JUNE 2 2014 (The Conway Bulletin) -Rumours of another devaluation of the tenge triggered a spike in demand for dollars, media reported. The buying of dollars forced Kazakh Central Bank chief Kairat Kelimbetov to step in and deny that another tenge devaluation was planned. Kazakhstan devalued the tenge by 20% earlier this year.
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(News report from Issue No. 187, published on JUNE 4 2014)
JUNE 2 2014 (Conway Bulletin) – Kazakhstan intends to build a centre for Islamic finance in Almaty, Central Bank chief Kairat Kelimbetov said. Mr Kelimbetov said the centre would be modeled on the City of London and offer potential investors tax and visa benefits.
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(News report from Issue No. 187, published on June 4 2014)
MAY 29 2014 (The Conway Bulletin) -The International Bank of Azerbaijan (IBA) started promoting its Eurobond issue. IBA plans to issue between $350m and $500m of Eurobonds. Azerbaijan’s ministry of finance owns 50.2% of IBA. The Eurobond sale will indicate investors’ appetite for Azerbaijan.
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(News report from Issue No. 187, published on JUNE 4 2014)
MAY 29 2014 (The Conway Bulletin) – Investors holding bonds in Kazakhstan’s Alliance Bank rejected a restructuring deal, Reuters reported. This would have been the second restructuring deal in four years for the bank that was effectively nationalised in 2009 during the global financial crisis. A new deal will have to struck to re-structure the debt.
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(News report from Issue No. 187, published on JUNE 4 2014)
MAY 31 2014 (The Conway Bulletin) – Consumer prices in May fell by 0.8% compared to April, media reported. Food price deflation was the main driver of the overall drop, the national statistics office reported. It did not explain why food prices had dropped. Overall year-on-year inflation for end- April was 3.6%.
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(News report from Issue No. 187, published on JUNE 4 2014)
JUNE 3 2014 (The Conway Bulletin) -Annualised inflation in Georgia slipped back to 2.4% in May, its slowest rate this year, the national statistics agency reported. Compared to April, average prices dropped by 0.3%. Food prices dropped 1.7%. Georgia’s Central Bank is concerned about a generally slowing economy.
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(News report from Issue No. 187, published on JUNE 4 2014)
MAY 29 2014 (The Conway Bulletin) – At a ceremony in Astana, Russian President Vladimir Putin, Kazakh President Nursultan Nazarbayev and Belarusian President Alexander Lukashenko signed into existence the Eurasian Economic Union (EaEU).
The EaEU is the successor of the Customs Union and is designed to further integrate its members’ economies. The rhetoric has been of high praise for the EaEU but the reaction on the street has been markedly different, as a correspondent for The Bulletin discovered in Almaty.
Berik, a 35-year-old office worker wasn’t even sure of the treaty. “Who are the parties involved?” he said. “Belarus and Russia. I’m not sure, with them it could go either way. It could either be a success or a failure.”
An ethnic Russian lady hurrying along the street also said she doubted the value of the group. “It would have been better if they had not signed the treaty,” she said.
Other people agreed. Most had either not heard of the EaEU or said they doubted it would be positive.
One of the few people to support the formation of the Eurasian Economic Union was Saken a 50-year-old man who worked in real estate. He said that Soviet era ties remained and that the union would be stronger than if countries pursued their own agendas.
“In the Eurasian Union we will welcome troubled countries like Kyrgyzstan and Armenia, who are not really as stable as we are, but we will definitely help them, with the same friendship we used to relate to each other during the Soviet era,” he said.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 187, published on JUNE 4 2014)
MAY 28 2014 (The Conway Bulletin) – Kazakhstan’s parliament passed the first reading of a bill that will give a tax amnesty for people willing to repatriate cash held in offshore accounts.
The amnesty is designed to boost the size of the legal economy.
Ardak Tengebayev, deputy finance minister, said the plan would bring much needed cash into the Kazakh economy.
“We expect a turnover of 2 trillion tenge ($11b) and we hope that this sum will be reintroduced into the country’s economy,” he said
A similar amnesty in 2006-07 pulled in assets of $7b.
Not everybody, though, thought the amnesty was a good idea. Viktor Yambayev, chief of the Almaty Association of
Entrepreneurs, said the plan was designed to help only the country’s rich.
“This amnesty doesn’t affect the majority of the population. Instead, it benefits government employees, monopolist companies, extractive industries,” he told a Bulletin correspondent.
An amnesty may draw in some, much needed, cash into the Kazakh economy but another problem, the divide between the rich and poor, is intensifying.
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(News report from Issue No. 187, published on JUNE 4 2014)
JUNE 2 2014 (The Conway Bulletin) – Armenia’s government is considering increasing electricity prices for the second year running.
Ara Simonyan, deputy minister for energy, made the omission after questions from parliamentarians who were trying to find out whether rumours of a price increase had any substance.
“The electricity tariffs are not frozen in Armenia and shall be reviewed from time to time. There is no certain decision at the moment,” he said.
Last year the state’s body for regulating electricity prices raised the cost of a kilowatt hour to 38 drams from 30 drams. Now, media has reported, the government is considering putting up prices by another 20% to around 45 drams.
This is important because rising utility prices stirs anger.
Armenians have already vented their frustration this year against proposed changes to the pension system, triggering the downfall of one government. The new government has said that it will look again at the proposed changes which would have meant that people have to put 5% of their income towards their state pension.
Mr Simonyan said hydroelectric stations were unusually dry last year meaning that less electricity was generated and that this meant prices had to rise.
Regardless, if the government does take the decision to increase electricity prices, it could generate public resentment.
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(News report from Issue No. 187, published on JUNE 4 2014)
MAY 23 2014 (The Conway Bulletin) – Following the European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB), the Islamic Development Bank (IDB) pledged to lend Kazakhstan an extra $2b over the next three years. The deal was signed at the annual Astana Economic Forum.
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(News report from Issue No. 186, published on May 28 2014)