APRIL 6 2017 (The Conway Bulletin) — In the first quarter of 2017, Turkmenistan produced 6.2% more electricity than the same period in 2016, official media reported by quoting deputy PM Dadebay Amangeldyev. Turkmenistan has been boosting its electricity generation capacity specifically with an eye on exports to Afghanistan and Pakistan.
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(News report from Issue No. 324, published on April 13 2017)
APRIL 10 2017 (The Conway Bulletin) — SaryArkaAvtoProm, a Kazakh car- maker based in Kostani in the north of the country, started production of the Chevrolet Niva car, the GM-AvtoVAZ company said in a press release. The announcement is a major boost for Kazakhstan’s fledgling car-making industry. It has been hard hit by a sharp economic downturn that has knocked consumer confidence. The SaryArkaAvtoProm is one of three car-making factories in Kazakhstan. GM-AvtoVAZ is a joint-venture set up by the US’ GM and Russia’s AvtoVAZ. It will sell the Chevrolet Niva produced by SaryArkaAvtoProm in southern Russia.
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(News report from Issue No. 324, published on April 13 2017)
APRIL 10 2017 (The Conway Bulletin) — A train carrying whisky, baby food and vitamins left a depot in southern England at the start of an 18-day journey through Central Asia to China.
This modern-day ‘Silk Road’ odyssey is part of China’s push to promote freight transport by rail between East Asia and Europe.
At its heart, the 11,000km route relies upon a stable Central Asia with modern infrastructure and it shows just how important the region has become as a transport hub. The ‘Silk Road’ train will travel through Europe into Russia and then dip down into Kazakhstan before crossing into western China and terminating in Yiwu on the eastern coast Xubin Feng, the head of Yiwu Timex Investment Company, underlined the importance of the train.
“Restoring the ancient Silk Road as a means by which China, North Europe and now the UK can exchange goods is an important and exciting initiative,” he said.
The project is part of China’s drive to promote its so-called ‘One Belt, One Road’ programme. Three months ago, the first freight train arrived from China to Britain and several other European capitals have already been linked up to China by rail.
And this ‘One Belt, One Road’ policy is important for Central Asia, and in particular Kazakhstan, as it plays a vital, and potentially lucrative, stagepost role.
Kazakhstan has started to leverage its position as a link between Europe and East Asia and, as well as promoting its rail infrastructure, it has also promoted itself as a refuelling pitstop for airlines crossing to Asia.
Also, this year, the first train from Kazakhstan headed through China to Vietnam, opening up another route.
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(News report from Issue No. 324, published on April 13 2017)
APRIL 12 2017 (The Conway Bulletin) — Georgian energy minister Kakha Kaladze said that Georgia would not purchase any more gas from Gazprom until the end of the year and will instead buy all its gas from Azerbaijan. Gas purchases from Gazprom have been controversial for Georgia after it signed a deal at the beginning of the year changing the arrangement from a barter deal to a paid-for deal. Mr Kaladze has refused to name the price agreed with Gazprom for gas purchases, fuelling speculation that he had agreed to pay too high a price. Mr Kaladze has always maintained that the deal gives Georgia more flexibility, including being able to choose how much gas to buy from Gazprom.
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(News report from Issue No. 324, published on April 13 2017)
ALMATY, APRIL 12 2017 (The Conway Bulletin) — GE Transportation, a division of US engineering giant GE, bought a 50% stake in Kazakh train maker Lokomotiv Kurastyru Zauyty for an undisclosed amount.
The deal could be one of the biggest investments by a Western company in a Kazakh engineering company outside the extractive industries this year.
In a press release Jamie Miller, the GE Transportation CEO, as saying: “Kazakhstan has a strategic plan for its railroad to support economic growth and increased regional trade, and today’s announcement underscores GE’s commitment to working with KTZ to ensure that Kazakhstan’s rail infrastructure remains modern and reliable.”
For Kazakhstan the deal will likely be a relief, although the amount that GE Transportation paid for its 50% stake has not been released. It has been trying to attract more Western investment into industries outside the oil, gas and mining sectors. Its railway sector is one area in which it has been investing heavily.
Lokomotiv Kurastyru Zauyty was set up in 2009 by Kazakh railway company Temir Zholy and Russia’s Transmashholding. It is Central Asia and the South Caucasus’ biggest manufacturer of locomotive trains and exports across the region.
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(News report from Issue No. 324, published on April 13 2017)
APRIL 5 2017 (The Conway Bulletin) — Russia’s Lukoil said it had reached what it described as a landmark production level of 40b cubic metres of gas at its projects in Uzbekistan, more than two-thirds of total Uzbek gas output. It said that most of this gas was produced at its two fields near Bukhara — Khauzak-Shady and Kuvachi-Alat. Lukoil is one of Uzbekistan’s biggest foreign investors. Uzbekistan has proven gas reserves of 1.1 trillion cubic metres, according to BP. This is roughly the same as Azerbaijan.
