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Qishloq Ovozi

An employee changes an exchange rate sign at a currency exchange office in Almaty in February.

The year 2015 was rough for Central Asia and though it’s unwise to forecast, I’ve got a feeling 2016 is going to be a very eventful year in the region -- and not in a good way.

The year that’s coming to a close saw a drastic economic downturn in Central Asia and an increase in security concerns as the situation in northern Afghanistan deteriorated and the threat of the Islamic State (IS) militant group grew in the minds of Central Asian government officials.

To be fair, many experts in the field of Central Asian studies contend that the security fears are overblown and being used by Central Asia’s governments as a pretext for eliminating perceived domestic opponents.

So was 2015 a temporary setback for Central Asia or the first signs of a longer-term turn for the worse?

RFE/RL’s Turkmen Service, known locally as Azatlyk, assembled the Majlis, a panel, to discuss events in Central Asia in 2015 and what those events might portend.

And for this one, the Majlis brought in people who follow events in Central Asia as closely as anyone in the world.

Azatlyk Director Muhammad Tahir moderated the discussion. Participating from RFE/RL’s Kyrgyz Service, known locally as Azattyk, was Director Venera Djumataeva; from RFE/RL's Tajik Service, known locally as Radio Ozodi, was Ozodi Director Sojida Djakhfarova; and from RFE/RL's Uzbek Service, known locally as Ozodlik, was Senior Correspondent Sirojiddin Tolibov. I also sat in on behalf of RFE/RL's Kazakh Service, known locally as Azattyq.

There were some important elections in Central Asia in 2015, both parliamentary and presidential.

Tajikistan conducted parliamentary elections on March 1 and brought to an end any hint of political pluralism. As Djakhfarova pointed out, after 18 years of a government that included members of genuine opposition parties, the 2015 parliamentary elections “deprived two major opposition parties from seats in the parliament.”

Before the end of 2015, one of those opposition parties -- the Islamic Renaissance Party of Tajikistan -- would have its registration canceled by a court decision and later was declared to be an illegal extremist group.

Kyrgyzstan provided one of the bright moments of 2015 when it conducted its parliamentary elections on October 4. “It was a big political testament in Kyrgyzstan for parliamentary democracy, for the young parliamentary system in Kyrgyzstan, which [is] the only one that exists in Central Asia so far,” Djumataeva said.

Those elections did have some shortcomings and the new deputies have yet to prove they can meet the high expectations the electorate has for them, but the campaigning process was, arguably, the best Central Asia has ever seen.

There were presidential elections also in Kazakhstan and Uzbekistan. Kazakh President Nursultan Nazarbaev and Uzbek President Islam Karimov, the only two leaders in the CIS who have ruled their countries since the first day of independence (and even before that), conducted early elections and received fresh mandates to lead their countries.

There was speculation that the two wanted new terms before the reality of the expected economic crisis in Central Asia really took hold.

Karimov was reelected on March 29 and Nazarbaev on April 26, both officially receiving more than 90 percent of the vote.

Economic Crisis

The economies in their countries, and the other Central Asian states, were already showing signs of severe strain, with several factors combining to the detriment of the region.

There were some states that had grown reliant on remittances from migrant laborers, mainly in Russia. The devaluation of the Russian ruble, caused by falling oil and gas prices on world markets and Western sanctions on Russia for the Kremlin’s role in fighting in eastern Ukraine, impacted millions of Central Asian migrant laborers working in Russia.

Millions of people from Uzbekistan have been sending home money earned in Russia for many years, some $6.6 billion in 2013. Tolibov pointed out “remittances from Russia and abroad decreased by 40 percent,” in 2015 and he added some migrant laborers are returning to Uzbekistan where “the unemployment rate is increasing.”

This has also been a problem in Kyrgyzstan, one of the most remittance-dependent countries in the world.As has been true throughout Central Asia, Kyrgyzstan’s national currency -- the som -- has depreciated in value. Djumataeva noted during 2015 that “Prices jumped up much higher than 30 percent; it is around 50 percent,” which she said led to “half of the construction companies [in Kyrgyzstan] facing bankruptcy.”

