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Iran deal signals a radical shift in U.S. approach to the Mideast

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

1At least since 9/11 and arguably for two decades before that, two propositions have informed U.S. policy in the Mideast. The first is that U.S. interests there are best served by the United States establishing a position of unquestioned preeminence. The second is that military might, wielded unilaterally if necessary, holds the key to maintaining that dominant position. Call it the Big Enchilada policy, with attitude. As implemented, however, that approach has yielded almost uniformly unfavorable results. Iraq and Afghanistan provide exhibits A and B, of course. But Libya, Somalia and Yemen don’t look much better. Even so, some hawkish types argue that trying a little harder militarily will produce better outcomes. Their ranks include a platoon of Republican presidential candidates vowing if elected to get tough on the ayatollahs, Andrew J. Bacevich for the Los Angeles Times.

2India Opens Gateway to Central Asian Gas Riches After Iran Deal. With U.S. sanctions easing, India is racing to build a port in Iran that will get around the fact that its land access to energy-rich former Soviet republics in Central Asia has been blocked by China and its ally Pakistan.“We’re seeing the latest manifestation of the Great Game in Central Asia, and India is the new player,” said Michael Kugelman, a South Asia expert at the Washington-based Woodrow Wilson International Center for Scholars. “It’s had its eyes on Central Asia for a long time.” While the world focuses on what Iran’s opening means for Israel and Arab nations, the ramifications are also critical for Asia. Closer Iran-India ties would allow New Delhi’s leaders to secure cheaper energy imports to bolster economic growth and reduce the influence of both China and Pakistan in the region. Natalie Obiko Pearson for Bloomberg.

3Turkmenistan’s government-owned TurkmenGaz will lead a consortium of the national oil companies of the four nations that will build and operate the ambitious Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, the petroleum ministry said without clarifying whether foreign private companies can still participate in the $7.6 billion project.

4Kazakhstan will establish an energy efficiency fund, which will become a tool for supporting energy service companies by allocating them credits and loans on preferential terms, said Albert Rau, Kazakhstan’s Deputy Investment and Development Minister.”Currently, works on the establishment of an energy efficiency fund are already being conducted together with the World Bank and the United Nations Development Program,” he said. “This will give additional impetus for the development of this sector in Kazakhstan. In this regard, we should follow the example of Europe, in particular Germany, which has made significant progress in the field of energy saving.” According to the “100 concrete steps” plan voiced by President Nursultan Nazarbayev, one of the important directions of Kazakhstan’s industrial development is the reduction of energy intensity in the gross domestic product of the country.

5A sophisticated cyber-attack on an email network at the Pentagon affected 4,000 military and civilian personnel working for the Joint Chiefs of Staff, and the network was shut down for two weeks. It was a so-called spear-phishing attack in which people are tricked into opening bogus emails which then infect the network.US officials did not say whether the attack has been linked to individuals or the Russian government but said it was “sophisticated.”One official said: “It was a spear-phishing attack traced to that country (Russia),” Another told NBC News: “It was clearly the work of a state actor.” No classified information was obtained but the Pentagon decided to shut the email system down.

6S-400 Triumf missile defense systems have entered service in the Russian Armed Forces on the Kamchatka Peninsula, the head of the Defense Ministry’s press service for the Eastern Military District said Friday.“The S-300 missile defense systems that were deployed earlier reliably defended the airspace for over a quarter of a century. The capabilities of the new technology will allow for the detection of air targets at more than 600 kilometers away and are several times better than the military efficiency of anti-air defense of foreign states,” Roman Martov said. The S-400 Triumf (SA-21 Growler) is a Russia’s next-generation anti-aircraft weapon system, carrying three different types of missiles capable of destroying aerial targets at short-to-extremely long range.

7A Business Incubation Center at Mingachevir Tech Park will be created before the end of this year, says executive director of the High Tech Park Seymur Agayev. Currently, the general plan of progress for selected areas and the very structure of the Mingachevir Tech Park is under development, he said.“There are a number of measures concerning the activities of the Mingachevir technology park that will be adopted, and the business incubator is one of them. We are developing a comprehensive program that will at once launch the activity of the Tech Park. In addition, discussions are underway with potential investors and members,” Agayev said.

