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‘There will be no security and peace in Central Asia, without peace and security in Afghanistan’

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Khusrav Noziri, Secretary General of the Economic Cooperation Organisation (ECO), told Harici: “Afghanistan is not only the security concern for Tajikistan but for the whole region, for the whole Central Asia because the Central Asian countries consider the security of Afghanistan as the security of the Central Asia.”

Established in 1985 with Turkey, Pakistan, Iran, Afghanistan, Azerbaijan, Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan and Turkmenistan as members, and the Turkish Republic of Northern Cyprus (TRNC) as an observer, ECO is an economically-oriented regional organisation with a population of some 450 million.

Established with the aim of developing regional economic cooperation, ECO enables the implementation of regional cooperation projects in the fields of trade, transport, agriculture, energy, environment, health, industry, finance and economy.

Khusrav Noziri, who has been Secretary General of ECO since 2021, has held senior positions such as Deputy Minister of Foreign Affairs in Tajikistan, as well as diplomatic posts in many countries, including Tajikistan’s embassies in Egypt, the Republic of South Africa and China. In 2021, he was awarded the “20th Anniversary of the Shanghai Cooperation Organisation” medal for his contribution to the establishment and development of the Shanghai Cooperation Organisation (SCO).

Ambassador Khusrav Noziri, Secretary General of ECO, answered our questions about the organisation’s goals, upcoming projects and trade cooperation in Central Asia.

The fact that the Middle Corridor continues to move forward despite obstacles is seen as a symbol of the South Caucasus-Central Asia region’s desire for political and economic autonomy. How do you assess the approach of major powers such as China and Russia to this issue?

Middle Corridor is one of the major corridors in the territory of the Economic Cooperation Organization (ECO) and as you know, we have established the Coordination Committee between ECO and United Nations Economic Committee for Europe (UNEC). In this framework, we are discussing how to better implement this project and realization of this corridor. This corridor is of high importance for our region because from the East, it connects our region to China, one of the most important countries in the world, and also, from the West to Europe. And this issue was also raised in Antalya Diplomacy Forum; it was highlighted that due to some events happening in the eastern part of Europe, the northern corridor has some difficulties. So now, we focus on how to better use of the potential which the Middle Corridor possesses, which cross through the ECO region.

Despite Western pressure, the Economic Cooperation Organization refuses to join the sanctions targeting Russia. How do you assess Washington’s measures on secondary sanctions?

As ECO, we agreed among the member states, not to raise political issues and focus only on the issues of economic cooperation and integration among ten member states.  But of course, it is sovereign right of every member state what to decide and whether to implement sanction or not. But what we are doing in our organization is that we have a target set, goals set in trade and transport, connectivity, energy, environment etc. We are now, according to our basic strategic document which is Vision 2025, implementing our projects, in all our priority areas. But, of course, we understand that these sanctions which are enforced against one of our key member states, of course, has negative consequences on our agenda of regional economic cooperation. We understand it. But, nevertheless, we are trying our best to overcome these difficulties and move towards closer cooperation economically and for closer integration in all our priority areas.

Can you give us some details about the remarkable goals which take place in your strategy document, Vision 2025?

According to our basic strategy document which is Vision 2025, we set a target to double our intra-regional trade. If we compare the level of our cooperation in the area of trade, we can see that the amount of our regional trade which is now 9% of from our global trade is much less if we compare with the similar level from other regional economic blocks and organizations. So, that’s why we set the target to double our intra-regional trade. We have two tracks on this. The first is to increase the share of contribution of our organization to the global trade. In 2022, for the first time we, as ECO members, crossed the mark of 1 trillion USD which is about 4% of the global trade. We want to increase our share and our contribution to the global trade. Secondly, we also simultaneously set a target to increase our intra-regional trade, the trade which we have inside the region among the member states. Because if we analyze the trade we can see that many items and commodities could be imported from within the ECO, instead of importing them from outside the block. So, in this regard, we have a huge potential. The second priority area is on transport and communication. In transport and communication, we have many success stories and we already discussed Trans-Caspian Middle Corridor. And also, we have again reactivated the corridor which is called ITI (Islamabad-Tehran-Istanbul) which starts from Islamabad and goes through Tehran and ends in Istanbul. If we compare it with the relevant sea corridor, it will be less expensive and time saving. Now, we are discussing with the Bulgarian companies to extend this corridor to Bulgaria which will eventually connect the South Asia by railway for the first time to Europe. So, it’s another major corridor in our region. Also, we are in the last ministerial meeting on transport which was held in Tashkent last year, we initiated two new corridors, multimodal corridors, which are called TUTIT and KUTIT. TUTIT is abbreviation for Tajikistan, Uzbekistan, Turkmenistan, Iran and Türkiye. KUTIT is for Kyrgyzstan, Uzbekistan, Turkmenistan, Iran and Türkiye. Both are plus China. These two corridors are multimodal corridors. In last September, we had the first meeting of the working group in Dushanbe and now we are discussing when we should have a test-run alongside the TUTIT multimodal corridor. 

