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
1Foreign energy giants, which have been waiting for return to the Iranian market, now have a real chance to restore their activity in the Islamic Republic.BP, Royal Dutch Shell and Italy’s largest oil producer Eni are awaiting a lifting of the sanctions against Iran in order to assess the feasibility of participation in oil and gas projects in the country.”For us, Iran is a huge gas province so it would be good to be there – in conventional gas – at the right terms,” Shell’s financial chief Simon Henry said in London according to Press TV.Though Shell is interested in returning to Iran, Henry said that the company did not expect any quick, easy deals.”Anybody who thinks that we are going to suddenly swan in and end up with great contracts that make a difference within 12 months, I think is a little naive. It’s not going to be easy, it will take time,” the energy news provider Platts quoted Henry as saying. Despite Shell’s long-term activities in Iran’s upstream projects, including in South Pars, the firm pulled out of the world’s largest gas field’s Phase 13 development in 2008. Shell also operated Iran’s Soroush and Nowruz oilfields in the Persian Gulf at a capacity of 200,000 barrels per day. An outstanding debt to the tune of $2.3 billion remains unpaid by the company to Iran since 2012.
2Baku, Moscow focus on military cooperation. Azerbaijani and Russian high-ranking officials have discussed the military cooperation between the two countries.Sergei Shoigu, the Russian Defense Minister and Zakir Hasanov, the Azerbaijani Defense Minister met on August 1 during latter’s visit to Moscow, Azerbaijani defense ministry reported.”I am very pleased that you have found time to take part in the opening ceremony of Army games. Hopefully, your team will show good results,” RIA Novosti quoted Shoigu as saying at a meeting with his Azerbaijani counterpart.During the meeting, the Azerbaijani and Russian defense minsters exchanged views on topical issues of regional security, as well as on the state and prospects of military cooperation between Russia and Azerbaijan.
3Russia is Preparing the 4th Open Innovations Forum 2015. From October 28 to November 1, 2015, Moscow will host for the fourth time the annual Open Innovations Forum – the largest event in Russia that focuses on technology entrepreneurship and innovation-driven development. For the first time Open Innovations 2015 will comprise a five-day international professional congress and a popular exhibition for general public performed as Technology Show. The forum, centered around the main topic of Humanity in the Center of the Technological Revolution, will last for five days. Each day will be devoted to one of five specific spheres of the human life, dramatically changing under the impact of technologies – productivity, habitat, education, health and entertainment.
4Turkmenistan completing gas pipeline construction for Europe. The ‘East-West’ gas pipeline, under construction in Turkmenistan, will link major gas reserves, creating conditions for Turkmen fuel exports to world markets, said the ‘Neutral Turkmenistan’ newspaper Aug. 1. ‘East-West’ is over 800 kilometers long and has a capacity of 30 billion cubic meters a year, said the pipeline is being built by the divisions of the Turkmen state concerns, Turkmengaz and Turkmennebitgazgurlushyk. The pipeline starts at the ‘Shatlyk’ gas compressor station in the Mary province, and then, running westerly through the Mary and Ahal provinces, it will be connected to the ‘Belek’ gas compressor station in the Balkan province.
5Will gas become divisive point between Russia and Turkmenistan? “Gas sphere was one of the strategic areas of partnership between Turkmenistan and Russia until recently. Turkmenistan transports its gas to Russia via the Central Asia-Center gas pipeline that was constructed during the Soviet period and monopolized by Russia’s Gazprom company. Turkmenistan’s Ministry of Oil and Gas Industry and Mineral Resources said in mid-July that Gazprom Export LLC (100-percent subsidiary of Russia’s Gazprom company) doesn’t pay the remaining money for the actually delivered Turkmen natural gas, without explaining the reason. Later, the world media reported citing the sources close to Gazprom that the company has filed a lawsuit in Stockholm Court against Turkmenistan’s Turkmengaz company demanding to revise the prices in the gas supply contract” [Azernews]
6Azerbaijan’s cooperation with the Shanghai Cooperation Organization will create new opportunities for the country, Hikmet Hajiyev, the spokesman for Azerbaijan’s Foreign Ministry said on July 30.”Azerbaijan’s foreign policy is multi-vector, and in this respect the country is further expanding cooperation on bilateral and multilateral bases,” he noted. Hajiyev also noted that in this context, it is possible to highlight Azerbaijan’s observer status in the Arab League, African Union, Organization of American States, and other regional and international organizations, which creates even greater opportunities for the country to develop relations with multilateral organizations and their member states.
7Kazakhstan seeks to reclaim historical role as the crossroads of East and West. “as more and more of its manufacturers move inland, China is looking to develop trade from the west, following the tracks of the fabled Silk Road and once again making Xian the gateway to Europe. While shipping by sea takes about five weeks, the new Silk Road train can deliver goods from China to Europe in three weeks. It’s more expensive than sea freight, but the shorter transit time often makes it worthwhile for multi-national companies dependent on global trade. Railway officials in Kazakhstan told me the goal now is to optimize the inland route and reduce costs so the new Silk Road becomes even more viable for businesses” [Times of Oman]
8The Iran deal and South Asia. “India likes to regard itself as a rival of China for influence in Central Asia and has been making hectic plans to catch up with its northern neighbour. To match China’s ‘One Belt One Road’ initiative for a network of infrastructure and energy projects to link China with Europe and the Middle East over land and by sea, Delhi has revived plans for a transit corridor to Europe and Russia through Iran. India has labelled it as the International North-South Transit Corridor (INSTC). It includes transport by rail, road and sea from Mumbai to Moscow via Bandar Abbas in Iran, with options for connectivity with Turkey and countries in Eastern Europe. Not surprisingly, given the availability of other more viable existing and planned transit routes between Asia and Europe, the INSTC has gained little traction so far” writes Asif Ezdi for thenews.com.pk
9Kazkommertsbank JSC (“KKB”), one of the largest banks in Kazakhstan and Central Asia, sold its 99.86 percent stake, representing 1,497,946 common shares, in “Subsidiary of BTA Bank “London-Almaty” Insurance Company” JSC July 21 2015, the press service of the bank said. The stake was earlier transferred to KKB in line with the Agreement on the simultaneous transfer of assets and liabilities between KKB and BTA.The value of the stake was based upon an independent appraisal prepared by international audit company. Earlier, Kazkommertsbank JSC received “Subsidiary of BTA Bank “London-Almaty” Insurance Company” JSC from BTA Bank JSC within the framework of the agreement on the simultaneous transfer of assets and liabilities.
10A delegation from Azerbaijan, to be led by the Minister of Economic Development, is slated to arrive in Tehran on Monday to consolidate bilateral relations and discuss implementation of previously accorded joint projects in the energy sector.”We are presently hashing out organizational affairs such as setting the date for the working group’s first meeting as well as specifying its agenda of activites,” the deputy head of Azerbaijan’s State Agency for Alternative and Renewable Energy Sources Jamil Melikov.The Azeri officals have voiced their willingness for Iran’s partnership in Trans-Anatolian Natural Gas Pipeline (TANAP) project to transfer sour gas from Iran’s South Pars field to EU markets.
An economic space from the Atlantic to the Pacific
On the 23 May, in the run-up to SPIEF, a roundtable held jointly between the Roscongress Foundation and St. Petersburg State University of Economics took place, entitled ‘Building a Common Economic Space from the Atlantic to the Pacific: Current Issues and Ways to Overcome Them’.
The experts discussed opportunities related to integration, investment, infrastructure, and innovation, alongside new forms of collaboration for those shaping the economic region of Greater Eurasia. In addition, they brainstormed a joint vision as to how the shared economic space from the Atlantic to the Pacific will develop in the future.
The welcome address was given by Igor Maksimtsev, rector of St. Petersburg State University of Economics. Moderating the session was Sofia Rekord, head of the world economy and international economic relations department of the same institution.
The participants observed that the geo-economic potential of Greater Eurasia – stretching from one ocean to another – is enormous, and needs to be unlocked to a greater extent, regardless of the unpredictability of the global economic environment and political climate. They also laid out the main aim behind the formation of a shared economic space from the Atlantic to the Pacific: to facilitate comprehensive interaction and cooperation between countries across the Eurasian continent through stepping up dialogue between all stakeholders. These include government representatives, business figures, the expert community, and research organizations tackling a wide range of issues related to economics, politics, and culture. This should result in continuous development for all parties, and prudent solutions to new challenges.
