● Political Developments
● Economic Developments
● India-Central Asia Relations
Presidential elections were held in Uzbekistan on 24th October. Voter turnout was strong at 80.8%: over 16 million out of a total of 20 million eligible voters exercised their franchise. Incumbent President Shavkat Mirziyoyev won more than 80% of votes cast. The other candidates got: 6,6% — Vorisova; 5,5% — Qodirov; 4,1% — Oblomurodov; 3,4% — Abduhalimov. The result was an emphatic approval of the political, economic, social and regional policies of the President who has opened Uzbekistan to the world since he assumed office in 2016. As part of the campaign, meetings and roundtables were organised in Tashkent to discuss pressing issues such as economic recovery in the post-pandemic era and the situation in Afghanistan. With some 800,000 first-time voters among the 20 million registered voters, many youngsters actively participated in the roundtables that were joined by several ministers. During the campaign, the situation in Afghanistan following the Taliban takeover in mid-August also came up for discussion, and senior Uzbek officials insisted that the war-torn country should not be isolated in view of its urgent humanitarian needs. The officials also called for the formation of a government in Kabul that includes all ethnic groups and is based on democratic principles. Voting across the country of 36 million people began at 8am and continued until 8pm.
A second term for President Mirziyoyev will allow him to deepen his reform campaign and further open up Uzbekistan to foreign trade and investment. He has also struck a balance in his country’s relations with Russia and the West, while pushing forward with connectivity projects with South Asia. People want him to continue to transform the country as he has been doing since he took office five years ago. Several people called the election “a celebration/a festival.’’ Mirziyoyev has been praised for opening the country to the world, which improved living standards. On the foreign scene, he facilitated regional cooperation and engaged constructively with world players. Mirziyoyev improved relations with world powers such as Russia, China and the West, while also resolving conflicts with neighbors including establishing peaceful interaction with Afghanistan. Under Mirziyoyev, freedom of speech expanded compared to suppression during the Islam Karimov era. Several independent news media and bloggers have appeared. Mirziyoyev relaxed tight controls on Islam that Karimov imposed to counter dissident views. Mirziyoyev lifted controls on hard currency, helping encourage foreign investment. The country’s general economic situation appears considerably better than five years ago. Uzbekistan has become more attractive to international investors and has acquired a more central role in the geopolitical architecture of Central Asia. Mirziyoyev has moved to boost economic and trade ties with Russia, which is building Uzbekistan’s first nuclear power plant and has invested in other big economic projects in the country. Russia also attracts a flow of migrant workers from Uzbekistan. Uzbekistan under President Mirziyoyev has emerged as the leader of Central Asi and as an authentic voice of the Region.
In addition to several scholars, commentators, media personnel and retired Ambassadors from India, India’s Chief Election Commissioner led a three-member delegation to observe the conduct of Presidential polls. Uzbekistan has been relatively spared from COVID-19 crisis as a result of which more than 1,000 international observers travelled to Uzbekistan for the election.
Russian President Vladimir Putin was the first to congratulate Mirziyoyev on his re-election. Putin expressed his “satisfaction with the convincing victory”, assuring further developments in strategic cooperation and partnership between Moscow and Tashkent.
In 2011 Tajikistan offered China 1,158 square kilometres of territory in the Pamir range in exchange for Beijing writing off the country’s debt. Analysts had then blamed the Chinese “debt-trap diplomacy” although both sides claimed that the deal was nothing more than the settlement of a century-old border dispute. Ten years later, Tajikistan is once again heavily in debt. It owes creditors US$3.1 billion, almost half to China. Tajikistan’s GDP in 2020 was just US$8.2 billion. This gives China leverage over Tajikistan, allowing it to increase its security presence in the country (it opened a small facility in 2016) and obtain mining rights. As a BRI transit country, Tajikistan is not as important as Kazakhstan. It does not provide oil as Kazakhstan does, or gas like Turkmenistan. But one area in which China is particularly interested is security. Tajikistan has a 1,344 km border with Afghanistan. Beijing is concerned that the country could be a transit state for Uyghur militants to attack China. This tempts China to take a greater role in Tajik border security, conduct joint raids on Uyghurs living in the country and acquire mining exploration rights in the country. This is a matter of concern as Sinophobia is relatively widespread in Tajikistan. But since Tajikistan is authoritarian, Sinophobia rarely manifests itself in public.
