Like other countries, Turkey has also been hit hard by COVID-19. Turkey's economy was in bad shape until COVID-19 spread in March, and a recession was inevitable. While Prime Minister Recep Tayyip Erdogan has been grappling with the consequences of the devaluation of the lira, major engineering projects may still face disruption and delays.
In recent years, Turkey has continued to deepen its interest in Central Asia. This year, in particular, the outlook for the countries of the Central Asian region has deteriorated and growth has been hampered. Turkey's relations with China and Russia have gradually changed, as have its relations with its neighbors. Earlier
this year, the business press warned that Turkey was heading for a severe recession. As one commentator put it: "Turkey's economy is like a dam about to collapse.". He reminded that the lira has lost 90% of its value against the dollar in the past three years, and that international reserves have likewise been depleted by ineffective currency defense. Dan Arbell of the
International Institute for Strategic Studies (IISS) said that even before the COVID-19 outbreak in March, Turkey's economy was already in a fragile state of high debt, declining foreign exchange reserves and rising unemployment. He raised three issues that the Turkish leadership is most concerned about: the declining lira exchange rate against the US dollar, the rising unemployment rate and the declining foreign exchange reserves.
In June, Aykan Erdemir and John A Lechner wrote for foreign policy that the prime minister appears to be pinning most of his hopes on a lira-real swap with Qatar. This is a temporary arrangement to increase the currency reserves of the Turkish Central Bank from $5 billion to $15 billion. After the failed coup in 2016, Erdogan was supported by Qatar's rulers, and the deal provided more guarantees for the alliance. According to Bloomberg, a year later, some countries, led by Saudi Arabia, boycotted Qatar economically, and Turkey expressed support for Qatar in return.
Due to the restrictions of the epidemic, exports and tourism have taken a major blow. Analysts say Turkey's GDP will contract by more than 3% this year.
Another form of financial assistance comes from economic support from Europe for micro, small and medium-sized enterprises. In the first five months of this year, the European Bank for Reconstruction and Development (EBRD) injected 8.00% into the Turkish economy, much of which was channelled to the banking system to increase lending to small and medium-sized enterprises, particularly women entrepreneurs. JPMorgan became the first private organisation to support the EBRD's operations through philanthropic co-financing. Since 2009, the EBRD has invested about $12.4 billion in various parts of the Turkish economy, almost all of it in the private sector, said Maria Rozanova, communications analyst at the EBRD Green Financing Channel. The latest situation of
large-scale projects in Turkey, the first large-scale project is the third airport in Istanbul. In June, Prime Minister Erdogan unveiled the airport's third runway. The airport is currently the second airport in Europe to have three separate runways. By the time the entire project is completed in 2028, the airport will have six runways and a total capacity of 200 million passengers per year.
Local media reports have confirmed that the government will go ahead with the controversial Istanbul Canal project, despite widespread public anger over its cost and environmental impact. The canal will connect the Black Sea to the north of Istanbul with the Sea of Marmora to the south. It is estimated that the project will cost $11.6 billion. On March 26, five companies bid for the historic Odabasi and Dursunkoy Bridge. The timing of the tender has been widely criticised amid the pandemic crisis. Earlier
this year, Anadolu News Agency reported that Turkey's Minister of Transport and Infrastructure, Kasit Turhan, said that the Istanbul Grand Tunnel would be based on a build-operate-transfer (BOT) model. Tenders for the contract are expected to be issued this year. The large-scale project will be integrated with the Yenikapi-Sefak Sefaköy metro line. The route, with a total length of 6. 5 million people will travel between the European and Asian ends of Istanbul every year. The new tunnel will connect the Eurasia Tunnel, which opened in 2016, and the Mamorra Sea Commuter Railway, which opened in 2013, both under the Bosporus Strait.
