Wednesday, February 20, 2013

John Stewart and Kazakhstan

Comrades,

I absolutely love John Stewart's "The Daily Show." While I read the major print news outlets, I rely on Stewart's reporting of domestic politics, as I have no patience for many of the talking heads on the major cable networks.

On last night's show, Stewart featured a segment titled "We may be f#@ked, but at least God isn't hurling rocks and loose horsemeat at us," in which the comedian makes fun of the recent scandal in Europea in which significant amounts of horse meat appeared in beef patties and the meteorite that landed in Russia.

Stewart features a clip of a journalist reporting that horse is consumed in "France, Italy and Kazakhstan." Stewart then goes on to mock a KFC-like assortment of horse meat, featuring the head of the horse. Here is the clip, "Horse d'Oeuvre":




I would like to correct Stewart. Kazakhstanis do, in fact, eat horse meat. It is quite tasty. They do not, however, eat the heads of horses. Kazakhstanis eat the heads of lambs. In fact, at traditional Kazakh feasts, lambs head is served and the honored guest eats the eye of the lamb. Here are some pictures of some lambs heads in Kazakhstan.





Now, Stewart's analysis of Russians is hilarious. My biggest criticism is that when he talks about the woman eating a bumper of a car, they would put mayonnaise, not cheese as he suggests, on the bumper. Copious amounts of mayonnaise. Here is the clip, "How I Meteored Your Motherland":



So the moral of the story is that while John Stewart is a brilliant comedian, don't believe everything he says. Kazakhstanis do not eat horse heads -- they eat lambs heads.

That is all.

Monday, February 18, 2013

Best Youtube Video Ever

Comrades,

As I was procrastinating my homework and on Facebook, my Kazakh friend posted this Youtube video, "Opera at the Green Bazaar in Almaty." It is fantastic. Enjoy!


Saturday, February 16, 2013

Central Asia and the WTO


Last Wednesday, the Central Asia-Caucus Institute (CACI) Silk Road Studies Program at the Johns Hopkins University hosted a panel featuring the ambassadors from Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, as well as officials from the U.S. Trade Representative, to discuss the Central Asian states’ path to membership in the World Trade Organization (WTO).

The WTO is an international organization with 158 member states that assists “producers of goods and services, exporters and importers conduct their business.” Membership in the WTO is not easy, and requires countries to institute significant reforms in the areas of trade, tariffs, customs and industry. All members of the WTO adhere to the principles of non-discrimination in practices of international trade. The WTO also promotes the principles of open trade with low trade barriers (tariffs, duties, import bans and quotas), predictable and transparent trade patterns, free and fair competition and environmental protection. For economies in transition, WTO membership provides the invaluable benefit of having a seat at the negotiating table.

According to remarks made by Ambassador Kairat Umarov, Kazakhstan submitted its application for WTO membership in 1996. Ambassador Umarov and the representatives of the USTR agreed that Kazakhstan is, in the words of Professor S. Frederick Starr, “on the doorstep of WTO membership.” Already, 95% of existing laws within Kazakhstan are in compliance with WTO norms. The remaining reforms to be undertaken are in the areas of agriculture and the development of domestic processing industries. For Kazakhstan, and any economy in transition seeking to join a major rules-based trading organization, the major challenge is determining “how to balance effective implementation of Kazakhstan’s key economic priorities” in accordance with “commitment to WTO accession.” Given Kazakhstan’s geographic position in the middle of the Eurasian continent, the Ambassador explained the country’s strategic vision to become a trade and logistics hub, transforming the country from “land-locked” to “land-linked.”

Like many post-Soviet countries, Kazakhstan’s government heavily subsidies domestic electricity consumption.

Now, when Russia joined the WTO, domestic prices for electricity consumption were forced to gradually increase. During the 1990s, Gazprom essentially provided gas for domestic consumption for free, generating a profit on its hard-currency exports to Europe. After Russia joined the WTO in 2008, Moscow had to gradually increase the price of domestic electricity consumption, as one of the requirements of membership is that domestic industries do not gain unfair advantages via government subsidies. Gazprom had to provide its services “at cost.” Consequently, electricity costs for household gradually increased. On the surface, one would assume that such an increase in electricity rates would generate widespread resentment and political unrest. However, the Russian public has absorbed the gradual price increase, as real per capita income has steadily increased since 2001. The increase in real income managed to offset the changes in energy rates.