Tajikistan has approved construction of a new Chinese-funded base near the country’s border with Afghanistan as Tajik officials warn of growing threats emanating from there. In a separate development, Tajik government has offered to transfer full control of a pre-existing Chinese military base in the country to Beijing and waive any future rent in exchange for military aid from China. These two developments paint a picture of a growing Chinese military footprint in the Central Asian country as Beijing and its neighbors in the region turn their attention toward an increasingly murky security situation in Afghanistan since the Taliban’s takeover. Such activity in Tajikistan shows the level of Chinese concern towards Afghanistan and the region. Tajikistan appears to have put forward a proposal by which China would provide increased funding to build up Tajik military points along the border with Afghanistan in exchange for Dushanbe transferring full control of the existing facilities to China and not charging any basing fees. Lately there has been a trend of China, in addition to its huge foot-print in the economic sphere, becoming a security player also. China is also increasingly engaged in military drills with Central Asian states. Beijing’s arms transfers through donations and sales to Central Asian countries were modest until 2014. Since then, China has ramped up arms transfers to the region. China built its Tajik military outpost in 2016, with facilities in the country’s mountainous Gorno-Badakhshan province near the Afghan border.
It is reported that a Tajik militant group in Afghanistan that may be beyond the control of Taliban could be planning an incursion into Tajikistan. Russia which has a military base in Tajikistan responded by saying that it stood ready to protect Tajikistan both within the (Moscow-led) Collective Security Treaty Organisation framework and bilaterally in the event of any cross-border attack from Afghanistan. The Tajik militants are allied with the Taliban, but not entirely under their control. Since their takeover of Afghanistan, Taliban have been riled by Tajikistan, where the National Resistance Front (NRF) Afghan government-in-exile is based. Taliban has warned Tajikistan against meddling in Afghan affairs. There have been reports of troop build-ups on both sides of the Afghan-Tajik border since early October. Since Taliban took control of Afghanistan, Russia has been holding almost continuous military exercises with the Central Asian republics to Afghanistan’s north. Tajiks are second largest ethnic group in Afghanistan and make up a majority of population in some northern areas close to border with Tajikistan.
It is unlikely that open confrontation will occur across the Afghan-Tajik border; neither Dushanbe nor Kabul would like to see that outcome. But both sides are using the tension for their own ends—for Tajikistan to ensure that the Taliban will keep the militant Tajik group Ansarullah in check, and for the Taliban to put pressure on Tajikistan to recognize its government.
Presidents of Turkmenistan and Uzbekistan discussed ways to expand strategic partnership and increase trade volume between the two countries during the former’s visit to Uzbekistan. The two countries signed several agreements following the Uzbek-Turkmen Economic Forum. The agreement signed to set up a border trade zone and to replace imports from third countries with competitive products produced in Uzbekistan and Turkmenistan is expected to increase mutual trade. Trade between Uzbekistan and Turkmenistan has tripled in recent years despite the coronavirus pandemic, and increased by 25% since beginning of 2021. Improved conditions for development of bilateral trade, including through removing existing tariff and non-tariff barriers, are expected to increase annual Uzbek-Turkmen trade to US$1 billion.
The two leaders also discussed Afghanistan. Both countries have a similar policy towards it, one focused on economic potential of trade routes through Afghanistan. They asserted that they would continue to provide help “to the people of Afghanistan.” The policy Turkmenistan is pursuing toward the Taliban is to stay out of Afghan politics and deal with anyone in power there to advance Turkmenistan’s economic interests.
