DEC. 20 2016 (The Conway Bulletin) — Kazakhstan has exported 7.9m tonnes of grain this so far this year, Kazakh deputy agriculture minister Kairat Aituganov said at a press conference, a 12% increase on 2015. Grain is an increasingly important part of the Kazakh economy. Overall, Mr Aituganov said that agricultural production in Kazakhstan had increased this year by 4.5%.
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(News report from Issue No. 310, published on Dec. 23 2016)
BISHKEK, DEC. 21 2016 (The Conway Bulletin) — Kyrgyzstan’s Association of Markets and Businesses has criticised the government for rushing through reforms to the tax code without consultation, media reported.
Reports said that the government had published a new tax code on Dec.
6 without consulting the group. Sergey Ponomarev, the group’s leader, said that it had been working with the government for six months previously to produce a new tax code.
“The previous code has been discussed for a year and the document became balanced. It wasn’t perfect, but at least the development process and decision were complied,” he said. Mr Pomomarev said the business community would need six months to look at the new proposals. Kyrgyzstan is suffering from an economic downturn and its looking to raise revenue.
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(News report from Issue No. 310, published on Dec. 23 2016)
BISHKEK, DEC. 9 2016 (The Conway Bulletin) — Canadian gold miner Centerra Gold said it suspended its regular quarterly dividend issue because the bank accounts of its subsidiary in Kyrgyzstan that operates the Kumtor mine has been frozen.
Scrapping the quarterly $0.04 dividend payout to shareholders breaks with a six-year tradition and highlights tension between the Kyrgyz government and the Toronto- listed mining company. The Kyrgyz government, owns a 27% stake in the company but wants, instead, to own a direct stake in Kumtor.
“In light of the current restrictions relating to funds held at Centerra’s wholly-owned Kyrgyz Republic subsidiary, Kumtor Gold Company, Centerra’s Board at its regularly scheduled board meeting yesterday decided against declaring a third quarter dividend,” the company said in a statement.
“In addition, the Board has decided to suspend future dividends for the time being.”
Kumtor’s bank accounts have been frozen since June because of an unpaid environmental fine. Centerra has said the fine is politically motivated to force it to relinquish more equity in the gold mine. For the past couple of years, Kyrgyzstan has argued that it wants to give up its share in Centerra in exchange for a direct 50% stake in Kumtor.
Kumtor is Centerra’s biggest asset. In 2015 it accounted for 97% of its total revenues. And the gold mine is also vital for the Kyrgyz economy. It is its single biggest industrial asset, making up an estimated 10% of total GDP.
Reuters quoted RBC Capital Markets analyst Stephen Walker who said that for every quarter Centerra fails to pay a dividend, Kyrgyz state- owned Kyrgyzaltyn will lose around $9.5m in revenue – a vital source of funding.
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(News report from Issue No. 309, published on Dec. 16 2016)
DEC. 12 2016 (The Conway Bulletin) — The EBRD issued a €5m ($5.2m) loan to Aversi Pharma, a top-5 healthcare provider in Georgia, for the creation of a new cancer treatment centre in Tbilisi and a clinic in Telavi, in the east of the country. Last year, the EBRD loaned $10.9m to Aversi Pharma to refurbish its hospital in Marneuli, in the south of the country.
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(News report from Issue No. 309, published on Dec. 16 2016)f
DEC. 15 2016 (The Conway Bulletin) — The Asian Development Bank and the Kyrgyz government signed a loan agreement for the upgrade of the Soviet-era Toktogul hydropower plant, the biggest in Kyrgyzstan. The ADB will provide loans totalling $60m and a $50m grant. Toktogul produces around 40% of the country’s electricity. This is the third phase of the refurbishment at Toktogul. The ABD has already participated in the funding of the first two phases.
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(News report from Issue No. 309, published on Dec. 16 2016)
DEC. 14 2016 (The Conway Bulletin) — Tajikistan’s Central Bank said that Tojiksodirotbank (TSB), the country’s troubled second-largest lender, has completed its temporary administration period and will now resume banking activities.
The Central Bank intervened in TSB in May, saving the bank from bankruptcy. It cut staff numbers and injected 2b somoni ($254m) into the bank, becoming an 80% shareholder. Sources cited by the Avesta news agency also said the government had injected 1.2b somoni ($152m) into Agroinvestbank and hundreds of millions of somoni into Fononbank and Tochprombank to save them from going bankrupt too.
These banks had suffered a liquidity shortage triggered by a fall in the value of the somoni and a steep rise in bad loans. Savers and government employees, who received salaries through banks were unable to access their funds.
