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Kazakhstan readies itself for EXPO2017

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

1In 2017, Astana, the capital city of my home country of Kazakhstan, will host the next Universal World Exposition, joining a long heritage that includes Shanghai’s extraordinary effort in 2010. EXPO-2017 is a national project that provides a great opportunity for the Republic of Kazakhstan to investigate new sources of energy and current developments in green technologies. We have set ambitious goals to ensure that this exhibition is held at the highest level, meeting the expectations and hopes of other countries. The president of Kazakhstan has set up some challenging objectives; we need to turn EXPO-2017 into the central point for the third industrial revolution, which includes the development of an alternative economy and the creation of new high-tech materials, sources of renewable power and a skilled workforce. The promotion of EXPO-2017 is gaining significant feedback from across the world” Rapil Zhoshybayev, first deputy minister of foreign affairs of Kazakhstan. [Global times]

2Mayor of Almaty replaced with fresh face: analysis. Kazakhstani political analysts Andrey Chebotarev and Dosym Satpayev talked to Tengrinews about the meaning of the new appointments. The first believes that both appointments are a sign of trust that the President put into the two men. The second thinks Yessimov was downgraded, and Baibek’s appointment was a way to encourage the younger generation of civil servants. Director of the Center of Topical Research Alternative Andrey Chebotarev contended that rotation of high-level officials was a normal occurrence. Yessimov had served as Akim (Mayor) of Almaty for quite a long time – since 2008. The expert believes that appointing Yessimov as head of the National Company Astana EXPO – 2017 was a sign of confidence that the President had in him.

3The Pluto of International Organizations: The Evolution of the SCO. “The SCO seems to be structured in a manner that undermines its own development, as IO evolution is understood by the scholarly community. The member states simultaneously support and undermine the organization via individualized micro-agendas because of their worries about the tricks each might play upon the other. Interestingly, what the literature does not do is question the legitimacy of the SCO. This is one of the main contentions here: membership of the SCO in the IO community should be questioned instead of simply de facto bestowed. Until now, its membership has always been a given” Dr. Matthew Crosston for Modern Diplomacy.

4Off the Coast of Iran, a High-Stakes Version of Spy Versus Spy. “In the skies and waters of the Persian Gulf, the Strait of Hormuz, the Arabian Sea and the Gulf of Aden, the two continue to constantly watch each other. American naval ships openly roam the waters along Iran’s 1,100-mile-long southern coastline, their radar trained on the Iranian shore and on Iranian ships leaving their harbors. Iranian fighter jets patrol the skies, keeping an eye on American combat planes that take off from an aircraft carrier in the Persian Gulf every time an Iranian jet comes close to their ship. “It’s a little bit of a game we play,” said Capt. Benjamin Hewlett, the commander of the air wing aboard the aircraft carrier Theodore Roosevelt, which is in the Persian Gulf keeping an eye on Iran right now. “When they launch, we launch. We consider this our sovereign territory, so we make sure they’re not unescorted in and around the aircraft carrier” Helene Cooper for New York Times.

5Enagás making investment in important gas pipeline connecting Azerbaijan with Europe. We are investing in an important gas pipeline connecting Azerbaijan with Europe, CEO of Enagás, Marcelino Oreja said while speaking about Trans-Adriatic Pipeline (TAP) project in an interview with “European CEO” newspaper. He said that this gas pipeline would supply gas to the European Union.

6The “Azerbaijan: Land of Tolerance” exhibition will open its doors to all art lovers in Paris on August 18.World famous for his intrepid style of photographing the world’s most exotic places, Reza is putting on display a series of photographs on the Christian, Muslim, and Jewish communities cohabitating in Azerbaijan. All are driven by a deep commitment for sharing, mutual respect, and dialogue with each other. The exhibition, to be held between August 18 and September 10, highlights the millennial ties that all of these religious communities have forged with each other.