Source: "Energy Efficiency in Russia: Untapped Reserves," IFC/World Bank, 2008.


I compare Russia’s experience with Kazakhstan. I have not found a lot of political-economy literature on Kazakhstan’s WTO admission since 2008, and all of the papers published prior to the global financial recession are fairly outdated considering the world average price of oil has achieved record high levels since 2009 and the banking sector has undergone major reforms. I also have not found any models on the effect of WTO admission to Kazakhstan’s domestic energy market, and how the removal of government subsidies for electricity for household domestic consumption will alter per capita GDP growth as well as other macroeconomic and social indicators. While the table below indicates that Kazakhstan’s average per capita GDP has been steadily increasing, following an upward trend like Russia, income inequality has also increased and the provision of electricity services throughout the country is inconsistent. Nearly 8% of the country lives below the poverty line and as of 2009, Kazakhstan ahs a Gini index of 26.7, according to the CIA world indicators database.

Graph made by author with numbers from the World Bank Data Bank, http://data.worldbank.org/ 


At the panel, I asked the USTR representative about the effect of domestic fuel subsidies on Kazakhstan’s economy. She noted that in Russia, WTO admission had a more profound impact on this sector because gas is so intertwined with other sectors of the economy and relates to fertilizer production, among other sectors. This was just a quick, general comment after the panel, so running the numbers would be pretty interesting.

I also found the comments by the Ambassador of Uzbekistan pretty interesting. He discussed delaying admission to the WTO until Uzbekistan is ready. “We must consider under what conditions we will enter.” Politically, the Ambassador’s comments could be interpreted to mean that Uzbekistan does not want to submit itself to the rules of the WTO as the regime remains fairly closed off in terms of economic participation. However, to give credit where credit is due, the Ambassador does make a good point. WTO accession does impact a country’s economy. Uzbekistan now hosts a textile industry and a GM automobile plant. Many parts of the country regularly experience electricity outages and fuel is heavily subsidized. Plus, the cotton monoculture inherited from the Soviet Union remains one of the country’s major industries. They don’t call it “white gold” for nothing.

Finally, it is interesting to look at the entire Central Asia region in the context of WTO membership. Tajikistan recently gained membership into the WTO earlier this year and Kyrgyzstan entered the organization in 1998. With that said, Kyrgyzstan and Tajikistan have experienced political, domestic turmoil and their share in global trade is miniscule. Tajikistan’s aspirations to develop its hydroelectric capacity have been thwarted by political maneuvering by Uzbekistan. Plus, the country lacks domestic capacity for industrial manufacturing and nearly half of its workforce is in Russia or Kazakhstan as migrant workers, sending remittances home. I salute Tajikistan for its WTO membership, but in order to take advantage of the benefits of the WTO trading system, significant domestic reforms must be instituted in order to make the country an attractive destination for foreign direct investment and business development. Kyrgyzstan must also work on strengthening domestic institutions and promoting a business friendly environment.

Above all, the Central Asian states must crack down on corruption by low-, mid- and upper-level officials. Corruption and bribe-taking acts as a tax on the population and encourages entrepreneurs to circumvent formal rules and participate in the informal economy.

While Central Asia is making progress towards full integration into the global trading system, domestic reforms must be seriously undertaken. Membership in the WTO is half the battle. The domestic legal structure is in place, now the regimes must focus on strengthening domestic, institutional capacity. Implementation is a long-term process, but under the right conditions of genuine political commitment, financial and technical assistance, Central Asian states can become active WTO members who benefit from and contribute to global commerce. 

Monday, February 4, 2013

What a year it has been for U.S.-Kazakhstan relations!


January 30th marked the one-year anniversary of the conduct of parliamentary elections, and the visit of then Foreign Minister Yerzhan Kazykhanov to Washington for the U.S.-Kazakhstan strategic dialogue. 