Turkmenistan and Uzbekistan export electricity to Afghanistan. Taliban is short of cash and unable to pay for electricity imports. According to Asian Development Bank, 73% of Afghanistan’s electricity is imported. Of that, Uzbekistan supplies 57%, Iran 22%, Turkmenistan 17%, and Tajikistan 4%. Afghanistan spends around US$300 million per year for electricity import. Of that Turkmenistan receives some US$51 million and Uzbekistan about US$171 million. Uzbekistan is constructing a 260-kilometer section of a 500-kilovolt power line from Surkhon in Uzbekistan to Pul-e Khumri, north of Kabul, that would boost Uzbek electricity exports to Afghanistan by 70%. Turkmenistan’s electricity goes to northwestern Afghanistan; Uzbekistan’s electricity powers Kabul. Turkmen and Uzbek governments have a history of keeping a tight rein on religion in their own countries. But the lure of pipeline, power line, and railway connections to and through Afghanistan seems to have convinced the two governments that the cost of overlooking the Taliban’s religious extremism is worth the potential gain in trade and transit.
Turkmenistan and Uzbekistan are the only two Central Asian countries that do not border Russia or China. Both have long looked to the south for connectivity to the wider world.
Taliban has reportedly appealed to United Nations Assistance Mission in Afghanistan (UNAMA) for US$90 million to settle nearly three months of unpaid electricity bills. Afghanistan usually pays US$20-25 million a month to Uzbekistan, Tajikistan, Turkmenistan, and Iran for electricity. Those bills have gone unpaid, as Taliban does not have access to Afghanistan’s international reserves which are frozen. Collections from domestic electricity customers have slowed to a trickle. Uzbekistan continues to supply electricity, as does Tajikistan, despite the latter’s verbal duel with Taliban.
Electricity accounted for almost 65% of Tajikistan’s exports to Afghanistan last year, or about US$45 million. Dushanbe needs the money. The poverty rate has jumped during the pandemic with 30-40% of population forced to cut back on food intake.
Uzbek foreign minister visited Kabul on October 7 for talks with Taliban leadership on Surkhon-Pul-e Khumri power line and the Mazar-e Sharif-Kabul Peshawar railway line. Uzbek officials and Taliban representatives held a working meeting in the border city of Termez on October 16 to improve cross-border connectivity, especially for shipping humanitarian aid. Uzbekistan is interested in moving forward with a project to extend the existing railway line connecting Termez and Hairatan in Uzbekistan to Peshawar in Pakistan. The line currently terminates at Mazar-e-Sharif in northern Afghanistan. Uzbekistan feels that enhanced connectivity would also open new doors to improve security situation and deal with terrorism and extremism across the region. Uzbekistan feels that any isolation of Afghanistan could lead to an economic collapse and more chaos across the region. Uzbekistan and Afghanistan share a 144-kilometer (89-mile) border.
Chairman of Kazakhstan Council on International Relations has sought to allay fears regarding situation in Afghanistan saying that it poses no direct threat to Central Asia. He however admitted that one of the threats posed by Taliban is the fact that they give shelter to several other radical groups. Kazakhstan says it has evacuated a group of ethnic Kazakh-Afghan nationals from Kabul. There are about 200 ethnic Kazakh-Afghans in Afghanistan although the actual figure could be much higher. Since Taliban took control of Afghanistan, many Afghans have urged Kazakh authorities to take them to Kazakhstan, claiming to be ethnic Kazakhs. There appears to be growing discontent among some Kazakhs with the situation in which the government is providing humanitarian support to Afghanistan instead of helping its own citizens in need.
Russian Foreign Minister has told Afghanistan’s neighbours to refuse to host US or NATO military forces following their withdrawal from Afghanistan. Russia is worried by the risk of terrorists spilling into Central Asia from Afghanistan and bristles at the idea of the West gaining a foothold in a region that used to be part of the Soviet Union. He said it was important to curb and control migration flows from Afghanistan and that criminal and terrorist elements were already trying to enter Afghanistan’s neighbours disguised as refugees.
Iran hosted a multilateral meeting of Afghanistan’s neighbours. Six foreign ministers from Tajikistan, Uzbekistan, Turkmenistan, Pakistan and China besides hosts Iran and Russia attended. All the countries invited except Russia share borders with Afghanistan. Taliban was not invited.