Another project it is KTI which is Kazakhstan, Turkmenistan and Iran. During the summit which we held in Ashkabad, we agreed to commercialize this transport corridor. One of our targets in the area of transport and communication is to make our transport corridors economic and trade corridors and thus commercialize them. Also, we are developing our cooperation in the area of transport in the maritime cooperation because we have Caspian Sea and Persian Gulf in the south, these are important sea ports. Also, Gwadar sea port in Pakistan and also the important sea ports in Türkiye will be included in the project. Three of our countries in organization have access to the sea but the majority of them, remaining seven member states are landlocked countries. And in this regard, the issues related to increasing the potential of landlock countries and providing them the access to the sea through this echo-gates, is of great importance. 

Also, we have a good cooperation in the aviation sphere. In the last ministerial meeting on transport, we decided to grant ECO the status of a hub to Gabala of Azerbaijan and Samarkand of Uzbekistan. This status, which also we hope that, will increase the potential of landlock countries in attracting the business, investments and etc. 

Other top priority areas are energy and environment. On energy, I would like to say that we have two flagship important projects. The first one is the establishment of ECO Clean Energy Center in Baku. This is a joint project which is implemented together with United Nations Industrial Development Organization (UNIDO) and the initial phase of the establishment has been completed. Now, we are moving towards the implementation of the next stages of this project. We hope that during the next Conference on Parties 29 (COP29), which will be hosted by Azerbaijan, which is one of our important member states, we will succeed in inauguration of the ECO Clean Energy Center in Baku.

Another flagship program in energy sector is ECO-RAM. It’s a regional electricity market, now it’s at pilot stage. In this project, Türkiye and Iran, as neighboring countries are participating, with the potential involvement of Azerbaijan. But we think that this project has a prospect to be expanded because in our region, we have other countries which are rich in the natural resources and the production of electricity. Some of them are based on the fossils and some of them are based on electricity like Tajikistan and Kyrgyzstan. This cooperation is promising. 

Another area is environment. During the last COP in Dubai, we had the ministerial meeting on environment. In this meeting, we decided to have the first meeting of the high-level dialogue platform on environment cooperation in Samarkand, Uzbekistan. It’s a newly established mechanism in our organization.

The next priority area is tourism. Now, we are developing the concept of the tourism capitals of ECO. Now, we have six cities in this project. One of them is Erzurum of Türkiye. Next year, Erzurum will be announced as the tourism capital of ECO. In this regard, we are planning to convene major events in Erzurum. After Erzurum, it will be the turn of the Shusa. 

Last year, China organised a quintet summit in Xian that brought Central Asian countries together. How would you interpret China’s growing role in the region?

We understand that China plays a growing role in the ECO member states. That’s why ECO is interested in developing, strengthening and expanding relations with China. As you know, some significant number of ECO member states are the neighbors of China. Starting from Kazakhstan, Kirgizstan, Tajikistan and Pakistan are direct neighbors of China. ECO member states have significant and big projects, infrastructural projects etc. with China, which we consider that eventually could benefit ECO as well for increasing our economic cooperation and integration. So, China, for us, is an important trade partner, economic partner, investment partner. 

Some countries are pro-Chinese investments and some countries are feeling worried regarding the Chinese economic growth and being bounded to Belt and Road initiative and debts caused by that. What is the ECO’s position? 

If you look at the reality on the ground, I think all member states are welcoming the growing Chinese investments in their economies. We can see it on the ground in the forms of realization of the grand projects and different various areas.

You are not giving this interview on behalf of Tajikistan but if you allow me, I have some questions about your home country as well. We don’t know much about Tajikistan. We cannot speak much with Tajik politicians. It’s very hard to catch them and talk to them. We would like to know more about foreign policy of Tajikistan as according to the Tajikistan constitution it stressed upon a peaceful policy. What is that criteria and how it goes with the regional countries and beyond?

