Japan looks to invest in Central Asian energy sector

For the first time since 2006, Japanese Prime Minister Shinzo Abe launched a six-day tour in Central Asia with the goal of boosting energy cooperation in the region. Tokyo is believed to be on the edge of the implementation of a new policy for increasing its presence in Central Asia, ostensibly aimed to counter China’s increasing influence. Abe already signed an agreement in Ashgabat, on development of the largest gas field, Galkynysh. TAPI pipeline construction will start in 2016 according to Turkmenistan state media news. Overall, the project considers some 428 industrial facilities that add up to a total $9.7 billion. This large-scale plan includes construction of Turkmenistan-Afghanistan-Pakistan-India (TAPI) transnational gas pipeline with 33 billion cubic meters of capacity, gas-chemical complex, a plant for gasoline production, two airports and a cement plant as well as hospitals, houses, schools etc. Tokyo is expected to invest about $10 billion in the project and $2 billion in the port of Turkmenbash.

After Japan’s visit to the Turkmen delegation, diplomats went to Washington on regional security matters after the renewal of Taliban offensive and Obama’s decision to slow down US withdrawal from Afghanistan. Japanese economic and American geopolitical interests are believed to be coinciding in Central Asia, especially on the stabilization of AfPak (Afghanistan-Pakistan) region by its increased linkages to Central Asia.

The Japanese Prime Minister also promised deliver an intensive aid program in Kazakhstan and Uzbekistan. Tokyo is primarily interested in the oil and gas industry of Kazakhstan, where the Japanese company JOGMEC is already actively exploring the northern Caspian shelf. In Uzbekistan, Japan is investing in railways, oil and gas, mining, telecommunications, electronics and textile projects. Abe’s visit will last through 28 October and also include meetings with Tajik and Kyrgyz leaders.

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News Briefs:

  • China finally opened up a more detailed vision of its Central Asian foreign policy, named Silk Road Economic Belt back in 2013. In the first ever event held outside of China, Tbilisi Silk Road Forum, Chinese representatives discussed a goal of developing a network of trade and economic corridors originating from China towards Europe to allow greater connectivity between some of the world’s largest markets. Georgia would be one important partner in this transit corridor. Currently, China is primarily concerned over development of relevant infrastructure for increasing trade and commerce. The Asian Development Bank already runs a long-term Central Asian project and the European Investment Bank has funded number of infrastructural developments.
  • Iran’s navy is set to undertake a rare visits around the Caspian Sea. Three Iranian vessels will pay Iran’s second visit to the Russian Caspian Flotilla in Astrakhan since summer 2013 and a first ever visit to Azerbaijan. The Russian visit was well planned beforehand during Defense Minister Sergey Shoigu’s visit to Tehran whose agenda contained more naval port calls. Iran will send its most powerful ship, Damavand to Russia, however, the novelty still goes to its decision to berth in Azerbaijan. The two countries maintained rather cool ties as Baku remains in partnership with the US in terms of naval development. However, in parallel to normalization of West-Iran relations, Azerbaijan has been exploring improved military relations with Iran.
  • Both Kazakhstan and Uzbekistan’s state media services are actively hinting about their leaders’ choice of political successors. Kazakh president Nursultan Nazarbayev has recently elevated his daughter Dariga to deputy prime minister position. As a result, he significantly strengthened her political influence suggesting her future take over of the presidential or prime minister post if Kazakhstan follows its plan to convert from the centralized to parliamentarian system. In Uzbekistan, clan division and contestation over power is a major challenge to the 77-year-old President Karimov. Media recently leaked the information over Karimov’s decision to promote his youngest daughter Lola as his successor who is considered to be a rival of his elder sister Gulnara, each representing different clans of Tashken and Fergana.
  • Russia and US reached an agreement on aircraft regulation in Syria serving to minimize the risk of air collisions. Russian official named the agreement as a potential for US-Russia counterterrorism cooperation, whilst Washington denied any establishment of zones of cooperation or sharing intelligence in Syria. The deal was called a narrow arrangement that implies an agreement over maintaining safe distance between the aircraft and frequent communication on the ground. The deal was preceded by several occasions when Russian aircraft came too close to US warplanes. In parallel the Pentagon complained that Russian airstrikes primarily target rebel forces rather than Islamic State fighters.
  • Azerbaijani authorities arrested seven officials from the National Security Ministry with an accusation of power abuse. President Ilham Aliyev dismissed the head of the ministry just few days prior without providing a clear reason. These developments take place in the context of tightened governmental constraint over opposition groups. Azerbaijan will hold parliamentary elections in a month from which OSCE monitoring group already renounced itself pointing at too harsh restrictions.
  • Latvia plans to build a fence along its 270-kilometer border with Russia to stop the flow of illegal immigrants from its eastern neighbor. Fence-building is part of a 20 million euro project with the goal to strengthen and better mark Latvia-Russian border and will last up to four years. The project was initiated a while ago but has been only recently prioritized due to a migrant crisis in Europe. About 300 hundred migrants mostly from Vietnam, but also from Iraq and Syria already crossed the border illegally this year from the Russian territory. As the Interior Ministry spokesperson stated the fence will cover 90km of the land border and will be equipped with high-tech sensors.