Day: April 11, 2022

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Economic output in ECA region forecast to contract by more than 4.1 percent in 2022, says WB report

Europe and Central Asia Economic Update, Spring 2022: War in the Region, in particular, notes that the Europe and Central Asia (ECA) region's economy is now forecast to shrink by 4.1 percent this year, compared with the pre-war forecast of 3 percent growth, as the economic shocks from the war compound the ongoing impacts of the COVID-19 pandemic.

The World Bank expects the Ukrainian economy to shrink by 45.1 per cent this year as a result of the Russian military operation, while Russia will see its economy contract by 11.2 per cent in the same period.

Moreover, the war has added to mounting concerns of a sharp global growth slowdown. The economic impact of the conflict has reverberated through multiple global channels, including commodity and financial markets, trade and migration links, and confidence. Neighboring countries in the Europe and Central Asia region are likely to suffer considerable economic damage because of their strong trade, financial, and migration links with Ukraine and Russia, according to the report.

In addition to Russia and Ukraine, Belarus, Kyrgyzstan, Moldova and Tajikistan are all projected to fall into recession this year due to spillovers from the conflict, weaker-than-expected growth in the euro area and trade shocks.

Russia and Ukraine account for about 40 percent of wheat imports in the region and about 75 percent or more in Central Asia and the South Caucasus. Russia is also a major export destination for many countries, while remittances from Russia are close to 30 percent of GDP in some Central Asian economies (Tajikistan, Kyrgyzstan).

The Ukraine war and the pandemic have reportedly once again shown that crises can cause widespread economic damage and set back years of per capita income and development gains.

“Governments in the region should fortify their macroeconomic buffers and credibility of their policies to contain risks and deal with potential fragmentation of trade and investment channels; strengthen their social safety nets to protect the most vulnerable, including the refugees; and not lose focus on improving energy efficiency to ensure a sustainable future,” Asli Demirgüç-Kunt, World Bank Chief Economist for Europe and Central Asia said.

Source: Asia-Plus

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Russians and Belarusians open 11,940 bank accounts in Kazakh banks

The event has reportedly brought a mini-boom in custom for banks in Kazakhstan. Russians and Belarusians are traveling to the country to circumvent financial sanctions imposed because of the war.

Citizens of those two countries locked out of the global banking system have opened nearly 12,000 accounts in Kazakh banks since Russia invaded Ukraine on February 24, Kazakhstan’s financial regulator said on April 8, according to Eurasianet.

That reportedly represents an 8-percent rise on the number of bank accounts they previously held in Kazakhstan.

Russians and Belarusians have opened 11,940 bank accounts since February 24, bringing the total to 162,000, according to data from the Agency for Regulation and Development of the Financial Market quoted by Vlast.kz.

The vast majority are personal bank accounts held by individuals. Just seven were opened by companies, bringing the total number of corporate bank accounts held by Russian and Belarusian firms in Kazakhstan’s banking system to 805.

Some 10,000 Russian citizens received personal identification numbers – known as INNs and required to open bank accounts – in Kazakhstan’s e-government system between February 24 and April 2, the Interior Ministry said recently, according to Eurasianet. . It did not provide comparative data, but the figure appears high for such a short period.

As citizens of countries, which are fellow members of the Eurasian Economic Union (EAEU), Russians and Belarusians benefit from simplified residence and employment rules in Kazakhstan. They can easily obtain permission to work, and can remain in the country for 90 days at a time without residence permits.

This makes traveling to Kazakhstan to open bank accounts straightforward, especially from neighboring Russia.

It does not, however, afford them particular advantages in obtaining personal ID numbers or opening bank accounts, which all foreigners can do with relative ease.

The financial regulator was at pains to stress that due diligence is performed on new customers, including stringent ID checks.

Eurasianet adds that Russians are also being lured to Uzbekistan by Russian travel agencies offering special packages purely to open bank accounts instead of doing the usual tours around exotic Silk Road sites.

Tours cost around $270 without flights at current exchange rates. They include assistance with preparing paperwork in advance to open an account, and a visit to a bank to sign documents and collect a debit card.

There is no data available on how many citizens of Russia have jetted into Uzbekistan to take up the offer.

Source: Asia-Plus

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Tajikistan advised to refrain from attracting non-concessional loans.

A report released by the Asian Development Bank on April 8, notes that the latest joint debt sustainability analysis by the World Bank and the International Monetary Fund in February 2022 assessed Tajikistan’s debt-carrying capacity as medium and determined that it is at high risk of debt distress for both external and public debt.

