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
1Many states — including Britain, France and North Korea — have used nuclear weapons to permit greater independence from their senior allies. Indeed, fear of that independence has frequently driven the United States’ surprisingly vigorous efforts to prevent even its allies from acquiring nuclear weapons, as several scholars have documented. To the extent that Iran’s senior allies — Russia and China — now constrain Iranian behavior, we might expect Iran to behave more independently upon acquiring nuclear weapons. But Russia and China are (at best) loose allies of Iran, so this effect is likely to be limited. Mark S. Bell for The Washington Post
2Former US secretary of state Henry Kissinger has urged the United States to treat Russia as a “great power” and stop making efforts to break it.“Breaking Russia has become an objective [for US officials] the long-range purpose should be to integrate it,” the 92-year-old said during an interview with The National Interest published on Wednesday.“If we treat Russia seriously as a great power, we need at an early stage to determine whether their concerns can be reconciled with our necessities,” he told the policy magazine.In his interview, Kissinger accused the American and European governments for failing to recognize the historical context in which the confrontation between Russia and Ukraine started.”The relationship between Ukraine and Russia will always have a special character in the Russian mind,” he said.“It can never be limited to a relationship of two traditional sovereign states, not from the Russian point of view, maybe not even from Ukraine’s. So, what happens in Ukraine cannot be put into a simple formula of applying principles that worked in Western Europe,” the veteran diplomat added.
3The Asian Development Bank (ADB) has approved a $1 billion loan to help Kazakhstan continue government programs to strengthen the economy in the face of recent challenges.”This loan from ADB’s Countercyclical Support Facility will give the country the fiscal leeway it needs to mitigate the unanticipated and significant negative impacts of the steep decline in world oil prices and the economic slowdown of the neighboring countries,” said Lotte Schou-Zibell, Principal Economist in the Central and West Asia Department.
4Iran will cooperate with Azerbaijan on gas transportation to Europe through the Southern Gas Corridor, Mahmoud Vaezi told Trend on August 20.The Iranian Information and Communications Technology Minister, said that his country plans to export gas not only to Asian markets, but to Europe as well.“Transportation through Azerbaijan is one of the routes of bringing Iranian gas to Europe,” Vaezi noted. The Southern Gas Corridor is a priority energy project for the EU. It envisages the transit of gas from the Caspian Sea region to European countries through Georgia and Turkey.
5Azerbaijan: Back in the USSR? The conviction of two prominent dissidents conjures up the Soviet past. Political prisoners are nothing new in today’s Azerbaijan, run by Ilham Aliev, its authoritarian president. But the Yunuses’ case is especially egregious. They are veterans of the Soviet dissident movement and still the country’s most prominent civil-rights activists. In the early 1980s they worked for a samizdat newspaper, Express Chronicle. In the late 1980s Mrs Yunus was at the forefront of Mikhail Gorbachev’s perestroika reforms, which held out the promise of a free and dignified life. When Soviet tanks rolled into Baku in 1990 in a desperate attempt to stop the crumbling of the empire, she led a national independence movement. [The Economist]
6The Delegation of Azerbaijan to the OSCE rejects the allegations made by the US, EU, Canada and Norway with respect to the situation with human rights in Azerbaijan and find such statement as undermining bilateral relations with these countries, said the statement of the Delegation of Azerbaijan at the 1064th Special meeting of the OSCE Permanent Council on August 19. “Azerbaijan condemns the attempts to deliberately politicize and misinterpret ongoing legal cases against some individuals in our country,” said the statement. “Azerbaijan calls on US, EU, its member states, EU officials and institutions concerned, Canada and Norway to respect the decisions of justice system in Azerbaijan and to refrain from interfering into ongoing legal cases. We consider the references made in the statements to some anonymous international monitor’s observations in courts as seriously flawed and designed with a view to exert pressure on administration of justice.”Every person in Azerbaijan is equal before the law and bears equal responsibility for his or her deeds, according to the statement.
7U.N. human rights experts have criticized a court in Azerbaijan for what they say were “politically motivated” convictions of a prominent rights defender and her husband.A court in Baku on Aug. 13 sentenced Leyla Yunus to 8½ years in prison on charges of fraud, tax evasion and illegal business activities. Her husband Arif Yunus was given a 7-year sentence for fraud.Six experts linked to the U.N.’s Human Rights Council in Geneva said in a statement Thursday that the convictions were a sign of “the continuing repression of independent civil society in Azerbaijan.”The Yunuses both pleaded not guilty during the trial. They have suffered serious health problems in custody since their arrest a year ago, and the experts urged Azerbaijan authorities to provide proper medical care. [The Associated Press]
8China Petroleum & Chemical Corp. completed the purchase of a 50 percent stake in a Kazakh oil producer from Lukoil PJSC for $1.09 billion, gaining full control of a venture with stakes in five oil and gas fields.The sale of Caspian Investments Resources Ltd. received the required permits from the state authorities of the Kazakhstan in late July, Lukoil said in a statement Thursday. The deal concluded after more than a year of talks and the price is less than the $1.2 billion agreed on in April 2014.
