Tag Archives: Coronavirus

Coronavirus undermines region’s projected growth

ALMATY/April 5 (The Bulletin) — The coronavirus will undermine what had looked like a strong year of economic growth in 2020 and instead knock the Central Asia and South Caucasus region into a recession.

Of the six countries in the region that have declared states-of-emergencies and infections of the coronavirus, only Kazakhstan has officially said that its economy will shrink in 2020 but analysts expect others to follow.

Kazakh economy minister Ruslan Dalenov said on April 2 that the combined impact of the coronavirus and a fall in oil prices mean that Kazakhstan’s economy will shrink by 0.9% in 2020.

Oil is Kazakhstan’s main export and with prices dropping by 40% to around $35/barrel because of a price war and a drop in demand triggered by the spread of COVID-19, the disease caused by the coronavirus, Mr Dalenov said oil exports would fall.

“A decrease is also expected compared to previously approved growth rates in the manufacturing industry, agriculture, construction and the services sector, including trade,” he said.

Kazakhstan had previously predicted GDP growth of 4.5% for 2020. It last went into a recession in 2016 after a previous oil price collapse.

In Armenia, the Central Bank is still predicting GDP growth this year but only of 0.7%, down from an earlier prediction of 7.6%.

Other countries have held off giving predictions on the economic cost of the spread of the coronavirus although they have all said that their original growth estimates are likely to be heavily reduced.

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Checkpoints appear around Uzbekistan to stop travel during pandemic

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APRIL 5 (The Bulletin) — Uzbek officials said that the number of people infected with the coronavirus had increased by 32 to 298. The government has ordered the population of its key cities to self-isolate and people are only allowed out of their homes to buy food and go to the doctor.

Police checkpoints have appeared around the country to stop the people from travelling and army reservists have been mobilised.

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Berdymukhamedov prepares Turkmen business for restrictions

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APRIL 5 (The Bulletin) — Although it has not reported any cases of the coronavirus and has not imposed a lockdown on its cities, reports from Turkmenistan said that President Kurbanguly Berdymukhamedov was still discussing various measures to support small and medium-sized businesses from the economic fallout. The US-funded Radio Free Europe/Radio Liberty has also reported large food price spikes in Turkmenistan, linked to fears about the spread of the coronavirus.

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

COMMENT: Kyrgyz authorities have failed to protect people

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APRIL 5 (The Bulletin) — The authorities in Kyrgyzstan have failed in their first duty to protect the country’s people.

In January, the coronavirus began to spread across the world. It changed from being a China-centric epidemic to being a pandemic. Here in Kyrgyzstan, the authorities closed land borders with China and quarantined people arriving from Iran and Korea, both at the time heavily infected countries, to block the coronavirus. But they ignored other places.

And this gave Kyrgyzstan its Achilles Heel.

As a result, the first cases of infection in Kyrgyzstan with the coronavirus were returnees from Saudi Arabia, Pakistan and India. They were either pilgrims who made the Hajj to Mecca or followers of the Tablighi Jamaat Islamic movement. These people had constantly been in crowded places and had a wide circle of contacts, including with foreigners.

The authorities did not consider that these were very religious people who were in no hurry to follow the instructions of the secular authorities regarding self-isolation. Most of them turned out to be poorly educated people living in rural areas of south Kyrgyzstan. They simply did not believe in a global pandemic and did not take any precautions. It is possible that the religious President Sooronbai Jeenbekov, with consultation with the Muslim clergy in Kyrgyzstan, did not want to impose harsh quarantine measures against these people.

Another flagrant incompetence of the authorities was that Kyrgyz industry did not speed up the production of necessary goods, antiseptics for hands, medical masks and other protective agents against viral infections. Kyrgyzstan has a developed sewing industry which could have started the production of masks in advance of the arrival of the coronavirus inside our borders. This would have covered the shortage of this important product not only in the Kyrgyz Republic, but also helped other countries.

