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Qishloq Ovozi

Monday 18 December 2017

Striking miners in the mines of ArcelorMittal Temirtau -- would there have been a crackdown if they'd been aboveground?

Among the many interesting aspects of the recent coal miners' strike in Kazakhstan's central Qaraghandy region was the reappearance of Kazakhstan's opposition Nationwide Social Democratic Party (OSDP).

The OSDP has been quiet for many months.

The OSDP participated in Kazakhstan's March 2016 parliamentary elections but took only 1.18 percent of the vote in a poll dominated by, and some say organized to favor, pro-presidential parties.

After that, media coverage of the OSDP practically vanished.

The recent coal miners' strike to demand higher wages and better working condition from manager ArcelorMittal Temirtau gave the OSDP an opportunity.

Starting on December 11, the miners chose to stay underground in protest, which prevented the authorities from moving to quickly break up the strike, as would likely have happened if the protest took place on the surface.

The protest lasted about four days and was increasingly covered by Kazakhstan's media.

With so much attention on the event, the OSDP released a statement of support for the striking miners on December 14.

The statement said the OSDP "considers the socioeconomic demands of the striking miners of ArcelorMittal Temirtau to be absolutely fair and expresses our full support for them."

The statement called on the management of ArcelorMittal Temirtau to "listen to your miners and meet their just demands."

It also urged Kazakhstan's government to "cease the habit of serving the interests of big business and under no circumstances resort to repressive measures regarding the striking [miners]."

Kazakhstan's state media did not report on the OSDP statement but curiously, Russia's Interfax did.

The OSDP website shows the party is active and apparently the party's youth wing is increasingly responsible for party activities, a sign, perhaps, that the opposition party will not soon simply fade away, at least anytime soon, as other Kazakh opposition parties already have.

There is reason to believe the OSDP could become, if not a big player, at least a player in Kazakhstan's politics.

In the 2007 elections to the Mazhilis, the lower house of parliament, the OSDP received nearly 5 percent of the vote, coming in second to the ruling Nur-Otan party that won all 98 seats available.

The OSDP's chances in elections were reduced after 2007.

In the 2012 and 2016 Mazhilis elections the pro-government Democratic Party of Kazakhstan Ak-Zhol and the Communist People's Party of Kazakhstan won a small number of seats.

The two parties' presence in the Mazhilis creates a facade of a multiparty parliament. Both parties, despite one being nominally a "democratic" party and the other nominally a "communist" party, completely support the president's policies.

Judging from its website, the OSDP has not given up hope that it could participate in future elections.

Back in 2004, and prior to that, Kazakhstan's parliament did have opposition parties represented in parliament, so there is precedent.

And change is coming to Kazakhstan in the not-too-distant future. President Nursultan Nazarbaev will turn 78 in July and many groups are already making preparations for what happens after Nazarbaev, including, it seems, the OSDP.

The views expressed in this blog post do not necessarily reflect those of RFE/RL
The price of churek in the western Balkan Province of Turkmenistan has recently risen from 1 manat to 1.5 manats.

Turkmenistan has a population of some 5 million people. Turkmenistan also has the fourth-largest natural-gas reserves in the world.

The small population and the large amount of gas led Turkmenistan's first president, Saparmurat Niyazov, to predict after its 1991 independence that Turkmenistan would become a second Kuwait and everybody would be driving Mercedes.

Instead, Turkmenistan is facing its second straight year of shortages of basic foods as winter approaches.

RFE/RL's Turkmen Service, known locally as Azatlyk, spoke with people around Turkmenistan in the days leading up to December 12, the day in 1995 that the UN officially recognized Turkmenistan as a neutral country.

The situation they described is far from a second Kuwait.

A reminder: We are withholding the names of people who spoke with Azatlyk because the Turkmen government doesn't like RFE/RL and makes life difficult for people who speak with us.

One man told Azatlyk that the price of a cheap churek (the round bread of the region) weighing 450 to 500 grams in the northern Dashoguz Province was normally 1 manat ($0.28) but that since the start of December the price has risen to 1.40 manats.

Azatlyk heard that the price of similar bread in the western Balkan Province recently rose from 1 manat to 1.5 manats.

The situation is the same in the south-central Mary Province.

In the capital, Ashgabat, one woman said the price of imported chicken legs at state stores was 8 manats per kilogram, but she said there was a 1-kilogram limit for customers. There was no limit in private stores, the woman said, but the price is 10 manats per kilogram.

Eggs are also reportedly in short supply in Ashgabat.

