NOV. 25 2015 (The Conway Bulletin) – Georgia’s government unveiled plans to boost excise tax on cigarettes and alcohol by up to 50% to raise 90m lari ($37.5m). The tax rises have been triggered by a drop in receipts linked to an economic downturn.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 258, published on Nov. 27 2015)
NOV. 26 2015 (The Conway Bulletin) — In an attempt to revive old Soviet factories and boost industrial production, the Georgian government invested 4m lari ($1.7m) into a new company that will manufacture bottle caps. Geocap, set up under the Produce in Georgia state programme, opened its first factory this week. The government has invested over 350m ($146m) lari in industrial enterprises since the programme started in June 2014. Georgia’s drinks industry is growing and is becoming a major employer.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 258, published on Nov. 27 2015)
NOV. 23 2015 (The Conway Bulletin) – An internet video allegedly produced by the Islamic extremist group IS called on Muslims living in Georgia to overthrow the government and set up a caliphate.
Speaking in Georgian, a group of fighters brandishing Kalashnikovs and wearing Islamic headdress referenced Georgia’s involvement in the US-led wars in Iraq and Afghanistan.
“I would like to address the faithless people living in Georgia that have been fighting Islam for a long time. Everybody who has acted against Islam, no matter in Iraq or Afghanistan, will be judged by God’s law,” one of the fighters said.
“You consider yourselves to be very far from Caliphate, thinking we cannot reach Georgia but I would like to remind you of the period when Caliphate was established in Georgia.”
This is the first direct threat made by IS against Georgia.
The Georgian security services have warned that IS has stepped up its recruitment in Georgia, and specifically in the Pankisi Gorge in the north of the country, which is home to Muslim ethnic Chechens.
The day before the IS video surfaced, security forces said they had arrested a 29-year-old Georgian citizen living in the Pankisi Gorge on terrorism related charges. It has also strengthened border checks.
Georgia is an overwhelmingly Orthodox Christian country. It has been an enthusiastic supporter of US action in Iraq and Afghanistan. Georgia wants to join NATO and views its involvement in both wars as an extension of its diplomatic policy by showcasing its loyalty.
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(News report from Issue No. 258, published on Nov. 27 2015)
NOV. 18 2015 (The Conway Bulletin) – Has Tony Blair, the former British PM, found himself a new client? Speculation that he was now advising the Georgian Dream coalition government spiked after he flew to Tbilisi for dinner with Georgian PM Irakli Garibashvili.
Mr Blair’s business outfit, Tony Blair Associates, declined to comment but the Georgians were more keen to show off their much-feted visitor.
The PM’s website hosted a 1.58 minute long video showing Mr Blair and Mr Garibashvili enjoying the view, and a glass of wine, from a restaurant above Tbilisi before taking a funicular ride back down to the city.
The Georgian PM’s office described the meeting as a “working dinner”.
“Georgia’s democratic reforms, the situation in the world and the region, were the main topics of the meeting,” the PM’s office said without giving any more information. Perhaps the emphasis should be on “working dinner”. It’s likely that Mr Garibashvili would have paid for Mr Blair’s advice. Plenty of other leaders, including Kazakh President Nursultan Nazarbayev, have.
And Mr Blair’s wife, a lawyer, is also involved in Georgia. Her company, Omnia Strategy, has been advising the Georgian justice system. It’s unclear exactly what advice, Mr Blair imparted. Although influential, his reputation is generally accepted to have been stained by the 2003 war in Iraq that he pursued with US President George W. Bush. Still, Georgia is an avowed fan of Mr Bush. It has named a street after him, and was one of his biggest allies during the wars in Iraq and Afghanistan.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 17 2015 (The Conway Bulletin) — Swedish mobile provider TeliaSonera appointed the former head ofTcell, Tajikistan’s biggest mobile network provider, Mansur Khamidov to be a vice-president in charge of the Eurasia region. TeliaSonera is currently restructuring its operations and has said that it wants to sell its Eurasia companies, partly because of corruption allegations alleged against its Uzbek subsidiary. As well as Tajikistan, TeliaSonera owns mobile operations in Kazakhstan, Uzbekistan, Azerbaijan and Georgia.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 16 2015 (The Conway Bulletin) – Georgia’s producer price index (PPI) rose by 8.3% in the year to the end of October, the national statistics agency said, indicating that inflation is built into Georgia’s economy. The biggest pressure on prices over this period was from a 10% jump in electricity prices.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 20 2015 (The Conway Bulletin) — The Kazakh tenge was steady this week, trading at around 307.2/$1, off an all-time low against the US dollar of 311/$1 earlier in November.
There is still much speculation by analysts on just how monetary policy in Central Asia’s biggest economy is going to change under new Central Bank chief Daniyar Akishev. He said that inflation was too high and appeared to make this his priority.
With this in mind, expect another interest rate rise at the Central Bank’s policy meeting next month — if the policy wonks don’t cancel it again. There are, though, two urgent problems, it seems to me, with the Kazakh monetary policy. People don’t know what it is or whether it works.
The new key interest rate — overnight repo rates — was only introduced in September. It was raised in October to 16% from 12% and then ignored in November when the Central Bank cancelled its policy meeting at the last moment. Does this interest rate have any credibility? Does the market even care about it? It doesn’t appear to have had any effect so far.
And Mr Akishev appeared to acknowledge as much when he said that a fall in oil price would send the tenge tumbling further. Oil prices, outside the Kazakh Central Bank’s control, are the driver of tenge value and not its key interest rate.
In neighbouring Kyrgyzstan, the som currency did continue to set new records against the US dollar. It hit an all-time low on Friday of 72.5/$1 versus 71.9/$1 at the start of the week. On Oct 1, the som had been valued at 68.8/$1, meaning that it has lost over 5% of its value in the past seven weeks.
As the Bulletin reports in the main section of the newspaper, information coming out of Turkmenistan is that its manat currency has devalued and that the government has placed restrictions on the amount of cash people can withdraw from the banks. Earlier this month, The Bulletin also reported on the devaluation of the Uzbek soum.
Even staunchly controlled currencies are feeling the pressure, it seems.
And over in the South Caucasus, it is a similar story. Since its sharp 33% devaluation in February, the Azeri manat has been kept steady but analysts have increased chat of a need to devalue again.
Both the Armenian dram and the Georgian lari were steady through the week.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 19 2015 (The Conway Bulletin) – Envoys from Russia and Georgia met in Prague to continue a series of talks aimed at bringing the two neighbours closer. The meetings are an important part of the normalisation process and, since the Georgian Dream won power in 2012, have been considered successful .
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 20 2015 (The Conway Bulletin) — US fast food company Wendy’s opened a new restaurant in central Tbilisi, the largest in the world. Spread over three floors, the restaurant is part of a new strategy by Wendy’s to develop a concentrated presence in a handful of countries rather than spread too thinly across several different countries. In Georgia, Wissol Group own the Wendy’s franchise.Fast-food brands have earmarked Georgia as a growth market.
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(News report from Issue No. 257, published on Nov. 20 2015)
NOV. 16 2015 (The Conway Bulletin) – Remittances to Georgia in October were 27% lower, at $90m, than during the same month in 2014, the Central Bank reported, an indication of the regional economic malaise. Remittances from Russia had nearly halved.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 257, published on Nov. 20 2015)