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
1Azerbaijan on Friday fiercely rejected European criticism of its human rights record and threatened to “revise” relations over a European Parliament’s resolution calling for sanctions against Azeri authorities.“(Azerbaijan’s) relations with the European Union should be revised due to its anti-Azeri and anti-Islamic tendencies,” the oil-rich Caucasus nation’s foreign ministry said in a statement.The European Parliament passed on Thursday a non-binding resolution strongly condemning the “unprecedented repression against civil society in Azerbaijan.”It called on the EU’s executive body to “consider targeted sanctions and visa bans on all politicians, officials and judges involved in the political persecutions.”MEP also urged the EU to “conduct a thorough investigation into the corruption allegations against President (Ilham) Aliyev and members of his family.”Baku said Friday it has decided to postpone the visit of a European Commission delegation which was due to arrive in Baku for talks on planned EU-Azerbaijan “strategic partnership” agreement.
2Kazakh President Nursultan Nazarbayev on Friday kicked off the first of a series of events commemorating the 550th anniversary of the Kazakh Khanate, the roots of present-day Kazakhstan.Speaking at the Palace of Independence, Nazarbayev paid tribute to the ancestors who laid the country’s foundations through the khanate (political entity ruled by a khan) of Kazakh.The Kazakh Khanate was founded in 1465 in Tazar, southern Kazakhstan, by a joining of the tribes of Janybek Khan and Kerey Khan and endured until it was absorbed by the Russian Empire in the mid-19th century.The president stressed the need to know the past in order to “respect and interpret the present.”Nazarbayev said that Kazakh means “free,” “a freedom that characterizes the Kazakhs,” a people made up of more than 130 ethnic groups, among which he highlighted “Russians, Ukrainians, Belarusians and Uzbeks.”
3The European Commission estimates that Iran could become a major natural gas supplier to the European Union by the next decade, a new report says. According to an EU official, cited by the Wall Street Journal, the bloc could import up to 35 billion cubic meters of gas a year from Iran by 2030 that would help reduce dependence on Russian shipments.The conclusion of nuclear talks with Iran has set off a race among the Europeans to search for new business opportunities in the energy-rich country which owns the world’s largest natural gas reserves.According to the Journal, EU Energy Commissioner Miguel Arias Canete met representatives of major European energy companies last week to encourage them “to actively pursue ties in Iran”.
4Ukrainian President Petro Poroshenko said his country was moving towards peace with Russia. According to Poroshenko, he had been working “day and night” in the last 15 months since Ukraine clashed with Russia. While he does not want to dream about peace yet, he said there was “a change in tactics.”“We know where the Russians and their proxies are still hiding their weapons, their tanks and their artillery – for now the order has been given to cease fire, but for how long?” the Ukrainian president told The Independent. “This is not the end of the war, but instead a change in tactics.” Russian news agency Tass reported that the Ukrainian defense ministry and the general headquarters had started the process of demobilization in September upon Poroshenko’s order.
5The energy-rich Azerbaijan is expected to slightly increase oil production by late 2015.The country’s oil production will hit 0.88 million barrels a day in the third and fourth quarters of the year, according to the U.S. Energy Information Administration’s Short-Term Energy Outlook.The country’s oil production stood at 0.86 million barrels a day in the first quarter and 0.87 million barrels a day in the second quarter of this year, according to the EIA’s forecasts.
6The European Parliament has carried out another political campaign against Azerbaijan. During the meeting on Sept.10, the rules of etiquette were violated, and slanderous statements were made against Azerbaijan, Speaker of the Azerbaijani Milli Majlis (Parliament) Ogtay Asadov said at the parliament’s extraordinary session on Sept.14.The European Parliament’s resolution is fully biased and fictitious, the speaker said, adding organization’s previous meetings were attended by 50-60 deputies, but this time more than 600 deputies were involved in the meeting on Sept.10. Asadov said over the past two years the European Parliament has adopted a number of biased documents against Azerbaijan. “We were silent for a long time. However, it is impossible to be silent. This time, Europe has broken all the rules of conduct,” noted the speaker. Morover, Asadov said that the parliament will appeal to the Cabinet of Ministers to reconsider Azerbaijan’s cooperation with Euronest.
7Kazakhstan’s President Nursultan Nazarbayev signed off on daughter Dariga’s appointment as deputy-prime minister Friday, in a move that could be linked to the ex-Soviet republic’s looming succession issue. Nazarbayeva, 52, was an MP and vice-speaker of the Kazakh parliament before the Friday decree. Her appointment to the position comes months after Nazarbayev secured a new five-year term in April presidential elections many believe were his last.
