Azerbaijan - 02

Caspian and Central Asia Region Buffeted by Declining Rouble and ISIL Threat

In an 11 November national address, President Nursultan Nazarbayev suggested that Kazakhstan would face a challenging next few years and ordered the government to prepare for 2015 with a special 50-day program. Nazarbayev cited growing global and regional turbulence that is likely to affect Kazakhstan, including: the changing global security landscape; the growth of the Islamic State of Iraq and the Levant (ISIL); the ongoing regional currency crisis; and falling oil prices. This outlook is not unique to Astana, and in our view all Caspian nations are now facing similar threats.

Turkmenistan and Azerbaijan, which are economically shielded from Russia by independent trade patterns and cash reserves, are unlikely to see currency depreciations, but are nevertheless considering budget cuts. A more pressing concern for Ashgabat and Baku, and indeed the region in general, is the growing momentum of ISIL and other radical Islamist groups across the Middle East and Central Asia.

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