Tag Archives: economy

FDI in Georgia jumped 39% in 2014

MARCH 15 2015 (The Bulletin) – Preliminary data from Georgia’s statistics agency, Geostat, showed that foreign direct investment (FDI) jumped by 39% to 1.3b last year.

This is the highest level of FDI since 2008 when Georgia experienced an economic boom before a short war against Russia curtailed investor confidence in the country.

Geostat wasn’t able to give specific reasons for the sharp increase in FDI in 2014. FDI is vitally important in Georgia and the statistics showed how Georgia’s economic conditions had improved this year.

The data, though, doesn’t reflect the worsening economic conditions over the past months.

Economic turmoil in Russia and a drop in the price of oil have hit the region, knocking growth rates and denting currencies. This has trickled through to Georgia. FDI levels are expected to fall again this year.
ENDS

(News report from Issue No. 223, published on March 18 2015)

IMF says that Georgia is well placed to weather financial storm

MARCH 5 2015 (The Bulletin) – Severe external shocks have hit Georgia’s economy causing it to falter and for growth to slow to a virtual standstill, the IMF said at the end of a mission to Tbilisi.

But the IMF said that because Georgia has been able to keep its government budget deficit under control it is better placed than other countries in the region to weather the economic storm triggered by a decline in oil prices and the drop in Russia’s economic health.

“We look forward to plans to accelerate reforms to make Georgia a more attractive place for doing business and for investing, for creating jobs, and for boosting growth in the future,” the IMF said in a statement.

“These should include easing recent restrictions on foreign businesses, seeking out new private investment, boosting saving through pension and capital market reforms and raising education standards.”

It also gave a much needed boost to Georgia’s Central Bank chief Giorgi Kadagidze who has been criticised for not doing enough to divert the country from a decline in the value of its lari currency.

“We need to protect independence of the central bank; they are doing a good job,” media quoted Mark Griffiths, who led the IMF mission as saying.
ENDS

(News report from Issue No. 222, published on March 11 2015)

Kazakhstan bans Russian oil products

MARCH 4 2015 (The Bulletin) – Kazakhstan banned the import of light oil products from Russia for 45 days from March 5 . The measure was brought in to stem the flow of Russian oil products, made cheaper by the fall in the value of the rouble, and to protect jobs and business at Kazakh refineries.
ENDS

(News report from Issue No. 222, published on March 11 2015)

Tajikistan’s remittance will fall, says IMF

MARCH 9 2015 (The Bulletin) – In an interview to the Asia-Plus website, the head of the IMF mission in Dushanbe, Aidyn Bibolov, said remittances would drop by 30% in 2015. Such a large drop would be a big hit for Tajikistan’s economy. Remittances make up 50% of Tajikistan’s GDP.
ENDS

(News report from Issue No. 222, published on March 11 2015)

Remittances to Armenia fall by 40%

MARCH 9 2015 (The Conway Bulletin) – Remittances to Armenia, a vital part of its economy, were 40% lower in January 2015 compared to January 2015, media reported quoting the Central Bank.

Like other countries in the Central Asia/South Caucasus region, Armenia’s economy is partially reliant on workers in Russia sending back cash for their families back in Yerevan and other Armenian towns and villages.

But the Russian economy has dipped over the past 12 months because of Western imposed sanctions and a sharp drop in global energy prices.

This has had a large knock-on effect. Armenia’s economy is especially tied-in to Russia’s financial health.

The data shows Armenia’s dependency on Russia in more detail. Total remittances to Armenia were $72m in January, compared to $122 in the same period in 2013. Of this, the amount from Russia fell 56% to $38m from $87m in 2015.

Economists have been lining up to say that economic growth in Armenia this year will measure around zero, below even the government’s estimates of 2% growth.
The ARKA news agency quoted economist Vilen Khachatryan.

“Given the strong dependence of Armenia on the Russian market we expect the negative developments in Russia and our region will lead to a reduction in turnover and unemployment among Armenian labour migrants in Russia which will in turn affect Armenia’s economy,” he said.

