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Business comment: Eurasian Bank Council

NOV. 27 2015 (The Conway Bulletin) — Central Banks in the South Caucasus and Central Asia have had a rough year. Keeping up with the strengthening dollar and the falling rouble while monitoring inflation has been a tough test.

In an attempt to stick together during the economic downturn, some of the central bankers appear to have decided to use old infrastructure to continue their meetings and coordinate policies.

Confusion, however, clouds the various structures that are still in place.

The new body which met in Almaty this week was renamed the Eurasian Council of Central Bank Chiefs and is a spin-off of the now- defunct Eurasian Economic Community (EurAsEC).

It doesn’t overlap with the Eurasian Economic Union (EEU) because Armenia is not in it and is no longer representative of the old EurAsEC, which officially closed down last year, as Uzbekistan is not a member.

And this says a lot about just how confusing economic integration has been in the region.

Since the EurAsEC was disbanded, the Eurasian Economic Union (EEU) has become the integrationist body. Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia are part of the EEU.

So why brand it as EurAsEC? Why is Armenia out of the picture?

“Pressing economic questions” are the rationale behind this new body, according to Kazakhstan’s Central Bank.

The countries that form the new body are all in the midst of an economic crisis, but so are other countries that were not invited to the Eurasian banking council.

With the EEU in place and Tajikistan lined up to become a member, the decision to revive such a strange body, rather than another, is difficult to understand.

ENDS

(News report from Issue No. 258, published on Nov. 27 2015)

Kyrgyz police arrest IS recruiter at Osh airport

NOV. 18 2015 (The Conway Bulletin) – Police in Osh said that they had arrested a 19-year-man who was actively recruiting for the IS extremist group based in Syria and Irag.

Governments in Central Asia have been warning, increasingly shrilly it seems, that IS are recruiting more heavily from disaffected young men in Central Asia. IS has claimed responsibility for a series of attacks in Paris last week that killed last least 130 people.

“A young man has been sending recruits from Osh region to participate in wars abroad as part of terrorist organisations in Syria and Iraq with further intention of committing unlawful acts on the territory of Kyrgyzstan,” media quoted the ministry of interior as saying.

“He was also doing the financing, documentation and buying of tickets for recruits to countries of conflict zones.”

Police said that they arrested him at Osh airport as he was helping a recent recruit on his way to Istanbul and then on to Syria. They also said that they had found various fake ID cards, SIM cards and laptops on him.

There has been more than a trickle of recruits from Central Asia heading out to join IS, the most famous being a police chief from Tajikistan, but Western analysts have been disparaging of the image of Central Asia as a major IS recruiting ground.

A more established recruitment area for IS is in Moscow, where an economic downturn has cost Central Asian migrant workers their jobs.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Armenia-EU finalise deal

NOV. 18 2015 (The Conway Bulletin) – Armenia could finalise a deal with the EU before the end of the year, Armenian foreign minister Edward Nalbandian was quoted as saying. For the EU a framework deal with Armenia, a member of the Kremlin-lead Eurasian Economic Union, would be an important victory, especially after the rejection of the Association Agreement in 2013. For Armenia, close links with the EU are important to maintain.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Kazakhstan looks to Islamic finance

NOV. 15 2015 (The Conway Bulletin) – Looking to boost finances, Kazakhstan said that it would launch its first sovereign Islamic bond, a sukuk, next year. Last week a source at the Central Bank said that Kazakhstan would probably aim to raise $1b through the sukuk. In 2012, the state-owned Kazakhstan Development Bank issued a $73m sukuk.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Blair flies to Georgia for ‘working dinner’ with PM

NOV. 18 2015 (The Conway Bulletin) – Has Tony Blair, the former British PM, found himself a new client? Speculation that he was now advising the Georgian Dream coalition government spiked after he flew to Tbilisi for dinner with Georgian PM Irakli Garibashvili.

Mr Blair’s business outfit, Tony Blair Associates, declined to comment but the Georgians were more keen to show off their much-feted visitor.

The PM’s website hosted a 1.58 minute long video showing Mr Blair and Mr Garibashvili enjoying the view, and a glass of wine, from a restaurant above Tbilisi before taking a funicular ride back down to the city.

The Georgian PM’s office described the meeting as a “working dinner”.

“Georgia’s democratic reforms, the situation in the world and the region, were the main topics of the meeting,” the PM’s office said without giving any more information. Perhaps the emphasis should be on “working dinner”. It’s likely that Mr Garibashvili would have paid for Mr Blair’s advice. Plenty of other leaders, including Kazakh President Nursultan Nazarbayev, have.