Tajik President visited Brussels and met with EU High Representative for Foreign Affairs and Security Policy, the European Council president, as well as EU Special Representative for Central Asia. Afghanistan featured most prominently on the agendas of these meetings, with both sides being affected by the deteriorating security situation. The issue of strengthening the Afghan-Tajik border to prevent drug trafficking and other transnational organized crimes through defense assistance was highlighted. This was beyond the support offered through the already traditional programs of BOMCA (Border Management in Central Asia) and CADAP (Central Asia Drug Action Program). In a post-meeting tweet, European Council President stressed that both sides support an inclusive government in Kabul and had discussed “the spill-over of the situation in Afghanistan.” Tajik President’s visit to Brussels was significant in this respect. Since the Taliban takeover the number of Afghan refugees entering Tajikistan has risen from 7,000 in the spring to over 15,000 in October, although in September there was an announcement about the lack of accommodation infrastructure. Tajik authorities cited financial constraints as preventing Tajikistan from hosting refugees. Tajik President’s talks in Brussels and the ones in Paris could offer Tajikistan a way out of this, through a deal which may provide Dushanbe with needed money. Nevertheless, Tajikistan is considered merely a transit country, with most refugees hoping to reach Canada or the United States, mainly due to lack of economic opportunities in Tajikistan.
Tajik President’s European tour, although subject to some calls to address human rights violations, elevated Tajikistan to the status of a like-minded partner for the European Union regarding the situation in Afghanistan. The “open doors” foreign policy adopted in Dushanbe is generally based on the benefits awarded by potential partners. Tajikistan’s interest to become a part of the Generalized Scheme of Preference Plus (GSP+) list of the EU, entailing further trade benefits in exchange for implementation of 27 international conventions on sustainable development and good governance, and the launching of negotiations for the Enhanced Partnership and Cooperation Agreement are the main benefits offered by the EU, especially to a country with limited resources. However, an assistance package for resettlement of Afghan refugees in Tajikistan and their integration into the community may offer Brussels a peace of mind much needed in a Europe facing multiple crises.
President of Kazakhstan visited Turkmenistan for a state visit at invitation of his Turkmen counterpart. The Presidents paid special attention to expanding political, trade and economic, transport, cultural and humanitarian cooperation. The Presidents agreed on the need to boost trade, which suffered from the consequences of the pandemic. In the eight months of 2021, however, trade increased by more than 30%. There is good potential in areas of energy, transport, and logistics, agriculture, and industry. Kazakhstan expressed readiness to increase exports of nearly 60 commodity items worth more than US$130 million to Turkmenistan, including flour and wheat, the country’s key export items.
Kyrgyzstan said it will purchase unmanned aerial vehicles (UAV) from both Turkey and Russia. Kyrgyz President said that this is not being done to go to war with anyone but to ensure the country’s security.
The Russian military base in Tajikistan will replace its old combat vehicles with 30 upgraded T-72B3M tanks with advanced combat specifications before the end of 2021. Currently, the military base is “rearming” the units with modern military and special equipment. The motor rifle divisions of the military base recently received a batch of advanced BMP-2 infantry fighting vehicles, cutting-edge Verba man-portable infrared homing surface-to-air missiles, rocket-propelled infantry flamethrowers of longer range and higher power, Kornet anti-tank guided missiles, 12.7mm ASVK-M Kord sniper rifles, AK-12 rifles, Linza sanitary armoured cars, and the equipment of rear and technical services.
Gulf countries have increased investments in Central Asia in recent years due to their desire to diversify their economy and lessen their dependence on finite hydrocarbon reserves. UAE has been most proactive in this. In accordance with its policy to dominate ports throughout the world, in 2019 Dubai Ports World bought a 49% stake in Aktau special economic zone on Kazakhstan’s Caspian Sea coast, and 51% stake in Khorgos special economic zone, a major transportation hub on Kazakhstan-China border.
From 2005 to 2019, flow of funds between Kazakhstan and the UAE reached US$2.1 billion. In late 2020, the two countries signed an investment cooperation agreement which foresaw implementation of 21 projects forUS$6.1 billion. This will include projects in infrastructure, manufacturing and food production.
