MARCH 19 2015 (The Conway Bulletin) – The Georgian Central Bank is continuing to support the lari currency, buying $40m to prop it up. This was the fourth Central Bank intervention to defend the lari currency this year. Since November, the lari has lost 29% of its value, media reported.
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(News report from Issue No. 224, published on March 25 2015)
MARCH 21 2015 (The Conway Bulletin) – In the largest rally for several years in Georgia, demonstrators accused the government of economic mismanagement and called on it to resign.
Media estimated that several thousand people attended the march in Tbilisi.
Nino Lomouri, a 28 year old Tbilisi resident who works for the opposition United National Movement party (UNM), explained why she attended the rally.
“Not only do I pay more now for food and cigarettes, I also feel unsafe on the streets, crime has gone up a lot,” she said.
During the march, UNM MP Giorgi Gabashvili said that the UNM would hold several more anti-government protests across the country.
Georgia has a history of political turbulence and analysts have said the current economic problems across the region may stoke instability.
And via a video-link from Kiev where he holds a position with the Ukraine government, former Georgian president Mikheil Saakashvili said he wanted to return and lead the country once again.
“I miss you all. I miss Georgia,” he said. “I believe I will overcome all obstacles and come back to save the country.”
Mr Saakashvili, who led Georgia between 2003 and 2013, loved and loathed in equal measures in Georgia.
The current government coalition has an arrest warrant out for Mr Saakashvili for various economic crimes.
Mr Saakashvili has said the charges are politically motivated and that he wont return to Georgia until they are dropped. Several of his colleagues have been jailed for similar crimes.
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(News report from Issue No. 224, published on March 25 2015)
MARCH 24 2015 (The Conway Bulletin) – The Asian Development Bank (ADB) sent a warning to all Central Asian economies, and in particular to Tajikistan, in its Asian Development Outlook report.
Landlocked and dependent on remittances from migrant workers, Tajikistan is particularly vulnerable to the present economic crisis, the ADB said.
The ADB said Tajikistan is expected to experience a deceleration in its GDP growth. This had averaged 9% between 2010-14 but will fall to 5%.
“The decline in remittances and the traditional exports of aluminum and cotton slowed growth in 2014 and inflation worsened to 6.1%,” it said.
The ADB is also expecting rampant inflation and a further devaluation of the somoni currency by 6.5%.
Remittances, mostly from Tajik workers in Russia, represent roughly half of its GDP. The rouble crisis has affected both the value of those transfers and the capacity of these workers to retain their jobs. The ADB also said that new legislation for migrant workers in Russia will hit Tajikistan’s earnings.
“Remittances will likely contract further in 2015 as new regulations require that migrants to the Russian Federation have Russian language proficiency, as well as medical tests and health insurance that are estimated to cost about $500 per Tajik migrant,” it said.
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(News report from Issue No. 224, published on March 25 2015)
MARCH 25 2015 (The Conway Bulletin) – Armenian president, Serzh Sargsyan, visited China, signing various deals with his Chinese counterpart, Xi Jinping, and pledging greater cooperation between the two countries.
Short on regional allies, Armenia is looking for cash and investment to help it out of a worsening economic situation. It is currently overly reliant on Russian business and aid.
With this in mind, Mr Sargsyan’s trip to China was an important one.
“The Chinese government will encourage domestic enterprises to participate in transportation, mining, electricity, information technology and infrastructure sectors in Armenia,” the Xinhua Chinese state information agency quoted Mr Xi as saying.
This is exactly what Mr Sargsyan wanted to hear. Armenian state media said that Chinese trade had increased in importance over the past year and now accounted for 10% of Armenia’s total trade turnover, up from 8% in 2013.
Importantly, too, Mr Xi accepted an invitation to visit Armenia. For Armenia, successfully courting China is important.
China, eager to boost its regional presence, has probably found a willing partner in Armenia.
Perhaps also linked to this general diplomatic push, Armenia said that it is opening a consulate in Ebril, the capital of Kurdish Iraq.
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(News report from Issue No. 224, published on March 25 2015)
MARCH 20 2015 (The Conway Bulletin) – The Kremlin-led Eurasian Economic Union’s (EEU) first year is shaping up to be one to forget.
A sharp devaluation in the value of the rouble, triggered by Western sanctions and falling oil prices, and meddling in Ukraine’s civil war have hit Russia’s credibility among its former Soviet partners. After a meeting in Astana, Kazakh President Nursultan Nazarbayev appeared to distance himself from the Kremlin.
Mr Nazarbayev hosted Russian President Vladimir Putin and Belarusian President Aleksandr Lukashenko at the meeting. Armenia, the fourth member of the EEU, didn’t attend.
Mr Nazarbayev appeared to suggest that Mr Putin’s alleged support for rebels in eastern Ukraine had gone too far.
“It is important for any decisions that get made to rely on fundamental principles of international law. We are interested in Ukraine staying a stable, independent, territorially integral country,” he said.
Apparent tension at the meeting in Astana between the leaders wasn’t contained to Ukraine.
Mr Putin once again brought up the prospect of a single currency throughout the Eurasian Economic Union, something that Mr Nazarbayev has already ruled out.
“The time has come to start thinking about forming a currency union,” news reports quoted Mr Putin as saying. Mr Putin also suggested a Central Bank for the single currency could be based in Almaty.
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(News report from Issue No. 224, published on March 25 2015)
MARCH 19 2015 (The Conway Bulletin) – SOCAR, Azerbaijan’s state energy company, said that it had issued $750m worth of 15-year Eurobonds. It had earlier said that it would issue debt but didn’t specify how much. SOCAR said the debt issue was linked to the fall in oil prices.
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(News report from Issue No. 224, published on March 25 2015)
MARCH 20 2015 (The Conway Bulletin) – Officially, Georgia’s economy grew by 4.8% in 2014, up from 3.3% in 2013, the Georgian national statistics office said. Georgia has been enjoying growth for a few years. Economists have predicted a slowdown, though, because of a regional economic trough.
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(News report from Issue No. 224, published on March 25 2015)
MARCH 16 2015 (The Conway Bulletin) – Canada-based Condor Petroleum halted oil production at its Shoba oil field in west Kazakhstan because the oversupply of cheaper Russian oil products has dented domestic production.
A fall in oil prices and the imbalanced between the Russian rouble and the Kazakh tenge are hurting foreign energy companies in Kazakhstan. “Kazakhstan is experiencing an oversupply of refined oil products, including diesel, which is causing downward pricings pressures on domestically produced diesel and on crude oil,” Condor Petroleum said in a statement.
“Currently, Kazakhstan refineries are either not operating or the offering prices are below the Company’s cost of operations.”
This is, in effect, a criticism of the Kazakh government’s determination to defend the tenge despite the imbalance with the rouble.
Earlier this month a Kazakh official said important upgrade work to Kazakh refineries would have to be postponed because Russian oil products had destroyed their profitability.
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(News report from Issue No. 224, published on March 25 2015)
MARCH 19 2015 (The Conway Bulletin) – Armenia issued a 10-year $500m bond with a yield of 7.5%. Governments in Central Asia and the South Caucasus have been borrowing to offset a drop in their economies.
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(News report from Issue No. 224, published on March 25 2015)
MARCH 15 2015 (The Bulletin) – Hundreds of people demonstrated in Baku against the devaluation by 33% of the manat currency last month. The size of the march was contested with its organisers saying 10,000 people attended and police saying there were a few hundred.
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(News report from Issue No. 223, published on March 18 2015)