Tag Archives: Kazakhstan

Inflation at correct level, says Kazakh Central Bank chief

MARCH 13 2017 (The Conway Bulletin) — Kazakh Central Bank chief Daniyer Akishev said that he wanted to target inflation of 6-8% by the end of the year. It currently measures 7.8% which is down from a recent high of 17.7% in July 2016. Kazakhstan’s economy has stabilised after falling heavily in the previous couple of years, a drop linked to the fall in oil prices and tenge weakness.

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(News report from Issue No. 321, published on March 20 2017)f

Kazakh Central Bank says to buy KKB bad debt

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ALMATY, MARCH 15 2017 (The Conway Bulletin) — Kazakhstan’s Central Bank confirmed that it would buy up 2.4 trillion tenge ($7.5b) of bad debt owned by Kazkommertsbank, effectively subsidising its purchase by Halyk Bank.

Halyk Bank, owned by the daughter and son-in-law of Kazakh president Nursultan Nazarbayev, agreed to buy Kazkommertsbank earlier this year for an undisclosed amount in a deal that will give it a 38% market share and Kazakhstan’s elite control of the banking sector.

The 2.4 trillion tenge bad debt held by Kazkommertsbank is a legacy of its purchase of BTA Bank from the government. The government had

bought it in 2008/9 when it was about to collapse during the Global Financial Crisis.

Separately, deputy Central Bank chairman Oleg Smolyakov said it would take two to three months for Halyk Bank to carry out its due diligence of Kazkommertsbank before the takeover could be completed.

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(News report from Issue No. 321, published on March 20 2017)

Kazakhstan’s Eurasian Bank plans to expand

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MARCH 14 2017 (The Conway Bulletin) — Kazakhstan’s Eurasian Bank plans to expand into Uzbekistan, Kyrgyzstan, Georgia and Azerbaijan in a bid to become a truly regional operator, its CEO Pavel Loginov said in an interview with Forbes Kazakhstan. Almaty, the former capital of Kazakhstan, is considered the financial capital of Central Asia but the only two banks in the region listed on the London Stock Exchange are both Georgian — Bank of Georgia and TBC.

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(News report from Issue No. 321, published on March 20 2017)

Islamic finance boosts in Kazakhstan

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MARCH 14 2017 (The Conway Bulletin) — The Association of Financiers of Kazakhstan, an industry lobby group, and Islamic Development Bank have signed a deal to look at ways of developing Islamic finance in Kazakhstan, media reported. There are currently two banks in Kazakhstan practising Islamic banking — Zaman Bank and Bank Al-Hilal.

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(News report from Issue No. 321, published on March 20 2017)

Kazakhs do not express concerns about constitutional changes

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ALMATY, MARCH 20 2017 (The Conway Bulletin) — Betraying a lack of interest in politics, most people in Almaty who spoke to The Conway Bulletin about changes to the Kazakh constitution made earlier this month just shrugged their shoulders.

Some were concerned that Kazakh President Nursultan Nazarbayev made the changes to hand more power to parliament without consultation but they were in the minority.

Aigerim, a 25-year-old woman working in service sector, said casually: “I haven’t heard of the constitutional changes. I don’t know, I couldn’t care less. They will decide [do what they want] anyway, they will not ask us.”

There was also a degree of scepticism over how much power parliament will really be given.

Malik, 60, said: “Parliament will not be given decision-making power, it is just formality. Nazarbayev is and will be the only person in power.”

These views were echoed by most people that the Bulletin spoke to, although the issue of land ownership has dominated some discussion groups.

Land is a touchy subject in Kazakhstan. Last year, people protested in several cities across the country against a change to the law that was going to give foreigners improved rights to land ownership in Kazakhstan. The constitutional changes brought in by Mr Nazarbayev hasn’t touched the issue of land rights but that didn’t stop it dominating conversations.

Rabiga, a pensioner, said: “I do care, I have my family living here. I have heard of (the constitutional changes) but don’t know the details. But I heard there was one article on land that is changed from citizen to anybody. I have read about it a lot.”

Most analysts said that Mr Nazarbayev has tinkered with the constitution to try to split power between a number of people in order to avoid any one person dominating Kazakh politics when he leaves. The 76-year-old hasn’t yet unveiled plans for his accession.

