APRIL 29 2016 (The Conway Bulletin) – The Armenian parliament adopted a new electoral code, after weeks of debate in parliament (April 29). The new code, which will be used for the next parliamentary elections in 2017, is a mixed proportional-majoritarian system. Critics said the amendments failed to make the code robust and fraud-proof.
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(News report from Issue No. 279, published on May 6 2016)
MAY 5 2016 (The Conway Bulletin) – Turkmenistan must push through more structural reforms of Soviet era policies and characteristics still embedded in its economy if it is to navigate its way through an economic storm that has hit the region, the IMF said after a mission to Ashgabat.
Turkmenistan’s economy grew 6.5% last year, the IMF said, but there is likely to be a slowdown in 2016 because its economy it too tightly linked to gas.
“2016 could see another slight slowdown in growth on the back of a broadly stagnant hydrocarbon economy and slowing (albeit still massive) investment,” the IMF said in a statement.
In its assessment, the IMF praised austerity measures taken by the government over the past 18 months to counter the impact of the economic downturn. In particular, it praised the devaluation of the manat currency and the decision to phase out subsidies to the population.
“A fundamental re-orientation of the economy through a further acceleration of wide-ranging structural reforms, including in the areas of business climate and governance, as well as market-driven diversification, offers the best way to boost future growth rates,” the IMF said.
Turkmenistan devalued its manat currency by 19% on New Year’s Day 2015, its first currency devaluation for seven years and this year it said that it would scrap much cherished state subsidies of utilities.
Both policy moves were designed to bolster Turkmenistan’s listing economy.
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(News report from Issue No. 279, published on May 6 2016)
APRIL 29 2016 (The Conway Bulletin) – International ratings agency Standard & Poor’s said that it doesn’t expect the Azerbaijani government to raise tariffs on electricity for fear of social unrest. S&P downgraded the state-owned electricity distributor, Azerenergy, from a rating of BB+ to BB, saying it would need a government bailout to pay back its debts.
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(News report from Issue No. 279, published on May 6 2016)
APRIL 30 2016 (The Conway Bulletin) – State-owned KMG EP and China’s CEFC energy company finalised their earlier agreement to form a joint venture that will take over the business of KMG International, formerly Rompetrol. In December, CEFC bought a 51% stake in KMG International for $680m, KMG EP revealed this week.
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(News report from Issue No. 279, published on May 6 2016)
MAY 3 2016 (The Conway Bulletin) – Tajikistan’s Central Election Commission approved President Emomali Rakhmon’s daughter, Ozoda Rakhmon, as a parliamentary candidate. Ms Rakhmon is currently head of the Presidential Administration and will run for a seat in the upper house in a May 29 by-election. Democracy advocates have accused Tajikistan of nepotism in selecting public officials.
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(News report from Issue No. 279, published on May 6 2016)
MAY 5 2016 (The Conway Bulletin) – Azerbaijan’s government lifted a month-long ban on foreign currency loans, official media reported. The country’s Financial Markets Supervisory Authority, which acts as a regulator, had forbidden banks from granting loans denominated in foreign currency on April 5 to try and strengthen the local manat currency.
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(News report from Issue No. 279, published on May 6 2016)
APRIL 29 2016 (The Conway Bulletin) – International ratings agency Moody’s said that the proportion of loans deemed non-performing in Azerbaijan had reached 20%, a sign of the country’s poor economic health.
Moody’s said that data clearly shows the growth of non-performing loans in Azerbaijan. At the end of 2014, the proportion of non-performing loans in Azerbaijan had been 4.5%. This rose to 9.1% by the end of the third quarter of 2015 and has doubled, again, in the past six months.
Non-performing loans are credits that banks have been unable to collect for over 90 days. Analysts deem this timeframe a problem because when a loan is not repaid within three months it is likely that it will not be repaid at all.
Moody’s downgraded Azerbaijan’s economy, giving it a negative outlook and predicting problems collecting outstanding loans.
“The manat devaluation triggered a flight out of local currency deposits, led to a rise in banks’ problem loans, and eroded capital buffers,” it said in a statement.
Azerbaijan’s economy is heavily dependent on oil and gas which has collapsed in value since August 2014. The Central Bank devalued the manat currency twice last year. It ended the year at half the value it had started 2015 at.
Moody’s said this has had a negative impact on both economic activity and the banking sector.
“Azerbaijan’s economic growth outlook remains weak,” Moody’s said. “Moody’s recently revised its 2016 growth forecast for Azerbaijan, expecting real GDP to shrink by 3.3%, compared to a previous forecast contraction of 0.7%, reflecting its expectation of a contraction in both the oil/gas and non-oil/gas GDP sectors.”
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(News report from Issue No. 279, published on May 6 2016)
APRIL 29 2016 (The Conway Bulletin) – Grigory Marchenko, former chief of Kazakhstan’s Central Bank, bought an 8.3% stake in AGBank, a private bank in Azerbaijan. Chingiz Asadullayev, the bank’s chairman, increased his stake to 31.7%, up from 23.3%. The World Bank’s International Financial Corporation decreased its stake from 17.5% to 4.3%. Mr Marchenko left his post at Kazakhstan’s Central Bank in October 2013. Since leaving the role, Mr Marchenko has kept a low profile.
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(News report from Issue No. 279, published on May 6 2016)
APRIL 29 2016 (The Conway Bulletin) – Kazakhstan’s ministry of defence said it will not hold its usual military parade in Astana to celebrate Victory Day on May 9, the anniversary of the defeat of Nazi Germany in 1945. The ministry said parades should only be organised for round anniversaries. Last year, Kazakhstan held its largest-ever parade for the 70th anniversary of the Soviet Union’s victory in World War II. Observers said the decision not to hold a parade is linked to budget constraints.
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(News report from Issue No. 279, published on May 6 2016)
MAY 4 2016 (The Conway Bulletin) – Canadian miner Centerra Gold, owner of the Kumtor gold mine in Kyrgyzstan, once again said that it had not broken any rules in 2013 when it made a dividend payment . It was responding to a raid by police on the Kumtor office in Bishkek. Police were apparently sent to the Kumtor office specifically to search for any evidence of financial crime. Kyrgyzstan wants to increase its stake in Kumtor.
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(News report from Issue No. 279, published on May 6 2016)