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How to Reduce the Risk of a Military Encounter Between Russia and NATO

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

1A Pan-European Task Force on Cooperation in Greater Europe, including former foreign and defence ministers from the U.K., Poland, Russia, Germany, Turkey and France has expressed its concern over a possible military escalation in the crisis between Russia and the West and has called for a new agreement between NATO and Russia to prevent accidental incidents or miscalculations leading to an escalation of tension and even confrontation. In its paper on Avoiding War in Europe: How to Reduce the Risk of a Military Encounter between Russia and NATO the Task Force describes some of the increased military activity in Europe in recent months and outlines a required new military agreement modelled on a recent US-China deal to avoid dangerous incidents in the East China Sea and elsewhere. [European Leadership Network]

2Kazakhstan, EU to sign new deal. The new EU-Kazakhstan Enhanced Partnership and Cooperation Agreement will help Kazakhstan to implement the government programs aimed at strengthening the national economy. The implementation of the new Agreement has significant importance for the country, particularly in the current context of regional tension and global economic crisis.The new Agreement will replace the Partnership and Cooperation Agreement in force since 1999, and will give EU-Kazakhstan relations a new up-to-date and stronger foundation.Over the past decades, the EU has become Kazakhstan’s first trading partner and first foreign investor, representing over half of total Foreign Direct Investments(FDI) in Kazakhstan.

3Secretary General of the Organization of Islamic Cooperation Iyad bin Ameen Madani has applauded Azerbaijan`s role as an active member of the organization, AzerTag reports.“Azerbaijan is making a considerable contribution to the efforts to address economic, humanitarian and political challenges faced by the OIC,” Mr Ameen Madani told Foreign Minister Elmar Mammadyarov as they met in Baku. The OIC Secretary General also congratulated Azerbaijan on “excellent” organization of the first European Games. He expressed confidence that the country will successfully host the Islamic Solidarity Games in 2017.

4Turkmenistan will propose to consider the issue of holding the ‘International Forum on Security and Cooperation in Central Asia’ in Ashgabat in 2016 during the forthcoming 70th session of the UN General Assembly. The forum aims at establishing a regular multilateral dialogue on the problems of the region, working out the common approaches to the creation of a permanent mechanism of political consultations in Central Asia in the future.The international non-military, non-block organizations, primarily, the UN and OSCE, could also take part in the forum.

5Tehran and Moscow started talks on the supply of the Russian-made Sukhoi 30 fighter jets to Iran. The talks were held on Tuesday on the sidelines of the MAKS 2015 air show in the town of Zhukovsky near Moscow during which Russian President Vladimir Putin and Iranian Vice-President for Science and Technology Sorena Sattari were present. The Sukhoi Su-30 is a twin-engine, two-seat supermaneuverable fighter aircraft developed by Russia’s Sukhoi Aviation Corporation. It is a multirole fighter for all-weather, air-to-air and air-to-surface deep interdiction missions.

6Why the JCPOA Won’t Turn Iran Into the Next Saudi Arabia. “Yet it is far from certain that the JCPOA will have anything like the cataclysmic effect some have predicted. Moreover, it is questionable how far Iran will push its newly-freed oil economy once sanctions are lifted, with a host of infrastructural challenges, as well as some compelling historical experience, potentially foiling the country’s rise into major petro-state status” Gregory Brew for Modern Diplomacy

7Former Executive Director of the International Energy Agency has predicted Iran will become one of the leading powers in the world oil and gas market by 2040. During a visit from Iranian petroleum ministry’s Institute of International Energy Studies (IIES) in Tehran, Nobuo Tanaka said, “We believe that Iran is the most important player in the world oil and gas market because of its exemplary geopolitical situation which is worth any kind of energy investments. I hope the Strait of Hormuz is never blocked and the world is never deprived of Iran’s energy resources,” said Tanaka, who currently serves as executive director at the Sasakawa Peace Foundation., Iran’s SHANA news agency reported.

8The United States-Azerbaijan Chamber of Commerce and the U.S. Commercial Service has started the formation of the American trade mission to Azerbaijan. The mission, that will take place on November 18-20, is a response to the rapid growth and potential of Azerbaijan.The mission is open to U.S. companies, investors, consultants specializing in the field of agriculture, banking and financial services, chemicals and petrochemicals, education, energy, food processing, healthcare, telecommunications and IT, infrastructure and construction, light industry, machinery, pharmaceuticals, transport and logistics, and tourism. The trade turnover between Azerbaijan and the U.S. increased by 7.7 percent in the annual quantities – up to $877.07 million – in January-July, according to the Azerbaijan State Customs Committee.

9Chinese Vice Premier Zhang Gaoli and First Deputy Prime Minister Bakytzhan Sagintayev of Kazakhstan reached a six-point consensus to advance bilateral cooperation on Tuesday. Zhang and Sagintayev co-chaired the seventh session of the China-Kazakhstan Cooperation Commission in Beijing, at which they summarized the results and planned future cooperation in the areas of manufacturing capacity, energy and resources, trade and investment, inter-connectivity, technology and people-to-people contact. The two sides agreed to step up integration of the China-proposed Silk Road Economic Belt with Kazakhstan’s new economic policy of the Bright Road. They will establish a joint work group on building the Silk Road Economic Belt as soon as possible and start drafting a guideline on bilateral cooperation at the earliest possible date.

10International Conference InvestPro Azerbaijan 2015. This autumn the Bosco Conference Company for the third time holds an international b2b conference and exhibition devoted to international investments, finance, corporate solutions, wealth management and asset protection: 26th of October 2015 – InvestPro Azerbaijan Baku 2015 (JW Marriott Hotel Absheron Baku)

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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