Tag Archives: Kazakhstan

Epic murder trial tests Austrian justice

Tight security and intense media interest marked the start of Austria's 'trial of the year'
Tight security and intense media interest marked the start of Austria’s ‘trial of the year’

After a three-month trial, an Austrian jury has found two Kazakh men not guilty of involvement in a brutal double murder committed thousands of miles away.

Alnur Mussayev, a former Kazakh intelligence chief was cleared of all charges. Vadim Koshlyak, a former security adviser, received a two-year sentence for deprivation of liberty, but was cleared of murder.

The verdict concludes one of the most complex and unusual court proceedings Austria has seen.

The case has also raised questions over whether the Kazakh secret service tried to manipulate the judicial process.

When proceedings at the Vienna Regional Court got under way in mid-April amid heavy security, the media had already dubbed it “the trial of the year”.

At its heart: the brutal killing of two managers of the Kazakh Nurbank, whose bodies where found four years ago.

Evidence presented in court suggested that the victims, Zholdas Timraliyev and Aybar Khasenov, had been drugged, tortured and strangled before being buried in metal barrels on wasteland near the Kazakh commercial hub of Almaty in early 2007.

‘Forced confessions’

The investigation had centred mainly on one man, Rakhat Aliyev, once part of the innermost circle of the Kazakh elite, a former deputy of both the intelligence service and the foreign ministry.

He was a wealthy businessman, and as son-in-law of President Nursultan Nazarbayev, he was close to the oil-rich Central Asian country’s authoritarian leader – until the two men fell out in 2007.

Aliyev was also the main share holder in Nurbank.

Vienna prosecutors alleged that he kidnapped the murder victims to confront them over illicit loans, that he repeatedly tortured them and forced them to confess and sign over shares and property before they were killed.

The men now cleared in the Vienna trial were accused of assisting Aliyev.

Aliyev himself never appeared in court.

Two months before the trial, on February 24 he was found hanged in his Vienna prison cell.

Rakhat Aliyev

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Rakhat Aliyev, seen in an undated photo, was a former son-in-law of President Nazarbayev

  • 1980s: Medical training; marries Darigha Nazarbayeva, elder daughter of future President of Kazakhstan
  • 1990s: Various business ventures; head of Kazakh financial police; becomes deputy head of Kazakh spy agency, KNB
  • 2002: Sent to Vienna as Kazakh ambassador; returns to become deputy Foreign Minister in 2005
  • 2007: Sent to Vienna once again after disappearance of Nurbank managers; fired in May and divorced from Darigha in June
  • 2008: charged and convicted in absentia to 40 years in jail and hard labour for mafia activities and attempted coup

Austria was legally bound to investigate the case after refusing extradition requests from Kazakhstan, citing the country’s poor human rights record.

After being fired as ambassador in Vienna, Aliyev had stayed in Austria, evading the Kazakh authorities who convicted him in absentia for a variety of crimes, including plotting a coup.

Vienna prosecutors started to investigate in 2011, ultimately leading to the arrest of Aliyev and his associates and formal charges last year.

‘Tale of lies’

When lead prosecutor Bettina Wallner presented the case in court, she said the alleged events sounded “like the plot of a Hollywood film”. The motive, she said, was money.

Defence lawyers argued throughout that the charges amounted to a “tale of lies” constructed by the Kazakh secret service and designed to persecute opposition figures who had fallen foul of the regime.

Over three months the jury of eight men and women listened to over 60 witnesses, more than half of whom had been flown in from Kazakhstan and spoke only Russian. A team of translators was hired to assist.

Also present were several of Vienna’s most prominent law firms.

Even though the main suspect was dead, many of the proceedings were dominated by Aliyev, with witnesses describing a man of immense power and influence.

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Alnur Mussayev (right) , the former head of the Kazakh secret service and Vadim Koshlyak, at the start of their trial

Throughout the trial there were extraordinary scenes.

After six days of testimony, the judge, Andreas Boehm, surprised everyone by freeing the suspects from custody, citing contradictory information from Kazakhstan and in some of the evidence provided by witnesses.

The prosecution and lawyers for the victims’ families protested. A month later Mr Mussayev and Koshlyak were back in handcuffs after Judge Boehm was overruled by a higher court.

Two weeks later the prosecution supported a formal application to remove Judge Boehm from the case altogether.

