AUG. 13 2014 (The Conway Bulletin) – People protesting against the alleged use of child labour in Uzbekistan’s cotton fields have targeted South Korea’s Daewoo International Corporation, media reported. According to demonstrators Daewoo buys 5% of Uzbekistan’s cotton. The protests are a reminder of just how sensitive the use of Uzbek cotton is in western clothing.
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(News report from Issue No. 196, published on Aug. 20 2014)
AUG. 18 2014 (The Conway Bulletin) – Coca-Cola has re-started drinks production in Uzbekistan a year after manufacturing stopped, media reported.
This is significant in the internal Uzbek power struggle and may show that after a turbulent 12 months Uzbekistan’s politics are calming.
Coca-Cola production in Uzbekistan had been closely associated with Gulnara Karimova, daughter of Uzbek President Islam Karimov, through her company Zeromax which also owned several other major Uzbek companies.
Over the past year or so, though, the influence of Ms Karimova has waned. She is now under house arrest in Tashkent and her closest associates have been jailed for various economic crimes.
Information coming out of Uzbekistan is scant but analysts have said that Ms Karimova’s rivals moved to weaken her before she could set herself up as the heir apparent to her father.
In any case, Coca-Cola products had virtually disappeared from supermarket shelves in Uzbekistan this year. It appears now that control of Coca-Cola has been handed over to Ms Karimova’s rivals, marking their ascendency as well as the return of Coca-Cola’s soft drinks.
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(News report from Issue No. 196, published on Aug. 20 2014)
AUG. 8 2014 (The Conway Bulletin) – The TAPI gas pipeline that is planned to run from Turkmenistan through Afghanistan to Pakistan and India is already influencing regional trade links. At a meeting in Ashgabat to discuss progress on the project, Pakistan and Turkmenistan also agreed to improve bilateral ties.
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(News report from Issue No. 195, published on Aug. 13 2014)
AUG. 8 2014 (The Conway Bulletin) – The level of water in the Toktogul reservoir in Kyrgyzstan, vital for the country’s hydroelectric power production, is down by roughly a quarter because of the especially dry Central Asian summer, media reported. Uzbekistan has also reduced gas supplies leading analysts to predict energy shortages this winter.
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(News report from Issue No. 195, published on Aug. 13 2014)
AUG.12 2014 (The Conway Bulletin) – Azerbaijan has said it will export power to Iraq and Afghanistan, media reported. The deal is particularly important for the US which has urged Azerbaijan to increase its involvement in regional politics. Azerbaijan has become relatively rich through oil and gas exports.
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(News report from Issue No. 195, published on Aug. 13 2014)
AUG. 4 2014 (The Conway Bulletin) – Kazakhstan’s Alliance Bank agreed a debt restructuring deal with creditors ahead of a merger with Temirbank and ForteBank, owned by Kazakh billionaire Bulat Utemuratov. It’s an important deal for the government, which owns 51% of Alliance Bank and has been looking to sell it.
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(News report from Issue No. 194, published on Aug. 6 2014)
JULY 30 2014 (The Conway Bulletin) – Profit at Toronto-based Centerra Gold, owner of Kyrgyzstan’s Kumtor gold mine, fell because of low gold prices, media reported. Kumtor is Centerra Gold’s main asset and the focus of a major row with the Kyrgyz government. Ian Atkinson, Centerra Gold CEO, also said he was confident of a deal with the Kyrgyz government soon.
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(News report from Issue No. 194, published on August 6 2014)
JULY 17 2014 (The Conway Bulletin) – BP said it had hired former British PM Tony Blair for its advisory board on how best to export energy from the Azerbaijani sector of the Caspian Sea to Europe. Mr Blair has been an adviser to Kazakh President Nursultan Nazarbayev since 2011.
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(News report from Issue No. 193, published on July 30 2014)
JULY 25 2014 (The Conway Bulletin) – Azerbaijani finance looks in good shape.
At a local finance level, the European Bank for Reconstruction and Development (EBRD) has handed a $42m loan to Demirbank earmarked to help smaller businesses raise funds.
At an international level, Citi Group said it is now selling more Azerbaijani debt than at any time since 2008.
Both pieces of news are good general indicators for the Azerbaijani economy. Most analysts agree that the economy is in pretty good shape although domestic consumer lending needs to be tapered.
Bloomberg quoted Citi Group as saying that it had debuted nearly $15m of debt for Kapital Bank having issued $38.5m of debt for the International Bank of Azerbaijan earlier this year.
“Investors are seeking risk in emerging markets as central bank stimulus measures suppress returns on debt issued by companies in developed nations,” Bloomberg wrote.
Even so, the yield on the Azerbaijani bank debt is high at nearly 9%, reflecting the risk involved.
The Demirbank deal is more the culmination of a long term project by the EBRD to improve access to finance for smaller businesses in Azerbaijan. In April AccessBank, another Azerbaijani bank, secured a $60m loan from 16 lenders also for micro-finance.
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(News report from Issue No. 193, published on July 30 2014)
JULY 30 2014 (The Conway Bulletin) – So, is this the price of membership of the Russia-led Customs Union? Kazakhstan’s Bek Air has agreed to buy seven Sukhoi Superjet 100-95s for an undisclosed amount.
The Sukhoi Superjet 100-95s were unveiled to much fanfare in 2008 but sales have been sluggish and the reviews less than flattering.
In 2012, Armenian airline Armavia returned its Sukhoi Superjet after a year of flying it between Yerevan and Kiev because it was deemed to be sub-standard.
A few months earlier, in May 2012, a Superjet 100 had crashed into mountains in Indonesia during a demonstration flight killing all 45 people on board. Pilot error was declared the cause of the accident.
The Sukhoi Superjet-100 is the first passenger plane to be manufactured by Russia since the end of the Soviet Union. It is designed for medium and short-haul flights and has a capacity of between 86 and 108 passengers, depending on how the seating is arranged, and retails for around $35m per plane.
Bek Air is an almost perfect client for Sukhoi, which is a majority Russian state-owned company. Bek Air flies internal routes across Kazakhstan between Almaty, Astana, Uralsk and Atyrau.
Importantly Bek Air is also Kazakh. Kazakhstan is a junior member of the Customs Union, soon to morph into the Eurasian Economic Union, and will be under pressure to buy kit from Russia.
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(News report from Issue No. 193, published on July 30 2014)