Tag Archives: economy

Tesco ditches Uzbek cotton

OCT. 9 2014 (The Conway Bulletin) – Tesco, the world’s second largest retailer, has signed up to an agreement not to buy cotton from Uzbekistan because of concerns over its use of child labour to pick it, media reported.

The timing will particularly hurt Uzbekistan as Tesco’s move comes on the eve of the annual Uzbekistan cotton trade show on Oct. 14. This set piece event is supposed to showcase Uzbek cotton — one of the country’s biggest exports.

The problem for Uzbekistan is that its use of deploying school children, teachers and doctors to harvest the cotton has made buying it taboo.

“Markets for Uzbek cotton sourced with forced labour continue to diminish as consumers become more aware of the egregious human rights violations that occur during the Uzbek cotton harvest, with over 4m Uzbek citizens forced to pick cotton under threat of penalty,” the advocacy group Responsible Source Network (RSN) said on its website after announcing that Tesco had agreed to support it.

To an extent, RSN is correct. More and more Western retailers are looking to stop buying clothes made with Uzbek cotton. Uzbekistan last year also allowed the United Nation’s International Labour organisation (ILO) to tour the country at harvest season and inspect reports of child labour.

It’s likely, campaigners have said, that child labour is still used in Uzbekistan but this has been reduced over the past few years.

And, there is a flip side. With Western companies trying to stop using Uzbek cotton, Uzbekistan has looked east to potential clients who are less squeamish about human rights. Bangladesh has become a key importer of Uzbek cotton.

ENDS

(News report from Issue No. 204, published on Oct. 15 2014)

IMF downgraded Azerbaijan economic growth

OCT. 9 2014 (The Conway Bulletin) – The IMF downgraded its economic growth figures for Azerbaijan to 4.5% this year because of the impact of sanctions on Russia, media reported. Earlier, the IMF had predicted growth of 5% for Azerbaijan. Azerbaijan’s economy is less impacted by Russia’s economy than other former Soviet states.

ENDS

(News report from Issue No. 204, published on Oct. 15 2014)

Tajikistan raises interest rates

OCT. 9 2014 (The Conway Bulletin) – Tajikistan’s Central Bank increased its key interest rate by 1% to 6.9%, its highest level in two years, to try and dampen rapidly rising inflation.

Like other countries in former Soviet Central Asia, Tajikistan’s economy is suffering from the knock-on effect of sanctions on Russia. Remittances from workers based in Russia generate around half of Tajikistan’s GDP. This revenue stream has dried up since the sanctions dampened Russia’s economy.

But Tajikistan is also battling rising inflation. Inflation measured over 5% for the first eight months of this year, nearly double the rate for last year.

The main problem for Tajikistan is that as well as weakening remittance flows from Russia, importing goods has become more expensive.

Rising inflation and a weakening economy is a nightmare combination for Tajikistan.

This was also the second interest rate increase by Tajikistan this year. In May it boosted interest rates by 1.1% to 5.9%. Previously it had cut rates on eight consecutive occasions.

ENDS

(News report from Issue No. 204, published on Oct. 15 2014)

Moodys rates Azerbaijan’s economy

OCT. 7 2014 (The Conway Bulletin) – Moodys, the ratings agency, said Azerbaijan’s foreign investments, its low government debt and oil generated fiscal surpluses would shield its economy from shocks. The report highlights why Azerbaijan’s economy is stronger than others in the region.

ENDS

(News report from Issue No. 204, published on Oct. 15 2014)

Kazakh bank received negative ratings

OCT. 14 2014 (The Conway Bulletin) – Ratings agency Standard & Poors placed Kazkommertzbank, one of the biggest banks in Kazakhstan, on a negative ratings watch because of its purchase of BTA Bank. BTA Bank was bought from the government in what analysts have said was a political, rather than business, move. BTA Bank owned a large amount of bad debt.

ENDS

(News report from Issue No. 204, published on Oct. 15 2014)

Kazakh government to generate billions through IPOs

OCT. 8 2014 (The Conway Bulletin) – The Kazakh government said it would restructure Kazakhstan’s sovereign wealth fund Samruk-Kazyna in order to generate $11.2b in sales and savings.

Costs will be cut and unwanted assets sold off through the much vaunted, but still-to-emerge, People’s IPO.

