Department of Russian and Eurasian Studies

This report seeks to offer a humanitarian perspective on the legacy of the nuclear testing at the Semipalatinsk Nuclear Test Site. The report shows some of the ways in which the nuclear testing has impacted and still affects people living in the region, by investigating health consequences, the environmental situation around the test site, people’s experiences, and the state support system. The legacy of nuclear tests is evident even after more than 20 years after the closure of the test site and more than 50 years after the last surface detonation.

The barriers to trade in developing countries constitute one of the major obstacles to economic development and growth. This study aims at addressing the issues surrounding the prevalence of informal trade barriers in Kazakhstan and Uzbekistan. While it appears to be logical that the strongest economies of Central Asia should increase trade volume with neighboring countries, in reality the potential for intensifying cross-border trade is barely being realized. This paper attempts to shed light on trade barriers in key industries in both countries, including manufacturing, transport, and agriculture. As can be seen from this study, these industries experience different types of restrictions and varying degrees of state intervention in Kazakhstan and Uzbekistan. The paper places special emphasis on informal barriers and the tools companies use to overcome those barriers. The paper is based on a survey of a total of 108 companies in both countries and the output of a roundtable discussion in Kazakhstan with representatives of companies and other experts in the above-mentioned industries.

The barriers to trade in developing countries constitute one of the major obstacles to economic development and growth. This study aims at addressing the issues surrounding the prevalence of informal trade barriers in Kazakhstan and Uzbekistan. While it appears to be logical that the strongest economies of Central Asia should increase trade volume with neighboring countries, in reality the potential for intensifying cross-border trade is barely being realized. This paper attempts to shed light on trade barriers in key industries in both countries, including manufacturing, transport, and agriculture. As can be seen from this study, these industries experience different types of restrictions and varying degrees of state intervention in Kazakhstan and Uzbekistan. The paper places special emphasis on informal barriers and the tools companies use to overcome those barriers. The paper is based on a survey of a total of 108 companies in both countries and the output of a roundtable discussion in Kazakhstan with representatives of companies and other experts in the above-mentioned industries.

Since independence the countries of Central Asia embarked upon liberal reforms in their economic policies, including trade. However, persistence of formal and informal barriers to trade in general, and to services in particular, impedes further liberalization and development of the service industries in both countries. Moreover, existence of these barriers prevents large trade volumes between the neighbouring states. Therefore, it is very important to identify and analyze those barriers within each country.
In the research formal and informal barriers to trade in services in Kazakhstan and Uzbekistan are first revealed and then assessed. Having identified the barriers it would be possible to provide policy
recommendations for various international organizations and governments of the region with regard to further promotion of trade in services in Central Asia.

This report examines the strengths and weaknesses of Myanmar’s business climate in the petroleum and renewable energy sectors: how it compares with other countries, especially in ASEAN; what matters to foreign investors; and how this situation can be improved. Not resting on one’s (new) laurels: The recent international interest in Myanmar may prove counterproductive for the country’s investment climate, if this upsurge in interest induces the government to slow down in its reform efforts. When the novelty of Myanmar wears off, that may become a problem. Indeed, possible signs of such a slowdown can be observed already. According to official data, FDI in Myanmar decreased significantly in the first four months of 2016 compared to the same period in 2015. Investors were increasingly cautious and worried about the slow pace of reform, delays in establishing a panel to approve new investment projects and the lack of clarity on the country’s new economic development strategy (DVB, 2016). This highlights the importance of working constantly to improve the investment climate and staying in close contact with investors, keeping them informed about developments.

Challenges common to the petroleum and renewables sectors: Lack of data and information for market entry; fragmented institutional and regulatory framework; low levels of electricity access and digitalization; low international oil prices. Challenges in the petroleum sector: Limited supply-industry infrastructure and lack of local engineers; MOGE petroleum sector monopolization and conflicts of interest; limited geological data; complicated taxation; weak government–business communication; challenges in finding local partners; time-consuming licensing procedures; paper-based communication and lack of e-government; production-sharing agreements biased towards participation of large oil companies, excluding smaller ones; frequent changes in legislation; closed downstream market.

Challenges in the renewable energy sector: No national target or legislation on renewable energy; no dedicated public agency regulating the sector; lack of business associations; subsidies for grid electricity generated from fossil fuels disadvantage off-grid renewables; access to suitable land; complex mountainous terrain and protected areas as well as political instability in these areas; underdeveloped grid system for large-scale production; lack of data on the renewable-energy resource potential; limited infrastructure for technical support and maintenance; high cost of installing solar panels and wind turbines; disintegrated biofuel production and supply markets; lack of local specialists; no taxation system for renewables; security risks in conflict-prone Kachin, Rakhine and Shan states.