It is symbolic that the new Ambassador of Kazakhstan to the United States, the honorable Kairat Umarov, met with some of Washington’s brightest and most informed followers of Central Asian political developments to convey his policy ambitions. Ambassador Umarov is a career diplomat who has previously served in Washington, and is a real gentleman with a warm smile and kind demeanor. I was particularly impressed with his willingness and genuine interest in engaging with Washington’s policy wonks, which is not at all an easy task. Among his priorities are strengthening Science and Technology (S&T) and Innovation within Kazakhstan. The Ambassador emphasized the importance of promoting bottom-up innovation.

Having just returned from Kazakhstan and spoken with scientists, I found this the most interesting comment. Innovation is an idea, but to make it a reality, requires effective and dynamic institutions that support experimentation, collaboration, publishing, and commercialization.

From my experience, there is innovation and world-class S&T occurring in Kazakhstan and lead by Kazakhstani scientists. Scientists at Kazakhstan National University at Al-Farabi were pioneering projects in the areas of atomic and particle physics and gamma spectrometry. One researcher was measuring levels of excess tritium in the water surrounding Semipalatinsk while another was exploring nuclear waste in Lake Balkhash. I chatted with another PhD student who had just returned from spending several months in Slovenia conducting research. Kazakhstan’s scientific community is active, but the challenge moving forward lies in creating an institutional support structure for scientists to commercialize their activities.

Lab at KazGU at Al-Farabi.

KazGU at Al-Farabi.



The issue lies in the commercialization of innovation and institutions – how can scientists transform their research into a quality deliverable for an academic or commercial audience? While research may occur, the next step is to publicize that research and make it relevant to the international science community as a whole. While organizations such as the International Science and Technology Center facilitate international exchanges, domestic institutions must help by providing an outlet for scientists to collaborate, exchange information, and work with small and medium enterprises. Kazakhstan must create an environment in which independent, scientific and business institutions can thrive from the ground up.

Now, creating such an environment is not the job of the Ambassador and cannot be handled by government alone. Institutions thrive in an environment where low, mid and high-ranking government officials in ministries and law enforcement are committed to rules and do not fall prey to the temptations of corruption and informal payments. This is a societal change that has already begun to a certain extent, as Bolashak scholars return to work in Kazakhstan after studying abroad. The Ambassador noted how they are efficient bureaucrats and excellent, western-style managers. I confess that I am biased, as I have several friends who were Bolashak scholars and deeply respect them. With that said, I had dinner with a friend in Almaty in January who was not a Bolashak scholar, but expressed his preference for working with government officials who were Bolashak scholars, because he knows they are fair, efficient and genuinely good at their jobs.

The Ambassador also discussed Nazarbayev University (NU) as a center for innovation. I argue that NU is different not necessarily in terms of the research divisions within the university, but because it has the networks and institutions to support researchers in actualizing and completing innovative projects.
Development model for Nazarbayev University in Astana.

Lab at Nazarbayev University.

Main Atrium of Nazarbayev University in Astana.



Overall, it was an interesting breakfast discussion and a wonderful introduction to Ambassador Umarov. I can only imagine what will occur in the next year of U.S.-Kazakhstan relations. 

Friday, February 1, 2013

US-Central Asia Relations post-2014

Comrades,

January flew by! Since returning from Kazakhstan, I have been consumed with research, school and overcoming jetlag.

I've also been translating some of the documents I found in the Academy of Sciences in Almaty, which has been a tedious but incredibly rewarding task. One book, "Semipalatinsk svoyimii glazamii" or "Semipalatinsk through my eyes" is the memoirs of a Kazakh scientist who worked at Semipalatinsk. He describes his interactions with the Russians and experiences conducting nuclear tests. Really deep stuff. At one point, he shares an anecdote when a Soviet minister of health visits from Moscow and tells the officials to note report any information to the local inhabitants about the damaging effects of nuclear testing.

Research on Kazakhstan aside, I want to comment about an article that appeared in the New York Times today by Andrew Kramer titled "As NATO Prepares for Afghan Withdrawal, Uzbeks Seek War's Leftovers."

