Tag Archives: Kazakhstan

Kazakh police arrest pension fund chiefs on corruption allegations

ALMATY, JAN. 6 2017 (The Conway Bulletin) — A Kazakh court ordered the arrest of the state pension fund’s top managers on corruption allegations, severely denting the public’s trust in one of the state’s flagship financial organisations.

The arrest of the pension fund’s chairman, Ruslan Erdenaev, the director of financial risk management, Musa Bakhtov, as well as two directors from two different mining companies, is just the latest in a series of high profile corruption cases in Kazakhstan which have even included a former economy minister.

And ordinary Kazakhs, who are already struggling to deal with the impact of a sharp economic downturn that has wiped 50% off the value of the tenge, destroyed jobs and savings, are voicing their frustrations increasingly vocally.

In Almaty, Inna Kisilenko, a mother of a six-year-old boy, shrugged her shoulders.

“Time will tell,” she said. “But honestly I feel doubtful. They [the government] increases the pension age and makes up other things.”

The pension fund arrests were ordered after the Central Bank asked the security services to investigate a deal between the fund and two mining companies worth 5b tenge ($15m) in November.

And the $20b pension fund is a particularly sensitive issue in Kazakhstan. It was created in 2014, when the government forced banks to merge their pension funds into one single state-controlled unit. Kazakhs questioned the motive of such a move. This grumbling turned to outrage when news emerged in the summer that the fund had lent members of the elite cash to finance construction of a shopping centre.

Natalya, 50, summed up people’s feelings.

“I just don’t trust it [pension fund],” she said. “I think it is not right because times are hard. I think about how elderly people survive with their pension money. Everything is getting more expensive, rent, groceries.”

ENDS

(News report from Issue No. 312, published on Jan. 13 2017)

Estonian builder says Kazakhstan hasn’t paid fine

JAN. 12 2017 (The Conway Bulletin) — Estonian construction company Windoor said that Kazakhstan had refused to pay a 23m euro settlement imposed by Stockholm’s arbitration court last year for reneging on a 2012 deal to build a conference centre in Astana for the Kazakh foreign ministry. Windoor said that it would now take the judgement to an international tribunal in Washington.

ENDS

(News report from Issue No. 312, published on Jan. 13 2017)

Kazakhstan cuts uranium production, forcing prices to rise

ALMATY, JAN. 10 2017 (The Conway Bulletin) — Kazakhstan, the world’s top uranium producer, pledged to cut uranium output, immediately pushing up the price of the metal by 10%.

The production cut promise, and subsequent price rise, demonstrated just how much influence Kazakhstan has over the global uranium market. It currently produces around 40% of the world’s uranium.

Announcing the 10% cut in production, Kazatomprom chairman Askar Zhumagaliyev, said that 2016 had been scarred by a global oversupply of uranium.

“It will be better for our shareholders and stakeholders to leave these strategic uranium resources in soil, rather than use them in the current situation of oversupply,” media quoted him as saying. “The uranium will be produced when the situation improves in the markets in the coming years.”

Uranium prices collapsed in 2016, hitting a 12-year low of $18/pound in mid-December. This represented a drop of 25% since September.

Analysts blamed a number of factors.

A tsunami in 2011 knocked out the Fukushima nuclear power plant in Japan. Fukushima had been a major buyer of uranium before the accident and knocking it out of the market had triggered an immediate oversupply.

The accident at Fukushima also dented the reputation of nuclear power as a safe and reliable energy source and a drop in global oil prices also switched attention away from nuclear power and back to hydrocarbon-fired power which has dropped in price.

Kazakhstan has also contributed to the glut of uranium as it moved to become the world’s biggest supplier. Kazakh uranium production shifted from 18,000 tonnes in 2010 to 24,000 tonnes in 2016. In 2007, Kazatomprom mined 5,000 tonnes.

