarstan, St. Petersburg, Astrakhan, Sverdlovsk and others.

5Azerbaijan is the EU’s reliable and strategic partner in the energy field, and we want to take this partnership further, President of European Council Donald Tusk said at the joint press conference with the President of Azerbaijan Ilham Aliyev in Baku on July 22. One aim of the European energy union is to exclude the possibility of using gas as a threat, this is why the EU is dedicated to diversifying our supplies. And Azerbaijan is a main partner in this endeavor,” he added.“Today, we agreed to stand united on developing the Southern Gas Corridor – a project which is in our common strategic interest – and to make sure it is completed on time, whatever our competitors do. For Europe, it is a question of diversifying supply. For Azerbaijan, it is a question of diversifying demand,” Tusk said.

6Kazakhstan to establish fund to finance energy-saving programs. Kazakhstan will establish a special fund engaged in financing energy-saving programs, Investment and Development Minister Asset Issekeshev said at a briefing in Astana on July 20.”Many countries have established special funds for energy efficiency,” he said. “Currently, we are working over the concept of such a fund.”Issekeshev also said that the Kazakh authorities are holding talks “with the World Bank and the European banks” to ensure financial provisions to the fund.”The main investors will be international financial institutions. They have already expressed their readiness. It is clear that in order to use the money efficiently and transparently, we asked them to be the main investors and help us manage the fund to launch pilot projects,” he added.

7The Olympics for military experts. China has successfully deployed its military personnel and hardware, including tanks, to Russia to participate in war games, the Russian Defense Ministry reports. The deployed members of the People’s Liberation Army of China as well as Chinese military hardware were deployed to take part in the International Army Games 2015 along with 14 other nations, including India, Armenia and Russia. The games, which are often described as the Olympics for military experts, will take place from August 1 through 15 and will consist of 13 military individual and team competitions, including a ‘tank biathlon’ as well as Aviadarts, according to Russian agency Sputnik International News.

8The head of the World Health Organization (WHO) says Turkmenistan is the country with the world’s lowest proportion of tobacco smokers. WHO chief Margaret Chan said during a July 21 health forum in Ashgabat that a recent WHO study shows only 8 percent of Turkmenistan’s population smokes tobacco. She said “this is the lowest national indicator in the world.” Turkmenistan annually holds a month of public exercises and sporting events under the slogan “Health and Happiness.” It was one of the first post-Soviet republics to crack down on smoking, introducing hefty fines in 2000 for smoking in public places.

9President Ilham Aliyev: We need to bring to the world the truth about Azerbaijan. “The target number one for Armenians worldwide is Azerbaijan. I already talked about this, and I want to reiterate that our main enemy – is the Armenian lobby. I can say and prove it at any audiences”, – said Azerbaijani President Ilham Aliyev at a meeting with members of the Board of the Press Council on the occasion of the 140th anniversary of the national press.

10Israel’s nuclear strategy after the Iran agreement. “In each and every case, Israel’s nuclear strategy must aim for deterrence ex ante, not revenge ex post. This does not mean that such strategy should necessarily steer clear of preparations for actual nuclear war fighting. On the contrary, there is still likely to be established a purposeful and productive association between enemy perceptions of any such nuclear war-waging preparations, and Israeli nuclear deterrence” writes Louis René Beres for The Hill.

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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World Bank Financing to Help Kazakhstan Unleash Full Potential of its Livestock Industry

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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.

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Turkey’s Rail Connectivity and Logistics will Improve with World Bank Financing

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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.

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Second phase of the Nurek Hydropower Rehabilitation Project in Tajikistan

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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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