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Published on Central Asia-Caucasus Institute Analyst (http://www.cacianalyst.org)

9 June 2010 News Digest

By Alima Bissenova (06/14/2010 issue of the CACI Analyst)

New Tajik Polio Outbreak Prompts Swift Measures From Moscow
29 May
The reemergence of an old disease in Tajikistan has led to an outbreak of a "polio war" between Moscow and Dushanbe. The dispute erupted after news emerged in April that the viral disease, which primarily spreads in areas with poor sanitation and can cause paralysis within hours of contraction, had returned to Tajikistan in a big way.  Two deaths resulting from polio have been confirmed in the Central Asian country, although Russian officials have placed the number as high as 15. Some 104 cases of wild poliovirus have been confirmed, and nearly 440 cases of acute flaccid paralysis, the most common sign of polio, have been recorded. In Russia, where hundreds of thousands of Tajik migrant workers trek for seasonal work, suspected cases have appeared among young children of Tajik migrant laborers in hospitals in Moscow and thousands of kilometers away in Angarsk, Irkutsk Region. These illnesses have led officials to introduce a number of measures to prevent the disease from spreading.  Tajik children less than six years of age, the most likely group to contract the virus, have been barred from entering the country and testing at border points has begun. In another move that threatens to further damage Tajikistan's already battered economy, imports of dried fruit were banned by Moscow. (RFE/RL)

Ethnic tensions simmer in Kyrgyzstan
1 June
Hundreds of Uzbek security [1] forces were sent to an Uzbek enclave in Kyrgyzstan as protesters demanded protection for Kyrgyz inhabitants, security forces said. Security forces in Uzbekistan sent police and military [2] troops to the Uzbek enclave of Sokh in Kyrgyzstan to greet area protesters, Radio Free Europe/Radio Liberty reports. Hundreds of residents in the enclave, one of the largest Uzbek enclaves in Kyrgyzstan, blocked a main highway to Uzbekistan to call for security for Kyrgyz citizens. The protesters said several cars belonging to Kyrgyz citizens were damaged in the area in recent days. Uzbek authorities closed the border with Kyrgyzstan following the April uprising that removed President Kurmanbek Bakiyev from power. Interim leaders in Bishkek said scores of people were injured or dead during ethnic clashes in the south of the country. Thousands of backers of the ousted president have protested in the south in recent weeks, calling for justice against leaders of the Uzbek community. Bakiyev supporters blame ethnic Uzbeks for inciting unrest. Ethnic clashes erupted when Kyrgyz authorities stopped letting Sokh resident use regional pastures. (UPI)

China, Kazakhstan vow to enhance judicial cooperation
2 June
China and Kazakhstan have agreed to enhance cooperation between their judicial departments. An agreement was reached during a visit to Kazakhstan by Wang Shengjun, president of the Supreme People's Court of China, who wrapped up his trip on Wednesday. In a meeting with Kassym-Zhomart Tokayev, speaker of the Kazakh Parliament's Senate, Wang said relations between China and Kazakhstan have developed rapidly and healthily, with their strategic partnership enriched and pragmatic cooperation expanded. He said his three-day visit to Kazakhstan aimed to implement the consensus reached between the leaders of the two countries and further boost exchanges between the judicial departments so as to provide judicial safeguard for their cooperation in various fields. Tokayev said both countries have witnessed the development of their cooperation and friendship in various areas, and he believed the visit by China's supreme court chief will further promote judicial exchanges and cooperation between the two sides. In talks with his Kazakh counterpart, Mussabek Alimbekov, and Chairman of the Kazakh Constitutional Council Igor Rogov, Wang said China is reforming its judicial system and would like to learn best practices from other countries including Kazakhstan. Wang and Alimbekov also signed a memorandum of understanding on sharing judicial experience, training of judges and jointly sponsoring international conferences and seminars, as well as the exchange of visits by judges from the two countries. (Xinhua)

Kazakhstan Limits Tenge Moves Versus Dollar to 0.3%
2 June
Kazakhstan’s central bank won’t let the tenge change in value versus the dollar by more than 0.3 percent per official trading session, central bank Chairman Grigory Marchenko said. The bank “tries not to intervene much when the tenge is between 146 and 147 per dollar,” Marchenko told reporters in Almaty today, referring to official trading session in May. The bank won’t allow the currency to move more than 30 or 40 tiins at a time. “If one will try to earn money on exchange rate movements, we will change our attitudes,” Marchenko said. (Bloomberg)

