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NATO-Russia: No “business as usual”

Dimitris Giannakopoulos

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Welcome to the Greater Caspian Brief, where you will find the most important things you need to know about diplomacy, intelligence, military and economy of the Caspian 5, Central Asia and Caucasus. We appreciate ideas, reports, news and interesting articles. Send along to Caspian[at]moderndiplomacy.eu or on Twitter: @DGiannakopoulos

DIPLOMACY

NATO and Russia held “frank and serious” talks despite “profound disagreements” as their ambassadors met on Wednesday for the first time since 2014, alliance chief Jens Stoltenberg said. The two sides agreed to keep communicating following the meeting of the NATO-Russia Council, which has been on ice since the alliance cut practical ties with Moscow to protest the annexation of Crimea from Ukraine in early 2014. The aim of the talks was to ease military tensions over the simmering violence still gripping eastern Ukraine, although former Norwegian Prime Minister Stoltenberg admitted there was no major breakthrough. Russia blames NATO for increasing the risk of conflict by building up its troops in eastern European countries, many of which have been lobbying for more Western support.

Obama meets Saudi king with Iran on agenda

U.S. President Barack Obama arrived in Riyadh on Wednesday to meet Saudi Arabia’s King Salman ahead of a summit with other Gulf Arab leaders on Thursday and with regional tensions with Iran likely to be high on the agenda. The White House shares the view of Gulf Arab states that Tehran plays a destabilising role, but has said it hopes to bring them and Iran to develop a “cold peace” in which their rivalry does not further inflame smouldering Middle East tensions.

Shinzo Abe to visit Russia on May 6

Russian President Vladimir Putin said on Wednesday that Japanese Prime Minister Shinzo Abe will visit the Black Sea resort city of Sochi on May 6, with a long-simmering territorial dispute expected to top the agenda.”I expect that the working visit of Prime Minister Shinzo Abe planned to take place in Sochi on May 6 will facilitate the widening of Russian-Japanese ties on the basis of mutual advantage and taking each other’s interests into account,” he told foreign ambassadors at the Kremlin.

Tokyo-Moscow relations have been hamstrung by the row that dates back to the end of World War II when Soviet troops seized the four southernmost islands in the Kuril chain, known as the Northern Territories in Japan. The lingering tensions have prevented them from signing a peace treaty, which has hindered trade and investment ties.

INTELLIGENCE

10,000 ISIL Fighters in Afghanistan ‘Trained to Expand to Central Asia, Russia’

The presence of DAESH in Afghanistan, is a significant security threat, said Zamir Kabulov, the head of the Asia and Middle East department of the Russian foreign ministry, who also serves as special envoy of the Russian president to Afghanistan. “There are now 10,000 DAESH fighters in Afghanistan. A year ago there was a hundred. This growth over a year is huge. The Afghan branch of DAESH is definitely specialized against Central Asia. Russian is even one of their working languages,” Kabulov added. “They are being trained against Central Asia and Russia.”

Moscow believes that Afghan government forces are either unable or unwilling to fight DAESH-affiliated groups, focusing whatever resources they have on opposing the militant group Taliban. The Taliban suffered from DAESH growth too, losing men, lands and influence to the group.

MILITARY

Azerbaijan and NATO meeting in Brussels

The meeting took place between Azerbaijan and NATO to discuss the Planning and Review Process document for 2016. Head of the Military Cooperation Department of MOD major-general Huseyn Mahmudov briefed NATO representatives, in detail, on provocative and destructive actions taken by Armenian units against Azerbaijani citizens and settlements along the front line in the first days of April. NATO representatives were also informed on responsive measures and necessary security actions taken by Azerbaijani Armed Forces in different directions of the front line in order to prevent Armenian destructive actions and protect civilians.

Russia to finish deliveries of S-300 missiles to Iran by year-end

Russia will complete its deliveries of S-300 air defence missile systems to Iran by the end of the year, Interfax news agency cited Sergei Chemezov, the head of the Russian state-owned high- tech conglomerate Rostec, as saying on Tuesday.

Gulf, US agree joint patrols to block Iran arms

Gulf Cooperation Council (GCC) countries and the United States have agreed to carry out joint patrols to stop any Iranian arms shipments reaching Yemen, the bloc’s secretary general, Abdullatif al-Zayani, said on Wednesday. Iran denies accusations by Gulf states that it is smuggling weapons to Yemen, where GCC countries are involved in a military campaign against the Tehran-allied Houthi movement.

ECONOMY

OPEC will invite Russia, Oman, and Azerbaijan to June talks in Vienna

The three major oil producers, who are not OPEC member states, last met with members of the oil exporting cartel in Doha on April 17, in a failed bid to put through a February decision on capping oil production. The output freeze is expected to be brought up again at the talks in the Austrian capital. Oil prices have plunged more than 60 percent from their peak of $110 a barrel in June 2014 amid fears that the global oil production was outpacing the world’s demand.

