FEB. 25 2020 (The Bulletin) — On a visit to Baku, Turkish President Recep Tayyip Erdogan signed a deal with Azerbaijan’s Ilham Aliyev that promotes a “preferential trade agreement” between the two allies. Media reported that in 2019, Turkey’s exports to Azerbaijan were $1.6b and its imports were $400m.
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— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin
— Copyright the Central Asia & South Caucasus Bulletin 2020
FEB. 24 2020 (The Bulletin) — Azerbaijan’s state-owned gold mine AzerGold said that it was exploring two new gold mining areas that could be commissioned as mines by 2021. The areas, in the Western Dashkasan region, have already been scoped out and identified as potential sites. Azerbaijan is trying to diversify away from the oil and gas sectors. Last year, Azerbaijan’s gold production grew by 33.2% from 2018.
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— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin
— Copyright the Central Asia & South Caucasus Bulletin 2020
DEC. 28 2019 (The Bulletin) — Uzbek president Shavkat Mirziyoyev officially opened a new Chinese-built chemical production complex near Navoi in the centre of the country. Mr Mirziyoyev said that the plant had “changed Uzbekistan’s dependence on imports of PVC, caustic soda, and created a large number of new jobs”. It also further cements China’s influence, in business and politics, in Uzbekistan.
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— This story was first published in issue 433 of the weekly Bulletin on Jan. 13 2020
— Copyright owned by the Central Asia & South Caucasus Bulletin
TASHKENT/Jan. 7 2020 (The Bulletin) — Proctor & Gamble, one of the world’s largest producer of consumer goods, is considering setting up a production site in Uzbekistan, the Uzbek government said.
According to Uzbekistan’s ministry of investment and foreign trade, regional executives from Proctor & Gamble flew to Tashkent for a meeting with ministers.
“Procter & Gamble is currently studying the industrial potential of Uzbekistan and considering the prospects of creating high-tech production facilities in the country,” media reports said of the meeting on Dec. 24. “In the operations in the country, the company will follow American standards of quality and environmental friendliness.”
If Proctor & Gamble did set up a production facility in Uzbekistan it would be a major coup for the Uzbek government which has been trying to woo foreign investment and to present itself as the premier business location in Central Asia.
The company, which is based in Cincinnati and is listed on the New York Stock Exchange, is best known for its brands such as washing up powders Ariel and Tide, shampoo brand Head & Shoulders and shaving products sold as Gillette. It has not commented on the Uzbek government statement.
Like other Western companies, Proctor & Gamble reentered the Uzbek market in 2017, the year after Islam Karimov, the reclusive autocrat who had run the country since the 1991 collapse of the USSR, died. Shavkat Mirziyoyev, who had been PM under Karimov, took over as president and immediately promised to dismantle most of the hardline policies. He also made it easier for Western companies to repatriate profits.
There are currently 260 people working at Proctor & Gamble’s distribution site in Uzbekistan.
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— This story was first published in issue 433 of the weekly Bulletin on Jan. 13 2020
— Copyright owned by the Central Asia & South Caucasus Bulletin
JAN. 3 2020 (The Bulletin) — Lydian International, the mining company developing the Amulsar gold mine in Armenia, said that it had extended its protection from creditors scheme by three weeks to Jan. 23. Lydian said at the end of last year that its creditors had told them that they would not be extending their credit lines. Lydian has not accessed the Amulsar mine since June 2018 because of protests that it says the Armenian government has been unwilling to clear.
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— This story was first published in issue 433 of the weekly Bulletin on Jan. 13 2020
— Copyright owned by the Central Asia & South Caucasus Bulletin
JAN. 8 2020 (The Bulletin) — Uzbekistan signed a deal with Japan to supply uranium worth $1b to Japan between 2023 and 2030, a deal that highlights Uzbekistan’s status as one of the world’s top uranium producers. Neighbouring Kazakhstan is considered to be the world’s biggest uranium producer.
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— This story was first published in issue 433 of the weekly Bulletin on Jan. 13 2020
— Copyright owned by the Central Asia & South Caucasus Bulletin
JAN. 9 2020 (The Bulletin) — The Astana International Finance Center (AIFC), the government-backed project in Nur Sultan that was supposed to kick start the Kazakh capital as a regional financial hub, said that a company called Kazakhstan Energy Reinsurance Company had relocated from Bermuda. The AIFC said that the Kazakhstan Energy Reinsurance Company, an affiliate of state energy company Kazmunaigas, would maintain all the legal rights it enjoyed in Bermuda.
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— This story was first published in issue 433 of the weekly Bulletin on Jan. 13 2020
— Copyright owned by the Central Asia & South Caucasus Bulletin
— The crash of Bek Air flight 2100 is a tragedy that would have been avoided with better industry oversight. The government should now prioritise this, writes Paolo Sorbello.
