Tag Archives: government

Georgian Central Bank challenges budget plans

TBILISI, JULY 7 2015 (The Conway Bulletin) — Georgia’s Central Bank scorned as inadequate the government’s plan to cut spending in the face of a region-wide economic downturn.

The statement will increase tension between the Central Bank and the Georgian Dream Coalition government which have become embroiled in a row about oversight of commercial banks.

Central Bank chief Giorgi Kadagidze, who was appointed by the former government of President Mikheil Saakaashvili, and his allies have said the government’s criticism of him is politically motivated.

“Expenditures should be cut mostly at the expense of current spending,” the Central Bank said in a statement. “If the goal of the Parliament is to ease the loan burden caused by lari depreciation or to offset further downward pressure on lari, appropriate changes should be made in the [budget], which are not envisaged by the proposed draft of the budgetary amendments.” This is rare criticism.

Last month MPs voted to cut spending across different ministries. The lari has lost just over a quarter of its value since November 2014.

ENDS

(News report from Issue No. 239, published on July 9 2015)

Azerbaijani oil fund starts buying Chinese yuan

JULY 3 2015 (The Conway Bulletin) – Azerbaijan’s State Oil Fund, or SOFAZ, said that it had bought $500m worth of Chinese yuan, part of a policy to diversify its assets.

The purchase will also endear Azerbaijan to China, another unsaid reason for SOFAZ to buy yuan. China has been boosting its interest in the South Caucasus over past few years and Azerbaijan is looking for more allies.

“In order to further broaden and diversify the currency basket, SOFAZ has started making investments in Chinese Yuan,” SOFAZ said in a statement on their website.

And that wasn’t all. SOFAZ said it was looking at further exposure to China.

“Going forward, SOFAZ is planning to gain exposure to Chinese equity markets,” it said.

Azerbaijan’s oil fund is important because at $37b it is one of the biggest investment funds in the world. Its mission is to act as a social fund for the government to dip into in special circumstances and to fund large infrastructure projects.

It has begun to diversify its investments and, over the past couple of years, has built up a property portfolio in Europe and Asia.

It has been planning to buy into China ostentatiously to further diversify its investments.

ENDS

(News report from Issue No. 239, published on July 9 2015)

Rakishev buys another stake in Kazkommertsbank

JULY 3 2015 (The Conway Bulletin) – Kenes Rakishev bought an additional 2.61% stake in Kazkommertsbank from its founder and former chairman Nurzhan Subkhanberdin, further strengthening the Kazakh elite’s grip on one of the country’s largest banks.

The share purchase gives the 35-year-old Mr Rakishev, who is regarded as a trustee for more powerful members of the Kazakh elite and is best known for helping to buy a house in England from Prince Andrew in 2008, a 25.84% stake in the bank.

Samruk-Kazyna, Kazakhstan’s national welfare fund, owns 10.7% of the bank and an investment company called Alnair, which is also close to the Kazakh elite, owns a 28% stake in it.

The London-based Mr Subkhanberdin still controls around 32% of the bank but he has been gradually pushed out of Kazkommertsbank this year. His stake in the bank has dwindled and in March he was ousted as chairman.

Mr Subkhanberdin’s mistake had been to flirt with supporting Kazakhstan’s opposition.

In 2009 he wrote an open letter to Kazakh President Nursultan Nazarbayev questioning the imprisonment of the former head of the Kazakh uranium company Kazatomprom, Moukhtar Dzhakishev on various corruption charges.

Earlier this year, the Kazakh government, through Mr Rakishev, forced Kazkommertsbank to buy the debt-ridden BTA Bank.

ENDS

(News report from Issue No. 239, published on July 9 2015)

Senators write to Azerbaijani president

JULY 8 2015 (The Conway Bulletin) – Sixteen US senators have written to Azerbaijani president Ilham Aliyev calling on him to improve human rights in the country, Radio Free Europe/Radio Liberty reported. Mr Aliyev has previously accused the West of mounting a smear campaign against Azerbaijan.

ENDS

(News report from Issue No. 239, published on July 9 2015)

Tajikistan needs $2b to fix water supply

JULY 9 2015 (The Conway Bulletin) – Tajikistan needs to invest about $2b into its infrastructure if it wants to provide clean drinking water for its entire population, Alimurod Islomzoda, head of the Tajik state public utilities company, said.

This is a rare public omission in Tajikistan but Mr Islomzoda didn’t stop there. He also said that updating the system would take 80 years.

“To date, only some 57 percent of the country’s population has access to safe drinking water,” the Asia-Plus news agency quoted Mr Islomzoda as saying. “About $2b is needed and the full rehabilitation of the water supply systems will take 80-85 years.”

Tajikistan is one of the poorest countries in the world and with vital remittances from Russia dropping by around 40% this year because of a downturn in the Russian economy, the outlook is looking worse.

ENDS

(News report from Issue No. 239, published on July 9 2015)

Kazakh oil and gas company wants to sell Kashagan stake

JUNE 30 2015 (The Conway Bulletin) – Kazmunaigaz, Kazakhstan’s state-owned oil and gas company, said it would sell half its stake in the Caspian Sea Kashagan oil field to Samruk-Kazyna, the Kazakh sovereign wealth fund.

