Author Archives: Editor

Georgia to reopen shops from Feb. 1

JAN. 22 2021 (The Bulletin) –Georgia’s government said that after a compulsory coronavirus lockdown, shops will be allowed to reopen from Feb. 1 and that a month later, on March 1, schools and public transport will restart operations. Georgia had been praised for its tough initial lockdown but had to redouble efforts in the autumn after a far worse-than-expected second wave.

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— This story was first published in issue 469 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Two Azerbaijani sailors held in Libya return home

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JAN. 21 2021 (The Bulletin) — Two Azerbaijani sailors, imprisoned in Libya after the ship that they were working on was detained on smuggling charges in 2016, were released. Elmihan Bagirov, captain of the ship that was owned by a Turkish company and was sailing under the flag of Sierra Leone, and Aliaga Babayev, a sailor, spent five years in a prison in Libya, convicted of smuggling oil products. Another Azerbaijani sailor died in custody.

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— This story was first published in issue 468 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Coronavirus pandemic supresses inflation in Uzbekistan

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JAN. 21 2021 (The Bulletin) — The annual rate of inflation in Uzbekistan slowed to 11.1% in 2020 from 15.2% in 2019 because of a drop in demand linked to the coronavirus pandemic, Uzbekistan’s Central Bank said in a statement explaining why it kept interest rates steady at 14%. The exception to this drop in inflation was food prices which continued to rise. The Central Bank said, for example, that eggs rose in price by 42%.

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— This story was first published in issue 469 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

European Court for Human Rights says Russia mistreated Georgian civilians in 2008 war

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TBILISI/JAN. 21 2021 (The Bulletin) — Nearly 13 years after the case was originally submitted, the European Court for Human Rights (ECHR) ruled that Russia was responsible for crimes committed against Georgian citizens during a five-day war for control of South Ossetia in 2008.

It said that towards the end of the war in August 2008, Russian forces had been in control of Tskhinvali, the South Ossetian capital, when Georgian citizens were rounded up from their homes and kept prisoners in inhumane conditions in the basements of official buildings.

“The conditions of detention of some 160 Georgian civilians and the humiliating acts to which they had been exposed had caused them undeniable suffering and had to be regarded as inhuman and degrading treatment, the court said.

The court did rule, though, that at the start of the war, which ran between Aug. 8 – 12, South Ossetian militia was in control of Tskhinvali and Russia could not be held responsible for alleged war crimes during the first three days of the conflict.

Georgia lost the war, which the Kremlin said was started by the then Georgian President Mikheil Saakahsvili, but has since worked to discredit Russia.

Georgian politicians said that the ECHR ruling was an important win. In a tweet, Georgian PM Giorgi Gakharia said that the ECHR’s ruling was “one of the most important days in the history of Georgia”. It was probably no coincidence, either, that as the verdict was announced Georgian President Salome Zurabishvili was touring Brussels in another drive to build support for Georgia’s entry to the EU and NATO.

Russia, which is a member of EHRC, has said that the findings were biased and that it does not recognise them.

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— This story was first published in issue 469 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Coronavirus hits Georgian banks

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TBILISI/JAN. 21 2021 (The Bulletin) — Profit at Georgia’s 15 commercial banks fell by nearly 90% last year, the Central Bank said, reflecting the impact of the coronavirus pandemic on its economy.

It said that it expected profits at the banks to be 100m lari ($30.3m) in 2020 compared to 950m lari in 2019.

Medical experts praised Georgia for its initial hard and fast response to the coronavirus, although economists also said that this had a tough impact on its economy.

And the assessment of banks’ profit drop was given only a couple of days before Fitch, the ratings agency, downgraded the so-called support ratings of TBC Bank, Bank of Georgia and Liberty Bank to 5 from 4 because their liabilities are now larger than the Central Bank’s reserves.

The support rating is a measure of the ability of the Central Bank to prop up commercial banks, if needed.

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— This story was first published in issue 469 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Turkmenistan and Azerbaijan agree deal to develop Caspian Sea oil block

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BAKU/JAN. 21 2021 (The Bulletin) — Turkmenistan and Azerbaijan agreed to jointly develop an oil block in the middle of the Caspian Sea, ending a 30-year feud that has slowed energy development in the region.