 Georgia’s ruling party wins local elections
2 June
Georgia's Central Election Commission today released the final results of municipal elections that show President Mikheil Saakashvili's United National Movement won the May 30 poll. Three election blocs and 14 political parties competed for seats in 64 municipal councils. The United National Movement received almost 66 percent of the votes and its candidate, incumbent Gigi Ugulava, won the first-ever election for mayor of the capital, Tbilisi. The Organization for Security and Cooperation in Europe's (OSCE) observer mission said in a statement that the election was "transparent" and marked "evident progress towards meeting international standards." But the statement added that "significant shortcomings remain to be addressed." It noted "systemic irregularities," including several cases of ballot-box stuffing and an "uneven playing field favoring contestants from the incumbent party." (RFE/RL)
 
Afghan jirga discusses peacemaking with Taliban
3 June
Some 1,600 Afghan tribal elders are meeting for a second day in Kabul to discuss whether to make peace with Taliban leaders and, if so, which ones. Delegates have broken into 28 groups for two sessions of talks, each aiming to come up with ideas on how President Hamid Karzai's government should pursue peace with the Taliban. The second day of the gathering, a Consultative Peace Jirga, is being held after three Taliban fighters, dressed in women's burqas, on June 2 slipped past security lines and interrupted the opening day with a rocket and gunfire attack not far from where the meeting is being held. No delegates were reported hurt.  The Taliban, which have rejected the jirga as a U.S.-backed stunt, are not attending the three-day event. On the first day of the jirga, Afghan President Hamid Karzai urged the Taliban to stop fighting and help rebuild Afghanistan. (RFE/RL)

Uzbek troops leave Kyrgyzstan
3 June
Uzbekistan has pulled its troops out of an enclave in Kyrgyzstan and allowed residents back into the area, provisional leaders said. Uzbekistan earlier this week dispatched police and military [3] forces to the Uzbek enclave of Sokh in Kyrgyzstan to greet area protesters. Hundreds of residents in the Uzbek enclave blocked a main highway to Uzbekistan to call for security for Kyrgyz citizens. The protesters said several cars belonging to Kyrgyz citizens were damaged in the area in recent days. Uzbek authorities closed the border with Kyrgyzstan following the April uprising that removed President Kurmanbek Bakiyev from power. A spokesman for the provincial Kyrgyz leader in the region said Uzbekistan has removed its forces from the area, Kyrgyz news agency 24.kg reports. Interim leaders in Bishkek said scores of people were injured or killed during ethnic clashes in the south of the country. Thousands of backers of Bakiyev have protested in the south in recent weeks, calling for justice against leaders of the Uzbek community. Bakiyev supporters blame ethnic Uzbeks for inciting unrest. Ethnic clashes erupted when Kyrgyz authorities stopped letting Sokh residents use regional pastures. (UPI)

Baku to benefit from Nabucco
3 June
Azerbaijan has a major role to play in the Nabucco natural gas pipeline [4] for Europe, consortium members said during a Baku energy conference. Europe is looking to the Nabucco pipeline to break the Russian grip in the regional energy sector. Moscow is pushing for its South Stream project along a similar route. Jeremy Ellis, head of business development at German energy company [5] and Nabucco consortium member RWE, said Nabucco was not a South Stream rival. Nabucco, he added, was shorter and less expensive than South Stream, however. South Stream would carry Russian natural gas to Europe, while Nabucco would bring gas from Azerbaijan, Turkmenistan and Iraq. Consortium members are anxious to convince Azerbaijan and Turkey to hammer out a gas deal that could expedite Nabucco. The proposed 2,500-mile pipeline will run from Azerbaijan to Austria via Turkey and would carry 1.1 trillion cubic feet of natural gas per year to Europe."One benefit for Azerbaijan from Nabucco is that the project will bring the country closer to Europe," Ellis was quoted in the Azeri news agency News.Az as saying. Energy analysts predict that Europe could face natural gas shortages as early as 2015. Nabucco is expected to start gas deliveries in 2014. (UPI)

China, Kazakh pipeline expansion on Hu visit agenda
4 June
Chinese President Hu Jintao will sign an agreement to increase crude pipeline capacity from Central Asia during a trip to Uzbekistan and Kazakhstan next week. Chinese assistant foreign minister Cheng Guoping told reporters in Beijing that the agreement will be part of China's efforts to diversify oil sources. The Sino-Kazakh line accounts for roughly 4 percent of China's total crude imports, which hit a record high of more than 5 million barrels per day in April. (RFE/RL)

