Tag Archives: economy

Georgia to raise electricity prices

TBILISI, JAN 1 (The Conway Bulletin) — Electricity prices, a touchy issue in the South Caucasus, are due to rise again in Georgia, media reported.

The Georgian National Energy and Water Supply Regulation Commission (GNERC) approved the rise, asked for by power supply companies Telasi and EnergoPro Georgia, because of the cost of infrastructure upgrades.

The rise will be the second increase in electricity prices in Georgia in the past 2-1/2 years. One of the election promises of the ruling Georgian Dream coalition government in 2012, when it was voted into power, was to cut electricity prices.

From the start of the year, Tbilisi residents will now pay 1.56 tetris more per unit of electricity. In August 2015 the price was increased by 3 tetris.

In 2015, proposed electricity price rises in neighbouring Armenia triggered street protests that lasted weeks until the rises were dropped.

ENDS

— This story was first published on Jan. 5 2018 in issue 356 of The Conway Bulletin

Hundreds of finance ministry staff sacked for corruption in Uzbekistan

Leave a Reply

DEC. 27 (The Conway Bulletin) — Uzbekistan sacked 562 staff from its finance ministry in a corruption purge that appears designed to show off President Shavkat Mirziyoyev’s determination to root out bribe-taking. Reuters reported that Mr Mirziyoyev had described the finance ministry staff accused of corruption as “rats”.

ENDS

— This story was first published on Jan. 5 2018 in issue 356 of The Conway Bulletin

Comment — Bugs are destroying Georgia’s harvest

Leave a Reply

SEPT. 24 (The Bulletin) — Farming in Samegrelo, Western Georgia, in the last months has been ravaged by a new pest, the brown marmorated stink bug.

The bug attacks hazelnut and fruit trees, feeding off their leaves. Precise numbers are not yet in, but many farmers report that they lost their entire crop. One hazelnut factory in Zugdidi says that while last year they processed 300 tonness of hazelnut per month, they are now down to 50 tonness. Many people have said more than 60% of the harvest has been lost.

The loss is likely to have grave consequences. One farmer reported that his neighbours would struggle to buy food, as their only major source of income had been wiped out. Thousands of families in Samegrelo are affected. Hazelnut, too, previously was Georgia’s largest agricultural export. One Georgian businessman said Georgia will export $66m of hazelnut this year compared with $166m in the bumper year of 2016. Corn has been hit, too.

The mood in Samegrelo is grim.

People are protesting. Farmers and opposition activists say that they had warned since April, but that the government only started spraying program on June 21, after most experts had concluded that this year’s crop was lost.

The crisis has showcased the structural weaknesses of the Georgian Dream government — the reaction was sluggish. The spraying was haphazard, and in part done before rainy days, which washed out the pesticide, a mistake they could have avoided by consulting a specialised forecast, according to an expatriate agronomist. In this context, too, local protesters say that it does not help that the 6,000 employees of the Ministry of Agriculture primarily are rural activists of the Georgian Dream. The ministry has not proven to be an apparatus that can conduct an effective containment campaign.

The bug is reported to have crept in from Sochi, as an invasive species that came with building materials for the 2014 Winter Olympics and people on social networks now are discussing the arrival of the bug in Tbilisi.

If the government does not stem its advance in the next year, the consequences could be severe.

>>Paul Scott is a pseudonym for a Georgia and South Caucasus analyst

ENDS

— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Kazakhstan increases manufactured goods exports

Leave a Reply

SEPT. 21 (The Bulletin) — Kazakhstan has increased exports of manufacturing goods by 28% in the first six months of the year compared to the same period last year, media quoted development minister Zhenis Kasymek as saying. One of the biggest boosts to the $7.5b worth of manufacturing exports was from the car industry. Lada Niva, which makes cars in Oskemen, started exports to China and the UAE.

ENDS

— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Veon says devalued Uzbek soum has cost it “hundreds of millions of doillars”

Leave a Reply

TASHKENT/SEPT. 21 (The Bulletin) — Veon, the New York-listed Amsterdam-headquartered telecoms company formerly called Vimpelcom, said that that the liberalisation and devaluation of the Uzbek soum had cost it hundreds of millions of dollars.

Earlier this month, the Uzbek government scrapped a US dollar peg for the Uzbek soum, allowing it to lose half its value. The move was generally applauded as necessary to modernise Uzbekistan’s economy and for giving foreign investors clarity but businesses already entrenched in Uzbekistan said there would be a cost.

Veon, which operates the Unitel subsidiary in Uzbekistan under the Beeline brand, said there were advantages in the long-run but that, in the short term, profits were lower.

