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Cryptocurrency producers invest in Kazakhstan

ALMATY/OCT. 27 2021 (The Bulletin) — Cryptocurrency miners are continuing to invest in Kazakhstan despite a cap on the amount of power they can use after they were blamed for outages.

Taoping Capital, which is listed on the Hong Kong Stock Exchange, said that it had set up a subsidiary in Kazakhstan called Kazakh Taoping to produce energy-intensive cryptocurrencies.

In a statement, Taoping Capital said that it will spend $3.2m building a data centre in the next six months.

“Kazakhstan is a growing hub for cryptocurrency mining, we believe the completion and operation of the project will create greater value for our shareholders and clients,” Taoping Capital chairman Jianghuai Lim was quoted as saying.

And here lies the quandary for Kazakh government officials. Since China evicted cryptocurrency producers this year because of their excessive energy use, many have set up in Kazakhstan where electricity is relatively cheap and effectively subsidised by the government. The problem is that while they generate investment, Kazakh officials have also blamed them for excess energy use which they say has crashed the systems.

Kazakhstan’s National Association of Blockchain and Data Centre Industry said that cryptocurrency miners bring in 98b tenge per year, around $1.5b, but the government has also said that a single cryptocurrency production centre uses the same amount of energy as 24,000 homes.

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— This story was published in issue 505 of the Central Asia & South Caucasus Bulletin, on Oct. 28 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

China stops processing cargo from Central Asia

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ALMATY/BISHKEK/OCT. 27 2021 (The Bulletin) — China has stopped processing rail cargo to and from Central Asia at its Khorgos terminal on the Kazakhstan-China border because it is prioristing a backlog of wagons heading to Europe.

A Beijing-based official from Kazakhstan’s national railway company Temir Zholy told media that there were 3,000 railway wagons stuck at the border trying to get into Kazakhstan and 7,000 trying to get into China.

“The main demand from the Chinese side is for container trains to the EU,” the official was quoted as saying. “They account for 90% of all traffic, while in the direction of Central Asia only 10%.”

Freight networks in Central Asia are under increasing pressure. Kyrgyz officials have also said that their usual border crossings directly into China at the Torugart and Irkeshtam passes are either closed or reduced to a fraction of their pre-coronavirus traffic, forcing most truck drivers to cross into Kazakhstan and head for Khorgos.

Not only is this a major detour but Kyrgyz truck drivers have said that Kazakh officials harass them. The head of the Kyrgyz Freight Carriers Association Temirbek Shabdanaliev said that he thought that Kazakh customs officials had been told to harass Kyrgyz drivers to put Chinese companies off using the Kyrgyzstan route into Central Asia.

“Our drivers have to unload and load several times, often in bad weather. This takes five or six days,” he said.

Kazakh officials have said they are trying to clamp down on smuggling.

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— This story was published in issue 505 of the Central Asia & South Caucasus Bulletin, on Oct. 28 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Turkmen foreign minister flies to Kabul for Taliban meeting

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OCT. 27 2021 (The Bulletin) — Turkmen officials were preparing to fly to Kabul after the Taliban government said that it supported its moves to build a gas pipeline, dubbed TAPI, across the country.

The project is important to Turkmen leader Kurbanguly Berdymukhamedov because he wants to diversify Turkmenistan’s gas clients away from an over-reliance on China. The Western-backed government in Afghanistan had supported the TAPI plans but there were some concerns that the Taliban, which took control of Afghanistan in August, might ditch it.

Turkmen officials, though, have taken a comparatively soft line towards the Taliban since they took power, opening up lines of communications and sending aid. Now, it seems, the Taliban have decided to back TAPI.

In a statement, the acting Taliban minister for mines and petroleum, Mohammed Issa Akhund, said that the project would now go ahead, although he didn’t give dates.

“We have been working hard for some time and we are ready to take pride in starting work on the TAPI project,” he said.

The pipeline is slated to carry 33b cubic metres of gas across Afghanistan to Pakistan and India from Turkmenistan’s giant Galkynysh field once it is completed, an ambitious plan by Turkmenistan to turn itself into the region’s main gas exporter.

Under the current plans, Afghanistan would keep about 5% of the gas supplies and also earn hundreds of millions of dollars in transit fees.

Separately, the Taliban government also said that it will pay Uzbekistan millions of dollars in fees it owes for electricity purchases. Like Turkmenistan, Uzbekistan has looked to engage with the Taliban government in Afghanistan since it took control of the country, hosting its officials in Termez and sending envoys to Kabul.

