Tag Archives: business

Russia sanction could hit Kazakhstan

APRIL 15 2014 (The Conway Bulletin) — The fallout from Ukraine’s revolution and the ensuing standoff between Russia and the West has created a headache for Kazakhstan.

If relations fray further the US and the EU may impose trade sanctions on Russia and these will impact Kazakhstan.

But the Kazakh energy sector is probably more robust than energy minister Uzakbai Karabalin made out last week.

Kazakhstan relies heavily on Russia as a transit country for its oil and it may have to find alternative export routes, but those routes do exist. This might include sending oil south, through Iran to the Persian Gulf.

Around a third of Kazakhstan’s oil exports flow through the Caspian Pipeline Consortium (CPC) which owns the pipeline running from Atyrau in western Kazakhstan to Novorossiysk on Russia’s black Sea coast.

At first glance it looks as if any sanctions on Russia would hit CPC — the pipeline crosses Russia and feeds into a Russian mix of oil. But the CPC has international status and should, in theory, be exempt from sanctions.

Kazakhstan now also exports much of its oil to China, across the Caspian Sea and through the South Caucasus. Mr Karabalin’s concerns about the impact on Kazakhstan’s domestic oil-products market from a sanctions hit Russia also feels slightly overblown.

Kazakhstan has a shortage of refinery capacity and has to import oil products from China and Russia. This has been expensive and has threatened to push up prices.

If the West did impose sanctions on Russia and it did flood Kazakhstan with oil products, prices would drop.

Kazakhstan and the rest of Central Asia are exposed to Russia’s economy. If, under the weight of threatened sanctions, it stutters, so too does Central Asia. Kazakhstan’s energy sector, though, is more sheltered.

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(News report from Issue No. 180, published on April 16 2014)

Tajikistan seizes Ukrainian businessman’s assets

APRIL 3 2014 (The Conway Bulletin) — A Tajik court ordered the state to re-nationalise a garment plant owned by Dmytro Firtash, a Ukrainian businessman held in Vienna on criminal charges, because it had been illegally privatised. Critics of the Tajik government accused it of using Ukraine’s crisis to seize assets.

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(News report from Issue No. 179, published on April 9 2014)

Kazakhstan’s main oilfield remains closed until 2016

APRIL 6 2014 (The Conway Bulletin) — Kazakhstan’s Kashagan oil field will be shut for another two years while faulty gas pipelines are replaced, unnamed sources close to the deal told the qz.com website. The $50b Kashagan project was supposed to have turned Kazakhstan into an energy superpower. Instead it has become a major headache for the government.

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(News report from Issue No. 179, published on April 9 2014)

Kazakhstan’s Kcell fears TeliaSonera verdict

APRIL 2 2014 (The Conway Bulletin) — A bribery investigation at Swedish- Finnish telecoms company TeliaSonera appeared to widen from Uzbekistan, its initial focus, to other companies it owns in Central Asia and the South Caucasus after it said some other business deals may have been illegal. TeliaSonera owns Kcell, Kazakhstan’s largest mobile provider.

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(News report from Issue No. 179, published on April 9 2014)

ADB boosts microfinance in rural Azerbaijan

APRIL 2 2014 (The Conway Bulletin) — Azerbaijan’s government should develop rural microfinance mechanisms to help boost its economy and wean it off its addiction to oil, the Asian Development Bank (ADB) said in an annual report.

The main body of the ADB’s report covers similar ground to other economic organsiations — that as oil prices relax and Azerbaijan’s own oil output slows, revenues to the government budget are likely to dip.

This, the ADB said, will probably reduce public spending.

And public spending, fuelled by oil revenues, has been driving Azerbaijan’s economic growth.

The government, therefore, has to look for other ways of generating economic growth, the ADB said. It praised the Central Bank’s move to curb lending to consumers and instead promote growth through loans to small and medium sized businesses.

“However, more is needed to promote lending in rural areas,” the ADB said.

Roughly 40% of Azerbaijan’s population live in rural areas but, the ADB said, growth was being stymied by excessive government activity swamping private enterprise and potential state revenues. What Azerbaijan needs to do in rural areas is build micro-finance options and extend bank branch networks.

“These steps should boost rural income and, eventually, revenue from rural areas, thereby reducing the budget’s current dependence on oil earnings,” the ADB said.

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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 179, published on April 9 2014)

Kazakhstan’s KazKom posts profits

APRIL 6 2014 (The Conway Bulletin) — Kazkommertsbank (KazKom), Kazakhstan’s biggest lender, said it made a profit of $288m last year, turning around a loss in 2012. KazKom’s ratio of non-performing loans, though, remained a stubbornly high 32.4%. Kazakhstan has made a priority of reducing its non-performing loans.

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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 179, published on April 9 2014)

Chinese interest in Georgia grows

APRIL 4 2014 (The Conway Bulletin) — The China Development Bank will send a high-level delegation to visit Tbilisi, media reported during a trip to Beijing by Georgian parliamentarians, a sign of Chinese interest in Georgia. China has been boosting links in the South Caucasus. It has opened a cultural school in Tbilisi and funded projects.

(News report from Issue No. 179, published on April 9 2014)

Activists protest mining in Kyrgyzstan

APRIL 3 2014 (The Conway Bulletin) — Highlighting tension in Kyrgyzstan’s mining sector, media reports said that protesters blocking a road in the Talas region of north Kyrgyzstan clashed briefly with police. The protesters were demanding compensation for alleged environmental damage from the mining company.

(News report from Issue No. 179, published on April 9 2014)

Gas production soars in Turkmenistan

APRIL 7 2014 (The Conway Bulletin) — More statistics from Turkmenistan’s state statistics figures underline just how quickly the economy is growing.

Turkmenistan’s economy is apparently growing at 10% per year. This is an energy-powered growth and as well as showing overall economic growth in Turkmenistan, the state’s statistics committee also said that gas production had increased by 6.9% in the 12 months to the end of March.

Most of Turkmenistan’s gas production is now flowing to China although it has other clients, including the Middle East and Russia.

One area of real growth is electricity production. Turkmenistan has increased electricity production by over 16% in the past 12 months, the statistics agency said.

This is not only for domestic consumption, although increased electricity use is an indicator of general economic growth, but also for export. Turkmenistan is ideally situated to supply its more troubled neighbours with electricity. These clients, current and future, include Iran, Afghanistan and Pakistan.

(News report from Issue No. 179, published on April 9 2014)

Kazakhstan’s police arrests Kazatomprom executive

APRIL 1 2014 (The Conway Bulletin) — Kazakh police arrested Valery Shevelyov, a director at Kazakh nuclear agency Kazatomprom, and his deputy, Serik Abdrazakov, for corruption. In 2009, Kazakhstan jailed Mukhtar Dzhakishev, then head of Kazatomprom and an opposition figurehead, for 14 years for corruption.

(News report from Issue No. 178, published on April 2 2014)