All of these projects will depend on how much COVID-19 impacts the construction industry. The economy is fragile and there may be some chaos. In April, as the epidemic spread, Moustafa Ali, an economist at GlobalData, commented, "The depreciation of the lira and the continued deterioration of the economic environment are expected to seriously weaken the growth of the construction industry.". If the lira remains weak, the government may delay some infrastructure projects that are expected to boost construction growth.
Turkey and Central Asia
Turkey's role in Central Asia has changed dramatically over the past two decades. Turkey and Russia, unlike in the 1990s, will no longer be adversaries, argues Se Seçkin K Köstem of Bilken University. Both governments recently overcame a crisis over Turkey's Downing of a Russian fighter jet in 2015. Of course, Russia and its historical disputes still exist, but they are not as important as they were in the past. K Köstem noted that Turkey's welcome to China's Belt and Road Initiative will revitalize Turkey's connectivity project, the Middle Corridor. The route, which passes through Georgia, Azerbaijan and the Caspian Sea, could complement China's Silk Road Economic Belt, according to the Turkish government. There are also plans to connect Baku-Tbilisi-Kars with Kazakhstan and Turkmenistan. This is done in order to shorten the travel time to 15 days, so as to quickly transport Chinese goods to Europe.
In the book "The Changing Geopolitics of Central Asia", S. Turkey's investment in energy and communications has reached $7 billion in Kazakhstan alone. Turkey is the largest investor in Turkmenistan, and its position in Kyrgyzstan and Uzbekistan is also rising. Universities, secondary schools, and cultural institutions funded by Turkey are located throughout Central Asia.
Central Asia
, like many countries, is suffering from a double crisis brought about by the COVID-19 epidemic and the collapse of oil prices. It is still not clear how long the outbreak will last or at what level energy prices will stabilize. At the time of writing, the situation remains unclear. The European Bank for Reconstruction and Development expects Central Asian economies to contract by an average of 1.2% this year. And rebound in 2021 5.
Kate Mallinson of the Russia and Eurasia Program at Chatham House commented, "While these GDP numbers seem manageable, But the various crises have occurred at a time when the population of the region has been facing socio-economic difficulties for a long time. In all, in Kazakhstan, while the government has announced at least $13.4 billion in subsidies for the population, there is still a limited grace period for debt and tax deferrals. In Turkmenistan, the arrival of COVID-19 highlights the structural challenges of the economy as oil and gas revenues fall due to the collapse in oil prices. Turkmenistan closed its border with Iran at the end of February. In the first week of June, the border was reopened as restrictions on the outbreak were lifted. The economy of Uzbekistan is expected to be severely affected due to the health crisis between outbreaks. Since foreign direct investment is low, lower fixed investment may affect economic progress. Weak demand from China and Russia had a negative impact on export markets.
Kate Mallison predicts a bleak future for Kyrgyzstan and Tajikistan, two of Central Asia's poorest countries. Remittances accounted for more than 30% of GDP growth in both countries. The two countries face a sharp decline in the number of migrants working in Russia and Kazakhstan. Long before the emergence of COVID-19, Tajikistan suffered from hunger, especially malnutrition among children. An author from Chatham House mentioned that rare social unrest has become evident in Kazakhstan, Tajikistan and Turkmenistan. There is even talk of postponing elections in Kyrgyzstan and possibly Kazakhstan.
The Belt and Road Initiative and Central Asia
are well known. In September 2013, Chinese President Xi Jinping announced the Belt and Road Initiative during his visit to Astana, the capital of Kazakhstan. This is a well-planned policy in which the Central Asian region and Kazakhstan are of strategic importance. Rosa Nurgozhayecv, deputy general counsel of Nazarbayev University in Kazakhstan, wrote in a recent issue of Diplomat magazine, "For Central Asia, the Belt and Road Initiative looks very promising, enabling Central Asian countries to improve connectivity, expand regional trade, and modernize their aging transport infrastructure.". From China's perspective, "Belt and Road" is an important way to provide public goods, promote global connectivity, and establish the image of a responsible stakeholder.