7The Russia-OPEC-America Nexus: Reimagining the Great Oil Game. “The most intriguing geopolitical connection with oil prices collapsing is the Western sanction regime on Russia. As inflation hit the Russian economy and protracted recession weighed on Russian morale, OPEC ramped up production. Similarly, Russia has (as of May 2015) produced more oil since the end of the Soviet era. Interestingly, this economic stand-off brought the two biggest oil-producing countries (Saudi Arabia and Russia) to the bargaining table as Russia considers closer ties to OPEC. This tantalizing prospect of a Russian-OPEC alliance has almost always been an illusion since OPEC’s formation and would drastically increase OPEC’s global power in determining oil prices. OPEC has never really trusted Russia and an alliance may only form out of dire necessity. But that is something the United States would staunchly oppose” Brian Hughes for Modern Diplomacy.

8An Azerbaijani delegation will attend the international forum of the Asian Infrastructure Investment Bank to be held in Tbilisi on August 23-25. The event will bring together government and state officials, economists, experts from 57 countries. The forum will focus on the activity of AIIB, investment in infrastructure projects in partner countries of AIIB, as well as economic cooperation. AIIB is newly created bank that is expected to be established by the end of this year for the purpose of providing loans for infrastructure projects in developing countries in Asia.

9An Iranian official says Iran and Azerbaijan have been talking on transiting gas to Europe. Azerbaijani and Iranian officials have in recent weeks discussed in Tehran ways to export Iran’s gas to Europe via Azerbaijan, the Fars news agency quoted an unnamed official as saying Aug. 18. Recently, on Aug. 4, an Azerbaijani delegation headed by Economy and Industry Minister Shahin Mustafayev traveled to Iran and met with Iranian top officials, including Oil Minister Bijan Namdar Zanganeh.“Azerbaijani delegation offered their Iranian counterparts to cooperate in the gas export to Europe via Azerbaijan, as Iran’s involvement will leave no concern in terms of providing Europe with gas,” the source said.According to the report, the two parties stressed that the Iranian gas export to Europe through Azerbaijan is easier than its direct export to the West. The head of Azerbaijan’s state oil company SOCAR, Rovnag Abdullayev said in April that Iran is interested in purchasing a stake in the Trans-Anatolian Natural Gas Pipeline (TANAP).

10North Korea’s Balancing Act in the Persian Gulf. “In March 2015, Saudi Arabia signed a deal with South Korea to build two small and medium-sized nuclear reactors. This move grabbed the attention of the White House, as it symbolized Saudi dissatisfaction with U.S. attempts to forge a nuclear deal with Iran. The synchronized timing of North Korea’s missile shipments to Yemen and the North Korean regime’s defiant rejection of Iran-style nuclear talks with the U.S. is therefore intriguing. Pyongyang’s extension of assistance to Yemen could be its way of retaliating against Saudi nuclear cooperation with South Korea, which will probably increase should the US Congress ratify the Iran deal” Samuel Ramani for The Huffington Post.

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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After stalling last year, renewable power capacity additions to hit double-digit growth in 2019

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After stalling last year, global capacity additions of renewable power are set to bounce back with double-digit growth in 2019, driven by solar PV’s strong performance, according to the International Energy Agency.

The IEA expects renewable capacity additions to grow by almost 12% this year, the fastest pace since 2015, to reach almost 200 GW, mostly thanks to solar PV and wind. Global solar PV additions are expected to increase by over 17%.

Last year was the first time since 2001 that growth in renewable power capacity failed to accelerate year on year, largely due to a Chinese government policy change. This highlights the critical role of governments for the deployment of renewables and the need to avoid sudden policy changes that can result in strong market volatility.

Renewables have a major part to play in curbing global emissions and providing universal access to affordable, secure, sustainable and modern energy. Renewable capacity additions need to grow by more than 300 GW on average each year between 2018 and 2030 to reach the goals of the Paris Agreement, according to the IEA’s Sustainable Development Scenario.