8Will Vladimir Putin save Russia’s ailing firms, like EkoNiva, Rosneft, Gazprom? Including the money in the sovereign wealth funds, the government has $US358 billion in foreign currency reserves and gold. So why not put some to work aiding businesses? One problem is that some banks and companies are poorly managed and deserve to go under, says Bernie Sucher, a longtime US investor in Russia who serves on the board of Moscow-based UFG Asset Management. Bailing them out only delays the day of reckoning, he says. That’s what happened in the 2008 financial crisis in Russia, when “the government sprayed liquidity all over the economy”, he says. “The big miss in 2008 was the failure to use the crisis to pursue deep structural reforms.” Carol Matlack for Sydney Morning Herald.

9Kazakhstan government has revised the decree that made many popular resorts a special border zone requiring special passes. Foreigners will no longer have to obtain permits to visit them. It greatly widened the strip of nearborder land considered a special zone not supposed to be visited by foreigners without obtaining a prior permit from the local authorities. A lot of popular destinations, including Big Almaty Lake, Medeo high altitude skating rink, Shymbulak skiing resort, Lake Alakol, Kolsay Lakes and Charyn Canyon ended up in that zone.

10An agreement to build “Wind Parks” in the vicinities of the Iranian city of Khaf has been reached. According to the agreement, the project will be implemented by LLC “Azalternativenerji”. The project will be implemented within the framework of the Memorandum of Understanding, which was held in Baku in October 2014.

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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The COVID-19 Shock to Kazakhstan’s Economy Largest in Two Decades

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For the first time since the late 1990s Kazakhstan’s economy is expected to contract by projected 3 percent in 2020 with a moderate recovery by 2.5 percent in 2021, according to the World Bank’s latest Kazakhstan Economic Update (Summer 2020) – Navigating the Crisis report.

Although Kazakhstan’s GDP showed mild growth at 2.3 percent in the first quarter, economic activities weakened in the following months as commodity prices dropped, trade declined, and COVID-19 preventive measures slowed economic activity. Consumer demand showed moderate growth at  at 1.2 percent,  reflecting growing concerns over COVID-19 and the restriction measures. Investment is expected to ease to 1.0 percent annually, supported mostly by the on-going foreign direct investments into the oil and gas industry and residential construction. Supply disruptions and currency depreciation pushed up inflation to above the upper bound of the National Bank target range.

“The authorities acted early to contain the COVID-19 pandemic, and the accumulated fiscal buffers allow the government to introduce a relief package to mitigate the impacts of COVID-19 on the economy,” said Sjamsu Rahardja, Senior Country Economist, World Bank in Kazakhstan. “Weak demand and oil prices, as well as the protacted pandemic expose significant risks to the economic outlook. Authorities may want to consider using the available resources to provide relief to the poor and vulnerable, protect productive assets, and introduce reforms to sustain economic recovery.”

A prolonged crisis is likely to increase poverty and can increase inequality in Kazakhstan. Preliminary estimates suggest that poverty rate may rise in 2020 from a projected 8.3 to 12.7 percent – equating to more than 800 thousand additional people living in poverty. The shock to the labor market in Kazakhstan due to both the pandemic and the mitigation measures, is expected to have severe implications for jobs, particularly in sectors that employ low-skilled workers.

The report also argues that COVID-19 has a negative impact on human capital development in Kazakhstan. Unequal access to quality education, especially during lockdown, can negatively impact human capital development for the poor. School closures could result in learning loss of more than one-third of a school year and the impact could mean a decline in the Program for International Student Assessement (PISA) points. As most students in the country currently perform around the threshold for functional literacy and assuming some will lose more than others, the estimates suggest that the percentage of students performing below functional literacy will increase by 3 percentage points (from 64 to 67 percent).

