FEB. 16 2015 (The Conway Bulletin) — Kyrgyzstan’s energy minister, Kubanychbek Turdubayev, has accused Russia of working too slowly on upgrades to hydropower projects, eurasianet.org reported. Upgrades to the Kambar-Ata 1 dam and the Upper-Naryn Cascade were part of a 2012 deal that saw Moscow secure an extension to leases on military bases in Kyrgyzstan.
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(News report from Issue No. 219, published on Feb. 18 2015)
FEB. 11 2015 (The Conway Bulletin) — Kazakh president Nursultan Nazarbayev said that all government spending, excluding social projects, would be cut by 10% to cope with the economic slowdown, media reported. He made a point, though, of denying that there was an economic crisis in Kazakhstan.
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(News report from Issue No. 219, published on Feb. 18 2015)
>>Economy minister warns of more price rises>>
FEB. 17 2015 (The Conway Bulletin) — Kyrgyzstan’s economy minister, Temir Sariev, said that inflation could hit 13% this year, double the rate the government is aiming for.
Mr Sariev said that a combination of events had forced a large price jump in Kyrgyzstan — the falling Russian rouble, a slowdown in the economy and joining the Kremlin-steered Eurasian Economic Union.
In December annualised inflation measured over 10%, sharply up from the beginning of the year.
Last month the Kyrgyz Central Bank raised interest rates by 50 basis points to 11%, its highest rate since 2012.
But alongside the rouble devaluation and entry to the Eurasian Economic Union, Mr Sariev said that other problems had also weighed on the economy and had made the start of 2015 difficult.
“Seasonal water shortage has brought two big problems for us. Firstly, agricultural products produced in fewer amounts. Second, less energy produced. As a result, we had to buy it in Kazakhstan,” he said according to media reports.
The problem for the government is a weak economic outlook triggers resentment.
Opposition parties have already said that intend to hold a series of rallies in Bishkek this spring themed around what they described as a new economic crisis.
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(News report from Issue No. 219, published on Feb. 18 2015)
FEB. 17 2015 (The Conway Bulletin) — Kyrgyzstan has spent around 10% of its currency reserves this year defending its currency from devaluing, media quoted the chairman of the Central Bank, Tolkunbek Abdygulov, as saying. The Kyrgyz som is closely linked to the Russian rouble and has devalued against the US dollar by around 20%.
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(News report from Issue No. 219, published on Feb. 18 2015)
FEB. 8 2015 (The Conway Bulletin) — Perhaps feeling the pinch from falling energy prices, Turkmen leader Kurbanguly Berdymukhamedov wants Turkmenistan to increase the number of foreign clients it has for its gas, the official website turkmenistan.ru reported. Mr Berdmukhamedov has already increased Turkmenistan’s client case since taking over.
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(News report from Issue No. 218, published on Feb. 11 2015)
>>Pres. Aliyev cuts more government spending>>
FEB. 11 2015 (The Conway Bulletin) — Azerbaijani president Ilham Aliyev closed four state bodies in an effort to cut back on government expenses.
Although government officials avoided justifying the disbandment of the state-run companies Bakielektrikshabaka and Azerenerji, which were tasked with generating electricity in Baku and the regions, as well as the State Land and Cartography Committee and Baku Taxes Department, analysts said that cost-cutting was the clear motivator.
“I can’t recall four state bodies being terminated in one week until now,” an Azerbaijani analyst who wanted to keep his identity a secret, told The Bulletin.
“This is definitely about the oil price drop. The government should have done this before. It kept those bodies because of the easy oil money. Now the money is gone, they have had to disband these bodies.”
Ratings agencies have downgraded Azerbaijan’s sovereign debt rating and Mr Aliyev has also talked about reducing government expenditure. Last month it cancelled a multi-million dollar project to extend internet services to rural parts of the country.
Azerbaijan is reliant on energy to generate its income. BP, its biggest foreign investor, has already laid off 8% of its total workforce in Azerbaijan because of the slip in global prices. Oil has halved in value over the last seven months.
Mirvari Gahramanli, an Azerbaijani oil workers’ rights defender, told a local radio programme that the situation was likely to worsen.
“As oil prices go down, we expect more job cut in oil companies. Also, these people will have less chance to find new job places,” she said.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 218, published on Feb. 11 2015)
FEB. 10 2015 (The Conway Bulletin) — Turkmen officials are due to meet in Islamabad with counterparts from Pakistan, India and Afghanistan to decide on the contractor to build the TAPI pipeline, media reported. Sources said the leading candidate to build the pipeline to pump Turkmen gas to Asia is Total.
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(News report from Issue No. 218, published on Feb. 11 2015)
FEB. 9 2015 (The Conway Bulletin) — The ratings agency Standard & Poor’s downgraded the Azerbaijani state energy company SOCAR to a negative outlook from stable because of the decline in global energy prices, Reuters reported. Standard & Poor’s downgraded Azerbaijan’s sovereign rating last month.
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(News report from Issue No. 218, published on Feb. 11 2015)
>>Rouble devaluation makes Russian goods cheap>>
FEB. 6 2015 (The Conway Bulletin) — Local authorities in Kazakhstan said they are worried about cheap goods from Russia flooding its northern markets. The rouble has halved in value, making goods from Russia cheap for Kazakhstanis.
Duisenbai Turganov, vice-governor of the Pavlodar province, directed his concerns to Kazakh deputy PM, Bakhytzhan Sagintayev.
He said Russian goods flooding the Kazakh market could be classified as a dumping practice.
“Prices of Russian competitors are 30-60% lower than Kazakh suppliers can offer. This has a negative impact on the activities of the local industrial enterprises,” the tengrinews.kz website quoted him as saying.
The row piles more pressure on to the Eurasian Economic Union which has become tainted by commercial wars among the members. Belarus and Armenia are also members.
And we’ve seen this issue before. Since December, Kazakhs are crossing the border to buy cheap goods in Russia. Although quantities may be risible for Moscow, on the other side of the fence, buying Russian goods makes a difference for Kazakhs.
From cars, to poultry, to petroleum products, the large-scale entry of cheap goods from the north into Kazakhstan creates an imbalance in the Kazakh economy and puts local factories under stress.
The governor in Pavlodar may be talking peanuts to Russia, but these are vital components of the socio-economic makeup of the northern regions of Kazakhstan.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 218, published on Feb. 11 2015)
FEB. 6 2015 (The Conway Bulletin) — Viktor Khristenko, chairman of the Kremlin-lead Eurasian Economic Union, said the final barriers to Kyrgyzstan’s entry to the group had been removed. He was talking to press after a meeting of the Eurasian Economic Union. Kyrgyzstan aims to join the EEU, which includes Belarus, Kazakhstan and Armenia, later this year.
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(News report from Issue No. 218, published on Feb. 11 2015)