Kazakhstan seeks 10 pct of foreign-owned gas project
4 June
Kazakhstan wants to acquire 10 percent of the Karachaganak oil and gas project from a group of foreign investors, state firm KazMunaiGas said on Thursday, as the country moves to tighten control over its energy resources. KazMunaiGas President Kairgeldy Kabyldin said the state oil and gas company had made the proposal to a consortium of four foreign investors led by Britain's BG Group and Italian energy firm ENI. "We have stated our wishes to acquire a 10 percent stake if there are acceptable commercial conditions. This is our proposal," Kabyldin told reporters. Kazakhstan, Central Asia's largest economy, has long sought a stake in the Karachaganak Petroleum Operating Group and has accused Kazakhstan's biggest gas project of tax evasion. The group says its operations comply with Kazakh law. BG and ENI each own 32.5 percent while U.S. oil major Chevron has a 20 percent stake. Russia's largest non-state oil firm, LUKOIL, is also a shareholder. The government also wants to strip projects such as Karachaganak, which had been accused of overstating costs by $1.3 billion, of immunity to tax changes as it increases tax rates in the energy and mining sectors. In March, Kazakhstan's financial police accused Karachaganak of illegally earning $708 million in 2008 by producing more oil and gas than originally agreed with the state.  he group has denied wrongdoing. BG Chief Financial Officer Ashley Almanza, who is leading the company's discussions with the Kazakh government, declined to comment specifically on the talks. But he told a conference in Almaty he was confident any problems related to energy projects in Kazakhstan could be resolved. "It's almost inevitable that differences of opinion will arise from time to time," he said. "We remain confident that these differences can be resolved through open and constructive dialogue." Kabyldin said he was not aware of the consortium members' reaction to the proposal by KazMunaiGas. He declined to say how much the state company would be willing to pay for a stake. KazMunaiGas Chairman Timur Kulibayev said the price would be subject to negotiation. Analysts have said the government might be hoping to gain its stake without paying, possibly agreeing to drop its tax and cost claims in return. In April, a source close to talks said the state wanted to acquire up to 30 percent in the consortium. The Karachaganak developments mirror the case of Kashagan, another oil field developed by foreign energy majors, where the government acquired a stake after accusing the consortium of environmental violations, delays and cost overruns. Separately, Kabyldin said during the conference that KazMunaiGas -- the parent company of London-listed KazMunaiGas Exploration and Production -- planned to invest about $20 billion in various projects by 2015. (Reuters)

Five NATO troops killed in Afghanistan
6 June
NATO says five international troops were killed today in separate incidents across Afghanistan. The alliance says three members of its force were killed in a vehicle accident in southern Afghanistan. Another service member died when a makeshift bomb exploded in the south, while a fifth NATO service member was killed in an insurgent attack in the east. The U.S. military said four of the dead were American. The nationality of the fifth dead soldier was not immediately available. Separately, Spain said two of its soldiers sustained minor injuries when they were ambushed by insurgents in the northwest. And the Afghan government said bomb attacks and ambushes killed four Afghan police officers and two civilians across the country today. (RFE/RL)

Senior official leaves Kyrgyzstan government
7 June
A senior official in Kyrgyzstan's interim government has resigned, saying he doubted its commitment to democratic reform. Edil Baisalov, the chief of staff to acting president Roza Otunbayeva, said he was forming a new party to contest parliamentary elections in October. He is the most senior official to leave the interim government since President Kurmanbek Bakiyev was ousted in April. Mr Bakiyev was forced to flee after mass protests turned violent. Both the US and Russia are watching events in Kyrgyzstan closely. Both have military bases in the Central Asian nation which they consider strategically vital. The interim government has been working to regain control of the country since then, but there have been sporadic clashes in the south and outbreaks of ethnic violence. The authorities had promised a presidential election in October, as well as parliamentary polls, but have now put this back a year. Mr Baisalov, a prominent civic activist, said Kyrgyzstan needed a new political party and some new faces in power. "At the current moment it is necessary to return the republic to a democratic path and I, as an active citizen, have made the decision that a new force should take part in the elections," he said. And he hit out at the current government. "I doubt that the new authorities will provide deeper democratic reforms. Look at the staffing arrangement - nothing has changed," AFP news agency quoted him as saying. More than 80 people were killed in the 7 April violence that ousted Mr Bakiyev. (BBC)