“Under these liberalized exchange rules, Veon may in the longer term be able to more effectively repatriate cash from Uzbekistan,” it said in a statement.

“[But] as a result [of the devaluation], Veon expects annualised decreases in revenues of $300-350m and in underlying EBITDA of $175-225m.” These comments are important as they come from a company already doing business in Uzbekistan.

Veon has previously been fined for paying a bribe to a company ultimately owned by the daughter of Uzbek president Islam Karimov for market access to Uzbekistan in 2007/8.

Sweden’s Telia and Norway’s Telenor have also been fined for paying bribes in Uzbekistan.

ENDS

— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Economic activity rises in Armenia

Leave a Reply

SEPT. 20 (The Bulletin) — Armenia’s economic activity index showed a rise of 5.5% between Jan. and Aug. compared to the same period in 2016, the National Statistics Agency said. The index is considered the most important index to watch for business sentiment in Armenia.

ENDS

— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Kazakhstan says it will issue an Islamic bond next year

Leave a Reply

SEPT. 17 (The Bulletin) — Kazakhstan will issue an Islamic sovereign bond, or sukuk, next year, media quoted President Nursultan Nazarbayev as saying. He said that the sukuk would be worth $300m. Kazakhstan has been talking up the prospect of issuing another sukuk for years. It issued its first one, worth $57m, in 2012.

ENDS

— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Azerbaijan increases exports of non-oil products

Leave a Reply

SEPT. 16 (The Bulletin) — Azerbaijan increased exports of non-oil products in the first eight months of the year by 30%, deputy economy minister Sahil Babayev was quoted by media as saying at a press conference. He said that agriculture exports had increased by 37% and industrial products by 25.4%. Azerbaijan has been looking to increase the status of non-oil products in its economy.

ENDS

— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

BP-led consortium signs deal to extend ACG licence

Leave a Reply

SEPT. 14 2017 (The Conway Bulletin) — A consortium lead by BP signed a deal to extend its operation of the Azeri-Chirag-Guneshli (ACG) fields in the Azerbaijani section of the Caspian Sea, an agreement originally dubbed the “Contract of the Century” in 1994.

Under the new deal, BP and its partners will run ACG, Azerbaijan’s biggest producing oil fields, until 2050. The original contract was due to expire in 2024.

Negotiations for a renewed deal had been ongoing all year and despite each side’s frustrations with the other, an agreement had always been likely.

At the signing ceremony in Baku, Bob Dudley, the BP CEO, said: “Over the past 23 years the ‘Contract of the Century’ has truly transformed Azerbaijan, energy supplies to Europe and all of us who have worked so hard to make it a success. Today’s contract is perhaps an even more important milestone in the history of Azerbaijan.”

SOCAR chairman Rovnag Abdullayev was equally exuberant.

“Today is a significant day for Azerbaijan,” he said. “Since the signing of the first PSA in 1994, ACG has benefited from $33bn of investment, producing around 440 million tonnes of oil, and delivering directly more than $125bn of net profit to our country.”

For Azerbaijan, this second operating agreement for ACG is much improved from the original. SOCAR, the Azerbaijan state oil and gas company, increased its stake in the project to 25% from 11.65%. The Azerbaijani government, strapped for cash in the midst of an economic downturn, will also receive a one-off $3.6b payment.

For BP, securing an extension to the agreement was vital. ACG forms a major part of its reserves and income. Its share in the project has been cut to 30.37% from 35.8%. Its partners, other than SOCAR, have also had to agree to an equity cut to secure a new deal on ACG.

Chevron now owns a 9.57% sake, Inpex 9.31%, Statoil 7.2%, ExxonMobil 6.79%, TPAO 5.73%, Itochu has 3.65% and ONGC Videsh holds 2.31%.
Relations between Azerbaijan and the BP-led coalition have become increasingly fraught over the past few years.

Azerbaijan has been frustrated that BP hasn’t been able to stem a drop in production at the site and BP executives have become increasingly exasperated at the negative headlines surrounding Azerbaijan, which has been accused by the West of clamping down on the media and of various corrupt practices.

ENDS

— This story was first published in issue 343 of The Conway Bulletin on Sept. 15 2017

Uzbekistan to scrap excise duties on several products

Leave a Reply

SEPT. 10 2017 (The Conway Bulletin) — In line with a general liberalisation policy, the Uzbek authorities said that they were scrapping excise duties on several imported products. These included natural resin, wire of non-alloy steel, non-woven fabric, drops and solutions for contact lenses, video recording equipment and other products, Azerbaijan’s Trend news agency reported.
ENDS

— This story was first published in issue 343 of The Conway Bulletin on Sept. 15 2017