The Times of Central Asia - update of 2 July 2010

In this issue:

1. Point of View: Kyrgyzstan after the constitutional referendum

4. Uzbekistan developing small hydropower industry

1. Point of View: Kyrgyzstan after the constitutional referendum (Kyrgyzstan, July 2, 2010-issue 623) By Giorgio Fiacconi TCA publisher

BISHKEK (TCA) – Although approximately 60 percent of those entitled to vote cast their ballots in the Kyrgyz constitutional referendum last Sunday, the fact that approximately 91 percent approved the new Constitution and the appointment of Roza Otunbayeva as interim president until 31 December 2011 is certainly a big success of Otunbayeva and her provisional Government.

Observers of the OSCE and ODIHR noted that international standards were not fully observed but the referendum was conducted without violence or strong intimidation. There were cases when names were not registered or electoral bulletins in either Kyrgyz or Russian were missing (why in the future not to print bulletins in both languages?) and other issues related to missing documents and IDs. Given the circumstances, and considering the past experience, we can say that the vote was more or less normal. If at the referendum only 8% voted against, we cannot say that the large percentage of those that did not show up were against the constitution of the new proposed President, but were mainly unable to participate (Uzbek refugees and thousands of displaced people), or simply feared that some violence might have erupted. Irrespective of the opportunity to hold a referendum in a country that still has an emergency situation and different opinions of various local and foreign experts and international representatives, the provisional Government has achieved the first objective of its campaign focused on the need to provide legality and obtain a direct mandate from the people. Today, after the referendum, everybody is looking forward to the real normalization and to parliamentary elections that have now been announced to be advanced from the previously indicated date of October 10 to some time in September 2010. The new President will be in office until the end of 2011 and cannot be re-elected. She will oversee the proposed parliamentary election in September or October 2010 and the election of a new President expected to take place in October 2011. What everybody is now questioning, inside and outside Kyrgyzstan, is if there will be further violence, if the new Parliamentarian system will stand up to the country’s requirements, and if political parties and political leaders will be able to give up their internal fighting and drive the country toward a peaceful and effective governance. On this aspect there may be many doubts. Many say that the country is not ready for the proposed democratization. That Kyrgyzstan needs a strong leadership and that Roza Otunbayeva is not the right choice. Others fear that violence can erupt any time and if the previous unrest was externally supported or provoked, a new unrest will have a clear ethnic source. Another big question is the relations with Russia and the members of the SCO and CSTO. A few days ago, during the G20 meeting, Russian President Medvedev criticized the recent reforms of the Kyrgyz provisional government with the introduction of a new constitution and a large transfer of powers from the President to Parliament. Medvedev fears new violence and an increased extremism that may later expand to other Central Asia countries. It is clear that the success of Kyrgyz referendum in the democratic direction claimed by the new Kyrgyz President will undermine the system of other Central Asia countries and the recent contrast inside supranational bodies like the SCO and CSTO is already an indication to that. The decision of President Lukashenko of Belarus to grant asylum to ousted President Bakiyev and CSTO’s inability to reach unanimous decision on how to handle the Kyrgyz crisis and unrest is a clear proof of internal divisions. At stake there is the ability of the SCO to control instability of the entire region and to provide a deterrent against internal situations as those happened in Kyrgyzstan. The fate of the SCO will also depend on the capability of Kazakhstan, the chairman of the OSCE, to solve the Kyrgyz situation and develop a modus vivendi with a new parliamentarian system that is unique for Central Asia. In addition to all this, we have an internal situation that is far from being normal. The numerous expressions of humanitarian support and concrete help by many western countries did not translate into political recognition and even when this will happen, it will not be synonymous of good governance. Certain decisions of nationalization and rushed incriminations have a smell of property redistribution and political revenge, and to build confidence in the system and the leaders will take a lot of time and certainly humanitarian support will not solve the chronic inability of Kyrgyzstan to attract new investments. It is easy to say that the new system will be able to introduce democracy and the rule of law equal for everybody. The fact is that clans, private interest, political leaders and parties will use all their abilities and means to impose their claims and political agenda, and eventually clans and nepotism, which are endemic of the Kyrgyz culture, will prevail. Practically it is possible that Kyrgyzstan will replace a single family rule with several political leaders and parties unable to reach consensus on a Government of national unity. Or if they reach such an agreement, we will see a sort of public partitioning of the administrative resources with a clear return to corruption and wrongdoing and a possible new unrest. In a recent survey conducted by the 24.kg news agency, only about 13% of those questioned indicated a full trust in the Kyrgyz Provisional Government, while 55% expressed the opposite opinion. It is clear that after the tragic violence, both in the South and the North of the country there is a strong need to build credibility among the people that now watch and see what the government will be able to accomplish. In the meantime, immediately after the referendum, a state of emergency and curfew has been imposed again in the South of Kyrgyzstan and prolonged until the 10 of August 2010. Today Kyrgyzstan is at a crossroad between a new form of governance toward a clean democratic system and the old clannish system prevailing in Central Asia. If democracy will prevail very much depends on political leaders and their supporters that, regretfully, will probably continue looking for their personal interests. To achieve a different result in the interests of the country and future generations, it will take a strong and charismatic leadership willing to lead the country toward a new equilibrium that will undoubtedly meet strong resistance inside and outside the country.

