SEPT. 25 (The Conway Bulletin) – Kyrgyzstan’s Central Bank kept its key interest rate at 4.75% because it also said that inflation had slowed. Specifically, the Kyrgyz Central Bank said that food prices had stagnated. It said that it expected overall inflation to measure 4% by the end of 2018.
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>>This story was published in issue 387 of The Conway Bulletin on Oct. 1 2018
SEPT. 25/28 (The Conway Bulletin) – Russia and Kyrgyzstan held joint counter-terrorism drills in eastern Kyrgyzstan, part of large series of wargames by CIS member states. Ahead of the exercise, which involved 400 pieces of military hardware, 30 Russian aircraft and a missile defence system, Russian officials said that they were important because of the increased terrorist threat from Afghanistan.
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>>This story was published in issue 387 of The Conway Bulletin on Oct. 1 2018
BISHKEK/SEPT. 24 — Kyrgyz PM Mukhammedkalyi Abylgaziev fired Zuurakan Kadenova as deputy minister for labour and social development two days after she was taken off a flight bound for Almaty in Seoul because she was drunk and incoherent.
The flight on Sept. 22 was delayed by two hours and eyewitnesses said that Ms Kadenova 46, was later seen in the airport with blood and vomit on her clothes.
She denied being drunk and said instead that a combination of a new diet plan, through which she said she had shed 5kg during her 20-day stay in South Korea, and corvalol, a mild tranquilliser, that she had taken, had made her feel ill. She said that she had not been allowed to go to the lavatory as the plane was about to take off.
“I was pale, like a drunk, and trembling, but I was not drunk. I do not drink spirits at all,” she was quoted by media as saying. “This is a political decision. Even at the airport in Seoul, when I read the news, I was ready to resign.”
A statement from Air Astana, though, differed. The Kazakh airline was quoted by several media outlets as saying that Ms Kadenova had been taken off the business class section of the flight because she was incoherent and unable to fly.
“For the safety of the flight, and also in view of the risk of further deterioration of the passenger’s health, a decision was made to refuse her transportation,” Air Astana said in a statement.
Ms Kadenova had been in Seoul for training at the Korean International Cooperation Agency, which arranges exchange programmes. There are strong links between South Korea and Central Asia, especially Uzbekistan, Kyrgyzstan and Kazakhstan where tens of thousands of ethnic Koreans live.
Ms Kadenova was made deputy minister for labour and social mobility in 2015, when current Kyrgyz President Sooronbai Jeenbekov was PM, and was previously a deputy minister for education, a teacher and a lecturer.
For the Kyrgyz government, Ms Kadenova’s sacking for being drunk will be embarrassing. South Korea is one of the countries it is targeting to boost foreign direct investment.
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>>This story was first published in issue 387 of The Conway Bulletin on Oct. 1 2018
>> So what is going on here? Why are Kazakhstan and Kyrgyzstan rowing about trade?
>> In an interview with Euronews, Kyrgyz President Almazbek Atambayev blamed Kazakhstan for imposing a trade barrier in 2010 which then forced it to join the Kremlin-lead Eurasian Economic Union. The Kazakh side responded by denying that this had ever happened and issuing a formal complaint.
>> So is this serious? What is the back-story to this?
>> This an extension of a long-running feud between the two neighbours over trade. Each has accused the other of underhand tactics which have damaged their trade. Kazakhstan is a far bigger economy than Kyrgyzstan. This puts Kazakhstan is a far stronger position than Kyrgyzstan and Kyrgyz MPs and officials often accuse it of essentially bullying it. The issue here, though, maybe that Atambayev is looking to deflect from his unpopular move in 2015 to pull Kyrgyzstan into the Kremlin’s Eurasian Economic Union. Kyrgyzstan became the fifth member of the group after Russia, Belarus, Kazakhstan and Armenia.
>> Why has the Eurasian Economic Union become so unpopular in Kyrgyzstan?