Now, TSB said it will soon resume regular banking activity.
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(News report from Issue No. 309, published on Dec. 16 2016)f
DEC. 14 2016 (The Conway Bulletin) — The European Parliament voted to renew a textile deal with Uzbekistan after dropping the agreement five years ago because of concerns over child labour, drawing anger from human rights groups who said that modern day slavery was being excused.
Under the EU-Uzbekistan trade deal, originally agreed in 1999 but suspended in 2011, tariffs on Uzbek cotton will be dropped. It is a major boost for Uzbek president Shavkat Mirziyoyev who appears to want to improve the country’s image after the death in September of Islam Karimov.
The vote was passed by 564 in favour versus 100 against the motion, with 41 abstentions.
Commenting on the vote, MEP Maria Arena, said: “This consent is the result of the progress and commitments made by Uzbekistan in the fight against forced and child labour. But as adult forced labour remains a strong concern, we will follow the situation closely and if there are serious human rights violations or any regress on these issues, MEPs will not hesitate to ask the Council and the Commission to suspend the entire partnership agreement.”
Last month the European Parliament’s influential International Trade Committee had voted to recommend that a deal was approved.
Uzbekistan has appeared to respond to pressure to clean up its employment issues. This year the UN’s International Labour Organisation monitored the harvest in Uzbekistan and said that while doctors and teachers were forced to work in the cotton fields, there were far few children working.
Cotton is a major cash earner for Uzbekistan. It is the fifth largest cotton producer in the world.
Human rights group, though, were less than impressed. “Adopting this Protocol now sends the wrong message to Tashkent,” Human Rights Watch, a New York-based group, said. “Do members want to be seen by Uzbekistan’s millions of victims of forced labour as the parliament that turned a blind eye to their suffering?”
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(News report from Issue No. 309, published on Dec. 16 2016)
DEC. 14 2016 (The Conway Bulletin) — AZAL, Azerbaijan’s flagship carrier, said it will establish a subsidiary to operate low-cost flights. The new company, BUTA Airways, will take over from the Azaljet brand used this year for AZAL’s low-cost flights. Azalet had not been a separate company. AZAL will own 100% of BUTA, which will start operations in late 2017.
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(News report from Issue No. 309, published on Dec. 16 2016)
DEC. 15 2016 (The Conway Bulletin) — US President-elect Donald Trump’s business cancelled a licensing deal it had made in Azerbaijan, media reported. Mr Trump had been criticised during the US presidential campaign for making a deal to lend his name to a hotel development project in Baku linked to senior members of the Azerbaijani elite who had previously been accused of money laundering.
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(News report from Issue No. 309, published on Dec. 16 2016)f
DEC. 16 2016 (The Conway Bulletin) — The Georgian Dream coalition government in Georgia stands on the brink of a great victory. It may have been former President Mikheil Saakashvili who set the ball rolling for more integration with the EU for Georgia but he has been vanquished by the Georgian Dream. To the victor the spoils.
Now — once the mechanism to kick out any countries whose citizens abuse the system has been approved, and this EU sources say is a mere formality — Georgians holding biometric passports will be able to enter the 26-country Schengen area for up to 90 days.
By early next year Georgians will be able to avoid the tiring, often boring and sometimes humiliating visa process. Instead they’ll be able to confidently stroll up to immigration queues handover their passport, flash a smile and then skip over into the EU.
And good for them.
This hasn’t been an easy or even straight forward process. There have been plenty of times when the EU could have pulled the process. Instead both the EU and Georgia have stuck to the script. Just. The big wobble was created by the Syria refugee crisis. Suddenly, once the impact of hundreds of thousands of hungry and impoverished refugees had been absorbed by Europe, and Germany in particular, the EU was less keen to allow visa-free access to Georgia, and also to Ukraine as it happens.
Of course though, the perceived threat of Georgian people flows was overblown. There are only 4m people in Georgia and they are not all involved in organised crime, as the German government seemed to imply at one point. The vast majority also don’t want to migrate to Europe. They just want to be treated as equals.
Perhaps, though, geopolitical forces also propelled the process along again. With Russia seemingly dominant in eastern Ukraine and in the Middle East, the EU may have wanted to remind the Kremlin that soft power and the slow pull of European values can be influential. By agreeing to grant Georgia, and Ukraine, visa-free access to the Schengen area, the EU is making itself relevant.
Make no mistake, Georgia’s westward European trajectory is as geopolitically charged as it ever was.
By Giulia Bernardi, The Conway Bulletin’s Tbilisi correspondent
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(News report from Issue No. 309, published on Dec. 16 2016)