By Richard Weitz (05/08/2015 issue of the CACI Analyst)
Now that the UN Security Council has blessed the Iranian nuclear deal, Tehran’s chances of becoming a full member of the Shanghai Cooperation Organization (SCO) in coming years have improved, following a decade of rejection. Iranian leaders have long wanted to join the SCO to gain diplomatic, economic, and security advantages. Nonetheless, Iran will need to overcome several major obstacles on its path to full membership, even if nothing goes amiss with the implementation of its nuclear deal.
By George Tsereteli (05/08/2015 issue of the CACI Analyst)
On July 10, Russian military personnel moved border markers further into Georgian territory from the breakaway region of South Ossetia, in the process positioning the new “border” even closer to the strategically vital East-West highway and placing more of the Baku-Supsa pipeline under Russian control. As a result, the Georgian government has been criticized by opposition groups for not doing enough to prevent such incursions, and for not responding adequately. As prescribed by contemporary Russian military doctrine, Russia’s recent actions in Georgia, as well as in other parts of the world, are manifestations of a new warfare strategy.
THE UZBEK-TAJIK DÉTENTE: CAN IT LAST?, by George Voloshin
AGRI’S PROGRESS ADVANCES BRUSSELS’ AND BAKU’S ENERGY AGENDAS, by Micha’el Tanchum
ISLAMIC STATE IN CENTRAL ASIA: THREAT OR OPPORTUNITY, by Charlie Smith
IS THE NORTH CAUCASUS BECOMING ANOTHER BATTLEFIELD IN THE GLOBAL JIHAD?, by Tomáš Baranec
TAJIKISTAN’S GOVERNMENT MISSES THE REAL PROBLEM OF LABOR MIGRANTS, by Oleg Salimov
RULING COALITION TO CUT FUNCTION OF GEORGIA’S NATIONAL BANK, by Eka Janashia
KYRGYZSTAN’S CONSTITUTIONAL CHAMBER DISMISSES JUDGE, by Arslan Sabyrbekov
BAKU CRACKS DOWN ON ALTERNATIVE MEDIA AFTER CONCLUDING EUROPEAN GAMES, by Mina Muradova
By Eka Janashia (08/07/2015 issue of the CACI Analyst)
On June 27, Georgia’s parliament passed, in the first reading, a bill that deprives the National Bank of Georgia (NBG) of its supervisory function of financial institutions, assigning these tasks to an independent agency.
The proposal, initiated by the Georgian Dream (GD) ruling coalition a month earlier, has faced a spate of sharp criticism not only from the political opposition but also from influential international financial institutions, civil society and the business sector. President Giorgi Margvelashvili pledged to veto the bill in case it was endorsed.
According to the amendments, a new body – the Financial Supervisory Agency (FSA) – will monitor and conduct oversight of Georgia’s banking sector and financial institutions, a function currently carried out by NBG. A seven-member board, including a representative and the president of NBG, as well as five government nominees, will run FSA after the parliamentary confirmation. The board members, in turn, will name the head of the agency, which should also be approved by the parliament.
The critics of the bill discern political motives behind the proposal, arguing that it is designed to undermine the position of NBG’s President Giorgi Kadagidze, who is affiliated with the formerly ruling United National Movement (UNM) party.
The legislation’s timing coincides with an escalating confrontation between senior GD politicians and Kadagidze. The initial attacks against Kadagidze took place in February last year, when the depreciation of Georgia’s national currency reached a dramatic level. Former Prime Minister Bidzina Ivanishvili lashed out at the NBG president, blaming him for inaction to prevent the currency crisis by using the national reserves (See 03/18/2015 issue of the CACI Analyst). Since then, Kadagidze, whose term in office will expire in February 2016, has become a frequent target of attacks from GD politicians.
Opponents of the bill also question the financial advisability of moving banking supervision from the NBG, arguing that there is no economic and financial rationale justifying the damage implied by the planned changes.
Reputable financial institutions, including the International Monetary Fund, World Bank, European Bank for Reconstruction and Development and Asian Development Bank have warned PM Irakli Gharibashvili and Parliament Speaker Davit Usupashvili that splitting the NBG’s functions will weaken “the independence and quality of banking supervision in Georgia” and challenge both stability in the banking sector and the sustainability of economic growth. In particular, they warn against empowering the parliament to appoint FSA Board members, which will undermine the principle of checks and balances practiced in the current appointment procedures for the NBG Board. Such a shift risks leading to a politicization of banking supervision, damaging its independence and autonomy, the institutions assert.
By contrast, GD argues that the amendments will grant “more independence” to the banking sector. A co-sponsor of the bill, GD MP Tamaz Mechiauri, who chairs the parliamentary committee for finances, explained that the proposal will lead to the de-politicization of NBG’s currently politicized board, which “do not reflect at all the interests of those forces, which are currently in power.”
Against the background of such statements, UNM insists that bill was initiated and backed by Ivanishvili, who aspires to obtain a “key” to the banking sector – the only sector that is not under his control.