“The impact of COVID-19 on education and learning losses will have a decades-long impact on the economy by an estimated 2.9 percent, amounting to an overall economic loss of up to $1.9 billion every year”, says Jean-Francois Marteau, World Bank Country Manager for Kazakhstan.  “A focus on improving access to quality education, including distance learning, would be important to prevent a decline in the quality of human capital, especially among Kazakhstan’s low-income population.”

The report concludes that under the risk of a prolonged slump in the global oil market, Kazakhstan’s pathway for a resilient recovery may focus on strengthening the effectiveness of public administration and services, including the use of e-platforms to deliver key public services, better tax administration, and a mechanism to review and redeploy fiscal resources toward better state programs. A renewed emphasis on reforms in the logistics, digital telecommunications, and financial sectors could help the overall private sector explore new opportunities.

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China-Eurasia Council condemns aggression of Azerbaijan

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China-Eurasia Council for Political and Strategic Research strongly condemns Azerbaijani aggression which Baku started on July 12, 2020.  Azerbaijani Ministry of Defense is a threat for the entire World as it is speaking about its aims to strike Metsamor Nuclear Plant, which is located in Armenia. Baku must understand that this is a crime against humanity, and it is equal to nuclear strike.The destruction of Metsamor Nuclear plant will be a disaster not only for Armenia, but also for Iran, Georgia and Azerbaijan, it will harm World’s environment and stand a real problem for several generations of the World. It is worth mentioning, that this time Baku attacked the Northern borders of Armenia, which are sovereign territory of the Republic of Armenia according to International law. Azerbaijan violated the principle of territorial integrity of a sovereign state, which is one of the important pillars of International law.

China-Eurasia Council for Political and Strategic Research condemns Azerbaijan for using force against civilian population of Armenia and calls for peaceful negotiations. Baku must show solidarity and join global ceasefire initiated by the UN secretary general Antonio Guterres and must not try to escalate the situation on the border to deflect public attention from the situation concerning the outbreak of Covid-19 in Azerbaijan. We call official Baku to take care of Azerbaijani people in the hard times of Coronavirus and not send its soldiers to real death.  Being multinational Council, for us It’s terrible to hear about lossfrom both sides and we express our sincere condolences. Hopefully peace will come to South Caucasus, which is an important crossroad in Eurasian mainland and it can stand a very important link for Belt and Road Initiative, if all problems solved in a peaceful way.

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Condemnation Of Armenian Aggression By Friends Of Azerbaijan (FoA)

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Friends of Azerbaijan (FoA) strongly condemns the coward act of Armenians aggression in the Tovuz district of Azerbaijan that is a sheer violation of international borders and law. The act is an attempt of Armenia to drive global attention from the peaceful dialogue and negotiation process on Nagorno Karabakh.

In an online meeting of the delegates of the Friends of Azerbaijan (FoA), a joint declaration of condemnation has been issued by the honorable members of Friends of Azerbaijan (FoA). 

According to this declaration, Armenian aggression can jeopardize the whole South Caucasus region. The incident on July 12, 2020, is being considered as a direct attack on Azerbaijan and the repercussions of this incident can result in massive catastrophe in the entire region.


The delegates of Friends of Azerbaijan (FoA) stressed the global powers to come forward and take serious action on Armenian intervention by violating the international border of Azerbaijan. The act of Armenia is an open challenge to the sovereignty of Azerbaijan.

Malik Ayub Sumbal founder of Friends of Azerbaijan (FoA) termed that Armenia is losing its legal and moral position on Nagorno Karabakh and there is mounting pressure on Armenia by the international community for the peaceful solution of Nagorno Karabakh according to the UN Resolutions. At this time to get rid of such kind of diplomatic moves, Armenia has launched another major front in Tovuz. 

When the whole world is busy against the Covid19 Armenian Prime Minister has chosen a very dangerous path that can take the whole region into war and bloodshed. 

Friends of Azerbijan (FoA) is firmly standing with shoulder by shoulder to the people of Azerbaijan and martyr’s families at this hour.

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