Tag Archives: economy

Azerbaijan’s President dismisses tax code

FEB. 10 2016 (The Conway Bulletin) – Azerbaijani President Ilham Aliyev refused to sign into law a bill that would have imposed a 20% tax on all foreign currency investments, media reported, an apparent U-turn on a much-heralded government strategy unveiled last month to head off a worsening currency crisis. Azerbaijan’s currency lost around half its value in 2015 and the Central Bank has been under pressure to stop businesses cashing out of manat into other currencies. By refusing to sign the bill, though, Mr Aliyev is effectively saying that law- makers and the Central Bank have to re-think their policies.

ENDS

(News report from Issue No. 267, published on Feb. 12 2016)

IMF says Azerbaijan is well placed to deal with economic downturn

FEB. 3 2016 (The Conway Bulletin) – The IMF said it would increase technical support to Azerbaijan after a week-long mission that focused on whether or not to give an emergency loan to help Baku ride out worsening economic conditions.

Concluding its trip to Baku, the IMF mission also said the government was well-placed to deal with the economic downturn.

It made no mention of a potential $4b emergency loan that media had previously reported was being negotiated.

“Looking ahead, economic growth and balance of payments pressures are likely to remain major challenges for the authorities in the near term,” the IMF said in a statement.

Azerbaijan’s economy is reliant on oil exports. Its currency has fallen by a third in the past month, inflation is speeding up and discontent is rising.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Kazakh President tells people not to panic

JAN 29 2016, ALMATY (The Conway Bulletin) — At a televised conference for his Nur Otan political party, a stony faced Kazakh President Nursultan Nazarbayev played down a 50% drop in the value of the tenge currency and told viewers to look at the economic positives.

Mr Nazarbayev likes to act the elder father figure during times of economic and political strife in Kazakhstan and with oil prices at a 12- year-low, government spending being cut and inflation rising, Mr Nazarbayev clearly thought it was time to calm the increasingly jittering nerves of his countrymen.

“We have been living with $30 per barrel oil for half a year now and nothing has happened. We will overcome (this) and maybe we should get used to this, I think it has come here to stay,” he told the 2,000 assembled delegates.

Kazakh officials know that they are treading a thin line and are eager to head off any sign of discontent.

In Azerbaijan, unease at the economic malaise triggered several clashes between protesters and police in regional towns last month but in Kazakhstan, the authorities have been able to dampen public frustration.

Judging the public mood — when to be firm and when to be conciliatory — is a key skill during this time of economic hardship and one that Mr Nazarbayev has previously shown that he is adept at.

Last month, Mr Nazarbayev called a parliamentary election for March, 18 months early. Analysts said that this had been arranged so that Mr Nazarbayev and his officials could hold an election now, before the economic situation worsened further.

At the Nur Otan conference, though, Mr Nazarbayev avoided mention of the election and instead told Kazakhs that the government was working hard to look after them.

“We support our working population through implementation of the Employment Roadmap-2020 Program. There is no place for unemployment in Kazakhstan. We have all resources in place to avoid it,” he said.

Official unemployment figures in Kazakhstan are considered unreliable. Correspondents in Kazakhstan, though, and reports from various regional towns suggest that people are losing their jobs.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Inflation increases in Georgia

FEB. 3 2016 (The Conway Bulletin) – Annualised inflation in Georgia rose to 5.6% at the end of January, the state’s statistics agency said, an increase from 4.9% in December. Inflation increased steadily in Georgia last year hitting 6.3% in November, fuelled by a drop in the value of the Lari currency, until it dropped off slightly. By comparison, in January 2015, annualised inflation had been 1.4%.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Kyrgyzstan imposes fines for USD

FEB. 3 2016 (The Conway Bulletin) – Kyrgyzstan’s anti-monopoly said it would start to impose fines against shops, companies and people selling products in US dollars rather than the local som currency. The new rules appear designed to boost the use and the strength of the Kyrgyz som. The som has lost around a third of its value.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Kazakh mortgage holders protest