2. Kyrgyzstan votes for stability (Kyrgyzstan, July 2, 2010-issue 623) Over 90 percent of Kyrgyz voters back new constitution

BISHKEK (TCA) — A preliminary tally of 100 percent of the ballots confirms that 90.56 percent of Kyrgyz voters supported Kyrgyzstan’s new draft constitution in a referendum held last Sunday, June 27, Kyrgyzstan’s Central Election Commission has said.

According to election officials, nearly 70 percent of 2.7 million eligible voters took part in the referendum, only two weeks after deadly ethnic violence in southern regions killed hundreds people and forced some 400,000 – mostly ethnic Uzbeks — from their homes. The June 27 vote passed off fairly peacefully. Turnout for Osh region, the epicenter of the violence, was the lowest in the country but still reached 51 percent, indicating that at least some of the hundreds of thousands of people displaced by the unrest were able to vote. The new constitution paves the way for the first parliamentary democracy in Central Asia, reducing the chances of future presidents accumulating too much power in their hands. In a single question on the ballot paper, voters were asked whether they approved not only the new constitution but also a separate law containing two important changes – appointing the current interim government head Roza Otunbayeva as president for a transitional period until 31 December 2011, and abolishing the Constitutional Court. The referendum also gave legitimacy to the interim government, which came to power in April in the aftermath of public protests that toppled President Kurmanbek Bakiyev. Roza Otunbayeva outlined her intentions at a news conference shortly after polls closed. "After a very modest inauguration ceremony, I will be granted presidential powers according to the constitution of 2007," she said. "Then I will begin forming a new government — a government that will not be called provisional, but it will be a technical government. In English, they say ’a caretaker government.’" The new constitution considerably reduces presidential powers, the first move of its kind in Central Asia, a region notorious for autocratic presidents. Otunbayeva said voters had chosen to put an end to the era of "authoritarian rule by one family under two previous presidents" — a reference to Bakiyev and his predecessor Askar Akayev, both overthrown by public uprisings amid widespread allegations of corruption and nepotism. With a parliamentary election planned for October, Otunbayeva said those ministers in the interim administration who plan to stand as candidates will step down by July 10.