As Secretary General of Economic Cooperation Organization, of course, I cannot talk on behalf of Tajikistan, but I can say that Tajikistan is a very important and active member of our organization. Tajikistan hosted the summit of the organization, the Council of Ministers of the Organization several times. As you know, the Council is the highest decision and policymaking body in our organization. Tajikistan also participates in implementation of different regional projects in our organization. We value the participation of Tajikstan. In Antalya Diplomacy Forum, we once again met with the Foreign Minister of Tajikistan, Sirojiddin Muhriddin and had an exchange of views on the areas of cooperation and strengthening the role of Tajikistan and the activities.

Apparently, Tajikistan has a big issue with two of its neighbors and that’s are Kyrgyzstan and Afghanistan. What steps has been taken to normalize its ties or if there is any chance for improving of ties between those countries?

Again, I cannot speak on behalf of Tajikistan but what I know is that: Both Tajikistan and Kyrgyzstan are our members. We welcome the negotiation process which is going on between Tajikistan and Kyrgyzstan. We heard about the positive developments and the big area of the joint border between Kyrgyzstan and Tajikistan. I think, the delegations agreed on how to demarcate this border. There are positive steps and positive development in this area. Afghanistan also is the member state of ECO. Afghanistan is very important especially in terms of the transport and especially in the terms of energy because we have projects with regard to Afghanistan but because of this current situation and de-facto rulers in Afghanistan, many of our projects are now on-hold. But, we have special program for Afghanistan.

Can we say that this is also one of the biggest security concerns of Tajikistan, too? 

Afghanistan is not only the security concern for Tajikistan but for the whole region, for the whole Central Asia because the Central Asian countries consider the security of Afghanistan as the security of the Central Asia. It was stated several times by Central Asian leaders that there will be no security and peace, without peace and security in Afghanistan.

Do you refer to Afghanistan as a country or do you refer to this threat regarding the de-facto rule of Taliban?

I refer to Afghanistan as a country because this situation not started two years ago. It continues already more than 40 years. So, I’m referring to the country. Afghanistan is an important member of our organization but due to this this current situation, Afghanistan regrettably cannot officially attend in our meetings.

The US and China are interested in investing in Tajikistan. Which of them have invested more in Tajikistan and in which areas?

[Laughter] For the countries receiving investments, I think, there is not big difference in who is investing as long as the money flows. I think the countries are interested to increase these investments and increase the number of countries who are coming with the investment. So, I believe, this is a policy of Tajikistan as well.

Looking on the ground, which country is investing more?

According to the statistics which we have, of course, China is the major investor not only in Tajikistan but in all Central Asian countries and in Iran as well and in Pakistan as well. 

Is there anything that I didn’t ask you but you want to tell us?

There is one more priority area which I haven’t mentioned. It is human resources and sustainable development. In this regard, this year we are going to convene the first Forum on Sustainable Development in Arkadak, Turkmenistan, which is the new modern smart city. This year is of the chairmanship of Iran. Iran came with the theme of enhanced and resilient ECO region through intra-regional trade. Again, coming back the intra-regional trade is a top priority for our region. With this regard, we are taking necessary measures for our organization. We negotiated on The Economic Cooperation Organization Trade Agreement (ECOTA) and signed and ratified by five member states, which is the minimum for entering into force. But regrettably, this agreement remains non-operational due to the divergence in opinion among the parties on the articles related to the reduction of the tariffs. But, it is not the end of the story but we are now exploring other ways how to facilitate the trade in particular. There are draft trade facilitation strategy and draft trade facilitation agreement. 

ASIA

China and Pakistan agree to speed up work on CPEC: Insecurity is key challenge

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China and Pakistan have agreed to accelerated progress on the China-Pakistan Economic Corridor (CPEC), a massive bilateral project to improve infrastructure within Pakistan for better trade with China and to further integrate the countries of South Asia. CPEC is part of the larger Belt and Road Initiative (BRI) to improve connectivity, trade, communication and cooperation between several countries. BRI was announced by the Chinese government in 2013, and work to achieve this goal has been in progress since then. CPEC in Pakistan includes projects such as a 3,000km road construction, water-electricity dams, building and rebuilding of sea-and-land corridors as well as work on deep water port in Gwadar in the Arabian Sea and a well built road and rail link from this port to Xinjiang region in western China. This port would be a shortcut trade route between Europe and China. In Pakistan, the CPEC will overcome electricity shortfall, infrastructural development and modernizing transportation networks. Pakistan can also move itself from an agricultural based economic structure to industrial based and CPEC is only the key project to achieve this goal.

