Tag Archives: international financial institutions

IMF says needs to develop private sector in Turkmenistan

MARCH 21 2017 (The Conway Bulletin) — The IMF concluded a working visit to Turkmenistan by calling on the government to do more to develop the private sector. It also said that Turkmenistan needed to reduce the size of its external debt and that the economy was still struggling to deal with the fall in gas prices. Accurate economic data on Turkmenistan is tough to source but anecdotal evidence suggests the economy is struggling.

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(News report from Issue No. 322, published on March 27 2017)

ABD demands reforms from Tajikistan

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MARCH 20 2017 (The Conway Bulletin) — The Asian Development Bank (ADB) has linked another $50m loan to Tajikistan to reforms that it said the government needs to make to 14 areas to improve economic conditions, mainly focused on protecting businesses from tax inspections and official pressure, media reported. Tajikistan’s economy is under pressure from a recession in Russia and it has been looking for handouts from international lenders.

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(News report from Issue No. 322, published on March 27 2017)

Azerbaijan’s economy will shrink again in 2017, says ADB

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MARCH 14 2017 (The Conway Bulletin) — Azerbaijan’s economy will continue to shrink in 2017, the Asian Development Bank said in a grim assessment of the country’s outlook following a disastrous 2016.

Overall, the ADB said that the Azerbaijani government’s prediction of 1% growth in 2017 was wildly over-optimistic and that a decrease of 1.1% was more likely. Last year,

Azerbaijan’s oil-backed economy shrunk by 3.8%, its worst year of economic activity since the 1990s.

“Our preliminary assessment as of today is minus 1.1 percent … and it’s most likely that our … assessment of GDP for this year will remain at the negative level,” Nariman Mannapbekov, the ADB’s country chief, told Reuters in an interview in Baku.

The ADB assessment will be a major blow to Azerbaijan which has been looking for some growth.

And, once again, Mr Mannapbekov urged the Azerbaijani government to focus on diversify the economy away from oil.

The slump in oil prices has hit Azerbaijan hard, forcing the government to slash funding.

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(News report from Issue No. 321, published on March 20 2017)

EBRD to start lending to Uzbekistan after decade-long break

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MARCH 17 2017 (The Conway Bulletin) — The EBRD rounded off a visit to Uzbekistan by promising to invest in the country for the first time in a decade, giving Uzbek President Shavkat Mirziyoyev a major boost.

EBRD President Suma Chakrabarti flew to Tashkent to meet Mr Mirziyoyev to discuss the terms of the return, a decade on since a row over human rights scuppered relations.

In a statement, the EBRD said that it was looking forward to helping to give private enterprise a boost and to help open up the country after years of isolation under Islam Karimov.

“I am delighted that the EBRD is re-engaging with Uzbekistan. These discussions have been highly fruitful and there is great interest on both sides in reinvigorating the relationship between the Bank and Uzbekistan,” the EBRD quoted Mr Chakrabarti in a press release.

“This is a new beginning in EBRD- Uzbek relations.”

It is only seven months since the death of Islam Karimov, president of Uzbekistan for 25 years, but already Mr Mirziyoyev has attracted much needed investment into the country. Earlier this month Asian Development Bank President Takehiko Nakao visited Uzbekistan and promised to lend $573m to fund four projects, including a scheme to fund small businesses in rural areas.

Funding from institutional banks such as the EBRD and the ADB have been instrumental in helping Central Asia’s economies develop. The EBRD phased out its involvement in Uzbekistan gradually after it held its 2003 AGM in Tashkent. That meeting was marked by a row between Uzbekistan and the EBRD over media freedom and prisoners’ rights. The relationship never recovered during Karimov’s lifetime and the EBRD’s last investment in Uzbekistan was in 2007.

As a comparison, the EBRD said that it has invested €11.6b into Central Asia. Of this, Uzbekistan, where roughly half of Central Asia’s population live, received €894m. That’s roughly 8% of the total.

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(News report from Issue No. 321, published on March 20 2017)

Eurasian Bank agrees to loan Kyrgyzstan

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MARCH 14 2017 (The Conway Bulletin) — The Eurasian Development Bank has signed a deal with Kyrgyzstan to provide a loan of $110m to finance the construction of Unit 2 at the Kambarata hydropower plant, media reported. The Eurasian Development Bank is the bank of the Eurasian Economic Union. The funds for the hydropower development will come out of a special unit put aside to assist Kyrgyzstan joining the EEU in 2015.

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(News report from Issue No. 321, published on March 20 2017)

ADB agrees $573m loan to Uzbekistan

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MARCH 6 2017 (The Conway Bulletin) — The Asian Development Bank agreed to give Uzbekistan a series of loans worth $573m in a deal that signifies that institutional lenders consider Uzbek president Shavkat Mirziyoyev worth doing business with. A $100m loan has been earmarked for small businesses in rural communities and another $121m loan has been put against developing Tashkent’s water supply.