‘An unexpected success’

Political analyst Tamerlan Ibraimov said the referendum was still the beginning rather than the end of what would be a difficult process. “The referendum is a first step towards stability, allowing a rewritten constitution to be passed and a caretaker president confirmed, so this chapter is closed,” he said. “But the current government still remains an institution in limbo. The main step towards legitimizing it will be the parliamentary election.” Most observers see the referendum as an unexpected success. Bishkek-based political analyst Pavel Dyatlenko said that most political forces in Kyrgyzstan backed the referendum as they realized that if it did not go ahead, “the consequences would be bad for everyone – for society and for them”. As for the interim government’s diehard opponents who stand accused of masterminding the recent ethnic violence, Dyatlenko said “they had exhausted their resources and strength on the [unrest] and simply didn’t have time to organize something new”. Ibraimov says it would be wrong to write off these dangerous forces. “They haven’t given up,” he said, adding that they might change their tactics from inciting violence to funding some of the candidates standing in the forthcoming parliamentary election. At the same time, Ibraimov is cautiously optimistic. “I sense a certain easing of the road towards stability,” he said. “I certainly don’t think there is going to be complete calm in this country – political struggle and elections always bring conflict.”

Western nations, organizations praise referendum

The United States, United Nations, European Union, and Organization for Security and Cooperation in Europe (OSCE) have all praised Kyrgyzstan for having conducted a peaceful constitutional referendum. In Washington, State Department spokesman Philip Crowley praised “the peaceful conduct of ordinary citizens who voted without incident.” He added that the White House hoped the referendum is the first step toward peace and stability after what has been a volatile few months. UN Secretary-General Ban Ki-moon said the outcome of the referendum demonstrates that the Kyrgyz people are aspiring for peace and stability after weeks of violence and disorder. "The adoption of a new constitution is an important step towards promoting the rule of law and establishing a legitimate, democratically elected government," Ban said. "The United Nations will continue to support Kyrgyzstan and its people as they prepare for parliamentary elections later this year." Maja Kocijancic, a spokeswoman for EU foreign policy chief Catherine Ashton, told RFE/RL’s Kyrgyz Service that the June 27 vote marks an "important step toward a re-establishment of the constitutional order and democratic process" in the country. The OSCE praised Kyrgyzstan for holding a "largely transparent" referendum on a new constitution. In a statement on June 28, the OSCE noted the challenging circumstances, including what it called the "pervasive atmosphere of fear and intimidation in parts of the south," which may have kept some potential voters home. The OSCE and local observers also noted some shortcomings during the process, including incorrect ballot counting. In some polling stations, voters were not checked to prevent possible cases of multiple voting, observers say. But the OSCE said "efforts were made to enfranchise internally displaced voters who often had no identification papers." "Considering the extremely difficult environment in which this referendum took place, only weeks after the violence in Osh and Jalal-Abad," said Boris Frlec, the head of the observer team from the OSCE Office for Democratic Institutions and Human Rights, "the provisional government and other authorities should be commended for organizing a remarkable, peaceful process."

…as Russia expresses doubts

Russian President Dmitry Medvedev, however, expressed doubts about the viability of the political system that would be ushered in under the new constitution. "I don’t really understand how a parliamentary republic would work in Kyrgyzstan," he said. "Will this not lead to a chain of endless problems, to reshuffles in parliament, to certain political groups gaining power, to uncontrollable shifts of power from one person to another, and, finally, will this not help extremist-minded forces come to power?" In a separate statement, Russia’s Foreign Ministry offered measured praise for the vote, expressing hope that the referendum will "facilitate political stability" in Kyrgyzstan. (IWPR, RFE/RL, Interfax)

Otunbayeva’s inauguration as Kyrgyz interim president scheduled tentatively for July 3

Roza Otunbayeva’s inauguration as interim president of Kyrgyzstan has been preliminarily scheduled for July 3, Interfax reported. "The official ceremony of Roza Otunbayeva’s taking office is planned for July 3," Farid Niyazov, a spokesman for the Kyrgyz interim government, told journalists on Wednesday. He noted, however, that the date will be endorsed finally after the Central Elections Commission publishes the official results of the June 27 constitutional referendum.