And the problem is even more acute in Kyrgyzstan’s agricultural sector.

Kazakhstan’s national currency -- the tenge -- started the year with an exchange rate of some 180 tenge to $1 but as the year drew to a close the rate was some 330 tenge to $1.

In Kazakhstan’s case the cause was more the falling price of oil, the country’s major export, coupled with the economic woes of two of its main trading partners -- Russia and China.

The falling price of natural gas created similar problems in Turkmenistan, where for the first time in many years there were reports of layoffs in the gas sector and even a strike by gas workers in the eastern Lebap Province.

The effects of fighting in northern Afghanistan spilled over into Central Asia.
The effects of fighting in northern Afghanistan spilled over into Central Asia.

Added to economic troubles were problems south of the Central Asian borders, in Afghanistan. Foreign forces completed their drawdown at the end of 2014 and the previously, relatively peaceful northern provinces saw a large uptick in violence. The provincial capital of Kunduz, not far from Tajikistan, briefly fell into the hands of Taliban and foreign militants in late September. Fighting farther west reached the Turkmen border in several places during the last few months of 2015.

And then there was the specter of the Islamic State (IS) militant group. Hundreds of Central Asians have gone to Syria and Iraq to join the world’s richest terrorist group. Most had been recruited in Russia, where they were working as migrant laborers. But some, including notably the head of Tajikistan’s Interior Ministry commando units, left from Central Asia to join IS.

Russian officials warned Central Asian governments about the growing threat from IS throughout 2015, but these officials were essentially preaching to the choir. The Central Asian governments needed little urging to initiate legislation and measures that simultaneously allowed them to neutralize potential domestic regime opponents, both religious and secular.

The panel discussed these issues in greater detail as well as dealing with other topics.

Listen here for the full audio:

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(Left to tight:) Indian Vice President Hamid Ansari, Pakistani Prime Minister Nawaz Sharif, Afghan President Ashraf Ghani, and Turkmen President Gurbanguly Berdymukhammedov take part in a ceremony to launch the construction of the TAPI pipeline in Mary on December 13.

The leaders of Turkmenistan, Afghanistan, Pakistan, and the vice president of India gathered near the Turkmen city of Mary on December 13 to launch the construction of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline.

It was reminiscent of December 14, 2009, when the leaders of Turkmenistan, China, Kazakhstan, and Uzbekistan gathered in Saman-Depe, Turkmenistan, near the Uzbek border, to launch another gas pipeline.

There is a very big difference in the two launches, however.

The 2009 event in Saman-Depe marked the actual start of gas supplies from Turkmenistan, through Uzbekistan and Kazakhstan, to China. The pipeline (the first of four) in this case was complete.

The 2015 event was more about a hope that many feel is misplaced. Not one section of pipe has been laid and there are formidable obstacles in financing and hazards along the proposed route.

To understand how difficult it would be to construct the 1,814-kilometer TAPI pipeline to eventually carry some 33 billion cubic meters of gas from southern Turkmenistan all the way to Fazilka, India, RFE/RL's Turkmen Service, known locally as Azatlyk, assembled a Majlis, a panel discussion, to review the situation for TAPI as construction begins in Turkmenistan.

Moderating the panel was Azatlyk director Muhammad Tahir. Participating from Ottawa was Dr. Robert Cutler, a senior research fellow with the Institute of European, Russian & Eurasian Studies at Carleton University. William Byrd, senior Afghanistan expert at the U.S. Institute of Peace and former country director for Afghanistan at the World Bank joined the conversation from Washington. And I was, of course, delighted to throw in some comments of my own.

The idea of TAPI has been around for two decades. From the Majlis to the Qishloq Ovozi blog, we've covered some aspects of this topic in recent months, so to keep things "fresh" here, we'll summarize earlier information and concentrate on newer developments.

Deteriorating Security

The route is fraught with peril, as Byrd noted. "Certainly the security situation is really worrisome and the pipeline route actually goes through some of the more insecure parts of Afghanistan, particularly in the south areas, which basically the Taliban has a large degree of control over and also over areas where individual warlords have some influence."

