OCT. 30 2014 (The Conway Bulletin) – Uzbekistan’s sum currency lost 20% of its value over a few days because of the depreciation of the Rouble, Russian media reported quoting a Central Bank official. Economists have warned of a ripple effect across Central Asia from the worsening Russian economy.
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(News report from Issue No. 207, published on Nov. 5 2014)
NOV. 3 2014 (The Conway Bulletin) – Inflation in Georgia eased to an annual rate of 3.4% in October, down from 4.8% in September, the national statistics office reported. Although other economies in the region are suffering with the downturn in Russia’s economy, Georgia’s is relatively buoyant.
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(News report from Issue No. 207, published on Nov. 5 2014)
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NOV. 4 2014 (The Conway Bulletin) – Although Armenia has agreed to join the Russia-led Eurasian Economic Union, currently called the Customs Union, in 2015, the EU approved a 140m – 170m euros tranche of aid. The aid will be used to bolster the private sector, the justice sector and reform government institutions.
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(News report from Issue No. 207, published on Nov. 5 2014)
BISHKEK/Kyrgyzstan, NOV 5 2014 (The Conway Bulletin) — It would seem to be a done deal. Despite parliamentary opposition from an unlikely cast of nationalists and liberals — as well as serious concerns on the street — Kyrgyzstan appears to be primed to join Russia, Kazakhstan, and Belarus in the Eurasian Economic Union in 2015.
And, of course, Armenia will accede on the same day.
But accession will be problematic for many Krygyz. The Customs Union, from which the Eurasian Economic Union will emerge, mandates higher tariffs on imports from third countries. China’s share of Kyrgyzstan’s import pie is 55%, dwarfing Russia and Kazakhstan’s combined share of 25%.
Prices for goods from cars to household items will go up significantly. Kyrgyz President Almazbek Atambayev has ceded that inflation is likely to jump in the short term after joining the Eurasian Economic Union.
Such price hikes would be hard to swallow anywhere; in a poor country like Kyrgyzstan, they will be punitive. Many people in Bishkek are afraid and everyone from taxi drivers to professionals, is quick to share their concerns.
One Bishkek-based foreign national in the NGO sector underscored this analysis. “Many fear that the lifeblood of Kyrgyzstan’s economy, cheap goods ranging from cars to shower curtains to raw materials imported from China, will either stop flowing due to newly-imposed tariffs or will dramatically rise in price,” he said, preferring to remain anonymous.
Of course, Russia and Kyrgyzstan are bound in many ways. As many as 500,000 Kyrgyz citizens work in Russia, and Russian news media is widely watched in Kyrgyzstan.
There are, of course, silver linings to Kyrgyzstan’s accession. Kyrgyz citizens working in other EEU countries will not need to register with the police for stays of less than 90 nights. Currently, a Kyrgyz citizen staying longer than five nights is compelled to register.
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(News report from Issue No. 207, published on Nov. 5 2014)
NOV. 4 2014 (The Conway Bulletin) – Tajikistan produced 1m tonnes of cement for the first time since the breakup of the Soviet Union, media reported. The boost in cement production is thanks to China which has built and operates a new cement plant. China has also paid for a massive infrastructure programme.
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(News report from Issue No. 207, published on Nov. 5 2014)
OCT. 31 2014 (The Conway Bulletin) – France’s President Francois Hollande will travel to Astana on Dec. 5 for a two day visit, the French embassy in Kazakhstan said. France and Kazakhstan have developed close economic ties. Mr Hollande’s predecessor Nikolas Sarkozy visited Astana a handful of times.
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(News report from Issue No. 207, published on Nov. 5 2014)
OCT. 27 2014 (The Conway Bulletin) – Tajikistan’s GDP has fallen by 0.8% this year compared to 2014, the World Bank said, more evidence that economies closely-linked to Russia are suffering from sanctions imposed by the West.
The World Bank said that a fall in remittances from Tajik workers in Russia had translated into weaker domestic demand for goods.
“A Russian slowdown affects Tajikistan largely through the remittances channel,” the World Bank wrote in its report.
“A slackening in remittances weighs heavily on household demand, notably demand for services and housing construction.”
This is particularly worrying for Western countries which are counting on a strong and stable Tajikistan to act as a bulwark against any movement by the Taliban northwards into Central Asia from Afghanistan.
Most of the former Soviet Union has been hit by Western sanctions imposed on Russia because of its alleged intervention in the Ukraine civil war but the World Bank also said that a generally weak global demand for industrial goods was impacting Tajikistan too.
It said that industrial growth had fallen to 3% from 7% a year earlier because of low global industrial demand and falling cotton and aluminium prices.
These sentiments mirror the Tajik Central Bank. Both also predicted that inflation would gradually become an increased concern in Tajikistan.
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(News report from Issue No. 206, published on Oct. 29 2014)
OCT. 27 2014 (The Conway Bulletin) – Kyrgyz president Almazbek Atambayev has said inflation will increase in Kyrgyzstan when it joins the Customs Union, which is morphing into the Eurasian Economic Union next year. He also said the country no alternative to joining the Russia-led economic bloc, highlighting the Kremlin’s tightened grip over Kyrgyzstan.
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(News report from Issue No. 206, published on Oct. 29 2014)
OCT. 27 2014 (The Conway Bulletin) – Armenia has denied that it has given permission for a commercial flight between Yerevan and Simferopol, the capital of Crimea.
As reported by the Bulletin last week, Grozny Avia, a Chechen airline, has floated plans to fly between the two cities twice a week. If the flight route did materialise it would be the first air route into Crimea, other than from Russia, since Russian forces annexed the Ukrainian province earlier this year.
News of the planned flight angered the Ukrainian government. It has also been suggested that Armenia had been coaxed into allowing the flight to appease Russia. Armenia needs Russian economic support to keep its finances in order and Russian military support to balance the threat posed by Azerbaijan which wants to re-take the disputed region of Nagorno-Karabakh from Armenia-back rebels.
But Armenia’s civil aviation authority has said that an earlier statement from Crimea’s transport minister about the planned flight was simply wrong.
“The Head Department of Civil Aviation did not receive, and therefore has not examine, a bid for operation of direct flights from Yerevan to Simferopol,” media quoted spokesman Ruben Grdzelyan as saying.
This is not a categorical no, then. It does suggest that this issue may have further to run.
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(News report from Issue No. 206, published on Oct. 29 2014)
OCT. 28 2014 (The Conway Bulletin) – Kazakhstan will probably issue another sovereign or quasi- sovereign bond next year following its $2.5b Eurobond issue in October, the head of the Kazakh Central Bank Kairat Kelimbetov told Reuters in an interview. Mr Kelimbetov said another debt issue would likely be made as a sukuk, a bond linked to Islamic banking principles.
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(News report from Issue No. 206, published on Oct. 29 2014)