The president’s office rejected the bill for its lack of professionalism and also lamented that the way it was elaborated contradicts Georgia’s commitments under the Association Agreement with the EU. According to the 2014-2016 Association Agenda, Georgia is obliged to boost the NBG’s independence by revising its legislation according to EU best practices and with the support of experts including from the European Central Bank. In fact, neither NBG, nor local or foreign experts, or representatives of Georgia’s business community, were invited to participate in the preparation process of the draft bill. Moreover, the sponsors of the bill failed to provide the political, financial and economic rationale justifying the prospective reduction of NBG’s functions and the need for creating a new agency.
If the bill is approved, GD will obtain real levers on the FSA Board, which will increase the perception of political motives behind the new amendments.
The president’s pledge to veto the bill will be largely symbolic since GD is well positioned to override it. The coalition holds 86 seats in parliament – 10 more than it needs to overturn a presidential veto.
Given the overall economic context – decreasing exports and investment as well as a slowdown of economic growth in Georgia, the endorsement of the bill will even further fuel speculations on the government’s agenda vis-à-vis NBG, and will complicate Georgia’s relations with financial donor organizations.
By Mina Muradova (08/07/2015 issue of the CACI Analyst)
After 17 days of competition, the first European Games have ended in Baku. Yet the crackdown on dissenting voices continues in Azerbaijan. The country will be remembered not only for its capable hosting of a major sporting event, but also for its silencing of critical voices in connection with the event.
Azerbaijan’s government hailed the games as a triumph and is now considering bidding for the Olympics. “The first European Games will go down in sporting history,” the Minister of Youth and Sport Azad Rahimov said in a statement on July 3. “I’m very proud of what has been achieved in Baku and the positive feedback we have been getting … It has been a success for Azerbaijan and will be a launch pad for future sporting events we will host. The coverage ... and the positive messages we have sent have really highlighted Azerbaijan on the world and European map.”
Next year, Azerbaijan will host the 42nd Chess Olympiad and a Formula One race through the streets of Baku. It will also stage the Islamic Solidarity Games in 2017 and soccer matches in the Euro 2020 competition.
According to Rahimov, “There is a new culture growing, this is very important, of supporting the development of sport … Every ticket sold is an important contribution to sustain and maintain our sporting arenas and develop our athletes in different sports.” Azerbaijan, enjoying loud support at every venue, has surprised many and was second in the medal table with 18 golds. Nearly 6,000 athletes from 50 countries competed in 20 sporting events at the Games that ended on June 28.
However, Azerbaijan was widely criticized before and during the games for politically motivated arrests and for banning the Guardian, along with a number of media outlets and human rights activists, from entering the country to cover the games.
Two days after the closing ceremony in the Baku Olympic Stadium, seating 68,000, the prominent human rights activist and director of Meydan TV Emin Milli posted that “It is remarkable that the government has started repressions against Meydan TV the day after the European Games’ closing ceremony. Several journalists from Meydan TV have been banned from leaving Azerbaijan, stopped at the border and were not allowed to come for a short trip to Tbilisi, Georgia. … from past cases, we may conclude that there is now a criminal case opened and an investigation going on against Meydan TV.”
On June 26, Milli reported that he had received a threat from Minister Rahimov, in connection with his critical reporting on the European Games. Meydan TV is a Berlin-based online television station that provides alternative news coverage of Azerbaijan. During the European Games, Meydan TV’s materials were widely used by international media, including critical cartoons, stories on an Azerbaijani bus driver who crashed into three Austrian swimmers and an interview by a national television station of a fake British tourist – both of which were highly embarrassing to the ruling regime.
International human rights watchdog organizations expressed their concerns over “an increase in the government harassment of independent journalists” in Azerbaijan in the wake of the European Games. “We fear that this growing harassment is a forerunner of a new crackdown targeting Meydan TV’s staff,” said Johann Bihr, the head of the Reporters Without Borders Eastern Europe and Central Asia desk.
Azerbaijan is ranked 162nd out of 180 countries in the 2015 Reporters Without Borders press freedom index. There are currently about 100 political detainees, at least 20 of whom are identified as “prisoners of conscience” by Amnesty International.
Sport for Rights calls on the Azerbaijani authorities to put an end to their ongoing attempts to silence critical reporting, and to take immediate steps to improve fundamental freedoms in the country, including by releasing all the journalists and human rights defenders currently behind bars for political reasons.
The campaign further calls on the European Olympic Committees to speak out, publicly condemning the threat against Milli, as well as the broader human rights crackdown taking place in the country. Finally, Sport for Rights calls on German authorities to provide Milli with immediate and full protection.
The Central Asia-Caucasus Analyst is a biweekly publication of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Transatlantic Research and Policy Center affiliated with the American Foreign Policy Council, Washington DC., and the Institute for Security and Development Policy, Stockholm. For 15 years, the Analyst has brought cutting edge analysis of the region geared toward a practitioner audience.