Alcohol factories, having large volumes of alcohol, could also be rebuilt to produce hand sanitisers.

The government has now imposed strict quarantine measures but the authorities have not worked out mechanisms for issuing special permits for employees of strategic enterprises. Flour mills have been forced to the brink of closure because their workers could not get past roadblocks to work. Only media hype and the prospect of bread shortages forced the government to step in and push for the flour factories to stay open.

If we are to get through this, the Kyrgyz government needs to up its game.

>> Evgeny Pogrebnyak is a journalist based in south Kyrgyzstan

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Central Asia and the South Caucasus tighten coronavirus lockdowns

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YEREVAN/April 5 (The Bulletin) — Battling to stop the spread of the coronavirus, governments in Central Asia and the South Caucasus intensified lockdowns that ban people from leaving their homes.

At least 17 people have died across the region with the COVID-19 disease caused by the coronavirus, although analysts think the real figure could be many more. Health ministries and international donors are now worried that the region’s underfunded and under-resourced hospitals and health systems will buckle if there is a surge in infections.

On March 26, Armenian deputy PM Mher Grigoryan appeared to betray his nervousness about whether Armenia’s health service could cope with rising infections.

“We have an obvious problem, which is outstanding everywhere else in the world and it is important to solve here in Armenia,” he was quoted as saying. “It is the modernisation and re-equipment of the healthcare system. Here, too, we must take measures.”

In the region, only Tajikistan and Turkmenistan have not reported any infections, to the derision of observers who think it is unlikely that either country has escaped the coronavirus that has been ripping across the world since it appeared in central China in December.

Armenia and Kazakhstan have been worst hit by the coronavirus, with 822 and 569 people infected by April 5, but Kyrgyzstan appears to be most vulnerable economically. Kyrgyz President Sooronbai Jeenbekov has already asked for emergency financial support from the IMF.

As for the intensified lockdowns, the Kazakh authorities have told people that they can only leave their homes every other day and in Azerbaijan people have to notify the police via an app or an SMS if they are going out onto the street.

In Armenia, where PM Nikol Pashinyan had only a few weeks ago said that the coronavirus could easily be beaten, the government has ordered all businesses, restaurants and cafes to close until at least April 10.

He has been criticised for holding referendum campaign rallies in March that may have contributed to the spread of the coronavirus.

“Compared to Azerbaijan and Georgia, our corona infection stats are higher. Am I the first to say that the reason for this is the referendum campaign?” said Samvel Grigoryan, a public health analyst.

A referendum on the status of the country’s top judges had been set for April 5. This has now been postponed.

Armenia’s government has said that the rate of infection is slowing, but people told The Bulletin’s correspondent that they are worried.

“We need to obey,” said Margarita Aghayan, 56, who is confined to her two-room apartment in a Yerevan suburb with her husband, her daughter and granddaughter.

“I feel very scared. I feel horror. I am scared of the people who don’t take this seriously.”

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Economists say the panemic will knock the Tajik economy

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APRIL 5 (The Bulletin) — Tajikistan has not reported any cases of the coronavirus and has not placed any of its cities under a lockdown but economists have said that it will still be one of the worst affected economically.

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Kyrgyz pilgrims blamed for spreading the coronavirus

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JALA-ABAD,Kyrgyzstan/April 5 (The Bulletin) — Resentment is building in south Kyrgyzstan towards groups of pious Muslims who are accused of bringing the coronavirus into the country.

Officials have said that in mid-March infected pilgrims returning from the Hajj to Mecca in Saudi Arabia and members of the Tablighi Jamaat religious organisation, who had visited Pakistan and India, ignored orders to self-isolate. Instead they celebrated their return with a series of feasts, spreading the coronavirus.