Kyrgyz parliamentary elections to be held as planned, on October 10

Parliamentary elections in Kyrgyzstan will be held as was originally planned, on October 10, but an official announcement on this will be made after Roza Otunbayeva officially takes office as interim president, the interim government press service told Interfax on Wednesday. "The parliamentary elections in Kyrgyzstan will be held on October 10. A decision on this was made at a meeting between interim government Deputy Prime Minister Omurbek Tekebayev and the leaders of the key political parties of Kyrgyzstan on Wednesday," it said. Tekebayev agreed with party leaders’ reasons in support for holding the elections in October but said that "the government will officially announce this date after Roza Otunbayeva takes the office as the republic’s president," it said. There were proposals earlier that parliamentary elections in Kyrgyzstan be held between September 10 and 20.

3. Tajikistan looking for new energy market (Tajikistan, July 2, 2010-issue 623) By Rakhim Nazarov

DUSHANBE (TCA) — The Tajik government has sent an official letter to the Afghan president asking to accelerate the construction of a 220 kilovolt electricity transmission line Sangtuda–Puli Khumri in Afghanistan.

According to Nurmakhmad Kholnazarov, head of the Energy Policy Department at Tajikistan’s Energy and Industry Ministry (TEIM), the letter to the Afghan president was sent after the general contractors of the project – India’s KEC International and RPG Transmission – asked Tajikistan to assist in solving a number of issues concerning the Afghan part of the project. “In particular, it is necessary to obtain land plots for building electricity substations,” explained Kholnazarov. “Tajikistan has practically completed its part of the project and is ready to put the power line into operation.” Early this year, Tajikistan and Afghanistan signed a protocol to accelerate the implementation of the project. The Afghan side committed to complete the construction of a 60 kilometer long transmission line from the Afghan city of Kunduz to Tajikistan’s border. According to TEIM, completion of the Afghan section of the line would enable putting the transmission line into operation to begin electricity export to Afghanistan from the end of June, when Tajikistan has electricity surplus. Earlier this year, in Dushanbe, Afghanistan’s Minister of Energy and Water Resources Muhammad Ismoilkhon said that the construction of the Sangtuda-Puli Khumri transmission line will be completed within 10 months, that is by November of this year. One hundred and sixty four kilometers of the high-voltage line will go through the Afghan territory and 118 kilometers through the Tajik territory. TEIM reported that currently Tajikistan has a surplus of electricity but existing transmission lines to Afghanistan and Kyrgyzstan do not allow exporting it in large volumes. Kazakhstan is also interested in importing Tajik electricity, but Uzbekistan does not allow the transit of Tajik electricity through its territory, TEIM said. According to Tajikistan’s National Statistics Agency, since the beginning of this year, the share of electricity in the country’s foreign trade was 0.6%. Energy exports in January-May totaled 107.8 million kilowatt hours worth about $2 million. The import of electricity in the same period totaled 172.7 million kilowatt hours worth over $6.6 million. All imported electricity goes to Tajikistan’s Zerafshan valley, which is cut off from the country’s unified energy system. According to Abdullo Kurbonov, deputy chairman of the Barki Tochik State Energy Holding, the Varzob-Aini high-voltage power line will be put into operation by the end of June. This transmission line will provide the Zerafshan valley with electricity,” he said. According to Kurbonov, this region is currently cut off from Tajikistan’s unified energy grid and imports electricity from Uzbekistan. One kilowatt-hour of Uzbek electricity costs $0.04, which is very expensive for Barki Tochik whose price within Tajikistan is $0.02, Kurbonov added.

4. Uzbekistan developing small hydropower industry (Uzbekistan, July 2, 2010-issue 623) By Dilshod Ashurmatov

TASHKENT (TCA) — The construction of small hydropower plants in Uzbekistan is going on very slowly. The reason is low paying capacity of energy consumers and the country’s limited water resources.

