Tag Archives: economy

Architect of Georgia privatisation dies

LONDON/United KIngdom, NOV. 19 2014 (The Conway Bulletin) — Kakha Bendukidze, one of the chief architects of Georgia’s radical privatisation drive under President Mikheil Saaskhvili, has died in London aged 58.

He had recently undergone minor heart surgery and there was no suggestion of foul play.

A biologist who became a wealthy businessman towards the end of the Soviet Union, Bendukidze is best known for being the economy minister under Mr Saakashvili. Under Bendukidze, Georgia pursued one of the most aggressive privatisation schemes in the world.

This massive privatised and tax cutting drive — dubbed Bendunomics — attracted both praise and criticise. Praise from international organisations, such as the World Bank and the IMF, which champion private ownership over state ownership but criticism from rivals who pointed out that lucrative assets which had formerly belonged to the state ended up in the hands of Mr Saakashvili’s allies.

Before he was appointed economy minister in 2004, Bendukidze was a high profile businessmen in Russia advocating a low tax regime and reduced state intervention. He had been on close terms with Mikhail Khodorkovsky, who was arrested and imprisoned on tax evasion charges, largely interpreted as being linked to his various challenges to Russian President Vladimir Putin.

After Mr Khodorkovsky’s arrest and imprisonment, Bendukidze decided that it was time to leave Russia and he readily accepted a position in Mr Saakashvili’s revolutionary government.

A larger than life figure, both in terms of his size and booming personality, Bendukidze left Georgia earlier this year after the current government started to arrest and prosecute high- profile members of the previous administration for various economic crimes. Over the last few months Bendukidze had been advising the new president of Ukraine, Petro Poroshenko, and had been expected to take up a government position.

ENDS

(News report from Issue No. 209, published on Nov.19 2014)

Weak rouble hits Armenia wine

NOV. 17 2014 (The Conway Bulletin) – The falling value of the Russian rouble is hitting vital wine exports to Russia, the head of the Armenian wine-making union, Avag Harutyunyan, told media. Russia is the biggest market for Armenian wine and brandy. Mr Harutyunyan said that Armenia would export 30% less wine this year than last year.

ENDS

(News report from Issue No. 209, published on Nov.19 2014)

Car imports drop in Azerbaijan

NOV. 17 2014 (The Conway Bulletin) – Azerbaijan imported 52,000 cars in Jan-Oct this year, a drop of 38.5% from the same period in 2013, media reported quoting the state statistics agency. The drop is likely attributable to a combination of weaker economics and new emissions regulations.

ENDS

(News report from Issue No. 209, published on Nov.19 2014)

Food prices rising in Uzbekistan

NOV. 12 2014 (The Conway Bulletin) – The Uzbek sum currency has fallen to its lowest levels against the US dollar in independent Uzbekistan’s 23 year history, pushing up the price of food and threatening social stability.

On the Black Market, an essential measure of currency rates, the exchange rate in Tashkent hit the 3,450 sums to $1. The skyrocketing currency price is a mirror of Russia’s economic troubles.

A Tashkent resident told the Conway Bulletin that a kilogram of mutton now costs between 25,000 and 30,000 sums, compared to 20,000 sums in the summer.

Prices of bread, sugar and grain-based cereals have also risen by roughly 25% over the past three months, he said.

“As if the recent increase in utility costs was not frustrating enough, the government’s inaction to stem price increases because of a foreign currency adds insult to injury,” the source said.

The Tashkent resident was referring to a 10% increase imposed by the government on utility prices on Oct. 1.

This insight is important because it provides a first- hand snapshot of how frustration is building in Uzbekistan over food price increases and the rising cost of utilities.

Ordinary Uzbeks have also had to put up with fuel and gas shortages. Social pressure is building.

ENDS

(News report from Issue No. 209, published on Nov.19 2014)

Kazakhstan to sponsor Turkish football team shirts

NOV. 15 2014 (The Conway Bulletin) – Samruk-Kazyna, Kazakhstan’s national investment fund, has signed a $40m deal to sponsor the shirts of the top Istanbul football club Galatasaray, Turkish media reported. With the Kazakh economy under increased pressure, economists and ordinary Kazakhs may question the worth of the deal.

