Category Archives: Uncategorised

Business comment: Corruption in telecoms

MAY 3 2016 (The Conway Bulletin) – Telia Company, the re-branded version of Swedish company TeliaSonera, scored a small victory this week as Swedish prosecutors dropped a bribery case related to its dealings in Azerbaijan in 2008.

Allegedly, it paid bribes to public officials to obtain licences for its subsidiary, Azercell, but prosecutors said they couldn’t prove their claims.

This, though, still leaves Telia, and other companies, entangled in an investigation linked to corruption in Uzbekistan, where they allegedly paid hundreds of millions of US dollars to obtain licences.

The beneficiary of the bribes is said to be Gulnara Karimova, the once-extravagant eldest daughter of Uzbek President Islam Karimov.

VimpelCom, an Amsterdam- based Russian company, has already settled its Uzbek bribery case with US and Dutch courts by paying a penalty of $795m, effectively admitting wrongdoing.

The Uzbek case had negative repercussions across Scandinavia.

In Sweden, perhaps in an effort to erase recent memories, TeliaSonera changed its name, colours and branding and is now registered as Telia Company.

In Norway, heads started rolling last year at the state-owned telecoms company Telenor, which owns 33% in VimpelCom.

CEO Svein Aaser was sacked in November and the Norwegian former CEO of VimpelCom Jo Lunder was arrested a few days later.

Last autumn, both Telia and Telenor said they wanted out of their operations in the South Caucasus and Central Asia, allegedly because of market pressures, but their exit, rebranding and apologies can only really be read as last minute attempts to pull their hands out of the cookie jar.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Armenia to debate status of Nagorno-Karabakh

May 5 2016 (The Conway Bulletin) – Armenia’s government sent a bill proposing the recognition of Nagorno-Karabakh as an independent country to parliament, teeing up another flashpoint with Azerbaijan over the disputed region.

This is the first time that the parliament will formally debate the status of Nagorno-Karabakh even though it has been run by Armenia- backed forces since a UN-brokered ceasefire was imposed in 1994.

Last month the worst fighting in two decades broke out around Nagorno-Karabakh, killing several dozen people and alarming the international community.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Tourism grows in Armenia

APRIL 30 2016 (The Conway Bulletin) – The National Statistical Service of Armenia said 252,506 tourists arrived in Armenia during the first quarter of 2016. This figure is an 8.6% increase compared to the first quarter of 2015. This may reflect Armenia’s increased attractiveness to Russian tourists, who have been banned from visiting Turkey because of a row between the two neighbours.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Workers complain in Kazakhstan

MAY 5 2016 (The Conway Bulletin) – A union of metal workers at the ArcelorMittal Temirtau factory in central Kazakhstan said it would appeal to the Prosecutor General against the company’s plans to cut benefits and, ultimately, lay off workers. According to Zhaktau, the union, several workers have had their full-time contract changed into freelance project work. The union also said the company plans to sack 700 workers by the end of the year. ArcelorMittal Temirtau did not comment.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Cash shortage spreads to Uzbek capital

MAY 2 2016 (The Conway Bulletin) – Several employees at state-owned companies in Tashkent have not received payment since February, according to sources interviewed by Eurasianet. This is a sign that a shortage of hard currency, previously confined to the provinces, has spread to Uzbekistan’s capital. Wage arrears cause distress among the population. Last year, a leaked letter from the Central Bank revealed a shortfall of 1.5 trillion sum ($517m at the official rate) in the state budget.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Georgian CBank intervenes, again

MAY 5 2016 (The Conway Bulletin) – Georgia’s Central Bank intervened in the currency market for the sixth time in two months, in an effort to dampen the appreciation of its lari currency. The Central Bank bought $20m, injecting lari into the market. The intervention came as the lari reached 2.21/$1, its strongest rate since July 2015.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Kazakhstan plans mining auction

MAY 3 2016 (The Conway Bulletin) – A Kazakh mining government agency said it will auction 101 gold, copper, manganese and other precious metals mines on June 16. The auction, Kazakhstan’s second, will be conducted within the framework of the International Mining and Metallurgical Congress. Last year’s auction earned the state budget around 1.5b tenge ($4.5m).

ENDS

(News report from Issue No. 279, published on May 6 2016)

Kazakhstan’s CBank cuts interest rate as inflation begins to slow

MAY 5 2016, ALMATY (The Conway Bulletin) — Kazakhstan’s Central Bank cut its key interest rate by two percentage points to 15% because it said that inflation was slowing and the overall economic outlook was improving.

The consumer price index grew in April to an annualised rate of 16.3%, its highest since 2009, but the Central Bank said that the pace of inflation had slowed.

“Seasonally adjusted, annualised month-on-month inflation for each of the last three months was within the target range for the annual inflation set between 6% and 8%,” the Central Bank said in a statement linked to its rate change.

“A survey of households also showed that expectations of inflation have subsided as well.”

After months of poor economic data and a 50% devaluation of the tenge currency, any prognosis on Kazakhstan’s economy which is even vaguely positive will be seized upon and lauded. This is the first time in months that Kazakhstan’s Central Bank has shown confidence in its ability to control the money market, a sign that the worst period of a regional economic downturn might be over.

Still, the Central Bank did add a large dash of caution to its outlook.

It said that a potential downside risk to the economy was the “increased tenge-denominated high interest rate liabilities” held by commercial banks, which could put pressure on the financial sector. This is, essentially, a reference to bad loans.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Kyrgyz-Tajik CASA-1000, a ‘mad plan’ now nearing its launch

MAY 5 2016, DUSHANBE (The Conway Bulletin) — CASA-1000 is the power transmission project that most analysts dismissed as too madcap to work.

Conceived by US diplomats and regional officials sometime around 2010 when Hillary Clinton, then the US Secretary of State, was promoting her vision of a north-south Silk Road stretching from Central Asia to India, this was the project that was meant to fail.

Instead, Tajikistan, Kyrgyzstan, Pakistan and Afghanistan will officially launch its construction next week.

If all goes to plan, and security in areas of Afghanistan where the Taliban are active is a major concern, CASA-1000 should foster improved relations in the region and boost economies.

The World Bank is the project’s biggest backer, pledging more than half the estimated $1b cost to build the 1,222km transmission line and support systems.

ENDS

(News report from Issue No. 279, published on May 6 2016)

ADB expects Turkmenistan’s TAPI to be completed by 2021

MAY 5 2016 (The Conway Bulletin) – The Asian Development Bank (ADB) said it expects the TAPI pipeline project to be completed by 2021. TAPI will pump Turkmen gas to India through Afghanistan and Pakistan. The Turkmen government insists the pipeline would be ready by 2019. For Turkmenistan TAPI has become a race against time. It wants to diversify its client base. The ADB, which is an adviser on the project, has offered a potential $600m loan.

ENDS

(News report from Issue No. 279, published on May 6 2016)