OCT. 11 2016 (The Conway Bulletin) – Trade turnover between Georgia and Saudi Arabia has increased, the two countries’ diplomatic corps said at a meeting in London. Saudi investment into Georgia reached $100m in the first nine months of the year and total trade turnover has doubled. Tourism is also on the rise, with visits from Saudi Arabia to Georgia likely to triple.
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(News report from Issue No. 300, published on Oct. 14 2016)
OCT. 13 2016 (The Conway Bulletin) – During an official trip to Tbilisi, Kyrgyz President Almazbek Atambayev said that he supported Georgia’s territorial integrity. By voicing support for Georgian rule over the breakaway regions of South Ossetia and Abkhazia, which claimed independence after a brief war in 2008, Mr Atambayev was effectively condemning Russia’s support for the rebels.
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(News report from Issue No. 300, published on Oct. 14 2016)
OCT. 7 2016 (The Conway Bulletin) – The EBRD gave a $560,000 loan to Taze Ay, a Turkmen meatpacker aiming to expand its production line by 25%. Located in the southern city of Mary, Taze Ay was founded in 2003 by a local family. Taiwan’s International Development and Cooperation fund will also contribute to the expansion of the factory with a $240,000 loan.
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(News report from Issue No. 300, published on Oct. 14 2016)
OCT. 4 2016 (The Conway Bulletin) – Brussels-based Rezidor Hotel Group said that its first Radisson Blu hotel in Kyrgyzstan will open in 2019. Rezidor has teamed up with local LLC Stability to build the hotel in central Bishkek. The Radisson Blu is Rezidor’s high-end hotel brand. In Central Asia and the South Caucasus, Radisson Blu hotels already operate in Astana, Tashkent, Yerevan and Tbilisi.
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(News report from Issue No. 299, published on Oct. 7 2016)
OCT. 4 2016 (The Conway Bulletin) – A prized hunting falcon belonging to Tamim bin Hamad Al Thani, Emir of Qatar died in a Kazakh customs warehouse. The precise reasons for the falcon’s death have not been released to the public. The Emir was a regular visitor to Kazakhstan, where he liked to hunt with falcons near Lake Balkhash. Kazakhstan is a popular destination for Middle Eastern rich with a penchant for falconry.
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(News report from Issue No. 299, published on Oct. 7 2016)
BISHKEK, OCT. 1 2016 (The Conway Bulletin) — Uzbekistan and Kyrgyzstan reopened previously closed border crossings and pledged to improve relations after a friendly meeting in the Uzbek city of Andijan in the Ferghana Valley.
The sudden improvement in Uzbekistan-Kyrgyzstan relations comes just a month after the death of Islam Karimov, Uzbek president since independence from the Soviet Union in 1991. He was regarded as a belligerent leader who preferred to keep relations with his neighbours cool.
By contrast acting President and PM Shavkat Mirziyoyev has appeared eager to improve Uzbekistan’s relations and one of his first acts, at least according to many analysts, was to mend relations with Kyrgyzstan.
This year, both countries have strengthened their forces in a stand- off that has threatened to escalate into conflict. In August, Uzbekistan suspended rail links with Kyrgyzstan.
Relations between Kyrgyzstan and Uzbekistan have been tense for years due to border disputes, rows over gas
prices and interethnic violence in Kyrgyzstan after a revolution in 2010. The Uzbek-Kyrgyz meeting on Oct. 1 culminated in a photo-op at the Uzbek-Kyrgyz border where Uzbek deputy PM, Adkham Ikramov, and his Kyrgyz counterpart, Mukhammetkalyi Abulgaziyev, exchanged kind words.
“Today, we understand just how much Kyrgyzstan and Uzbekistan need such meetings,” Mr Ikramov said.
The unprompted thawing of relations caught many by surprise.
Ruziali, an Uzbek student living in Bishkek, said that economic gains were behind the move.
“If acting President Shavkat Mirziyoyev wins the election, relations with Russia could improve and it is quite possible that we will enter the Eurasian Economic Union, of which Kyrgyzstan is already a member,” he said.
Uzbekistan holds a presidential election in December which is expected to confirm Mr Mirziyoyev as president.
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(News report from Issue No. 299, published on Oct. 7 2016)
TBILISI, OCT. 6 2016 (The Conway Bulletin) — The Georgian government unveiled the 20.7MW Kartli Wind Farm, Georgia’s first large-scale wind farm which is considered a key milestone towards both boosting its power production and increasing its green energy footprint.
Kartli Wind Power Plant, a joint venture owned by the Georgian Energy Development Fund (GEDF) and Oil and Gas Company of Georgia, manages the project, which cost $34m to build. GEDF is part-owned by the EBRD, which loaned $22m for the project.
