Tag Archives: economy

ADB cuts growth rates for the South Caucasus

JUNE 18 (The Bulletin) — The Asian Development Bank (ABD) joined other international finances institutions in cutting its expected growth rates for the economies of the South Caucasus because of the impact of lockdowns imposed to stop the spread of the coronavirus. It said that Georgia’s economy would now contract by 4.9%, Armenia’s would shrink by 3.5% and Azerbaijan’s by 0.1%.

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— This story was first published in issue 451 of the Central Asia & South Caucasus Bulletin, published on June 23 2020

— Copyright the Central Asia & South Caucasus Bulletin 2020

China wants to speed up BRI projects in Tajikistan post-Covid

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DUSHANBE/JUNE 17 (The Bulletin) — Tajikistan and China should speed up projects linked to the Chinese Belt and Road Initiative to counter the impact of an anti-coronavirus lockdown, media reported Chinese President Xi Jinping as saying to his Tajik counterpart, Rustam Emomali, in a telephone conversation.

The reported conversation will concern analysts in the West who say that China already treats Tajikistan, Kyrgyzstan and, to a lesser extent, the other Central Asian states, as vassal countries which are tied into its expansive Belt and Road Initiative.

It has handed out billions of dollars in soft loans over the past decade in return for influence and business contracts.

In May, Kyrgyz President Sooronbai Jeenbekov asked China for debt relief to help it deal. Instead, Beijing stepped up consignments of protective equipment and aid, a strategy that some analysts described as “photogenic”.

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— This story was first published in issue 451 of the Central Asia & South Caucasus Bulletin on June 23 2020

— Copyright the Central Asia & South Caucasus Bulletin 2020

Thousands of Tajik workers return home

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DUSHANBE/April 5 (The Bulletin) — Thousands of Tajik workers have returned early from jobs in Russia because of a lockdown triggered by the spread of the coronavirus, threatening to undermine the Tajik economy which is one of the most remittance-reliant economies in the world.

An estimated 500,000 Tajiks work in Russia – labouring on building sites, selling roses at train stations, cleaning streets and other menial jobs – and they send home the equivalent of around a third of Tajikistan’s annual GDP. The numbers are similar for Kyrgyzstan.

Economists have said that the combined drag of the coronavirus pandemic and a crash in oil prices may tip Russia into a recession.

The last time the Russian economy contracted, in 2015, the knock-on effect to the Tajik economy was significant.

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Azerbaijan failed to highlight impact of the coronavirus

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APRIL 5 (The Bulletin) — Azerbaijan’s government has been quiet on the impact of the coronavirus pandemic on its projected growth figures for 2020. It has unveiled a multi-million dollar aid programme to help businesses get through the economic downturn and has also set up a fund which is being supported by government agencies and large private companies such as banks.

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Coronavirus undermines region’s projected growth

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ALMATY/April 5 (The Bulletin) — The coronavirus will undermine what had looked like a strong year of economic growth in 2020 and instead knock the Central Asia and South Caucasus region into a recession.

Of the six countries in the region that have declared states-of-emergencies and infections of the coronavirus, only Kazakhstan has officially said that its economy will shrink in 2020 but analysts expect others to follow.

Kazakh economy minister Ruslan Dalenov said on April 2 that the combined impact of the coronavirus and a fall in oil prices mean that Kazakhstan’s economy will shrink by 0.9% in 2020.

Oil is Kazakhstan’s main export and with prices dropping by 40% to around $35/barrel because of a price war and a drop in demand triggered by the spread of COVID-19, the disease caused by the coronavirus, Mr Dalenov said oil exports would fall.

“A decrease is also expected compared to previously approved growth rates in the manufacturing industry, agriculture, construction and the services sector, including trade,” he said.

Kazakhstan had previously predicted GDP growth of 4.5% for 2020. It last went into a recession in 2016 after a previous oil price collapse.

In Armenia, the Central Bank is still predicting GDP growth this year but only of 0.7%, down from an earlier prediction of 7.6%.

Other countries have held off giving predictions on the economic cost of the spread of the coronavirus although they have all said that their original growth estimates are likely to be heavily reduced.

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Central Asia and the South Caucasus tighten coronavirus lockdowns

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YEREVAN/April 5 (The Bulletin) — Battling to stop the spread of the coronavirus, governments in Central Asia and the South Caucasus intensified lockdowns that ban people from leaving their homes.

At least 17 people have died across the region with the COVID-19 disease caused by the coronavirus, although analysts think the real figure could be many more. Health ministries and international donors are now worried that the region’s underfunded and under-resourced hospitals and health systems will buckle if there is a surge in infections.

On March 26, Armenian deputy PM Mher Grigoryan appeared to betray his nervousness about whether Armenia’s health service could cope with rising infections.

“We have an obvious problem, which is outstanding everywhere else in the world and it is important to solve here in Armenia,” he was quoted as saying. “It is the modernisation and re-equipment of the healthcare system. Here, too, we must take measures.”

In the region, only Tajikistan and Turkmenistan have not reported any infections, to the derision of observers who think it is unlikely that either country has escaped the coronavirus that has been ripping across the world since it appeared in central China in December.

