Category Archives: Uncategorised

Moody downgrades Kazakh banks

SEPT. 7 2015 (The Conway Bulletin) — Moody’s ratings agency downgraded three Kazakh banks due to their deteriorating asset quality and their exposure to foreign currency lending. Kazkommertsbank’s baseline credit assessment (BCA) was rated caa2, ATF Bank fell to caa3, and Eurasian Bank was downgraded to caa1. Moody’s also changed the outlook of the three Kazakh lenders, together with Halyk Bank, to negative, highlighting the precarious state of Kazakhstan’s banking sector.

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(News report from Issue No. 247, published on Sept. 11 2015)

Construction starts on $85m aircraft parts plant in Georgian capital

TBILISI, SEPT. 7 2015 (The Conway Bulletin) — Georgia’s PM Irakli Garibashvili officially initiated construction of a factory near Tbilisi airport that will produce structural components for airplanes.

Last March, Israel’s Elbit Systems and Georgia’s Partnership Fund, a state-owned holding, set up a joint- venture called Aero-Structure Technologies to build the $85m plant.

“The fact that Elbit Systems is returning to Georgia means a lot to me personally and to the Georgian government, because this is an expression of confidence towards our government and our country,”

Mr Garibashvili said at the opening ceremony.

The plant will give Georgia’s tech industry a major boost as well as create 300 new jobs. It will open in 2017. A Georgian government press release said the plant’s production was aimed at the major aircraft manufacturers Boeing, Airbus, Bombardier and Sukhoi.

For Elbit, one of Israel’s biggest weapon’s manufacturers, the new factory marks a remarkable turn around in its business relationship with Georgia.

Elbit Systems had previously built and sold Hermes 450 reconnaissance drones in Georgia. In 2011, though, it fell out with the government of President Mikheil Saakashvili.

The government launched a $100m law suit against Elbit which it settled for $35m.

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(News report from Issue No. 247, published on Sept. 11 2015)

Eurasian Economic Union causes problems for Kyrgyz business

BISHKEK, SEPT. 11 2015 (The Conway Bulletin) — Kyrgyzstan’s entry to the Eurasian Economic Union last month has created confusion and extra bureaucracy for businesses, Aziz Soltobayev, founder of the online store svetofor.info, said in an interview with The Bulletin.

Mr Soltobayev, 32, said the Kyrgyz government had failed to give clear instructions on what impact membership of the Eurasian Economic Union would have.

“There is not much to be happy or thrilled about,” he said at his company’s headquarters, a converted house in central Bishkek. “For example if you want to export you have to be on the exporter’s list and this means more bureaucracy and inspections and examinations.”

Kyrgyzstan became the fifth member of the Russia-led Eurasian Economic Union last month. Kazakhstan, Belarus and Armenia are also members. The problem is that when the idea of the Eurasian Economic Union was floated, Russia was in the ascendency. Now its economy has tipped into recession.

“Oil prices were really high and it [Russia] was just booming,” Mr Soltobayev said. “But things have changed. The war with Ukraine, US sanctions and the devaluation of the rouble has made this Union miserable, just the worst place.”

And the costs are growing too. Svetofor.info buys stock from China but Mr Soltobayev said prices for imported goods had already increased significantly.

Regarding svetofor.info, which he started in 2004, Mr Soltobayev said its best-selling products were mobile phone handsets. On the streets of Bishkek, most people seemed glued to mobile phones.

Mr Soltobayev said svetofor.info was going to quit its remaining high street shops altogether in the next few years and move its operation completely online.

“With access to the internet and with the decline (in price) of data packages people are using it more and more,” he said. “We see now that people are buying products on their mobile phones. They don’t have desktop phones any more and we see people doing this not just in the city but also in the countryside.”

Fashion, he said, is all important with the latest smartphone being the number one accessory for Kyrgyz.

“They would certainly rather buy an iPhone and live in miserable conditions,” he said.

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(News report from Issue No. 247, published on Sept. 11 2015)

Power station extends in Azerbaijan

SEPT. 9 2015 (The Conway Bulletin) – The Trend news agency quoted a source in the Azerbaijani energy market as saying that the long-delayed extension to the Shimal power plant in Baku will finally be commissioned this year. The extension, which will double the capacity of the power station, was supposed to have been commission last year.

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(News report from Issue No. 247, published on Sept. 11 2015)

Comment: Internal issues trigger violence in Tajikistan

SEPT. 11 2015 (The Conway Bulletin) – Last week Tajikistan experienced some of its bloodiest fighting in recent years. Although the regime has been quick to label the rebels as “terrorists” sponsored by outside forces, the conflict is in fact the product of internal factors.

