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Kazakhstan’s Eurasian Bank buys rival

OCT. 20 2015 (The Conway Bulletin) — Eurasian Bank, a private lender in Kazakhstan linked to members of the elite, said it had bought a 100% stake in BankPozitiv, a Kazakh subsidiary of a Turkish bank. Michael Eggleton, Eurasia Bank’s CEO said the deal will not exceed $32m. In anticipation of tighter capital requirements and in an effort to cut costs, foreign banks have been selling their assets in Kazakhstan.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Kyrgyz electricity prices rise

OCT. 21 2015 (The Conway Bulletin) – Nurbek Elbayev, director of the Kyrgyz energy regulatory agency, said electricity tariffs will rise sharply over the next two years. The regulator will impose a 21% increase in August 2016 and a 29% rise in 2017. Electricity prices have risen across the region, triggering civil unrest.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Turkmenistan delays TAPI construction

OCT. 20 2015 (The Conway Bulletin) – Turkmenistan said construction of the TAPI pipeline that will, it is hoped, pump gas from fields in the east of the country to consumers in India would start in 2016. Earlier this year, Turkmenistan had pushed for TAPI to start by the end of 2015. TAPI is a $10b project that will cross Afghanistan and Pakistan.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Azerbaijan’s oil production rises

OCT. 20 2015 (The Conway Bulletin) – Azerbaijan produced 31.4m tonnes of oil in the first nine months of the year, around 3% more than had originally been expected, media reported quoting the state oil and gas company. This will be a relief for Azerbaijan’s government which relies on oil for its main revenue.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Tajik capital demolition angers many

OCT. 23 2015, DUSHANBE (The Conway Bulletin) — The authorities in Tajikistan plan to demolish some of Dushanbe’s most striking buildings to make way for new developments, infuriating many people.

Specifically, city planners are eyeing up the Rohat teahouse — a tourist destination — two theatres, the former presidential administration and the current parliament building for demolition. All of the buildings lie on prime real estate in the city centre and were built during the early Soviet period.

Nurali Saidzoda, deputy head of architecture and construction committee, told Tajik media last week that the buildings selected for demolition are not unique.

“If you had seen the blueprints of what will be built in their places, you would say the same,” he said.

The Tajik authorities appear to have something of a fad for large construction projects and grandiose design. Over the past few years they have built the biggest library, biggest teahouse, and biggest mosque in the region.

But not everybody was happy. Grassroots activism is rare in Tajikistan but, even so, hundreds of people signed an online petition calling for the demolition to be scrapped.

Fotima, an old woman walking in central Dushanbe, said she was concerned about the future of the city.

“The buildings to be demolished carry the spirit of the city. The city will not be as the same as I remember it anymore,” she said.

Abdulfattoh Shafiev, a Dushanbe- based analyst, said the demolition plans was linked to business.

“Demolition of old Stalinist buildings in the Tajik capital is completely unrelated to any ideology and is simply a business idea to build new and bigger skyscrapers in the most valuable part of Dushanbe, down- town,” he said.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Tajik baby dies in Russia

OCT. 22 2015 (The Conway Bulletin) – The Russian authorities declined to take responsibility for the death of Umarali Nazarov, a five-month old Tajik boy who died in police custody in St. Petersburg nine days earlier. Nazarov had been separated from his parents who were also detained. Tajikistan has lodged an official complaint about Nazarov’s death.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Turkmen President presents 2016 budget

OCT. 16 2015 (The Conway Bulletin) – Turkmen President Kurbanguly Berdymukhamedov confirmed that the government will increase by 10% all salaries for state employees from next year.

In an official announcement in the state’s Neutral Turkmenistan newspaper, Mr Berdymukhamedov presented his budget for 2016.

“The State budget was drafted with consideration of the Decree on the President of Turkmenistan on a 10% increase in wages, pensions, state benefits and scholarships on January 1, 2016,” Neutral Turkmenistan reported.