FEB. 2 2016 (The Conway Bulletin) – Around 50 mortgage holders protested in Almaty because they said it was not possible to repay their debt after a devaluation of the tenge. This was the third protest by mortgage holders against banks this year, a rare sustained level of public discontent in Kazakhstan. The tenge has lost around 50% of its value. Last year, the Kazakh government gave banks $130m to refinance mortgages but protesters have said that more needs to be done. Analysts have said that one of the biggest issues the Kazakh government faces is growing consumer debt.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Kyrgyz business blames EEU for poor outlook

FEB. 5 2016, BISHKEK (The Conway Bulletin) — Frustrated Kyrgyz businessmen and company owners are blaming a worsening economy on joining the Russia-led Eurasian Economic Union (EEU) last year.

The criticism of the EEU, whether it is accurate or not, is a major problem for Kyrgyzstan’s leadership which dragged the country into the trade bloc despite deep-rooted unease from ordinary Kyrgyz. Also in the EEU are Russia, Kazakhstan, Belarus and Armenia.

In Bishkek, Azamat, who was selling cars, said Kyrgyzstan had aligned itself with the wrong countries.

“While we are in the Customs Union we will have nothing to develop,” he said.

The Customs Union is the old name for the EEU, which analysts have said was dreamt up by the Kremlin to extend its political control.

Western sanctions and a collapse in oil prices have tipped Russia’s economy into a recession. It has cancelled overseas projects, including a hydropower plant in Kyrgyzstan, and remittance flows from Kyrgyz workers in Moscow have fallen by around 40%. Inflation is rising in Kyrgyzstan and economic growth rates are being cut – a familiar story across the region.

Emil Umetaliev, a former Kyrgyz economy minister who now owns a travel company, told The Conway Bulletin that the EEU has been a major hindrance to small and medium sized companies, rather than the help that had been promised.

“The Eurasian economic union tends to organise countries’ interdependence on resources,” he said. “It does not encourage small and medium enterprises to develop and does not have a friendly investment climate.”

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Exchange booth volumes in Kazakhstan

JAN. 29 2016 (The Conway Bulletin) – The volume of sales of US dollars at kiosks in Kazakhstan rose by $600m in December to $1.7b, media quoted government data as showing. The data underlines the lack of confidence that Kazakhs have in the tenge. It has lost half its value in the past 12 months, a drop linked to a fall in oil prices. The 52% rise in US dollar sales in December was likely due to a sudden rise in tenge’s value.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Azerbaijan revokes another banking licence

FEB. 2 2016 (The Conway Bulletin) — Azerbaijan’s Central Bank revoked the licence of Texnikabank, one of the country’s largest lenders, and handed back a licence to NBCBank after it said it was looking at a possible merger with a bigger rival.

The moves are part of a wider plan by the Azerbaijani Central Bank to tighten and strengthen Azerbaijan’s commercial banking sector.

The Central Bank said Texnikabank, one of Azerbaijan’s 10 largest banks by assets, did not comply with the minimum capital requirement of 50m manat ($31.3) and the capital adequacy ratio. Texnikabank became the seventh bank in Azerbaijan to lose its licence in the past few weeks.

It later handed NBCBank back its licence after it said that it had entered into negotiations with KredoBank and ParaBank about a possible merger.

Another commercial bank, Caucasus Development Bank, said it intends to merge with Gunay Bank and Atrabank.

Azerbaijan is trying to deal with the fallout from a sharp drop in the price of oil, its main export. This has hit its economy and its currency, the manat, putting increasing pressure on the banking sector.

There are currently 37 commercial banks operating in Azerbaijan.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Kyrgyz CBank should cut spending, says IMF

FEB. 4 2016 (The Conway Bulletin) – Kyrgyzstan’s Central Bank needs to slow its interventions in the currency market in order to avoid depleting its reserves, the IMF said at the end of a mission to Bishkek. The IMF had been on a fact-finding mission ahead of a meeting in April when Kyrgyzstan hopes to extend its borrowing. Its Central Bank has been buying som heavily to support its value.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)