Kazakhstan has also been courting interest from Qatar, which has been a major political rival of UAE, possibly hoping to balance the two countries to get more favourable terms. This balance currently appears to be decisively in UAE’s favour. Oman also has a role to play in Kazakhstan: its state-owned oil company OQ owns minority stakes in two Kazakh oil fields.
Kyrgyzstan received a delegation from UAE comprising minister of energy and infrastructure, and representatives of major Emirati companies. UAE already has substantial economic ties with Kyrgyzstan: in 2019, trade between the two countries totalled over US$900 million. Kyrgyzstan is looking to attract foreign investors to support national infrastructure projects, and strengthen its economy which is affected by a large debt to China. Kyrgyzstan’s foreign debt is reportedly around US$5 billion. More than 40% of that is owed to China for a series of infrastructure projects over the last decade. Kyrgyzstan and others have identified capital-rich Gulf Arab countries as possible alternatives to the debt-driven Chinese policy, and Russian military-political hegemony over the region.
UAE has also invested in Turkmenistan. Despite Turkmenistan having a highly-protected oil and gas industry, Dragon Oil, a Dubai-based (but Irish-owned) firm has been working in Turkmenistan for over 15 years and is only foreign company to export Turkmenistan’s oil to global markets.
All this appears to be happening with the tacit consent of GCC’s western allies, who possibly view it as a welcome development. They would prefer Central Asia to be under influence of its own allies, rather than geopolitical rivals Russia and China, or an increasingly assertive and independent Turkey.
If played right, the Central Asian republics can benefit immensely from this jockeying for influence in their region, and lessen their dependence on China for infrastructure development and Russia for military and diplomatic support.
Taliban has stated that the TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline and a proposed rail connection between Turkmenistan and Afghanistan are “long-term priority projects”. The Turkmen government held talks with Taliban even prior to their takeover of Afghanistan in anticipation of US troop withdrawal. It has been suggested that the pipeline’s security is not the pivotal issue for TAPI’s success. Rather pipeline financing is the main obstacle. When the project’s price tag is combined with the various upstream costs of delivering 33bn cubic metres of gas per annum, TAPI’s costs would balloon to US$40bn. It would be viable only with significant funds from international lenders. Turkmenistan does not appear to have been able to secure any meaningful financing for the project from banks and private energy firms.
Russia and Turkmenistan have signed an economic cooperation program for 2021-2023 during a bilateral intergovernmental commission meeting in Ashgabat. Fuel and gas sector, transport and communications, gas-to-chemicals industry, geology, construction, financial and banking sector were identified as promising areas of cooperation. Humanitarian cooperation issues, particularly those related to education and healthcare were also discussed.
Parents in Central Asia earlier used to send their children to Moscow or St Petersburg for higher education. Now, some of them are opting for China. China has become an increasingly popular destination for many Central Asian students after Russia. Many of them in later years will form a new element of China’s soft power in these countries. Rising prestige of Chinese universities is a crucial reason behind the shift, while Russian institutions are in relative decline due to lack of resources and investment.
India-Central Asia Relations
External Affairs Minister (EAM) S. Jaishankar paid a 4-day visit to Kyrgyzstan, Kazakhstan and Armenia with an aim to further expand bilateral ties and discuss key regional issues including developments in Afghanistan. The visit was a continuation of India’s increased engagement with countries in its extended neighbourhood.
