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Kazakhstan joins currency war as tenge plummets after float

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

1Kazakhstan switched to a floating exchange rate, creating fears that the world is about to witness a new round of “currency wars.” After currency devaluations in neighboring Russia and China, oil and mineral-rich Kazakhstan’s currency fell 36 percent overnight after its government introduced a floating exchange rate for its currency, the tenge. While Kazakhstan’s economy is more dependent on oil prices than Russia’s, it has been able to avoid currency devaluations until now. After the country’s currency collapsed, many stores closed, apparently to change price tags. The Alser electronics store in the central department store of Almaty, Kazakhstan’s largest city hung up a sign saying it is “closed for technical reasons.” [Sputnik]

2Iran, Kazakhstan discuss launching energy trade zone. Iran, Kazakhstan’s provincial officials discussed mutual ties, including establishment of a free trade zone of energy, oil and gas in the Caspian Sea. Rabi’ Fallah Jolodar the governor-general of Iran’s Mazandaran Province and Rakimbek Amirjanov a deputy governor-general of Kazakhstan’s Mangystau Province have conferred over ways to further develop bilateral ties, Fars News Agency reported August 19. During the meeting, the two sides focused on the establishment of a free trade zone of energy, oil and gas in the Caspian Sea. Amirjanov noted that launching the Aktau-Sari flight would further facilitate economic cooperation between the two provinces.Data released by Iran’s Customs Administration shows last year Iran exported $205.11 million of non-oil goods to Kazakhstan while importing $175.95 million worth non-oil goods.

3Russian lawmakers are calling the largest allied airborne drills in Europe since the Cold War a threat and provocation rather than a defensive exercise. The war games, dubbed Swift Reponse 15, involve nearly 5,000 soldiers from 11 NATO countries flying across Germany, Italy, Bulgaria, and Romania, and will continue from August 15 to September 13.In announcing the games August 18, the U.S. Army said they were aimed at demonstrating “high-readiness” and the capacity to maintain “a strong and secure Europe.”But Vladimir Komoyedov, head of the State Duma Defense Committee, said August 19 that Russia in response is keeping its forces “on alert.”Konstantin Kosachyov, head of the Federation Council International Affairs Committee, said the exercises are egging on a recent escalation of fighting in eastern Ukraine.”Conducting large-scale NATO drills is tantamount to conducting an operation to cover or support another adventure of Kyiv.” He said the “hyper exercise” is actually undermining security in Europe rather than increasing it. “Europe is secure and strong precisely when sabers are rattled less,” he said.

4IS Releases Russian Propaganda App. Islamic State (IS) militants from the extremist group’s Russian-speaking faction have released a propaganda app for Google’s popular Android platform. The app, called Caucas, is not available through the Google Play Store, where Android users obtain mainstream apps. Instead, it was made available for download on August 18 via links posted on sites such as archive.org, a U.S.-based digital archive that IS often uses to post videos. The app provides several types of IS propaganda in Russian. [RFERL]

5Almaty among Top 100 liveable cities. Economist Intelligence Unit (EIU) rated 140 cities by livability. The cities were ranked based on “stability, healthcare, culture and environment, education and infrastructure”. Almaty landed on the 100th place of the rating earning 65.3 points out of 100. The City of Apples earned 77 points for stability, 66.7 for healthcare, 57.6 for culture and environment, 66.7 for education and 60.7 for infrastructure. [Tengrinews]

6Azerbaijan has developed six projects under the Harmonizing Digital Markets Initiative and submitted them to the European Commission for financing, according to remarks made by Tofig Babayev on August 17. The director of the Regional Information Technologies Academy told Trend that the main projects to be financed in 2016-2017 will be determined by the end of 2015.”The projects developed in six areas of HDM Initiative, including e-customs, e-commerce, e-business, and e-security, will be further implemented in Azerbaijan,” he noted. The HDM Initiative includes countries of the Eastern Partnership (Belarus, Moldova, Ukraine, Azerbaijan, Georgia and Armenia).

7What makes Kazakhstan right for the bank deal? “Kazakhstan is home to some of the world’s most abundant uranium deposits, making it a key contributor to nuclear fuel supplies around the globe. In 2011, Kazakhstan increased uranium production to almost 20,000 tonnes, making it the largest uranium-producing country. Russia, China and Japan all export significant percentages of their uranium supplies from Kazakhstan. Although Kazakhstan currently does not generate nuclear power, the country is exploring assistance from Russia and Japan to construct nuclear power plants” [Gulf News]

8Russia’s top diplomat has said his country doesn’t care about the United States’ unilateral sanctions against Iran over the delivery of the Russian-made S-300 anti-aircraft missile defense system to the Islamic Republic. “The U.S. sanctions are no concern of ours,” Sergei Lavrov said on August 19, emphasizing that Moscow stands only by its own international commitments, Press TV reported. This came as Washington voiced concern a day earlier over delivery of the S-300 missiles to the Islamic Republic. John Kirby, U.S. State Department spokesman, said that Washington is concerned about the delivery of the defense system to Tehran despite the fact the move does not violate any UN Security Council resolutions.

