MAY 26 2014 (The Conway Bulletin) – The Eurasian Development Bank, set up to fund projects in Eurasian Economic Union (EEU) member states, agreed to lend Kyrgyzstan $20m to develop its agriculture, media reported. The EEU will replace the Customs Union which comprises of Kazakhstan, Russia and Belarus. Kyrgyzstan aims to join later this year.
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(News report from Issue No. 186, published on May 28 2014)
MAY 22 2014 (The Conway Bulletin) – Uzbekistan aims to keep economic growth at between 7% and 8% per year for the next four years, media reported quoting material from a business forum in Tashkent. Economic data from Uzbekistan should be treated with scepticism. Uzbekistan has been looking to develop its hi-tech sector.
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(News report from Issue No. 186, published on May 28 2014)
MAY 22 2014 (The Conway Bulletin) – The shadow economy in Kyrgyzstan is worth around 40% of the country’s economy, media quoted PM Djoomart Otorbayev as saying. He said agriculture was particularly affected and that he wanted to change this to bolster tax receipts. The figure highlights the complexity of managing the Kyrgyz economy.
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(News report from Issue No. 186, published on May 28 2014)
MAY 28 2014 (The Conway Bulletin) – Armenia’s Central Bank dropped growth rate predictions for 2014 by around a fifth mainly because of a slowdown in Russia’s economy.
All the Central Asian and South Caucasus countries are vulnerable to a slowdown in Russia’s economy but Armenia has perhaps been the first to warn publicly of the impact.
It said economic growth this year would now be between 4.1% and 4.8%, down from an earlier prediction of between 5.4% and 6.1%. Russia is by far Armenia’s biggest trading partner and Yerevan has been looking to join the Russia- led Customs Union to cement this relationship.
But sanctions imposed by the EU and US because of Russia’s annexation of Crimea from Ukraine earlier this year have impacted its economic growth and the domino effect means that this has weighed on economies across the former Soviet Union.
Russia owns much of Armenia’s businesses, supplies its gas and is a magnet for seasonal labourers from Armenia who generate an important remittance flow.
Armenia’s Central Bank also said a delayed copper mine and a weak tax regime also hindered economic growth rates.
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(News report from Issue No. 186, published on May 28 2014)
MAY 27 2014 (The Conway Bulletin) – Looking to boost production in the long run, Turkmenistan’s government said it would set up a state commission to improve the growing and transportation of cereal crops, media reported. Turkmenistan has grown increasingly rich from its gas exports. Cereal crop production has also grown.
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(News report from Issue No. 186, published on May 28 2014)
MAY 27 2014 (The Conway Bulletin) – TBC Bank is aiming to be the second Georgian company to list on the stock exchange in London. It named a price range for its shares at its proposed IPO at the end of June of between $13 and $16.
This is an important IPO for Georgia and the wider former Soviet Union. For Georgia, TBC Bank will be the first IPO since the end of Mikheil Saakashvili’s era as president. For the wider former Soviet Union, it will test investors’ appetite for buying into the region while the conflict in Ukraine appears to be worsening.
Rival Bank of Georgia floated on the London Stock Exchange in 2006 and is now part of the FTSE-250.
TBC Bank, valued at nearly $800m, aims to float around 50% of its stock in the IPO. It is the biggest bank in Georgia in terms of retail deposits, with a 33% share of the market.
The TBC floatation will also be a test of how investors view the Georgian economy. It has improved over the last year, partly because relations with Russia have improved, but there are still plenty of weaknesses. Inflation is still stubbornly low and direct foreign investment, so important, is taking some time to pick up again.
Still, with the South Caucasus’ status as a transit region for cargo and energy products between the Caspian Sea and Europe growing, Georgia has experienced an economic re-bound.
The TBC IPO at the end of June will be a good indication of how investors feel about the region.
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(News report from Issue No. 186, published on May 28 2014)
May 14 2014 (The Conway Bulletin) – Georgia will start building a deep water port on its Black Sea coast to cope with an expected surge in cargo being transported across the South Caucasus and on to Europe.
Georgian PM Irakli Garibshvili appeared to slip in news of the planned construction, almost casually, during comments he made at a Georgia-France business forum.
“We expect that Georgia’s demand for transport and logistics will increase,” the Trend news agency quoted Mr Garibashvili as saying.
“Therefore, we have decided to construct a deep-sea port in the Black Sea (Anaklia), to better serve the rapidly growing business in transportation and warehousing sectors.”
There has been something of an infrastructure boom across the South Caucasus.
The Baku-Tbilisi-Ceyhan pipeline pumps oil from the Caspian Sea to Turkey, generating revenue for the transit countries and plans for more pipelines will also push up earnings.
What Mr Garibashvili was talking about though is physical cargo transported from the Caspian Sea to the Black Sea. Azerbaijan, Georgia and Turkey have combined to modernise the co-called Baku-Tbilisi-Kars railway. This is predominantly a trade route used to transit goods. Although it doesn’t finish in Anaklia it will still benefit the port town just north of Poti.
Increased trade across the South Caucasus is set to give Georgian industry a much needed boost.
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(News report from Issue No. 185, published on May 21 2014)
May 19 2014 (The Conway Bulletin) – Halyk Bank, the second largest bank in Kazakhstan, said its profit in the first three months of the year had almost doubled. Importantly, Halyk said much of this profit increase was due to a fall in the amount of poor loans on its books, an issue Kazakh banks have been grappling with since the 2008/9 economic crisis.
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(News report from Issue No. 185, published on May 21 2014)
May 20 2014 (The Conway Bulletin) – Tajikistan and Afghanistan are discussing setting up economic free zones, media reported after a meeting between their economy ministers in Dushanbe. Although no agreements were signed, this is a sign that Central Asian states want to incorporate Afghanistan into their economic area.
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(News report from Issue No. 185, published on May 21 2014)
May 19 2014 (The Conway Bulletin) – Industrial production in Azerbaijan increased by 5.1% in the first 4 months of the year, the state stats committee reported. The data is more good news for Azerbaijan’s economy. Last month, the Central Bank cut interest rates to its lowest level for three years.
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(News report from Issue No. 185, published on May 21 2014)