Nabucco welcomes Azeri gas deal in Turkey
7 June
A natural gas deal signed between Turkey and Azerbaijan is a positive development for the Nabucco gas pipeline for Europe, directors said Monday. Turkish Energy Minister Taner Yildiz [6] signed a gas deal Monday in Istanbul with his Azeri counterpart Natiq Aliyev [7] for 388 billion cubic feet of natural gas. The gas will be shipped from the second phase of the giant [8] Shah Deniz field by 2017, Turkey's news agency Today's Zaman reports. A bilateral deal between Turkey and Azerbaijan was seen as a key development to the Nabucco pipeline for Europe. The Nabucco consortium hailed the agreement, saying it would go a long way toward bringing energy security to Europe [9]. "This is a step ahead in the right direction," Nabucco Managing Director Reinhard Mitschek said in a Monday statement. The proposed 2,500-mile pipeline will run from Azerbaijan to Austria via Turkey and would carry 1.1 trillion cubic feet of natural gas per year to Europe. Energy analysts predict that Europe could face natural gas shortages as early as 2015. Nabucco is expected to start gas deliveries in 2014. (UPI)

Kyrgyz Mufti Hospitalized After 'Severe' Beating
8 June
Kyrgyzstan's acting chief mufti, Suyun-Hajji Kuluev, has been hospitalized after being beaten during a religious gathering in the capital Bishkek, his family has told RFE/RL's Kyrgyz Service. Kuluev's relatives told RFE/RL that about a dozen unidentified assailants attacked him on June 6 during a gathering of religious clerics and that he was hospitalized with concussion and injuries. The Interior Ministry's press service told RFE/RL that since Kuluev has not filed an official complaint, no details of the incident are available. The press service of the Muftiat, the country's highest religious authority, told RFE/RL that the attackers were shouting that Kuluev must resign. Kuluev was recently named acting top cleric following the resignation of Abdushukur-hajji Narmatov. Narmatov, in turn, had replaced long-serving mufti Murataaly-Hajji Juman-uulu, who stepped down following the deadly clashes between antigovernment protesters and security forces on April 7 that led to the resignation of Kyrgyz President Kurmanbek Bakiev. Juman-uulu was later kidnapped and taken to the outskirts of Bishkek. His abductors demanded a $1 million ransom. He was released in late April. (RFE/RL)

Villagers near Bishkek demonstrate; demand clean water, electricity
8 June
Some 500 protesters from a village near the Kyrgyz capital, Bishkek, blocked a major highway today, demanding the authorities provide their village with clean water and electricity, RFE/RL's Kyrgyz Service reports. RFE/RL's correspondent reports from the spot that the protesters from the village of Ak-Jar used a KamAZ truck to block the road. Local officials met with the protesters and persuaded them to unblock the highway that connects Central Asia's largest market -- Dordoi, in Bishkek -- with Kazakhstan. They promised the demonstrators that construction of a power line to Ak-Jar will begin on June 9. The village, on the outskirts of Bishkek, was built five years ago, mainly by newcomers from rural areas. Many of them had no legal permission to build homes there. Because construction was spontaneous, without a formal development plan, the village lacks proper infrastructure and amenities. (RFE/RL)

NATO helicopter shot down in Helmand in Afghanistan
9 June
Four Nato soldiers have been killed when their helicopter was shot down in Helmand province in southern Afghanistan. Nato said the aircraft was hit by "hostile fire". The troops were Americans, the US military spokesman in Kabul, Lt Col Joseph T Breasseale, said. The Taliban claimed its fighters had shot down the aircraft with a rocket-propelled grenade. The helicopter crashed in the Sangin district, said provincial government spokesman Dawood Ahmadi. Taliban spokesman Yousuf Ahmadi said it had been brought down in the Sangin district bazaar on Wednesday morning. "We brought it down with a rocket," he told AFP news agency. A number of Nato helicopters have been shot down in Afghanistan since the alliance sent troops into the country in 2001. The BBC's Martin Patience, in Kabul, says conditions are particularly dangerous for the aircraft when they come in to land and then take off, as they are more susceptible to gun or rocket fire. The crash brought to five the number of Nato soldiers killed in the south of the country on Wednesday. The military announced earlier that another soldier had been killed by a roadside bomb. More than 20 Nato soldiers have died this week, including 10 on Monday, when US-led forces in Afghanistan had their deadliest day in two years. Wednesday's deaths came as US defence secretary Robert Gates said he expected to see signs of progress in a counter-insurgency strategy "by the end of the year". Speaking in London on Wednesday, Mr Gates said there were "no illusions" about quick victories and warned it would be a "tough summer", AFP reported. Meanwhile, gunmen attacked an Afghan-bound Nato convoy overnight near the Pakistani capital, Islamabad, killing at least seven people and setting several vehicles on fire. The shooting down of the helicopter comes amid an upsurge of violence in the volatile south of Afghanistan. (BBC)

