Tag Archives: Kazakhstan

Kazakh president orders spending spree

FEB. 10 2016 (The Conway Bulletin) – Kazakh president Nursultan Nazarbayev ordered his government to spend more than 360b tenge ($1b) building houses and supporting small and medium-sized businesses, a policy he hopes will both stimulate Kazakhstan’s flatlining economy and cement support for his Nur Otan party ahead of parliamentary elections next month.

His plan also involves trying to protect both Kazakhstan’s $4b national pension pot by diversifying investments into other currencies and second tier banks by buying up their bonds, a form of financial aid.

With more data showing that low oil prices and a devalued currency have dragged down Kazakhstan’s economy, Mr Nazarbayev appears to have decided that now is the moment to be bold.

“Many countries have found themselves in a difficult situation and are forced to cut social spending, suspend projects, resulting in rising unemployment. Yet we continue building industrial facilities and open new markets,” he told a government meeting. “At the centre of all my orders are the needs of the common man, his well-being and stability.”

Three government financial insti- tutions — the Baiterek Holding company, the House Building Bank of Kazakhstan and the Samruk Kazyna sovereign wealth fund — will admin- ister funds for the house building spending spree, official media reported. The $1b will come from pushing cash earmarked for a social spending in 2017 forward by a year.

Mr Nazarbayev likes to act the father figure, looking after the Kazakh people during times of hardship. This showed through with his emphasis on looking after the common man. He said that his spending plans would create 18,000 jobs, build 42 new schools and extend and improve the electric grid system.

“Full and effective utilisation of funds allocated for the implementation of these measures will stimulate economic activity, support employment and add 1% into economic growth in 2016,” he said.

If Mr Nazarbayev needed a reminder of the battle he faces to turn around the economy, it came from the Central Bank. It said the country’s deficit measured $5.3b in 2015, a result of the currency depreciation. The tenge halved in value in 2015.

ENDS

(News report from Issue No. 267, published on Feb. 12 2016)

Kazakhstan posts current account deficit

FEB. 10 2016 (The Conway Bulletin) – Kazakhstan posted a $5.3b current account deficit in 2015, the Central Bank said. The balance of payments in Kazakhstan has been in the red for six consecutive quarters now. The Central Bank said a sharp drop in the price of oil has cut the value of Kazakhstan’s main export. The new Central Bank figures show a 42.6% drop in the US dollar value of Kazakhstan’s exports in 2015, compared to the previous year.

ENDS

(News report from Issue No. 267, published on Feb. 12 2016)

TCO posts production record in Kazakhstan

FEB. 9 2016 (The Conway Bulletin) – Tengizchevroil, the Chevron-operated oil project near Atyrau in western Kazakhstan, produced a record 27.16m tonnes of oil in 2015, up from 26.7m tonnes in 2014, media reported quoting the company. The data underlines Tengizchevroil’s status as Kazakhstan’s biggest oil exporter. It was supposed to have been overtaken by the giant Kashagan oil field in the Caspian Sea by now but faulty gas pipes have had to be repaired on this project, delaying production until either the end of this year or 2017.

ENDS

(News report from Issue No. 267, published on Feb. 12 2016)

Kazakh President tells people not to panic

JAN 29 2016, ALMATY (The Conway Bulletin) — At a televised conference for his Nur Otan political party, a stony faced Kazakh President Nursultan Nazarbayev played down a 50% drop in the value of the tenge currency and told viewers to look at the economic positives.

Mr Nazarbayev likes to act the elder father figure during times of economic and political strife in Kazakhstan and with oil prices at a 12- year-low, government spending being cut and inflation rising, Mr Nazarbayev clearly thought it was time to calm the increasingly jittering nerves of his countrymen.

“We have been living with $30 per barrel oil for half a year now and nothing has happened. We will overcome (this) and maybe we should get used to this, I think it has come here to stay,” he told the 2,000 assembled delegates.

Kazakh officials know that they are treading a thin line and are eager to head off any sign of discontent.

In Azerbaijan, unease at the economic malaise triggered several clashes between protesters and police in regional towns last month but in Kazakhstan, the authorities have been able to dampen public frustration.

Judging the public mood — when to be firm and when to be conciliatory — is a key skill during this time of economic hardship and one that Mr Nazarbayev has previously shown that he is adept at.

Last month, Mr Nazarbayev called a parliamentary election for March, 18 months early. Analysts said that this had been arranged so that Mr Nazarbayev and his officials could hold an election now, before the economic situation worsened further.

At the Nur Otan conference, though, Mr Nazarbayev avoided mention of the election and instead told Kazakhs that the government was working hard to look after them.

“We support our working population through implementation of the Employment Roadmap-2020 Program. There is no place for unemployment in Kazakhstan. We have all resources in place to avoid it,” he said.