ENDS

(News report from Issue No. 209, published on Nov.19 2014)

Tajikistan’s cotton production uses forced labour

NOV. 17 2014 (The Conway Bulletin) – Tajikistan claims it is on track for a cotton production target many thought unrealistic when the government announced it earlier in the year.

Avesta.tj, the Dushanbe-based news agency, quoted the country’s ministry of agriculture as saying 373,000 tonnes of its 408,000 tonne target have already been gathered.

Cotton plays a key part in Central Asia’s economy, although it is controversial as human rights campaigners have criticised all the Central Asian states of using forced labour to pick the harvest.

In 2013, the US State Department Trafficking in Persons report said: “Some Tajik children and possibly some adults were subjected to agricultural forced labor in Tajikistan — mainly during the fall 2012 cotton harvest — but this exploitation occurred to a lesser degree than in 2011.”

That may be because cotton production itself has become steadily less profitable. Typically, Tajikistan exports raw cotton to Russia, China, Turkey and Iran. Efforts to develop finished cotton products in the country’s mills have been harmed by chronic electricity shortages that tend to begin right after the season finishes.

ENDS

(News report from Issue No. 209, published on Nov.19 2014)

Kazakh tenge celebrated a not-so-happy birthday

NOV. 19 2014 (The Conway Bulletin) – In Kazakhstan, November 15 is the Day of the National Currency, a little-known holiday for workers in the financial sector.

With the Kazakh tenge under pressure again despite a 20% devaluation earlier this year, they and the national currency will be grateful for the rest.

The tenge was born in 1993, after Kazakhstan’s independence from the Soviet Union.

It had a bumpy ride with initial inflation, matching concerns about the viability of an independent Kazakhstan. The exchange rate against the dollar jumped from an initial 4.75 to 35 within two months.

A dollar peg provided some stability — even if it was shaky — for the tenge during the second half of the 1990s but the Russian and Asian crises forced a new market- driven devaluation. Between April and September 1999, the tenge lost one third of its value against the greenback.

A corner, though, was turned at the start of the 21st century and with Kazakhstan maturing as a country so did its currency. Fiscal responsibility helped keep down inflation in the early 2000s, oil prices slowly rose, giving Kazakhstan’s fledging energy sector a boost.

Then came two devaluations of 20%. The first in Feb. 2009 and the second five years later.

With the US Federal Reserve easing its policy of cheap money and preparing to raise interest rates, pressure on emerging currencies, including the tenge, is likely to increase.

Aged 21, the tenge has already had an eventful existence.

ENDS

(News report from Issue No. 209, published on Nov.19 2014)

Kumtor slowdown costs Kyrgyzstan

NOV. 11 2014 (The Conway Bulletin) – Kyrgyzstan will lose $65m in revenue this year because of a delay in restructuring the Kumtor gold mining project, the country’s biggest industrial operation, media quoted Eldar Tadzhibayev, head of the Kyrgyz mining union, as saying. Kumtor has been the focus of a major row between Kyrgyzstan and its Canadian partners.

ENDS

(News report from Issue No. 208, published on Nov.12 2014)

Armenia remittances fall

NOV. 6 2014 (The Conway Bulletin) – Remittances to Armenia from Russia were 8.6% lower in September this year than in the same month in 2013, media reported quoting the Central Bank. Armenia’s economy is closely linked to Russia which is suffering from a severe downturn triggered by a falling oil price and Western imposed sanctions.

ENDS

(News report from Issue No. 208, published on Nov.12 2014)

No devaluation says Kazakh Central Bank

NOV. 7 2014 (The Conway Bulletin) – Kairat Kelimbetov, head of the Kazakh Central Bank, said the tenge currency would not be devalued for at least three years. The comments, made at a conference in Almaty, were the strongest indicator yet that, despite a falling rouble, the tenge would not devalue for the second time this year.

ENDS

(News report from Issue No. 208, published on Nov.12 2014)