Chinese President Xi Jinping has announced the planned investment of $16.3 billion USD in a New Silk Road policy championed by Beijing. The intention of reviving the old route is historically significant for China, as it did and will serve as the linchpin of the route upon its completion. The vast majority of the funds will be doled out by state-owned Chinese policy bank, the China Development Bank, and utilized to build roads, modernize railways and spearhead gas and oil pipelines throughout the region. China sees the linking of Western provinces to Central Asian nations as an opportunity to develop its restive west and eliminate narcotics smuggling smuggling through Afghanistan. China also fears that separatist Uyghurs will find increasingly find refuge in poor Central Asian states, and has moved to bolster joint border security efforts.
China has already taken steps to develop new infrastructure in neighboring Tajikistan, where it has financed roads that lead from Tajiistan’s capital of Dushanbe to Western China. Beijing’s investment in Tajikistan alone will total nearly $6b USD over the next few years, with similar investments pledged to shore up Afghan institutions, road and railway infrastructure. The project, which hasn’t been given a timeline for completion, is expected to go beyond Central Asia and lead as far West as Europe.
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- Teachers in Kyrgyzstan have begun to leave their jobs in order to make ends meet. Some teachers in Kyrgyzstan receive a salary of less than 70 dollars a month, and as a result have had to seek out unskilled labor in order to provide for themselves and family members. The status of a teacher in Kyrgyzstan is similarly low, unlike in Western countries, which removes the incentive for many to pursue the profession and for cities and local governments to raise their salaries.
- Former Kashmiri separatist Sajjad Lone will run for election to represent Jammu and Kashmir in India’s national assembly. Lone is the chairman of Peoples Conference, a local opposition political party that has recently risen in prominence. Lone’s strongest opponent in the coming elections will be a rival from the Bharatiya Janata Party (BJP), one of the two largest Indian political parties and currently one of the strongest. Lone will center his campaign on an effort to convince Kashmiris that none of the previous representatives in Assembly have been truly pro-Jammu and Kashmir.
- Russia has officially boycotted the 2016 Nuclear Security Summit. The mostly symbolic maneuver is a blow to US President Obama, who has for years tried to bring the Kremlin to reduce its nuclear arsenal, without much success. Earlier this year reports emerged that Russia has increased the amount of nuclear weapons in its arsenal, in stark contrast to the stated goal of reducing nuclear weaponry throughout the world.
- With Russia’s economy continuing to falter, the International Monetary Fund issued a pessimistic forecast for most of the Caucasus and Central Asia. Growth throughout the region had been expected at nearly 7% in 2014-2015, though recently released forecasts estimate growth at around 5.5%. Oil rich countries such as Kazakhstan and Azerbaijan will be impacted by dropping oil prices, whereas countries like Tajikistan and Kyrgyzstan will suffer from a sharp drop in remittances from nationals working in Russia.
- Ukraine has resorted to using its foreign reserves to pay off gas debt to Russian energy giant Gazprom. The move to pay off debt using foreign reserves demonstrates the difficulties the Ukrainian economy has experienced as it seeks to promote foreign investment into its economy despite an ongoing bellicose conflict with rebels in its southeast. The IMF agreed to grant Kiev a much-needed loan of $17.01b USD, which, when combined with foreign reserve funds, will allow Kiev to repay the remaining $4.5b USD that it still owns Gazprom by the January deadline. Estimates for long-term growth are still low, as the country still experienced rampant inflation and a low foreign investment.
- The EU’s new foreign policy chief, Federica Mogherini (who has replaced Catherine Ashton), wasted no time in denouncing the Ukrainian separatist elections as “illegal and illegitimate” on Sunday. She additionally said that the situation may have killed off all prospects of a political settlement in Ukraine, and speculated that additional sanctions would force Moscow to shift its policy.
- Russia has allocated some $6.7 million in grants to Tajikistan for the express purpose of improving the well-being of locals who live in rural communities, said the UN Resident Tajikistan Coordinator yesterday. The project will take roughly three years and will be aimed at supporting populations in 9 regions of Tajikistan. Some 2,000 micro-credit loans will be distributed and 500 people will be trained in new professions to stimulate the rural economy. Russian ambassador Igor Lyakin-Frolov said the project is an important step at re-establishing the close relationship between Dushanbe and Moscow
- According to a new article in the WSJ, the US Pentagon had been lobbying for years to encourage investment in Afghanistan’s economy from none other than Iran. With no formal relationship between the two countries, a specialized Department of Defense task force tried to secure special permission from the US government to seek aid from Iran in setting up a national pharmaceutical company in Afghanistan and in the development of four mines. Engagement “likely faltered” according to the article, due to objections from oversight committees in Congress.
- Kazakhstan’s national electrical utility grid operating company announced a share offering yesterday. KEGOC (Kazakhstan Electricity Grid Operating Company) announced it is the second state-run company to launch an IPO in order to revitalize domestic investment. Kazakh sovereign wealth fund Samruk-Kazyna said that roughly 10% of the company will be sold off in the IPO. The first Kazakh state company to offer an IPO was KazTransOil, which became public in December 2012 after attracting some $168 million in investment.
- Kazakhstan has strengthened legislation against extremism, with President Nursultan Nazarbayev saying that the procedures for the definition of a terrorist group under the law will be simplified, allowing for more broad prosecution of those found guilty under its stipulations. The law will allow the state to shut down groups designated as terrorists immediately and to confiscate their property without redress.