Armenia and Kazakhstan have been worst hit by the coronavirus, with 822 and 569 people infected by April 5, but Kyrgyzstan appears to be most vulnerable economically. Kyrgyz President Sooronbai Jeenbekov has already asked for emergency financial support from the IMF.

As for the intensified lockdowns, the Kazakh authorities have told people that they can only leave their homes every other day and in Azerbaijan people have to notify the police via an app or an SMS if they are going out onto the street.

In Armenia, where PM Nikol Pashinyan had only a few weeks ago said that the coronavirus could easily be beaten, the government has ordered all businesses, restaurants and cafes to close until at least April 10.

He has been criticised for holding referendum campaign rallies in March that may have contributed to the spread of the coronavirus.

“Compared to Azerbaijan and Georgia, our corona infection stats are higher. Am I the first to say that the reason for this is the referendum campaign?” said Samvel Grigoryan, a public health analyst.

A referendum on the status of the country’s top judges had been set for April 5. This has now been postponed.

Armenia’s government has said that the rate of infection is slowing, but people told The Bulletin’s correspondent that they are worried.

“We need to obey,” said Margarita Aghayan, 56, who is confined to her two-room apartment in a Yerevan suburb with her husband, her daughter and granddaughter.

“I feel very scared. I feel horror. I am scared of the people who don’t take this seriously.”

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Economists say the panemic will knock the Tajik economy

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APRIL 5 (The Bulletin) — Tajikistan has not reported any cases of the coronavirus and has not placed any of its cities under a lockdown but economists have said that it will still be one of the worst affected economically.

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Kyrgyz pilgrims blamed for spreading the coronavirus

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JALA-ABAD,Kyrgyzstan/April 5 (The Bulletin) — Resentment is building in south Kyrgyzstan towards groups of pious Muslims who are accused of bringing the coronavirus into the country.

Officials have said that in mid-March infected pilgrims returning from the Hajj to Mecca in Saudi Arabia and members of the Tablighi Jamaat religious organisation, who had visited Pakistan and India, ignored orders to self-isolate. Instead they celebrated their return with a series of feasts, spreading the coronavirus.

South Kyrgyzstan is now the epicentre of the coronavirus outbreak in the country. More than half of Kyrgyzstan’s 149 coronavirus infections are in the region and in the small town of Nookat, south of Osh, where many of the pilgrims lived, two people have died with the COVID-19 disease caused by the coronavirus. A strict lockdown has been imposed on Osh and Jala-Abad, the region’s two main cities, and the villages that orbit them. Bishkek has also been placed under a lockdown.

Anastasia, a resident of the village of Blagoveshchenka near Jala-Abad, said that she has been unable to work as a shop cashier since the lockdown was imposed.

“People are very angry at the pilgrims who brought this infection to us,” she said. “Now, like everyone, I just have to sit at home and probably have to get into debt.”

Since the state-of-emergency was announced, the streets of Osh and Jala-Abad have emptied. A Bulletin correspondent said that these rules are being tightened every day and that a person on the street without official permission and a passport can now be arrested.

Some people are not merely frustrated with the pilgrims for bringing the coronavirus into Kyrgyzstan, they are also suspicious of the authorities’ motives for the harsh lockdown.

Bolotbek, works as an IT specialist in a state institution in Jalal-Abad, and lives in the village of Bazar-Korgon, 30km from the city. He said that he has been placed on unpaid leave.

“I see it as an attempt to strengthen control over people, following the example of China,” he said. “Of course, the epidemic must be fought, but not by the same harsh measures. Soon people will begin to starve if they do not lift quarantine.”

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Kazakhstan cuts its interest rate to help business deal with the coronavirus

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APRIL 3 (The Bulletin) — Having increased its key interest rate to 12% from 9.5% last month to try to prop up its ailing currency against the dual impact of a collapse in oil prices and the spread of the coronavirus, Kazakhstan’s Central Bank slashed it back down to 9.5%.

It said that the interest rate cut was needed to help businesses emerge intact from the economic fallout of the coronavirus pandemic.

Kazakhstan has also been one of the first countries in the region to admit that its economy may contract after the shock of the pandemic.

Kazakhstan’s deputy finance minister Berik Sholpankulov said that the government would borrow $3b on foreign capital markets to fund economic recovery projects which include a massive state-sponsored construction spree that will employ thousands of people.

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Armenia says the coronavirus will wipe out any potential GDP growth

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APRIL 2 (The Bulletin) — Armenia’s economy minister, Tigran Khachatryan, said that the coronavirus will wipe out any previously projected economic growth this year.

Economists had been predicting another strong year of growth for Armenia with a GDP rise of around 7.5% but it has been hit hard by the spread of the coronavirus – with 822 infections, the highest in the region – and COVID-19, the disease caused by the coronavirus.

The Armenian Central Bank has also said that economic growth will slow to 0.7% in 2020, but Mr Khachatryan, the economy minister, said that it was too early to even predict this level of growth.

“We believe that in 2020 there will be a significant reduction in economic indicators as opposed to optimistic forecasts made at the beginning of the year,” he was said.

Fitch, the ratings agency, warned that the economic fallout from the coronavirus will damage Armenia’s banking sector and increase the ratio of nonperforming loans. It also said the government’s current account deficit would increase from 1% of GDP to 5%.

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— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin