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Turkmenistan prepares large gas breakthrough in Europe

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

1The West has long been waiting for this step, lobbying for the idea of the Trans-Caspian Pipeline as a part of the Southern Gas Corridor, hoping to take away the convenient instrument of pressure on Europe, that is, Russian gas from the Kremlin’s hands.However, previously, Turkmenistan wasn’t ready for an open confrontation with Russia and to start major gas deliveries to the West. Meanwhile, selling almost all of its gas to China, Ashgabat found highly risky, as both the single customer, and the single seller meant constant dependence. And today, Ashgabat has an opportunity to get away from that dependence on the buyer, and to diversify its supplies to the West” Elmira Tariverdiyeva – [Trend.az]

2Iran’s Mahmoud Ahmadinejad seeks political comeback. Iran’s former President Mahmoud Ahmadinejad has launched a political campaign ahead of February’s parliamentary elections in what could prove a challenge to the moderates behind a landmark nuclear agreement reached last month. Few expect a rerun of Ahmadinejad’s surprise victory in the 2005 elections, which kicked off an eight-year presidency marked by confrontation with the West, incendiary rhetoric toward Israel and refusal to compromise on the disputed nuclear program.[Associated Press]

3Russia, together with Azerbaijan and Kazakhstan, will hold two joint naval exercises in the Caspian Sea by the end of 2015, Navy Commander-in-Chief Adm. Viktor Chirkov said Monday.Between August 3 and 11, the Caspian Sea is hosting the open naval competitions Caspian Cup-2015 and Caspian Derby-2015, as part of the International Army Games.”We are planning to hold at least two international naval drills in the Caspian Sea before the end of 2015,” Chirkov said at the competitions’ opening ceremony. He added that one of the exercises would be tripartite, with the participation of the Russian Caspian Flotilla, the Azerbaijani Navy and the Kazakh Navy. The second round of naval drills will involve only the Azerbaijani and Russian forces.

4Iran offers Azerbaijan to supply oil to Gulf. Iran stands ready to carry out the swap deliveries of Azerbaijani oil to the Persian Gulf, the Iranian Oil Minister Bijan Namdar Zanganeh said.He made the remarks August 4 in Tehran addressing a meeting with Azerbaijan’s Economy and Industry Minister Shahin Mustafayev.Zanganeh said that oil can be transported from Iran’s Caspian port of Neka via a pipeline (with a capacity of 500,000 barrels per day) to the Tehran Oil Refinery.“Instead, Azerbaijan will get oil on the southern borders of Iran,” said Zanganeh.

5The construction of a $US10 billion ($A13.74 billion) gas pipeline stretching from Central to South Asia is set to begin in December, Pakistani officials said on Monday after meeting with a delegation from Turkmenistan.Turkmenistan, Afghanistan, Pakistan and India have long planned the ambitious project to meet growing energy needs in the three South Asian countries but administrative issues and unrest in Afghanistan have so far delayed its realization. But the project is politically complex, requiring cooperation between at least four governments, and logistically challenging, as the pipeline would pass through areas of Afghanistan and Pakistan plagued by Taliban and separatist insurgents.

6Sweden has expelled a Russian diplomat and Moscow has retaliated by throwing out a Swedish diplomat.A Swedish Foreign Ministry spokesman said the Russian’s activities had not been in accordance with the Vienna Convention, a diplomatic code of behavior.But he did not disclose any details, nor did he say when either expulsion occurred.Sweden has been highly critical of Russia’s actions in Ukraine, and increased military activity by Russian planes and vessels in the Baltic Sea region has intensified regional tensions.

7Russia: Gazprom, A Behemoth No More.”It was not too long ago that Gazprom, the state-controlled energy conglomerate, was one of the Kremlin’s most potent geopolitical weapons. But those days now seem like a distant memory: Gazprom is a financial shadow of its former self.The speed of Gazprom’s decline is breathtaking. At its peak in May 2008, the company’s market capitalization reached $367.27 billion, making it one of world’s most valuable companies, according to a survey compiled by the Financial Times. Gazprom’s deputy chair, Alexander Medvedev, repeatedly predicted at the time that within a decade the Russian energy giant could be worth $1 trillion.That prediction now seem foolhardy” [EurasiaNet]

8Iran’s Ambassador to India has told the country’s media that Tehran is eager to cooperate with New Delhi in mega connectivity projects in the region. Gholamreza Ansari has specifically cited an agreement between the two countries over the development of Iran’s southeastern port of Chabahar as a key connectivity project. “India can be always part of any big ticket projects in Iran,” Ansari told The Times of India in an exclusive interview.Asked about the possibility of reviving the Iran-Pakistan- India gas pipeline project, the envoy said it was up to India and Pakistan to sort out their differences.

9Elections in Donetsk and Russia’s New Conflict-Freeze Model. “Holding an electoral mandate, but fronting for Russia, the authorities of Donetsk and Luhansk could then be seated at the table with Ukraine’s central government, to negotiate an “internal” Ukrainian constitutional settlement. That would introduce an entirely new paradigm of “conflict freeze” in Europe’s East. For the first time in the 25-year history of those conflicts, Moscow and the main Western chancelleries are urging the aggressed country—Ukraine in this case—to authorize elections in the territory under Russian military and secessionist control, then bargain with the predetermined winners of those elections” [Jamestown]

10Research Report: Coffee in Kazakhstan. Kazakhstan is a nation of tea drinkers and drinking coffee is not a normal habit. Despite this, the interest in coffee increased over the review period with Kazakhstanis traveling more and getting to know other cultures and their cuisines better. The westernisation of Kazakhstani culture has also created a noticeable move towards coffee drinking. The increasing number of foreigners in Kazakhstan has had a positive effect on sales of coffee as well. [Fast Market Research]

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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Turkey-Africa Partnership: Trade and stimulus to cushion the economic fallout of COVID-19

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African Development Bank Vice President for Regional Development, Integration and Business Delivery Khaled Sherif said trade and stimulus were needed to cushion the economic impacts of the COVID-19 pandemic and build resilience among African economies to future shocks.

Sherif participated in a 12 May virtual panel sponsored by the Foreign Economic Relations Board of Turkey (DEIK) titled Multilateral Response to Covid-19 Crisis: Turkey-Africa Partnership that also included Secretary General of the African Continental Free Trade Area (AfCFTA) Wamkele Mene; President and Chief Executive of Trade and Development Bank Admassu Tadesse; Nail Olpak, President of the Foreign Economic Relations Board of Turkey; and Husnu Dilemre, Director General for International Agreements and EU Affairs, Turkish Ministry of Trade. Nicholas Norbrook, Managing Editor of The Africa Report served as moderator.   

Discussions centered on the impacts of the pandemic on Africa, and how its partnership and trade with Turkey as well as regional institutions could help the continent bounce back. Dilemre pointed to Turkey’s strong diplomatic links to countries across Africa, noting that the country has embassies in 42 African countries, before going on to emphasize the importance of maintaining trade. “We are making sure that even in the present, under the severe measures that are used to control the spread of the pandemic, trade continues without restriction. We believe COVID-19 should not be an excuse to restrict trade,” he said.  

In response to a question from the moderator about the scheduled commencement of trade under AfCFTA on July 1,  Mene said there would be a delay given the current circumstances: “The conditions on the ground are not permissive for a credible trading to begin on the ground as we had been directed by the heads of state.” 

However, he argued that the Free Trade Area, once up and running, would act as a stimulus for the continent. “The stimulus package for us has got to be to implement this agreement. To boost inter-African trade and to position ourselves for year-on-year growth on the back of this trade agreement,” Mene said. 

Sherif described a number of obstacles to building stronger economic resilience in Africa,  including the continent’s heavy reliance on commodities for exports, lack of social safety nets, the need to import food staples and a low tax base on which governments can draw on for revenue. These have sharpened the economic impact of the pandemic, running down of foreign exchange reserves and leading to the downgrade of sovereign credit ratings for Nigeria, Angola and a few other countries.

“We are dealing with a set of exogenous shocks that Africa has never seen,” Sherif said.  He emphasized that the shocks were a result of global measures taken to contain the virus, not the disease itself. “This is not a crisis caused by the coronavirus, because the coronavirus has not spread substantially across the continent, except in five countries.”

The Bank is working with partners to cushion the  impact of the economic crisis, he said. “Between the International Monetary Fund, the World Bank, the African Development Bank, everyone is teaming up to see what kind of stimulus we can provide to the countries that are most in fiscal distress.”

Tadesse pointed to sectors that had been relatively less affected. “The agriculture sector is still going well. We’ve financed quite a bit of fertilizer as an example. Just between January and now we’ve done over half a billion dollars of fertilizer as imports,” he said.

He agreed with other panelists that free trade was key to accelerating growth in Africa. “As we go forward, I think we’ll see aggregate demand across borders picking up momentum, and I think that will act as a stimulus,” he said. “Of course, it will take some time to actually get there but complementary measures to support industrialization and value addition in various sectors, will actually give that momentum the pace that it needs.”

According to Turkey’s trade minister, the country’s bilateral trade with Africa stood at $23.8 billion in 2018, with Turkey’s exports at $14.4 billion in the same period. Turkish panelists expressed confidence that a Turkey-Africa conference scheduled for later this year would go ahead.  

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Energy News

World Bank: META 2 to Modernize the Energy and Mining Sectors in Brazil

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The World Bank Board of Directors approved today a US$38 million loan for the Energy and Mineral Sectors Strengthening Project II (META 2). Under the program, various Brazilian public institutions and sectoral agencies will be offered technical assistance activities varying from studies, training, methodologies, databases and IT equipment.

Brazil’s energy and mining sectors are among the largest in the developing world and are key to the country’s growth. However, both still face challenges to realize their full development potential and promote environmental sustainability and social inclusion. The project will allow the production of more reliable power, at lower prices, and the economic benefits of growing more efficient, resilient and competitive energy and mining sectors.

“The energy and mining sectors are among the main drivers of the Brazilian economy as they form the basis for the sustainability of the industrial and commercial sectors, in addition to leading to the provision of services that are essential for the quality of life of citizens. This project is a continuation of long-term collaboration with the World Bank. This new phase will promote changes to support the sustainable extraction and processing of minerals and metals to meet the needs of the global supply chain for inputs and new technologies. In energy, working together will make it possible to increase the efficiency and resilience of markets in Brazil,” said Bento Costa Lima Leite, Brazil Minister of Mining and Energy.

In Brazil, the electricity, oil and gas and mining and mineral processing sectors represent approximately 3, 13 and 4 percent, respectively, of the country’s Gross Domestic Product (GDP). These sectors, though, stand at different stages of development. The power sector is one of the most sophisticated in Latin America, but it is facing a number of challenges with respect to supply security, affordability and increasing its resilience to climate change. In the natural gas sector, Brazil has started adopting various measures under a new program aimed at establishing an open, dynamic and competitive natural gas market.This has significant potential to enhance energy security and to reduce industrial energy costs, but still needs to solve regulatory and governance issues. The mining sector requires modernization to achieve sustainable practices and a new strategy underpinned by sustainability.

“META’s first phase provided technical assistance to strengthen the capacity of key public institutions to increase the sector’s contributions towards a lower carbon growth path that is environmentally and socially sustainable,” says Paloma Anós Casero, World Bank Director for Brazil. “This second stage aims at increasing efficiency, long term infrastructure adequacy and climate resilience in both sectors, allowing them to grow in a more efficient and competitive way.”

Among the outcomes supported by the Project are:

  • Increase efficiency, long term infrastructure adequacy and climate resilience in the energy and mining sectors;
  • Institutional strengthening of energy and mining institutions to establish and implement strategies, policies and regulation; and
  • Implementation support, monitoring and evaluation, knowledge sharing and dissemination.

This fixed spread loan from the International Bank for Reconstruction and Development (IBRD) to the Ministry of Energy is guaranteed by the Federative Republic of Brazil and has a final maturity of 20 years, with a 19.5 year grace period.

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As the world’s forests continue to shrink, urgent action is needed to safeguard their biodiversity

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Urgent action is needed to safeguard the biodiversity of the world’s forests amid alarming rates of deforestation and degradation, according to the latest edition of The State of the World’s Forests released today.

Published on the International Day for Biological Diversity (22 May), the report shows that the conservation of the world’s biodiversity is utterly dependent on the way in which we interact with and use the world’s forests.

The report was produced by the Food and Agriculture Organization of the United Nations (FAO) in partnership, for the first time, with the United Nations Environment Programme (UNEP), and technical input from the UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC).

It highlights that some 420 million hectares of forest have been lost through conversion to other land uses since 1990, although the rate of deforestation has decreased over the past three decades.

The COVID-19 crisis has thrown into sharp focus the importance of conserving and sustainably using nature, recognizing that people’s health is linked to ecosystem health.

Protecting forests is key to this, as they harbour most of the Earth’s terrestrial biodiversity. This report shows that forests contain 60,000 different tree species, 80 percent of amphibian species, 75 percent of bird species, and 68 percent of the Earth’s mammal species.

FAO’s Global Forest Resources Assessment 2020, noted in the report, found that despite a slowing of the rate of deforestation in the last decade, some 10 million hectares are still being lost each year through conversion to agriculture and other land uses.

“Deforestation and forest degradation continue to take place at alarming rates, which contributes significantly to the ongoing loss of biodiversity,” FAO Director-General, QU Dongyu, and the Executive Director of UNEP, Inger Andersen, said in the foreword.

The report presents a comprehensive overview of forest biodiversity, including world maps revealing where forests still hold rich communities of fauna and flora, such as the northern Andes and parts of the Congo Basin, and where they have been lost.

Conservation and sustainable use:

In this report, a special study from the Joint Research Centre of the European Commission and the US Forest Service found 34.8 million patches of forests in the world, ranging in size from 1 hectare to 680 million hectares. Greater restoration efforts to reconnect forest fragments are urgently needed.

As FAO and UNEP prepare to lead the United Nations Decade on Ecosystem Restoration from 2021 and as countries consider a Global Biodiversity Framework for the future, Qu and Andersen both expressed their commitment for increased global cooperation to restore degraded and damaged ecosystems, combat climate change and safeguard biodiversity.

“To turn the tide on deforestation and the loss of biodiversity, we need transformational change in the way in which we produce and consume food,” said QU and Andersen. “We also need to conserve and manage forests and trees within an integrated landscape approach and we need to repair the damage done through forest restoration efforts.”

The report notes that the Aichi Biodiversity Target to protect at least 17 percent of the Earth’s terrestrial areas by 2020 has been achieved for forests, although progress is still required to ensure the representativeness and effectiveness of such protection. 

A study conducted by UNEP-WCMC for this report shows that the largest increase in protected forest areas occurred in broadleaved evergreen forests – such as those typically found in the tropics. Furthermore, over 30 percent of all tropical rainforests, subtropical dry forests and temperate oceanic forests are now located within protected areas.

Jobs and livelihoods:

Millions of people around the world depend on forests for their food security and livelihoods.

Forests provide more than 86 million green jobs. Of those living in extreme poverty, over 90 percent are dependent on forests for wild food, firewood or part of their livelihoods. This number includes eight million extremely poor, forest-dependent people in Latin America alone.

UN Environment

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