And for the last few years, the security situation in northern Afghanistan, just across the border from Turkmenistan has been deteriorating rapidly. Questions about security for the pipeline start less than one kilometer inside Afghanistan from the Turkmen border. In 2015, militant groups -- Taliban and the Islamic Movement of Uzbekistan -- briefly captured villages right on the border with Turkmenistan.

And, Byrd added, the situation does not improve much when the route exits Afghanistan. "Let's also not forget," he said, "the pipeline goes through a pretty insecure part of Pakistan as well, [Balochistan] where there's been separatist movements for many decades and so you can't even say for sure that the pipeline is completely secure in parts of the Pakistan route.

Byrd suggested that, for TAPI to be built, some sort of arrangement with the Taliban, as well as the Afghan government, would be necessary, though it was noted during the discussion that Afghan President Ashraf Ghani had pledged a 7,000-strong force to guard the pipeline and its construction.

Now to newer, non-security obstacles.

At various times during the TAPI project's history major international companies have expressed an interest in joining, and possibly managing, the project. That is no longer the case due largely to reasons just mentioned above.

So Turkmenistan's state gas company Turkmengaz has promised to contribute 85 percent of the cost of building the $10-billion pipeline.

Cutler asked, "For a country like Turkmenistan in which the gross domestic product is about $45 billion what sense does this make?"

Cutler also questioned the timetable. Turkmenistan's President Gurbanguly Berdymukhammedov confidently predicted at the TAPI launch that the pipeline would be functional by 2019.

But Cutler pointed to construction of the East-West pipeline, which runs from fields in eastern Turkmenistan to near the Caspian coast. "TAPI is more than twice as long and it will cost five times as much," Cutler said.

"Now recall that this [East-West pipeline] was announced in 2008 or so; it took seven years for this to be constructed," he added.

Cutler also reminded us that the East-West pipeline was internal, located solely inside Turkmenistan, whereas TAPI passes through four countries.

As Cutler explained, "You're going to need an organizational design, you're going to need specialists, you're going to need experts, it's not even clear, honestly, that the Turkmenistan government…has access to…the expertise that they would require for the construction of the pipeline."

Rising Costs

And that is only the technical part of the project. Cutler also suggested that the $8.5 billion the Turkmen government has pledged translates to an obligation to raise that money by luring international investment into the project.

But, as Cutler said, "it's equally unclear, equally doubtful, that they [the Turkmen government] have the negotiating skills that would be required to craft a credible, legal, institutional, and organizational-infrastructural framework [for a pipeline project]."

And, concerning funding, Byrd said that, in his opinion, "the interesting thing is not related to Afghanistan but why, if this is so beneficial for India and Pakistan, why they're not contributing almost anything at all."

As it currently stands, Afghanistan, Pakistan, and India are actually obligated to each come up with five percent of the project's cost, so $500 million per country.

Cutler also explained that the estimated cost of the project, today, is $10 billion. "The costs of these projects tend to grow over time and not to diminish," and he recalled that in 2008 the cost of TAPI was estimated at $7.6 billion.

The discussion was not all gloom and doom, however. Valid points about the importance of the project to the region were discussed and that importance provides some guarantee that TAPI will not be forgotten any time soon. The panel discussed in greater detail all these topics and other matters.

An audio recording of the talk can be heard here:

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About This Blog

Qishloq Ovozi is a blog by RFE/RL Central Asia specialist Bruce Pannier that aims to look at the events that are shaping Central Asia and its respective countries, connect some of the dots to shed light on why those processes are occurring, and identify the agents of change. Content will draw on the extensive knowledge and contacts of RFE/RL's Central Asian services but also allow scholars in the West, particularly younger scholars who will be tomorrow’s experts on the region, opportunities to share their views on the evolving situation at this Eurasian crossroad. The name means "Village Voice" in Uzbek. But don't be fooled, Qishloq Ovozi is about all of Central Asia.

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