Tag Archives: Kazakhstan

Italy charges company with corruption at Kazakhstan’s Kashagan

MARCH 4 2016 (The Conway Bulletin) – Italian prosecutors charged Dinamo, an energy consortium registered near Milan, with paying millions of euros in bribes to Kazakh officials for a contract to service the giant Kashagan oil field.

The bribes, the prosecutors said, are part of a deep-rooted system of corruption used to win contracts in the oil services sector around the world. So far, ENI, Italy’s biggest energy firm, has not been involved in the legal proceedings, but analysts argue that the investigation might inevitably reach the former operator of Kashagan.

ENI holds a 16.8% stake in the Kashagan consortium of which Kazmunaigas, Exxon Mobil, Shell, Total, CNPC and Inpex are all part.

Italy is one of Kazakhstan’s main trade partners. Kashagan is supposed to start commercial oil production later this year after a three year delay.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Oil workers strike in Kazakhstan

MARCH 4 2016 (The Conway Bulletin) – About 200 people working for the oil services company Techno Trading, which is a sub-contractor for Mangistaumunaigas went on strike. They complained that the company had not paid them their quarterly bonuses. Industrial action is a sensitive issue in western Kazakhstan where police and demonstrators clashed in 2011, killing at least 14 people. Inflation is rising and the value of the tenge has dropped in Kazakhstan, straining worker-employer relations.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Malaysia buys up field in Kazakhstan

MARCH 7 2016 (The Conway Bulletin) – Malaysia’s Reach Energy Berhad said it offered $154.9m for a 60% stake in Palaeontol B.V., a Dutch-registered company that operates an onshore block in the Mangistau oblast in Western Kazakhstan. The fields in the block are known as Emir Oil. China’s MIE Holdings Corp owns Palaeontol. According to Reach Energy, the fields holds oil reserves of 10m tonnes.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Women march through Kyrgyz capital on March 8 to demand more rights

MARCH 8 2016, BISHKEK (The Conway Bulletin) — Dozens of women protested in Bishkek against what they said was the patronising message sent out by the traditional March 8 International Women’s Day celebrations.

The march was a rare challenge to what has become one of the former Soviet area’s most popular and enduring holidays.

“Don’t sell 8th of March for flowers,” the marchers chanted. “We don’t want flowers, we need rights.”

Civic demonstrations, especially by pro-women’s rights groups are rare, if not unheard of, in Central Asia, where governments retain strict control and generally mistrust the rise of women in society.

Kyrgyzstan is something of an exception. It has more political plurality than other countries and counts a woman, Roza Otunbayeva, as a former head of state. She was president of Kyrgyzstan in 2010 and 2011, after a revolution overthrew her successor Kurmanbek Bakiyev. None of the other Central Asian states have had any significant female political or business leadership other than daughters of presidents.

Saadat, one of the march participants, told the Bulletin’s Bishkek correspondent that March 8 was not a holiday to celebrate spring and woman but something much more important.

“Instead of buying flowers and making profit for local flower shops, people would better support women’s crisis centres or female entrepreneurs,” she said.

“I think, one of reason why we were not dispersed on the square (bpolice) is that two female MPs were also with us on the square,” she added.

There is supposedly a quota of women in the Kyrgyz parliament of 30% although activists said the proportion of women in parliament had dropped to 12.4% from 19% in 2004.

Arina Sinovskaya, a member of a Kazakh feminist group, said their rally had been banned in Kazakhstan.

“In Kazakhstan, unfortunately, we cannot hold a march, so we came here to express our solidarity,” she said.

ENDS

(News report from Issue No. 271, published on March 11 2016)

McDonalds finally opens its first restaurant in Kazakhstan

MARCH 8 2016, ALMATY (The Conway Bulletin) – Hundreds of people queued for their first taste of McDonalds in Kazakhstan when it opened its inaugural restaurant in Central Asia in Astana.

McDonalds has teamed up with Kazakh businessman Kairat Boranbayev, whose daughter is married to Kazakh president Nursultan Nazarbayev’s grandson, to bring its burgers to Kazakhstan.