Other areas of focus included promising forms of economic collaboration in Greater Eurasia: opportunities for dialogue between the EAEU, SCO, ASEAN, and EU; the implementation of the EAEU’s shared digital agenda; prospects for transport, logistics and energy projects; bolstering regional development institutions when unlocking the investment potential of the EAEU; and opportunities to foster greater foresight with regards the future development of a shared economic space from the Atlantic to the Pacific.
Participants from the expert community included Mikhail Voronin, associate professor of the world economy and international economic relations department of the St. Petersburg State University of Economics; Sergei Dyatlov, professor of the department of general economic theory and the history of economic thought of the St. Petersburg State University of Economics; Sergei Karaganov, dean of the world economy and international politics faculty of the Higher School of Economics National Research University and honorary chair of the presidium of the International and Defence Policy Council; Dmitry Miropolsky, head of department of general economic theory and the history of economic thought of the St. Petersburg State University of Economics; Vadim Panin, associate professor of the world economy and international economic relations department of the St. Petersburg State University of Economics; Vladimir Salamatov, director general of the International Trade and Integration Research Centre; Tatyana Urzhumtseva, director of the China and Asia-Pacific Studies Centre of the St. Petersburg State University of Economics; Alexander Khodachek, president of the Higher School of Economics National Research University in St. Petersburg; and Slava Khodko, general director of the North-West Development and Investment Promotion Agency.
Russia’s Economic Recovery Continues: Modest Growth Ahead
Russia’s economic recovery continues, amidst relatively high oil prices, enhanced macroeconomic stability, gradual monetary loosening, and ongoing momentum in global economic growth, says the World Bank’s latest Russia Economic Report (no. 39 in the series). However, the country’s growth prospects for the period 2018-20 remain modest.
Russia’s growth is forecast at between 1.5% and 1.8% over the next three years. In the short-term, however, this forecast may be adjusted because of changing oil prices – which were projected to average US$ 65/bbl in 2018 and 2019, and US$ 66/bbl in 2020, but which may increase further, especially in the short-term.
In 2017, growth was mainly driven by non-tradable sectors. The unemployment rate declined to 5.2%, while real wages and pensions increased on the back of low inflation. In 2018-20, consumer demand is expected to be the main engine of GDP growth, while the poverty rate is expected to decrease slightly.
“Russia’s economy continued its recovery in 2017, but growth prospects for 2018-20 remain relatively modest, and well below the current global growth average of over 3%,” said Apurva Sanghi, World Bank Lead Economist for Russia, and main author of the report. “In the next few years, greater focus on education, health and infrastructure investments will require the government to find fiscal space through further improvements in tax administration, optimization of non-tax revenues, increased efficiency of public expenditures, and potentially some tax policy changes.”
Moderately tight monetary and fiscal policies, in combination with a favorable external environment, let the Central Bank of Russia reach a record low-level of consumer price index (CPI) inflation, which averaged 3.7% in 2017. Annual inflation now stands below the Central Bank’s target of 4%, while inflation expectations, though trending downward, remain elevated.
Driven by a rebound in disposable income and consumption, the poverty headcount declined marginally in 2017 to 13.2%, after reaching 13.3% in 2016. The poverty rate is projected to decline in 2018, 2019 and 2020 to 12.5, 11.9 and 11.4%, respectively, as income and consumption grow further. Among the factors that could fuel real income growth are a general recovery of the economy and further deceleration of inflation.
“With enhanced macroeconomic stability, the key challenge for achieving higher levels of economic growth is to increase productivity.” said Andras Horvai, World Bank Country Director and Resident Representative for Russia. “This requires improved infrastructure connectivity, strengthened competition across the economy, further improvements in the business climate, vibrant innovation activity and the reduction of the skills gap. Investments in human capital will be key.”
The special topic of the 39th edition of the Russia Economic Report examines how Russia can accelerate its transformation to a digital economy. A strategic focus on digital transformation has enabled Russia to build a national digital infrastructure to support universal broadband and mobile communications. However, to fully reap the socio-economic benefits of this digital infrastructure, Russia will need to implement policies that accelerate the digital transformation of the traditional enterprise sector, and promote R&D, innovation and entrepreneurship.
