Astana Wins Bid to Host Expo 2017 World’s Fair

A November 22 vote by the General Assembly of the Bureau of International Expositions (BIE) named the Kazakh capital, Astana, as the host for the 2017 world’s fair, Expo 2017. The event will coincide with the capital’s twentieth-anniversary celebration. The exposition will be dedicated to the theme of future energy and will be the first BIE international exposition to be held within the Commonwealth of Independent States.

Several news reports in December indicated that the Kazakh government plans to make Expo 2017 into a massive investment project for its capital. Tengrinews reported in early December that construction for the event would likely cost $1.5 billion, a sum that the country expects to recover through advertising and sales of pavilion space. The government has planned large infrastructure projects—including a 42-station light-rail system—to address the influx of 6–7 million visitors to Astana, which has a permanent population of less than 1 million. Kazakh President Nursultan Nazarbayev even floated the idea of constructing a miniature, domed city within a city for the event, a grand project seeking to address Astana’s frigid temperatures, which can drop below -40 oF in the winter.

Nazarbayev has called for the financing of the project to be as transparent as possible to diminish popular fears that corruption might increase with the massive influx of capital.

The Kazakh government believes Expo 2017 presents three major opportunities for the country. The development of Astana itself is a primary target, and 279 acres of land have been allocated for construction of infrastructure, restaurants, and hotels. President Nazarbayev also believes that the fair will boost innovation and international interest in the country, even referring to Astana’s selection as host as “Kazakhstan’s biggest international achievement over the years of independence.” Finally, the exposition’s theme of renewable energy reflects a central focus of the Kazakh government, with the recently announced Kazakhstan 2050 Strategy stating that at least half the country’s energy supply will come from renewable and alternative sources by 2050.

Tajikistan Joins World Trade Organization

On December 10, Tajik President Emomali Rahmon signed the accession protocol for Tajikistan’s entrance into the World Trade Organization (WTO), marking the end of Tajikistan’s eleven-year membership bid. Tajikistan’s membership in the organization was finalized on January 9, 2013, when the Tajik parliament ratified the accession agreement. It is the second Central Asian country to join the WTO, following Kyrgyzstan’s 1998 accession.

Both foreign and Tajik leaders expressed hope that WTO membership will ameliorate Tajikistan’s economic difficulties. Following the December 10 ceremony, European Union Trade Commissioner Karel de Gucht claimed that “Tajikistan’s accession will serve as a major engine for Central Asia’s economic development.” Likewise, President Rahmon stated that the WTO will provide “solid foundations for further promotion of sustainable social and economic growth.”

Tajik leaders hope that compliance with WTO requirements will provide a more attractive environment for foreign investors. Tajikistan attracted $933 million in foreign direct investment  in 2011 – the least of any country in the Commonwealth of Independent States, and far too little to jumpstart its economy. However, it is unclear if WTO membership alone will be enough to give Tajikistan the investment bump it seeks. Illustrating this point is the case of neighboring Kyrgyzstan. In spite of its longtime status as a WTO member, the Kyrgyz Republic pulled in only $341 million more in FDI than Tajikistan did in 2011.

Kazakhstan and China Open New Rail Link

China and Kazakhstan opened a new railroad border crossing at Khorgos Pass in late December, connecting a railroad line in the town of Zhetigen (just north of the city of Almaty) to the Chinese province of Xinjiang. The project included 182 miles of new track laid in Kazakhstan, with another 181 miles of track extending across the Chinese border. The crossing is expected to ease traffic at the countries’ only current rail link at Dostyk Station.

China is Kazakhstan’s largest single-country trading partner (its total trade volume is eclipsed only by the EU), and the two countries aim to double their total trade turnover to $40 billion by 2015. The rail crossing at Khorgos, which itself is expected to handle 15 million tons of commodities turnover by 2020, is just one aspect of a planned cross-border cooperation center meant to support this volume of trade. In addition to a rail link and highway, there are plans to construct several convention centers and exhibition areas in the surrounding region.

Kazakh Premier Conducts Official Visit to Uzbekistan

Kazakh Prime Minister Serik Akhmetov met with top Uzbek leaders, including President Islam Karimov and Prime Minister Shavkat Mirziyoyev, during an official visit to Tashkent in late December. The visit followed a meeting of Karimov and Kazakh President Nazarbayev in Astana last September. Akhmetov’s trip largely focused on improving economic relations between the two countries. The Kazakh premier referred to Uzbekistan as one of Kazakhstan’s “key economic partners” and suggested the creation of a business council as a means of further enhancing bilateral trade relations.

High-level meetings between Kazakh and Uzbek officials are becoming more common, eclipsing what has often been described as a strained relationship between the two countries. Prior to the September 2012 meeting, the last official meeting between Karimov and Nazarbayev took place in April 2008, when Karimov rejected the Kazakh president’s call for the formation of a Central Asian Union.

The increased cooperation may be due in part to Karimov’s attempts to rally support in his fight against the large-scale hydroelectric projects proposed by Kyrgyzstan and Tajikistan. The Uzbek president believes that the upstream republics’ plans to construct additional dams on the Vakhsh and Naryn Rivers threaten the economic well-being of Uzbekistan as well as Kazakhstan and Turkmenistan.

Uzbekistan Halts Gas Exports to Tajikistan

Uzbekistan halted all natural-gas exports to Tajikistan on December 31, 2012, after the two countries failed to reach a new gas trade agreement. Uzbek state gas company Uztransgas notified Tajikistan on December 25 of the impending cutoff. An urgent call from Tajik Prime Minister Akil Akilov to Uzbek Premier Shavkat Mirziyoyev seeking to resolve the issue reportedly went unanswered.

This marks the third time in a year that Uzbekistan has halted gas shipments to its neighbor. The first occurred in early January 2012, when gas shipments were shut off for one day before contracts were renegotiated. On April 1, Tashkent again stopped all gas supply to Tajikistan, citing a need to fulfill its export obligations to China. Shipments resumed two weeks later after a new supply contract was signed.

Many in Tajikistan see the cutoffs as being politically motivated. Tensions between the two states have been growing increasingly strained, primarily due to the escalating standoff over Tajikistan’s planned construction of the Rogun Dam, which Uzbek authorities believe will endanger their country’s supply of water for irrigation.

In the immediate aftermath of the April shutoff, the Tajik embassy in Moscow stated in a press release that Uzbekistan was enforcing a systematic transport blockade against Tajikistan and that Tashkent’s actions could lead to “a humanitarian catastrophe.” Uzbek officials countered that Tajikistan often cannot pay the contracted rates for the gas they receive.

These gas shutoffs pose dramatic economic challenges to the Tajik economy. Uzbekistan is Tajikistan’s only natural-gas supplier, and past shutoffs have forced Tajik companies to decrease their projected industrial output. Representatives of Tajik Aluminum Company—the country’s largest industry and its largest consumer of natural gas—have stated that the company has begun to pursue energy independence and now meets 90 percent of its gas needs through the gasification of domestic coal.