September 4, 2017 #206
world
13
New Silk Road: Japan To Counteract China In Kazakhstan With New Asia-Europe Rail Deal
Azerbaijan issues nearly $632M for construction of BTK’s Georgian section Azerbaijan’s state oil fund allocated $631.79 million as of July 1, 2017 for financing construction of the Baku-Tbilisi-Kars railway (BTK) project. Under the agreement signed between Azerbaijan and Georgia, the funds were transferred through the International Bank of Azerbaijan to the Marabda-Kartsakhi Railway, which was created for the design, construction, rehabilitation, reconstruction and operation of the Marabda-Turkey railway section and related infrastructure facilities, Trend reported. In the first half of the year, SOFAZ allocated $1.56 million for the implementation of the project. Azerbaijan has allocated $775 million loan for the construction of the Georgian section of the BTK. The project is financed by SOFAZ in accordance with the decree of the President of Azerbaijan “On Implementing the Activities of the Baku-Tbilisi-Kars Project” dated February 21, 2007. The BTK railway is a corridor that will connect Azerbaijan, Georgian and Turkish railways. It is being constructed on the basis of the Azerbaijan-Georgia-Turkey intergovernmental agreement. The main purpose of the project is to improve economic relations between the three countries and gaining foreign direct investment by connecting Europe and Asia.
Armenia to Kickoff Construction of Free Economic Zone in Meghri in November – Minister Armenia plans to kickoff the construction of a free economic zone in the southern town of Meghri on the border with Iran in November, economic development and investment minister Suren Karayan told journalists on Thursday. Earlier this month Suren Karayan and Iranian president’s advisor and secretary of free trade zones coordination council Akbar Torkan signed a memorandum of understanding (MoU) to broaden cooperation between Iran’s Aras and Armenia’s Meghri free trade zones. The agreement is meant to step up potentials of cooperation between the two countries’ free trade zones. The establishment of the free economic zone in the southern Armenian Meghri, near the border with Iran is estimated to cost $32 million, of which $28 million are capital expenditure. The free economic zone is said to create 2,500 new jobs and increase Armenian exports by 30%. According to the government, the main purpose of the free economic zone is to help boost trade and economic relations with Iran and other countries of the region, help the development of the southern Armenian province of Syunik, as well as position Armenia as a link between Iran and members of the Eurasian Economic Union (EEU) and Georgia.
Japan continues standing in the ring with China, exchanging blow for blow as the Asian rivals both compete and cooperate with each other in the creation of the trans-Eurasian mega-project that has been dubbed the New Silk Road. Just months after the announcement of a deal that would see China’s COSCO shipping and Lianyungang Port take a 49% cut of Kazakhstan’s epic Khorgos Gateway dry port on the Kazakh/China border, Japan’s Nippon Express logistics firm has signed an MoU with Kazakh Railways (KTZ) to increase the overland flow of container traffic between the Japan / South Korea region and Central Asia, the Caucasus, and Europe. Nippon Express provides the cargo and KTZ handles the transshipment and processing of the containers through Kazakhstan. The parties also reportedly discussed the need to bring more investment into the Khorgos - Eastern Gate special economic
zone, of which the Khorgos Gateway is just one part of. Despite the best efforts of DP World, the Dubai-based shipping giant who advises on operations in the SEZ, the colossal development area is still little more than a 5,000+ hectare empty field outside of the dry port. This move by Nippon Express and KTZ can be viewed as a continuation of China and Japan’s efforts to vie for influence and investment throughout Eurasia and Africa. In unison with the US, Japan has declined to join the China-initiated Asian Infrastructure Investment Bank (AIIB), despite the fact that many of its allies have jumped in and the need for the bank is very real. In Indonesia, Japan’s plan to construct a high-speed rail line from Jakarta to Bandung was usurped by China. In Bangladesh, Japan was given a contract to build a deep sea port on Matarbari island at the expense of a Chinese proposal to build a similar one nearby.
Russia Expands Grip on Wheat Exports as Asia Set to Buy More
$100 billion trade with Turkey attainable, says Russian envoy Turkey and Russia’s desire to expand bilateral trade to $100 billion is demanding but an attainable goal that can be realized with the help of mutual investments globally, Russia’s new ambassador to Turkey has said. Speaking in Ankara on Aug. 28after attending the 86th Izmir International Fair, where Russia attended as a partner country, Alexei Yerkhov hailed Turkey as a “crucial” trade partner for Moscow in a wide range of areas including the construction sector. “There are very serious and important investment activities for Ankara and Moscow in our states that are not limited to only the construction sector,” YErkhov said. “Russia’s biggest companies have been investing in the Turkish economy for a long time while Turkish companies are operating very successfully in the Russian market.” Yerkhov said that bilateral trade between Turkey and Russia started with shuttle trade in the 1990’s, but now the sphere of cooperation has expanded to the extent now that huge infrastructure projects are being implemented, including the Turkish Stream natural gas project and Turkey’s first nuclear plant - the Akkuyu Nuclear Power Plant.
The trade volume reached a record high in 2010 with $34 billion, a time when political parties first voiced the target of $100 billion, according to the Russian ambassador. “However it is important to note that our trade volume recently decreased extensively for known reasons as well as due to market conditions. It dropped around 50 percent compared to levels seen seven or eight years ago. “Despite this, the target to increase the mutual trade volume up to $100 billion is a demanding but attainable goal,” he said. Yerkhov underlined that both the business world and regional governors are working hard to reach this goal, adding that an important example to this effort is evident in the Alabuga Free Trade Zone in the Republic of Tatarstan in which Turkish firms actively operate. In reaching the trade volume target, the cooperation and synergy between Turkey and Russia is key, Yerkhov said, adding that the recent agreement between Iranian private company Ghadir Exploration and Production Company, the Russian state company JSC Zarubezhneft and Turkish Unit International to develop oil and natural gas fields in Iran is a good example of this kind of cooperation.
Russia, the world’s biggest wheat exporter, is about to grab even more customers in the fast-growing economies of Asia -- a region that normally gets most of its imported grain from somewhere else. A farm industry that emerged from the former Soviet Union to become a wheat-trade powerhouse is poised to expand its market share in countries like China, Indonesia and Japan. That’s because droughts are eroding production in Australia, the U.S. and Canada. Those are the dominant suppliers of wheat to Asia, which accounts for about a third of global imports. While shipments of wheat from Russia already were expected to exceed those of any other country, very little usually ends up in Asia, where imports have almost doubled in a decade as rising incomes boosted demand for noodles, cakes and breads. But this season, Australian production will plunge the most in a decade, American farmers will have their smallest harvest since 2002, and Canada’s crop will shrink for the third time in four years. “Russia will be a big winner,” said Benjamin Bodart, a director at adviser CRM Agri-Commodities in Newmarket, England. “Russia’s crop is expected to be a record. They will need to find markets to supply that wheat to.” For a second straight season, growers from the Black Sea to southern Siberia are collecting Russia’s largest wheat crop ever. The U.S. Department of Agriculture estimates production will rise to 77.5 million metric tons, exceeding domestic consumption by the widest margin on record. The U.S. had been the world’s top exporter for decades, but was supplanted by Russia in 2015-16 before regaining the title last season. The USDA forecasts Russia will be back on top in the 12-month marketing season that began July 1, with exports jumping 13 percent from a year earlier to 31.5 million tons, almost three times what they were in 2012-13.