JUNE 18 2015 (The Conway Bulletin) – Experts in Azerbaijan’s real estate sector are predicting a drop in house prices this year as the market reacts to a decline in economic conditions in the region, media reported. A sharp fall in oil prices and the value of the Russian rouble have hit the former Soviet region.
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(News report from Issue No. 236, published on June 18 2015)
JUNE 15 2015 (The Conway Bulletin) – Fuel prices in Kyrgyzstan are rising, media reported quoting the Kyrgyz Association of fuel traders. They said extra tax imposed by the Kyrgyz government had triggered the rise. Kyrgyzstan is also facing general inflation due to the falling value of its currency.
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(News report from Issue No. 236, published on June 18 2015)
JUNE 16 2015 (The Conway Bulletin) – MPs in Kyrgyzstan’s parliament have called for the introduction of a new tax on gold exports, media reported, pitting themselves, once again, against the country’s largest foreign investor.
The Kumtor gold east of the country is Kyrgyzstan’s single biggest industrial asset and parliamentarians said that its exports needed to be targeted to raise extra revenue for the national budget.
Centerra Gold, listed on the Toronto Stock Exchange, owns Kumtor. The Kyrgyz government is a minority owner in Centerra. It has been fighting to increase its stake in the company and to gain more control over Kumtor itself. Earlier this year, a Kyrgyz PM resigned after failing to win concessions.
Mirlan Bakirov, an MP for the opposition Onuguu (Progress) party, proposed a 20% gold export tax to be instated at the beginning of 2016, while Alla Izmalkova of the Social Democratic Party argued for a similar tariff to start in 2018.
Official data showed that in 2014, Kyrgyzstan exported 85,000 tonnes of gold, an increase of around 36% from mine in the 2013.
But the issue of taxing gold exports has been passing around the Kyrgyz parliament for years without ever being resolved.
Earlier in June, Kozhobek Ryspayev, member of the Committee on Fuel and Energy, said an export tax would harm the mining industry. Valentin Bogdetsky, member of the Board of the Kyrgyz Mining Association similarly stated: “The imposition of an export duty on gold is not a solution to the problems between the industry and the government.”
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(News report from Issue No. 236, published on June 18 2015)
JUNE 11 2015 (The Conway Bulletin) – The Uzbek legislation rubber- stamped the government’s report on fulfilling the 2014 and 2015 budget which reported GDP growth of 8.1% despite a general downturn in economic conditions across the region.
The glowing numbers appear at odds with other economic indicators leaking out of the country.
According to analysts interviewed by the US-funded Radio Free Europe/Radio Liberty’s Uzbek service, brewing financial trouble, triggered by the government’s failure to pay salaries, pensions and stipends over the last several months could spark turmoil.
The Uzbek economy has been shrinking over the last couple years caused by falling global oil prices, a boycott of Uzbek cotton and diminishing remittances from Uzbek labour migrants in Russia as predicted by the World Bank. The World Bank has said that Uzbekistan’s economy will shrink further in 2015-16.
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(News report from Issue No. 236, published on June 18 2015)
JUNE 8 2015 (The Conway Bulletin) – Official Turkmen websites reported another rise in GDP, throwing into serious doubt the authenticity of official economic statistics. The official turkmenistan.ru said GDP had registered a year-on- year increase in the first five months of the year of 9.5% despite a currency devaluation and low global energy prices.
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(News report from Issue No. 235, published on June 11 2015)
JUNE 8 2015 (The Conway Bulletin) – The IMF changed its forecast for Azerbaijan’s economy this year to reflect improved conditions, media reported. Reports quoted the IMF mission chief in Baku, Raja Almarzogi, as saying the IMF had increased its economic growth forecast in 2015 to 1.8% from 0.6%.
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(News report from Issue No. 235, published on June 11 2015)
JUNE 5 2015 (The Conway Bulletin) – The Uzbek-US joint car-maker General Motors Uzbekistan said it would discount two of its models by 15% until the end of 2015, an admission of sorts that its needs to boost sales to counter a falling market linked to economic turmoil in Russia.
Customers, though, can only claim the 15% discount on Lacetti and Cobalt cars by paying in US dollars with international debit and credit cards.
The car plant in the eastern town of Andijan is critical for jobs in the surrounding region and also an important barometer of Uzbek industry.
Most of its sales are made in Russia and also in neighbouring Kazakhstan but the fall in oil prices has hit the region and badly dented demand for cars.
In March, the plant sold 1,757 cars compared to 4,604 cars in the same month a year earlier, the Association of European Businesses, an industry lobby group, said.
As well as driving up car sales (pun intended), the government may also be looking to bolster US dollar flows in its economy.
Information leaking out of Uzbekistan on the state of the economy is light but it does appear to show that the slowdown in the Russian economy is having a major impact on Uzbekistan. Remittances are hugely important in Uzbekistan. They rely on a strong Russian economy. Economists have estimated that these will fall by 40% this year. Global gas prices, another important foreign currency earner for Uzbekistan, are also low.
By imposing a dollar payment scheme on car buyers, the Uzbek government may be trying to get hard currency flowing through the system once again as well as boosting sales at its flagship industrial asset.
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(News report from Issue No. 235, published on June 11 2015)
JUNE 10 2015 (The Conway Bulletin) – Saudi Arabian Prince Al-Waleed Bin Talal bin Abdulaziz al Saud visited Tbilisi and met separately with both PM Irakli Garibashvili and President Giorgi Margvelshvili. Prince Al-Waleed is a billionaire investor. Georgia has said it wants to boost foreign direct investment.
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(News report from Issue No. 235, published on June 11 2015)
JUNE 5 2015 (The Conway Bulletin) – Russia’s Lukoil will knock 10% off the price of assets in Kazakhstan it plans to sell to China’s Sinopec to ease the deal through, media reported quoting industry sources. The discount shows how oil and gas assets in Kazakhstan have lost value since oil prices fell sharply.
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(News report from Issue No. 235, published on June 11 2015)
JUNE 5 2015 (The Conway Bulletin) – The IMF jumped into an increasingly vicious row over supervisory oversight of commercial banks in Georgia by criticising the government’s plans to strip the Central Bank of the responsibility.
In a rare intervention into domestic politics, the IMF released a statement
which said it was worried about the implications that a change of supervisory powers would bring.
“The IMF is concerned that recent proposals to amend the central bank law would put NBG (National Bank of Georgia) independence at risk,” the statement said.
The government’s plan, which some suspect has been motivated by a desire to punish the Central Bank still headed by senior officials appointed by the previous administration of Mikheil Saakashvili, has been controversial from the start. A group of businesses warned that the policy change would not only pose a threat to the banking system, but also to the business and investment climate. This sentiment was supported by President Giorgi Margvelashvili, who said he would veto the bill if it was adopted by parliament.
The government has said that it wants to transfer responsibility for the oversight of commercial banks to an independent body to improve and strengthen this oversight. It has fallen out with Central Bank chief Giorgi Kadagidze over his handling of the economic storm which has battered the region.
IMF made its statement the day after former PM and Georgia’s most powerful man, Bidzina Ivanishvili, backed the proposed changes.
Mr Ivanishvili set up the governing Georgian Dream coalition and is considered the country’s chief power broker. He has clashed with both Mr Margvelashvili and Mr Kadagidze.
It its statement, the IMF also reiterated its public support for Mr Kadagidze, pitting itself firmly against Mr Ivanishvili and Mr Margvelashvili.
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(News report from Issue No. 235, published on June 11 2015)