And Mr Blair’s wife, a lawyer, is also involved in Georgia. Her company, Omnia Strategy, has been advising the Georgian justice system. It’s unclear exactly what advice, Mr Blair imparted. Although influential, his reputation is generally accepted to have been stained by the 2003 war in Iraq that he pursued with US President George W. Bush. Still, Georgia is an avowed fan of Mr Bush. It has named a street after him, and was one of his biggest allies during the wars in Iraq and Afghanistan.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Turkcell moves to buy mobile companies from TeliaSonera in Uzbekistan and Tajikistan

NOV. 18 2015 (The Conway Bulletin) — Turkcell, Turkey’s biggest mobile service provider, is planning on buying TeliaSonera’s assets in Central Asia and the South Caucasus, Bloomberg News reported by quoting a source close to the company.

The source said that Turkcell had appointed HSBC and Citigroup to advise it on its potential bid to buy the stake in Fintur from TeliaSonera that it doesn’t already own.

Turkcell owns 41.45% of Rotterdam-based Fintur; TeliaSonera owns the rest. Fintur runs brands in Georgia, Azerbaijan, Kazakhstan and Moldova with 18m users.

Turkcell CEO, Kaan Terzioglu, appeared to confirm the company’s intention to buy TeliaSonera’s stake in Fintur. Answering journalists’ questions in Istanbul on when a deal would be finished, he said: “in 2016 if all the negotiations go well.”

The deal is important because it moves TeliaSonera towards its stated aim of selling its companies in Central Asia and the South Caucasus. It also owns businesses in Uzbekistan and Tajikistan which it wants to find a buyer for.

Earlier this year, it said that it wanted to sell up after investigations began into a corruption scandal at its Uzbek company. It is alleged to have paid Gulnara Karimova, the eldest daughter of Uzbek president Islam Karimov, millions of dollars in bribes to gain access to the Uzbek mobile market in 2007/8.

Telenor, its Norwegian rival, is also investigating alleged corruption at its Uzbek subsidiary. It owns a 33% stake in Russia-based Vimpelcom which owns a company in Uzbekistan that also, allegedly paid a bribe to enter the market.

Turkcell is Turkey’s main mobile operator. Its shareholder structure has been argued over since 2011. It has shares listed on the New York and Istanbul stock exchanges but its institutional shareholders include Turkey’s Cukurova Holding, Russia’s AlfaGroup and TeliaSonera.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Uzbekistan detains rights activist

NOV. 16 2015 (The Conway Bulletin) – Uzbek opposition media reported that police detained Uktam Paradayev, a well-respected human rights activist. It is unclear if Mr Paradayev has been charged with anything. Earlier this month Mr Paradayev was denied an exit visa to leave Uzbekistan.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Pakistan PM meets Uzbek President

NOV. 17 2015 (The Conway Bulletin) – Pakistani PM Nawaz Sharif met with Uzbek president Islam Karimov in Tashkent where the leaders signed deals that should deepen bilateral relations .

The trip was significant for Pakistan because it is looking to boost ties with Central Asia and important for Uzbekistan which needs allies to sell cotton to.

Cold-shouldered by the West, which avoids buying Uzbek cotton because of allegations it is picked using child labour, Uzbekistan has boosted relations with Pakistan as it buys Uzbek cotton for its garments industry.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

Iran-Armenia sign deal

NOV. 20 2015 (The Conway Bulletin) – Officials from Iran and Armenia have signed deals which will improve cross-border trade insurance claims and investigations, media reported. The deal underlines the advanced relations between Armenia and Iran. The neighbours need each other to boost trade.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)

TeliaSonera’s appoints Tajik Tcell’s head as Eurasia VP

NOV. 17 2015 (The Conway Bulletin) — Swedish mobile provider TeliaSonera appointed the former head ofTcell, Tajikistan’s biggest mobile network provider, Mansur Khamidov to be a vice-president in charge of the Eurasia region. TeliaSonera is currently restructuring its operations and has said that it wants to sell its Eurasia companies, partly because of corruption allegations alleged against its Uzbek subsidiary. As well as Tajikistan, TeliaSonera owns mobile operations in Kazakhstan, Uzbekistan, Azerbaijan and Georgia.

ENDS

(News report from Issue No. 257, published on Nov. 20 2015)