Pakistan officials visited China to push work on CPEC

Pakistan Foreign Minister Ishaq Dar had paid a three-day official visit to China, where he met with  Minister of the International Department of the Communist Party of China, Liu Jianchao, where they discussed issues related to the CPEC.

During the meeting in the capital city, Beijing, the two sides agreed to further accelerate work on CPEC projects and they also discussed the longstanding cooperation and exchanges between the political parties of Pakistan and the Communist Party of China.

Senator Dar reaffirmed Pakistan’s firm support to China on its core issues while Minister Liu expressed China’s support for Pakistan’s sovereignty, territorial integrity and high-quality socioeconomic development, according to a statement issued by the Foreign Office.

The two leaders also reaffirmed the importance of the All-Weather Strategic Cooperative Partnership between Pakistan and China and to further reinforce mutually beneficial collaboration. “

They also expressed joint determination to accelerate progress on all CPEC projects including ML-I upgradation, Gwadar Port and KKH realignment.

CPEC security is important to Sino-Pakistani ties

China and Pakistan both are on the same page to accelerate work on CPEC, but security is the main obstacle and the important part of the project is Gwadar Port which is located in Balochistan, a state where security incidents to hamper CPEC work has been on large scale.

Indeed, CPEC projects have yielded tangible benefits for the local economy and its people, but the recent wave of attacks has been one of key challenges, which Pakistani security agencies apparently failed to overcome.

A view of hydel power project under China-Pakistan Economic Corridor (CPEC) built on Jehlum river.

Pakistani security apparatus must put security issues on their priority in the wake of recent attacks against Chinese workers.

On May 9, at least seven workers were killed in the city of Gwadar in Balochistan, while a few weeks earlier, 11 people were shot dead in two separate incidents again in Balochistan.

It is worth mentioning that all the seven victims in Gwadar and the nine bus passengers who were gunned down near Noshki were from Punjab province. These targets clearly add to the ethnic dimension of the incident and this is because the Baloch Liberation Army (BLA), has been openly said to target anyone as they want freedom of Balochistan. Targeting people from Punjab is part of their strategy to pressurize the central government in Islamabad.

BLA group would do everything to hamper CPEC proejct

Meanwhile, BLA would also not hesitate to attack Chinese sites and workers in a bid to hamper the work on CPEC and BLA will continue to target Chinese engineers to stop progress on CPEC as well as to damage China-Pakistan relations.

On March 26, five Chinese nationals and a Pakistani citizen were killed in a suicide attack targeting a vehicle carrying Chinese staff working on the Dasu Dam in the Khyber Pakhtunkhwa province.

It is important to mention that similar attacks targeting Chinese citizens happened in 2021 and 2022, leaving many people dead and wounded.

Indeed, each of these terror attacks has its own specific dynamics and the target is clear to just hamper CPEC and also to discourage China on CPEC project, but so far Beijing’s reaction to the incident has been firm, but at the same time for example after March 26 attack, Beijing called for a thorough investigation, and even called for a forming a join investigation team. China also assured that Beining and Islamabad’s cooperation can not be sabotaged by any attempt and recently both agreed to accelerate work on the CPEC.

There have been security failures on part of Pakistan

Undoubtedly, there have been security failures on the part of the security establishment of Pakistan, which failed to maintain security across the country, especially in Balochistan. The Pakistan army needs to chalk out an effective security plan to help improve security and avoid any security lapses that could affect Pakistan-China interests, and particularly to protect the lives of humans. The recent killing of seven barbers in Balochistan is unjustifiable.

Security issue has always been a headache in Pakistan, where several big incidents happened, but there could be lots of internal, regional and international reason behind that. But what is the most important is that Pakistan is also suffering from fragile economic condition and CPEC is one of the most important projects that could play an important role in improving the country’s economy.

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Mighty dollar pushes Asian governments to boost currency protection

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Asian governments are increasingly intervening in the market to stem the slide in local currencies that has been driven by the strong US dollar this year.

According to the Nikke Asia report, the relative strength of the US economy and high interest rates, which are likely to remain high for an extended period, have caused Asian currencies to weaken.

Asian policymakers are responding to the dollar’s strength with varying degrees of caution, from verbal warnings to interest rate hikes. Some are even believed to be intervening by buying local currencies from the market. The move is seen as “undermining the credibility of central banks”, says the report.

Analysts will be focusing on the US Consumer Price Index for April, which will be released on Wednesday. Last month’s data caused the Japanese yen to fall sharply against the dollar. The Japanese yen is one of the Asian currencies most affected by the stronger-than-expected US economy.