9Is A Slow Putsch Against Putin Under Way? A quarter century after the fall of the USSR, Kremlinologists sense a putsch in the air, despite Vladimir Putin’s overwhelming approval ratings. The tea leaves say that the Kremlin elite, dubbed by some as Politburo 2.0, is currently deciding whether Putin should go before he makes a bad situation worse. The founder of the respected daily Kommersant predicts that a dramatic change is about to take place and advises Russians who have the means to leave the country for a month or so and take their children with them. Paul Roderick Gregory for Forbes.
10Is Turkmenistan Opening Up?Turkmenistan remains the only Central Asian country that requires citizens of all neighboring countries to obtain a visa before visiting–with tiny exceptions (visits lasting five days or less) for people living in select bordering communities in Kazakhstan and Uzbekistan. Though many statements have been made in the past, both by Berdimuhamedov and other regional leaders, about the need to ease travel over borders, there is little overall progress on that front. [The Diplomat]
World Bank Financing to Help Kazakhstan Unleash Full Potential of its Livestock Industry
The World Bank Board of Executive Directors approved today a $500 million loan for the Sustainable Livestock Development Program to support the development of environmentally sustainable, inclusive, and competitive beef production in Kazakhstan.
The program financing will support Kazakhstan’s state Agro-Industrial Complex Development program in improving veterinary services and animal recording systems, scaling-up a farmer-centric service delivery model, and improving agro-environmental policies for the sector.
Over a period of five years, the program aims to achieve a 10 percent increase in the share of public expenditure for sustainable beef production and processing, and a three-fold increase in the value of beef exports. In addition, around 20,000 small and medium farmers will be connected to export value chains.
“We are very happy to support Kazakhstan in developing its high-value export-oriented beef sector,” said Jean-Francois Marteau, World Bank’s Country Manager for Kazakhstan. “The country has a huge natural potential and favorable geographic position, which are conducive to export-oriented beef sector development. These can be utilized to benefit Kazakhstan’s long-term economic development goals, namely, diversification of exports and improving rural livelihoods. The Program is particularly important in a COVID-19 environment which is affecting employment countrywide.”
An export-oriented, high-value beef sector provides an opportunity for Kazakhstan to achieve its national development objectives, by mobilizing significant investments from domestic and foreign agribusiness firms and expansion of production by small and medium farmers.
A potentially competitive expanded resource base and geographical proximity to important consumer markets will also help attract private investment in meat processing, packaging, and logistics companies to Kazakhstan.
The program will promote green growth and sustainability policies aimed at promoting climate-smart practices for beef cattle production, reducing greenhouse gas emissions and improving the overall agri-environmental outcomes of the government’s beef sector support programs.
The five-year (2021-2025) implementation of the Sustainable Livestock Development Program for Results will be financed through a $500 million IBRD loan, which will be disbursed on the basis of Program-for-Results (PforR) – a financing instrument that links the disbursement of funds directly to the achievement of specific program results.
Turkey’s Rail Connectivity and Logistics will Improve with World Bank Financing
The World Bank’s Board of Executive Directors today approved a loan in the amount of EUR 314.5 million ($350 million equivalent) for the Turkey Rail Logistics Improvement Project. The project aims to reduce transport costs in selected rail freight corridors and to strengthen institutional capacity at the Turkish Ministry of Transport and Infrastructure (MoTI) to deliver rail freight connectivity and manage rail-enabled logistics centers.
The project will support delivery of last-mile rail and multimodal connectivity infrastructure at well-prioritized nodes of Turkey’s national railway network. These interventions will help revitalize the transport and logistics sector, and by extension, contribute to the sustainability of the cargo owners operating supply-chains in the project’s target corridors in the aftermath of the COVID-19 pandemic.
“Despite having economic geography and commodity specialization characteristics that are in-principle favorable to the use of rail freight, rail accounts for only 4% of Turkey’s transported tonnage, leaving a large share of freight to be moved by road. This leaves significant economic value on the table in terms of avoidable logistics costs and environmental externalities,” says Auguste Kouame, World Bank Country Director for Turkey. “The project’s investments will contribute towards more fully realizing rail freight’s potential in Turkey.”
The project will be implemented by the Ministry of Transport and Infrastructure’s (MoTI), and has three components:
Component 1 includes construction of railway branch lines and multimodal connections at priority network nodes, including Filyos Port, Çukurova Region Industrial Zones, Iskenderun Bay Maritime Ports, and at additional priority sites to be selected during implementation;
Component 2 includes feasibility studies, detailed engineering designs, environmental and social documentation, and construction supervision for rail last-mile connectivity infrastructure at additional freight nodes;
Component 3 focuses on Phase 2 COVID-19 response support, institutional strengthening, capacity building, and project implementation support, including technical assistance on uniformization of rail technical standards across the national rail network, support in preparation of a strategy document for rail freight sector performance improvement, and support to Turkish State Railways through development of an operational and management model for rail-enabled logistics centers.
