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
Israeli Prime Minister Benjamin Netanyahu said in a meeting with Russian President Vladimir Putin on Thursday that he wants to “strengthen the security coordination between us so as to avoid mishaps, misunderstandings and unnecessary confrontations.” Israel and Russia established a mechanism meant to coordinate between their air forces in Syria after Russia began carrying out airstrikes to help Syrian President Bashar Assad who has said his forces are battling Islamic militants and other “terrorists.” Assad’s government often refers to all opposition fighters as terrorists.
Israel is widely thought to have carried out a number of airstrikes that have targeted advanced weapons systems believed to be destined for the Lebanese Shiite Hezbollah militant group. Israel has also responded to fire into its territory emanating from Syria.
Obama meets with Arab nation leaders on security in Persian Gulf
President Barack Obama met Thursday with top officials from six Arab nations to discuss regional security issues in the Persian Gulf including the fight against the Islamic State militant group.The White House has said the summit meeting will include three sessions. One is aimed at fostering regional stability and another at counterterrorism efforts including efforts to defeat al-Qaida and Islamic State militants. A third session will focus on Iran, which Saudi Arabia and other Gulf states see as a destabilizing rival in the region.
The Gulf states are deeply skeptical of Obama’s willingness to negotiate with Iran, and fear that last year’s nuclear deal with the Islamic Republic will lead to a rebalancing of regional stances at their expense. Disputes over Iran were a major part of Obama’s talks with Saudi King Salman on Wednesday.
President Zuma will lead state visit to Iran
The Presidency says the visit will serve to cement the strong fraternal relations between the two countries, which originated during the apartheid era when Iran “refused to oil the apartheid machinery and cut ties with apartheid South Africa”. Mr Zuma will be accompanied by various cabinet ministers and a high-level business delegation. In 1994‚ with the advent of freedom and democracy in South Africa‚ Iran lifted all sanctions and the two countries re-established diplomatic ties. Since then‚ the two countries have enjoyed mutually beneficial‚ fraternal and strategic relations.
“The state visit of the president to Iran is an important structural catalyst in elevating bilateral and economic relations into a substantive strategic partnership and serves as evidence of the friendly relations between South Africa and the Islamic Republic of Iran, based on mutual respect‚” said Presidency spokesman Bongani Majola.
Russia’s multifaceted ties with Pakistan
Russian President Vladimir Putin has said that his country has been actively developing multifaceted relations with Pakistan, particularly in the fields of trade and counter-terrorism. He made these remarks in a meeting with Pakistan’s Ambassador in Russia Qazi Khalilullah, who presented his letter of credence to the Russian President in Moscow. The Russian President also expressed satisfaction at the level of cooperation between the two countries in the United Nations, which was based on a shared commitment to international law and convergence of positions on many key global and regional issues.
Russia Urges Renewed Armenian-Azeri Peace Talks
Russia urged the parties to the Nagorno-Karabakh conflict to “reduce military risks” and resume peace talks as Russian Foreign Minister Sergey Lavrov headed to Yerevan on Thursday.
Lavrov will meet with President Serzh Sarkisian and Foreign Minister Edward Nalbandian on Friday more than two weeks after Moscow helped to stop the worst fighting around Karabakh since 1994. Russian Prime Minister Dmitry Medvedev sought to cement the shaky ceasefire when he visited Yerevan and Baku in the following days. Lavrov also met with Azerbaijani leaders in Baku in early April.
The Russian Foreign Ministry spokeswoman, Maria Zakharova, said both sides should now “show restraint” and strive for the “restoration of stability” in the conflict zone. “We strongly believe that the parties need to resume the negotiation process aimed at achieving a lasting and peaceful settlement,” the RIA Novosti news agency quoted her as saying. They should also step up efforts to “lower military risks,” she added.
UN Secretary General’s visit to Armenia postponed
UN Secretary-General Ban Ki-moon’s visit to the South Caucasus, including Armenia has been postponed, the Organization’s office in Armenia said.“The Secretary-General has a keen interest in the South Caucasus region so his visit will be rescheduled,” Officer-in-Charge at UN Department of Public Information Armineh Haladjian said. It was earlier reported that Ban would arrive in Armenia on April 25 as part of his official visit to the South Caucasus countries.
