The fuel supply contract was signed last week between U.S. Defense Logistics Agency and Gazpromneft Aero-Kyrgyzstan.

“The Americans have to be certain that we can deal with that volume of supplies. And maybe then [we] will start delivering more than 50 percent of the base’s needs,” said Tilek Isayev, head of the Gazpromneft-Aero Kyrgyzstan.

Former Soviet Central Asian nation authorities suspect the current supplier, Gibraltar-registered Mina Corp., of links to the family of former President Kurmanbek Bakiyev, overthrown last year — allegations it has denied. Mina’s contract as the sole supplier to the base expires in December, but it can bid to retain a piece of the business.

Fuel sales to the air base in this impoverished have been mired in controversy over lack of transparency. A Gibraltar-registered firm is currently the sole supplier of fuel, but that arrangement is terminating in December.

Manas Center provides logistical support for NATO in Afghanistan and is a major transit hub for U.S. troops flying in and out of the region. The company also supplies fuel to civilian aircraft at the international airport where the base is located.

The new supplier is Gazpromneft-Aero Kyrgyzstan, which is 51 percent owned by a subsidiary of Gazprom and 49 percent by Kyrgyzstan’s government.

U.S. Ambassador to Kyrgyzstan Pamela Spratlen told journalists the two sides could sign another contract within 90 days of the initial shipment of fuel that would increase delivery to up to 50 percent of the base’s needs, the Reuters news agency said.

The arrangement could ease concerns about corruption involving fuel supplies to the Manas. The potential for significant revenue also could reduce Moscow’s incentive to seek closure of the U.S. base.

The U.S. Manas air base spends from US$300 million to US$400 million a year on aviation fuel.

“The money coming from fuel supplies to the [Manas] Transit Center will go into Kyrgyzstan’s state budget, and it will be hard to filch it,” Russian Ambassador to Kyrgyzstan Valentin Vlasov said to the Associated Press.

Berdymukhammedov predecessor, Saparmurat Niyazov, who enjoyed a bizarre personality cult during his 21-year rule until he died suddenly of a heart attack in December 2006, had routinely held show trials of top officials to demonstrate his attempts to root out corruption.

Foreign press repeatedly noticed that Gurbanguly Berdymukhammedov also enjoys unrestricted authority in this Central Asian country.

Authorities may also be seeking to reassure foreign investors as a group of Turkish companies prepares to seek legal action against Turkmenistan in a bid to recover what they say is more than US$1 billion in unpaid bills for construction work in the former Soviet state, the Associated Press speculates.

“I held a responsible job, in which I embarked on a track of illegal enrichment. I extorted money from businessmen — worth a total of US$3.6 million,” television showed Byashim Begjanov, a former head of international operations at Turkmenistan’s central bank, telling the court.

“I repent for the grave crime I committed,” he said.

Begjanov and two other senior central bank officials were each sentenced to 15 years in jail, which is the maximum penalty in Turkmenistan for economic crimes.

The government has recently reduced maximum prison sentences for economic crimes down from 25 years as part of reforms aimed at liberalizing the justice system.

The gas-rich nation has made waffling efforts to diversify the country’s mostly energy-dependent economy, but many foreign companies remain wary of investing in what remains an opaquely regulated and corruption-riddled market.

Turkmenistan, which holds the world’s fourth-largest reserves of natural gas, is a small nation of approximately 5 million people. It is located in Central Asia and is bordered by the Caspian Sea to the west, Iran and Afghanistan to the south, Uzbekistan to the east, and Kazakhstan to the north.

Turkmenistan’s economy is based largely on natural resource extraction. Although the hydrocarbon sector performs well, according to the U.S. Fund for Peace, 58 percent of the population lives below the poverty level.

During the Soviet period, Turkmenistan was one of the poorest republics, and since the collapse of the Soviet Union, it has continued to fall behind its Central Asian neighbors in most areas of development. Infant and maternal mortality rates are among the highest in the other Central Asian states, while GDP is lower and economic development is slow in comparison to its neighbors.