8With China slowing down, Russia is trying to sell its oil to India. “With the China story fizzling out, Russia is now planning to build up its presence in China’s neighbor India. With huge internal energy consumption and a bustling economy, India is set to grow faster than China in 2015 and 2016 according to the recent projections from the IMF.After China, India is the next best logical alternative for Russia to strengthen its Asian ties and move away from western sanctions” Gaurav Agnihotri –Oilprice.com
9Azerbaijan’s state energy company SOCAR is interested in establishing a full-scale cooperation with Turkmenistan – a reliable and promising partner, which has huge energy resources and economic potential. This was stated at a meeting held between Turkmen President Gurbanguly Berdymukhamedov and President of Azerbaijan’s state energy company SOCAR Rovnag Abdullayev in Turkmenistan’s national tourism zone Avaza on September 11.The sides discussed cooperation issues between the two countries in the fuel-energy, transport and communication sectors.
10The Organisation for Security and Cooperation in Europe (OSCE) said it will not monitor Azerbaijan’s November parliamentary election because restrictions imposed by authorities have rendered credible poll monitoring impossible. Azeris are due to vote for the new parliament on Nov. 1. Previous elections in the ex-Soviet state, led by President Ilham Aliyev for the last 12 years, have been criticized by international observers. “The restriction on the number of observers taking part would make it impossible for the mission to carry out effective and credible election observation,” Michael Georg Link, Director of the OSCE Office for Democratic Institutions and Human Rights (ODIHR), said in a press release on the OSCE website.
IRENA and Mission Innovation to Work Together on Renewable Energy Innovation
At the 3rd Mission Innovation Ministerial, the International Renewable Energy Agency (IRENA) and Mission Innovation, an initiative of 22 countries and the European Commission working to reinvigorate and accelerate clean energy innovation, agreed to work together to scale-up the deployment of renewable energy technologies through knowledge sharing on innovation data, trends and priorities. Mr. Ibrahim Baylan, Minister for Policy Coordination and Energy in Sweden, on behalf of Mission Innovation, and Mr. Adnan Z. Amin, Director General of IRENA, signed today a letter of intent to that effect.
“Innovation is at the heart of the global energy transformation, not only in terms of technological advancements but also in policy, finance and business.” said IRENA Director-General Adnan Z. Amin.
“By collaborating with Mission Innovation, we can bring together the knowledge, data, convening power and experiences of the two organisations to create innovative approaches to develop the energy system of the future,” he added.
Speaking on behalf of Mission Innovation, Mr. Ibrahim Baylan said: “There is an urgent need to accelerate clean energy innovation. The member nations can do this better and faster with the global collaboration of the Mission Innovation. Likewise, the Mission Innovation itself stands stronger when collaborating with other international organizations in the clean energy field.
“I am therefore very pleased to announce that we have signed letter of intent for collaboration between the Mission Innovation and the International Renewable Energy Agency,” continued Minister Baylan, “and I am confident that this cooperation will benefit both our organisations.”
IRENA’s analysis shows that energy efficiency and renewable energy can achieve 90 per cent of the emissions reductions needed by 2050 to decarbonise the energy sector in line with the objectives of the Paris Agreement. However, to meet these goals the speed of renewable energy deployment must increase by at least a factor of six.
Fostering system wide innovation will be key to scaling up the share of renewables in the global energy system, based on IRENA’s analysis. While technology innovation is central to progress, identifying new policy, market and business approaches is equally necessary.
Key areas for collaboration include:
- Tracking Innovation Progress:Working together in order to improve the quality of data and insights on progress in renewables and energy system technologies and better inform high-level decision-making processes related to clean-energy innovation.
- Strengthening cross-border collaboration on innovation: Identifying research priorities to support RD&D in key technology areas, monitoring technological evolution, and identifying relevant innovation gaps.
- Sharing insights and knowledge on innovation policy priorities and strategies: Leveraging IRENA’s data, tools and reports to inform Mission Innovation activities and priority areas.
An economic space from the Atlantic to the Pacific
On the 23 May, in the run-up to SPIEF, a roundtable held jointly between the Roscongress Foundation and St. Petersburg State University of Economics took place, entitled ‘Building a Common Economic Space from the Atlantic to the Pacific: Current Issues and Ways to Overcome Them’.
The experts discussed opportunities related to integration, investment, infrastructure, and innovation, alongside new forms of collaboration for those shaping the economic region of Greater Eurasia. In addition, they brainstormed a joint vision as to how the shared economic space from the Atlantic to the Pacific will develop in the future.
The welcome address was given by Igor Maksimtsev, rector of St. Petersburg State University of Economics. Moderating the session was Sofia Rekord, head of the world economy and international economic relations department of the same institution.
