Tag Archives: economy

Greece and Armenia to boost ties

SEPT. 30 2014 (The Conway Bulletin) – On a trip to Yerevan, Greece’s president Karolos Papoulias and Armenia’s president Serzh Sargsyan agreed to expand economic relations.

The statement was short on detail and mainly forgettable, if it wasn’t for the timing. The visit by President Papoulias to Armenia comes less than a month after Greece’s parliament agreed to make denial of the alleged genocide by Ottoman Turks against the Armenians a crime.

For Armenia, persuading Greece to take this line was a major success. Some countries, such as France, do formally recognise the Armenian genocide but Greece is only the third country to make it illegal to deny that the genocide took place.

Switzerland and Slovakia have also made it illegal to deny the Armenian genocide. France is considering a similar law.

Turkey denies genocide and says instead that Armenians died in fighting between the two sides towards the end of the First World War.

Relations between Armenia and Turkey and are still strained and the border between the two neighbours is closed.

Of course, relations between Turkey and Greece are also strained making a deal between Armenia and Greece natural.

ENDS

(News report from Issue No. 202, published on Oct. 1 2014)

Manas closure hits Kyrgyz economy

SEPT. 24 2014 (The Conway Bulletin) – The closure of the US airbase at Manas outside Bishkek earlier this year is already having a knock-on effect on the local economy, the eurasianet.org website reported. It its story, eurasianet.org reported that around 2,000 Kyrgyz truck drivers were now out of a job because of the closure.

ENDS

(News report from Issue No. 202, published on Oct. 1 2014)

Shares plummet for one of Kazakhstan’s biggest banks

SEPT. 30 2014 (The Conway Bulletin) – Shares in Kazkommertzbank have nose-dived since it bought a stake in BTA Bank from the Kazakh government.

By the end of September, shares in KazKom, as the bank is commonly known, traded at $1.65 on the Kazakh Stock Exchange, down by 37.5% since July when it completed buying nearly half of BTA.

Analysts said the drop highlighted the toxic nature of BTA’s bad debt portfolio and a drop in profit. KazKom said profit for the first half of 2014 was down by 6%.

A source from the banking industry said: “Most bad loans are with BTA which is unable to recover them from its debtors. This entails a huge cost.”

Mountains of bad debt still holds back Kazakhstan’s financial sector, a legacy of the Global Financial Crisis of 2008/9 when the government had to buy up a handful of banks. One of these was BTA Bank.

At the end of last year, the Kazakh government said it wanted to sell its shares in government-owned banks.

Kenes Rakishev, a young Kazakh businessman with strong links to the elite and KazKom, controlled by the London- based businessman Nurzhan Subkhanberdin agreed in February to buy the bank. At the time, sources with knowledge of the Kazakh finance centre said buying BTA Bank made no business sense for KazKom. Instead, they said, it was a political move by Mr Subkhanberdin to win favour.

ENDS

(News report from Issue No. 202, published on Oct. 1 2014)

Court rules against Kyrgyz government

SEPT. 29 2014 (The Conway Bulletin) – A court in Bishkek ruled against plans by the government to increase fees on electricity and gas, media reported, argued for by reformers who have said that Kyrgyzstan needs to charge more for its utilities.The ruling is a blow for the government which has been working to modernise Soviet-era systems.

ENDS

(News report from Issue No. 202, published on Oct. 1 2014)

Kyrgyz PM sacks two ministers

SEPT. 18 2014 (The Conway Bulletin) – Kyrgyz PM Djoomart Otorbayev sacked two cabinet ministers, minister of culture Kamila Taliyeva and interior minister Abdyldy Suranchiyev, his first major reshuffle since taking over the job in March.

The sackings are a nod to public dissatisfaction with the government, with reports growing that many ministers are hanging on to their jobs by a thread.

But they may be less about improving the efficiency of government and more about preparations for next year’s parliamentary elections. With a winter energy crisis expected to put pressure on both President Almazbek Atambayev, affiliated to the Social Democratic Party of Kyrgyzstan, and Mr Otorbayev, loosely associated with the socialist Ata-Meken party, dropping a few unpopular officials makes political sense.

Kyrgyz media reported that both the sacked ministers where disliked, making them easy scapegoats for failings across government but personnel changes are unlikely to spare the government public frustration if the winters are as cold as expected, especially with Kyrgyzstan’s power production struggling.