Crude Accountability NGO, which focused on environmental justice for petroleum communities in the Caspian Sea region, has named Turkmenistan in its report as the “one of the world’s most closed and repressive countries.”

The bill, approved early Friday, is designed to overhaul Ukraine’s Soviet-era pension system as the government seeks to slash spending in the wake of the Global Financial Crisis.

Ukraine’s parliament approved a government bill on pension reform at first reading on June 16.

The parliament discussed amendments to the document all night (consideration of the bill lasted 8.5 hours) before passing the final text in the early hours of Friday. It is expected to be signed into law soon by President Viktor Yanukovych.

The bill, which will enter into force on September 1, would gradually raise the retirement age for women from 55 to 60 years and increase by 10 years the period when workers make salary contributions to their retirement funds. The retirement age of male civil servants men was raised to 63 years.

The adopted bill stipulates the maximum pension cannot exceed 10 times the living wage, which is currently around US$95 a week. Previously, the maximum amount was 12 time.

The bill also decreases from 90 percent to 80 percent the wage for calculating pensions for civil servants. The maximum pension is limited to 10 minimum incomes (some US$1,000 at present).

The Ukrainian government put forward a draft pension reform bill parliament last year in a bid to overcome the Pension Fund’s growing annual deficit and to meet IMF requirements. But its passage has been postponed several times.

As a result the IMF froze funding this year because of the failure to pass the bill, and the government hopes the aid will resume once the law is passed. The bill now awaits presidential approval to become law.

“If the parliament will vote for the pension reform, in early August we can get the decision of the IMF Board of Directors,” Ukrainian Deputy Prime Minister for Social Policies Sergei Tigipko said to reporters.

Tigipko suggested that the two tranches of the IMF might be combined. “We might be able to obtain two tranches simultaneously – about US$3 billion, which will be added to the foreign exchange reserves of the National Bank.”

According to official data, Ukraine has the world’s largest share of spending on pensions – 18 percent of GDP in 2010. Moreover, one of the highest levels of pension contributions in Europe, representing 35 percent of gross salary. In addition, despite that in 2010 an amount equivalent to 7 percent of GDP was transferred from the budget to the pension fund.

Martin Raiser, World Bank Director for Ukraine, Belarus and Moldova assures that once the bill is be signed by the Ukrainian president to come into force, it will allow annual savings on pension costs amounting to about 1.5 percent of GDP starting 2012. And till 2015 Pension Fund deficit budget financing will disappear.

According to the survey, conducted by the Gorshenin Institute on June 11-13 2011, 52.3 percent of interviewed respondents living in Ukraine’s regional centers, cities, towns and villages, including Kiev and Sevastopol, agree that the pension reform is definitely necessary.

At the same time, only 6.7 percent of respondents are taking some actions to ensure their financial security upon retirement, while 68.3 percent of respondents, as it was in Soviet time, are “doing nothing and count on a state pension.”

The festival will be organized by the efforts of Mongolian Association in Ujinbu.

Golomt and Khaan Banks, headhunted in Ulaanbaatar, together with Seoul Global Center and two Korean lenders Woori Bank and Shinhan Bank announced will sponsor the cultural event, infoMongolia.com reports.

South Korea is the largest labor market for Mongolians. Estimates suggest that 38,000 to 40,000 Mongolian’s currently live and work in Republic of Korea. The country now has more Mongolians than Japan, Europe and the US combined.

At the same time, compared to other Asian countries, Mongolia has a relatively small overseas diaspora.

The government of South Korea estimates that one out of every two urban households in Mongolia has a family member working in South Korea.

According to South Korean government figures, 40 percent are residing in the country illegally; other estimates of the proportion of illegal migrants run as high as 70 percent.

Most Mongolians in South Korea are migrant workers employed in heavy industry. Some also run small restaurants, trading companies, and grocery stores in Seoul.

Aside from migrant workers, Mongolians come to South Korea to pursue higher education –around 2000 Mongolians annually. Remittances from Mongolians working in South Korea have become an important source of income to this nation of 2.7 million.

Mongolian women also come to South Korea as the brides of men they met through international marriage agencies; their average age is just 24.9, whereas that of their husbands is 44.5, and many are more educated than their husbands, according to the figures of Asian Workers News.