The lawyer for the father of one of the victims demanded the trial should be filmed to document the judge’s facial expressions and body language, which he said proved his lack of impartiality.

The defence focused on the role of the victims’ association, Tagdyr, which was founded by the widows of the murdered bankers and which spent millions on bringing the Aliyev trial to court.

The widows’ lawyer rejected accusations that Tagdyr was a front for the Kazakh secret service, saying it was financed by surviving relatives of the victims and their supporters.

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An advert for Kazakhstan’s Nurbank on a building in Almaty

But the Aliyev case also sparked a much wider debate about whether Austrian justice and institutions were in danger of being manipulated by Kazakhstan.

As far back as 2009, a parliamentary inquiry reported that politicians had been “unknowingly instrumentalised” by the Kazakh secret service to manipulate public opinion in the interests of the Kazakh government.

There have been persistent accusations that lawyers, officials and politicians have lobbied on behalf of the Kazakh authorities in the Aliyev case.

Austrian and German media have raised questions over the role of the so-called Independent International Advisory Council, whose members advise Kazakh President Nazarbayev and include the former Austrian chancellor, Alfred Gusenbauer, along with other leading European ex-politicians.

Mr Gusenbauer has issued a statement saying that the Aliyev case had never been discussed by the IIAC, and that members had at no time tried to influence the judicial proceedings.

“The IIAC advises the government and the President of Kazakhstan in questions of international politics and the economy,” the statement said.

Questions remain

At the end of a 30-day marathon trial many questions remain unanswered.

Investigations are continuing into alleged espionage on behalf of Kazakhstan.

There has also been a fresh extradition request for Mr Mussayev in another murder case, which some fear could lead to yet another trial on Austrian soil.

And the lawyers who acted for Rakhat Aliyev say they remain unconvinced that their client committed suicide in Vienna.

Observers say the verdicts are a bitter defeat for prosecutors in Vienna and Kazakhstan.

An appeal against the verdicts is possible.

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The World’s Longest Railway Is Stalled In Madrid

China Russia Train Map

The world’s longest train route spans more than 8,000 miles, crosses through eight countries, and covers a greater distance than the diameter between the North and South pole.

The China-Europe Block Train begins in the east Chinese city of Yiwu and crosses through Kazakhstan, Russia, Belarus, Poland, Germany, and France before reaching its destination 21-days later in the Spanish capital of Madrid.

Also called Yixinou, the route surpasses the world’s second and third longest routes, the Trans-Siberian railway (5,772 miles) and the Moscow-to-Beijing (4,340 miles) train.

Yixinou worlds longest train china spainSTR/AFP//GettyJournalists wait to take photos of the first cargo train ‘Yixinou’ from China’s Yiwu to Spanish capital Madrid on November 18, 2014.

In mid-November China launched the 82-railcar freight train from Yiwu, an important wholesale distributing hub near Shanghai, to Madrid.

The maiden convoy pulled approximately 1,400 tons and switched engines 16 times (about once every 500 miles) during the entirety of the journey, Spain’s El País reports.

And now it is sitting in Madrid, despite operators hoping the train would return to China in time for the country’s new year on February 19.

While the new train service is nearly 10 days faster than the traditional sea route, the cost is also 20-30% higher, El País reports. Another drawback of the marathon route stems from the variety of climates the cargo undergoes while in transit.

The harsh Russian winters of minus-22 degrees Fahrenheit cause serious problems for commodities like Spanish wine and jamón, increasingly popular products among China’s middle class, The Local Spain reports.

Consequently, the report adds, “thirty containers set to make the voyage to China remain empty in a Madrid warehouse.”

Yazhong Huang, the Director of Business at the Chinese Embassy in Madrid, told El País, that the European Union is currently China’s largest trading partner with Spain being China’s seventh largest partner within the EU.

 “The volume of bilateral trade in 2013 reached $24.9 billion,” Huang said.

One Of The World’s Biggest Oil Projects Is A Total Fiasco

Kashagan

WHEN it was discovered in 2000, the Kashagan oilfield in Kazakhstan’s waters in the northern Caspian Sea was the world’s biggest oil find in three decades. By now it was supposed to be pumping out 1.2m barrels a day (mbd), enough to meet Spain’s entire consumption.

But the project, whose name sounds unfortunately like “cash all gone”, went spectacularly awry. A year ago, when the first trickle of crude briefly flowed, it was already eight years behind schedule. Having cost $43 billion, it was $30 billion over budget. And production lasted only a few weeks before leaks of poisonous gas forced its suspension. Earlier this month a government minister admitted it would not restart until at least 2016.

Undeterred by the Kashagan fiasco, this week the government said it would approve a plan to expand the onshore Tengiz oilfield, another huge budget-buster. Tengiz was first expected to cost $23 billion but the government said this week that the bill had risen to $40 billion.

Each of the two oilfields is owned by a different consortium of foreign firms and the state oil company, KazMunaiGaz. In Kashagan’s case they include Exxon, Shell, Total and ENI. In part the project’s setbacks are due to unexpected technical problems. Corrosive and poisonous hydrogen sulphide gas, pumped up from the seabed along with the oil, has eaten through pipes bringing it onshore.

KashaganREUTERS/Leon NealA general view shows the Bolashak oil plant on the Kashagan offshore oil field near Atyrau in Kazakhstan June 30, 2013.

It may cost another $5 billion to fix the problem. But insiders say privately that with so many companies involved, the project has lacked clear leadership and suffered from government meddling.

Investors of all kinds worry about “the declining predictability of Kazakhstan’s regulatory and legal environment”, says Mariyam Zhumadil of Halyk Finance, an investment bank in the commercial capital, Almaty.

In 2010 the government filed a $1.2 billion tax claim against the consortium that operates another field, Karachaganak, while making noises about breaches of environmental rules, not long after expressing an interest in buying a stake in the field. Later the consortium gave it 10% in return for it agreeing to expand the field.

Likewise, at Kashagan, environmental officials have fined the field’s operators $737m for burning off the poisonous gas, which the consortium argues was an emergency measure. Ms Zhumadil reckons the fine is a “tool for future negotiations, perhaps to strengthen the national oil company’s presence in the project.”

This may not be the best way to encourage foreign firms to pump in the tens of billions of dollars more that are still needed to develop Kazakhstan’s oilfields.

Putin’s Eurasian Dream Is Over Before It Began

Putin’s Eurasian Dream Is Over Before It Began

The Eurasian Union that came into effect on Jan. 1 isn’t a sign of Moscow’s growing regional influence. It’s a sign of its decline.

 

 

The Eurasian Union that came into effect on Jan. 1 isn’t a sign of Moscow’s growing regional influence. It’s a sign of its decline.

The Eurasian Economic Union — a post-Soviet economic bloc of Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia — was designed to allow the Kremlin to reassert influence in its backyard and counterbalance the Brussels-based, 28-member-state European Union, which has inched towards Russia’s borders over the past decade.

Instead, the Kremlin’s prestige project, announced in 2011, but floated as an idea since 1994, limped out of the start gate in 2015.

Lángoló gázvezeték Ukrajnában - AFP PHOTO / URKAINIAN EMERGENCY PRESS

Since taking power in 2000, Putin moved to rewrite the history of Russia’s tumultuous 1990s, a decade marred by war in Chechnya, an economic crisis in 1998, and a rudderless foreign policy in its former backyard.

Putin not only made Russia’s military relevant once again by modernizing it and setting up military bases in neighboring countries, but also wielded influence with former Soviet countries by controlling economically vital oil and gas pipelines.

The Eurasian Union was meant to be the next step to secure Moscow’s standing as the economic champion of the post-Soviet space.

The Eurasian Customs Union, the Eurasian Union’s precursor, formed in 2010 and designed to remove trade barriers and harmonize tariffs between prospective members, has already faced its share of problems.

 

Originally comprised of Belarus, Kazakhstan, and Russia, the integration project expanded to include Armenia and Kyrgyzstan in 2014, but has not delivered the economic boom that its members were promised.

Both Kazakhstan and Belarus have seen their exports become more expensive in the crucial Russian market due to the ruble’s exchange rate troubles, while cheaper Russian goods have made it hard for domestic producers to compete.

As the ruble’s value tumbled some 20 percent in mid-December, consumers from Belarus and Kazakhstan crossed the border into Russia to snatch up deals on anything from cars to fruit as they found their buying power suddenly increased.