The opening of McDonalds’ restaurant is a boost for Mr Nazarbayev who is looking to bolster support ahead of elections despite a worsening economic slowdown.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Business comment:

MARCH 11 2016 (The Conway Bulletin) – Kazakhstan is AvtoVAZ’s largest export market but a duty introduced at the start of the year by the Kazakh government to support its car making industry, has, apparently, destroyed it.

The number of AvtoVAZ cars delivered to the country jumped in 2015 due to the tenge-rouble currency imbalance for the first part of the year.

From the end of 2014 the rouble started collapsing, but the Kazakh Central Bank stubbornly kept the tenge at 185/$1.

This made imports very cheap, undermining Kazakhstan’s own carmaking industry but boosting AvtoVAZ.

In the first half of 2015, car sales were down by one-third. For the year, sales were down 40% to 97,446 units, the lowest level since 2012.

Even President Nursultan Nazarbayev weighed in and said that it was wrong for Kazakhs to buy cheaper products abroad and push the domestic industry out of the competition.

The Kazakh government also looked into subsidising the local automotive sector and impose import duties — an issue that must surely have raised concerns for both the World Trade Organisation and the Eurasian Economic Union.

The new $2,000 car import tax has also had an almost immediate effect. It has made imports unsustainable. It has simply priced them out of the market, denting consumer choice and, also, Kazakh- Russian relations.

Kazakhstan and Russia are supposed to be allies. The Eurasian Economic Union, a Kremlin project, was supposed to protect the area from interventionist duties. Where was it when Kazakhstan said it was going to impose its $2,000 import levy on car imports.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Editorial: NPLs in Kazakhstan

MARCH 11 2016 (The Conway Bulletin) – Women banging pots, blowing whistles and wearing grey capes in the streets of Almaty last January alarmed observers.

They were protesting about mortgages and how difficult it was to repay these loans after a devaluation of the tenge. In other words, this was yet another alarm bell about non-performing loans in Kazakhstan.

The country was battered with toxic loans in the aftermath of the Global Financial Crisis of 2007/8 and some banks, directly or indirectly, asked for help from the government.

And the government has only just started to offload these banks — think BTA and Kazkommertsbank’s merger last year.

Now, though, new data suggests that there may be another round of dodgy debt to deal with. This time the government needs to act early to stop borrowers from tipping the fragile banking system into the red again. It has the funds and it now also has the experience. This time round, there are few excuses for the Kazakh government and the Central Bank.

ENDS

(Editorial from Issue No. 271, published on March 11 2016)

EU criticises Kazakhstan

MARCH 10 2016 (The Conway Bulletin) – The European Parliament issued a rare strongly worded statement criticising a recent crackdown on media in Kazakhstan. “MEPs are deeply concerned about the climate for the media and free speech in Kazakhstan, where strong pressure on independent media outlets includes some being closed down, and news agency directors and journalists being detained, placed under criminal investigation and sentenced to prison,” it said.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Kazakhs bad debt worsens

MARCH 9 2016, ALMATY (The Conway Bulletin) — Non-performing loans, a major signifier of the banking sector’s economic health, have started to rise again in most large Kazakh banks, data showed.

Other than Kazkommertsbank, which wrote-off swathes of non-performing loans last year after it merged with debt-ridden BTA Bank, only Halyk Bank of the big lenders improved its loan portfolio in 2015.

Halyk Bank is owned by business- man Timur Kulibayev and his wife Dinara Nazarbayeva, daughter of Kazakh Pres. Nursultan Nazarbayev. Tsensabank, Bank Centre Credit and the Kazakh subsidiary of Russia’s Sberbank all saw the ratio of non- performing loans in their portfolios worsen.

Kazakhstan is sensitive to the proportion of non-performing loans held by its banks because after the 2008/9 Financial Crisis it was considered to have one of the worst ratios of bad to good loans in the world.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Oil output to rise in Kazakhstan

MARCH 10 2016 (The Conway Bulletin) – Kazakhstan will raise its target annual oil production in 2016 by 5% to 77m tonnes if oil prices remain at around $40/barrel, media quoted energy minister Vladimir Shkolnik as saying. This is important because a rise in both production and price would give government revenues in Kazakhstan a much-needed lift.

ENDS

(News report from Issue No. 271, published on March 11 2016)