Mongolia’s trade with South Korea has almost quadrupled over the last decade and the Asia’s fourth biggest economy is now the third largest trading partner of the resource rich country after China and Russia.

According to the Foreign Investment and Foreign Trade Agency of Mongolia, South Korea is the 4th largest investor in Mongolia with total FDI of over US$255 million since 1990.

South Korea is also a key donor who has provided approximately US$137 million since 1990 in committed loans and grants to Mongolia.

According to Richard Stratford, who directs the State Department’s Nuclear Energy, Safety and Security Office, U.S. Energy Department’s officials and their counterparts in Ulaanbaatar, the Mongolian capital, are in the early stages of discussion.

Speaking at the biennial Carnegie International Nuclear Policy Conference, Stratford said a spent-fuel depot in the region could be of particular value to Taiwan and South Korea, which use nuclear power but have few options when it comes to disposing atomic waste.

“My Taiwan and South Korean colleagues have a really difficult time with spent fuel. And if there really was an international storage depot, which I have always supported, then that would help to solve their problem.”

The United States provides fresh uranium rods to selected trade partners in Asia, including South Korea and Taiwan. For Mongolia to accept and store U.S.-origin spent fuel from these or other nations would require Washington to first negotiate a nuclear trade agreement with Ulaanbaatar.

Although Energy Department officials have reportedly engaged in informal talks with Mongolian representatives for several months, Stratford has not yet had any contact with Ulaanbaatar on the matter, he said. It is not yet certain whether formal negotiations on a nuclear trade pact will move forward.

Energy Department officials traveled to Mongolia last fall for meetings on the matter, according to Mark Hibbs, a senior associate with the Nuclear Policy Program at the Carnegie Endowment for International Peace. He chaired the discussion on nuclear cooperation.

“It was a fruitful discussion,” Hibbs told GSN yesterday. “They went into some details [but] it was very exploratory.”

Mongolia could seek to step up mining of its natural uranium deposits and potentially expand into a wider array of services, such as providing foreign nations with fresh fuel and then taking back the atomic waste at a later date, nationaljournal.com speculates.

This type of move would come at a time when neither Russia nor China has acted on similar concepts for what is termed “leasing” of nuclear material.

“I think these guys are fooling themselves [if they] believe we will put a spent-fuel depot in Mongolia,” nuclear expert Jeffrey Lewis told GSN in a brief interview, noting surprise at Stratford’s remarks. “I don’t think Mongolia is going to accept being a regional spent-fuel repository.”

Mongolia has a long history of uranium exploration commencing with joint Russian and Mongolian endeavors from 1950s involving investment of some US$200 million. Initial success was obtained in Dornod and Gurvanbulag regions of northeastern Mongolia where uranium is present in volcanogenic sediments.

Mongolia joined the IAEA in 1993, though it has applied safeguards under the NPT since 1972. A law on nuclear weapons-free status was passed in 2000. The Additional Protocol to its safeguards agreement with IAEA has been in force since May 2003.

The country’s Nuclear Energy Agency has tentative plans for developing nuclear power, using either Korean Smart reactors or Toshiba 4S types, from 2021. Three sites under consideration are Ulaanbaatar, western Mongolia and Dornod province.

According to the Prime Minister S. Batbold, Mongolia plans to commence uranium exploration by the year of 2012 with uranium selling beginning from 2013 or 2014.

“Mongolia has nearly 1 million tons in reasonably assured reserve of uranium and we need to speed up the production,” he said earlier this January.

According to Amnesty International information, about 300 people gathered in the city’s Fountain Square for a rally held by the Musavat opposition party. Several people were also detained on their way to the event by the police.

“There is no justification for heavy-handed tactics to be used against obviously peaceful protestors,” said Natalia Nozadze, Amnesty International’s Azerbaijan expert who was present at the protest.

Demonstrators chanted “Liberty” and called for the resignation of the president and also called for the release of imprisoned activists.

