JULY 25 2014 (The Conway Bulletin) – The European Bank for Reconstruction and Development (EBRD) has agreed to loan Tajikistan $50m to modernise a vital power station, media reported. The Qairokkum plant, built in 1958, is the only power generating plant in the north of the country and supplies electricity to 500,000 homes.
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(News report from Issue No. 193, published on July 30 2014)
JUNE 24 2014 (The Conway Bulletin) – Media in Uzbekistan reported that a drought in the south of the country means that crop expectations are low.
The uznews.net opposition website said that harvest would be 50% lower than normal on rain-fed crops.
“It did not rain this April and we expect smaller harvests,” uznews.net quoted a farmer as saying.
Officials have not commented although signs of drought are important for policymakers. Droughts and a lack of income can trigger social discontent. Throughout the year, reports have surfaced from Uzbekistan of rising prices.
Uzbekistan is particularly prone to drought. Much of its agriculture is under-resourced and lacking in investment and the land is generally arid. A government report in 2012 said that 76% of the population was living in areas at risk of drought.
And the timing of the uznews.net report is pertinent. The state’s Committee for Natural Protection organised a roundtable on June 29 specifically to discuss desertification and drought in Uzbekistan. The World Bank and the Asian Development all provide various forms of financial assistance aimed at reducing drought in Uzbekistan.
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(News report from Issue No. 190, published on July 2 2014)
JUNE 25 2014 (The Conway Bulletin) – A draft report by the World Bank appears to give a green light for Tajikistan to build its controversial Rogun dam which Tajik President Emomali Rakhmon hopes will provide much need electricity. Human rights workers have said that the giant dam will force 42,000 people from their homes.
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(News report from Issue No. 190, published on June 25 2014)
JUNE 12 2014 (The Conway Bulletin) – The World Bank agreed to give Uzbekistan a $260m loan to improve irrigation in its agriculture, media reported, angering human rights activists who accuse Uzbekistan of using child labour to pick cotton. Cotton is one of Uzbekistan’s biggest exports although many Western fashion brands refuse to use it in their clothing.
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(News report from Issue No. 189, published on June 18 2014)
MAY 23 2014 (The Conway Bulletin) – Following the European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB), the Islamic Development Bank (IDB) pledged to lend Kazakhstan an extra $2b over the next three years. The deal was signed at the annual Astana Economic Forum.
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(News report from Issue No. 186, published on May 28 2014)
MAY 10 2014 (The Conway Bulletin) – In an interview with Tajik media outlet Asia Plus, Jorg Frieden, executive director at the World Bank in charge of its projects in Central Asia, underscored the eggshells the Bank and other international organisations must tread over when dealing with large scale energy projects in the region.
The Bank’s endorsement of hydroelectric projects, whether from a technical or financial point of view, is particularly important for Tajikistan, a country full of hydro potential, but with a track record of failing to attract foreign investment.
Dushanbe is also locked in a perennial conflict over its hydropower ambitions with downstream Uzbekistan. Uzbek President Islam Karimov has said that upstream dams in Kyrgyzstan and Tajikistan could trigger water wars if constructed.
The World Bank has already pledged $526m towards CASA-1000, a project that aims to deliver power from Kyrgyzstan and Tajikistan to electricity-deficient Afghanistan and Pakistan further south.
Mr Frieden reiterated the bank’s support for CASA-1000 while acknowledging that Uzbekistan strongly opposed it.
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(News report from Issue No. 184, published on May 14 2014)
MAY 5 2014 (The Conway Bulletin) — The World Bank signed a framework agreement with Astana to invest a further $2.5b into small and medium sized businesses and to help reform the banking sector.
This is a strong statement of intent from the World Bank.
“We are ready to start the first project on easing the access to financing for SMEs. We are glad that our collaboration with the government has been renewed,” said a spokesperson at the World Bank’s office in Astana.
In the same week, the Asian Development Bank (ADB) also signed an agreement to join its proposed $1.6b investment with a $5.5b cash injection from Kazakhstan’s own national funds.
ADB top management described the investment as “groundbreaking” as they gathered at a summit with the government in Astana.
Their investments will be primarily focused on the development of small and medium enterprises and strengthening the non-oil sector of the economy.
Both deals are important for propelling Kazakhstan further towards its stated aim of becoming one of the world’s top 30 economies by 2050.
The world’s main financial institutions appear to believe that the Kazakh economy can achieve this, or at least can punch further above its weight.
One experienced financial professional in Almaty was more candid, however. “If the money is directed towards the development of infrastructure and the private sector, then it’s a good thing. Otherwise, it can be a waste,” he said.
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(News report from Issue No. 183, published on May 7 2014)
APRIL 2 2014 (The Conway Bulletin) — Azerbaijan’s government should develop rural microfinance mechanisms to help boost its economy and wean it off its addiction to oil, the Asian Development Bank (ADB) said in an annual report.
The main body of the ADB’s report covers similar ground to other economic organsiations — that as oil prices relax and Azerbaijan’s own oil output slows, revenues to the government budget are likely to dip.
This, the ADB said, will probably reduce public spending.
And public spending, fuelled by oil revenues, has been driving Azerbaijan’s economic growth.
The government, therefore, has to look for other ways of generating economic growth, the ADB said. It praised the Central Bank’s move to curb lending to consumers and instead promote growth through loans to small and medium sized businesses.
“However, more is needed to promote lending in rural areas,” the ADB said.
Roughly 40% of Azerbaijan’s population live in rural areas but, the ADB said, growth was being stymied by excessive government activity swamping private enterprise and potential state revenues. What Azerbaijan needs to do in rural areas is build micro-finance options and extend bank branch networks.
“These steps should boost rural income and, eventually, revenue from rural areas, thereby reducing the budget’s current dependence on oil earnings,” the ADB said.
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(News report from Issue No. 179, published on April 9 2014)
APRIL 1 2014 (The Conway Bulletin) — The World Bank is considering a $200m loan to Uzbekistan for the construction of a railway in the east of the country, media report. China has already agreed various loans for the Angren-Pap railway that will link the eastern Ferghana Valley area with the rest of Uzbekistan.
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(News report from Issue No. 178, published on April 2 2014)
MARCH 17 2014 (The Conway Bulletin) — Looking to give Georgia’s currency a boost, the European Bank for Reconstruction and Development (EBRD) issued its first debt in lari. The 2-year bonds were worth 50m lari ($29m). The placement appears to follow an EBRD strategy. Last month it issued 1-year bonds worth 2b Armenian drams ($5m).
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(News report from Issue No. 176, published on March 19 2014)