One man said the price of good quality bread in Ashgabat had gone from 2 manats in early December to 3.5 manats by Neutrality Day.

Azatlyk reported about the shortage of flour in Mary and the southern Ahal provinces in late November when the price of good quality flour went from 50 to 100 manats per 50-kilogram sack and a sack of fair-quality flour jumped from 44 manats to 90.

The sudden, drastic increase seemingly led to hoarding and by December 1 flour was in short supply around the country and is now apparently the cause of the increase in the price of bread.

The situation appears not to have reached the point it did last December when people were putting their names on lists to be notified when sugar or cooking oil arrived at local stores.

But in late 2016, the problems with food shortages started with flour.

Food shortages and high prices for basic goods are not the only recent signs of Turkmenistan's economic decay.

In November, Azatlyk reported on impending cuts in the oil and gas sector, the backbone of the country's economy. Significantly, many of the personnel slated for layoffs were involved in drilling and maintaining wells -- a possible indicator that Turkmenistan already has more gas and oil than it can sell.

But Azatlyk reported on December 13 that there will be cuts in law enforcement agencies. A person in the eastern Lebap Province who knows about the cuts said: "In January 2018, they will cut some 1,000 police."

Another source in Lebap confirmed the coming reduction in the Lebap branch of the Interior Ministry but said it was not yet clear how many police officers would be laid off.

This source said the reductions would be imposed throughout the country and added some police officers say the department for fighting crime might be eliminated altogether.

And there are reports that a 30 percent reduction of state employees across the board is coming after the New Year.

Also, the black market value of the manat has dropped from around 5 or 6 to $1 at the start of 2017 to more than 10 manats to $1 as of early December, though the official rate remains 3.5 manats to $1, as it has been since February 2015.

For some two years now, Qishloq Ovozi has concluded tales of Turkmenistan's economic woes by pointing out there was not much hope Turkmenistan's economy would pick up and noting that the government was running out of options.

There are now two rays of hope breaking through Turkmenistan's dark economic clouds.

The first was President Gurbanguly Berdymukhammedov making reference to the use of the Stabilization Fund to help with the “successful implementation of social and economic programs” in 2018. (Thank you @A_Melikishvili)

Qishloq Ovozi has already looked at the Stabilization Fund.

Berdymukhammedov used billions of dollars that Niyazov had deposited in foreign banks to create the fund, and there are suspicions Berdymukhammedov has added many billions of dollars more, siphoned off from gas sales.

No one in Turkmenistan talks about the fund, leaving some to speculate Berdymukhammedov might be keeping it all for himself.

The fact that Berdymukhammedov said he is actually using the money for its stated purpose, to augment Turkmenistan's 2018 budget, could be seen as a sign of how desperate Turkmenistan's economic situation has become.

There is also a breakthrough in the legal status of the Caspian Sea. Reportedly, it will clear the way for Turkmenistan to finally build the Trans-Caspian Pipeline (TCP) and send some 30 billion cubic meters of gas to Europe.

Until the convention on the Caspian Sea's legal status is signed, it is still unclear whether the TCP can really be built without Russia and Iran objecting, as they have for two decades.

But even the possibility the TCP might finally be realized would give Berdymukhammedov something to hold out to Turkmenistan's population, the promise that tomorrow might be better than today.

At the moment, though, such a tomorrow seems a long way off as Turkmenistan's people stock up on all the basic goods they can obtain ahead of what many see as another year of shortages.

Azatlyk Director Farruh Yusupov contributed to this report. The views expressed in this blog post do not necessarily reflect those of RFE/RL.

Russian Foreign Minister Sergei Lavrov attends a meeting of foreign ministers from the Caspian Sea littoral states in Moscow on December 5.

On this week's Majlis podcast, we look at Russian Foreign Minister Sergei Lavrov’s remarks about an agreement on the legal status of the Caspian Sea finally being close after more than 20 years of talks.

Lavrov was short on details, so we explored what sort of changes and accommodations might be behind such a breakthrough, if indeed there has been a breakthrough.

Muhammad Tahir, RFE/RL's media relations manager, moderated the discussion.

This week, due to some unexpected difficulties, we had only one guest, but what a guest!

Joining us from Washington, D.C., is the former U.S. ambassador to Kazakhstan, William Courtney, who is now an adjunct senior fellow at the RAND Corporation. His comments about the possibility of China inadvertently playing a role in Caspian politics are well worth hearing.

I’ve read a thing or two about the Caspian Sea situation over the years, so I had a few things to say, too.