“If Russia fails to get out of the current crisis, Armenia’s economic growth this year will be zero.”
ENDS

(News report from Issue No. 222, published on March 11 2015)

Food prices in Georgia rise

MARCH 4 2015 (The Bulletin) – The price of staple foods in Georgia is rising, media reported. Interpressnews.ge said cooking oil, buckwheat, sugar, salt and other goods have all increased in price because of the devaluation of the Georgian lari. Economists have been warning that weakening economic conditions could trigger inflation.
ENDS

(News report from Issue No. 222, published on March 11 2015)

SOCAR plans Eurobond

MARCH 6 2015 (The Bulletin) – Azerbaijan’s state energy company SOCAR plans to issue a Eurobond by the end of March, the company’s CEO Rovnag Abdullayev said. Mr Abdullayev said SOCAR was launching the Eurobond because of the slide in oil prices over the past six months or so which have hit the company’s profits.
ENDS

(News report from Issue No. 222, published on March 11 2015)

Remittance data to Uzbekistan shows drop

MARCH 10 2015 (The Bulletin) – Remittances to Uzbekistan from Russia dropped by 10% in 2014, media reported quoting a survey by the Russian analytical agency TMT and the CONTACT money transfer system.

While these figures are not official, they do add credence to the picture of tumbling economies in Central Asia and the South Caucasus because of a faltering Russian economy.

Importantly, reports said that analysts expected remittances from Russia to fall by around 25% this year. This will affect most Central Asian and South Caucasus countries, especially Kyrgyzstan, Uzbekistan and Tajikistan which rely heavily on the flow of cash from Russia.

Proportionally, remittances make up a smaller proportion of the national income in Uzbekistan. In practice, though, it is a vital economic lifeline for many ordinary people.
ENDS

(News report from Issue No. 222, published on March 11 2015)

Kyrgyzstan-bound FDI dries up

MARCH 6 2015 (The Bulletin) – According to a recent publication by the Kazakhstan/Russia-funded Eurasian Development Bank (EDB), foreign investment in Kyrgyzstan in 2014 measured only $187m, down by 70% from 2013.

In 2013, the Central Asian country received over $623m in foreign direct investment (FDI), mainly from China, Russia, Britain, and Canada.

The EBD said the macroeconomic downturn which began in early 2014 was the main reason for the reduction of foreign activity. The recurring threat of nationalising the gold mine at Kumtor, together with monetary issues and galloping inflation, are also all factors.

The Kyrgyz government has tried to remedy the situation by increasing interest rates above 10% and protecting the national currency, the som, from the financial strains common throughout the region. Although it has performed better than the rouble, the som has lost over 20% against the dollar in the past six months.

FDI is a lifeline for countries like Kyrgyzstan, which rely on remittances from migrant workers abroad and capital injections from foreign investors.
ENDS

(News report from Issue No. 222, published on March 11 2015)

Kazakhstan speaks up against off-shoring

MARCH 6 2015 (The Bulletin) – At a Senate hearing in Astana, chairman of the ministry of finance’s revenue committee, Daulet Yergozhin, said the country was going to impose new measures against off-shoring cash.

This is important — if new legislation actually appears — as the issue of Kazakhstan’s wealthy getting their cash out of the country while poorer sections of the population suffer during an economic downturn could turn political.

A study published last month by Alexander Cooley and Jason Sharman, two academics, analysed the channels through which the Kazakh elite amassed “spectacular fortunes” in Western financial centres.

Mr Yergozhin wasn’t responding to these accusations. Instead he said Kazakhstan was working with Switzerland and Liechtenstein to reduce the flow of capital out of the country.

“Already this year, we are planning to put barriers against the movement of capital [to offshore locations] and we will start seeing the results of this policy early next year,” media quoted him as saying.

Kazakhstan has been looking was to bring capital back into the country. Last year it introduced an amnesty for people which repatriated cash. It has said that this amnesty has so far attracted $1b back into Kazakhstan.
ENDS

(News report from Issue No. 222, published on March 11 2015)