NOV. 5 2014 (The Conway Bulletin) – Luxury carmaker Rolls Royce has opened its first showroom in Kazakhstan, media reported, underlining how attractive the country still is for high-end goods despite a recent downturn in the economy. Rolls Royce is owned by Germany’s BMW and joins most other carmakers with a showroom in Almaty.
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(News report from Issue No. 208, published on Nov.12 2014)
NOV. 10 2014 (The Conway Bulletin) – Aiming to give tourism a lift, Armenia said it would join the EU-funded Black Sea Silk Road Corridor which already includes Georgia, Turkey and Greece. The focus of the corridor is a 3,000km path that weaves through 150 cultural sites. Armenia’s government has earmarked tourism as a way of boosting the economy.
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(News report from Issue No. 208, published on Nov.12 2014)
NOV. 6 2014 (The Conway Bulletin) – The Asian Development Bank (ADB) has predicted that inflation in Kyrgyzstan will hit 10% in 2015 after it joins the Russia-led Eurasian Economic Union. The biggest jump in prices, the ADB said, will be a 30% rise in petrol when prices are brought into line with Kazakhstan and Russia.
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(News report from Issue No. 208, published on Nov.12 2014)
NOV. 7 2014 (The Conway Bulletin) – Azerbaijan’s exports totalled $24.4b in the nine months to the end of September, media reported quoting the state statistics agency, but only $1.2b of this figure came in non-energy products. The figure highlights just how dependent Azerbaijan is on energy exports.
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(News report from Issue No. 208, published on Nov.12 2014)
NOV. 10 2014 (The Conway Bulletin) – The sharp fall in the price of oil has acted as a wake-up call for Kazakhstan, economy minister Kairat Kelimbetov said in an interview with the FT.
Virtually admitting that Kazakhstan had been caught off guard by the decline by roughly a third in the price of oil since June, Mr Kelimbetovsaid that the government was the economy and to make it planning measures to shore up more attractive to investors.
“Next month the government will be ready to announce some counter cyclical fiscal policy, with big plans in infrastructure,” he said in the interview in Almaty.
Economists have warned that a devaluing rouble and falling oil prices will combined to knock Kazakhstan’s growth rate.
And the falling economy is also knocking investor confidence. Energy analyst Sergei Smirnov said that with Brent oil prices falling to a four year low of $82/barrel it makes projects such as Kashagan unprofitable.
“Offshore oil production is always much more expensive than onshore production,” he said according to media.
Kazakh officials who have staked their credibility and the country’s economic prosperity on Kasahgan but the project is already behind schedule and running over budget.
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(News report from Issue No. 208, published on Nov.12 2014)
NOV. 11 2014 (The Conway Bulletin) – In a speech to the nation, Kazakh president Nursultan Nazarbayev ordered Kazakhstan’s government to spend more money on infrastructure projects to counter the drag caused by a slowing Russian economy and falling oil prices.
The hastily arranged policy speech caught observers by surprise. Mr Nazarbayev usually waits until his state-of- the-nation speech in January to unveil new policy.
“The tough times for which we prepared ourselves with the National Oil Fund have come. It’s time to use these reserves,” he said during his combative address.
Kazakhstan has amassed a sovereign wealth fund of roughly $77b to counter downturns in commodity prices — the economy is mainly reliant on oil and gas exports — as well as to defend the tenge currency when it is under pressure from a falling rouble.
And Mr Nazarbayev is acutely aware that economic progress is a cornerstone of his popularity.
Mr Nazarbayev pledged to inject $3b every year into Kazakhstan’s economy, during 2015/17. He also said that inter-governmental banks have pledged to match this cash injection.
“The investment from the National Fund must be necessarily accompanied by structural reforms,” he said. “This money will be channelled to develop transport, energy, industrial and social infrastructure.”
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(News report from Issue No. 208, published on Nov.12 2014)
NOV. 7 2014 (The Conway Bulletin) – The IMF completed a mission to Turkmenistan and said that economic growth measured between 10% and 11% this year. Importantly the IMF said Turkmenistan was sheltered from the slowdown in neighbouring economies, and in particular Russia, because of its limited exposure to foreign markets.
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(News report from Issue No. 208, published on Nov.12 2014)
NOV. 8 2014 (The Conway Bulletin) – On yet another trip to Beijing, Tajik President Emmomali Rakhmon agreed a deal with Chinese PM Li Keqiang to increase China’s investment in energy, transport and agriculture. Although no details of the deal were released it does underline China’s increasingly dominant investor position.
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(News report from Issue No. 208, published on Nov.12 2014)
NOV. 4 2014 (The Conway Bulletin) – Azerbaijan’s economy is, in general, holding firm despite problems in Russia and falling price of oil. That said, a growing household debt problem is threatening to undermine its relatively good position.
The Central Bank said that in the nine months to the end of September, consumers’ overdue loans had risen by over 22%.
Azerbaijanis are enjoying increasingly easy access to cash, something that international institutions and economists have told the Azerbaijani authorities to tighten up.
Lending but not the checks and balances needed for a sensible lending policy, have grown exponentially over the past two or three years.
In an article for the news site Media forum, the economist Samir Aliyev said that these disparages could cause serious problems for Azerbaijan.
“The share of these (consumer) loans increased by 16.7% in the last nine months,” he said of bank’s loan portfolio. “There has also been a decrease in the assets of the bank.”
This is a bad combination. Azerbaijani banks have been warned time and again to impose tighter controls over lending. If they don’t, the banks may find that they are holding a large proportion of bad consumer debt.
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(News report from Issue No. 207, published on Nov. 5 2014)
NOV. 3 2014 (The Conway Bulletin) – Tajikistan will have to increase its imports of grain over the next three years to cover a growing population, a ministry of economic development official told Tajik media. The news will disappoint analysts who had hoped that a gradual rise in grain production would reduce expensive imports.
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(News report from Issue No. 207, published on Nov. 5 2014)