Listen to the podcast above or subscribe to the Majlis on iTunes.

Azeris cool off in the Caspian Sea with offshore oil rigs in the background in Baku.

Russian Foreign Minister Sergei Lavrov said after a recent meeting of foreign ministers from the Caspian Sea littoral states that after more than 20 years of talks, an agreement on the legal status of the Caspian was "practically ready" for signing.

Lavrov met in Moscow with the foreign ministers of Azerbaijan, Iran, Kazakhstan, and Turkmenistan on December 4-5.

After the meeting ended, Lavrov told reporters: "I am pleased to tell you that we have found solutions to all outstanding key issues linked with this document. The text of the convention is practically ready."

Lavrov said the text of the draft agreement was being translated into the national languages of all the littoral states and added that "each of our countries will carry out domestic procedures to prepare for the signing of this convention by the leaders."

The fifth Caspian summit is expected to take place next year in Kazakhstan.

Lavrov did not provide any details about the draft agreement or comment on how the five parties were able to reach consensus after more than two decades of talks.

Lavrov's announcement is not a total surprise.

He met with Azerbaijani Foreign Minister Elmar Mammadyarov at the end of October in Baku. Mammadyarov said after that meeting that "Russia has made a very good proposal concerning the determination of the Caspian Sea status."

Back on August 9, during a visit by Turkmenistan's president to Baku, Gurbanguly Berdymukhammedov said joint work on the convention on the legal status of the Caspian Sea was almost complete, and he added that "the convention is expected to be signed at the next high-level meeting of littoral states."

A Sea Or A Lake?

The Caspian Sea's legal status has been a contentious issue between the five countries. The issue is whether the Caspian is a sea or a lake. If the Caspian is designated a lake, it would mean the littoral states would adopt a "condominium" approach that would divide up the wealth equally among the five countries.

Such a designation would be detrimental to Kazakhstan, which has the largest sector of the Caspian and, so far as is known currently, the largest amount of oil and natural gas.

Iran would benefit from the Caspian being designated a lake since its sector of the Caspian is the smallest (about 13 percent). Iran is still exploring its section of the Caspian, but so far it seems to have the least amount of oil and gas and is also the part of the Caspian with the highest salt content in the water, meaning Iran would need more expensive equipment to extract hydrocarbons from the seabed of its sector.

If the Caspian is designated a sea, it frees up all five states to exploit the resources in the maritime sectors as they wish.

Such an arrangement is de facto already in effect since Kazakhstan has been working on its Kashaghan oil and gas field for years (production finally started in earnest last year).

For more than a decade, Azerbaijan has also pressed ahead with development of some of its offshore Caspian fields, notably the Shah Deniz fields.

Looking For A Pipeline

However, the lack of an agreed legal status has been one of the factors that has prevented construction of the Trans-Caspian Pipeline (TCP) to carry some 30 billion cubic meters (bcm) of Turkmen gas across the Caspian seabed to Azerbaijan, where it could be loaded into pipeline networks leading to Europe.

In the short time since Lavrov's comments on December 5, there has already been talk the impending agreement clears the way for the TCP.

But Russia may have already headed off the realization of the pipeline.

When Turkmen Foreign Minister Rashid Meredov was in Moscow at the start of October, Russian Energy Minister Aleksandr Novak said Russia and Turkmenistan were discussing cooperation in the "production and sale of Turkmen gas."

Myrat Archaev, the head of state gas company Turkmengaz, said on November 2 that Turkmenistan was looking into the possibility of shipping gas via Russian pipelines to countries in the CIS and Eastern Europe. Such a possibility had not been mentioned for more than a decade, so it was not clear what prompted Archaev to raise the topic.

So it is possible Russia has already been talking to Turkmenistan about a deal that might avoid the need for construction of TCP.

The cash-strapped Turkmen government needs new sources of revenue quickly and might be willing to trade use of Russian pipelines for gas exports now in exchange for a promise not to build the TCP later.

In any case, the TCP could not be constructed and start pumping gas for several years and there are questions about extra capacity in the pipeline networks from Azerbaijan through Turkey to Europe. Currently, those pipelines could not accommodate 30 bcm of Turkmen gas, meaning other new pipelines would need to be built.

And with Nord Stream-1 built, and Nord Stream-2 and Turkish Stream under construction, Russia is already looking at the ability to ship up to 141.5 bcm to Europe. Turkmenistan's 30 bcm would be appreciated in Europe but could not displace Russian gas exports.

The views expressed in this blog post do not necessarily reflect those of RFE/RL

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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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