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(News report from Issue No. 320, published on March 13 2017)

EBRD set to re-engage with Uzbekistan

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MARCH 6 2017 (The Conway Bulletin) — In a major boost for Uzbekistan under its new president, Shavkat Mirziyoyev, the European Bank for Reconstruction and Development (EBRD) hinted that it was going to re-engage with the country after a 10 year break.

The move comes a month after EBRD delegates flew to Tashkent for talks with the Uzbek government on how best to reignite the lending process, a credit line that was cut in the late 2000s after rows over corruption, human rights and media freedom.

Reuters news agency quoted two anonymous EBRD officials in their London office as saying that they expected the bank to signal that it was re-starting lending to projects in Uzbekistan within a couple of days. They also said a visit to Tashkent later this month by EBRD president Suma Chakrabarti had also been discussed. By the end of the week no official word had been given but neither had officials refuted the Reuters story.

For Mr Mirziyoyev, a signal from the EBRD that it was preparing to resume normal service would be a major boost. He has been trying to pursue a reform-minded agenda, rolling back some of the more intransigent and isolationist policies that

his predecessor, Islam Karimov, followed. Karimov died in September 2016.

A second Reuters exclusive from Tashkent on March 7 said Mr Mirziyoyev had clashed with some of his ministers over his reform agenda.

The EBRD said that it has lent 900m euro to projects in Uzbekistan, although the flow dropped off in the first decade of the 21st century. In hasn’t approved a project in Uzbekistan since 2007 and doesn’t keep an office in Tashkent. In 2003, Uzbekistan held its AGM in Tashkent, a meeting overshadowed by rows over human rights.

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(News report from Issue No. 320, published on March 13 2017)

Azerbaijan quits EITI governance body after being suspended

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MARCH 10 2017 (The Conway Bulletin) — Azerbaijan quit the Extractive Industries Transparency Initiative (EITI), a governance watchdog used as a guide by financial institutions to decide whether to give out loans, 24 hours after its membership was suspended for failing to meet a number of demands.

By quitting the EITI, Azerbaijan risks jeopardising multi-billion-dollar loans from financial institutions such as the European Bank for Reconstruction and Development (EBRD) and the World Bank to build a $46b gas pipeline to Europe.

Announcing Azerbaijan’s decision to quit the EITI, Shahmar Movsumov, head of the SOFAZ, Azerbaijan’s state oil fund and the country’s top representative at the EITI, said the EITI had been infiltrated by groups which have shifted its agenda away from transparency in the extractive industries towards concerns about human rights and media freedom.

“We consider the Board’s decision on suspension of Azerbaijan as an unfair one,” he said. “The irrelevant facts introduced by different advocacy groups on various occasions show that the Initiative failed to stick to its original mission and objectives.”

The day before at its meeting in Bogota, the EITI had suspended Azerbaijan’s membership for failing to make sufficient progress in improving human right and NGO freedoms.

The move was welcomed by rights campaigners. Tom Mayne, a freelance consultant, said the EITI needed to throw Azerbaijan out of the group to retain its credibility.

“Transparency of oil revenues and respect for civil society go hand in hand, and both the EITI and independent observers have ruled that Azerbaijan has not created the space for free and open discussion of what happens to oil revenues,” he said.

The EITI is based in Oslo. It was set up in 2003 with the aim of setting “the international standard for transparency and accountability around a country’s oil, gas and mineral resources”.

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(News report from Issue No. 320, published on March 13 2017)

IMF agrees to fund Georgia

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MARCH 1 2017 (The Conway Bulletin) — At the end of a two-week mission to Georgia, the IMF agreed a three year $285m funding programme aimed at encouraging economic reform and Western investors. The deal replaces an earlier one that had expired. It should give the Georgian govern- ment an extra level of support as it pulls out of an economic malaise.

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(News report from Issue No. 319, published on March 3 2017)

Georgia expects new funding from IMF

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FEB. 21 2017 (The Conway Bulletin) — Georgia’s economy minister Giorgi Gakharia told Reuters in an interview that he expected a new funding deal with the IMF to be concluded at the end of its two week mission which started on Feb. 15. Mr Gakharia said that the IMF would be looking to link a funding mechanism to structural reforms of the economy and that Georgia’s main challenges were “pension reform, reform of capital markets, other structural reforms”. Georgia had agreed a three year $136m standby deal with the IMF that had been due to run until July. Reuters said that it had been allowed to lapse, though, because of disagreements over reforms.

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(News report from Issue No. 318, published on Feb.24 2017)