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(News report from Issue No. 321, published on March 20 2017)

Tasmagambetov swears in as Kazakh ambassador to Russia

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MARCH 16 2017 (The Conway Bulletin) — Imangali Tasmagambetov, formerly the mayor of Astana and Almaty and also an ex-defence minister, was sworn in as Kazakhstan’s ambassador to Russia. Mr Tasmagambetov had been considered a potential successor to President Nursultan Nazarbayev but most observers considered his shift to Moscow to be a demotion. Others argued that he needed to spend time with Kazakhstan’s most important ally, Russia, before he could be considered as a successor for President Nazarbayev.

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(News report from Issue No. 321, published on March 20 2017)

Azerbaijan buys trains from Kazakhstan

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MARCH 13 2017 (The Conway Bulletin) — A Kazakh factory producing trains has delivered 10 locomotives to Azerbaijan, media reported. The Trend news agency said that Lokomotiv Kurastyru Zauyty had also sent locomotives to Kyrgyzstan, Tajikistan, Ukraine and Turkmenistan. This is important for Kazakhstan as it is trying to boost its manufacturing sector. Azerbaijan is, itself, trying to boost its role as a pivot for global trade and has said it will buy more trains if it can secure a north-south trade route between India and Russia.

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(News report from Issue No. 321, published on March 20 2017)

Comment: SCO expansion should not threaten the West, says Pantucci

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MARCH 20 2017 (The Conway Bulletin) — The Shanghai Cooperation Organization (SCO) has achieved remarkably little in its decade plus life.

Established formally in 2001, it grew out of a regional grouping aimed at seeking to define China’s borders with the former Soviet Union. Over time, it has expanded beyond its immediate neighbourhood to include countries as distant at Belarus and Sri Lanka as ‘dialogue partners’.

The current push to welcome both India and Pakistan is likely to further test the organisation’s already limited capability. The practical implications for Central Asia are unlikely to be dramatic, though in the longer term it may help bind Central and South Asia closer together and foster a greater sense of community across the Eurasian heartland.

In practical terms, the SCO has always been a fairly limited organisation. Seen initially by Russia as a way of controlling Chinese activity in Central Asia, for Beijing it has provided a useful umbrella under which to pursue their stealthy expansion in the region. For Central Asian powers, it provided another format in which to engage their larger neighbours. While the primary thrust of its activity has been in the security space, China has regularly sought to push it in an economic direction.

Yet, at the same time, all of the countries involved have largely pursued their own national interests through other pathways. The most recent demonstration was the establishment by Beijing of the Quadrilateral Cooperation and Coordination Mechanism (QCCM). Focused on managing the security threats from Afghanistan, the QCCM in many ways replicates a function which one would have expected the SCO to deliver.

The addition of Pakistan and India to the grouping is unlikely to change this dynamic.

All of the nations involved in the SCO will continue to function through their own bilateral and other multilateral engagements. But it will offer another forum in which India and Pakistan are obliged to interact and will also help further tie Central and South Asia together. These ties have been growing for some time. Kazakhstan has expressed an interest in participating in the China- Pakistan Economic Corridor (CPEC) and Indian President Narendra Modi visited Central Asia last year.

If India and Pakistan join the SCO, it will further help tie them together.

By Raffaello Pantucci, director of International Security Studies at the London-based Royal United Service Institute (RUSI).

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(News report from Issue No. 321, published on March 20 2017)

Kazakh airline signs codeshare deal with Lufthansa

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MARCH 15 2017 (The Conway Bulletin) — Air Astana, half owned by the Kazakh government and half owned by Britain’s BAE Systems, signed a codeshare agreement, effectively allowing the airlines to sell each other’s flights between Frankfurt and Astana or Almaty. The agreement is a boost for Air Astana. It already has code sharing agreements with a handful of high- profile airlines including KLM, Turkish, Etihad and Air France.

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(News report from Issue No. 321, published on March 20 2017)

Tough times for Kazakh banks, says S&P

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MARCH 14 2017 (The Conway Bulletin) — The ratings agency Standard & Poor’s said that banks in Kazakhstan will face another tough year because the Kazakh economy is still labouring under slow growth rates, depressed commodity prices and exchange rate volatility. The Kazakh Central Bank has set up a fund to help banks that are struggling through this regional economic downturn.

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(News report from Issue No. 321, published on March 20 2017)