The Asian Development Bank (ADB)’s annual flagship economic publication, Asian Development Outlook (ADO) 2022, highlighted that Tajikistan’s public debt at the end of 2021 reached the equivalent of 43.8% of GDP, of which nearly 87% was external. External debt service equaled 15.9% of export value in 2021, somewhat above the 15.0% threshold for countries with medium debt-carrying capacity. However, this ratio is expected to stabilize after Tajikistan’s eurobond is repaid in 2027 and fall below 15.0% by 2028, according to the report.

The report notes that in 2022, the government reportedly plans $453 million in concessional borrowing from external sources. In 2020, the Debt Service Suspension Initiative of the Group of Twenty reportedly postponed more than $43 million in debt service owed by Tajikistan.

Tajikistan’s high risk of debt distress reflects several factors: chronic fiscal deficits that, if measured by international standards, would count loans as financing rather than revenue; past heavy use of non-concessional borrowing, including $500 million in eurobonds with a 7.125% interest rate; failure to conduct economic assessments when selecting investment projects; and the decision to undertake the Roghun hydroelectric project, whose initial cost of $3.9 billion has risen thus far to $4.8 billion and required considerable external financing. Losses from natural disasters and the cost of pandemic response have added to the debt burden.

Various initiatives reportedly can strengthen debt sustainability. These include maintaining the prohibition on non-concessional external borrowing; using cost–benefit analysis when selecting public investment projects and limiting the size of the investment budget; improving the performance of loss-making SOEs; promoting private sector growth through measures to improve the investment climate; taking steps to rely less on external borrowing by developing the domestic capital market, including a secondary market in government securities to encourage commercial banks and other parties to buy and hold government debt; and regularly publishing Ministry of Finance reports on public debt, including the audited annual statements of the 15 largest state-owned enterprises (SOEs).

Under the World Bank country classifications by income level, Tajikistan with its Gross National income (GNI) per capita of US$1,060 is currently in the lower-middle income category.

The World Bank assigns the world’s economies to four income groups—low, lower-middle, upper-middle, and high-income countries. The classifications are updated each year on July 1 and are based on Gross National income (GNI) per capita in current USD (using the Atlas method exchange rates) of the previous year (i.e. 2020 in this case).

For the current 2022 fiscal year, low-income economies are defined as those with a GNI per capita, calculated using the World Bank Atlas method, of $1,045 or less in 2020; lower middle-income economies are those with a GNI per capita between $1,046 and $4,095; upper middle-income economies are those with a GNI per capita between US$4,096-US$12,695, and high income economies are those with a GNI per capita more than US$12,695

As of January 1, 2022, Tajikistan’s external debt amounted to about 3.3 billion U.S. dollars, according to the Tajik Ministry of Finance (MoF).

The Export-Import Bank of China (Eximbank) remains the largest creditor of Tajikistan over the past 12 years – 1.2 billion U.S. dollars. Tajikistan’s large-scale borrowing from China started around 2006.

Source: Asia-Plus

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A 21-year-old man was killed in a car accident

On April 8, 2022, at approximately 10:10 p.m., the driver of an Opel Zefira, Rajabaliev Bakhtovar Yunusalievich, born in 1992, resident of Shahritus district, while driving from Shahritus district to Qubodiyon district, on the territory of Jamoat Navobod village was not able to control the vehicle and overturned on the side of the road.

As a result, the passenger of the car Ahmedaliev Erkinboy Shuhratovich, born in 2001, resident of Rudaki district, received serious injuries and died at the scene.

An investigation is under way.

Source: Ministry of Internal Affairs of the Republic of Tajikistan

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Russia revokes registration of fifteen international organizations

Western media reports say the announcement came on the 44th day of Russia’s so-call “special military operation” in Ukraine.

The Russian Justice Ministry said in a statement released on Friday that these organizations, including human rights watchdogs Amnesty International and Human Rights Watch (HRW), were taken off Russia’s registry of international organizations to “violations of the current legislation of the Russian Federation.”

The ministry did not Justice Ministry said in a statement without providing further details.

Russia’s move also effectively shut down the local offices of the Carnegie Endowment for International Peace, Friedrich Naumann Foundation for Freedom, the Friedrich Ebert Foundation, the Aga Khan Foundation (Switzerland), and the Wspolnota Polska Association, among others.

Over the past year, Russian authorities have reportedly been presiding over an unprecedented crackdown on dissent and independent journalism that has included dubbing non-governmental organizations and media outlets as “foreign agents.”

Source: Asia-Plus

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Tajik Boxer Usmonov Wins Gold Medal at the GeeBee Boxing Tournament-2022 in Helsinki

Tajik boxer Bahodur Usmonov won a gold medal at the 40th international boxing tournament in Finland in memory of Gunnar Barlund, known under the pseudonym GeeBee, reported the National Olympic Committee of Tajikistan.

The tournament was held from April 7 through 10 in Helsinki with the participation of more than 100 athletes from Finland, Norway, Sweden, Estonia, England, Wales, Scotland, Tajikistan, Kazakhstan, Armenia, Hungary, France, Germany, Bulgaria and Ukraine.

Usmonov in the weight category up to 63.5 kg started the competition from the quarterfinals (in the first round he was free) and defeated the representative of Armenia Hamlet Mnatsakanyan with a score of 5:0.

In the semi-finals, he defeated his Hungarian rival Richard Kovacs 3-2. Then in the final, Tajik boxer defeated the Scottish athlete Risi Lunch with a score of 4:1 and won the gold medal.

GeeBee Boxing Tournament-2022 have been held since 1982. This year the fights were held in 4 weight categories among women and 11 weight categories among men.

Source: National information agency of Tajikistan

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Thousands of students involved in lengthy rehearsals in Panjakent for meeting the president

A local resident has told Asia-Plus on the basis of anonymity that the rehearsals are being carried out from morning to evening, and therefore, classes are practically not held in schools.

The chairperson of the Panjakent Education Department, Ms. Shohida Mukammalova, has confirmed in an interview with Asia-Plus that 6,000 students are involved in the rehearsals. “They have been participating in the rehearsals both during classes and after them,” Ms. Mukammalova noted.

According to her, neither the Ministry of Education nor any other authorized agency has made a decision on involving students in these rehearsals.

“The students have been involved in the rehearsals on the basis of a letter from the Panjakent Culture Department,” Ms. Mukammalova added.

Local residents say that from morning to evening, the central square and the streets of the city are filled with schoolchildren and students having a rest before their turn to march in the central stadium. Teachers are also involved in these rehearsals.

Such obligatory displays of national pride are a long-standing tradition in Tajikistan and show little sign of being phased out.

Source: Asia-Plus

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Tajkistan / Politics / European Union Special Envoy for Afghanistan pays two-day visit to Tajikistan for consultations

The Special Envoy reportedly held discussions with President of Tajikistan Emomali Rahmon, the Minister of Foreign Affairs Sirojiddin Muhriddin, the Minister of the Internal Affairs Ramazon Rahimzoda and Commander of Border Troops, Colonel-General Rajabali Rahmonali as well as a range of other representatives of international organizations and diplomatic representatives.

Mr. Niklasson discussed the EU priorities on Afghanistan, especially the shared concerns on the lack of an inclusive political process in Afghanistan, which is a precondition for long-term peace and stability in the country. Interlocutors discussed also the human rights situation in Afghanistan, especially the situation for women and access to education for girls. Security implications for the region, including challenges on trafficking of drugs and weapons, as well migration and the situation of refugees were also discussed. The regional dynamics and geopolitical developments were also topics of discussion.

The EU Special Envoy, in particular, stated that his consultations in Tajikistan showed that Tajikistan and the EU share a common vision for a strong, independent, peaceful and stable Afghanistan. “A country, where the population enjoys the full rights and freedoms afforded to them by the commitments made by the state of Afghanistan, which does not pose or harbor threats to other countries. Our discussions focused especially on the need for genuinely inclusive political processes in Afghanistan, crucial for long terms stability. I look forward to further consultations in the region in the weeks and months to come,” Mr. Niklasson said.

The EU reportedly remains committed to assisting the Afghan people. The EU and its Member States have substantially increased support to the humanitarian assistance and basic needs. At the pledging event on March 31, the EU and the Member States contributed more than 500 million euros for 2022 out of the 2.2 billion euros pledges for Afghanistan by the international community.

In Tajikistan, the EU programs contribute to stabilization of the border with Afghanistan, capacity building for border management and emergency response, counterterrorism, humanitarian and refugee response preparedness, but also resilience and development of border communities.

Last week, Mr. Niklasson also had a meeting in Brussels with Special Envoys and Representatives from France, Germany, Italy, US, UK, Norway and the Special Representative of the UN Secretary General, Deborah Lyons, Head of United Nations Assistance Mission in Afghanistan.

The mandate of the EU Special Envoy for Afghanistan covers two broad areas. The first concerns the overall coordination of EU engagements related to a process of political consolidation in Afghanistan. In this context, the EU Special Envoy maintains contacts with and implements the EU policy on Afghanistan vis-à-vis a broad range of Afghan stakeholders, including the de facto authorities as well as civil society representatives. The second main area of his work concerns dialogue and cooperation with Afghanistan’s neighbors, the countries of the region, and key partners all over the world, in view of having a common understanding and formulating joint approaches in the promotion of a stable, secure, democratic and prosperous future for Afghanistan.

