Category Archives: Uncategorised

Kazakh-US deal extends military cooperation

JULY 5 2017 (The Bulletin) — After a meeting in Washington DC, officials from Kazakhstan and the US signed a deal to extend military cooperation between the two countries until 2022. No details of the cooperation were released although Kazakh and US armies do hold joint exercises. Over the last few years, Kazakhstan has been improving its military deals with Russia.

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(News report from Issue No. 336, published on July 16 2017)

WB keeps lending to Azerbaijan

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JULY 6 2017 (The Bulletin) — The World Bank approved a plan to lend Azerbaijan just over $400m in 2017, Russia’s Interfax reported, to fund the construction of the Southern Gas Corridor that will pump gas to Europe from the Azerbaijani section of the Caspian Sea. Earlier this year, Azerbaijan quit the Oslo-based Extractive Industries Transparency Initiative (EITI), a move that some analysts had said may impact its ability to secure loans from major intergovernmental institutions.

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(News report from Issue No. 336, published on July 16 2017)

OPEC oil deal will break up in 2018, says Kazakh minister

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JULY 5 2017 (The Bulletin) — JULY 9 2017 (The Bulletin) — Kazakhstan effectively signalled its withdrawal from an OPEC deal to cut oil output in an attempt to drive up prices. Russia’s TASS news agency quoted energy minister Kanat Bozumbayev as saying at an energy conference in Istanbul that Kazakhstan wanted to rise output as soon as the current agreement expired in March 2018.

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(News report from Issue No. 336, published on July 16 2017)

International Bank of Azerbaijan wins support for restructuring

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JULY 12 2017 (The Bulletin) — International Bank of Azerbaijan (IBA) said that it had secured support for its debt restructuring plan from creditors holding 87% of the debt. It missed a loan repayment in May triggering plans to restructure $3.3b of debt, effectively wiping 20% off the value of its debt. Western investors have complained that the restructuring plan is biased against them and had vowed to block it from being put into action. IBA said it would announce the formal results of a vote on its restructuring plan on July 18.

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(News report from Issue No. 336, published on July 16 2017)

Georgia court paves way to deport ‘Gulenist’ teacher

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TBILISI, JULY 7 2017 (The Bulletin) — A court in the Georgian capital rejected an asylum application by detained Turkish school manager Mustafa Cabuk, paving the way for his extradition to Turkey where he is he is accused of supporting terrorism and being a member of the banned Gulen organisation.

The case has been controversial because it has appeared to confirm that Georgia has bowed to pressure from Turkey to detain and extradite Turks linked to the Gulen movement. Turkish President Recep Erdogan has accused exiled cleric Fethullah Gulen and his followers of organising a failed coup last year.

Turkey has been pressuring allies in the South Caucasus and Central Asia to hand over businessmen and education officials linked to Gulen but until recently only Azerbaijan, its arch-ally, and Turkmenistan have acquiesced.

Georgia, though, has been trying to boost relations with Turkey and Mr Cabuk’s supporters have said that he is just a pawn in a bigger geopolitical game and that he faces being tortured if he is sent back to Turkey where thousands of Gulenists have been arrested. Georgia has also revoked the licence of a school in Batumi linked to the Gulen network and detained a Turkish businessman.

To the frustration of his supporters, the court ruled Mr Cabuk didn’t meet the requirements needed to be given political asylum and that his life would not be in danger in Turkey.

Cabuk was detained in May. He has worked in Georgia since 2002. His most recent job was as a manager for Demirel College in Tbilisi.

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(News report from Issue No. 336, published on July 16 2017)

Kazakh Halyk Bank completes KazKom takeover

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ALMATY, JULY 12 2017 (The Bulletin) — Kazakhstan’s Halyk Bank, owned by the daughter of Kazakh Pres. Nursultan Nazarbayev and her husband, completed the takeover of Kazkommertsbank, a deal officials say is vital to protect the banking sector but critics say cements the First Family’s power.

The complex deal involved the state writing off $7.5b of Kazkommertsbank and Halyk Bank bad debt. Halyk Bank officially paid only 185b tenge ($560m) for its rival. The combined market share of the merged bank will be around 37%, roughly four times its next competitor.

