Tag Archives: Kazakhstan

Comment: A quick look back at 2017

>> The region’s economies and Uzbekistan’s regeneration under Mirziyoyev are the standout features of 2017, writes James Kilner

JAN 5 (The Conway Bulletin) — For Central Asia and the South Caucasus, 2017 was a year of recovery. There have been the usual rounds of elections, generally predictable and cementing the incumbent powers in Georgia, Armenia and Kyrgyzstan, but economics, and not politics, caught the eye and the bigger headlines in 2017.

The economic stupor that had hung over the region since oil prices collapsed in 2014 and Russia’s economy fell into a recession, was finally thrown off. If, at the start of the year, the green shoots of recovery looked tentative, by October they were coming out into full bloom.

Most countries were posting decent economic growth figures and double-digit inflation, a real worry, has been neatly sidestepped.

Special mention here must go to Georgia which has posted exceptionally strong economic results, pushed on by a spurt in tourism and investment.

There have been some serious economic exceptions, though. Azerbaijan’s economy still shrunk and its banking sector looked as shaky as ever. International Bank of Azerbaijan defaulted on its debt repayments and several smaller banks have had their licenses revoked. Tajikistan also looks increasingly fragile and Turkmenistan, while the information stream coming out of the country is as beguiling as ever, looks like it may have been holed below the waterline. Watch out, in 2018, for a serious fracture in Turkmenistan.

As well as a recovery period for the region’s economies, 2017 was also a year of recovery for Uzbekistan’s political structures and their relationships with society. This will go down as the year that Uzbek President Shavkat Mirziyoyev made it clear that he was determined to pursue a reformist agenda after taking over from the authoritarian and brutal Islam Karimov in September 2016.

He devalued the official exchange rate of the Uzbek soum, took thousands of people off blacklists linked to Islamic extremists, reigned in the power of the secret service, encouraged traders to export to neighbouring countries and signed deals with the rest of the region over borders and commerce that his predecessor had spurned.

There is still much to do in Uzbekistan, and some people grumble about the lack of genuine democratic values and the slow pace of human rights progress, but Pres. Mirziyoyev is laying the foundation for a better future for Uzbeks.

If the Conway Bulletin had a ‘Person of the Year’ prize, Mirziyoyev would be a worthy winner.
>> Next week – the first in a 2-part series on what to look out for in 2018

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— This story was first published on Jan. 5 2018 in issue 356 of The Conway Bulletin

Nazarbayev signs “repressive” media bill into law

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DEC. 28 (The Conway Bulletin) — Kazakh President Nursultan Nazarbayev signed into law a bill that officials said should improve the quality of the country’s media but its critics have described as being designed to suppress free speech. Under the new laws, anonymous comments under online stories are no longer allowed. Journalists writing about a subject’s wealth, family or banking records need his or her permission.

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— This story was first published on Jan. 5 2018 in issue 356 of The Conway Bulletin

Alstom increases stake in Kazakh train-maker

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ALMATY, DEC. 22 (The Conway Bulletin) — French train-maker Alstom, bought another 25% stake in Astana-based EKZ, from Kazakhstan’s Temir Zholy, to bring to 75% its ownership of the locomotive manufacturer.

This is an important deal for Kazakhstan as it shows increased confidence in its manufacturing base by major Western companies. Kazakhstan is trying to show it is serious about diversifying its economy away from oil, gas and minerals.

Didier Pfleger, Alstom Senior Vice-President for Middle-East and Africa, said the deal highlighted the success of the EKZ project and also Alstom’s commitment to the region.

“By increasing once again Alstom’s share in EKZ, we show our confidence in the attractiveness of Kazakhstan and we contribute to the development of new expertise and skills locally to address not only Kazakhstan’s needs but also regional ones,” he said in a press statement.
The value of the deal was not declared.

EKZ was set up to assemble the Prima range of locomotives in 2010 by Alstom (25%), Russia’s Transmashholdings (25%) and Temir Zholy (50%). Alstom bought a 25% stake from Temir Zholy in 2016 too. It now owns 75% of the company and Transmashholding owns 25%.

As well as assembling the Prima locomotives at its factory in Astana, EKZ now also assembles passenger wagons. Outside the extractive industries, EKZ is one of Kazakhstan’s headline companies. It employs 420 and is seen as critical in diversifying the Kazakh economy.

Kazakhstan has become a major hub in China’s Belt and Road infrastructure strategy giving its railway system a boost.

The Kazakh government has also committed itself to upgrading its network. There are 20,000km of railway tracks in Kazakhstan, the third largest railway network in the world using the 1,520mm gauge.

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— This story was first published on Jan. 5 2018 in issue 356 of The Conway Bulletin

Kazakhs grumble about switch to Latin alphabet

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ALMATY/SEPT. 24 (The Bulletin) — Four years ago dozens of Kazakh intellectuals wrote to President Nursultan Nazarbayev expressing their opposition to a plan to ditch the Kazakh language’s use of Cyrillic in favour of the Latin alphabet.

They said that the switch would damage the Kazakh language, undermine literature written in Cyrillic and reduce the size of the media.

This opposition is still around today but now that this switch is being heavily pushed by the Kazakh government, a government that doesn’t tolerate opposition and is often described as autocratic, it has withered.

