SEPT. 14 2015 (The Conway Bulletin) — Lithuanian Railways will open a representative office in Kazakhstan’s capital Astana, the company said in a statement. “Kazakhstan is Lithuania’s major railway partner in Central Asia. Stasys Dailydka, a director at Lithuanian Railways, said trade volumes, mainly minerals, had been increasing rapidly over the past six years.
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(News report from Issue No. 248, published on Sept. 18 2015)
SEPT. 8 2015 (The Conway Bulletin) — Abat Nurseitov resigned as general director of KMG EP, the London-listed unit of Kazakhstan’s state oil and gas company. Mr Nurseitov had been general director since January 2013. Dastan Abdulgafarov, the CFO, was appointed interim CEO.
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 7 2015 (The Conway Bulletin) — The Kazakh government said a new tax on the extraction of groundwater is justified despite complaints from soft drinks producers, as companies have previously underpaid for water. “It is important to note that we have a serious shortage of drinking water in Kazakhstan,” Shafkhat Kudabayev, of the State Revenue Committee, told vlast.kz. The soft drink industry lobby groups have said the new tax will put companies out of business.
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 11 2015 (The Conway Bulletin) – The signs have been there for all to see for the past two or three years. Now there can be no denying it. Kazakh President Nursultan Nazarbayev appears to want to set his daughter, Dariga Nazarbayeva, up as his successor.
Her rehabilitation into the mainstream of Kazakh politics has been carefully managed. First she won back a seat in the 2012 parliamentary elections, then in 2014 she appeared next to her father after his State-of-the-Nation speech and then she started to take over increasingly important roles, including deputy speaker of parliament.
More recently, Mr Nazarbayev has spoken about the Asian model of democracy. This was, it now appears, code for managed dynastic succession.
Kazakhstan needs stability at the moment. It is moving through difficult economic territory and it needs strong, talented, leadership.
But it also needs choice.
Ms Nazarbayeva, who has sung opera at the Bolshoi Theatre in Moscow, certainly has the charisma, authority and the most famous surname in Kazakhstan, but is she the right person to lead Kazakhstan in the post-Nursultan era?
Infamously in 2013, at a parliamentary committee meeting, she described disabled children as freaks birthed by teenagers having sex too young. She sounded out of touch with ordinary people and drew heavy criticism.
There are other candidates, but Ms Nazarbayeva does now appear to be in pole position. What is certain is that the succession issue in Kazakhstan is, once again, at the forefront of the country’s politics.
By James Kilner, Editor, The Conway Bulletin
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 8 2015, ALMATY (The Conway Bulletin) — Kazakhstan’s government said that it would increase salaries for teachers by 20-50% depending on their qualifications, another indication that the devaluation of the tenge is spurring inflation.
Announcing the pay rise at a school in Astana, deputy PM Berdybek Saparbayev said that it showed the government cared about its workers. “We have very good news for our teachers,” media quoted him as saying. “Salaries will be increased from 20 to 50% starting from 2016.”
The Kazakh Central Bank has devalued the tenge twice since February 2014.
It is now worth around 40% less than it was before the first devaluation and economists have been warning that inflation will shoot up.
Companies have already been raising salaries and it was only a matter of time before the government put up pay for its thousands of employees.
Other key workers, such as doctors and nurses, have also been promised large tenge pay rises.
The problem for the Kazakh government is that with oil prices low and production declining, it may struggle to pay or all the rises.
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 11 2015 (The Conway Bulletin) — The Kazakh tenge and the Kyrgyz som dropped to record lows this week, as economies in Central Asia and the South Caucasus continued to show structural weaknesses.
By the end of Friday, the tenge traded at around 264/$1, down from 240/$1 at the start of the week. That’s a drop of 10%. The Kyrgyz som fared slightly better but still dropped through the 67/$1 barrier. A week earlier it had traded at around 65.5/$1.
Over the border in Tajikistan, the somoni held its own. This may have had something to do with a massive cash injection from China. It agreed to buy 3b yuan ($470m) worth of somoni in a so called currency swap deal. This is a thinly disguised mechanism to prop up the ailing somoni which has lost 17% of its value this year.
In the South Caucasus the currencies were broadly stable, although the Georgian lari lost some ground, falling to around 2.40/$1 compared with a price of around 2.36/$1 a week earlier.
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 4 2015 (The Conway Bulletin) – US billionaire businessman Warren Buffett has pledged $50m for Kazakhstan’s new low-enriched uranium bank, media reported quoting The Economist. The concept behind the uranium bank is that it will be able to control the flow of lightly enriched uranium to countries for nuclear power stations.
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 7 2015 (The Conway Bulletin) — Moody’s ratings agency downgraded three Kazakh banks due to their deteriorating asset quality and their exposure to foreign currency lending. Kazkommertsbank’s baseline credit assessment (BCA) was rated caa2, ATF Bank fell to caa3, and Eurasian Bank was downgraded to caa1. Moody’s also changed the outlook of the three Kazakh lenders, together with Halyk Bank, to negative, highlighting the precarious state of Kazakhstan’s banking sector.
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 8 2015 (The Conway Bulletin) — Irish industrial services company Deborah Services Limited (DSL) and Lancaster Group, a Kazakh private holding company, signed a multi-million euro agreement to form a joint venture to serve oil and gas operations in Kazakhstan. Infrastructure and utility support firm Siteserv owns DSL. The new company, DSL Caspian, will provide protective coatings and fire protection at onshore and offshore oilfields in Kazakhstan. Lancaster Group is closely linked to the Kazakh elite. Yerbolat Dossayev, currently minister of economic development, is a major stakeholder in the group.
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(News report from Issue No. 247, published on Sept. 11 2015)
SEPT. 8 2015 (The Conway Bulletin) – Police arrested the governor of the Kostanai region in north Kazakhstan, Akhmetbek Akhmetzhanov, for corruption. Kazakh officials have arrested a handful of senior regional officials over the past year or so for corruption.
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(News report from Issue No. 247, published on Sept. 11 2015)