NOV. 7 2014 (The Conway Bulletin) – Russian mobile provider MTS is testing equipment ahead of its re-entry into Uzbekistan, media reported. MTS, which is owned by Russia’s Sistema, quit Uzbekistan after a major row with the authorities in 2012 over alleged unpaid tax bills. It since appears to have made up and has agreed to return to the country.
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(News report from Issue No. 208, published on Nov.12 2014)
NOV. 8 2014 (The Conway Bulletin) – Protests continued across parts of Kazakhstan over petrol shortages. One protest, captured in a photo essay on the US-funded Radio Free Europe/Radio Liberty website showed four men pulling a Soviet-era car to a petrol station near Almaty with a donkey cart.
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(News report from Issue No. 208, published on Nov.12 2014)
NOV. 10 2014 (The Conway Bulletin) – The sharp fall in the price of oil has acted as a wake-up call for Kazakhstan, economy minister Kairat Kelimbetov said in an interview with the FT.
Virtually admitting that Kazakhstan had been caught off guard by the decline by roughly a third in the price of oil since June, Mr Kelimbetovsaid that the government was the economy and to make it planning measures to shore up more attractive to investors.
“Next month the government will be ready to announce some counter cyclical fiscal policy, with big plans in infrastructure,” he said in the interview in Almaty.
Economists have warned that a devaluing rouble and falling oil prices will combined to knock Kazakhstan’s growth rate.
And the falling economy is also knocking investor confidence. Energy analyst Sergei Smirnov said that with Brent oil prices falling to a four year low of $82/barrel it makes projects such as Kashagan unprofitable.
“Offshore oil production is always much more expensive than onshore production,” he said according to media.
Kazakh officials who have staked their credibility and the country’s economic prosperity on Kasahgan but the project is already behind schedule and running over budget.
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(News report from Issue No. 208, published on Nov.12 2014)
NOV. 11 2014 (The Conway Bulletin) – In a speech to the nation, Kazakh president Nursultan Nazarbayev ordered Kazakhstan’s government to spend more money on infrastructure projects to counter the drag caused by a slowing Russian economy and falling oil prices.
The hastily arranged policy speech caught observers by surprise. Mr Nazarbayev usually waits until his state-of- the-nation speech in January to unveil new policy.
“The tough times for which we prepared ourselves with the National Oil Fund have come. It’s time to use these reserves,” he said during his combative address.
Kazakhstan has amassed a sovereign wealth fund of roughly $77b to counter downturns in commodity prices — the economy is mainly reliant on oil and gas exports — as well as to defend the tenge currency when it is under pressure from a falling rouble.
And Mr Nazarbayev is acutely aware that economic progress is a cornerstone of his popularity.
Mr Nazarbayev pledged to inject $3b every year into Kazakhstan’s economy, during 2015/17. He also said that inter-governmental banks have pledged to match this cash injection.
“The investment from the National Fund must be necessarily accompanied by structural reforms,” he said. “This money will be channelled to develop transport, energy, industrial and social infrastructure.”
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(News report from Issue No. 208, published on Nov.12 2014)
NOV. 7 2014 (The Conway Bulletin) – Kazakhstan and Kyrgyzstan agreed a deal for Astana to meet most of Bishkek’s electricity deficit, albeit at a price greater than Kyrgyz President Almazbek Atambayev would have wanted to pay.
The deal, finalised during a meeting between Kazakh President Nursultan Nazarbayev and Mr Atambayev in Astana, means Kyrgyzstan must pay roughly three times more for the imported electricity than Kyrgyz citizens pay for domestically-produced electricity. Importantly, it also shows Kazakhstan’s political clout in Kyrgyzstan is growing.
An estimated deficit of 2b kilowatt hours (kWh) this year, caused by a shortage of water in its reservoirs, public reaction to shutoffs drove Bishkek and the potential to sign the deal.
Mr Atambayev will be relieved to have made the deal to import 1.4b kWh from Kazakhstan but here are still problems. He will have to make up the shortfall from somewhere else, possibly Turkmenistan, and he will have to finance the extra costs.
Currently the government has suggested modest tariff increases beginning Jan. 1. These are bound to irritate people in Kyrgyzstan.
Other agreements reached by Mr Atambayev and Mr Nazarbayev at the meeting are also indicative and suggested that Kazakhstan maintains significant leverage over its weaker neighbour.
Mr Nazarbayev promised that a fleet of Kyrgyzstan-bound fuel wagons, owned by Russian energy giant Rosneft and held by Kazakh customs officials without explanation since April, would be allowed to cross the two countries’ mutual border. He also pledged a $100 million grant to Kyrgyzstan as the country prepares to enter the Eurasian Economic.
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(News report from Issue No. 208, published on Nov.12 2014)
OCT. 31 2014 (The Conway Bulletin) – BP said it would shut down one of Azerbaijan’s biggest oil fields — Central Azeri — for the whole of November for essential repair work. The shutdown will hit Azerbaijan’s oil output which is already under pressure.
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(News report from Issue No. 207, published on Nov. 5 2014)
OCT. 30 2014 (The Conway Bulletin) – Russia may block trucks and trains carrying food from the EU and Norway to Kazakhstan from travelling across it territory because of an import ban. Russia has banned produce from the EU and Norway in retaliation for sanctions imposed by the West.
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(News report from Issue No. 207, published on Nov. 5 2014)
NOV. 3 2014 (The Conway Bulletin) – The Islamic Development Bank has agreed to loan Uzbekistan $100m to build extra rural housing, media reported. This is the second major loan by intergovernmental agencies for rural housing in Uzbekistan. In 2011, the Asian Development Bank approved a loan of $500m.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 207, published on Nov. 5 2014)
NOV. 5 2014 (The Conway Bulletin) – Armenia and Georgia are building a €300m electrical line between the two countries, Armenian energy minister Ara Simonyan told a cabinet meeting. The power line will improve the Georgian and Armenian electricity grid and help solidify the countries’ trade relations.
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(News report from Issue No. 207, published on Nov. 5 2014)
OCT. 31 2014 (The Conway Bulletin) – Iran said it had reached a deal with indebted Tajikistan to restructure ownership at the Sangtuda-2 Hydropower plant(HPP) plant built and operated in the Central Asian state by the Iranian company Sangob.
The new deal extends the period of Iran’s ownership of the facility by a further two years to 2029, a condition reportedly necessary because of a $40m bill that Tajikistan’s troubled state energy Barqi Tojik firm owes the plant.
Although details of the deal remain shrouded in secrecy, the importance of this agreement is that Tajikistan is having to agree to relinquish ownership of some of its core assets to cover various debts.
Tajik news agency Asia-Plus quoted an unnamed source as saying the deal was actually signed back in September. In March this year, the 100 megawatt plant was briefly shut down, suggesting a dispute between the sides.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 207, published on Nov. 5 2014)