But the ruble’s fall will continue to create economic strain for the Eurasian Union’s four non-Russian members and 180-million-person market. In the medium and long term, the economic bloc will likely fail to deliver on its promises of breathing new life into its members’ industries and stimulating much-needed economic growth.

Katonák Moszkvában, a Vörös téren -  Vladimir Astapkovich/RIA Novosti

 

“As Russia’s economy grows weaker, the Eurasian Union becomes increasingly irrelevant and unappealing for its other members,” says Luca Anceschi, a Central Asia expert at the University of Glasgow. “Eurasian integration was supposed to be about economic development, but it’s coming with a much larger price tag than its members expected,” adds Anceschi.

With Belarus and Kazakhstan slowly realizing the economic costs of allying with Russia, cracks in the Eurasian Union are already beginning to show even before the foundations are set.

Since Western countries imposed the first round of sanctions on Russia in March, trade spats between Belarus and Russia have become the norm.

Zavargások AFP PHOTO

 

Despite the political alliance between Minsk and Moscow, Russia banned meat imports from its neighbor in November, saying that Belarus had become a smuggling route for foods banned under the Kremlin’s counter-sanctions against the West. Belarus’s autocratic President Alexander Lukashenko calledthe restrictions “indecent.”

This was followed by another incident, on Dec. 18, when Lukashenko tried to head off devaluing the Belarussian ruble byordering the government to denominate trade with Russia in U.S. dollars or euros.

About 40 percent of Belarus’s exports go to Russia, according to Belarus’s Foreign Ministry, and much of the rest goes to other former Soviet countries closely linked to the Russian economy. The Belarussian ruble lost 13 percent of its value against the U.S. dollar in 2014 and Minsk is clearly worried about the spread of economic contagion from Russia and is looking for added protection.

Káposztaföld Oroszországban - Konstantin Chalabov/RIA Novosti

The Eurasian Union will only yoke the isolated Belarus even tighter to a very unhelpful partner.

The Eurasian Union will only yoke the isolated Belarus even tighter to a very unhelpful partner.

In Kazakhstan, a key country for Moscow’s plans for Eurasian integration, relations with Russia have been strained by mounting economic and political pressures over the past year. Like Russia, Kazakhstan relies heavily on oil to finance its budget and has been hard hit by the price slump for crude.

In February, Kazakhstan’s government devalued its currency, the tenge, by nearly 20 percent in one day due to falling oil prices. Sanctions on Russia have also taken an inadvertent toll on Kazakhstan, with the International Monetary Fund (IMF) forecasting that growth in Kazakhstan will slip from 6 percent of GDP to 4.6 percent in 2014 as a result of falling oil prices and the importance of trade with the Russian market.

Orosz katonák a Krím-félszigeten - AFP PHOTO/ VIKTOR DRACHEV

To keep itself afloat and back its way out of Moscow’s economic shadow, Kazakhstan is trying to show the world that it’s still a good place to do business. In November, Kazakhstan’s president of 25 years, Nursultan Nazarbayev, announced a $9 billion stimulus from the country’s national oil fund to boost infrastructure development and attract foreign investment.

This summer, the government unveiled new exemptions that allow foreign investors to avoid paying taxes for 10 years. The government in Astana has also announced that it is prepared to offer 30 percent reimbursement of capital costs to investors once a foreign facility is up and running in the country.

Meanwhile, Kazakhstan is also actively strengthening ties with Western Europe. The European Union is already Kazakhstan’s largest trading partner, a relationship that will grow further after Brussels and Astana signed anenhanced Partnership and Cooperation Agreement in October — a deal similar to the one Ukraine signed in September.

 

“The government is taking a gutsy approach to attracting foreign investment and it could actually work,” says Janet Heckman, the head of the European Bank for Reconstruction and Development in Almaty, Kazakhstan.

A szláv lakosság részaránya a teljes lakossághoz képest Kazahsztánban - Wikipédia
Slavic population in Russia

 

“Our foreign policy has always been about the national interests of Kazakhstan first and foremost,” Erlan Idrissov, Kazakhstan’s foreign minister, told Foreign Policy in a recent interview. In addition to looking West, Kazakhstan has also been deepening ties with neighboring China.

In 2013, China signed $30 billion worth of gas and oil deals and became the top investor in Kazakhstan’s Kashagan oil field — the largest in the world outside the Middle East.