Tajikistan remains a mafia state. Different factions compete over the resources it has to offer. Government posts are not merely daytime jobs; they offer elites access to power and wealth.

With such a contested political economy, conflicts boil to the surface intermittently.

After the country’s civil war ended in 1997, some opposition warlords were incorporated into the regime.

Since signing the power-sharing deal, Emomali Rakhmon’s government has reneged on its promises, imprisoning, killing and exiling many of its former foes.

Not all of them have laid down their arms without a fight. Last Friday’s armed uprising is just the last in a series of conflicts involving former opposition strongmen.

Until recently, Major-General Abdukhalim Nazarzoda was one of the last remaining opposition commanders in government.

A skilful player of the political game, he rose to the rank of deputy defence minister in 2014. At the same time, he amassed a fortune through control of a bread factory, a poultry farm and other assets.

But last week his position came under threat.

According to a statement released by his supporters on September 6, the regime plotted to remove Nazarzoda for refusing to agree with the recent ban on the government’s main opponents, the Islamic Renaissance Party.

Instead of going quietly, he decided to go out fighting. And fight he did, leaving over forty people dead.

Dushanbe seems to have the situation under control for now. Despite sustaining heavy casualties, the security services have now neutralised most of Nazarzoda’s supporters, killing the general himself on September 11.

With the move against Nazarzoda, the regime has sent a clear warning signal to other commanders of dubious loyalty.

Not all of them will step aside without a fight.

Over the next few years Tajikistan’s fractious post-conflict state will sporadically erupt into violence.

By Edward Lemon, PhD candidate at Exeter University focusing on Tajikistan

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(News report from Issue No. 247, published on Sept. 11 2015)

Business comment: FDI in Kyrgyzstan

SEPT. 9/10 2015 (The Conway Bulletin) — Between January and July this year, Canada increased its flow of Foreign Direct Investment into Kyrgystan by 90 times.

For Canada, read Centerra Gold, the Toronto-listed company that is part-owned by the Kyrgyz government. It owns the Kumtor gold mine in the east of the country, Kyrgyzstan’s main economic driver.

And it seems that this investment and the subsequent 49% increase in gold exports has helped Kyrgyzstan to post GDP data in Jan. – Aug. 2015 that shows growth of 7% from the same period last year. If capital flows are encouraging, however, foreign trade has shrunk significantly. The volume of import-export fell by 15% in the first 7 months of 2015.

In 2015, the fall of the som currency has led to lower purchasing power for Kyrgyzstan, and the government recently announced that Kyrgyzstan will inevitably face inflation for the next few months.

But as long as foreign investors retain their confidence in Kyrgyzstan, the country will be able to defend itself from the growing regional economic crisis.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Irish Siteserv enters Kazakhstan

SEPT. 8 2015 (The Conway Bulletin) — Irish industrial services company Deborah Services Limited (DSL) and Lancaster Group, a Kazakh private holding company, signed a multi-million euro agreement to form a joint venture to serve oil and gas operations in Kazakhstan. Infrastructure and utility support firm Siteserv owns DSL. The new company, DSL Caspian, will provide protective coatings and fire protection at onshore and offshore oilfields in Kazakhstan. Lancaster Group is closely linked to the Kazakh elite. Yerbolat Dossayev, currently minister of economic development, is a major stakeholder in the group.

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(News report from Issue No. 247, published on Sept. 11 2015)

Lobby group concerns for Turkmen journalist

SEPT. 7 2015 (The Conway Bulletin) – The France-based lobby group Reporters Without Borders said they were increasingly concerned about a journalist held by the Turkmen security forces. It said that Saparmamed Nepeskuliev, a freelance journalist who has worked for the US-funded Radio Free Europe/Radio Liberty, had not been heard of since he was detained by security forces three months ago.

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(News report from Issue No. 247, published on Sept. 11 2015)

Uzbek president daughter touted as successor

SEPT. 7 2015 (The Conway Bulletin) – Uzbek media reported that Usman Khaknasarov, described as a local political analyst with good access to the ruling elite, had said that Uzbekistan’s President Islam Karimov may be lining up his youngest daughter, Lola, to succeed him. The 77-year-old Mr Karimov has yet to announce a successor. His eldest daughter, Gulnara, has lost her power and influence.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Iran and Azerbaijan make deals

SEPT. 10 2015 (The Conway Bulletin) – Iran’s Khazar Exploration and Pro- duction Co. (KEPCO), a subsidiary of National Iranian Oil Company, met with officials from the Azerbaijani state oil and gas company SOCAR in Tehran to discuss how best to work together to explore and exploit oil fields in the Caspian Sea. Iran has has begun to re-integrate into the global community.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)