DEC. 2 2014 (The Conway Bulletin) – In talks ahead of a ceremony to mark the inauguration of a train line running from Kazakhstan to Iran via Turkmenistan, Kazakh president Nursultan Nazarbayev urged his Turkmen counterpart, Kurbanguly Berdymukhamedov, to join the CIS Free Trade zone. Mr Berdymuakhamedov has been opening Turkmenistan to global trade.
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(News report from Issue No. 211, published on Dec. 3 2014)
DEC. 2 2014 (The Conway Bulletin) – Inflation in Kazakhstan is beginning to edge up to the psychologically important double digit zone. The Kazakh statistics committee said prices rose by 0.7% in November after a 0.5% increase in October.
This is a precarious position for the Kazakh Central Bank. Annualised inflation already measures 7.6%. It won’t be long, if the current trend continues, until it hits 10%.
The problems are two two-fold and well-known — Russia and the drop in the price of oil.
These two issues have combined to produce something of an economic storm for Kazakhstan. And its options are limited. The Central Bank devalued — without warning — its tenge currency by 20% in February. For its currency to retain any credibility, it has had to pledge to protect it from further devaluation.
There is already a lot of economic uncertainty in Kazakhstan. Rising inflation is adding to that.
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(News report from Issue No. 211, published on Dec. 3 2014)
NOV. 28 2014 (The Conway Bulletin) – The depreciation of the Russian rouble has hit Kazakhstan’s energy sector, media reported.
Kazakh media said Samruk-Energo, the state-owned energy company, had cancelled rouble-denominated contracts with Russian clients.
“We have suspended power supplies over the lingering Russia’s currency devaluation. Supplies are no longer economically viable for Kazakhstan-based power plants. Loss of the markets is an important issue,” media quoted Almasadam Satkaliyev, head of Samruk-Energo, as saying.
This is important as it shows how Kazakh industry is beginning to lose out from a depreciating rouble. It’s an issue that could threaten to upset otherwise close relations between the two neighbours.
Kazakhstan has signed up to the Russia-led Eurasian Economic Union and has a host of other friendly treaties in place.
The problem is that the Kazakh Central Bank has pledged not to devalue its currency after knocking 20% off its value earlier this year. This means that Kazakhstan will have to look elsewhere to sell its power or accept a vastly reduced price.
Mr Satkaliyev also said that Kazakhstan was looking to replace coal supply contracts with Russian clients.
“Russia’s economy is not ready to import Kazakhstan’s coals at higher prices. Russia has adopted a program to replace Kazakhstan’s coal,” he said.
“A second factor is the continuing devaluation of the Russian rouble. All the contracts rely on the Russian rouble; therefore for the Kazakh side it is of great importance to ensure economic viability of supplies.”
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(News report from Issue No. 211, published on Dec. 3 2014)
DEC. 2 2014 (The Conway Bulletin) – Kazakh president Nursultan Nazarbayev and Iranian president Hassan Rouhani flew to Ashgabat for separate bilateral talks with Turkmen president Kurbanguly Berdymukhamedov as well as for the long-awaited inauguration of a new railway that will connect the three countries.
The inauguration ceremony for the 935km Ozen-Bereket- Gorgan line is due on Dec. 3. It will vastly reduce travel time and, it is hoped, boost north-south trade.
“This route will permit the region’s development and prosperity,” Turkmen leader Kurbanguly Berdymukhamedov was quoted by media as saying. “This event will go down in the history of our countries.”
A statement from Mr Nazarbayev’s office said they thought the railway route would increase trade by three- fold.
Predictions of trade increases generated by the new railway are, by their very nature during this period of economic uncertainty, difficult to gauge. What is more certain, though, is that Central Asia’s links with Iran will improve further.
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(News report from Issue No. 211, published on Dec. 3 2014)
DEC. 2 2014 (The Conway Bulletin) – Kazakhstan’s gold and foreign currency reserves have grown by 15.8% this year, media reported quoting the Central Bank’s press service. This war-chest is important because the Central Bank has said it is prepared to spend to defend the tenge currency against falling oil prices and a drop in the Russian rouble.
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(News report from Issue No. 211, published on Dec. 3 2014)
DEC. 1 2014 (The Conway Bulletin) – Kazakh PM Karim Massimov said Kazakhstan wanted to develop shale gas sites, industry website shaleenergyinsider.com reported. The website quoted Mr Massimov talking at an energy conference. If Mr Massimov acts on his statement it would mark a change in Kazakhstan’s energy policy.
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(News report from Issue No. 211, published on Dec. 3 2014)
DEC. 2 2014 (The Conway Bulletin) – Halyk Bank, Kazakhstan’s second biggest lender, said profits for the first nine months of the year had risen by around two-thirds, mainly because of an increase in the number of loans it has given out. The results are good news for Kazakhstan’s economy which has been under pressure from falling oil prices.
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(News report from Issue No. 211, published on Dec. 3 2014)
NOV. 30 2014 (The Conway Bulletin) – A gas explosion in a block of flats in the city of Taldykorgan in south Kazakhstan killed at least seven people, media reported. Media quoted the emergency services as saying improper use of gas cylinders had caused the explosion. The accident highlights poor infrastructure used in Kazakhstan.
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(News report from Issue No. 211, published on Dec. 3 2014)
DEC. 2 2014 (The Conway Bulletin) – Under a deal thrashed out last month, Kazakhstan started supplying Kyrgyzstan with electricity, media reported. Kyrgyzstan has been desperate to secure electricity because of a dry summer that has left reservoirs feeding hydropower sites low on water.
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(News report from Issue No. 211, published on Dec. 3 2014)
NOV. 25 2014 (The Conway Bulletin) – Kazakhstan is on the brink of accession to the World Trade Organisation (WTO), the WTO’s director-general, Roberto Azevedo, said in a report. Kazakhstan has been negotiating to join the WTO since the late 1990s and joining the group would give its credibility a boost.
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(News report from Issue No. 210, published on Nov. 26 2014)