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Uzbekistan promises to reform its currency exchange

TASHKENT, JULY 24 2017 (The Bulletin) — Uzbekistan plans to power ahead with reform of its currency exchange, the IMF said after a mission to Tashkent.

The Uzbek Central Bank has steadily cut the value of its soum currency, allowing it to devalue by around 25% this year, but there are still restrictions on trading it. Tearing up these restrictions would underscore the credentials of Shavkat Mirziyoyev, president since September last year, as a reforming leader.

In a statement, the IMF said: “The mission especially welcomed the authorities’ plan to frontload reforms of the foreign exchange system. Unifying exchange rates and allowing a market-based allocation of foreign exchange resources would allow the Central Bank of Uzbekistan to pivot to a stability-oriented monetary policy capable of effectively controlling inflation.”

The reference to inflation is important as the Uzbek Central Bank said earlier this year that it was having to raise its key interest rate to combat rising prices. Like the rest of the region, a collapse in oil prices and a recession in Russia have hit the economy of Uzbekistan.

Operating in Uzbekistan has always been problematic for foreign investors. There are two different exchange rates in the country. The official one set by the Central Bank, and the unofficial Black Market rate. A Bulletin correspondent said the Black Market rate for the Uzbek soum was 8,450/$1, compared to just over 4,000/$1 on the official market.

The IMF also said restructuring state-owned companies and banks and improving economic data were vital.

“The authorities’ decision to adopt a new CPI to measure inflation, starting in 2018, should already help improve the quality of a key statistical indicator,” the IMF said.

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(News report from Issue No. 337, published on July 27 2017)

Tajikistan targets opposition activist

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JULY 18 2017 (The Bulletin) — Human Rights Watch and the Norwegian Helsinki Committee accused the Tajik authorities of intimidating 10 relatives of anti- government activists who had taken part in a conference in Germany earlier in the month to mark the anniversary of the the end of the civil war 20 years earlier. HRW said that local officials had threatened the activists with having their property confiscated and banned them from leaving the country.

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(News report from Issue No. 337, published on July 27 2017)

Czech investors in Kyrgyzstan’s hydro projects may be a false company

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BISHKEK, JULY 17 2017 (The Bulletin) — The Czech company that Kyrgyz President Almazbek Atambayev was lauding for agreeing a multi-million-dollar deal to build new hydropower stations may not even exist.

Less than a week after a triumphant Mr Atambayev was quoted in media talking up Liglass, a company based in a provincial Czech town, as the new backers of a hydropower project that Russia backed out of in 2015, it has emerged that even his own diplomats were warning him that the company only appears to exist on paper.

Kyrgyzstan has staked much of its future economic potential on developing its hydropower. The deal was considered important because

Russia’s Rushydro pulled out of a $700m agreement to develop the hydropower stations in 2015.

Liglass had, according to Mr Atambayev, promised to pay $37m for a 50% stake in the Upper Naryn HPP, which includes two major hydropower projects, and to build and operate a string of smaller hydropower stations.

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(News report from Issue No. 337, published on July 27 2017)

Telia writes down Ucell, Uzbek subsidiary

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JULY 14 2017 (The Bulletin) — Telia, the Swedish-Finnish telecoms company, said that it had written off the value of Ucell, its Uzbek subsidiary, by 2b Swedish krona ($245m) to 1.3b krona ($160m) because of currency and regulatory risks. It wants to sell out of Central Asia after a corruption row focused on its Uzbekistan unit. Earlier this year it sold its majority stake in Tajikistan’s Tcell to the Aga Khan. It appears to be having more difficulty offloading Ucell and its majority stakes in Kazakhstan’s Kcell, Azerbaijan’s Azercell and Georgia’s Geocell.

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(News report from Issue No. 337, published on July 27 2017)

Uzbek officials consider easing cafe curfew

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TASHKENT, JULY 20 2017 (The Bulletin) — Uzbek officials said they would consider softening restrictions on cafe and restaurant opening times, a curfew blamed for stunting the development of Uzbekistan’s nightlife.

Although officials didn’t give any details, cafe owners and staff welcomed the news as another step towards opening up Uzbekistan since the death last year of President Islam Karimov. A waitress who works at a small summer cafe in Tashkent told a Bulletin correspondent that she currently closes the cafe when it is still full of customers.

“We have to close at a very time when we have a good flow of clients,” she said.

Local bars and restaurants in Tashkent are, officially at least, only allowed to open until 11pm, cutting the evenings short. In neighbouring Kazakhstan and Kyrgyzstan, restaurants and cafes stay open late.

Not that the rules are applied evenly, an employee at another Tashkent restaurant explained.

“If you have money and powerful contacts you can freely serve the clients at any time of the day. All you have to do is to please the police and other officials,” he said.

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(News report from Issue No. 337, published on July 27 2017)

Armenia accuses Kremlin of imperiallism

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JULY 12 2017 (The Bulletin) — Armenian lawmakers accused the Kremlin of outdated imperialism after its parliament passed a law which said that citizens of other Eurasian Union countries — Belarus, Kazakhstan, Kyrgyzstan and Armenia — could only work as commercial drivers in Russia if their countries recognised Russian as an official language. The only Eurasian Union country that doesn’t is Armenia.

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(News report from Issue No. 337, published on July 27 2017)

Tajikistan sets up fashion commission

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JULY 21 2017 (The Bulletin) — Concerned about so-called ‘Alien’ clothing, the Tajik government has set up a special commission to persuade ordinary Tajiks to dress in traditional clothes, media reported. Officials in Tajikistan are worried about the spread of extremist Islam and have waged various campaigns against beards that they consider to be too long and also against women’s clothes considered to be too conservative, such as the hijab.

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(News report from Issue No. 337, published on July 27 2017)

EU promises to help Uzbekistan

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JULY 18 2017 (The Bulletin) — At their first high-level meeting with Uzbek officials since the death of Islam Karimov in September, EU officials praised the reform path that the country has taken over the past 10 months and promised to help reform Uzbekistan’s agricultural sector with a 21.5m euro grant to water research institutes. Karimov was considered an autocrat who refused to relax his grip on both power and the lives of ordinary people. Since his death, Uzbekistan has reformed various laws and increased personal freedoms.

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(News report from Issue No. 337, published on July 27 2017)

Azerbaijan jails blogger

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JULY 20 2017 (The Bulletin) — A court in Baku sentenced Russian- Israeli travel blogger Alexander Lapshin to three years in prison for illegally entering Nagorno-Karabakh in 2011 and 2012 and for criticising Azerbaijan’s continued claim over the Armenian rebel-controlled area. The severity of the sentence surprised onlookers who had expected Lapshin to be freed under an amnesty. Belarus extradited Lapshin to Azerbaijan in February.

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(News report from Issue No. 337, published on July 27 2017)

Marches confront in Georgia

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JULY 23 2017 (The Bulletin) — Pro-European and far-right marches both protested through Tbilisi, culminating in a face-off that officials had worried could lead to violence. Although eggs and bottles of water were thrown, there were no reports of serious violence.

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(News report from Issue No. 337, published on July 27 2017)