“These latest numbers give us many reasons to celebrate: Renewable electricity additions are now growing at their fastest pace in four years after a disappointing 2018,” said Dr Fatih Birol, the IEA’s Executive Director. “We are witnessing a drastic decline in the cost of solar power together with strong growth in onshore wind. And offshore wind is showing encouraging signs.”

“These technologies are the mainstays of the world’s efforts to tackle climate change, reduce air pollution and provide energy access to all,” Dr Birol said. “The stark difference between this year’s trend and last year’s demonstrates the critical ability of government policies to change the trajectory we are on.”

The cost of solar PV has plunged more than 80% since 2010, making the technology increasingly competitive in many countries. The IEA estimates that global solar PV capacity additions will increase to almost 115 GW this year, despite a slight decline in China, the world’s largest market. This is set to be the first year that solar PV additions have surpassed 100 GW and the third year in a row that they account for more than half of global renewable additions.

The softness in the Chinese solar PV market is being offset by faster expansion in the European Union, led by Spain; a new installations boom in Vietnam as developers rush to complete projects before incentive cuts; and faster growth in India and the United States. Japanese solar PV developers are also expediting the commissioning of projects to meet deadlines for higher incentives.

The pace of acceleration in the Chinese solar PV market remains the biggest uncertainty for the IEA’s 2019 estimates. China’s policy transition from feed-in tariffs to competitive auctions resulted in relatively slow solar PV deployment in the first half of 2019. But installations in the second half of the year are expected to accelerate with the completion of the first projects linked to large-scale auctions and the emergence of projects that rely far less on incentives to compete with other power sources.

The rebound in renewables is also supported by higher onshore wind growth, which is expected to rise 15% to 53 GW, the largest increase since record deployment in 2015. In the United States, project developers have accelerated deployment before the phase-out of federal production tax credits. In China, lower curtailment levels have unlocked additional growth in several provinces this year, enabling faster expansion.

Offshore wind growth is expected to be stable at around 5 GW in 2019, led by the European Union and China.

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Liquidity Crisis Weighs on An Already Strangled Palestinian Economy

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Palestinian Authority (PA) faces a financing gap that could exceed US$1.8 billion for 2019 driven by declining aid flows and the unresolved transfer of taxes and import duties collected by Israel on behalf of the PA (clearance revenues), according to a new report released today by the World Bank. 

The report highlights the financing gap that has forced the PA to accumulate debt from domestic banks, and build up arrears to employees, suppliers and the public pension fund, creating large liquidity challenges for the economy. The Palestinian economic monitoring report will be presented to the Ad Hoc Liaison Committee (AHLC) on September 26, 2019 in New York, a policy-level meeting for development assistance to the Palestinian people.

“The outlook for the Palestinian territories is worrisome as drivers of growth are diminishing and the severe liquidity squeeze has started to affect the PA’s ability to fulfill its responsibilities of paying its civil servants and providing public services,” said Kanthan Shankar, World Bank Country Director for West Bank and Gaza. “With the right actions and collaboration between the parties, the situation could be reversed and bring relief to the Palestinian people, its economy and living standards.”

Overall revenue received in the first half of 2019 was half the amount in the same period last year mainly due to a 68 percent drop in clearance revenues. The PA has rejected the transfers of all clearance revenues due to deductions by Israel of US$138 million per year. As a result, the PA has taken a number of steps to cope with the loss of liquidity including fully using its borrowing capacity from domestic banks and paying only 60 percent of salaries to its employees while protecting those that make NIS2,000 per month (US$ 550) and below.

The retroactive transfer of fuel taxes made by the Government of Israel in August 2019 is expected to enable the PA to manage till the end of 2019 with reduced spending, while continuing to accrue arrears to employees, and private sector suppliers. Transferring to the PA the responsibility for fuel taxes that comprise about a third of total clearance revenues would be a partial help, but a more comprehensive agreement needs to be reached covering the mechanism and nature of Israeli deductions from clearance revenues going forward. 