This is a curious arrangement as Samruk-Kazyna actually owns Kazmunaigas. It may be a way for Kazmunaigas, which has been badly hit by the sharp drop in energy prices, to borrow cash cheaply.

According to a press release from the London Stock Exchange, Kazmunaigas is seeking the consent of the shareholders in the North Caspian Operating Company (NCOC) , the consortium which operates the Kashagan, to sell half of its 16.88% share to Samruk-Kazyna for approximately $4.7b.

“Samruk-Kazyna’s agreement to purchase the Kashagan Shares reflects the State’s strong support of KMG (Kazmunaigas), as a strategic national asset,” the statement said.

Part of the cash raised by the sale would be used to pay $2.2b Kazmunaigas owes in fees relating to its 2013 purchase of the Kashagan stake from US company ConocoPhillips.

Kazmunaigas said that the sale would come with an option to buy back the stake in Kashagan for the same price between 2016 and 2020.

NCOC declined to comment.

Kazmaunaigas had run up large debts, partly because of the oil price slump. Halyk Bank analyst Sabina Amangeldi said in a note last month that the company already has seven Eurobond issues outstanding worth a total of $8.8b.

She also noted that lower oil prices had knocked Kazmunaigas’ revenues by around a third and that profit had been wiped out.

ENDS

(News report from Issue No. 238, published on July 2 2015)

Tajikistan’s Central Bank cuts jobs

JULY 1 2015 (The Conway Bulletin) – Tajikistan’s Central Bank is cutting nearly 200 jobs as it restructures and streamlines its operations, media reported. It’s unclear exactly what the restructuring entails but media said that most jobs would be lost at the Central Bank’s offices in Dushanbe.

ENDS

(News report from Issue No. 238, published on July 2 2015)

Turkmen capital opens Arkadag park

JUNE 28 2015 (The Conway Bulletin) – To honour Turkmen president Kurbanguly Berdymukhamedov’s 58th birthday, city authorities in Ashgabat named a new park Arkadag, which means “Protector” and is the moniker he likes to go by.

Critics of Mr Berdymukhamedov have accused him of encouraging his officials to promote a cult of personality, something that he disparaged at the start of this period in power in 2007.

Earlier this year, though, the authorities unveiled a giant statue of Mr Berdymukhamedov on a horse. Television shots have also increasingly showed him berating officials and holding court, emperor-like.

And the new Arkadag park appears to back up this image. The park’s main feature is a large white marble arch with Mr Berdymukhamedov’s portrait in its centre.

ENDS

(News report from Issue No. 238, published on July 2 2015)

Kyrgyz MPs sack judge

JUNE 24 2015 (The Conway Bulletin) – BISHKEK — MPs in Kyrgyzstan voted to sack a judge over a row about biometric data in what civil activists described as more evidence of parliament’s authoritarian tendencies.

Protesters gathered in the centre of Bishkek to demonstrate against the apparent sacking of Klara Sooronkulova, a judge in the Constitutional Chamber of the Kyrgyz Supreme Court.

She had been working on a document that would have declared a law brought in last year forcing everybody in Kyrgyzstan to give their fingerprint data to the state as unconstitutional.

“Sooronkulova was dismissed only because she expressed her opinion as an independent judge,” shouted Nurbek Toktakunov, a lawyer, at the protest.

The law that Ms Sooronkulova took umbridge with decreed that only those people who had submitted biometric data could vote in a parliamentary election set for October.

She said that this was unlawful. Apparently irritated by her reluctance to accept the law on biometric data, the government forced MPs to vote three times to sack her. She survived the first two efforts.

“This is a clear evidence of complete arbitrariness,” Ms Sooronkulova told a newspaper.

It’s unlikely that protests will gather momentum but the independence of the judiciary from the executive power has been damaged in Kyrgyzstan.

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(News report from Issue No. 238, published on July 2 2015)

Armenia debates on debt calculation change

JUNE 22 2015 (The Conway Bulletin) – YEREVAN — Armenia’s government wants to change the way it measures its national debt, a con trick, its opponents have said, which is aimed at massaging the numbers by cutting out the Central Bank’s borrowings.

The Armenian parliament passed a first reading of a bill which will ditch the current state debt and instead measure the national debt.

Atom Janjughazyan, deputy finance minister, said the change was needed to meet international standards.

“The sole purpose of the bill is to improve the financial statistics of the State in accordance with international practice,” he said in parliament.

But opposition MPs said the change was merely a cover for allowing the government to borrow so that it can ease itself out of the current financial downturn, triggered by a fall in the Russian economy, the main economic driver for the former Soviet Union.

And this viewpoint appears to be backed by international economists. Teresa Daban Sanchez, the IMF representative in Armenia, told an Armenian newspaper the country’s external debt is now uncomfortable.

“The government needs to take measures so that the debt against the GDP index begins to fall,” she said.

Armenia’s government has previously said it will borrow to prop itself up through the current economic downturn. Under government rules its debt must be below 60% of GDP.

Mr Janjughazyan, the deputy finance minister, said under the new system, Armenia’s debt measured $4.4b against a GDP of $10.9m, comfortably below the 60% mark.

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(News report from Issue No. 237, published on June 25 2015)