Russia increased submarine patrols by 50 per cent around North Atlantic, raising NATO tensions
Russian attack submarines, the most in two decades, are prowling the coastlines of Scandinavia and Scotland, the Mediterranean Sea and the North Atlantic in what Western military officials say is a significantly increased presence aimed at contesting U.S. and NATO undersea dominance. Adm. Mark Ferguson, the U.S. Navy’s top commander in Europe, said last fall that the intensity of Russian submarine patrols had risen by almost 50 per cent over the past year, citing public remarks by the Russian navy chief, Adm. Victor Chirkov. Analysts say that tempo has not changed since then.
Independent U.S. military analysts see the increased Russian submarine patrols as a legitimate challenge to the United States and NATO. Even short of tensions, there is the possibility of accidents and miscalculations. U.S. naval officials say that in the short term, the growing number of Russian submarines, with their ability to shadow Western vessels and European coastlines, will require more ships, planes and subs to monitor them.
Tajik Commander among 75 ISIL Members Killed in Deir Ezzur
75 ISIL members were killed and many more were wounded after a column of the terrorists found themselves in an ambush operation of the government forces in Deir Ezzur province. A field source said that a Syrian army unit, in cooperation with the engineering units, ambushed against the ISIL in a street in al-Sina’ah neighborhood in Deir Ezzur city and surprised them with landmines and bombs traps in the street. At least 75 Takfiri terrorists were killed and tens of others wounded, including foreign militants, in the bomb blasts, according to the source.
The source added that a senior ISIL commander who had jointed the terrorist group from Tajikistan was also among the dead.
NATO Must Stop Expansion in Eastern Europe if Seeks Dialogue With Moscow
“If NATO really wants to resume the dialogue on arms control, on strengthening Europe’s stability and security on the basis of those developments, which for a long enough period served as the basis for maintaining stability in Europe, they should stop the process of strengthening its military presence along our borders. All [forces] that were sent to and has been rotating along our borders must be returned to the place of permanent deployment,” Russian Permanent Envoy to NATO Alexander Grushko told the Rossiya-24 television channel. According to the envoy, such moves would open a window of opportunity for a dialogue on the issues that the Alliance is interested in.
U.S. Concerned By Reports of Increased Russian Military Presence In Syria
The United States has expressed concern about reports that Russia is moving more military materiel into Syria. “We think it would be negative for Russia to move additional military equipment or personnel into Syria,” Ben Rhodes, deputy national security adviser to President Barack Obama, said on April 21. “We believe that our efforts are best focused on supporting the diplomatic process.”
Azerbaijan, Argentina explore ways of military cooperation
Azerbaijan and Argentina have explored ways of developing the political and military cooperation as Azerbaijan`s charge d`affaires to the country Rashad Aslanov met with Argentinian minister of defense Julio Martinez, Azertac reports. Aslanov informed the minister about the history, economic development and international relations of Azerbaijan. He also highlighted the current situation of Argentina-Azerbaijan ties, as well as opportunities for further strengthening of the cooperation. He stressed the importance of cooperation between the ministries of defense and defense industry of the two countries.
6 Russian military helicopters delivered to Azerbaijan in 2015
Helicopter design and manufacturing company Russian Helicopters delivered as many as 212 aircraft to various customers in 2015; Azerbaijan received six Mi-17V-1 military helicopters, Kommersant reports. According to the newspaper, at least 23 units of Mi-17V-5 were supplied to and six Ka-31 helicopters were modernized for India. Other vehicles were shipped to South Korea, Algeria, Iraq, Peru, Bangladesh, Sri Lanka and elsewhere.
Kazakhstan records drop in energy consumption
The electricity consumption in Kazakhstan has dropped to the minimum level over the last five years, Energyprom.kz analytical service said. The electricity consumption in Kazakhstan has decreased by 2.2 percent in the first three months of 2016 as compared to the same period in 2015 and stood at 24.4 billion kilowatt hours. The decrease in electricity consumption is due to the negative dynamics in the industrial production which accounts for over 67 percent of the energy consumption.
Turkmenistan eager to offer reliable energy supplies to world markets
Turkmenistan stands for broad international cooperation in defining ways for reliable energy transportation to international markets, the Strategic Planning and Economic Development Institute of Turkmenistan said in its report released on April 20. Turkmenistan is one of the richest countries with natural gas reserves in the world. In accordance with BP’s statistics, recoverable reserves of the country amount to 17.5 trillion cubic meters of natural gas or 10 percent of the world’s total reserves which makes Turkmenistan fourth richest country with natural gas in the world after Iran, Russia and Qatar.