JAN. 13 2020 (The Bulletin) — Early on Dec. 27, a Bek Air passenger plane flying from Almaty to Nur-Sultan crashed into a building just seconds after taking off. This tragedy shocked Kazakhstan, 12 of the 102 people on board were killed, but it was an accident waiting to happen.
Owned by Nurbol Sultan, one of Kazakhstan’s richest men, Bek Air is a low-cost airline in Kazakhstan and does not hold a licence to fly abroad. In 2016, Bek Air became the only Kazakh aviation company to refuse to take the IOSA, a safety audit by the International Air Transport Association (IATA). It said the cost of taking the safety test was prohibitive but this line of reasoning was dismissed by other local airlines, who said the cost of the audit was a fraction of the price of a ticket.
Other passenger airlines in Kazakhstan, Air Astana, SCAT, and Qazaq Air, are registered with the IATA. FlyArystan, the low-cost division of Air Astana that was established in 2019, flies on Air Astana’s Airline Operator Certificate (AOC) and is therefore also a full member of the IATA.
The Kazakh aviation market is price sensitive and this is where Bek Air was competitive. Its tickets between Almaty and Nur Sultan had generally been cheaper than Air Astana’s, the flagship Kazakh airline. Fares on FlyArystan, though, were comparable to those of Bek Air.
One European pilot explained why the Bek Air flights were cheap: “The difference in pricing is the missing zeal in maintenance and safety checks.”
After the crash, infrastructure minister Roman Sklyar admitted that “Bek Air and others have the right to fly in Kazakhstan because local standards are not the same as IOSA”. This is a worrying shortfall that needs correcting.
We are still waiting for the full results of the investigation but even so, the government’s response has been timid. Bek Air’s licence was stripped indefinitely. Sklyar could have said the government would work to bring airlines up to standard but he didn’t and this is an opportunity missed.
Passenger airlines in Kazakhstan should be held accountable to international standards whichever the route they fly. Some flight routes across Kazakhstan last three hours, longer than most flights in Europe.
The Kazakh government has to make sure that it shows that it can learn from this crash and improve oversight of its aviation industry. This is the least that can be done in the memory of those killed in Bek Air flight 2100.
–Paolo Sorbello if a journalist and analyst based in Almaty
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— This story was first published in issue 433 of the weekly Bulletin on Jan. 13 2020
— Copyright owned by the Central Asia & South Caucasus Bulletin
TBILISI/Jan. 6 2020 (The Bulletin) — Georgia’s capital city is reaping the results of a major PR push to promote it as one of the must-do travel destinations for 2019 with the government saying that tourist numbers have increased by nearly 16% from 2018.
The main increase comes from Europe and tallies with a rise in the number of flights from Europe to Georgia. There has also been an increase in the number of flights into Georgia from the Middle East, where Georgia is advertised as a cool European-style destination to escape to from the hot Arab summers.
Georgia wants to increase its visitor numbers next year also and to push tourists towards its resorts in the Caucasus mountains and along the Black Sea coast.
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— This story was first published in issue 433 of the weekly Bulletin on Jan. 13 2020
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TBILISI/Jan. 9 2020 (The Bulletin) — The Georgian government cancelled a $2.5b contract to build Georgia’s largest deep-water port at Anaklia on the Black Sea because it said that finances for the consortium which had taken on the project were too flimsy.
Critics of the government, though, accused it of turning the country’s biggest infrastructure projects into a political weapon. One of the key consortium partners is TBC Bank which was set up by Mamuka Khazaradze who is currently standing trial, accused of corruption.
“The Anaklia Port Project is owned by the state, it is not owned by any private investors,” Maia Tskitishvili, Georgia’s minister for regional development and infrastructure, said when she announced that the contract, held by the Anaklia Development Consortium (ADC), would be cancelled . “By the end of 2020, we had to have a port in operation but as you can see, we will not get this result.”
She said ADC, led by TBC Bank had failed to replenish capital of $120m or attract a loan of $400m from international banks. ADC disagreed, though, and said that it had secured loan pledges from international banks such as the European Bank for Reconstruction and Development (EBRD). It said that these pledges had been undermined because the government had failed to guarantee to potential investors that they would get their money back is the project collapsed.
ADC said it would take the government to arbitration over the Anaklia contract.
Georgia has framed this project, conceived in 2014 under the current Georgian Dream coalition, as a vital piece of infrastructure needed to boost its status on the east-west transit corridor that China has dubbed the Belt and Road project.
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— This story was first published in issue 433 of the weekly Bulletin on Jan. 13 2020
— Copyright owned by the Central Asia & South Caucasus Bulletin