Opportunities in the petroleum and renewable energy sectors: Government commitment to reform; advantageous location as part of the Greater Mekong Subregion and ASEAN, close to the Chinese and Indian markets; significant resource base, especially natural gas, hydropower and bioenergy; rapidly rising energy demand in Myanmar and neighbouring countries; high demand for investment in refineries, oil terminals, oil barges and petrol stations; opportunities in retail business; new petroleum and renewable energy laws are underway; abundant semi-skilled labour, and low cost of unskilled labour; low levels of corruption and criminality. Initially, companies may perceive the business climate as unpredictable, but, having entered the market, and having learned and adapted to local conditions, companies experience greater predictability.

Opportunities in the petroleum sector: Relatively transparent tender system; equal treatment of investors; government experience and capacity; market maturity. Myanmar’s strategic location, with rapidly rising energy demand among hundreds of millions of people in the neighbouring countries and low transportation costs (especially for gas delivery to China, India and Thailand), represents an opportunity to foreign investors.

Opportunities in the renewable energy sector: Latecomer advantage; low level of electrification increases cost advantage of off-grid electrification; support from international donors; strong civil society actors are promoting renewable energy development.

This study examines the implications of climate change for international affairs in Southeast Asia and for ASEAN as a multilateral organization. Climate change and efforts to mitigate climate change give rise to major risks as well as opportunities in international affairs. It is therefore in the interest of all countries to be aware of the risks and prepare for them, and the overarching purpose of this study is to support ASEAN and its member states in this area. Given Southeast Asia’s complex geography—with numerous archipelagoes, long coastlines, intricate borders, and great-power neighbors—climate change is especially likely to affect interstate relations in the region.Climate change may impact on international affairs among the ASEAN countries at several levels. Firstly, changing climatic conditions may affect interstate relations through humanitarian crises, migration, and/or the need for greater imports of vital goods. Secondly, reducing greenhouse gas emissions requires international coordination and cooperation. Thirdly, the global energy transition driven by climate policy may lead to an altered geopolitical situation in the world, including ASEAN.

The new report published by NUPI, jointly contributed by its partner institutes in all ten ASEAN countries, analyses the consequences of climate change and climate policy toward international affairs in ASEAN. Both climate change and climate mitigation are likely to affect international affairs in ASEAN—in ways that are both good and bad—for example through forced migration, strains on food production, accelerated dam construction on the region’s international rivers on reduced dependency on fossil fuel imports. Major analysis and assessment in term of global energy transition, international climate-policy commitments of ASEAN countries, ASEAN's role on climate and energy policy as well as recommendations were put forward.

My contribution was more in part of how Cambodia has responded to the latter (including the country's perspective toward COP21; commitment, progress, and achievement; INDCs; major challenges and constraints).

A new report published by 23 researchers at NUPI and sister institutes in all ten ASEAN countries analyses the consequences of climate change and climate policy for international affairs in ASEAN. Both climate change and climate mitigation are likely to affect international affairs in ASEAN—in ways that are both good and bad—for example through forced migration, strains on food production, accelerated dam construction on the region’s international rivers on reduced dependency on fossil fuel imports.

In Kazakhstan, civil society is held back and has had a limited role in the management of the petroleum sector. As this chapter notes, civil society has had little experience of promoting its own interests vis-à-vis the state, and public discussion of natural resource issues has been mainly government-driven. The fact that Kazakhstan made a notable step forward – from being a collapsing socialist economy in the 1990s, to becoming a regional economic player with improved social and economic performance – has helped to legitimize non-transparent natural-resource policies. As long as the socio-economic situation continues to improve or remains stable, the non-transparent management of natural resources is likely to be accepted by the population, which, like the Russian population, puts a premium on stability. The relative passivity of civil society has been compensated by Kazakhstan’s exposure to international initiatives and organizations such as the World Bank, the International Monetary Fund, the Organization for Security and Co-operation in Europe and numerous UN agencies. As in Azerbaijan, EITI has provided a platform for some civil society engagement with industry and government.