The government and the pliant Kazakh media have presented plans to switch the alphabets by 2025 as the overwhelming will of the people and a necessary modernisation of the Kazakh language that had, in any case, only been switched from Arabic script to the Cyrillic alphabet under Soviet rule in the 1920s.

But there has been no canvassing of public opinion and no poll has been published on how ordinary Kazakhs really feel about it – possibly because the results may not be as overwhelmingly in favour of the changes as the government says.

Online, there are hints of frustration. Many say the money would be better spent developing the, frankly, Third World state of rural Kazakhstan or improving the education system, which is hardly drowning in accolades. One user said he was “fed up with the caprices of the few chosen elites”.

Dariya Orazbayeva is a well-educated PR specialist living in Almaty. She speaks English but she is still against the switch.

“The process of adaptation will be really hard, I think, especially for the older generation,” she told The Conway Bulletin’s correspondent.

There are also concerns over how a 25-letter Latin alphabet, it will lose the ‘x’, can replace a 42-letter Cyrillic alphabet, which had nine letters unique to Kazakh.

The Kazakh language’s switch to Latin is not the clear-cut issue that the government likes to describe.

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— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Kazakhstan reduces Kashagan output expectations

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SEPT. 22 (The Bulletin) — Kazakhstan’s Kashagan oil field will produce 270,000 barrels of oil per day during the last quarter of the year, Kazmunaigas told Reuters, less than a previous figure of 300,000 – 370,000 barrels suggested by energy minister Kanat Bozumbayev. Kashagan is the major Caspian Sea oil field that Kazakhstan hopes will propel it into the Premier League of global oil producers.

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— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Central Asia Metals agrees deal to buy Macedonian zinc mine

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ALMATY/SEPT. 22 (The Bulletin) — Kazakhstan-focused Central Asia Metals agreed to buy Lynx Resources, which owns a zinc mine in Macedonia, from Bermuda-based fund Orion Co-Investments III and Swiss firm Fusion Capital for $402.5m.

The deal is the biggest merger or acquisition in the Central Asia region this year and highlights the boom year that metal producers and miners have enjoyed.

Nick Clarke, CEO of Central Asia Metals, said that buying Lynx was a perfect fit and the result of extensive research on how to expand.

“We believe that this transaction is an exceptional opportunity for Central Asia Metals to acquire a high quality asset which complements our existing business,” he said in a statement.

The deal will be financed through a mixture of equity and debt.

Kenes Rakishev, a Kazakh investor with close ties to Kazakhstan’s elite, has been the biggest stakeholder in Central Asia Metals with a 19% stake. Under the deal, he will have to sell around half his stake.

The London-listed Central Asia Metals has performed well this year, rising 10.4% to 254.5p before trading was suspended on Sept. 4 following rumours of a takeover.

When trading begins again on Monday, Central Asia Metal’s share price is expected to rise.

Central Asia Metals’ main assets have been a copper slag heap in Kazakhstan. Analysts said buying up Lynx would mean diversifying its portfolio, an essential move.

“The transaction serves to diversify Central Asia Metal’s jurisdictional and commodity exposure and whilst it appears they have paid full price, they have also acquired an asset with good economics and long life,” the Telegraph quoted analysts at Numis as saying.

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— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Former Kazakh PM released early from prison

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SEPT. 21 (The Bulletin) — Former Kazakh PM Serik Akhmetov was released from prison in Karaganda only two years into a 10 year sentence for corruption. Akhmetov was convicted in 2015 in a high-profile trial that highlighted the country’s endemic problem with corruption. He was PM from September 2012 until April 2014. Earlier in September, a court in Karaganda said that Akhmetov should be released but that he will face limitations on his freedom.

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— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Kazakhstan increases manufactured goods exports

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SEPT. 21 (The Bulletin) — Kazakhstan has increased exports of manufacturing goods by 28% in the first six months of the year compared to the same period last year, media quoted development minister Zhenis Kasymek as saying. One of the biggest boosts to the $7.5b worth of manufacturing exports was from the car industry. Lada Niva, which makes cars in Oskemen, started exports to China and the UAE.

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— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Kyrgyzstan accuses Kazakhstan of political meddling

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BISHKEK/SEPT. 20 (The Bulletin) — Kyrgyzstan and Kazakhstan exchanged testy diplomatic notes after Kazakh president Nursultan Nazarbayev travelled to Bishkek to meet with Omurbek Babanov, a former PM and a high-profile opposition candidate in next month’s presidential election.

Immediately after news of meeting between Mr Nazarbayev and Mr Babanov broke, the Kyrgyz government complained that the Kazakh government was trying to influence the election.

The Kazakh government replied in kind, saying that Mr Nazarbayev had every right to visit opposition leaders in Bishkek.

The election in Kyrgyzstan, set for Oct. 14, is ratcheting up into a grumpy affair. Pres. Almazbek Atambayev is stepping down after his single six-year term. He has backed his PM Sooronbai Jeenbekov to replace him.

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— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

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SEPT. 18 (The Bulletin) — Switzerland-based oil trader Vitol has extended its so-called cash-for-crude loans to Kazakhstan to $5b, the FT reported. This is an extension of the original $3b deal thrashed out between Kazakh state oil and gas company Kazmunaigas and Vitol in April last year. The deals have come about as Kazakhstan needs to generate cash on forward oil contracts. They have positioned Vitol at the centre of the Kazakh oil system, shipping barrels to Russia and on to Europe.

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— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.