At the inauguration ceremony near the town of Gori in central Georgia, PM Giorgi Kvirikashvili lauded the project and highlighted its importance.
“This project is an indication that Georgia is becoming a truly developed country with leading technologies,” Mr Kvirikashvili said.
“This wind farm will enable us to partly meet our electricity demand during winter time.”
The government has pushed for the development of wind projects across the country to increase domestic production and limit the growth in imports during the winter months.
In the summer, Georgia exports its electricity surplus from its hydropower plants, mainly to Russia and Turkey.
The Kartli wind farm aims to reduce the winter gap and lower carbon emissions.
The EBRD also praised the project and said that it was ready to lend more funds to develop the country’s renewable energies.
“The EBRD stands ready to support Georgia in promoting renewable energy sources and this project confirms our determination to continue making significant investments in renewable energy,” Aida Sitdikova, EBRD’s regional director for Energy, said in a statement.
The Kartli Wind Farm is the biggest wind power project in the South Caucasus although Azerbaijan said it was considering erecting a wind farm in the Caspian Sea.
Power production has become a major headache for governments in the region as they try to feed electricity to growing populations and also replace aging Soviet infrastructure.
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(News report from Issue No. 299, published on Oct. 7 2016)
OCT. 6 2016 (The Conway Bulletin) – Bank Standard, one of the largest banks in Azerbaijan, filed for bankruptcy, delivering a sharp shock to the country’s banking sector which is trying to recover from a currency crisis.
The sight of Bank Standard, considered a stalwart of the high street since the mid-1990s, going bankrupt in Azerbaijan will worry ordinary Azerbaijanis who have already seen the manat collapse and other smaller banks disappear in a harsh economic downturn.
Azad Javadov, director of the Azerbaijan Deposits Insurance Fund, a government fund that insures people’s savings in banks, told media the government had tried to save Bank Standard.
“The state tried to normalise Bank Standard, but failed. It was decided to declare the bank bankrupt to prevent more loss,” he said.
Bank Standard has, effectively, been on life-support for some time receiving funds from the government which wanted to save the bank and protect its financial sector.
But like several other smaller banks which have filed for bankruptcy this year, Bank Standard couldn’t weather the financial storm generated since 2014 by a collapse in oil prices, a recession in Russia and the fall in value of emerging market currencies.
Part of the blame, some analysts have said, lies with the Azerbaijani government which imposed heavy capital requirements on banks in 2016.
A few days after Bank Standard declared bankruptcy, the Central Bank ordered its deposits be transferred to Muganbank, a mid-sized bank. Zaminbank, another small bank, was also declared bankrupt on Oct. 4.
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(News report from Issue No. 299, published on Oct. 7 2016)
OCT. 7 2016 (The Conway Bulletin) – As shown in our charts this week, markets were upbeat, especially due to a steady increase in oil prices over the past two weeks, following a landmark agreement among the world’s top oil exporters.
OPEC, the exporters’ lobby group, decided to cut oil output by around 1.5% in an effort to put pressure on the US dollar and send oil prices higher.
This is OPEC’s first production cut in eight years, since the 2008 Global Financial Crisis. And the decision is an important one.
It marks a formal agreement between Saudi Arabia and Iran, whose diplomatic spats had been at the core of OPEC’s inability to decide in the past year.
It also has an important effect on countries around the Caspian Sea.
Azerbaijan has quickly eroded its reserve base, pumping its oil money into the budget to contain its currency crisis. This could have not lasted much longer. Now, if oil prices continue to float around $50/barrel, a good 20% higher than two months ago, transfers from the oil fund can slow down and the leadership can breathe.
Perhaps out of excitement from the impending re-start of Kashagan in the Caspian Sea, Kazakhstan is also rallying on higher oil prices, cutting interest rates and transfers from its oil fund into the budget.
Two caveats, however, are needed for Azerbaijan and Kazakhstan. First, don’t believe in any proposal from these two non- OPEC countries on freezing or cutting production. If their output falls it is because of economics.
Second, you need to wait until their mega projects, from Kashagan to Shah Deniz II, come online before making long-term assumptions on the energy might held by Kazakhstan and Azerbaijan.
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(News report from Issue No. 299, published on Oct. 7 2016)
OCT. 4 2016 (The Conway Bulletin) – In a third and final reading, Armenia’s parliament approved a controversial new tax code that has been in the works for two years. The new code will reduce the income tax bracket for most of Armenia’s working population, liberalise VAT and tax dividends. Critics of the reform have said that the new tax code will push Armenia into a recession.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 299, published on Oct. 7 2016)