Prospects for Central Asia in 2019

Subject Prospects for Central Asia in 2019. Significance Central Asia may face economic headwinds in the coming year due to uncertain oil prices and at best modest growth in Russia, the destination for labour migrants and many regional exports. Increasing intra-regional cooperation may blunt some of that effect. The region remains stable but all countries have concerns about the Islamic State (IS) group, especially its presence in nearby Afghanistan.

Subject Central Asian policies on repatriating nationals associated with Middle East insurgency. Significance Central Asian governments' concerns about radicalisation among Muslim-majority populations were amplified when hundreds of nationals went to Syria and Iraq in 2014-15 to join Islamic State (IS) and other jihadist groups. They are prioritising the repatriation of women and children, in contrast to European governments' reluctance to approve blanket returns. Impacts The security drive against local extremists will be sustained across Central Asia. Policies towards returning women will not be affected by IS-attributed attacks unless a direct link is made. In Russia, Chechen leader Ramzan Kadyrov is leading on repatriation efforts focused on children.


Subject Prospects for the Middle East in the second quarter. Significance With average oil prices in 2015 likely to be 30-40% lower than in 2014, most countries in the Middle East and North Africa (MENA) region will see a huge change in their financial performance. Oil exporters could face major falls in fiscal revenue and foreign exchange earnings, while oil importers will receive a welcome boost to their budgetary and external accounts. On the security front, regional governments will focus on the threat from an expanding Islamic State group (ISG), and the fallout from a possible nuclear deal between the P5+1 world powers and Iran.


Subject Prospects for the Middle East in the third quarter. Significance International negotiations over Iran's nuclear programme are set to culminate in an agreement early in the quarter, reshaping the regional geopolitical map. Meanwhile the new leadership in Saudi Arabia will be tested on multiple fronts, including Yemen, the expanding influence of Islamic State group (ISG), and adjusting its economic policies to a new era of lower oil prices. Libya is looking for agreement on a national unity government.


Subject Prospects for Central Asia in 2016. Significance In October, both the World Bank and the IMF downgraded Central Asia's economic growth outlook for 2016. The previous month, Kyrgyzstan and Tajikistan had signalled the rising influence of extremist organisations, first and foremost the Islamic State group (ISG) across the region. Central Asian regimes are faced with a multitude of risks, including political destabilisation.


Significance Moscow is a key partner in opposing Western hegemony, but Pakistan is the closest thing China has to an ally and depends increasingly on Chinese support. Territorial and economic conflicts with India are pushing Delhi closer to Washington and Tokyo. Impacts Russia would probably oppose any attempt to increase China’s overt military presence in Central Asia. Despite the return home of militants from Islamic State territories in Syria and Iraq, the threat from radical Islamism remains low. Divergences of interest will not prevent China-Russia cooperation for now, but Beijing cannot rely on Moscow to defer to its wishes.


Significance The operation, authorised by US President Donald Trump, killed Qassem Soleimani, longstanding chief of the Quds Force -- the external action wing of the Islamic Revolution Guard Corps (IRGC). Others also died, notably Abu Mahdi al-Muhandis, the leader of Iran-backed Iraqi militia Kata’ib Hezbollah, which had been targeted in earlier US strikes. Impacts Baghdad’s parliament will consider a bill to evict the US military presence. The confrontation with Iran will undermine efforts to combat the residual Islamic State presence. As the responses play out, oil prices are likely to rise further. The 2015 Iran nuclear deal could at last collapse. Damascus may increase its dependence on Moscow in the absence of Soleimani’s personal networks.


Subject Islamic State group's following in Central Asia. Significance Over the last 18 months, officials in Central Asia have frequently cited the recruitment of citizens by Islamic State group (ISG) as a major threat to national security. Governments fear that some of those who return will build networks and launch jihadist attacks. Their responses target suspected sympathisers and returning fighters but also alienate the broader community of devout but not extremist Muslims. Impacts Civil and political rights will be curbed as part of counter-terrorism programmes. Tajikistan and other states will look for Russian assurances including through the Collective Security Treaty Organisation. China will strengthen security ties although there is little Uighur activism in Central Asia.


Subject Government reforms. Significance Although some of Prime Minister Haider al-Abadi's reform programme is purely aspirational and unlikely to be implemented, the measures already taken constitute an unprecedented downsizing of Iraqi government in the post-2003 era. The reforms were well received initially by the political parties, partly due to support from the Shia clergy. However, increasingly, critical voices are making themselves heard, not least from hardliners within Abadi's own Shia coalition. Impacts Failure of Abadi's reform programme could increase political instability in Baghdad, harming efforts to defeat Islamic State group (ISG). Reforms may damage ties with Tehran, with Iran fearing that Abadi is using the process to develop stronger autonomy from it. If the reforms succeed, this may increase Sunni Arab confidence in Abadi as a potential buffer against pro-Iranian forces. Impact on government efficiency and the economy will be limited given other major challenges, notably low oil prices.


Keyword(s):  

Headline CAUCASUS/CENTRAL ASIA: Oil prices, Russia will hurt


Subject Islamic State strengthens in Afghanistan. Significance As US-led Afghan peace talks proceed slowly and the Taliban battle Afghan troops around the country, reports that Islamic State (IS) is growing in strength further complicate the prospects for peace. Impacts The Taliban determination to continue fighting diverts US and Afghan military resources from IS. Russia will make practical preparations for the long-feared emergence of a direct IS threat to Central Asia. Al-Qaida's already fading influence as global jihad leader will be further reduced if IS consolidates its position in Afghanistan.


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