Anticipation (part 2)

With the first week of January behind us, we are all in anticipation of what is to come, and there are a few things brewing in Central Asia.

Uzbekistan is all anticipation, as it’s ambition to diversify the automobile industry gives hope with seven local manufacturers planning to build plants across the country for the production of 100,000 passenger cars and over 45,000 trucks and minibuses throughout 2021-2023. The total cost of these projects adds up to $135m, of which $45m would be utilised this year, FDIs from Austrian, Turkish and Chinese partners included.

Uzbekistan received $35.1m from the Islamic Development Bank for the anticipated reconstruction of two sectors 21km long combined of the Tashkent-Termez road, estimated at $41.7m in total. The agreement is that the loan, commission fees and additional expenses will be repaid from the state budget. Last year, the IDB had allocated $167.2m for the reconstruction of a 100km sector of the same road.

In view of the resurging concerns over COVID-19, the OPEC+ agreed to cut back oil production  again by 425,000 barrels per day in February and March, with Saudi Arabia scaling down by $1m bpd from January's level. Russia and Kazakhstan, however, negotiated the right to increase their levels of production by a total of 500,000 bpd. As a result, this agreement drove Brent price up 5% to $53.65.

Turkmenistan and the US International Development Finance Corporation held a conference call to discuss the establishment of a C5 fund to finance regional development, with an emphasis on the strategic sectors of industry, transport infrastructure, agriculture and technology. The EBRD also anticipates a promising 2021, with projects in the country’s food, logistics, processing and packaging industries.

And while no one anticipated anything, the Central Asia Investment Partnership appeared on the horizon. Through this fund, the US, Kazakhstan and Uzbekistan governments will jointly raise $1bn to boost regional trade and the growth of the private sectors, while also deepening bilateral relations. Perhaps a move to get the upper hand in the future negotiations with Afghanistan by financing greater Central Asia-Afghanistan connectivity,

Tajikistan will again limit electricity usage anticipating the risk of running out of water before spring time. The same policy lasted from mid-October to December. Seems like the government failed to secure the remaining $142m to complete maintenance work of the Nurek Hydropower, where the reservoir level lowered by 4 metres and for the modernisation which it had received $50m from the World Bank.

On top of that, Tajikistan also remembered of its debt and started asking foreign donors to temporarily suspend the repayment of its $3.2bn external debt through the World Bank’s G20 Debt Service Suspension Initiative to increase its social spending capacity. Unlike Kyrgyzstan, Tajikistan was relieved of its $1.2bn debt to China. At the same time, Tajikistan hopes to borrow another $562m.

Having added an Airbus A320 Neo and three Boeings to its aircraft inventory last year, Uzbekistan Airways plans to purchase one more Boeing 787-8 Dreamliner in March for $141.7m, of which over $107 will be funded with a loan from China Development Bank. This comes in timely for the commercial jetliners manufacturer that has a $2.5bn criminal penalty related to its 737 Max scandal.

Kazakhstan revived the Committee for Fishery under the Ministry of Ecology, Geology and Natural Resources, in line with the 2030 State Programme for Fishery Development, estimated to rid the state coffers of over $358m. The plan is also to attract $822m in FDIs for the construction of 545 new fish farms to reach a production of up to 600,000 tons of fish, of which half would be set for export.

Meanwhile, Kyrgyzstan is all anticipation, preparing for the simultaneous vote over the presidential election and the referendum to switch to the presidential system to be held on 10 January. Polls favour the nationalist politician Sadyr Japarov, who had a turbulent 2020, with going from jail to the post of interim President, with support from the public during the October protests on the backdrop of the disillusionment of the previous leadership.

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