MAY 15 2015 (The Conway Bulletin) – Kazakhstan’s Central Bank said it will switch its monetary policy from targeting rigorous exchange rate stability to prioritising hitting inflation targets. Analysts have criticised the Central Bank for being too inflexible with its exchange rate controls.
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(News report from Issue No. 232, published on May 20 2015)
MAY 13 2015 (The Conway Bulletin) – The authorities in Azerbaijan questioned businessman Ibrahim Ibrahimov over an outstanding loan from the state-linked International Bank of Azerbaijan (IBA), media reported, the second high-profile Azerbaijani company owner to be hauled into a police station in a week.
Turan news agency reported that Mr Ibrahimov took a loans $57m, but sources in IBA told the news agency that the sum was actually $850m.
Last week police detained Nizami Piriyev, head of Azerbaijani Methanol Company. He was charged with financial fraud. Mr Piriyev is also charged with not repaying bank loans.
Natiq Cafarli, economist and executive director of ReAL opposition movement said in an interview with faktxeber.com that he does not expect the oligarchs to stay in jail for a long time. He said that the government just wants to recover its money.
“The ruling party does not need a lot of news around famous people,” he said. “They will be released soon.”
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(News report from Issue No. 232, published on May 20 2015)
MAY 14 2015 (The Conway Bulletin) – Outside the financial sector, SOCAR, Azerbaijan’s state energy company, is the largest company in Georgia, media reported quoting research from Ilia University in Tbilisi. SOCAR Petroleum Georgia is a SOCAR subsidiary. Its main business in Georgia is a network of petrol stations.
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(News report from Issue No. 232, published on May 20 2015)
MAY 20 2015 (The Conway Bulletin) – London-listed Bank of Georgia reported Q1 profit up 16% because revenue from its banking and healthcare units offset weaker contributions from insurance and real estate sectors. The results are much needed positive news after a bleak economic Q1 dominated by the falling value of the lari currency.
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(News report from Issue No. 232, published on May 20 2015)
MAY 18 2015 (The Conway Bulletin) – Swiss railway rolling stock manufacturer Stadler has won a 70m euro contract to deliver five double decker carriages to Azerbaijan’s railway company, media reported. The first two carriages will be put into operation ahead of the European Games in Baku next month.
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(News report from Issue No. 232, published on May 20 2015)
SUMQAYIT/Azerbaijan, MAY 20 2015 (The Conway Bulletin) — Absheron, the narrow peninsula surrounding Azerbaijan’s capital Baku, gives a remarkable insight into the country’s patchy oil-funded growth.
Dystopian industrial decay, dirty villages of crumbling homes and bleak oil fields of rusty drills share the same few dusty square miles with newly built sumptuous seaside resorts, whitewashed villas and long stretches of crowded beaches dotted with flashy restaurants and garish wedding palaces.
The coexistence of opposites is arguably not a harmonic one. Embarrassed by the deteriorating state of Absheron’s infrastructure and the dire living conditions of much of its population Azerbaijan’s political elite seems to have opted for the creation of a Potemkin-façade of disproportionate lavishness.
Along the modern highway connecting Heydar Aliyev International Airport to the resort town of Buzovna high marble walls veil the view of surrounding shantytowns and oil spills.
Azerbaijan’s government indulges in creating unrepresentative showcases of the country, while the huge revenues of the oil and gas industry centred in and around Absheron, fail to filter down to the local inhabitants.
The uneven distribution of both profits and investments is epitomised by the fate of Sumqayit, Absheron’s biggest town. A thriving industrial centre during Soviet times, this northern shore town of concrete blocks and wide alleys now feels abandoned.
Resentment towards the government is high in Sumqayit and the town has become a breeding ground for religious extremism. Last year there were reports that Sumqayit had become a hotbed for Syria-bound would-be jihadists and a string of arrests and search operations were carried around town.
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(News report from Issue No. 232, published on May 20 2015)
MAY 18 2015 (The Conway Bulletin) – Kazakhstan could buy a 29.25% stake in the Karachaganak oil and gas project in the north of the country when Shell completes its buyout of BG Group next year, BG Group said in its annual report.
Kazakhstan has been looking to increase its stake in various projects. Karachaganak was one of the last major operations that the Kazakh government took a stake in. It bought a 10% stake in Karachaganak for $3b in 2012.
Now, with Shell buying BG Group, Kazakhstan has the opportunity to buy a far larger chunk of Karachaganak.
“It is possible that the Republic of Kazakhstan may claim to have a right to acquire the Group’s interest in the Final Petroleum Sharing Agree- ment governing the operation of the Karachaganak gas and con- densate field in the event of a change of control of BG Group following a takeover bid,” BG Group said.
The Kazakh government hasn’t commented.
Karachaganak is one of BG Group’s most prized posses- sions, accounting for 9% of its revenues in 2014. Analysts have said that BG Group’s stake maybe worth around $4.4b.
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(News report from Issue No. 232, published on May 20 2015)
MAY 14 2015 (The Conway Bulletin) – Beeline, mobile operator VimpelCom’s brand in the former Soviet Union, said its revenue in Q1 had increased by 13% in Uzbekistan. It said that while its customer base had fallen by 1%, mobile data revenues had grown by 24%.
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(News report from Issue No. 232, published on May 20 2015)
MAY 18 2015 (The Conway Bulletin) – Uzbeks’ lack of confidence in the som has weakened Uzbekistan’s banks, reduced their capital and hit their ability to pay salaries and pensions.
This was the withering assessment of Ulugbek Mustafayev, a deputy chairman of Uzbekistan’s Central Bank, according to a report by the US-funded Radio Free Europe/Radio Liberty (RFE/RL).
RFE/RL said it had seen a copy of a letter, dated April 10 and stamped “official use only” written by Mr Mustafayev to Uzbek PM Shavkat Mirziyoyev.
The letter gives a vital, and rare, insight into official Uzbek thinking on monetary policy. It’s virtually unheard of for a senior official to speak out against his or her bosses.
In the letter, Mr Mustafayev said a lack of confidence by the population in the som currency had pushed people into relying on the black market and US dollar payments over bank accounts. He said that this had created a shortfall in capital of more than 2 trillion som ($620m) and that state pensions and salaries to interior ministry officials, the defence ministry and other government workers were not being paid.
The regional financial crisis and the fall in the som/dollar exchange rate has reduced the population’s trust in the national currency and in financial institutions.
Most transactions in Uzbekistan are reportedly carried out in cash. Mr Mustafayev said that consumers had paid in far less than expected into Uzbek banks in the first quarter of the year.
The Uzbek system, already frail, is becoming weaker, Mr Mustafayev said in his letter.
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(News report from Issue No. 232, published on May 20 2015)
MAY 20 2015 (The Conway Bulletin) – The European Bank for Reconstruction and Development (EBRD) said it had agreed a €3.5m, 15-year loan with Armenia to build the country’s first EU-compliant landfill site. The EU has also agreed a €3.5m grant for the project.
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(News report from Issue No. 232, published on May 20 2015)