JULY 9 2015 (The Conway Bulletin) – Around 30% of the Kyrgyz population live in poverty, media quoted the National Statistics agency as saying. People are considered living in poverty if they survive on less than $45/day. Kyrgyzstan is one of the poorest countries in the world.
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(News report from Issue No. 239, published on July 9 2015)
JULY 8 2015 (The Conway Bulletin) – Max Petroleum, a London-listed oil company operating in Kazakhstan said that it was operating under severe financial stress because of a back-tax bill imposed by the Kazakh government. Earlier this year, Max Petroleum said the drop in oil prices was pressuring its finances.
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(News report from Issue No. 239, published on July 9 2015)
JULY 3 2015 (The Conway Bulletin) – The amount of som held in Kyrgyz bank accounts has fallen by 11% since the beginning of the year, the Central Bank said, a reflection of the reduced confidence that people in Kyrgyzstan have of their national currency. The som, like other Central Asian currencies, has lost around a third of its value since November 2014.
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(News report from Issue No. 239, published on July 9 2015)
TBILISI, JULY 7 2015 (The Conway Bulletin) — Georgia’s Central Bank scorned as inadequate the government’s plan to cut spending in the face of a region-wide economic downturn.
The statement will increase tension between the Central Bank and the Georgian Dream Coalition government which have become embroiled in a row about oversight of commercial banks.
Central Bank chief Giorgi Kadagidze, who was appointed by the former government of President Mikheil Saakaashvili, and his allies have said the government’s criticism of him is politically motivated.
“Expenditures should be cut mostly at the expense of current spending,” the Central Bank said in a statement. “If the goal of the Parliament is to ease the loan burden caused by lari depreciation or to offset further downward pressure on lari, appropriate changes should be made in the [budget], which are not envisaged by the proposed draft of the budgetary amendments.” This is rare criticism.
Last month MPs voted to cut spending across different ministries. The lari has lost just over a quarter of its value since November 2014.
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(News report from Issue No. 239, published on July 9 2015)
JULY 6/7/8 2015 (The Conway Bulletin) – Indian PM Narendra Modi started an eight day tour of Central Asia and Russia with stops in Tashkent and Astana, an expedition he hopes will generate energy deals and shore up business links.
This is the first grand tour of Central Asia by an Indian leader, underlining just how seriously the country is now taking the region. But India is also playing catch up with China which has already established deep business and government level links in Central Asia.
The need to deepen relations was acknowledged by Mr Modi in a statement to media he released after meeting Kazakh president Nursultan Nazarbayev.
“I spoke about my vision for India’s relations with Central Asia,” he said.
“Kazakhstan is our biggest economic partner in the region. But, our relations are modest, compared to our potential. We will work together to take economic ties to a new level.”
Despite the rhetoric and good will that Mr Nazarbayev and Uzbek President Islam Karimov before him greeted Mr Modi with, no major deals were announced.
In Tashkent, the two sides said they discussed speeding up a deal to deliver uranium from Uzbekistan to India. In Astana, the Indian and Kazakh delegations also agreed a uranium supply deal and a mechanism to broaden military cooperation.
Mr Modi headed to the Russian city of Ufa on July 9 for a two day break from Central Asia to attend a meeting of the so- called BRICS, and a group that also includes Brazil, Russia, China and South Africa, and a summit of the Shanghai Cooperation Organisation (SCO). India is an observer member of the SCO, an economic/security group headed by Russia and China and focused on Central Asia.
He returns to Central Asia on July 11 with a meeting in Ashgabat with Turkmen leader Kurbanguly Berdymukhamedov before travelling to Kyrgyzstan and Tajikistan.
Mr Modi’s meeting with Mr Berdymukhamedov is arguably the most important.
India is the end destination for gas in an ambitious plan to build a pipeline from Turkmeni- stan across Afghanistan and Pakistan.
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(News report from Issue No. 239, published on July 9 2015)
JULY 3 2015 (The Conway Bulletin) – Year-on-year inflation in Georgian in May hit 4.5%, up from 3.5% a month previously, the official statistics said. This was the highest rate of inflation since September 2014 and confirmed an upward trend in 2015 driven mainly by alcohol, food and cigarettes.
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(News report from Issue No. 239, published on July 9 2015)
JULY 7 2015 (The Conway Bulletin) – Remittances to Armenia in the first half of the year were down 33% to $408m, the Central Bank said. This is consistent with other countries in the south Caucasus which are struggling to cope with the fall out from a recession in Russia and a drop in oil prices.
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(News report from Issue No. 239, published on July 9 2015)
JULY 9 2015 (The Conway Bulletin) – Funding for Kazakhstan’s healthcare service needs to be doubled or tripled, media quoted Almas Kurmanov, head of the budget at the ministry of health, as saying. Mr Kurmanov said Kazakhstan spends $254/person on health compared to an OECD average of $2,400.
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(News report from Issue No. 239, published on July 9 2015)
JULY 3 2015 (The Conway Bulletin) – Azerbaijan’s State Oil Fund, or SOFAZ, said that it had bought $500m worth of Chinese yuan, part of a policy to diversify its assets.
The purchase will also endear Azerbaijan to China, another unsaid reason for SOFAZ to buy yuan. China has been boosting its interest in the South Caucasus over past few years and Azerbaijan is looking for more allies.
“In order to further broaden and diversify the currency basket, SOFAZ has started making investments in Chinese Yuan,” SOFAZ said in a statement on their website.
And that wasn’t all. SOFAZ said it was looking at further exposure to China.
“Going forward, SOFAZ is planning to gain exposure to Chinese equity markets,” it said.
Azerbaijan’s oil fund is important because at $37b it is one of the biggest investment funds in the world. Its mission is to act as a social fund for the government to dip into in special circumstances and to fund large infrastructure projects.
It has begun to diversify its investments and, over the past couple of years, has built up a property portfolio in Europe and Asia.
It has been planning to buy into China ostentatiously to further diversify its investments.
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(News report from Issue No. 239, published on July 9 2015)
JULY 3 2015 (The Conway Bulletin) – Kenes Rakishev bought an additional 2.61% stake in Kazkommertsbank from its founder and former chairman Nurzhan Subkhanberdin, further strengthening the Kazakh elite’s grip on one of the country’s largest banks.
The share purchase gives the 35-year-old Mr Rakishev, who is regarded as a trustee for more powerful members of the Kazakh elite and is best known for helping to buy a house in England from Prince Andrew in 2008, a 25.84% stake in the bank.
Samruk-Kazyna, Kazakhstan’s national welfare fund, owns 10.7% of the bank and an investment company called Alnair, which is also close to the Kazakh elite, owns a 28% stake in it.
The London-based Mr Subkhanberdin still controls around 32% of the bank but he has been gradually pushed out of Kazkommertsbank this year. His stake in the bank has dwindled and in March he was ousted as chairman.
Mr Subkhanberdin’s mistake had been to flirt with supporting Kazakhstan’s opposition.
In 2009 he wrote an open letter to Kazakh President Nursultan Nazarbayev questioning the imprisonment of the former head of the Kazakh uranium company Kazatomprom, Moukhtar Dzhakishev on various corruption charges.
Earlier this year, the Kazakh government, through Mr Rakishev, forced Kazkommertsbank to buy the debt-ridden BTA Bank.
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(News report from Issue No. 239, published on July 9 2015)