A small hydropower plant (HPP) at the Akhangaran reservoir with a 21-megawatt capacity was commissioned in mid-June in the Tashkent region. The launch of its two units will increase the energy potential of Uzbekistan by 66.5 million kilowatt hours per year. In August, the Andijan HPP with a capacity of 50 megawatts and annual production of 171.1 million kilowatt hours will be launched. The general contractor for the construction of the two HPPs worth $52 million is the China National Electrical Equipment Corporation (CNEEC). In the nearest future, a small HPP with a capacity of 80.1 million kilowatt hours per year will be commissioned at the Gissarak reservoir in the Kashkadarya region. Also, small HPPs will be built in the Samarkand region and on Ertashsai River in the Tashkent region. According to Abdulaziz Zakirov, deputy director general of the Uzsuvenergo association at Uzbekistan’s Agriculture and Water Management Ministry, which manages small HPPs in the country, the launch of these power plants will allow to complete the first stage of the program on the construction of small HPPs. Currently, the total capacity of hydropower plants of the Agriculture and Water Management Ministry is 323 megawatts. With the commissioning of new HPPs, the capacity will increase to 439 megawatts.

Despite a low share of hydro resources in the country’s total electricity generation (8%), Uzbekistan has a considerable potential for electricity generation by small hydropower plants. The country has dozens of reservoirs, irrigation canals and mountain rivers, which allows building 141 HPPs with a total of 4.6 billion kilowatt hours annual production capacity. In 2005, the government approved a program worth approximately $250 million to develop small hydropower industry until 2010, which included the construction of 15 HPPs with a total capacity of 423 megawatts and power production of 1.36 billion kilowatt hours per year. However, only five HPPs with a total capacity of 110 megawatts have been commissioned so far, and the first stage of the program could become the last one. The development of small hydropower industry in Uzbekistan has slowed down, as low paying capacity of energy consumers and limited water resources do not allow attracting new investors. Uzbekistan intensified construction of small power plants, including HPPs, in the 1940-1960s. The decline in small hydropower industry began with the establishment of a unified electricity network. The main consumers of energy produced by small HPPs were collective and state farms, but in the late 1960s-early 1970s they were connected to a single power supply system. As a result, small plants turned out to be inefficient, which caused their liquidation. Most of the small HPPs previously belonged to collective farms have survived to this day, but they can not work as before as nowadays farmers and rural residents can not afford their services. “The low paying capacity of consumers affects our investments,” said Abdulaziz Zakirov. “Due to non-payment for consumed electricity, we have to adjust the funding and postpone commissioning of new HPPs.” Attracting foreign investors to finish the construction of HPPs as part of the Clean Development Mechanism did not bring any good results yet. One of the reasons is uncertain future prospects for such investments after the failed summit in Copenhagen: investors are reluctant to take the risk of signing long-term contracts on the purchase of emissions in exchange for investments under conditions of the uncertain prices and quotas. “The matter is that construction of HPPs, especially on mountain rivers, should be carried out without interruptions. If construction of this type of facility is frozen and then resumed, its total cost increases dramatically,” believes Ilkhat Tushev, analyst at Central Asia Investments.

Moreover, according to experts, the cost of electricity produced by a small HPP is by 15%-20% higher than that of electricity produced by a large HPP. So the use of a small HPP is cost-efficient only for satisfying the needs of its owner, for instance, a large industrial enterprise. However, with the right approach and interest from the government in developing small hydropower plants, pricing problems can be eliminated, believes analyst Anvar Jumayev. However, the government can do nothing with the water shortage in Uzbekistan and the entire region. The lack of irrigation water has already changed the program of small HPPs construction.

In 2006, for instance, the construction of the $40 million second unit of the Tupolang HPP in the Surkhandarya region was abandoned, as it turned out that the plant’s reservoir can not accumulate the required 500 million cubic meters of water.

Other energy projects have also affected the small hydropower energy program. In 2011, the Uzbekenergo national company will begin the construction of six new HPPs worth about $380 million and with a total capacity of 323.6 megawatts. According to expert Dilmurad Kholmatov, in order to compete with such a project, it is necessary to develop a technology to reduce the cost of electricity generated by small HPPs, as well as design small HPPs so that they could operate on low, winter water (when the level of water in rivers decline). This requires support from the state.

For further information: The Times of Central Asia.