Doha meeting disappoints Kazakhstan

The results of Doha meeting held in Qatar on April 17 between OPEC member states and non-OPEC oil producers fell short of the expectations of Kazakhstan, said Rashid Zhaksylykov, chairman of the presidium of KazService Union. Kazakhstan is concerned about the oil prices and its impact on the country’s development. The failure of the meeting is related to the intense geopolitical relations between Saudi Arabia and Iran. Saudi Arabia said it would not put a cap on the volume of oil it produces if other oil producers, particularly Iran do so. However, Tehran has no intention to freeze its oil production and did not even attend the meeting.

Azerbaijan, Georgia, Kazakhstan create railway consortium

The railway agencies of Azerbaijan, Georgia and Kazakhstan agreed to create the International Trans-Caspian Transport Consortium. Azerbaijani companies ADY Express and ACSC Logistics, Kazakh KTZ Express JSC and Georgian Trans Caucasus Terminals LLC are the members of the consortium. The Trans-Caspian international transport route runs through China, Kazakhstan, Azerbaijan, Georgia and then through Turkey and Ukraine goes to Europe. This is a multimodal corridor using railway, maritime and roadways for transporting goods.

Kazakhstan waits for potential participants of Eurasia project

Kazakhstan believes that potential participants of the Eurasia project will soon take a decision on the study and exploration of hydrocarbon deposits in the Caspian basin. The Eurasia project, to be implemented in 2016 to 2020, targets studying deep-water geological structure of the region to enable discovery of new and huge hydrocarbons recources. The government expects to receive intentions of participation in this project by late May, Kazakh Energy Minister said.

The prospects of realizing the Eurasia project are huge and it can bring huge benefits to Kazakhstan, in particular huge investments and financial revenues, new technologies and decrease of dependence on old oil fields. Experts believe that Kazakhstan, which desires the participation of international companies in the Astana-initiated project, will see more interest of big oil companies in its Eurasia project. The main condition on the way of involving leading energy companies in this project is the oil price in the world markets as in the current low oil prices and a glut of oil on the world markets the Eurasia project probably does not look so attractive.

Iran and Kazakhstan have reached an agreement to set up a joint shipping company

The planned freight shipping line would improve mutual trade through the Iranian port of Bandar Anzali and Kazakh port of Aktau, both on the Caspian Sea. Moreover, the Islamic Republic and Kazakhstan also decided to increase rail transportation through a railroad joining Iran, Turkmenistan and Kazakhstan.

Turkmenistan plans to privatize large industrial enterprises

The country has adopted a state program for privatization of state enterprises and facilities in 2013-2016. To date, 39 out of 89 facilities have been privatized as part of the first and second stages of the state program. It is planned to privatize 29 facilities during the third stage. Turkmenistan pursues the policy of gradual transition to market economy and has taken a number of measures such as denomination of the national currency, unification of exchange rates for this purpose. The country actively carries out privatization in the spheres of construction, communication and services.

LUKOIL builds gas processing plant in Uzbekistan

Russian company LUKOIL commenced construction works of Kandym gas processing plant in Uzbekistan, representative of Uzbekneftegaz, national holding company said on April 19. A gas processing plant with an annual production capacity of 7.819 billion cubic meters of commercial gas, 134,360 tons of stable condensate and 212,900 tons of elemental sulfur is planned to be constructed during the first phase of the complex construction and development of Kandym fields. Construction of 77 planned wells, six multiple-well platforms, two gathering stations, gas pipeline, rotational camp and external infrastructure are also under consideration. It is the largest investment project of LUKOIL in Uzbekistan. Total amount of investments to the project is estimated at over $3 billion.

Journalist, specialized in Middle East, Russia & FSU, Terrorism and Security issues. Founder and Editor-in-chief of the Modern Diplomacy magazine. follow @DGiannakopoulos

Greater Caspian News

The COVID-19 Shock to Kazakhstan’s Economy Largest in Two Decades

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For the first time since the late 1990s Kazakhstan’s economy is expected to contract by projected 3 percent in 2020 with a moderate recovery by 2.5 percent in 2021, according to the World Bank’s latest Kazakhstan Economic Update (Summer 2020) – Navigating the Crisis report.

Although Kazakhstan’s GDP showed mild growth at 2.3 percent in the first quarter, economic activities weakened in the following months as commodity prices dropped, trade declined, and COVID-19 preventive measures slowed economic activity. Consumer demand showed moderate growth at  at 1.2 percent,  reflecting growing concerns over COVID-19 and the restriction measures. Investment is expected to ease to 1.0 percent annually, supported mostly by the on-going foreign direct investments into the oil and gas industry and residential construction. Supply disruptions and currency depreciation pushed up inflation to above the upper bound of the National Bank target range.

“The authorities acted early to contain the COVID-19 pandemic, and the accumulated fiscal buffers allow the government to introduce a relief package to mitigate the impacts of COVID-19 on the economy,” said Sjamsu Rahardja, Senior Country Economist, World Bank in Kazakhstan. “Weak demand and oil prices, as well as the protacted pandemic expose significant risks to the economic outlook. Authorities may want to consider using the available resources to provide relief to the poor and vulnerable, protect productive assets, and introduce reforms to sustain economic recovery.”