On June 5, Ahmed Bux Jamali reminded readers in an article in the Asia Times that China is the largest investor in Central Asia. In fact, before the Belt and Road Initiative was formally proposed, China had invested about $19 billion in Kazakhstan's economy within the first two decades of its independence. In addition, China has made noteworthy investments in the energy sectors of Kazakhstan, Turkmenistan and Uzbekistan.
Jamali wrote, "Kazakhstan is the only country in the region that has established a comprehensive strategic partnership with China.".It is not only a supplier of China's precious energy and key resources, but also an important supporter of China's Xinjiang security development. Kazakhstan is an important transit corridor connecting China and Europe. Therefore, for China's "the Belt and Road" initiative, Kazakhstan's position is crucial both as a supplier of resources, especially oil and uranium, and as a transit country.
Journalists agreed that with the implementation of China's "the Belt and Road" initiative, China's influence in Central Asia is rapidly expanding, replacing Russia as the main investor. Russia's sluggish economy limits its ability to invest and reduces its political and economic capacity in Central Asia. On the other hand, as Roza Nurgozhayeva puts it, "Despite its growing influence, China is still unable to compete with Russia's institutional, cultural, and legal heritage in the region.". China is concerned about the strategic, political and economic interests of other countries in Kazakhstan and other countries in Central Asia.
Central Asia: The latest developments
in the cement industry Earlier this year, local media in Uzbekistan reported that most of the cement produced by Surkhantsementinvest's 1.1-million-ton cement production line, which began production in October 2019, would be exported. According to the National Statistics Committee, cement production reached 9.68 million tons in 2019, a year-on-year increase of 15. The country's 25 production lines have a total annual capacity of 11.1 million tons. Leading producers include Kyzyllkumcement, Akhanangarantsement and Sherabad Cement. The projects
expected to be completed this year include Huaxin Cement 's production line with an annual output of 1.5 million tons in the Jizak area, Karshi last year, International Cement Kazakhstan Co., Ltd. completed the construction of its 1.2 million tons per year production line, which is expected to be put into operation this year. It will supply cement to the Almaty and Tardikorgan regions of Kazakhstan. In October this year, the new China-Kazakhstan production line with a daily output of 2500 tons will be officially completed in Sheli County, Kyzylorda Region. The Asia Pacific Times reported that this is one of the 55 production line projects between China and Kazakhstan. As World Cement reported in June, Steppe Cement noted that the economy has suffered greatly this year due to the COVID-19 lockdown and lower oil prices, with lower demand making the market difficult to predict. In April, the Kazakh government shut down imports from Iran to West Kazakhstan to protect the interests of companies operating in the region. In the financial report, Steppe Cement mentioned plans to install related equipment, including chillers, EP fans, slag dryers, cooling fan systems and laboratory equipment. Imports of cement from Turkey have fallen sharply, according to reports from the Kyrgyz News Agency. In June, a Kabar newsletter carried an interesting report that the governor of the Osh Oblast region, Uzarbek Zhylkybaev, had met with Micha Michaél Roux, the French ambassador to Kyrgyzstan. While much of the discussion focused on tourism and Osh Oblast's potential for economic development, Ambassador Micha Michaél Roux said France was interested in building a cement plant in Kyrgyzstan. In June, Turkmenportal reported that Turkmen President Gurbanguly Berdymukhamedov had authorized the Ministry of Industry and Construction to expand the Baherden and Lebap cement plants from July. The project is expected to be completed in December 2022. Each cement plant will have an annual production capacity of 1 million tons. Beyik-Bina Individual Enterprise was awarded the contract to build the Baherden plant, while Turkmen Enjam Economic Society was awarded the contract to build the Lebap plant. Conclusion Both Turkey and Central Asia are facing many challenges and changes. The epidemic has worsened the economic situation of neighboring countries. Economic recovery will be slow everywhere, and tensions with neighbors will need to be defused diplomatically. The success of China's "the Belt and Road" initiative throughout the region will radically open up new trade patterns from East to West, and vice versa.
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