9The oil sector, which determined direct investments in Azerbaijan for two months running, failed to restore this status for March-July. In July direct investments in the Azerbaijan’s oil sector increased by 2.1% against June providing only 47.9% of all investments in the economy against 64.1% in January, abc.az reports. The State Statistics Committee (SSC) informs that over Jan-Jul 2015 it was invested AZN 4.125 bn in the oil sector ($3.9 bn on the exchange rate by the end of reported period of AZN 1.0495 to the US dollar) that is by 19.57% higher against the 2014 same term. The non-oil sector was invested AZN 5.2 bn (-6.7%). Oil investments for the reported period made up 44% and non-oil investments -56% of all investments in the economy.

10Iran is going to inaugurate eight new petrochemical projects during the current Iranian fiscal year, Ali Mohammad Bosaqzadeh, an official with the Iranian National Petrochemical Industries Company, said. He added that Iran’s petrochemical production increased by 4 percent in the current Iranian calendar year (since March 21). According to Bosaqzadeh, 18 million metric tons of petrochemical products were produced from March 21 to July 22. He said eight petrochemical firms across the country had productions above 90 of their nominal capacities in the meantime.During the period, Iran sold about 4.4 million metric tons of petrochemical products worth 860 trillion rials ($28.8 billion) in the domestic market.

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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New Solar Project to Restore Electricity to Over One Million Yemenis

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The World Bank announced today a new project to finance off-grid solar systems in Yemen to power vital basic services, and improve access to electricity for vulnerable Yemenis in rural and outlying urban areas.

Funded by a US$50 million grant from IDA, the World Bank’s fund for the world’s poorest countries, the new project will rely on the commercial solar market, which has grown despite the conflict, providing further support to the local economy and creating jobs.

Solar power has proved to be the most immediate solution for severe energy shortages in Yemen. A booming solar industry has developed driven by the private sector, but the costs have put the technology beyond the reach of public facilities and the most vulnerable populations.

The Yemen Emergency Electricity Access Project will work with the current solar supply chain and the existing network of microfinance institutions, to finance and deliver off-grid solar systems to rural and peri-urban areas. The aim is to restore or improve access to electricity to 1.4 million people, around half of them women. The project will also fund solar power for critical infrastructure, such hospitals, schools, water corporations, and rural electricity providers.

The lack of electricity in Yemen has had a devastating impact on Yemenis and the provision of services,” said Dr. Asad Alam, World Bank Group Country Director for Yemen, Egypt, and Djibouti. “While responding to immediate need, the project will contribute to building a more inclusive and sustainable solar market in Yemen through targeted financing to the private sector which will expand its reach to the poor and vulnerable.

The project will be implemented in partnership with the United Nations Office for Project Services (UNOPS) and in collaboration with the local private sector, including Micro Finance Institutions, solar equipment suppliers and technicians. Working with the Yemeni private sector will help create hundreds of jobs.

Investing in solar will make Yemen’s electricity more resilient, reduce the dependence on fuels for critical service facilities, and create jobs in the private sector,” said Joern Torsten Huenteler, World Bank Energy Specialist and Task Team Leader of the project, “What Yemenis need today more than ever is a quick and innovative energy solutions to help ease the crisis.

With this new financing, IDA emergency grants to Yemen issued since July 2016 have totaled US$1.183 billion.

These projects have been prepared – and are being implemented – in partnership with Yemeni institutions and UN organizations such as the United Nations Development Program, the United Nations Children’s Fund, the World Health Organization, the United Nations Food and Agriculture Organization, and the United Nations Office for Project Services.

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Japan works with UNIDO to boost employment in Lebanon

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Photo: UNIDO

The Government of Japan has announced that it will fund a project to create jobs in the carpentry and construction sectors in northern Lebanon. This is one of eight new projects implemented by the United Nations Industrial Development Organization (UNIDO) in Ethiopia, Iraq, Jordan, Lebanon, Liberia, Nigeria, Somalia and the Syrian Arab Republic, with Japanese funding totaling US$5.2m.