Growth in the Palestinian territories is estimated at 1.3 percent in 2019. This forecast is largely due to a slight improvement in Gaza of 1.8 percent growth, after a dramatic 7 percent decline in 2018. Reflecting the liquidity squeeze, growth in the West Bank is expected to slow in 2019 to the lowest level over the last five years at 1.2 percent.  As the PA, businesses and households exhaust their options for coping with the liquidity crisis, a recession is forecasted for subsequent years in the absence of an agreement that restores the normal flow of these revenues.

 “While the regular flow of clearance revenues is an immediate priority, for sustained economic expansion, steps need to be taken to reduce access and trade barriers. Work also needs to be done to enhance the business environment for Palestinian businesses. Coordinated efforts and support by all parties could offer better economic prospects for Palestinians,” added Shankar.

Progress can be made by expanding the pilot of door to door transport (a single movement of cargo on one mode of transport) through the West Bank crossings; completing the negotiations over electricity purchases between Palestinian and Israeli electricity companies; and revising the dual use goods system. Internally, reforms to improve the business climate are critical, including finalizing the revised Companies Law before the end of the year; and completing the institutional reform at the Palestine Land Authority to improve the efficiency and transparency of land administration. 

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New Study Offers Pathways to Climate-Smart Transport

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A two-volume study laying out a pathway to a low-carbon and climate-resilient transport sector in Vietnam was released at a workshop on Addressing Climate Change in Transport, held in Hanoi today.

This analytical work comes at a critical time when the Government of Vietnam is updating its Nationally Determined Contribution on reducing carbon emissions and set out its next medium-term public investment plan for 2021-2025.

“A resilient transport system is critical to the continued success of Vietnam’s economy, which relies heavily on external trade and seamless connectivity,” said Ousmane Dione, World Bank Country Director for Vietnam. “We hope that the findings and recommendations of this new report will help Vietnam in its efforts to achieve a resilient and sustainable transport sector.

The first volume demonstrates that by employing a mix of diverse policies and investments, Vietnam can reduce its carbon emissions in the transport sector up to 9 percent with only domestic resources by 2030, and 15-20 percent by mobilizing international support and private sector participation.

Currently, the transport sector contributes about 10.8 percent of the total CO2 emissions. In a business-as-usual scenario, these emissions are projected to grow at an annual rate of 6-7% to nearly 70 million tons CO2e. The most cost-effective measures to boost the resilience of the transport sector include shifting traffic from roads to inland waterways and coastal transport, deploying stricter vehicle fuel economy standards, and promoting electric mobility.

The second volume provides a methodological framework to analyze critical and vulnerable points of the transport network, and presents a strong economic case for investing in building the climate resilience of Vietnam’s transport networks. A vulnerability assessment looks at the potential impact of different hazards on the transport corridor or network, and the criticality assessment considers such questions as which links and routes along transport networks are the most critical for the unimpeded flow of transport across a particular transport network.

The study identifies systemic critical issues and hazard-specific, high-risk locations in Vietnam’s transport network. Considering climate change, it is estimated that 20 percent of the network is most critical in terms of its exposure to future disaster risks. Meanwhile, road failures can result in very high daily losses of up to US$1.9 million per day, while railway failures can result in losses as high as US$2.6 million per day.

To prepare for the increasing intensity and frequency of extreme hazards due to climate change, it is imperative to make investments to overhaul existing road assets to higher climate-resilient design standards.

Given the vulnerability of land-based transport, a shift to waterborne transport offers a good resilience strategy. A 10-percent shift in that direction could reduce climate risks by 25 percent, according to the report.

This report is a collaborative effort among the Vietnamese Ministry of Transport, the World Bank and Deutsche Gesellschaft für InternationaleZusammenarbeit GmbH (German Development Cooperation GIZ) under the commission by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU). It is sponsored by the Australian Government through the Australia-World Bank Group Strategic Partnership in Vietnam – Phase 2 (ABP2) program.

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