The government wants to half the number of companies administered by the fund and sell up to 10% in selected strategic national companies such as electric grid operator KEGOC, energy holding Samruk-Energo, railroad major Kazakhstan Temir Zholy, and the national nuclear agency KazAtomProm.

Samruk-Kazyna is the main tool through which the Kazakh government controls companies. The fund accounts for 10.5% of Kazakhstan’s GDP and its assets are valued at $100b.

The timing of such a large restructuring is important. Economic growth rates across the region have been halved over the past few months as Russia’s sanction-hit economy tips into recession.

It may just have been time to for the Kazakh government to get serious about cutting costs and raising revenue.

ENDS

(News report from Issue No. 204, published on Oct. 15 2014)

Kyrgyzstan wants to export meat to Russia

OCT. 14 2014 (The Conway Bulletin) – As part of Kyrgyzstan’s move towards membership of the Russia-led Customs Union, it has started preparing to export processed meat to Russia, media reported.

This is, potentially, significant as it shows just how the Customs Union, which turns into the Eurasian Economic Union, can help the poorer parts of the former Soviet Union.

It also shows how Russia is looking to its neighbours and allies for economic support to help it cope with the sanctions that the West has thrown over it.

Armenian cheese producers, for example, have said that they could export more cheese to Russia to make up for the shortfall of from France and other parts of the European Union.

Now the Kyrgyz news website 24.kg has quoted the agriculture minister as saying that he had spoken to his Russian counterpart and asked for guidance on bringing the meat processing industry in Kyrgyzstan up to standard for imports to Russia.

“Until now, the export of this product is prohibited. We asked about test batches in order for our businesses to start to explore the markets of Russia in anticipation of entering the Customs Union,” he said.

“The Minister gave a positive response and concluded a verbal agreement.”

Kyrgyzstan intends to join the Eurasian Economic Union, which also includes Belarus and Kazakhstan, next year. Armenia has also agreed to join the bloc.

ENDS

(News report from Issue No. 204, published on Oct. 15 2014)

No devaluation, Kazakh minister says

OCT. 9 2014 (The Conway Bulletin) – Kazakh economy minister Yerbolat Dossayev refuted speculation the Central Bank was planning to devalue the tenge again this year, media reported. Kazakhstan’s economy has stalled since sanctions started to bite Russia. Kazakhstan has already devalued its currency by 20%.

ENDS

(News report from Issue No. 204, published on Oct. 15 2014)

Azerbaijan increases defence budget

OCT. 13 2014 (The Conway Bulletin) – Azerbaijan will increase its defence spending next year by just over 3%, keeping up with inflation, IHS Janes Defence reported quoting the Azerbaijani finance ministry. Azerbaijan has been increasing its defence spending through the last few years.

ENDS

(News report from Issue No. 204, published on Oct. 15 2014)

Azerbaijanis worry about oil price fall

BAKU/Azerbaijan, DEC. 5 2014 (The Conway Bulletin) — Global oil prices have collapsed since the summer, hitting governments, currencies and ordinary people. Baku, the Azerbaijani capital, was built on oil and this slide has, perhaps, been keenest felt here.

Matanat Guliyeva’s husband works for a private oil company. She said: “Salaries have been late for the last two or three months. We have to reduce our budget, as we are uncertain whether my husband’s wage will arrive next week or not.”

Funds directly from oil sales or from taxes generated by oil sales, power Azerbaijan’s state budget. Earlier this month the government passed a budget that increased spending next year but some people in Azerbaijan are now worried about possible economic turmoil triggered by the falling oil prices.

Aytekin Gasimova 18, said she follows news about oil prices closely because an oil price means that her father, who works in local market in Moscow, will also earn less.

“I’m mostly concerned about my tuition fee,” she said. “It seems my family may have difficulties in paying for my education.”

Nijat Qafurov, 43, a bank worker is more optimistic. He said that people’s income will not decrease due to oil prices drop. Instead, he said, if prices keep falling, the government will cut infrastructure projects, not salaries.

And this sense of being able to ride out economic uncertainty rebounded around Baku.

Azer Mammadov, 28, a construction worker, said that the Azerbaijani government has enough money to save the economy.

“I am sure, they have kept some money for such days, and will not let people starve,” he said. “The government will manage it somehow.”

ENDS

(News report from Issue No. 212, published on Dec. 10 2014)