Essential CIS Politics: December 2018
Russia vows to restrict NATO warships in Arctic Ocean - On November 30 Russia promised to limit the movement of warships from NATO countries in the Arctic Ocean. This ocean to the north of Russia is of strategic importance. Goods and exported from Russia and imported to Russia via this route. Global warming has made these seas passable to merchant ships. The northern route between Europe and Asia is two weeks shorter for merchant craft than taking the Suez Canal. Many East-West commercial flights take this route. Maersk, the Danish shipping company, had a ship sail from St Petersburg to Vladivostok in 37 days in September. There is presently only a three-month window each year when the seas is navigable there. But if the planet continues to heat up then some scientists predict this time may be elongated. Some oil and gas has been discovered there in recent years and there may well be far more precious mineral resources under the North Pole.
Ukraine slow economic growth - The Ukrainian State Statistical Commission declared that GDP growth for the third quarter was 2.8%. This may seem impressive but it is lower than for the previous two quarters. Ukraine's budget is predicated on growth of at least 3%. The World Bank predicts that Ukrainian GDP will slow even further next year. The one bright spot for Ukraine is an increase in trade with China. It did USD 5.8 Billion up to the end of August this year. China will soon be the main trading partner. Ukraine desperately needs new markets and indeed sources of import because of its fraught relationship with Russia.
Tajikistan Dam opens -Tajikistan has opened a hydroelectric dam. This is intended to make the country energy independent in time. There are more sections of the dam to complete. Eventually the dam is supposed to generate so much electricity that it will be exported to nearby countries. Uzbekistan initially objected since it exports electricity to Tajikistan. Moreover, the dam would reduce waterflow to Uzbekistan. Uzbekistan produces cotton and this is a very thirsty activity.
Georgia a new president was elected - On November 28 Salome Zurabishvili was elected. She was born in France to Georgian exiles. Indeed, she was once France’s ambassador to Georgia. There was no decision winner in the first round of the elections, as in no candidate secured over 50% of the vote. In the second round the woman prevailed winning 60% of the vote. She did not have a political party. However, she was unofficially supported by Georgian Dream. Zurabishvili and her rival both accused each other of being Russian stooges. Zurabishvili is thought to want to bring Georgia into NATO and the EU. She was inaugurated on December 16.
Azerbaijan non-oil exports increase - Azerbaijan’s non-oil exports are slightly up. The country is trying to diversify away from hydrocarbons. The heavy reliance on oil and gas exports means that the country is very vulnerable to drops in to the world price of these commodities. The country’s biggest five non-oil trading partners are (from largest to smallest) Russia, Turkey, Georgia, Switzerland and Kazakhstan. Its trade with Russia went from USD 423 million to USD 467 million from last year to this year.
Armenia overwhelming victory for Pashinyan - Parliamentary elections were celebrated on December 9 in Armenia. As expected, Nikol Pashinyan’s My Step Alliance obtained a convincing victory with 70.4% of the votes. Businessman Gagik Tsarukian’s Porsperous Armenia Party and pro-Western Bright Armenia obtained 8% and 6% of the votes respectively. The turnout was about 49%, 10 points lower than in last year’s parliamentary elections. The results have been better than expected for My Step Alliance. A group of US Congressmen as well as Sir Alan Duncan, minister of State for Europe and the Americas, have welcomed the results.
Turkmenistan and Afghanistan open a railway - A railway has been opened between Turkmenistan and Afghanistan. 88km of track in Turkmenistan has already been laid and was inaugurated on November 28. The Afghan President Ashraf Ghani attended. When completed it will be 400 km track long going through Afghanistan and into Tajikistan.
Uzbekistan trade war against Ukraine - Ukraine banned the import of Uzbek cars on December 3. Uzbek manufactured cars comprise only around 1% of cars in the Ukraine but it is still a financial blow to Uzbekistan. In retaliation Uzbekistan is prohibiting the import of certain Ukrainian foodstuffs and medicines. Uzbekistan accounts for 60% of Ukrainian sugar exports. Why is all this happening? It could be because Uzbekistan is too close to Moscow. As Ukrainian sanctions against Russia have a negligible impact perhaps Kyiv seeks to targets pro-Russian states.
Moldova salaries up 12% YoY - Moldova released statistics stating that salaries have risen an average of 12%. This is 9% in real terms. The country is facing a labor shortage in some sectors. 29% of the population have claimed Romanian citizenship in the last decade. Moldova borders Romania and was once part of Romania. Moldova has Romanian as an official language along with Russian. As Romania is an EU member state citizenship of Romania allows a person to work anywhere in the EU. Moldova is the poorest country in Europe and is not an EU member state.
Belarus oil price dispute between Russia and Belarus - Russia and Belarus are not making progress in their negotiations over oil prices. The Belarussian Ambassador to Russia Vladimir Semashko has said so publicly. Belarus gets most of her energy from Russia. Energy for industrial use is a sore point for Belarus. The Eurasian Economic Union (Russia, Belarus, Kazakhstan and others) should ensure preferential pricing for member to member deals. Belarus has a lot of heavy industry particularly tractor manufacturing. MAZ (a Belarussian company) pays 11 cents per Kilowatt Hour and USD 276 per cubic meter of gas. This is three times and four times more respectively than Russian companies.
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