The opposition activists sent out more than 35,000 invitations for people to support the anti-government group on Facebook and more than 3,000 clicked the “I’m attending” button to support the Friday action.

Observers sound skeptical of a Near-Eastern scenario to be repeated in Baku. But Friday’s protests rattled the authorities enough to cause a wave of arrests that made the regime look both vicious and fearful.

Police said 43 people were detained near the Oil Academy, a major university in central Baku.

Azerbaijan, an energy supplier to Europe and a transit route for U.S. troops in Afghanistan, has been ruled by one family for nearly two decades since Soviet veteran Heidar Aliyev came to power in 1993. He was succeeded by his son Ilham in 2003.

The removal of autocrats in Tunisia and Egypt is being felt in other Central Asian countries as well.

Run by an aging tyrant Islam Karimov, Uzbekistan is nervous too.

State media in Uzbekistan, the only media permitted in the country, has been attacking both Muslim extremists and Western “satanic” rock and roll. This kind of music is created by “evil forces” and is “approaching as dark clouds over the heads of Uzbek youth,” the Radio Free Europe quoted local media as saying.

Meanwhile, in a sign of both corruption and anxiety, last year Uzbeks became the second-fastest growing nationality purchasing luxury residential properties in London. The Moscow Times reports average sale amounts to US$3.3 million.

While Russia has benefited from the turmoil in the Arab world due to the surge in the price of oil, China is worried about its own internal tensions in Tibet and Islamic Turkic-speaking Xinjiang, and at the same time China depends on Central Asia for a considerable portion of its energy needs.

China buys a lot of natural gas from Turkmenistan. Lately, China has been turning to neighboring Kazakhstan for more of its energy needs — 40 percent of its uranium, for example. China National Petroleum Corp. is developing gas deposits in western Kazakhstan for direct export to China via a pipeline under construction.

“But the problem is that a good percentage of energy shipments over land have to enter China via Xinjiang, which can easily become unsafe if disturbances break out,” Richard Lourie, the author of Autobiography of Joseph Stalin, said to The Moscow Times.

On December 27, the Central Election Commission registered a statement by the initiative group in favor of such a plebiscite, which was endorsed by both houses of parliament. In their letter to Nazarbayev, the legislators asked him “to support the initiative to call a national referendum on the following question: Do you accept the law on Amendments to the Constitution of the Republic of Kazakhstan, envisaging the possibility of extending in a national referendum the powers of the first president of Kazakhstan?”

The initiative group operating throughout the country has already collected 3.6 million signatures in support of the referendum, in contrast to the required minimum of 200,000.

Last Friday, a joint session of the lower and upper houses of parliament voted unanimously to change the constitution to allow the referendum. “The will of our people is law,” said Yerlan Nigmatulin, a Member of Parliament.

Earlier this January, the United States called the idea a “setback for democracy.” On the eve of the vote, the U.S. ambassador to the Organization for Security and Cooperation in Europe, a group that includes democracy promotion among its main goals, expressed grave concerns over the referendum plans.

“To cancel presidential elections once again in favor of a referendum would represent a step backwards from Kazakhstan’s OSCE commitments to establishing democracy, holding periodic free and fair elections, and respecting the rule of law,” Ambassador Ian Kelly told the OSCE permanent council in Vienna.

Kazakhstan has never held an election deemed free and fair by international observers.
On January 6, the U.S. Embassy to Kazakhstan made Washington’s position clear.

“We think that it is important that Kazakhstan’s government and citizens honor their international commitments and continue to strive for free and fair elections,” the Embassy said in a statement.

The United States has fostered close ties with the mineral-rich country, despite the government’s record on human rights, the stifling of opposition and the concentration of power in the hands of the president and his family.

Nursultan Nazarbayev has led Kazakhstan since its independence from the Soviet Union in 1991. He has already indicated he is confident of winning the next election, due in 2012.

Parliament, snubbing U.S. and EU criticism, has unanimously approved a referendum that would avert any potential challenge of the 70-year-old president in 2012 and 2017 elections.

The constitutional council, itself headed by the president, said in a statement that it would examine whether the proposal complied with Kazakhstan’s constitution and deliver its verdict within a month.

