Tag Archives: business

Azerbaijan’s will have to spend from oil fund

APRIL 22 2015 (The Conway Bulletin) – Azerbaijan’s government will have to dip into savings built up in its Oil Fund to prop up its ailing economy, economists have said.

They said the Azerbaijani government will not cut the state budget sufficiently despite a massive fall in the price of oil and gas.

“If the government does not cut budget spending the only real way to cover the deficit will be calling back State Oil Fund’s reserves abroad, or the government must have another big devaluation,” Samir Aliyev, an independent economist at the monthly Economic Forum magazine, told the Bulletin.

At Dec. 31 2014, the Oil Fund was worth around $37b.

The downturn in energy prices since last summer has hit Azerbaijan hard. It devalued its manat current by a third this year.

Rovshan Agayev, an independent economist, also told the Bulletin that even during the financial crisis of 2008 the government did not increase spending from the National Oil fund.

“This is a result of mismanagement of the state budget money for many years,” he said.

The independent MP Vahid Ahmedov told RFE/RL it was acceptable for the government to use cash from the fund, created in 1999, to prop up the economy.

“What was the Oil Fund is created for?” he said. “To save some money for the future generation and as well as to help the economy in crisis times.”

ENDS

(News report from Issue No. 228, published on April 22 2015)

EBRD gives loan to Kazakhstan’s Temir Zholy

APRIL 13 2015 (The Conway Bulletin) – The European Bank for Reconstruction and Development has agreed to give Kazakhstan Temir Zholy, the Kazakh national rail company, a loan of $200m to restructure its debt, media reported. Temir Zholy has been upgrading rapidly over the past few years.
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(News report from Issue No. 227, published on April 15 2015)

Italian builder wins Azerbaijan contract

APRIL 8 2015 (The Conway Bulletin) – Subsidiaries of Italian building company Maire Tecnimont have won a contract worth 350m euros to construct a plant producing the plastic polypropylene in Azerbaijan. This will be the first polypropylene plant in Azerbaijan and is part of a new petrochemical complex announced last month.
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(News report from Issue No. 226, published on April 8 2015)

Azerbaijan’s president travels to Saudi Arabia

APRIL 5 2015 (The Conway Bulletin) – Azerbaijan’s President Ilham Aliyev visited Saudi Arabia only a few days after members of the United Arab Emirates’ royal family had travelled to Baku for talks.

Some analysts have said that Mr Aliyev is looking to boost his alliances with Arab states as a potential bulwark against improving US-Iran ties.

“Saudi Arabia will extend its investment in Azerbaijan. We are both Muslim countries and Azerbaijan has good relations with Saudi,” Vahid Ahmadov, an independent MP, told the Bulletin.

In many ways it suits Azerbaijan to have its neighbour, Iran, ostracised and demonised by the international community. The thinking goes that if Iran is considered a rogue state, the US and Israel need Azerbaijan more. This month, at talks in Switzerland, the US moved to relax sanctions imposed on Iran because of concerns about its nuclear programme.

The opposition ReAl movement said that Mr Aliyev had been trying to woo Arab states because he needed more cash for various pipeline projects.

“Azerbaijan will need huge money for the TAP and TANAP projects. Oil revenues are falling and the government needs to find loans,” media reports quoted Azer Gasimli, an opposition activist, as saying.

“The IMF and World Bank set disturbing standards which require economic reforms for Aliyev. For him it is better to find loans from Arab countries.”

The EU and Western companies are investing in Azerbaijani energy and the infrastructure needed to transport it to markets. Azerbaijan, though, needs cash now.
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(News report from Issue No. 226, published on April 8 2015)

Azerbaijan says to relax visa regimes

APRIL 1 2015 (The Conway Bulletin) – Azerbaijan is planning to relax its visa regime for the inaugural European Games in Baku on June 12, the US Chamber of Commerce in Azerbaijan said. Ten days ahead of the Games, people with tickets will be able to apply for a visa on arrival at Baku airport.
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(News report from Issue No. 226, published on April 8 2015)

Kulibayev criticises Kazakh Central Bank

APRIL 3 2015 (The Conway Bulletin) – Timur Kulibayev, one of Kazakhstan’s richest men and son-in-law of President Nursultan Nazarbayev, criticised the Central Bank’s handling of the growing economic fallout, a rare show of dissent by a senior member of the Kazakh elite.

At a business forum in Almaty, Mr Kulibayev said he was “not satisfied with the work of the Central Bank”, specifically with regards to the lack of liquidity.

“How can entrepreneurs get access to liquidity?” he said. “How can lending become more affordable? When we travel to the regions, these are the questions we are asked.”

The fallout from a slide in the value of the Russian rouble and a drop in the price of oil has hurt economies in Central Asia and the South Caucasus, piling pressure on its leaders and businesses. Mr Kulibayev owns Halyk Bank, one of Kazakhstan’s biggest banks.

Once feted as a leader–-in-waiting, Mr Kulibayev has become increasingly out-spoken and isolated.

The National Chamber of Entrepreneurs (NCE), a powerful organisation which he heads, has repeatedly criticised the Central Bank’s support for the national currency despite devaluation pressure.

Last month, Umut Shayakhmetova, the CEO of Halyk Bank also said in an interview that the Central Bank was hurting the economy by not allowing the currency to free-float.
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(News report from Issue No. 226, published on April 8 2015)

India pushes TAPI project with Turkmenistan

APRIL 7 2015 (The Conway Bulletin) – India’s external affairs minister, Sushma Swaraj, flew to Ashgabat to meet Turkmen officials to, possibly, push the TAPI pipeline project along. TAPI aims to carry Turkmen gas to India via Afghanistan and Pakistan.
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(News report from Issue No. 226, published on April 8 2015)

Kyrgyzstan wants to build more hydropower stations

APRIL 6 2015 (The Conway Bulletin) – Kyrgyzstan plans to tackle a lack of electricity by building small hydropower plants in different parts of the country over the next few years, media quoted industry minister Batyrkul Baetov as saying. One of Kyrgyzstan’s few natural resources is water.
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(News report from Issue No. 226, published on April 8 2015)

Azerbaijan says oil prices to stay low

APRIL 2 2015 (The Conway Bulletin) – Azerbaijan’s Central Bank chief, Elman Rustamov, said that he believed the Azerbaijani government budget for 2016 would be based on oil costing around $50 per barrel, media said.

This is significant as Azerbaijan struggles to make a profit if oil prices are stuck at around $50 per barrel.

Effectively, then, Mr Rustamov is predicting the problems facing Azerbaijan’s economy will continue into next year.

At the end of last year Azerbaijan’s government had to cut various projects because oil prices had collapsed. Azerbaijan’s economy is hugely dependent on energy. International advisers have said that the government needs to concentrate on diversifying its economy away from oil and gas. Reform has been slow, though.

ENDS

(News report from Issue No. 226, published on April 8 2015)

Tajikistan raises taxes on mobile phones

APRIL 2 2015 (The Conway Bulletin) – Tajikistan has raised tax on mobile phone connections to 5% from 3%, an industry website reported. Reports said that the increase in tax will force mobile phone companies to pass on the extra cost to their consumers, pushing up inflation across the country.
ENDS

(News report from Issue No. 226, published on April 8 2015)