The trend continued on Dec. 14 as China and Kazakhstaninked $14 billion worth of infrastructure and energy deals — an important move for Kazakh economic independence, given that 80 percent of its oil exports are currently dependent on Russia-controlled pipelines and railways.

“We are not pro-Russian, pro-Chinese, pro-European, or pro-American in our foreign policy. We are pro-Kazakh,” Idrissov said. “If Russia can help us, we will turn to Moscow, but if Russia can’t offer us what we need to pursue our interests, we will turn elsewhere.

It’s simply pragmatic.” In Oct. 2013, Nazarbayev accused Moscow of erecting unfair barriers to trade, describing the Customs Union’s Russian-dominated regulatory body as politicized and complaining that foreign trade distortions were causing major difficulties for his country’s market.

Kazakhstan hoped that joining the union would help it develop a strong market for its local exports beyond hydrocarbons, but since accession to the Customs Union in 2010 the country has been flooded with Russian imports.

Kazakhstan hoped that joining the union would help it develop a strong market for its local exports beyond hydrocarbons, but since accession to the Customs Union in 2010 the country has been flooded with Russian imports.

All of this has raised fears in Astana, as well as Minsk, that the Eurasian Union they just entered will, as per Russian design, lock the post-Soviet states into Russia’s political orbit. Fears over sovereignty were increased following the annexation of Crimea in March.

“In the eyes of Kazakhstan, Crimea’s annexation was an announcement that Russia does not respect the sovereignty of post-Soviet states,” says Nargis Kassenova of Kazakhstan’s KIMEP University’s Central Asian Studies Center.

Crimea has left both Kazakhstan and Belarus walking a diplomatic tightrope, unable to fully split with Russia, but weary of its new face. Lukashenko, despite advocating support for Putin, called the annexation of Crimea a “bad precedent” for the region in March.

Speaking on Dec. 15, on the eve of two-day official independence anniversary celebrations, Nazarbayev said that Kazakhstan will celebrate the 550th anniversary of the Kazakh Khanate in 2015 and urged his citizens to defend the country’s independence.

The speech appeared to be a direct answer to a statement by Putin in August, who publicly said that Kazakhs had never had statehood before the collapse of the Soviet Union in 1991.

And while Kazakhstan and Belarus are diversifying their economic and political options, the Eurasian Union’s smaller members seem resigned to accept their fates as Russian satellites. Armenia’s National Assembly voted 103-7 on Dec. 4 to join the Eurasian Union along with Belarus, Kazakhstan, and Russia on Jan. 1.

But even lawmakers who voted “yes” were less than enthused about linking their future to Russia. “We cannot survive without the Russian people,” said Mher Sadrakyan, a member of parliament from the ruling Republican Party of Armenia, echoing the view that an alliance with Russia is a necessary evil.

Without Russia, Armenia would be left without support in its conflict with Azerbaijan over the predominantly ethnic-Armenian territory of Nagorno-Karabakh. The conflict there has been in limbo since a Russia-brokered cease-fire in 1994. Russia has a military base in Armenia and is the main supplier of arms to the Armenian military. “Without them [the Russians], they will devour us,” Sadrakyan said, referring to Azerbaijan.

Kyrgyzstan will also become a member of the nascent union — but with caveats. Kyrgyz President Almazbek Atambayev signed on the dotted line on Dec. 23, while noting that his country’s economy would not be ready for accession until May 2015. Major doubts persist in Kyrgyzstan about how joining the Eurasian Union will benefit the country’s economy, which relies heavily on the lucrative re-export trade of Chinese goods to other former Soviet countries.

Eurasian Union membership will place new tariffs on Chinese goods, which will effectively strangle the re-export trade and could close major markets in the country — a development that the Kyrgyz Ministry of Labor, Migration, and Youth warned could double unemployment. Still, Moscow is Kyrgyzstan’s main benefactor, providing billions of dollars’ worthof aid to prop up its struggling economy. The country’s leadership is not prepared to put that vital lifeline in jeopardy.

The Eurasian Union looks like a major dud. With Armenia and Kyrgyzstan reluctant members at best, and Belarus and Kazakhstan looking for alternatives to closer ties with Moscow, it’s becoming clear that the Eurasian Union won’t be the geopolitical game-changer Putin hoped for. Eurasian integration was meant to be the final step in Russia’s return to dignity and leadership, but instead the union is evidence of the Kremlin’s decaying foreign-policy aspirations.