South Kyrgyzstan is now the epicentre of the coronavirus outbreak in the country. More than half of Kyrgyzstan’s 149 coronavirus infections are in the region and in the small town of Nookat, south of Osh, where many of the pilgrims lived, two people have died with the COVID-19 disease caused by the coronavirus. A strict lockdown has been imposed on Osh and Jala-Abad, the region’s two main cities, and the villages that orbit them. Bishkek has also been placed under a lockdown.

Anastasia, a resident of the village of Blagoveshchenka near Jala-Abad, said that she has been unable to work as a shop cashier since the lockdown was imposed.

“People are very angry at the pilgrims who brought this infection to us,” she said. “Now, like everyone, I just have to sit at home and probably have to get into debt.”

Since the state-of-emergency was announced, the streets of Osh and Jala-Abad have emptied. A Bulletin correspondent said that these rules are being tightened every day and that a person on the street without official permission and a passport can now be arrested.

Some people are not merely frustrated with the pilgrims for bringing the coronavirus into Kyrgyzstan, they are also suspicious of the authorities’ motives for the harsh lockdown.

Bolotbek, works as an IT specialist in a state institution in Jalal-Abad, and lives in the village of Bazar-Korgon, 30km from the city. He said that he has been placed on unpaid leave.

“I see it as an attempt to strengthen control over people, following the example of China,” he said. “Of course, the epidemic must be fought, but not by the same harsh measures. Soon people will begin to starve if they do not lift quarantine.”

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

MARKETS: Central Banks sell US dollar reserves to defend currencies

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APRIL 5 (The Bulletin) — Central Banks across the region continued to spend millions of dollars propping up their ailing currencies against the dual onslaught of the impact of the spread of the coronavirus and a drop in oil prices.

Both the Kazakh tenge and the Georgian lari recovered ground that they had previously lost, moving up slightly. This was backed up by a recovery in oil prices and partly by the slowing of the spread of Covid-19. It is still a major concern, of course, and it has knocked economies across the world, but a near-global lockdown has slowed its spread.

The Kyrgyz som, though, continued to fall heavily. Currency speculators have said that Kyrgyzstan is particularly vulnerable to a global recession. It fell more than 16% to 85/$1, its lowest ever level after the Central Bank essentially accepted that it couldn’t defend its previous value of around 70/$1.

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Kazakhstan cuts its interest rate to help business deal with the coronavirus

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APRIL 3 (The Bulletin) — Having increased its key interest rate to 12% from 9.5% last month to try to prop up its ailing currency against the dual impact of a collapse in oil prices and the spread of the coronavirus, Kazakhstan’s Central Bank slashed it back down to 9.5%.

It said that the interest rate cut was needed to help businesses emerge intact from the economic fallout of the coronavirus pandemic.

Kazakhstan has also been one of the first countries in the region to admit that its economy may contract after the shock of the pandemic.

Kazakhstan’s deputy finance minister Berik Sholpankulov said that the government would borrow $3b on foreign capital markets to fund economic recovery projects which include a massive state-sponsored construction spree that will employ thousands of people.

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Armenia says the coronavirus will wipe out any potential GDP growth

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APRIL 2 (The Bulletin) — Armenia’s economy minister, Tigran Khachatryan, said that the coronavirus will wipe out any previously projected economic growth this year.

Economists had been predicting another strong year of growth for Armenia with a GDP rise of around 7.5% but it has been hit hard by the spread of the coronavirus – with 822 infections, the highest in the region – and COVID-19, the disease caused by the coronavirus.

The Armenian Central Bank has also said that economic growth will slow to 0.7% in 2020, but Mr Khachatryan, the economy minister, said that it was too early to even predict this level of growth.

“We believe that in 2020 there will be a significant reduction in economic indicators as opposed to optimistic forecasts made at the beginning of the year,” he was said.

Fitch, the ratings agency, warned that the economic fallout from the coronavirus will damage Armenia’s banking sector and increase the ratio of nonperforming loans. It also said the government’s current account deficit would increase from 1% of GDP to 5%.

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin