2011 World Economic Forum on Europe and Central Asia inaugurated; Kyrgyzstan President says Kyrgyzstan welcomes foreign investors; Kazakhstan’s upper house of parliament rejects deployment of troops to Afghanistan; Grigori Marchenko, the IMF candidate ba
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    • The 2011 World Economic Forum opened a two day conference devoted to European-Central Asian economic cooperation in Vienna. Over 500 participants along with heads of state and government from 12 countries took part in this event. Kyrgyz President Roza Otunbayeva and Kazakhstan’s Economy Minister Kairat Kelimbetov represented their respective countries. The conference focused on issues of improving competitiveness, managing risks and using natural resources wisely. The head of the organization’s Europe and Central Asia department, Stephen Kinnock, emphasized the goal of the conference was to “highlight the partnerships that are already working in the region and to build the new bridges between Europe and Central Asia that will drive sustainable growth through collaborative innovation.”1 Innovation was to become one of the key factors in establishing trade relations on a long-term basis rather than Central Asian countries hinging their economies on export of natural resources alone. Eurasian Development Bank (EDB) Chairman Igor Finogenov told the forum that growth of Central Asian regional economy will improve if integration is promoted and called on Central Asian states to unify their infrastructure in the spheres of electricity, water and transport to encourage regional economic growth.2

    Addressing World Economic Forum Kyrgyz President Roza Otunbayeva said Kyrgyzstan’s business environment is welcoming to foreign investors and the “state will be a reliable partner for investors.” 3 She also said, “Kyrgyzstan’s economy and its laws are among the most liberal. In this contrary, monetary policy has a flexible decision-making system, good infrastructure and manpower with the necessary skills. In connection with innovative companies from leading states, our businesses may be used for entering new markets.”4

    Kazakhstan’s upper house of parliament, the Senate, rejected a bill to send servicemen to join NATO’s International Security Assistance Force (ISAF) mission in Afghanistan on 9th June. The proposal to reject the bill was promoted by the International Affairs, Defense and Security Committee. The lower house or the Majilis had approved the plan on May 18 to send four officers to join ISAF in the war-ravaged country and the bill intended to send the troops to Afghanistan for a period of six months in support of the coalition forces there. The Taliban in May warned Kazakhstan of “serious consequences” if it sent military personnel to Afghanistan.5

    Grigori Marchenko, who has pulled out of the race to run the International Monetary Fund (IMF), was a reluctant contender who first heard of his candidacy by text message on the day it was agreed at a meeting of the Commonwealth of Independent States (CIS), the group of former Soviet countries.6 Marchenko, the head of the National Bank of Kazakhstan was promoted as the IMF candidate by the former Soviet Commonwealth of Independent States (CIS) in May. The focus on geopolitics underplayed his personal qualifications to be a candidate. The developing countries are unable to arrive at a unanimous consensus to nominate any candidate from a developing country. Marchenko, an energetic economist, with an almost professorial manner, is one of the developing world’s most outstanding central bankers. He won acclaim for steering Kazakhstan through a successful bank restructuring during the financial crisis, and before that, for managing the impact of the 1998 Russian financial crisis. He said that G8 countries may have agreed to back the French finance minister, even before the sudden resignation of Dominique Strauss-Kahn, who was expected to leave in July to campaign in the French presidential elections.7

    Malaysian Prime Minister Datuk Seri Najib Tun Razak on official visit to Astana announced that Kazakhstan and Malaysia will carry out five signature projects that will lead to greater Malaysian investment in Central Asia’s largest economy. Najib Razak said Malaysians will invest in energy exploration in Kazakhstan, through its state-owned oil and gas company Petronas, in exchange for Kazakh involvement in Petronas projects in third countries. Apart from this it will invest in Kazakh Islamic bank, cattle breeding, energy generation and construction of a hotel. "Our trade is estimated at $100 million after a 30 percent rise last year, but still it does not reflect our country’s potential," said the Kazakh president.8 The projects will be implemented by both the countries at the earliest.

    India’s GAIL national gas company and Indian Oil and Natural Gas Corp (ONGC) are eyeing ExxonMobil’s share in the supergiant Kashagan oil field in Kazakhstan, Gail Chairman B.C. Tripathi said on June 8th. GAIL and ONGC moved to buy an 8.4 percent equity stake from the American multinational oil and Gas Corporation for around $5 billion. ExxonMobil holds a 16.81 percent stake of the consortium along with Total, Agip, Royal Dutch Shell and KazMunaiGas, each with the same size of holding. The companies led by ONGC Videsh tendered a “non-binding but firm indicative bid” to ExxonMobil for 50 percent of its holdings in the Kashagan field, one of the world’s largest oil finds in four decades.9

    Kyrgyz Foreign Minister Ruslan Kazakbayev on June 10 attended the first Kyrgyz-U.S. Annual Bilateral Consultations (ABCs) in the U.S. capital Washington, DC. U.S. Assistant Secretary of State for South and Central Asia Robert Blake also attended the meeting. Blake said, “There are numerous opportunities for the U.S. and Kyrgyzstan to collaborate to promote business…The private sector plays an important role in our efforts to achieve these goals through trade and investment. We make it our mission to do as much as we can to help U.S. companies expand their exports and business overseas and resolve any problems they might experience.”10 Blake also urged the Kyrgyz government to reconsider its condemnation of Kimmo Kiljunen, who led the international inquiry into the country’s 2010 ethnic violence. The Kyrgyz parliament barred him from the country shortly after the report was published.11

    The Asian Development Bank (ADB) has agreed to provide a $55 million for the Central Asian interstate highway project to improve the 37-mile stretch of highway linking the Kyrgyz capital Bishkek and Kashi in China. The work will be carried out under the Central Asian Regional Economic Cooperation (CAREC) Program, which encompasses a network of six trade corridors interconnecting the Central Asian states and linking up with surrounding countries. ADB-supported CAREC was established to bolster cooperation by means of trade, transport, and energy links between the five Central Asian nations and their neighbors Afghanistan, Azerbaijan, China, Mongolia and Pakistan.12

    Tajik Customs Service chief Gurez Zaripov said that Tajikistan will follow Kyrgyzstan into the customs union. At a Customs Services Council meeting in the Siberian city of Irkutsk, he announced that Tajikistan “will join to the union after Kyrgyzstan, which has already made a decision”. However he pointed out that Tajikistan would need to first demarcate its borders.13 In the meanwhile, Tajik President Emomali Rahmon on 6th June addressed the European Parliament in Strasbourg on Central Asian cooperation issues and the region’s ongoing water problems. Rahmon asked for European support to help resolve conflict issues in Central Asia related to scarce water resources. The mountainous water-rich republic is in continuous conflict over the sharing of resources with its neighbors in the water-parched region. The country lacks hydropower production capacity to meet domestic demands for electricity and is in the process of constructing a large hydroelectric dam that has been strongly criticized by downstream neighbor Uzbekistan, which claims it will divert the region’s rare water resources from crops. “We expect that the European Union in the framework of its Strategy for Central Asia will be more inclusive to pay attention to issues of strengthening cooperation among regional countries, strengthen confidence, giving new impetus to the civilized nature of the relationship and the removal of obstacles to free movement of goods, capital and labor,” Rahmon said.14

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