Ulugbek Erkeshev, a Kyrgyz political journalist, said he has seen it all before.

“At a time when they need to be working together as a government around the clock they are passing portfolios around,” he said.

ENDS

(News report from Issue No. 201, published on Sept. 24 2014)

Kazakh car production rises

SEPT. 19 2014 (The Conway Bulletin) – Kazakhstan produced 6% more cars between January and August this year compared to the same period in 2013, the state’s statistics committee reported. The data shows that the Kazakh economy is still relatively buoyant despite the decline of the all-important Russian economy.

ENDS

(News report from Issue No. 201, published on Sept. 24 2014)

Remittances falling for Uzbekistan

SEPT. 22 2014 (The Conway Bulletin) – Remittances to Central Asia from sanctions-hit Russia have fallen by around 8%, the European Bank for Reconstruction and Development (EBRD) said. Heaviest hit in Central Asia is Uzbekistan which sends back the most remittances from Russia, although this forms a lower proportion of GDP compared to Kyrgyzstan and Tajikistan.

ENDS

(News report from Issue No. 201, published on Sept. 24 2014)

Iran eyes Tajikistan’s water

SEPT. 18 2014 (The Conway Bulletin) – There is only one natural resource Tajikistan is indisputably rich in. Water.

With the fresh water reservoirs close to Tehran running low, Iran is trying to work out how to import Tajikistan’s spare water, opening up a tantalising export prospect for Central Asia’s poorest country.

Iranian officials have previously touted the idea of pumping water from Tajikistan to Iran.

According to RFE/RL’s Tajik service, as of 2004 Tehran was prepared to invest $3b in an ambitious pipeline to send water from Tajikistan’s Lake Sarez to Khorasan province in Iran.

The pipeline, which could transit a billion cubic metres of water annually, would also have to travel at least 500 km across Afghanistan.

It’s expensive but when Iranian officials visited Dushanbe they again brought up the prospect, Bloomberg quoted Iran’s Mehr news agency as reporting.

With Iran’s liquidity hampered by UN sanctions, it is no surprise that now that the talk is of a water for oil swap. Tajikistan depends mostly on Russia for its petrol supplies.

ENDS

(News report from Issue No. 201, published on Sept. 24 2014)

Kazakh city improves for finance

SEPT. 22 2014 (The Conway Bulletin) – Almaty sees itself as the financial centre of Central Asia and, increasingly, as a hub for businesses and companies wanting to straddle Europe and Asia.

And it appears as if it is earning plaudits.
In the latest ranking by London-based consultancy Z/Yen of the world’s most important financial centres, Almaty ranked

43 out of 84 cities, a jump from 58 in February. Only Istanbul, in Eastern and Central Europe, ranks higher in 42nd position.

Professor Michael Mainelli, chairman, Z/Yen Group told the Conway Bulletin that instability in Europe, mainly triggered by the civil war in Ukraine, had diminished cities’ standings there to Almaty’s benefit.

“Political turmoil throughout the Middle East and Asia, particularly in oil-rich dictatorships, seems to put Almaty on a more even footing with its competitors,” he said.

The index is ranked on several different areas. These are business environment; financial sector development; infrastructure; human capital; reputation and general factors.

Since the first Global Financial Centres Index was launched in 2007, Almaty has steadily improved its ranking. Good news, indeed, for Kazakhstan’s financial sector.

ENDS

(News report from Issue No. 201, published on Sept. 24 2014)

Uzbekistan announces more utility price rises

SEPT. 18 2014 (The Conway Bulletin) – Uzbekistan’s government announced new electricity power price rises, the second of the year, from Oct. 1.

Like other Central Asian economies, sanctions on Russia have hit Uzbekistan too. Uzbek infrastructure is also groaning under increased demand, triggering energy shortages. Petrol shortages have also been reported for the past year.

Now Uzneftgaz, the state energy company, has said that prices for gas will rise by 10%. Water and heating prices will also rise by 7%.

These increases follow a 9% rise in April and analysts will be monitoring closely people’s reaction.

Rising utility prices can trigger widespread social unrest and with Uzbekistan in a state of flux it is vulnerable. The apparent arrest of Uzbek president Islam Karimov’s eldest daughter, Gulnara Karimova, on various economic charges has unsettled politics and petrol shortages coupled with utility price increases have hit its economy.

ENDS

(News report from Issue No. 201, published on Sept. 24 2014)