Turkmenistan devalued its manat currency by 20% on Jan. 1 this year, hitting people’s real wages. Earlier this year Mr Berdymukhamedov said that he would go some way towards compensating people by raising government salaries but there had previously been no official confirmation of how or when this would happen.

And in a budget clearly designed to ward off a drop in economic growth linked to low energy prices, Mr Berdymukhamedov said he would fund the salary rise by selling off some state assets.

“The revenues of the State budget are to be replenished through the privatisation of state-run objects and enterprises and dwelling houses from the state housing stock and the distribution of the bonds of the state fund,” Neutral Turkmenistan said.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Currency: Kazakh tenge, Georgian lari

OCT. 23 2015 (The Conway Bulletin) — Despite all the reassuring declarations coming from Astana and the Central Bank in Almaty, volatility will be a constant for the Kazakh currency over the next months. There is just no getting away from it.

On Wednesday, Kairat Kelimbetov, Kazakhstan’s Central Bank chief, said 277.5 tenge/ $1 is an acceptable rate as long as oil prices float around $50 per barrel. Already on Friday, Brent prices fell to $48 and the tenge followed to 278.2. Over the past fortnight it has lost 1.5% against the US dollar.

Other currencies fared better this week, maintaining their value. The Georgian lari was steady at 2.39/$1 and even the Kyrgyz som had a calm week below 69/$1.

Rumours of devaluation are more worrisome in Uzbekistan, where the sum is officially stable at around 2,663/$1, but the website dollaruz.com said informal rates on the Black Market are hitting over 5,700 sum/$1.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Armenia’s foreign trade slows

OCT. 20 2015 (The Conway Bulletin) – Armenia’s foreign trade turnover dropped 20% in the first eight months of the year, its national statistics office said. The data is more evidence of the economic slowdown that has hit the South Caucasus over the past year.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Economic crisis worse than 2008/9, says Kazakh President

OCT. 19 2015, ASTANA (The Conway Bulletin) — In a rare candid assessment of the economic storm battering Central Asia and the South Caucasus, Kazakh President Nursultan Nazarbayev said the outlook for Kazakhstan’s economy was now worse than it had been during the 2007-9 Global Financial Crisis.

Mr Nazarbayev’s comments, made during a meeting with Kazakh PM Karim Massimov and published on the Presidential website, were the most candid so far by one of the region’s leaders.

And any comparison with the dark days of 2007-9, when the economies of Kazakhstan and its neighbours reversed nearly a decade of sharp growth, will hit a nerve.

“Our people must know the current situation, profits at businesses are dropping, income is falling and there is the possibility of job losses,” he said.

“This is a real crisis — more powerful than in 2007-2009.”

In 2006, according to World Bank data, Kazakhstan had been powering along and enjoying GDP growth of over 10%.

This dipped to 9% in 2007 before falling in 2008 to around 3% and in 2009 to just over 1%.

Consumers and mortgage holders defaulted on debt repayments in 2008-9 and Kazakhstan’s government had to buy up bankrupt banks. Although the Kazakh economy has recovered, the experience left deep financial and psychological scars.

And the crash this time has been just as sudden as the 2007-9 Global Financial Crisis.

In 2007-9, sub-prime mortgages in the US started the rout. This time, a sudden fall in oil and commodity prices and a loss of confidence in Emerging Markets, including in China, have been the triggers.

Currencies across Central Asia and the South Caucasus have fallen by around 40%, inflation is rising and trade volumes falling.

Kazakhstan has built up cash reserves from oil and gas sales but Mr Nazarbayev said that, although social programmes would be supported, businesses would not be bailed out.

“Companies should not expect the State to give them the means to survive. This will not happen,” he said.

Other leaders across Central Asia and the South Caucasus may not have been as forthright as Mr Nazarbayev on the economic outlook but they are facing the same stormy conditions.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)