Monochrome: Caspian cargo, a thaw between Uzbek and Tajik presidents

Date: Mar 2018

Kazakh politician and president’s daughter Dariga Nazarbayeva raised critical issues in questions posed to the National Bank of Kazakhstan, including the historical state support of banks and losses caused by the devaluation of the tenge. Serious problems in the banking sector indicate the inefficient control and supervision of banks. Despite indication that parliament wanted to take action, it is clear from the poor shape of the banking sector that the trouble continues. Nazarbayeva also defended the role of the Russian language.

The US will supply special cargo to Afghanistan through the Caspian ports of Kuryk and Aktau in Kazakhstan, and further via rail transit through Uzbekistan. The US will also participate in a large conference on Afghan security set to be held in Tashkent later this month. You can find an interesting analysis of US strategy in Afghanistan here.

Uzbekistan is planning to attract the world's leading manufacturers of sporting goods, including Adidas and Nike, to operate in the new FEZ "Sport". The sports industry in Uzbekistan is currently in its infancy (indeed, it doesn’t really exist!), with the market flooded primarily with cheap Chinese goods. If the plans come together, the FEZ may attract investors interested in the untapped potential of the local market, as well as in the low operational costs.

Chinese authorities are planning to increase gas imports due to unexpectedly high demand in many Chinese cities. For the first time in the country, demand for gas increased by 14% amongst the population within one year. Gas will be purchased primarily from Russia and Central Asian countries, which could potentially provide the Turkmen government with an opportunity to benefit from the Turkmenistan-China pipeline and, to the extent possible, to negotiate beneficial terms.

The Russian state corporation Rosatom is proposing the construction of a two-block nuclear power plant in Uzbekistan with a capacity of 1.2 GW per block. This raises key questions: How much electricity will Uzbekistan need by 2030? Does Uzbekistan need to hold a referendum on the construction of nuclear power plants? We have tried to find answers to these questions, as well as wider issues such as why Germany is unlikely to give up on nuclear energy, in our interesting long read (in Russian).

Losses amongst Uzbek fertilizer producers have reached $250 million in total. President Shavkat Mirziyoyev claimed that an incompetent approach to agriculture financing has caused shortcomings and huge losses. Another very acute issue is the cost of fertilizer production; a whopping 67% of production costs cover electricity alone. Almost all of the largest fertilizer producers sustained losses in 2017, and only a few of them broke even in the last financial year.

For the first time in 18 years, Uzbekistan’s President Shavkat Mirziyoyev is paying an official state visit to Tajikistan to coincide with the two countries' removal of the mutual visa requirements. Over the past 20 years there have been constant disagreements between the two countries, with Dushanbe often accusing its neighbour of blocking railroads and roads and Tashkent opposing the construction of the Rogun hydroelectric power station in Tajikistan. According to Mirziyoyev, the time has come to "melt the 20-year-old ice".

Tajikistan will start supplying an estimated 1.5 billion kilowatt-hours per year of electricity to Uzbekistan at the end of March, at a rate of $0.02-$0.025 per kilowatt. However, 60 km of transmission lines connecting the south of Uzbekistan with Tajikistan need to be restored and automation systems must be installed. It could perhaps be a good idea to return to the looped energy system that operated in Central Asia under the USSR, solving problems including a lack of electricity by redirecting oversupplies.

The Tajik tourism industry has undergone significant development recently, with the introduction of tax exemptions and customs benefits, as well as the development of infrastructure. In all, this has resulted in the emergence of twenty new travel agencies in the past six months. Tajikistan certainly has plenty to offer: from impressive ethnic art to the highest point in the CIS region, Ismail Somoni, which stands at a mighty 7495m high. Interested? You can read more about climbing to the peak here.

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