Key elements of the energy strategy that Turkmenistan realizes are the growth of production and export of natural gas, as well as diversification of supply routes to the world’s largest markets. An effective step towards building a global partnership began with commissioning of the Trans-Asian gas pipeline (Turkmenistan-China) in December 2009. Currently, the construction of Turkmenistan-Afghanistan-Pakistan-India transnational gas pipeline is underway.
Kashagan oil project to be launched in June 2017
Kazakhstan’s oil Kashagan project will likely be launched in June 2017, Wang Zhongcai, the first vice president of China National Petroleum Corp, told reporters on Thursday at an energy conference in Moscow. Late last year, the Kazakhstan economy ministry said it planned to start commercial oil production at the Caspian offshore oil field in December 2016. After huge delays and cost overrruns, Kashagan finally launched output in September 2013 but halted production a few weeks later after gas leaks were detected in its pipelines.
Russian Economic Ministry Expects Annual Oil Price of $40
The Russian Ministry of Economic Development’s basic macroeconomic prognosis forecasts an average annual oil price of $40, while the conservative version suggests prices as low as $25 per barrel, Russian Prime Minister Dmitry Medvedev said Thursday. Prime Minister Dmitry Medvedev also added that Russian economic growth will stand at around zero in 2016, but will increase to around one to two percent in 2017-2019. “In the basic version [of the government’s macroeconomic forecast], GDP growth this year will remain at around zero or be slightly negative. A slight growth of one to two percent is expected in 2017-2019,” Medvedev added.
Bangladesh Economy Continues Robust Growth with Rising Exports and Remittances
The Bangladesh economy sustains strong growth in FY19 led by rising exports and record remittances, says a new World Bank report, “Bangladesh Development Update October 2019: Tertiary Education and Job Skills,” launched today.
Remittances grew by 9.8 percent, reaching a record $16.4 billion in FY19. The contribution of net export growth was positive, supported by a diversion of garment export orders from China and a decline in imports. Agricultural and pharmaceutical exports led non-RMG export growth. However, leather and leather product exports declined by 6 percent.
Net foreign direct investment (FDI) increased by 42.9 percent from a low baseline with investments in the power, food, and textile sectors. Private consumption grew by 5.4 percent. Private sector credit growth was weak and bank liquidity remains constrained. Non-performing loans continued to rise in the banking sector.
The report warns about an uncertain global outlook and domestic risks in the financial sector. Exchange rate appreciation is also a challenge for Bangladesh’s trade competitiveness. Reforms in the financial sector, including revenue mobilization and doing business, will be essential for progress. The report also urges closing the infrastructure gap and timely implementation of the Annual Development Plan.
“Bangladesh’s economy is projected to maintain strong growth backed by sound macroeconomic fundamentals and progress in structural reforms,” said Mercy Miyang Tembon, World Bank Country Director for Bangladesh and Bhutan. “To achieve its growth vision, Bangladesh will need a high-productivity economy. Human capital development that is responsive to labor market demand for higher-level skills and to rapid technological advancements will be crucial.”
Bangladesh needs to create quality jobs for about two million young people entering the labor force every year. To harness the benefits of this growing labor supply, investments in human capital are required. The country needs to invest significantly in teaching, learning and ICT facilities, among other areas, to create a competitive workforce.
Higher labor productivity will be essential to diversify the economy beyond garment exports and remittances. Growing sectors—such as export-oriented manufacturing, light engineering, shipbuilding, agribusiness, information and communication technology (ICT), and pharmaceuticals—will require skilled professionals in managerial, technical, and leadership positions.
Tertiary graduates struggle to find jobs, indicating a major skills gap. Only 19 percent of college graduates are employed full-time or part-time. At the tertiary level, more than a third of graduates remain unemployed one or two years after graduation, while unemployment rates of female graduates are even higher.
“Labor market surveys repeatedly show that employers struggle to fill high-skill positions such as technicians and managers,” said Bernard Haven, World Bank Senior Economist, and co-author of the report. “To bridge the demand and supply gap, investments in skills training, equitable access for female and poor students, public funding mechanisms to develop market-relevant skills and an effective regulatory and accountability framework are needed.”
Tackling obesity would boost economic and social well-being
Obesity-related diseases will claim more than 90 million lives in OECD countries in the next 30 years, with life expectancy reduced by nearly 3 years. Obesity and its related conditions also reduce GDP by 3.3% in OECD countries and exact a heavy toll on personal budgets, amounting to USD 360 per capita per year, according to a new OECD report.