Analysts said that the deal to develop the Dostyk block was the most significant for the Caspian Sea energy industry since plans to exploit the giant Kashagan field in the Kazakh sector were put into action in the 1990s.

After watching, on a video screen, the Azerbaijani and Turkmen foreign ministers sign the deal in Ashgabat, Turkmen Pres. Kurbanguly Berdymukhamedov described the agreement as “historic”.

“This is a truly significant event in the life of our countries and peoples,” he said. “It is aimed at strengthening our friendship and cooperation.”

Since the collapse of the Soviet Union in 1991, Turkmenistan and Azerbaijan have argued about the ownership of the Dostyk block which lies, roughly, in the middle of the Caspian Sea. The Dostyk block neighbours the Chirag and Azeri fields which Azerbaijan has exploited, with the help of BP, and used to anchor a major oil export business.

As well as developing the Turkmen and Azerbaijani oil industries, analysts said that the development of the Dostyk field should also accelerate plans for a trans-Caspian Sea pipeline that would connect to pipelines running to Turkey and Europe.

This is a potential game-changer for Turkmenistan, which holds the world’s fourth -argest gas reserves but is largely reliant on Russia and China for sales.

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— This story was first published in issue 469 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Kazakhstan to set up monetary policy committee in Central Bank

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ALMATY/JAN. 21 2021 (The Bulletin) — In an attempt to both modernise the Central Bank’s decision-making process and to inject some confidence into its currency, Kazakhstan set up a Monetary Policy Committee that will oversee interest rate setting decisions and inflation targets.

When it comes into operation later this year the committee will be the first focused on monetary policy in Central Asia and will, eventually, include independent economists.

“The establishment of the Monetary Policy Committee is in line with the best practices of inflation–oriented countries and will increase the efficiency and transparency of monetary policy decisions,” the Central Bank said in a statement.

Like other currencies in the Central Asia and South Caucasus regions, the impact of the coronavirus pandemic has buffeted Kazakhstan’s tenge, forcing it down to below 450/$1 in March last year from around 380/$1 in January. It is now trading at 420.4/$1.

Confidence in the tenge was already weak before the coronavirus pandemic as the Central Bank was blamed for its collapse in 2014 after a sharp fall in oil prices.

And it was perhaps with this in mind that Kazakh President Kassym-Jomart Tokayev ordered, in September last year, a Monetary Policy Committee to be set up. The order also came during a more general modernisation of the Kazakh Central Bank. It has dusted off plans to shift its headquarters to Nur Sultan from Almaty. The original plan was scrapped in 2015 after the economy went into recession.

On its new Monetary Policy Committee, analysts said that the Central Bank needs to move quickly to bring in independent economists. And the Central Bank agreed.

“In the medium term, the Committee will include independent members who specialise in macroeconomics and monetary policy and have extensive experience,” it said.

In its last interest rate setting decision, in December last year, the Kazakh Central Bank kept its core interest rate at 9%, saying that inflation was stable.

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— This story was first published in issue 469 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Chaarat says beats 2020 output expectations

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JAN. 21 2021 (The Bulletin) — London-based Chaarat Gold said that it had exceeded production expectations at its Kapan mine in Armenia. In a media interview, Chaarat CEO Artem Volynets said that despite a war between Azerbaijan and Armenia over Nagorno-Karabakh and a coup in Kyrgyzstan that could have destabilised its Kyrgyz operations, Chaarat had had a decent year.

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— This story was first published in issue 469 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Coronavirus forces closure of Kazatomprom mines

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JAN. 20 2021 (The Bulletin) — Kazatomprom, Kazakhstan’s majority state-owned uranium miner, suspended operations at two of its mines in the south of the country after workers tested positive for the coronavirus. Kazatomprom didn’t say how many workers had contracted the coronavirus at its sites in the Turkestan region, nor for how long they will be closed for. Kazatomprom also didn’t say what effect the closures would have on output.

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— This story was first published in issue 469 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Gazprom increases gas purchases from Turkmenistan

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JAN. 20 2021 (The Bulletin) — Russia’s Gazprom increased gas imports from Turkmenistan in 2020, although these exports still only measure around a tenth of the value of China’s gas purchases from Turkmenistan, but cut purchases from Kazakhstan and Uzbekistan, media reported. Demand for gas in Russia has dropped because of the coronavirus pandemic.

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— This story was first published in issue 469 of the Central Asia & South Caucasus Bulletin