Foreign Ministers from Germany, France, Russia, and Ukraine agreed on Saturday on steps to bring more stability to war-torn eastern Ukraine. Specifically, the provision to remove heavy weapons from the front lines has been discussed, with German FM Steinmeier stating that “I can tell you with relief that our meeting today has been one of the less confrontational and more successful ones,” according to a released statement.
Russian FM Lavrov, however, said that while the “deal was 90% ready….the devil is in the details.” However, contentious issues remain, namely the election processes and the related constitutional issues relating to autonomy of east Ukraine regions. The Minsk Accords, agreed in Belarus in February, and has been widely considered to be a failure up until this point, when this high-level political agreement took place. Another meeting has been set for October 2, according to a statement released by the Kremlin.
Ukraine is set to hold local elections on October 25, but said it would not hold them in rebel-held areas because of continued violence which has created new tensions. However, Russian backed separatist have announced they would hold their own ballot in mid-October and early November.
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- The Diplomat has an interesting article on South Korea’s growing ties with Uzbekistan, noting that South Korean companies account for 15.4% of all Uzbek imports, which are surpassed only by close neighbors like Russia and China. South Korea is also investing in the Surgil gas field to construct a large gas processing plant worth an estimated $12 billion and the attention led to the Asian Development Bank’s backing of several solar projects within Uzbekistan. Additionally, the textiles market has sparked major South Korean interest, although this has exposed Korean companies to criticism from human rights groups due to Uzbek cotton harvesting practices (which utilized temporary forced labor and constitute a form of slavery).
- Russian regional polls held yesterday barred opposition political groups from participation as Vladimir Putin tries to maintain control over the government as the economy descends further into recession. Opposition coalitions, including those led by Alexei Navalny, intended to use the polls as a springboard into obtaining seats in the Duma next year, but opinion polls still show that Putin is riding a wave of patriotic support linked to the sanctions and the situation in Ukraine. His approval ratings stand at a whopping 83%, which is still a decline since the conflict in Ukraine began over a year ago.
- Mongolia is being pushed once again as a growth frontier market, with investors pushing its retail offerings as being relatively uncorrelated with the decline in commodity prices that originally drove growth in the economy. But the analysts are quick to note that Mongolia’s biggest event on the horizon is not the approval of any new mines, but the rollover of the $1.5 billion sovereign bonds coming due in the coming years – all of which builds towards a situation where distressed asset prices in real estate and equities listed on the Mongolian stock exchange will present an excellent opportunity to buy.
- Taliban insurgents in Ghazni today have freed some 350 inmates, killing four Afghan security forces and further casting doubts over the ability of the Taliban or the Ghani government to negotiate in good faith over a peace treaty. The peace talks were completely derailed when it was revealed that a fierce internal struggle within the Taliban is taking place over the succession of Mullah Omar, the figurehead ostensibly in charge of the Taliban who was confirmed dead over the summer. US and Chinese officials observed the beginnings of the peace process in July, but the prognosis does not look good.
- Maritime energy transportation in Caspian Sea is finally seeing some competition. For many years, the market has been dominated by Azerbaijan’s Kaspar state-owned Caspian Shipping Company, probably due to the likelihood of an agreement between the five Caspian littoral states (Kazakhstan, Russia, Turkmenistan, Azerbaijan, and Iran). Kazakhstan in particular has been investing in a new tanker fleet, and a director of the Caspian Shipping Company has reported that it has been buying large bulk tankers with some 13,000 tons of capacity. The Caspian Shipping Company in response is eyeing funding from proposals by the European Union to keep its monopoly through the TRACECA program launched in 1993 which supports the creation of a trade corridor from the Caspian through the Caucasus into the Black Sea.
- SOCAR, Azerbaijan’s state oil company, is expected to slightly increase its oil production by late 2015, according to new estimates from the US Energy Information Administration’s Short-Term Energy Outlook, which often shares information with OPEC cartel members. Average volume of Azeri oil production has been upticking quite slowly, and the final quarter of 2015 is predicted to be at some 0.87 million barrels. Azerbaijan also seems to switching production to midstream natural gas transportation projects. Gas exports have been increasing at a breakneck speed in the place of oil.