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(News report from Issue No. 324, published on April 13 2017)
TBILISI, APRIL 8 2017 (The Conway Bulletin) — Tax increases on cars that are either more than 6-years-old or are right-hand drive, Eurasian Economic Union (EEU) tariffs and a regional economic downturn have combined to hit Georgia’s car market, once an important part of its economy.
Georgia became a hub for the import and export of used cars to the South Caucasus and Central Asia in the early 2000s, after the government simplified customs procedures and lowered tariffs. Kazakhstan, Azerbaijan and Armenia used to be the main importers of cars from Georgia. Nowadays, however, the once-booming used car market is shrivelling, limping through a painful decline.
Sales data from the Rustavi Auto market ‘Autopapa’, the biggest retailer of used cars in Georgia, which lies 25km south-east of Tbilisi, makes for grim reading. In 2013, almost 80,000 cars were exported. In 2016, around 16,000 were exported.
On a visit by a Conway Bulletin correspondent frustrated dealers were complaining that they were being driven out of business.
“I have been here since the opening of this market and it has never been this bad,” said Ioba. “I have 30 cars here. If the situation does not change, I will sell them and move on to another business.”
Others wistfully remembered a more prosperous age.
“I have around 15 cars now, but this business is just not working. Nobody wants old cars anymore. I will have to switch to new cars,” said Konstantin. “When the Kazakhs came here, not a single car went unsold. Those were golden times.”
The reference to Kazakhstan shows just how interdependent the economies of Central Asia and the South Caucasus are. The Kazakh economy is the biggest in the region but, like its neighbours, a downturn in the economy has pressured life- styles. Tariffs imposed by the EEU have also hurt the market. Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia are all EEU members.
Kakha Daushvili, executive director of the Association of Young Economist of Georgia said the EEU had helped undermined the car market but it wasn’t the only factor.
“This region was under serious crisis from 2014 up to present, I would say,” he said.
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(News report from Issue No. 324, published on April 13 2017)
TBILISI, APRIL 8 2017 (The Conway Bulletin) — The Russia-led Eurasian Economic Union (EEU) trade bloc has not damaged Georgia’s exports, Mariam Gabunia, head of the department for foreign policy at the Georgian economy ministry, told The Conway Bulletin in an interview.
Instead she said that Georgia was on course for a bumper year with exports rising strongly after a dip last year linked to tough economic conditions in Russia, Central Asia and the South Caucasus.
Some analysts have said that the EEU, which is essentially a trade bloc including Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan, would hurt those who didn’t sign up — including Georgia. Ms Gabunia, though, waived aside this notion.
“In general, we do not see any negative impact on Georgia’s trade with regard to the EEU,” she said. “We are part of the CIS free trade agreement and Belarus and Kyrgyzstan are part of it. On top of that we have bilateral FTA (free trade agreements) with Russia, Armenia and Kazakhstan.”
Ms Gabunia’s comments are important because it is one of the first times that a senior official from a government outside the EEU has commented on whether the bloc has hit regional trade. Many businesses within the bloc have been complaining that the extra bureaucracy and the bias towards the larger members have created problems.
Georgia is, to a large extent, still reliant on trade with its former Soviet neighbours. One of the biggest boosts to its economy over the past few years was repairing relations with Russia. Last year it was Georgia’s biggest export market with $200m of sales.
And Ms Gabunia said that bilateral agreements made in the 1990s underpinned Georgia’s trade within the former Soviet Union, taking precedence over EEU rules.
“According to the legislation of the EEU the FTA that were concluded before the creation of the EEU will stay in force. and we had FTA with all these countries before the EEU was created,” she said.
This year has started strongly, mainly because of much improved macroeconomic conditions in Georgia and the rest of the region. Ms Gabunia said that trade relations with Russia had improved along with political relations.
“As far as concerns the other EEU members, the situation is improving,” she said.
“Exports to Belarus increased by 61% in the first two months of 2017, for example.”
According to Geostat, Georgia’s biggest exports are copper ore, ferroalloys, wine, medicines and cars.
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(News report from Issue No. 324, published on April 13 2017)
APRIL 10 2017 (The Conway Bulletin) — Kazakhstan’s investment minister Zhenis Kasymbek said that a new airport terminal and a new railway station will open in mid-May, less than a month before Astana opens its EXPO-2017 exhibition. Media quoted Mr Kasymbek as saying that after it has been complete, Astana airport will be able to process 7.5m passengers every year. The EXPO-2017 exhibition is being touted as the biggest international festival held by Kazakhstan since independence from the Soviet Union in 1991. President Nursultan Nazarbayev has said that he wants to use it to showcase modern day Kazakhstan.
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(News report from Issue No. 324, published on April 13 2017)f
APRIL 7 2017 (The Conway Bulletin) — Azerbaijani MPs have passed a law allowing banks weighed down by debt to transfer their good assets to so-called bridge-banks, media reported. The concept, which inadvertently suggests that the Azerbaijani banking crisis is deepening, suggests that these bridge-banks are then able to re- package the sound assets into new banks which can then be sold on. Several small banks have been closed down in Azerbaijan over the past few years and the government this year bought a controlling state in International Bank of Azerbaijan, the country’s largest bank.
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(News report from Issue No. 324, published on April 13 2017)