A prolonged crisis is likely to increase poverty and can increase inequality in Kazakhstan. Preliminary estimates suggest that poverty rate may rise in 2020 from a projected 8.3 to 12.7 percent – equating to more than 800 thousand additional people living in poverty. The shock to the labor market in Kazakhstan due to both the pandemic and the mitigation measures, is expected to have severe implications for jobs, particularly in sectors that employ low-skilled workers.

The report also argues that COVID-19 has a negative impact on human capital development in Kazakhstan. Unequal access to quality education, especially during lockdown, can negatively impact human capital development for the poor. School closures could result in learning loss of more than one-third of a school year and the impact could mean a decline in the Program for International Student Assessement (PISA) points. As most students in the country currently perform around the threshold for functional literacy and assuming some will lose more than others, the estimates suggest that the percentage of students performing below functional literacy will increase by 3 percentage points (from 64 to 67 percent).

“The impact of COVID-19 on education and learning losses will have a decades-long impact on the economy by an estimated 2.9 percent, amounting to an overall economic loss of up to $1.9 billion every year”, says Jean-Francois Marteau, World Bank Country Manager for Kazakhstan.  “A focus on improving access to quality education, including distance learning, would be important to prevent a decline in the quality of human capital, especially among Kazakhstan’s low-income population.”

The report concludes that under the risk of a prolonged slump in the global oil market, Kazakhstan’s pathway for a resilient recovery may focus on strengthening the effectiveness of public administration and services, including the use of e-platforms to deliver key public services, better tax administration, and a mechanism to review and redeploy fiscal resources toward better state programs. A renewed emphasis on reforms in the logistics, digital telecommunications, and financial sectors could help the overall private sector explore new opportunities.

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Greater Caspian News

China-Eurasia Council condemns aggression of Azerbaijan

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China-Eurasia Council for Political and Strategic Research strongly condemns Azerbaijani aggression which Baku started on July 12, 2020.  Azerbaijani Ministry of Defense is a threat for the entire World as it is speaking about its aims to strike Metsamor Nuclear Plant, which is located in Armenia. Baku must understand that this is a crime against humanity, and it is equal to nuclear strike.The destruction of Metsamor Nuclear plant will be a disaster not only for Armenia, but also for Iran, Georgia and Azerbaijan, it will harm World’s environment and stand a real problem for several generations of the World. It is worth mentioning, that this time Baku attacked the Northern borders of Armenia, which are sovereign territory of the Republic of Armenia according to International law. Azerbaijan violated the principle of territorial integrity of a sovereign state, which is one of the important pillars of International law.

China-Eurasia Council for Political and Strategic Research condemns Azerbaijan for using force against civilian population of Armenia and calls for peaceful negotiations. Baku must show solidarity and join global ceasefire initiated by the UN secretary general Antonio Guterres and must not try to escalate the situation on the border to deflect public attention from the situation concerning the outbreak of Covid-19 in Azerbaijan. We call official Baku to take care of Azerbaijani people in the hard times of Coronavirus and not send its soldiers to real death.  Being multinational Council, for us It’s terrible to hear about lossfrom both sides and we express our sincere condolences. Hopefully peace will come to South Caucasus, which is an important crossroad in Eurasian mainland and it can stand a very important link for Belt and Road Initiative, if all problems solved in a peaceful way.

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Greater Caspian News

Condemnation Of Armenian Aggression By Friends Of Azerbaijan (FoA)

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Friends of Azerbaijan (FoA) strongly condemns the coward act of Armenians aggression in the Tovuz district of Azerbaijan that is a sheer violation of international borders and law. The act is an attempt of Armenia to drive global attention from the peaceful dialogue and negotiation process on Nagorno Karabakh.

In an online meeting of the delegates of the Friends of Azerbaijan (FoA), a joint declaration of condemnation has been issued by the honorable members of Friends of Azerbaijan (FoA). 

According to this declaration, Armenian aggression can jeopardize the whole South Caucasus region. The incident on July 12, 2020, is being considered as a direct attack on Azerbaijan and the repercussions of this incident can result in massive catastrophe in the entire region.


The delegates of Friends of Azerbaijan (FoA) stressed the global powers to come forward and take serious action on Armenian intervention by violating the international border of Azerbaijan. The act of Armenia is an open challenge to the sovereignty of Azerbaijan.

Malik Ayub Sumbal founder of Friends of Azerbaijan (FoA) termed that Armenia is losing its legal and moral position on Nagorno Karabakh and there is mounting pressure on Armenia by the international community for the peaceful solution of Nagorno Karabakh according to the UN Resolutions. At this time to get rid of such kind of diplomatic moves, Armenia has launched another major front in Tovuz. 

When the whole world is busy against the Covid19 Armenian Prime Minister has chosen a very dangerous path that can take the whole region into war and bloodshed. 

Friends of Azerbijan (FoA) is firmly standing with shoulder by shoulder to the people of Azerbaijan and martyr’s families at this hour.

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