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— This story was published in issue 505 of the Central Asia & South Caucasus Bulletin, on Oct. 28 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

New coronavirus variant discovered in Azerbaijan

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OCT. 27 2021 (The Bulletin) — Health officials in Azerbaijan said that they had detected six cases of a new variant of the coronavirus which has been described as 15 times more dangerous than the Delta variant. The AY.4.2 variant was first discovered in Britain, the US and Israel but has now spread to other countries.

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— This story was published in issue 505 of the Central Asia & South Caucasus Bulletin, on Oct. 28 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Internet companies will pay tax in Kazakhstan

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OCT. 27 2021 (The Bulletin) — Internet companies such as Google and Amazon will pay tax in Kazakhstan for the first time from January, Kazakhstan’s government said. There will also be a new tax brought in for cryptocurrency miners. Kazakh businesses have complained this year that the Kazakh tax system fails to tax online companies properly.

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— This story was published in issue 505 of the Central Asia & South Caucasus Bulletin, on Oct. 28 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Swiss double Karimova cash to return to Uzbekistan

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OCT. 27 2021 (The Bulletin) — The authorities in Switzerland more than doubled the amount of cash to 340m francs ($371m) that they will return to Uzbekistan from accounts linked to Gulnara Karimova, the imprisoned daughter of former Uzbek leader Islam Karimov, Swiss media reported. The extra cash was found in a BVI account linked to Karimova. She has been in prison in Uzbekistan since 2014 for various financial crime convictions.

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— This story was published in issue 505 of the Central Asia & South Caucasus Bulletin, on Oct. 28 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Tajikistan approves construction of Chinese military base

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BISHKEK/OCT. 22/27 2021 (The Bulletin) — — Tajikistan approved the construction of a Chinese military base and Kyrgyzstan ordered military drones from Turkey, deals that challenge Russia’s traditional security dominance in Central Asia.

Under this new agreement, China will build a military base on Tajikistan’s border with Afghanistan and publicly acknowledge a base that it has operated in the Pamir mountains for the past couple of years, Radio Free Europe/Radio Liberty reported by quoting what it described as a “communique sent from the Chinese Embassy in Dushanbe to Tajikistan’s Foreign Ministry”.

These are the only Chinese military bases in Central Asia and show just much influence China has built up in Tajikistan over the past few of years. Neither the Tajik nor Chinese governments have commented on the Chinese base expansion.

Kyrgyz officials were more open about their military deals with Turkey.

Kamchybek Tashiev, deputy PM and chairman of the Kazakh National Security Committee, said that the Kyrgyz military had placed an order for the Bayraktar TB2 drone.

“ Turkey is currently constructing Bayraktar drones for us,” media quoted him as saying. These drones are credited with helping Azerbaijan defeat Armenia in a war for Nagorno-Karabakh last year.

A couple of days later, Kyrgyz interior minister Ulan Niyazbekov flew to Istanbul to meet his Turkish counterpart. Turkish media reported that a bilateral security deal was imminent. The deals highlight Pres. Sadyr Japarov’s policy of cosying up to hardmen leaders since he took power in a coup last year.

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— This story was published in issue 505 of the Central Asia & South Caucasus Bulletin, on Oct. 28 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Police in Bishkek close pizza chain after illnesses

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BISHKEK/OCT. 27 2021 (The Bulletin) — Police closed down branches of Pizza Empire in Kyrgyzstan after 300 people fell ill after eating at one of its Bishkek restaurants.

The mass poisoning, one of the biggest recorded in Central Asia, highlights concerns that some people have had with hygiene and food safety standards in Kyrgyzstan.

Media reports said that of the 300 people who had been poisoned, 40 have been hospitalised. Pizza Empire often shares a restaurant, and a kitchen, with Sushi Empire.

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— This story was published in issue 505 of the Central Asia & South Caucasus Bulletin, on Oct. 28 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Final campaigning in Tbilisi mayoral election

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OCT. 27 2021 (The Bulletin) — Rivals Kakha Kaladze of the Georgian Dream party and Nika Melia of the United National Movement party held their final rallies before an election on Oct. 30 to become the mayor of Tbilisi. This runoff election was triggered because Mr Kaladze, the incumbent, failed to win more than 50% of the vote in the first round of the election earlier in October.

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— This story was published in issue 505 of the Central Asia & South Caucasus Bulletin, on Oct. 28 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Georgian and Kyrgyz Central Banks keep interest rates steady

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OCT. 25/27 2021 (The Bulletin) — The Georgian and Kyrgyz central banks both decided to keep their interest rates steady but warned that accelerating inflation may force more rises. Georgia raised its interest rate to a 13-year high of 10% in August. It said that inflation was now measuring around 12%. As for Kyrgyzstan, it kept its interest rate at 7.5% and said that external factors were driving inflation.

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— This story was published in issue 505 of the Central Asia & South Caucasus Bulletin, on Oct. 28 2021