“Strengthened management and decision-making capacity at MoTI to promote multimodality, expand the use of rail freight, and improve the quality of rail freight services nationally will be the other benefits,” remarked Murad Gürmeriç and Luis Blancas, Task Team Leaders of the Project. “The project is expected to reduce transport costs, reduce emissions of greenhouse gases (GHGs) and local pollutants, and increased share of rail in the freight transport task of the corridors targeted by the project.”
The project is aligned with Turkey’s Country Partnership Framework (CPF) for FY18-FY21, which focuses on the three strategic objectives of growth, inclusion, and sustainability.The project will contribute to the growth focus area which has the objective of enhancing the competitiveness of selected industries. The project is also aligned with the WBG approach to supporting client countries in mitigating the impact of COVID-19 on their economies, firms and workers.
The impact assessment envisioned in Component 3 of this project will help mitigate the impacts of COVID-19 by supporting MoTI in diagnosing the medium- and long-term impacts of COVID-19 on multi-modal logistics of both the demand and supply sides, and helping design public, public-private, and/or private interventions – including interventions aimed at tackling behavioral and occupational aspects of risk prevention.
Second phase of the Nurek Hydropower Rehabilitation Project in Tajikistan
The World Bank’s Board of Executive Directors approved additional grant financing of $50 million from the International Development Association (IDA) for the second phase of the Nurek Hydropower Rehabilitation Project in Tajikistan. The Nurek Hydropower Plant (HPP) is the most important asset of Tajikistan’s energy system.
“The restoration of the generation capacity of the Nurek HPP is essential for ensuring energy security for the people of Tajikistan,” said Jan-Peter Olters, World Bank Country Manager in Tajikistan. “Especially in these difficult times, the combination of inherent climate benefits from this renewable source of energy and the ability to support job creation and incomes for the local population, including by their engagement in this large-scale rehabilitation process, makes this a critical investment for a fast and sustainable post-crisis recovery.”
The Nurek HPP, with an installed capacity of over 3,000 megawatts, generates about 50 percent of total annual energy demanded in Tajikistan. Operational at currently about three-quarter of its installed generation capacity, the HPP is undergoing its first major rehabilitation since its commissioning in 1972. Once completed, the rehabilitation will allow the Nurek HPP to increase electricity generation by about 300 million kWh, supporting the Government’s efforts to ensure that energy demand can be met even during the cold winter months.
At the same time, during summer, Tajikistan would be in a position to expand electricity exports from its hydro resources, including through the CASA-1000 transmission line and upon synchronization of the country’s electricity network with Central Asian Power System (CAPS). This would generate much-needed additional revenues for the sustainability of the power sector, thereby reducing pressures on the pace of tariff adjustments.
The first phase of the Nurek Hydropower Rehabilitation Project, financed by the World Bank ($225.7 million), the Asian Infrastructure Investment Bank ($60 million) and the Eurasian Development Bank ($40 million), was launched in March 2019. It has focused on rehabilitating three of the nine generating units, replacing and refurbishing hydromechanical equipment and the key infrastructural components of the power plant, replacing six auto-transformers that are used to evacuate the generated electricity, and enhancing dam safety with a special focus on protection against seismic hazards and floods.
Through a separate project, the World Bank is supporting Government’s efforts in strengthening the institutional capacity and financial viability of the open joint stock holding company Barqi Tojik (BT).
The project’s second phase will finance the rehabilitation of the remaining six generating units, the Nurek bridge, the powerhouse, and other key buildings, while strengthening the HPP’s capacity to operate and maintain the power plant.
Capacity building will be provided to Nurek HPP and BT to enhance dam safety monitoring and the operation and management of hydro facilities. With a total cost of $192 million for the project’s second phase, the Government of Tajikistan is currently finalizing its discussions with other development partners to secure the required additional resources.
Given Tajikistan’s long history of power outages, particularly during the cold winter months, the climate co-benefits, and the socio-economic development impact of using available hydro resources effectively, Tajikistan’s energy sector has been a priority area of engagement for the World Bank. Its current energy-related investments exceed $530 million.
These investments aim at supporting the sector’s sustainability, eliminating seasonal energy rationing, ensuring an affordable and stable electricity supply to families and businesses and much needed revenues from increased export of clean, non-fossil energy resources.
The World Bank Group’s active portfolio in Tajikistan includes 21 projects, totaling US$938 million that aim at helping Tajikistan to take advantage of emerging regional opportunities, transform its economy and improve the livelihoods of its citizens. Since 1996, the World Bank has provided US$1.9 billion in grants, highly concessional IDA credits, and trust fund resources.
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