Myanmar may for a long time remain in a transitional state with an uncertain future. After a series of political and economic liberalization reforms from 2011 onwards, Myanmar’s political trajectory remains open-ended, although the most plausible scenario remains a continued slow democratization process. The democratic opening has been driven largely by the interest of the military rulers in changing Myanmar’s relations with Western states and thereby gaining leverage vis-à-vis China. Continued military influence, persistent capacity problems in political parties and parliamentary politics, weak channels of political representation and limited administrative capacity give rise to critical questions about the substance of democratization and economic development in Myanmar. The country’s informal economy is one of the largest in the world and is upheld by informal elite pacts that were formed in the military era, often involving high-ranking officers and crony companies. Along with a high level of corruption and lack of redistributive mechanisms the continuing cronyism hinders inclusive growth. If these economic structures persist, social and ethnic conflicts may intensify and progress towards further democratization stall. Despite this, foreign direct investments in resource extraction and other sectors have been on the rise since 2011 and are likely to continue. Myanmar is also ranked as the world’s second-most vulnerable country to climate change. The government needs a better understanding of climate change and its effects – both its direct impacts on Myanmar and its indirect impacts via neighbouring countries such as Bangladesh. As Myanmar remains at a crossroads, smart external assistance may have greater long-term impact in Myanmar than in other recipient countries where the situation is less volatile. However, donors may also become increasingly frustrated and reduce their assistance because of the ongoing Rohingya crisis and because of the limited local capacity to absorb international assistance.

Has the Belt and Road Initiative (BRI), launched by China in 2013, changed the perception of China among local actors in Central Asia? There are numerous internal problems and contradictions among the Central Asian countries and the region remains one of the least integrated in the world. This poses serious challenges to BRI but also offers opportunities for enhancing regional connectivity and integration. Although there has been some research and even more media coverage of BRI, little is known about how Central Asians perceive BRI. This chapter fills some of these gaps and analyzes the present state of relations between the Central Asian countries and China and collects and systematizes perceptions of Beijing and BRI among Central Asian stakeholders. The analysis focuses on economic cooperation, infrastructure and educational initiatives, as they as they are among BRI's main pillars. The main conclusion is that current attitudes towards China have been formed within the framework of bilateral relations that started in 1991, and there has so far been no major shift in the perception of China in Central Asia since BRI was launched. Whereas the broader public expects more economic opportunities from BRI and there has been more discussion of China's role in Central Asia after 2013, local communities remain uninformed and weakly connected to the high-level interaction between the Chinese and Central Asian governments.

This data article summarises the analysis of 261 Chinese projects in Central Asia. The findings indicate that trade promotion and industrial development are the sectors where there is most BRI-related activity in Central Asia. The total number of projects in these areas approximates the number of projects in all other areas combined. These sectors also receive most investment. In terms of the number of implemented projects, roads is the second key sector, followed by energy. However, due to larger project sizes, energy receives more funds than roads. The majority of Chinese projects in Central Asia are bilateral.

This data article shows that most of the rail and road projects in which the Chinese are involved in Central Asia are implemented within the territories of individual countries and thus are still poorly linked with each other. However, these internal transport routes are expected to eventually form the basis of a new cross-regional network within the Belt and Road Initiative (BRI). Smaller scale road construction and rehabilitation projects create linkages connecting China across Central Asia to South Asia, Turkey, Europe, and the Middle East.

One of the strategic objectives of the Belt and Road Initiative (BRI) in Central Asia is to provide China with alternative import/export and energy supply routes. This data article shows that the presentation and coverage of BRI projects varies considerably from country to country. The largest number of BRI projects in Central Asia are implemented in Kazakhstan and are in the oil and gas sector. By contrast, Turkmenistan is implementing only a few Chinese energy projects, though they are large-scale and its sum of investment is the second-largest of the Central Asian states.

Mineral resources is the sector that receives most Chinese investment in Central Asia. China and its Central Asian partners pursue both strategic and commercial goals by promoting projects in the minerals sector. Kazakhstan hosts the largest number of projects and receives the largest amount of Chinese investment. The second largest recipient of financing is Turkmenistan, where several big projects are implemented.

China’s investment in the industrial sectors of Kyrgyzstan and Tajikistan has been on the rise since the 1990s. However, this data article shows the recent expansion of Chinese investment also in Kazakhstan and Uzbekistan. Thus, China has expanded its engagement in the development of local industries in larger countries as well. The projects in Kazakhstan are the largest in terms of the number and size of investments. China has substantially increased the number of industrial projects in Uzbekistan, yet the evidence shows that the costs of the projects are small in scale.

China and its Central Asian counterparts pursue finance and IT projects for both commercial and strategic reasons. As this data article shows, transparency is limited and exact information on the size of their investments is only partly available. In the financial sector, China cooperates most closely with Kazakhstan among the Central Asian countries.

This data article looks at Chinese investment in agriculture and food production in Central Asia. It shows that the agricultural sector projects have low priority within the Belt and Road Initiative. Kazakhstan is the biggest recipient of Chinese investment in agriculture and food projects in Central Asia.