While opponents of Mr Nazarbayev and his son-in-law, Timur Kulibayev, have said that the long-planned deal gives the elite too much influence, its proponents have said that it is essential.

Kazakhstan’s banking sector is under increased pressure from nonperforming loans which have been mounting over the past few years, since an oil price collapse in 2014 triggered a downturn and a halving of the value of the tenge.

The Central Bank has said that it has prepared a $1.5b fund to bail out its banks. Some banks in Kazakhstan have already folded.

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(News report from Issue No. 336, published on July 16 2017)

Kazakhstan reaffirms support for Qatar

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JULY 2 2017 (The Bulletin) — In an apparent show of support for Qatar, which is under a blockade lead by its for neighbour Saudi Arabia, the Kazakh foreign ministry released a note highlighting diplomatic relations between the two countries. The note also said that a planned visit to Kazakhstan by high-ranking Qatari officials was still set for later this year. Qatar has been building links with Central Asian states over the past few years. Central Asia wants access to the Gulf and Qatar has been looking for allies.

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(News report from Issue No. 336, published on July 16 2017)

Kazakh capital hosts fifth round of Syria talks

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JULY 6 2017 (The Bulletin) — Kazakhstan hosted the fifth round of Syria peace talks in Astana aimed at ending the violence in the civil war that has ravaged the country in the last six years. Russia, Iran and Turkey were the key drivers around the talks which diplomats said ended with an agreement to set up so-called de-escalation zones although analysts also said that there had been no major break through. No specific details of the deals agreed were released. Importantly, both the Syrian government and the Syrian rebels attended the talks.

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(News report from Issue No. 336, published on July 16 2017)

CASA-1000 is on schedule, leaders say in Tajik capital

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DUSHANBE, JULY 6 2017 (The Bulletin) — The CASA-1000 electricity generation and supply project, considered an essential Western-based link between Central Asia and South Asia, will be finished this year, as scheduled, leaders of the four nations working on its construction said at a meeting in the Tajik capital.

This is important because CASA- 1000, which will generate electricity through hydropower stations in Kyrgyzstan and Tajikistan and distribute it to Afghanistan and Pakistan, is the main transnational Central Asia project backed by the West and its financial institutions. The US government has even described it as an important part of a new north-south Silk Road.

The West has lost influence in Central Asia over the last few years to Russia’s military expansionist strategy and China’s trade-orientated ‘Belt and Road’ policy.

Looking to allay fears that timings had slipped, Pakistan’s PM Nawaz Sharif, Afghan President Ashraf Ghani, Kyrgyz PM Sooronbay Jeenbekov and host Tajik President Emommali Rakhmon lined up to talk up progress.

Pakistani news agencies quoted Mr Sharif as saying: “We must make efforts to ensure that the project is completed well in time.”

There are still major security and operational concerns over CASA-1000, though, which need to be solved.

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(News report from Issue No. 336, published on July 16 2017)

Georgia’s BGEO to spin off non- banking investments

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TBILISI, JULY 3 2017 (The Bulletin) — BGEO, the London-listed Georgian investment company that owns most of Bank of Georgia and Georgia Healthcare Group, said it will split into two companies later this year in a move that surprised analysts but sent its share price up towards an all-time high.

The de-merger will give investors more opportunity to increase their exposure to Georgia with a new company focused on retail, healthcare, drinks and utilities.

Both Bank of Georgia and Georgia Healthcare have had strong years and have become two of the Central Asia and South Caucasus region’s favourite shares.

In a statement, BGEO said it would split into two London-listed companies — Bank of Georgia and BGEO Investments. BGEO will own a 10% stake in the bank; a 57% stake in Georgian Healthcare; M2, a real estate company; Aldagi, an insurance company; GGU, a utilities company; a 72% stake in Taliani Valley, a drinks company.

“The Board of BGEO Group believes a de-merger of the businesses will deliver additional long-term value to shareholders by creating two distinct entities, each of which will have enhanced growth opportunities

in the strongly growing Georgian economy,” the BGEO statement said. The news sent BGEO’s shares up and over the next couple of days they hit a peak of 3,721p, near a high of 3,744p in March. Shares in Georgia Healthcare were steady at 370p.

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(News report from Issue No. 336, published on July 16 2017)