Monochrome by Centil Law: Pulling Strings

As the hottest week of the year comes to an end, allies are pulling in, and start pulling strings to counteract any threats that come their way.

Amidst the growing concern with the Taliban gaining more ground, Tajikistan mobilised 20,000 of its own troops and Russia pledged to support Tajikistan, stating that the Russia-backed Eurasian security block CSTO, which also includes Kazakhstan and Kyrgyzstan, will be ready to retaliate should the intra-Afghan conflict spillover into Tajikistan. Taliban, concerned with polishing their image, quickly reassured the neighbour country that they have no such intention.

Realising that quick action is necessary to avoid potential tensions, Uzbekistan ordered the creation of a free trade zone in Termez, near the border with Afghanistan. The territory will host a variety of retail shops, a logistics centre, hotels, hospitals. The view is to encourage entrepreneurial activity and engage the local population in productive endeavours.

In addition, President Mirziyoyev adopted a law on the Freedom of Conscience and Religious Institutions. The law aims to simplify the process of registering and establishing of religious institutions and associations. The new law also abolished the ban on religious clothing such as head scarves and hijab in public spaces, introduced by the late President Karimov during his crackdown on radical Islamists. 

To balance things out, Uzbekistan committed to invest $100m into its vineyard industry with the prospect of boosting exports of grapes, raisin and local wines. To encourage local production and greater export volumes, the state will subsidise the costs of production, of equipment purchase and of export, as well as reduce the revenue and property taxes on harvested crops by 30%. These tax rates will be halved for those who manage to export from 30% of the yield. 

To boost its host country's technological progress ratings, Kazakhstan-based Eurasian Space Ventures company launched a space cryptocurrency exchange with a daily backup of operational and clientele data in low earth orbit, Biteeu, and the appropriately titled Divine system, a satellite system transmitting the text of the Quran. Both projects are expected to be fully operational by November 2021 and use the SpaceX Falcon 9 rocket space technology, in partnership with SpaceChain satellite network. 

Uzbekistan plans to issue new sovereign Eurobonds with dual denomination in Soum and US Dollars, to raise funds for ESG projects in sustainability and environment protection. The process will be facilitated by Citi, Gazprombank, JP Morgan and MUFG. It is expected that more 10-year long placements in US Dollars with a maturity period from 3 to 5 years will follow depending on the market conditions.

The Kyrgyz government faces another claim from Centerra over ownership rights of the Kumtor gold mine, which were temporarily transferred to the state for transgression of environmental laws. The Canadian mining firm filed additional arbitration claims to hold the Kyrgyz state and national mining agency responsible for any and all losses and damages resulting from this seizure in violation of long-standing investment agreements and without compensation.

Uzbekistan's Soum now represents 23.7% of the Netherlands-based TCX funds' currency distribution, making it the largest share in the latter's portfolio structure. TCX FI is an index tracking the performance of frontier currency-linked Eurobonds issued by development finance institutions. It aims to increase transparency around frontier currencies’ fixed income and support local markets’ sustainable growth. The Tajik Somoni and Kyrgyz Som come 4th and 8th in the list respectively.

To prevent a health disaster, Turkmenistan's President Berdimukhamedov ordered for vaccination against COVID-19 to be mandatory for all residents of 18 years of age and above, citing concerns with new cases the neighbouring countries. In the past he also said that there were no coronavirus cases registered in the country since the first outbreak of the pandemic across the region, but did introduce the use of disinfectants and of face masks outdoors at a later point.

Adding oil to the fire, Iran disclosed to the International Atomic Energy Agency that it commenced the process of producing enriched uranium metal, to the dismay of the United States, the United Kingdom, France and Germany. Now Iran's increasing potential to produce nuclear weapons poses an existential threat to the revival of the 2015 US-Iran nuclear deal, which both parties appeared to have high hopes for during the Vienna talks.

As part of the new strategy for Kazakhstan to strengthen its position globally, the main goal is to join the 30 most developed nations by 2050, with key sectors of the economy having been identified as having a relevant role to play in helping the country reach these objectives. The government is focusing on investments in technology with an emphasis on Information and Communications Technology (ICTs) and green technologies, and investments in solar power plants in Turkistan.

Seems like the heat in the region isn't coming down, wish we had London weather here right now.

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