JULY 1 2014 (The Conway Bulletin) – Azerbaijan’s housing market grew by 27% in the first five months of the year compared to the same period in 2013, media reported quoting the Central Bank. The data is another sign that Azerbaijan’s economy may be overheating.
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(News report from Issue No. 190, published on July 2 2014)
JUNE 27 2014 (The Conway Bulletin) – Alongside Moldova and Ukraine, Georgia signed an important deal to integrate its economy further with the EU.
The Association Agreement is a major step towards Georgia’s end goal of becoming an EU member state.
Georgian PM Irakli Garibashvili was under no illusion on the significance of the agreement. It was, he said, an historic moment for Georgia.
“Unofficially we applied for membership today. Officially, it depends on progress that we will make,” he said.
Georgia has been lobbying for membership of the EU and NATO for years. Former President Mikheil Saakashvili managed to antagonise Russia during his push to join the West. Perhaps the new government’s greatest achievement so far has been to pursue its pro-West agenda while also keeping relations with Russia amicable.
Importantly, signing the Association Agreement has the potential to rock relations with Russia. It was this deal, initially put forward in November last year, that Viktor Yanukovoch, then Ukraine’s president, declined to sign, triggering protests that lead to a civil war.
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(News report from Issue No. 190, published on July 2 2014)
JUNE 25 2014 (The Conway Bulletin) – Tajikistan will increase its electricity prices in July by 15%, media reported. This is the first electricity price increase for two years and may trigger frustration. One media outlet quoted a Tajik official saying prices had to rise because of the poor financial position of the state energy producer.
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(News report from Issue No. 190, published on July 2 2014)
JUNE 275 2014 (The Conway Bulletin) – Turkmenistan has begun to collect an estimated 1.6m tonnes of grain this year, media reported. Since 2010 when it first started exporting grain, Turkmenistan has become an increasingly important global grain producer. Officials have said that it wants to boost grain production further.
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(News report from Issue No. 190, published on July 2 2014)
JUNE 30 2014 (The Conway Bulletin) – The impact of sanctions on Russia is hitting all the economies of the South Caucasus and Central Asia but none more so than Armenia.
Armenia is particularly reliant on Russia for both financial support and as a market for its export. Last month, the Armenian Central Bank said it would cut interest rates for the third time this year to a four year low to try and curb falling inflation.
The latest inflation numbers show just how much work the Central Bank needs to do to prop up the economy. Armenia’s statistics agency said that inflation for the first half of the year was 4%, at the bottom end of its range.
But even this figure hides the really worrying data. Average prices in June fell 1.8% against May.
For more evidence of Russia’s faltering economy hitting the more outlying regions of the former Soviet Union, cognac is as good a place to look as any other. Armenian cognac is famous around the former Soviet Union and Russia is its biggest export market.
The latest data showed that cognac production fell for the first five months of May by 11.1% to just over 5.5m litres compared to the same period in 2013.
Although no official explanation has been given, the message is still fairly clear.
“In the first quarter of 2014 Armenia exported to Russia half the amount of cognac compared with the the same reporting period in 2013,” an Armenian business website reported. “They [Russian cognac importers] are in an unstable financial situation and do not know what will the political conflict between Russia and Ukraine.”
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(News report from Issue No. 190, published on July 2 2014)
JULY 1 2014 (The Conway Bulletin) – President Emomali Rakhmon and key figures in his regime have criticised an “artificial” spike in the price of meat during the holy month of Ramadan.
As Ramadan began, Tajik media reported a jump in the price of a kilo of meat from $6-7 to $8-9. Other products saw smaller increases. Last Ramadan saw similar jumps, suggesting collusion in the country’s urban markets, where costs are highest.
Mr Rakhmon’s attack on the meat cartels should be understood less as a defence of religion — an embarrassing video of him dancing drunk at his son’s wedding became an internet sensation when it was leaked in May 2013 — and more as sensitivity over price changes that could precipitate instability. GDP is expected to grow by 7% this year, but inflation, at 7.7% for the first half of this year, is more than keeping up.
“Prices for petrol are lower than they have been in recent years, there is enough feed for the animals and the price of meat should not be rising,” said Mr Rakhmon.
The Mayor of Dushanbe, Mahmadsaid Ubaidulloev, backed Mr Rakhmon’s stance emphasising the need to punish “shameless” butchers working out of the capital’s main bazaars.
Food assumes a special importance during the month of Ramadan when daytime fasting gives way to night time gorging. The Day of Eid holiday after the fasting period is associated with elaborate feasts.
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(News report from Issue No. 190, published on July 2 2014)
JULY 1 2014 (The Conway Bulletin) – Georgia has imported 20% more gas from Azerbaijan this year compared to the same period in 2013, media reported. This shows the increasing inter-dependency of the countries in the South Caucasus. Azerbaijan is Georgia’s largest gas supplier.
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(News report from Issue No. 190, published on July 2 2014)
JUNE 26 2014 (The Conway Bulletin) – Air Astana will aim for an IPO within three years, Peter Foster, its CEO, said, according to media. Samruk-Kazyna, the Kazakh sovereign wealth fund owns 51% of Air Astana and BAE Systems (formerly British Aerospace) owns 49%. The Kazakh government has been looking to privatise various companies it owns.
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(News report from Issue No. 190, published on July 2 2014)
JUNE 24 2014 (The Conway Bulletin) – Uzbekistan will almost double the amount of uranium it sends to South Korea, media reported after a trip by South Korean President Park Geun-hye. Ms Geun-hye has been on a tour of Central Asia, building relations and making business deals.
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(News report from Issue No. 190, published on June 25 2014)
JUNE 24 2014 (The Conway Bulletin) – Armenia’s Central Bank cut its key interest rate by 0.25% for the third time this year because of continued falling inflation.
The new 7% interest rate is the lowest set by the Armenian Central Bank for four years, reflecting concern over an economy that is bouncing along the bottom of economists’ forecasts.
Like other parts of the former Soviet Union, the unrest in Ukraine and the sanctions on Russia have impacted Armenia and slowed its economic prospects.
The Central Bank was succinct.
“There was 0.8 percent of deflation in May of 2014,” it said.
“In the coming months, the Board considers, that the inflation rate will keep on easing as the impact of energy prices, increased in July 2013, phases out, and it will further pace down (to) the lower boundary of the confidence band most probably during the third quarter.”
In other words, Armenia’s Central Bank is gently warning that its economic indicators will worsen further before there is any sign of improvement.
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(News report from Issue No. 190, published on June 25 2014)