The participants observed that the geo-economic potential of Greater Eurasia – stretching from one ocean to another – is enormous, and needs to be unlocked to a greater extent, regardless of the unpredictability of the global economic environment and political climate. They also laid out the main aim behind the formation of a shared economic space from the Atlantic to the Pacific: to facilitate comprehensive interaction and cooperation between countries across the Eurasian continent through stepping up dialogue between all stakeholders. These include government representatives, business figures, the expert community, and research organizations tackling a wide range of issues related to economics, politics, and culture. This should result in continuous development for all parties, and prudent solutions to new challenges.
Other areas of focus included promising forms of economic collaboration in Greater Eurasia: opportunities for dialogue between the EAEU, SCO, ASEAN, and EU; the implementation of the EAEU’s shared digital agenda; prospects for transport, logistics and energy projects; bolstering regional development institutions when unlocking the investment potential of the EAEU; and opportunities to foster greater foresight with regards the future development of a shared economic space from the Atlantic to the Pacific.
Participants from the expert community included Mikhail Voronin, associate professor of the world economy and international economic relations department of the St. Petersburg State University of Economics; Sergei Dyatlov, professor of the department of general economic theory and the history of economic thought of the St. Petersburg State University of Economics; Sergei Karaganov, dean of the world economy and international politics faculty of the Higher School of Economics National Research University and honorary chair of the presidium of the International and Defence Policy Council; Dmitry Miropolsky, head of department of general economic theory and the history of economic thought of the St. Petersburg State University of Economics; Vadim Panin, associate professor of the world economy and international economic relations department of the St. Petersburg State University of Economics; Vladimir Salamatov, director general of the International Trade and Integration Research Centre; Tatyana Urzhumtseva, director of the China and Asia-Pacific Studies Centre of the St. Petersburg State University of Economics; Alexander Khodachek, president of the Higher School of Economics National Research University in St. Petersburg; and Slava Khodko, general director of the North-West Development and Investment Promotion Agency.
Russia’s Economic Recovery Continues: Modest Growth Ahead
Russia’s economic recovery continues, amidst relatively high oil prices, enhanced macroeconomic stability, gradual monetary loosening, and ongoing momentum in global economic growth, says the World Bank’s latest Russia Economic Report (no. 39 in the series). However, the country’s growth prospects for the period 2018-20 remain modest.
Russia’s growth is forecast at between 1.5% and 1.8% over the next three years. In the short-term, however, this forecast may be adjusted because of changing oil prices – which were projected to average US$ 65/bbl in 2018 and 2019, and US$ 66/bbl in 2020, but which may increase further, especially in the short-term.
In 2017, growth was mainly driven by non-tradable sectors. The unemployment rate declined to 5.2%, while real wages and pensions increased on the back of low inflation. In 2018-20, consumer demand is expected to be the main engine of GDP growth, while the poverty rate is expected to decrease slightly.
“Russia’s economy continued its recovery in 2017, but growth prospects for 2018-20 remain relatively modest, and well below the current global growth average of over 3%,” said Apurva Sanghi, World Bank Lead Economist for Russia, and main author of the report. “In the next few years, greater focus on education, health and infrastructure investments will require the government to find fiscal space through further improvements in tax administration, optimization of non-tax revenues, increased efficiency of public expenditures, and potentially some tax policy changes.”
Moderately tight monetary and fiscal policies, in combination with a favorable external environment, let the Central Bank of Russia reach a record low-level of consumer price index (CPI) inflation, which averaged 3.7% in 2017. Annual inflation now stands below the Central Bank’s target of 4%, while inflation expectations, though trending downward, remain elevated.
Driven by a rebound in disposable income and consumption, the poverty headcount declined marginally in 2017 to 13.2%, after reaching 13.3% in 2016. The poverty rate is projected to decline in 2018, 2019 and 2020 to 12.5, 11.9 and 11.4%, respectively, as income and consumption grow further. Among the factors that could fuel real income growth are a general recovery of the economy and further deceleration of inflation.
“With enhanced macroeconomic stability, the key challenge for achieving higher levels of economic growth is to increase productivity.” said Andras Horvai, World Bank Country Director and Resident Representative for Russia. “This requires improved infrastructure connectivity, strengthened competition across the economy, further improvements in the business climate, vibrant innovation activity and the reduction of the skills gap. Investments in human capital will be key.”
The special topic of the 39th edition of the Russia Economic Report examines how Russia can accelerate its transformation to a digital economy. A strategic focus on digital transformation has enabled Russia to build a national digital infrastructure to support universal broadband and mobile communications. However, to fully reap the socio-economic benefits of this digital infrastructure, Russia will need to implement policies that accelerate the digital transformation of the traditional enterprise sector, and promote R&D, innovation and entrepreneurship.
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