The project will build upon previous interventions to create economic opportunities, particularly among host and refugee communities, in the northern areas of the country. The technical assistance will focus on the design of new training modules for construction skills training and the delivery of marketable vocational skills training to vulnerable individuals.

Matahiro Yamaguchi, Ambassador of Japan to Lebanon, stated, “Japan is very keen on creating employment opportunities in productive sectors such as carpentry and construction, in order to promote economic development in the country.” He expressed hope that the project assists both Lebanese residents and Syrian refugees in gaining access to job markets and entrepreneurship by equipping them with essential technical skills and practical knowledge.

Speaking at the kick-off event held on 28 March at UNIDO headquarters in Vienna, during which the eight projects and the funding from the Government of Japan were announced, UNIDO Director General, LI Yong, highlighted that the projects aim to strengthen the humanitarian-development nexus and promote inclusive and sustainable industrial development by taking a human security approach.

Ambassador Mitsuru Kitano, the Permanent Representative of Japan to the International Organizations in Vienna, stated that the projects will “help individuals to live under healthy conditions, consolidate their livelihoods and, with all of this, gain optimism for their future.”

Lebanon continues to be by far the largest host of Syrian refugees in proportion to population. The country is currently hosting more than one million refugees, resulting in a 25% increase in the population. In particular, interventions aimed at creating jobs and economic opportunities are considered urgent by the government and the United Nations.

This project will target individuals in areas that have been significantly impacted by the humanitarian crisis in Lebanon in order to upgrade their skills and knowledge to be better prepared to handle any external shocks to the labour market, as well as to enhance their employability. Given the backdrop of high youth unemployment (30%), falling oil prices and a slow in economic growth, this training couldn’t come at a better time for participants in the north of Lebanon.

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Economy and Human Welfare to Grow Under IRENA’s 2050 Energy Transformation Roadmap

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Increasing the speed of global renewable energy adoption by at least a factor of six – critical to meeting energy-related emission reduction needs of the Paris Climate Agreement – can limit global temperature rise to two degrees, according to the latest edition of the International Renewable Energy Agency’s (IRENA) long-term renewable energy outlook. At the same time, the report finds that by 2050, the global economy would grow by one per cent and global welfare, including benefits not captured by GDP, such as health benefits from reduced air pollution and reduced climate impacts, among others, would improve by 15 per cent, compared to the current trajectory.

Global Energy Transformation: A Roadmap to 2050, launched today at the Berlin Energy Transition Dialogue, also finds that increasing cumulative energy system investment by 30 per cent to 2050 in favour of renewable energy and energy efficiency, can create over 11 million additional energy-sector jobs, completely offsetting job losses in the fossil fuel industry. Immediate action will also reduce the scale and value of stranded energy-related assets in the future. The roadmap currently anticipates up to USD 11 trillion of stranded energy assets by 2050 – a value that could double if action is further delayed.

“Renewable energy and energy efficiency together form the cornerstone of the world’s solution to energy-related CO2 emissions, and can provide over 90 per cent of the energy-related CO2 emission reductions required to keep global temperature rise to two degrees Celsius,” said IRENA Director General Adnan Z. Amin. “If we are to decarbonise global energy fast enough to avoid the most sever impacts of climate change, renewables must account for at least two-thirds of total energy by 2050.

“Transformation will not only support climate objectives, it will support positive social and economic outcomes all over the world, lifting millions out of energy poverty, increasing energy independence and stimulating sustainable job growth,” continued Mr. Amin. “An opportunity exists to ramp up investment in low-carbon technologies, and shift the global development paradigm from one of scarcity, inequality and competition to one of shared prosperity – in our lifetimes. That is an opportunity we must rally behind by adopting strong policies, mobilizing capital and driving innovation across the energy system.”

Current government plans fall short of emission reduction needs. At today’s trajectory, the world would exhaust its energy-related “carbon budget” (CO2) for 2oC in under 20 years, despite continued strong growth in renewable capacity additions. By the end of 2017, global renewable generation capacity increased by 167 GW and reached 2,179 GW worldwide – yearly growth of 8.3 per cent.

However, without an increase in deployment, fossil fuels such as oil, natural gas and coal would continue to dominate the global energy mix by 2050. The roadmap analysis outlines an energy system in which renewables account for up two-thirds of total final energy consumption, and 85 per cent of power generation by 2050 – up from 18 per cent and 25 per cent respectively today.

To achieve this, at least a six-fold acceleration of renewable energy is needed, both through increased electrification of transport and heat, and more direct use of renewables. Electrification, and renewable power are key drivers outlined in the report, with solar and wind capacity leading the energy transformation.

Visit the IRENA website to download Global Energy Transformation: A Roadmap to 2050

IRENA

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