Kazakh President Warns Of Impact Of Ukraine Sanctions

Kazakh President Nursultan Nazarbaev said sanctions and trade restrictions stemming from the Ukraine crisis would hamper the economic growth of Kazakhstan's partners.
Kazakh President Nursultan Nazarbaev said sanctions and trade restrictions stemming from the Ukraine crisis would hamper the economic growth of Kazakhstan’s partners.

Kazakh President Nursultan Nazarbaev has said further escalation of the crisis in Ukraine could hurt Kazakhstan’s economy.

Nazarbaev made the comments in a speech to parliament on September 2.

He said sanctions and trade restrictions stemming from the Ukraine crisis would hamper the economic growth of Kazakhstan’s partners, which include Russia, and that this would eventually affect Kazakhstan’s economy.

Nazarbaev said  “mutual sanctions by states that produce a total of 60 percent of global GDP” will lead to “serious adjustments and changes in the existing economic relations and world order.”

Rusia retaliated to sanctions imposed by the European Union by banning many EU food imports last month.

Kazakhstan, Russia, and Belarus are partners in a customs union and have agreed to form a Eurasian Economic Union, which is scheduled to start functioning in January 2015.

Hollande to meet Putin in surprise Moscow visit

Fotó: Makszim Zmejev / AFP / Pool

French President Francois Hollande is due to make a surprise visit to Moscow on his way back from a visit to Kazakhstan. Hollande is expected to meet his Russian counterpart and discuss the Ukraine crisis.

 

Reports emerged on Saturday that Hollande would likely meet Russian President Vladimir Putin at a Moscow airport in a stopover on the way back to France from Kazakhstan following a two-day trip, according to news agencies quoting the Kremlin and Russian media.

Hollande’s unscheduled flying visit comes a day after he vowed to work towards de-escalation in Ukraine, according to comments made at a Friday press conference in Kazakhstan reported by news agency AFP.

At that conference, Hollande reportedly suggested that he, Putin, Germany’s Chancellor Angela Merkel and Ukrainian President Petro Poroshenko should make greater efforts to start the process of reducing tension together.

Portrait of Francois Hollande taken 17.11.2014

Rare meeting

While observers have noted the frequent contact between Putin and German Chancellor Merkel during the Ukraine conflict, such dialogue between Hollande and Putin has been a rarity.

The relationship between the two has been further tested in recent weeks, with Hollande havingsuspended the delivery of a French-built warship to Russia due to the Ukraine conflict. Late last month technical equipment was reported stolen from the warship, which is under construction at the port of Saint-Nazaire.

Both the European Union and the United States have imposed sanctions on Russia for what they see as its role in destabilizing Ukraine after the February ouster of the country’s pro-Moscow president. More than 4,300 people have been killed in fighting in Ukraine’s east and relations between Russia and the west have sunk to post-Cold War depths.

China to Invest $1 Billion in Russian Solar Energy

Chinese power giant Amur Sirius plans to invest up to 45 billion rubles ($1 billion) in Russian solar energy starting next year, business daily Vedomosti reported Wednesday.

Russia has blazing summers to match its harsh winters, and despite the country’s wealth of hydrocarbon resources, the government is making moves to encourage the emergence of green energy.

Solar Systems, a subsidiary of Amur Sirius, will start construction of a solar panel factory in the Alabuga special economic zone in Russia’s Tatarstan region next year, the company’s investment and finance chief Olga Bykova told the newspaper. Costing between 6 billion and 9 billion rubles, the plant should be completed by 2016, she said.

Solar Systems this summer also won tenders to build 175-megawatt solar power plants in three Russian regions, which will be commissioned between 2016 and 2018. Amur Sirius plans to continue bidding for new energy projects, and the company’s total investment in Russia could reach 45 billion rubles, Bykova said.

The government offers to subsidize green energy sales to guarantee a return on investment, but to qualify for the scheme, solar plants must use domestically produced equipment — hence the Tatarstan factory, Vedomosti reported.

Solar Systems is also considering new projects in Kazakhstan, Armenia and Eastern Europe, Bykova said.

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