Presidential adviser Yermukhamet Yertysbayev said he was uncertain what Nazarbayev would do now. Yertysbayev conceded that allowing the referendum would likely set Kazakhstan on a collision course with its international commitments to improve democratic standards.

“But parliament was unable to take any other decision since they represent the people, and 5 million people have supported this idea of referendum,” he said in an interview with The Associated Press.

Some analysts have suggested that the idea was made only so that President Nazarbayev could reject it, in order to improve his democratic credentials in the West, BBC News reports. But the success of the petition campaign now appears to have made the referendum inevitable.

A satirical cartoon posted last Friday on YouTube to the accompaniment of a song mocking the referendum proposal ends with an on-screen message reading: “Make the right choice! Be a sheep and vote yes.”

Early Monday the state electoral commission said Lukashenko had won 79.7 percent with Sannikov, his closest rival, garnering only 1.6 percent.

Belarus police Monday arrested hundreds of protestors. The numbers of demonstrators at a rally in central Minsk swelled to tens of thousands at one point, AFP correspondents reported, with some of them trying to storm government buildings and smashing the glass doors.

Media correspondents’ reports have seen several demonstrators beaten with truncheons.

Nine candidates were running against Lukashenko. Belarus police arrested at least four of them -Sannikov, Nikolai Statkevich, Rygor Katusev and Vitaly Rymanshevsky, their party spokespeople told Reuters.

Lukashenko, 56, runs a command economy and has ruled the country of about 10 million with an iron fist since 1994, often jailing opponents and muzzling independent media while offering generous welfare and pensions to his citizens.

No one, he has said, should expect him to leave office.

“There will definitely be political changes … but no change of power in Belarus,” he told reporters in Moscow last week.

The agreement, signed in Moscow Dec. 9, signals that Minsk can continue to refine cheap Russian oil and sell it to Europe at a profit. The practice has long lubricated Belarus’ economy and allowed Lukashenko to leave much of it unreformed and offering Soviet-style state handouts.

“Russia will continue to invest in President Lukashenko because there is no danger of a color revolution with him,” Sergei Markov, a State Duma deputy with United Russia, said to The Moscow Times.

Both Russia and the International Monetary Fund have injected millions of dollars into Belarus, sending its foreign debt soaring. Minsk owed some US$25.6 billion in October, while foreign currency reserves stood at just US$2.8 billion on Dec. 1, according to the Belarussian central bank.

According to the documents published in WikiLeaks, Lukashenko is the richest man of Belarus. His personal worth is amounted to US$9 billion.

The Economist Intelligence Unit’s Democracy Index 2010, released earlier this week, identified Belarus as an “authoritarian regime,” ranking it at 130, sandwiched between Gambia and Angola.

By comparison, the same report characterized Russia as a “hybrid regime” and ranked the country at 107, above Nepal but below Kyrgyzstan.

The OSCE had said on Sunday that the election already appeared “better” than in 2006.

The European Union has dangled the prospect of financial aid if Sunday’s vote is deemed fair. The EU will be watching carefully the verdict on Monday of the Organization for Security and Cooperation in Europe, which has fielded a small army of election monitors across the country.

The current Belarusian economic model, governed by annual and five-year plans “becomes non-competitive even in post-Soviet countries,” RIA Novosti quoted IMF representative in Belarus Natalia Kolyadina as saying.

The new version will be drafted by the president’s office and the government together with representatives of small businesses.

Thousands of entrepreneurs have been rallying across the country for two weeks protesting a reform passed by the parliament that would have made thousands of entrepreneurs no longer eligible for generous tax breaks.

On November 18, Ukraine’s legislature adopted the new tax code that basically abolishes simplified taxation, raises the income tax, and restricts the use of tax benefits. The legislation needed the president’s signature to become law.

The demonstrators say the tax code passed by the Verkhovna Rada is tilted toward the rich and big companies, and will punish small and medium-sized enterprises.

“I vetoed [the tax code] today,” Yanukovych told reporters after a government meeting.

“Protests in Kiev are a manifestation of the democratic process in Ukraine. It is normal and I welcome it,” he added.

