Monochrome: The Dragon Arises

Date: Jun 2018

The main news of the week is the rising power of the Shanghai Cooperation Organisation (SSCO). However, let’s start with other news first.

Kazakhstan and China have signed an agreement to establish a joint Kazakhstan-China Eurasian Nurly (Bright) Investment Fund, whose local partner is Kazyna Capital Management. The size of the fund will be approximately $500 million, which will be used to develop projects in Kazakhstan in the sectors of infrastructure, natural resources, logistics, information technology, manufacturing and agro-complex.

A draft law on public services is currently being discussed in Kazakhstan. According to the draft law, parts of the state function will be transferred to the private sector. The purpose of this initiative is to encourage citizens to develop self-regulation and generally improve the quality of public services.

Uzbekistan and Belarus have agreed to establish a joint-licensed production of sweets. The famous Belorussian "Kommunarka" factory will be participating in the project. Furthermore, the two countries plan to expand cooperation in the fields of food, pharmaceuticals and textiles. Belorussian President Lukashenko has planned an official visit to Uzbekistan this September.

In Kazakhstan, more than a thousand officials could be dismissed after the adoption of the amended law on entrepreneurship. The purpose of the law is to deregulate entrepreneurship. At the end of May, Nazarbayev signed amendments, which envisage reducing the supervisory functions of the state by 30%. The final decision about lay-offs will be made by the government and the presidential administration.

The clash of Russia's and China's interest in Central Asia has been coined as the next "Big Game". The Harvard Political Review prepared an interesting overview of the strategy from both states in the region. Briefly, Russia relies on historical and military ties and China on the ‘One Belt One Road’ initiative. Leaders from the region will have to engage their abilities in diplomatic equilibristic to preserve autonomy and balance in the interests of the powers. Given India's recent accession to the SCO and the imperceptibly growing influence of the SCO, keeping such a balance is becoming quite arduous.

China Express Airlines (Huaxia Airlines) has expressed its readiness to participate in the privatisation of Kazakhstan's Qazaq Air, which expects the deal to provide direct access to regional passenger traffic from China. In turn, China Express Airlines plans to intensify regional cooperation within the framework of the ‘One Belt One Road’ initiative. Last year it was reported that the sale of a stake in Qazaq Air is scheduled for 2020.

Kyrgyzstan still has a brewing dispute with Russian RusHydro over the Verhnenaryn cascade of the HPP. The matter may have to go to court soon. Besides that, the Kyrgyz Prime Minister criticised the state of affairs in the mining sector, pointing out that the buildings of a Chinese company were burned, in the Jalal-Abad region, as a result of a lack of timely measures being taken.

According to the FAO's expert opinion, Tajikistan could become the new Spain in the fruit and vegetables sector, however, some factors are preventing it from realising its potential. The main advantage of the country's agro sector is the fact that greenhouses in the south can harvest virtually any vegetables, fruits and berries, whilst benefitting from relatively cheap labour. However, the lack of infrastructure, the difficult economic situation and the regulatory environment hinder the unleashing of its potential.

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