Intervention continues as yen falls in Japan

Analysts say that although official data has not yet been released, the Japanese government appears to have intervened twice on 29th April and 1st May to support the yen. Prior to the first suspected intervention, the yen had fallen to its lowest level in 34 years, breaching the 160 level against the dollar.

The yen’s decline has been driven by the almost 5 percentage point difference in bond yields between the US and Japan. According to Refinitiv, the Japanese yen is hovering around 155 against the dollar, down 9.4% this year.

According to Mizuho Securities strategist Shoki Omori, further dollar selling and yen buying intervention may be difficult for Tokyo without support from Washington.

The summary of the Bank of Japan’s (BoJ) April policy meeting released last week showed that President Kazuo Ueda struck a “hawkish tone” compared to his previous public statements. While some board members felt that rate hikes could be accelerated, many said that the BoJ should reduce bond purchases.

However, Omori believes that “short” positions against the yen will continue until fundamentals change, as there is “no magic wand” to reverse the yen’s weakness.

South Korea’s central bank ‘burns dollars’

South Korea’s foreign exchange reserves fell by around $6 billion last month from March, partly due to the country’s efforts to halt the fall of the won, according to the Bank of Korea.

The country’s central bank said in a statement that the decline in foreign exchange reserves was related to several factors, including “market stabilisation measures such as currency swaps with the National Pension Service”, which were introduced in September 2022.

According to Moon Da Woon, an economist at Korea Investment & Securities in Seoul, the markets believe that the South Korean government is helping to stem the won’s rapid decline.

South Korea’s finance ministry and central bank verbally intervened in April to warn against rapid currency movements when the won hit the 1,400 level against the US dollar for the first time in almost a year and a half.

Indonesia hikes rates

In Indonesia, the central bank unexpectedly raised its benchmark interest rate by 25 basis points to 6.25% last month in a bid to strengthen the currency.

Bank Indonesia Governor Perry Warjiyo told a press conference last week that data showed no further rate hikes were needed for now and pledged to work to strengthen the currency to below 16,000 per dollar.

The rupiah has strengthened to around 16,000 to the dollar from around 16,300 before the surprise rate hike, but has yet to recover after falling to a four-year low last month.

Indian rupee and Malaysian ringgit also fall

The Indian rupee, one of Asia’s most stable currencies, fell to an all-time low of 83.739 against the dollar last month.

The rupee has been “tightly managed” by the Reserve Bank of India almost since October and has traded in a narrow range around 83, said Rob Carnell, chief Asia-Pacific economist at ING in Singapore.

Carnell said all central and regional banks in Asia, except Malaysia, have foreign exchange reserves to cover more than six months of imports, the threshold for adequate reserves.

The Malaysian ringgit is trading at 4.737 to the dollar, having fallen to a 26-year low of 4.7965 in February.

The ringgit’s weakness is due to the strengthening dollar, a decline in Malaysia’s current account surplus and the currency’s strong correlation with the weakening Chinese yuan.

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China launches $138bn bond sale

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China will start selling the first batch of 1 trillion yuan ($138 billion) of ultra-long term private government bonds on Friday to help revive the economy.

The central government will begin such sales this year by issuing 30-year bonds, according to a statement from the Ministry of Finance. According to Bloomberg, this ends months of speculation about when the bonds, only the fourth of their kind in 26 years, will be launched after a sweeping plan was announced in March.

According to the report, President Xi Jinping’s government is stepping up financial support to help an economy under pressure from the housing crisis and weak consumer confidence. Government spending on infrastructure, which can be financed through bonds, will play a key role in helping China achieve its annual growth target of around 5 per cent, above economists’ forecasts.

Australia & New Zealand Banking Group’s Xing Zhaopeng said the increase in gross domestic product could be as much as 1 percentage point.

“The timing of the bond issue is likely aimed at offsetting the impact of protectionist tariffs the US has threatened to impose on Chinese goods,” Zhaopeng said, noting the uncertainty ahead of a Communist Party meeting on reforms in July.

The 20-year and 50-year bonds will be sold on 24 May and 14 June respectively. Bond auctions will continue until the last batch of 30-year bonds goes on sale in November. The ministry did not disclose the amount of bonds to be sold.

Bloomberg announced the private government bond sale on Monday. The issue will include 300 billion yuan of 20-year bonds, 600 billion yuan of 30-year bonds and 100 billion yuan of 50-year bonds, according to people familiar with the matter, who requested anonymity because the information is private.

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