The EU policy on Afghanistan is guided by five benchmarks agreed in September 2021 by the 27 Foreign Ministers of the EU. These benchmarks, or areas of focus, orientate the EU’s engagement with the Taliban de facto authorities and concern i) unhindered humanitarian access, ii) respect for human rights, notably those of women, children, and minorities, iii) a process enabling an inclusive and representative governance system, iv) effective counter-terrorism measures and v) ensuring the safe passage of EU nationals and those wishing to leave Afghanistan.

The President of the European Commission announced in October 2021 a 1 billion euro “Afghanistan Support Package”, including substantially increased humanitarian aid, additional basic needs assistance for the population in the areas of education, health and livelihoods, and continuing support for the region to address the protracted Afghan displacement situation. Close to half of this amount was already contracted before the end of 2021.

The humanitarian assistance pledges by the EU and its Member States at the UN high-level meeting on Afghanistan in September 2021 amounted to EUR 677 million. The EU pledged EUR 113 million at the UN High-level Pledging Conference for Afghanistan on 31 March. The joint pledges by the EU and its Member States on this occasion reached almost 25% of the overall pledges (USD 597 million out of USD 2.4 billion).

Source: Asia-Plus

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Three ways the Russia-Ukraine conflict could escalate and drag NATO in

The challenge for NATO throughout this war has been how to give its ally Ukraine enough military support to defend itself without getting drawn into the conflict and finding itself at war with Russia.

The Ukrainian government has reportedly been explicit in its calls for help.

Ukraine reportedly wants tanks, warplanes, drones and advanced missile air defense systems to counter Russia's increasing use of air strikes and long-range missiles that are steadily depleting Ukraine's strategic stores of fuel and other essentials.

The risk of Russia resorting to using tactical (ie short range) nuclear weapons or of the conflict spreading beyond Ukraine's borders into a wider European war is constantly in the backs of western leaders' minds and here the stakes are dangerously high, according to the BBC.

Over 30 Western countries have reportedly provided military aid to Ukraine including €1bn from EU and US$1.7bn from US. Supplies so far limited to arms, ammunition, and defensive equipment like anti-tank and anti-aircraft missile systems: they include Javelins which are shoulder-held anti-tank weapons that shoot heat-seeking rockets, Stingers, man-portable anti-aircraft weapons; and Starstreak, a UK-made portable air defense system.

NATO members reportedly fear supplying heavier offensive equipment like tanks and fighter jets could lead to direct open conflict with Russia. That, however, has not prevented the Czech Republic from giving T72 tanks

President Putin reminded the world early on in this war that Russia is a nuclear weapons power and that he was moving its strategic nuclear deterrent up to a higher degree of readiness.

The US did not follow suit as it detected no movement of Russian nuclear warheads out of their secure storage bunkers, but Putin's point was made, according to the BBC.

Russian military doctrine reportedly allows for the early use of low-yield, tactical nuclear warheads on the battlefield, knowing that the West has abhorrence for nuclear weapons that have not been used in anger for 77 years.

NATO strategic planners reportedly worry that once the nuclear taboo is broken, even if the damage is limited to a localized target on the Ukrainian battlefield, then the risk of escalation to a catastrophic nuclear exchange between Russia and the West inevitably goes up a notch.

Tobias Ellwood MP, who chairs Parliament's Defense Committee, is reportedly one of those who believes Putin is bluffing when he raises the specter of nuclear weapons and that NATO should be doing more.

According to the BBC, there are number of potential scenarios, which will doubtless be occupying minds in Western defense ministries.

Here are just three of them:

1. A NATO-supplied anti-ship missile fired by Ukrainian forces in Odesa hits and sinks a Russian warship offshore in the Black Sea with the loss of nearly 100 sailors and dozens of marines. A death toll of this magnitude in a single strike would be unprecedented and Putin would be under pressure to respond in some form.

2. A Russian strategic missile strike targets a supply convoy of military hardware crossing from a NATO country, like Poland or Slovakia, into Ukraine. If casualties were sustained on NATO's side of the border that could potentially trigger Article 5 of NATO's constitution, bringing the entire alliance to the defense of the country attacked.

3. Amidst fierce fighting in the Donbas an explosion occurs at an industrial facility resulting in the release of toxic chemical gases. While this has already occurred, there were no deaths reported. But were it to result in the sort of mass casualties seen in Syria's use of poison gas at Ghouta and if it were found to have been deliberately caused by Russian forces, then NATO would be obliged to respond.

Source: Asia-Plus