Official unemployment figures in Kazakhstan are considered unreliable. Correspondents in Kazakhstan, though, and reports from various regional towns suggest that people are losing their jobs.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Kazakh bank sells shares

FEB. 5 2016 (The Conway Bulletin) — Kazkommertsbank, one of Kaza- khstan’s largest lenders, said it sold the 99.4% stake it owned in BTA Bank to Kenes Rakishev, Nurzhan Subkhanberdin and other minority shareholders. The total cost of the transaction amounted to around 6.1m tenge ($16,200). Mr Rakishev and Mr Subkhanberdin now each own 49.18% in BTA. Both are also major shareholders in Kazkommertsbank.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Kazakh mortgage holders protest

FEB. 2 2016 (The Conway Bulletin) – Around 50 mortgage holders protested in Almaty because they said it was not possible to repay their debt after a devaluation of the tenge. This was the third protest by mortgage holders against banks this year, a rare sustained level of public discontent in Kazakhstan. The tenge has lost around 50% of its value. Last year, the Kazakh government gave banks $130m to refinance mortgages but protesters have said that more needs to be done. Analysts have said that one of the biggest issues the Kazakh government faces is growing consumer debt.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Kazakhstan’s Nur Otan packs celebrities onto election list

JAN. 29 2016, ALMATY (The Conway Bulletin) — Nur Otan, the political party of President Nursultan Nazarbayev, has packed its list of candidates for next month’s parliamentary election with sportsmen, singers and other household names — reflecting both its status as the establishment party and also its drive to boost its popular appeal.

Candidates for the 127-seat lower house of parliament include champion boxer Gennady Golovkin, Olympic weighlifting gold medal winner Ilya Ilin, and pop stars Zhanar Dugalova and Kairat Nurtas as well as Dariga Nazarbayeva, Mr Nazarbayev’s daughter, and the ex- mayor of Almaty Akhmetzhan Yesimov.

Kazakh political analyst, Adil Nurmakov, said that although Nur Otan had used this strategy previously, they were employing it particularly heavily for this election.

“It is an attempt by the ruling party to position itself as a popular force among celebrities truly loved by the people. I see it as a primitive electoral technique. It has been used numerous times in the past,” he said.

Last month, Mr Nazarbayev called a parliamentary election for March 20, a year earlier than it had been scheduled for, officially because the current parliament had fulfilled its remit.

Analysts, though, said it was called early to head off civil strife as the economic climate worsens. On the streets of Almaty, reaction to the celebratory packed party list was mixed.

“Sportsmen are also people. If the Parliament has sportsmen there will be more discipline,” said Maksat, a sales distributor.

Others were less impressed.

“A deputy should be a person with special education not just a regular boxer or a singer,” said Zinaida Trinojenko, a PR specialist. “It is a delusion.”

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(News report from Issue No. 266, published on Feb. 5 2016)

Editorial: Iranian oil for Tajikistan

FEB. 5 2016 (The Conway Bulletin) – Iran is emerging from its economic exile with force and its impact is being felt across Central Asia and the South Caucasus.

The new petrol export deal with Tajikistan, together with recent deals with Kazakhstan’s Air Astana and the negotiations with Armenia and Georgia over gas supplies, is a testimony of the importance that countries in the region give to Iran as a trade partner.

Iran is still a net importer of gasoline but it is now close to opening a new 18m tonnes refinery on the Persian Gulf coast, which officials say “will change the gasoline balance in Iran” and could possibly turn the country into a net exporter.

For countries like Tajikistan this is good news as it means that Iran could become a supplier of oil for both Central Asia and the South Caucasus.

Tajikistan has previously bought all its refined petrol from Russia. With Iran’s re-emergence onto the scene this over-reliance on its former colonial master is reduced, giving Tajikistan a genuine choice on where to buys its petrol.

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(Editorial from Issue No. 266, published on Feb. 5 2016)

Exchange booth volumes in Kazakhstan

JAN. 29 2016 (The Conway Bulletin) – The volume of sales of US dollars at kiosks in Kazakhstan rose by $600m in December to $1.7b, media quoted government data as showing. The data underlines the lack of confidence that Kazakhs have in the tenge. It has lost half its value in the past 12 months, a drop linked to a fall in oil prices. The 52% rise in US dollar sales in December was likely due to a sudden rise in tenge’s value.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

ArcelorMittal cancels second pay rise for Kazakh workers

ALMATY, FEB. 1 2016 (The Conway Bulletin) — ArcelorMittal’s steel factory in Kazakhstan scrapped plans to raise workers’ salaries in June because of worries about continued weak market conditions for its products.

In January, ArcelorMittal increased salaries for its 14,000 workers at its steel plant in Temirtau, central Kazakhstan, by 6.8% and had promised another pay rise of 6.8% six months later, but in a letter to employees Vijay Mahadevan, the factory’s CEO, said that this was not now going to happen.

“Unfortunately, we have not fulfilled our plans for 2015, and therefore will not be able to pay the remainder of the wage increase this year,” he said.

“I know that this news will disappoint you, but no-one would benefit from a salary increase which will only put additional pressure on our company.”

A 50% drop in the value of the tenge and rise in inflation has hit workers’ real wages in Kazakhstan and forced many employers to raise salaries.

ArcelorMittal Temirtau is one of the biggest employers in Kazakhstan. It has had, though, tempestuous relations with its workers over salaries in the past few years and had to make thousands of staff redundant. The factory has added symbolic importance as President Nursultan Nazarbayev worked there before moving into politics.

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(News report from Issue No. 266, published on Feb. 5 2016)