Tajik Journalists Picket Uzbek Embassy Over Rail Holdup
9 June
More than 20 journalists protested today outside the Uzbek Embassy in the Tajik capital, Dushanbe, to demand an end to what they call Uzbekistan's ongoing economic blockade of Tajikistan, RFE/RL's Tajik Service reports. The protesters chanted "Release Tajik freight cars!" and demanded a meeting with Uzbek Ambassador Shohqosim Shohislomov. An embassy employee who declined to give his name asked the journalists to leave and come back to meet the ambassador after the Shanghai Cooperation Organization summit scheduled for later this week. Abduazimi Abduvahhob, one of the protesters, told RFE/RL that the demonstrators took part in the protest not only as journalists, but also as representatives of a new generation of young Tajiks angry at decades of confrontation between Central Asian leaders. Another journalist, Abdulazizi Vose, told RFE/RL that Uzbekistan's blocking of rail freight bound for Tajikistan is becoming a national issue, not just a dispute between two national leaders or two governments. It was the first protest rally by Tajik journalists outside the Uzbek Embassy in Dushanbe. Tajik students abroad earlier staged similar protests outside the Uzbek embassies in Bishkek and Washington. Tajikistan's state rail company estimates that more than 2,500 freight cars, including some transporting NATO supplies to Afghanistan, are held up in Uzbekistan. Two weeks ago, the NATO-led International Security Assistance Force (ISAF) in Afghanistan said it "may have to re-route some shipments" that are stranded in Central Asia after Uzbekistan suspended rail traffic to Tajikistan's southern Khatlon district.Uzbekistan has described the rail delays as technical. But Dushanbe has criticized the Uzbek moves as an "attempt to blockade Tajikistan" in retaliation for the Tajik government's plans, opposed by Tashkent, to build a huge hydropower station in Roghun. (RFE/RL)

 Kazakh Banks Should Do More to Stem Bad Loan Growth, IMF Says
9 June
Kazakhstan’s banks need to do more to stem growth in bad loans as faster economic expansion may not be enough to improve asset quality in the former Soviet Republic, the International Monetary Fund said. “It is essential that banks, in conjunction with the Kazakhstani authorities, take more forceful and broad action to reduce non-performing loans,” the Washington-based fund said in a statement [10] on its website late yesterday. Kazakhstan’s state-owned fund Samruk-Kazyna took stakes in the nation’s four biggest lenders last year after credit markets froze and the country’s property bubble burst. Central Asia’s biggest energy producer tapped $10 billion from its oil fund to support banks and companies.  BTA Bank [11], the country’s biggest lender before its collapse, Alliance Bank, AO Astana Finance and Temirbank, then controlled by BTA, defaulted, leaving about $20 billion in debt to be restructured. State-owned BTA, Alliancek and Temirbank reached a deal with creditors allowing them to write down debt of about $11 billion, according to Samruk-Kazyna’s statement in April. The debt restructurings “have been key in stabilizing the financial positions of these banks,” the IMF said. Even so, the continuing “sharp” increase in non- performing loans reflects banks’ excessive exposure to currency- induced credit risk “stemming from the combination of a low and dollarized deposit base, the reliance on foreign funding, and risky lending practices,” the fund said. Loans non-performing for more than 90 days jumped to 2.45 trillion tenge ($16.64 billion), or 26 percent of the loan portfolio, as of May 1 from 984 billion tenge in the same period last year, according to the Agency for Financial Supervision website. Kazakh gross domestic product will expand 4 percent this year, the IMF estimates. Total output grew an annual 7.6 percent in the first four months of the year, Finance Minister Bloat Zhamishev said on May 14. “Once the banking sector difficulties are addressed, the economy would benefit from greater market determination of the exchange rate and lower central bank intervention,” the IMF said. (Bloomberg)


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