UNIDO at SPIEF 2018: Increasing the contribution of women to economic growth and prosperity
On the opening day of the St. Petersburg International Economic Forum (SPIEF) 2018, the United Nations Industrial Development Organization (UNIDO) organized an international forum. Titled, “Increasing the contribution of women to economic growth and prosperity: Creating an enabling environment”, the event was staged in cooperation with the OPORA RUSSIA Committee on Women Entrepreneurship Development, with organizational support from the Roscongress Foundation and financial support from the Government of the Russian Federation.
More than 200 participants from all over the world came together to share their experiences on the challenges and best-practice solutions for scaling up successful models for women’s economic empowerment and entrepreneurship. The event was attended by numerous high-level representatives from regional governments of the Russian Federation, as well as from the Russian and international business community, including Scania, SAP, Festo and Didactic, among others. The event was attended by two UNIDO Goodwill Ambassadors, Helen Hai and Janne Vangen Solheim. Olga Algayerova, Executive Secretary of the United Nations Economic Commission for Europe also joined the event as a special guest.
During the opening session, the Deputy Chairperson of the Council of the Federation of the Federal Assembly of the Russian Federation, Galina Karelova, commented on the fact that for the second year running leading experts and representatives of the business community were debating opportunities and best practices for strengthening the role of women in economic development with UNIDO’s support at the prestigious SPIEF-2018: “This is strong evidence that the women’s agenda in Russia, as well as at the international level, has reached a fundamentally new level,” she stated.
In his written message sent to the organizers and participants of the Forum, Sergey Lavrov, Minister of Foreign Affairs of the Russian Federation, welcomed the fruitful cooperation between UNIDO and OPORA RUSSIA in the area of women’s entrepreneurship, and wished the Forum success in developing effective solutions aimed at increasing the role of women in overall efforts to achieve the Sustainable Development Goals.
Nadiya Cherkasova, Head of the OPORA RUSSIA Women‘s Entrepreneurship Development Committee, stressed the importance of women’s entrepreneurship as an engine for economic growth and noted the numerous opportunities for scaling up women’s participation in business activities.
Alexander Kalinin, Head of OPORA RUSSIA, mentioned that the country is facing an ambitious goal of boosting national economic growth, where a reliance on small and medium-sized businesses is crucial. He added that OPORA RUSSIA’s work in the area of women’s entrepreneurship is thus very timely, while women’s entrepreneurship is gaining pace and is expected to play a key role in economic development.
Jacek Cukrowski, Chief of UNIDO’s Europe and Central Asia Division, reiterated the importance of forming global alliances and building upon common goals to achieve the economic empowerment of women: “UNIDO has joined hands with OPORA Russia, capitalizing on our knowledge, experience and partners’ networks, for the delivery of concrete, measurable and productive outcomes,” he stated.
Three main sessions of the Forum provided a platform for fruitful debate with an action-oriented outlook on the road ahead, involving policymakers and representatives from the private sector, as well as women’s networks. The development of a global women-leaders talent pool, as a way of fostering network opportunities among women experts from various business sectors, the creation of an e-learning platform for women in business, providing opportunities to take learning and skills development courses to improve managerial and entrepreneurial skills, as well as capacity building initiatives for women entrepreneurs and leaders in different industrial sectors in cooperation with the private sector, business associations and civil society were all discussed during the event.
UNIDO’s representative said that women’s empowerment and entrepreneurship are powerful tools for economic development and are firmly anchored in the Goals of the 2030 Agenda for Sustainable Development. UNIDO will therefore continue in its efforts to advance the economic empowerment of women.The issue will be at the centre of the debate at the upcoming Eurasian Women’s Forum in St. Petersburg in September 2018.
An economic space from the Atlantic to the Pacific
On the 23 May, in the run-up to SPIEF, a roundtable held jointly between the Roscongress Foundation and St. Petersburg...
Russia’s Economic Recovery Continues: Modest Growth Ahead
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UNIDO at SPIEF 2018: Increasing the contribution of women to economic growth and prosperity
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