The OECD’s The Heavy Burden of Obesity – The Economics of Prevention says that more than half the population is now overweight in 34 out of 36 OECD countries and almost one in four people is obese. Average rates of adult obesity in OECD countries have increased from 21% in 2010 to 24% in 2016, meaning an additional 50 million people are now obese.
Children in particular are paying a high price for obesity. Children who are overweight do less well at school, are more likely to miss school, and, when they grow up, are less likely to complete higher education. They also show lower life satisfaction and are up to three times more likely to be bullied, which in turn may contribute to lower school performance.
Obese adults are at greater risk of chronic illnesses, such as diabetes, and reduced life expectancy. In the EU28, women and men in the lowest income group are, respectively, 90% and 50% more likely to be obese, compared to those on the highest incomes, entrenching inequality. Individuals with at least one chronic disease associated with being overweight are 8% less likely to be employed the following year. When they have a job, they are up to 3.4% more likely to be absent or less productive.
“There is an urgent economic and social case to scale up investments to tackle obesity and promote healthy lifestyles,” said OECD Secretary-General Angel Gurría. “These findings clearly illustrate the need for better social, health and education policies that lead to better lives. By investing in prevention, policymakers can halt the rise in obesity for future generations, and benefit economies. There is no more excuse for inaction.”
OECD countries already spend 8.4% of their total health budget on treating obesity-related diseases. This is equivalent to about USD 311 billion or USD 209 per capita per year. Obesity is responsible for 70% of all treatment costs for diabetes, 23% for cardiovascular diseases and 9% for cancers.
New OECD analysis in the report finds that investing in initiatives like better labelling of food in shops or regulating the advertising of unhealthy foods to children can generate major savings. Every dollar invested in preventing obesity would generate an economic return of up to six dollars, according to the report.
Reducing by 20% the calorie content in
energy-dense food, such as crisps and confectionery, could avoid more than 1
million cases of chronic disease per year, particularly heart disease.
Initiatives targeting the whole population, such as food and menus displaying
nutritional information and mass media campaigns, could lead to gains of
between 51,000 to 115,000 life years per year up to 2050 in the 36
countries included in the analysis. This would be equivalent to preventing all
road deaths in EU28 and OECD countries respectively. Economic savings would
also be significant, with menu labelling alone saving up to USD 13 billion
between 2020 and 2050.
The report, together with
country notes for Australia, Canada, France, Germany, Italy, Mexico, Spain and
the United Kingdom, are available at http://www.oecd.org/health/the-heavy-burden-of-obesity-67450d67-en.htm.
OECD leading multilateral efforts to address tax challenges from digitalisation of the economy
Today the OECD Secretariat published a proposal to advance international negotiations to ensure large and highly profitable Multinational Enterprises, including digital companies, pay tax wherever they have significant consumer-facing activities and generate their profits.
The new OECD proposal brings together common elements of three competing proposals from member countries, and is based on the work of the OECD/G20 Inclusive Framework on BEPS, which groups 134 countries and jurisdictions on an equal footing, for multilateral negotiation of international tax rules, making them fit for purpose for the global economy of the 21st Century.
The proposal, which is now open to a public consultation process, would re-allocate some profits and corresponding taxing rights to countries and jurisdictions where MNEs have their markets. It would ensure that MNEs conducting significant business in places where they do not have a physical presence, be taxed in such jurisdictions, through the creation of new rules stating (1) where tax should be paid (“nexus” rules) and (2) on what portion of profits they should be taxed (“profit allocation” rules).
“We’re making real progress to address the tax challenges arising from digitalisation of the economy, and to continue advancing toward a consensus-based solution to overhaul the rules-based international tax system by 2020,” said OECD Secretary-General Angel Gurría. “This plan brings together common elements of existing competing proposals, involving over 130 countries, with input from governments, business, civil society, academia and the general public. It brings us closer to our ultimate goal: ensuring all MNEs pay their fair share.”
”Failure to reach agreement by 2020 would greatly increase the risk that countries will act unilaterally, with negative consequences on an already fragile global economy. We must not allow that to happen,” Mr Gurría said.
The Inclusive Framework’s tax work on the digitalisation of the economy is part of wider efforts to restore stability and certainty in the international tax system, address possible overlaps with existing rules and mitigate the risks of double taxation. Beyond the specific elements on reallocating taxing rights, a second pillar of the work aims to resolve remaining BEPS issues, ensuring a minimum corporate income tax on MNE profits. This will be discussed in a public consultation foreseen to take place in December 2019.
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