The move shows his unwillingness to sacrifice popularity for the sake of reforms, analysts said.

It could also mean that other painful measures, especially those required by an International Monetary Fund program, will be delayed or canceled.

Proponents of the legislation, led by Prime Minister Mykola Azarov, had argued the changes were necessary to balance the national budget and reduce tax evasion.

Ukraine needs to cut its budget deficit to 3.5 percent of gross domestic product in 2011 from the 5 percent to 5.5 percent expected this year under its US$15 billion deal with the IMF.

While neither the government nor the IMF expected the tax code to immediately boost budget revenues, extending tax breaks for small businesses could make it harder for Ukraine to achieve the deficit target and sets a dangerous precedent.

Political experts agreed in opinion that Yanukovych has exercised his right of veto on the tax code because of fear of escalation of the conflict.

“The authority has reasonably estimated risks of the follow-up protest actions, their considerable scale and nature,” Yury Jakimenko, political analyst said to the Kommersant-Ukraine.

“This is negative for the country,” said Citi analyst Luis Costa said to The Moscow Times. “The market consensus was that Yanukovych was going to approve it despite popular resistance we have seen over the last couple of weeks.”

Next year, under the IMF deal, Ukraine needs to start gradually raising the retirement age for women to 60 from 55 and continue increasing the price of gas for households.

A draft bill requiring Eesti Gaas AS, an Estonian natural gas company which imports and sells natural gas, to split the ownership of sales and networks by Jan. 1, 2013 is “90 percent ready,” said Igor Grazin, a lawmaker with Prime Minister Andrus Ansip’s Reform Party, in a interview with Bloomberg.

The new bill would include the requirement of a forced sale for the Eesti Gaas transmission unit if a buyer is not found and a fine of US$44,622, Grazin said.

Eesti Gaas is owned by Gazprom (37.02 percent), Germany’s E.ON Ruhrgas (33.7 percent), Finland’s Fortum Oyj (17.72 percent), and Itera Latvija (9.9 percent).

The transmission division would be sold to a company based in the European Union.

Earlier this year, Lithuania announced a similar plan at Lietuvos Dujos AB, spurring criticism from Gazprom and Germany’s E.ON AG, which also has a stake in Eesti Gaas.

In order to connect Lithuania, Latvia and Estonia to wider EU energy networks and to unify the Baltic electricity grid, the EU Commission and its Baltic members signed the Baltic Energy Market Interconnection Plan in June 2009.

At present, Baltic countries pay the highest prices in the EU for Russian gas. Estonia bought Russian fuel in the first quarter at US$340 per 1000 cubic metres. At the same time, Gazprom was selling gas to Europe for an average of US$307 for the same volume. Prices for natural gas in Lithuania are US$100-150 above the gas prices in Western Europe.

“We can resist an uncontrolled rise of gas prices only by fighting the Gazprom monopoly,” said Rauno Veri, a spokesman for the junior government partner, Isamaa ja Res Publica Liit.

In an interview with Estonian business newspaper Äripäev, Raul Kotov, board member of Eesti Gaas, insisted that separation does not bring new suppliers, reduce the prices, nor reduce Gazprom’s importance in the gas that’s used in Estonia.

Kotov also argued that the ruling coalition’s allegation that Gazprom is barring newcomers from the market is wrong, as 63 percent of Eesti Gaas belongs to non-Russian enterprises, so Gazprom cannot decide on the destiny of the Estonian gas economy.

According to Kotov, gas prices aren’t more expensive in Estonia than in the rest of Europe. In July, the gas price in Estonia is 0.43 euros per cubic meter, while in Hamburg, Germany the price is 0.7 euros per cubic meter and in Finland 0.65 euros per cubic meter.

Gazprom Deputy Chief Executive Officer Alexander Medvedev warned the EU on October 14 that changes in pipeline ownership and a move away from long-term contracts may lead to a drop in supply and a shift in Russian gas exports to Asia.

Gazprom, which has traditionally accounted for about a quarter of Europe’s gas needs, supplied 140.6 billion meters of the fuel last year.