The article explains how the Government of Uzbekistan is interested in purchasing excess surplus military equipment left over from ISAF operations in Afghanistan. While Islam Karimov, who just celebrated his 75th birthday on Wednesday, is an authoritarian ruler and Uzbekistan does have a deplorable human rights record, the U.S. should not dismiss this opportunity to engage with Uzbekistan. 

The article notes that over the next two years, NATO will pull out 70,000 vehicles and 120,000 shipping containers. The U.S. already spends billions of dollars in Afghanistan and sustaining the NDN to supply our troops. It would be interesting for the US government or an academic to conduct a study comparing the costs of moving all of the equipment Uzbekistan is requesting back to the U.S. The amount of time and effort required to move night goggles, drones, armored vehicles, among other things, is exhaustive. Firs the government must evaluate all of the leftover items, then determine where in the U.S. reusable items can be stored. Some items might also be in need of repair. Transporting all of these items via overland trucking routes, ships and airplanes, is also a massive logistical effort and not at all cheap. Given the limited capacity of any organization  including the U.S. military, which is one of the most capable organizations in the world, wouldn't it make more sense to channel efforts into modernizing the military, bringing our troops home and wrapping up our war in Afghanistan? It is probably a lot cheaper to buy new weapons.

Plus, Kramer misses the political argument made by a lot of Central Asian regimes in that a post-2014 Afghanistan without American troop presence threatens regional stability. Naturally, predicting a spillover of violence, the regimes want to strengthen their borders and military. How Central Asian regimes use the supplies upon acquisition is another issue, and is a conversation worth having. However, policymakers and strategic planners should not entirely dismiss the arguments made by Central Asian regimes about the security of the region after the U.S. withdraws from Afghanistan. Central Asia will undoubtedly be affected by the withdrawal and there is historical precedence, with the most recent example being the movement of Tajiks, Afghans and Uzbeks across borders during the Civil War in Tajikistan between 1992 and 1997.

Plus, it is not like there is not a black market for ISAF military items in Afghanistan and Pakistan today. There is a huge black market of items stolen from American containers in transit by Afghans and Pakistanis. From a strategic perspective, it is almost better to be sure that the goods will end up in the hands of a tightly-controlled regime than in the armies of Pakistan or Afghanistan. This would be a lesser of two evils, but at least the U.S. knows the weapons and items will be secure under Karimov's regime.

Finally, this is an opportunity for the U.S. to at least work with Uzbekistan. When I hear arguments by political commentators that the U.S. should end relations with a country, I just think of a middle school cafeteria during lunchtime: Person A is mad at Person B for falling through on plans to see a movie together so they stop talking? Like get real. Cutting off diplomatic relations and all forms of communication -- including defense cooperation -- is not the way to influence policy. What tools does the U.S. have? At least we are talking and we will have members of the U.S. government on the ground.

U.S.-Uzbekistan relations have been strained since the Andijan massacre of 2005 when all NGOs left the country and the U.S. lost our base at K2. 

Yet, now more than ever, the U.S. must engage with the Uzbeks. Islam Karimov is 75 and has been in power since the Soviet times. He has not yet designated a mechanism for the peaceful transfer of executive power. President Karimov is mortal and therefore needs to institutionalize a mechanism to transfer power or name an heir apparent. The unanswered succession question is a source for instability. While the issue of transferring military weapons is not directly related to the succession question, the reality is that we need to at least improve relations and maintain some level of engagement, dialogue and communication with the Uzbeks. 

The bottom line is that U.S. engagement in Central Asia during the withdrawal of forces from Afghanistan and in the post-2014 era must be based on our interests as well as the interests of the Central Asian states. Regime transitions will occur in Uzbekistan, as well as in neighboring Kazakhstan and Tajikistan, over the next five, ten or fifteen years, and the U.S. must engage with these states and establish a productive relationship in order to prevent leadership succession from destabilizing the region. If bilateral relations start at the military level, then so be it. 

As always, I appreciate any feedback. Thanks for reading!