After the Kazakh cut announcement, which represents around 3% of global supply, Uranium’s spot price rose to $24.25/pound, its highest since September.

ENDS

(News report from Issue No. 312, published on Jan. 13 2017)

Kazakh Central Bank to stress test the sector

JAN. 9 2017 (The Conway Bulletin) — Clearly worried about the solvency of its commercial banks, the Kazakh Central Bank said it intends to stress test the sector in H1 2017. Oleg Smagulov, the deputy chairman of the Kazakh Central Bank, told the kapital.kz website that it wanted to limit banks’ expose to bad debt. Last month it cancelled KazInvestBank’s licence to operate and unnamed sources also told Bloomberg that Kazkomertsbank, the biggest Kazakh bank, may be looking for a government loan.

ENDS

(News report from Issue No. 312, published on Jan. 13 2017)

Kazakh court imprisons 7 men for terrorism

JAN. 6 2017 (The Conway Bulletin) — A court in Aktobe, north-west Kazakhstan, sentenced seven men to prison for terrorism related offences. The state prosecutors said that the group had been planning a series of attacks against Russia and Russians. Central Asian governments have become increasingly wary of attacks on their territory and of Islamic radicals using the region as a prime recruiting ground.

ENDS

(News report from Issue No. 312, published on Jan. 13 2017)

Inflation slows in Kazakhstan

JAN. 4 2017 (The Conway Bulletin) — Annualised inflation in Kazakhstan slowed to 8.5% in 2016, down from 13.6% in 2015, the country’s statistics committee said. The slow- down will be a relief to the Central Bank as it will give it increased room to use its monetary policy levers to try and induce more economic activity. The government’s inflation target has been 6-8%.

ENDS

(News report from Issue No. 312, published on Jan. 13 2017)

Kazakhstan Caspian pipeline exports increase

JAN. 9 2017 (The Conway Bulletin) — Exports via the Caspian Pipeline, which pumps oil from western Kazakhstan, around the Caspian Sea to the Russian Black Sea port of Novorossiisk, rose by 4% in 2016, data released by the pipeline’s owner the Caspian Pipeline Consortium (CPC) showed. CPC’s main client is the Tengiz field in Kazakhstan. CPC’s biggest shareholders are Russia with a 24% stake, Kazakhstan with a 20.75% stake and Chevron with a 15% stake.

ENDS

(News report from Issue No. 312, published on Jan. 13 2017)

HRW criticises Kazakhstan over Union closure

JAN. 10 2017 (The Conway Bulletin) — The New York-based Human Rights Watch criticised the imminent closure of Kazakhstan’s independent workers’ union, the Confederation of Independent Trade Unions of Kazakhstan, as a violation of the right to freedom of association. A court in Shymkent, south Kazakhstan, had ordered the Union’s closure because it had violated union registration rules. The Kazakh authorities are suspicious of trade unions. They blame them for stirring up an oil workers strike in 2011 that turned into a riot.

ENDS

(News report from Issue No. 312, published on Jan. 13 2017)

Kazakh Central Bank keeps rates steady

JAN. 9 2017 (The Conway Bulletin) — Kazakhstan’s Central Bank held its key interest rate as 12% at its first monetary session of 2017 but hinted that cuts would come later in the year to boost economic activity. The challenge for the Kazakh Central Bank is to boost economic activity without undermining confidence in its tenge currency.

ENDS

(News report from Issue No. 312, published on Jan. 13 2017)

Kazakhstan buys Russian choppers

JAN. 11 2017 (The Conway Bulletin) — Kazakhstan will receive an order of four Mi-35M combat helicopters from Russia in 2018, Russian Helicopters said. Kazakhstan has been looking to modernise and improve its military. It has signed various deals with Russia to boost military relations. The Mi-35M is Russia’s most sophisticated combat helicopter and is designed to attack land-based vehicles.

ENDS

(News report from Issue No. 312, published on Jan. 13 2017)