It was the first visit by Jaishankar as EAM to Kyrgyzstan.In addition to meeting his counterpart, he also called on Kyrgyz President Sadyr Japarov. India agreed to provide a US$200 million Line of Credit for development projects in Kyrgyzstan during talks to boost bilateral ties, including defence cooperation. They also discussed global issues like Afghanistan. EAM said that both”India and Kyrgyz Republic have a shared approach to developments in Afghanistan.” Defence and security cooperation are important on account of common interest in maintaining peace and security in the region. Both sides agreed to continue cooperation in high-altitude training and biomedical research. Holding of annual military exercise Khanjar despite the constraints of Covid pandemic was applauded. Leaders discussed need for early travel of Indian students and more liberal visa regime. EAM said that one area that needed a concerted push from both sides was bilateral trade and investments. They agreed to encourage their Chambers and businesses to work closely with the governments which play a facilitative role. Jaishankar noted that signing of new Bilateral Investment Treaty in 2019 and mutual agreement on date of entry into force of Amended Protocol of India-Kyrgyz Double Taxation Avoidance Agreement (DTAA) are important steps towards that. Lack of Connectivity, which is a major impediment to bilateral trade also figured prominently in discussions. EAM reiterated that respect for sovereignty and territorial integrity was a prerequisite for any connectivity initiative. Jaishankar said that Development Cooperation has been gradually emerging as an important pillar of bilateral engagement between the two countries. India’s telemedicine centers have helped Kyrgyz people in rural areas get connected to medical facilities in cities. India will support establishment of three more Tele-Medicine Centers in Batken, Jalal-Ababd, and Chui regions. As part of the evolving development partnership paradigm, the two countries agreed to explore joint development projects in the fields of eco-tourism, jewellery-design, pharma, medicines, medical education, IT Parks & data-banks. EAM thanked Kyrgyz President for his guidance on further strengthening the excellent bilateral relationship. Jaishankar gifted Indian epics and classics to the Manas-Mahatma Gandhi library in Bishkek. He also released a dictionary of common words in Hindi and Kyrgyz languages along with his Kyrgyz counterpart. Praising the Kyrgyz landscape, Jaishankar said that lakes and peaks offer excellent destinations for Bollywood productions. He said that an incentive-package by Kyrgyz side could open new avenues for Bollywood film shootings.
EAM visited Kazakhstan to attend the 6th Ministerial meeting of the Conference of Interaction and Confidence Building Measures in Asia (CICA). He also held bilateral talks with the Deputy Prime Minister and Foreign Minister of Kazakhstan.
The first India-Kyrgyzstan Strategic Dialogue between the National Security Council Secretariats of the two countries was held in New Delhi. Indian side was led by National Security Adviser Ajit Doval and Kyrgyz side by Secretary of Security Council Lieutenant General Marat Imankulov. The two sides held discussions on threats and challenges facing the two countries as well as the regional security environment with special reference to Afghanistan. The two sides welcomed similarity of views on these matters and agreed upon steps to enhance bilateral security cooperation between relevant bodies, including in the fields of counter-terrorism, combating radicalisation, narcotics control and defence cooperation. India and Kyrgyzstan agreed to enhance cooperation in counter-terrorism and defence to address common threats and challenges arising from the situation in Afghanistan. The dialogue is significant in view of India’s efforts to step up cooperation with Central Asia on regional security. The two sides discussed the Afghanistan issue in wake of Taliban’s takeover. The Kyrgyz NSA was in agreement with the Indian perspective on stabilization of Afghanistan through a government in Kabul that had enough representation of women and minorities like Tajik, Uzbek and Hazara communities. This strategic dialogue was held days ahead of India hosting a meeting of national security advisers (NSAs) of countries in the region to discuss the situation in Afghanistan.
Uzbekistan wants to push ahead with a joint plan with India and Iran to promote connectivity through Chabahar port as part of the country’s efforts to improve and diversify access to sea routes for trade. The three countries intend to shortly hold the second meeting of a trilateral working group to discuss the joint use of Chabahar port. Uzbekistan feels that recent developments in Afghanistan would not have any impact on plans of the three countries. Uzbek Deputy Foreign Minister Sidiqov said that India is one of its most significant strategic partners and this is an important project. The first meeting of trilateral working group on joint use of Chabahar port was held virtually in December, 2020. The Indian side had said at the time that Chabahar port could be “a fulcrum of connectivity to Central Asia. ”Almost 80% of Uzbekistan’s exports and imports move through northern routes passing through Central Asian states and Russia and it would be beneficial for Uzbekistan to gain access to the Persian Gulf. Uzbekistan feels that countries in South Asia are developing fast, and represent a huge market with a population of about two billion.