>> It’s mainly the timing of joining that was the problem. Russia had just tipped into a recession linked to a collapse in oil prices. Jobs for migrant workers dried up and various projects that Russia had promised to fund were scrapped. At the same time, Kyrgyzstan’s economy started faltering and the currency started to fall. Officials looking to shift blame found an easy target in the Eurasian Economic Union. There have also been some genuine problems with paperwork and with what was described in 2015 as a flood of cheap imports from Kazakhstan and Russia into Kyrgyzstan, which damaged local producers.
>> Are there any numbers to back this up?
>> The data that Kyrgyz officials use to back up their arguments is from the Kyrgyz Statistic Committee which said that trade with other Eurasian Economic Union members was down by over 18% last year. This was held up as proof that the Eurasian Economic Union was not working. The reality is a bit more complex. Kazakhstan also published trade figures that showed its trade with other Eurasian Economic Union figures had fallen by a similar amount. This may be more to do with the general regional economic downturn than the Eurasian Economic Union.
FEB. 5 (The Conway Bulletin) – Kyrgyz president Sooronbai Jeenbekov dropped a $73,500 libel suit against the 24.kg news agency for publishing a story which said that he and his brother had ties to “radical Arab organisations”. Although he wants damages, Mr Jeenbekov’s decision to drop the libel suit will play well to free speech activists who have accused Kyrgyzstan of adopting some its neighbours’ autocratic leanings. Mr Jeenbekov’s predecessor, Almazbek Atambayev, was notoriously litigious and wouldn’t baulk at bankrupting media outlets.
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>>This story was first published in issue 360 of The Conway Bulletin
BISHKEK, FEB. 6 2018 (The Conway Bulletin) — Russian President Vladimir Putin wrote off $240m of debt that Kyrgyzstan owed to Russia. The debt write-off had been expected as it was agreed during a trip to Moscow last year by former Kyrgyz president Almazbek Atambayev. Since 2013, Russia has written off Kyrgyz debt worth $500m. The debt write-offs underline just how influential Russia is over Central Asia and its various economies.
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— This story was first published on Feb. 6 2018 in issue 360 of The Conway Bulletin
>> China’s Belt and Road project has triggered a surge in FDI in Central Asia in the past few years. There is more to come, writes Filip Rambousek.
FEB. 6 (The Conway Bulletin) – In 2018, Chinese foreign direct investment (FDI) in Central Asia, stemming from its global Belt and Road Initiative, is likely to continue to increase. Kazakhstan, where China has already built railways and a pipeline, can be especially optimistic.
2017 saw the first freight train arrive in the UK from China via Kazakhstan, and in 2018, we will likely see a gradual increase in traffic, as China looks to expand the Kazakh route by trading with Iran.
Increasing Chinese activity will also trigger geopolitical competition in the region. Japan has already announced its intention to increase freight traffic from South Korea through Kazakhstan to Europe to curb Chinese influence. Similarly, the US may be turning back to the region following the scaling down of its military operations in Afghanistan and closure of its military base in Kyrgyzstan four years ago.
At a meeting between Nazarbayev and Donald Trump in Washington this January, the two leaders reportedly signed deals for US investment in Kazakhstan worth more than $7.5b. This may not be military but it is a big commercial statement. The US will also continue to watch Uzbekistan, Central Asia’s most populous state and arguably biggest underachiever, as Pres. Shavkat Mirziyoyev’s reform programme seeks to attract Chinese investment to restore its economy.
Similarly, for Kyrgyzstan, Chinese FDI presents an attractive alternative to the Eurasian Economic Union (EEU). Promising better access to the Russian markets, the EEU has been an economic disappointment, serving primarily as a vehicle for Russian influence. Kyrgyzstan’s ambivalent relationship with the EEU is illustrative of Russia’s position in the region. While its cultural and political heritage remains compelling, the EEU cannot match the potential offered by China; even Kazakhstan’s move to the Latin alphabet is a step away from Russia, which will likely see its influence over Central Asian affairs beginning to diminish.
Nevertheless, for China, Central Asia is only a means to an end. Its investment may travel along Central Asian railways but provide no lasting benefit. Central Asian countries should use Chinese investment to kick-start their economies, and show that FDI investment in the region can make sense.
Opportunity may come to Central Asia, but optimists should also be cautious.
>>Filip Rambousek is a Russia and CIS analyst at the S-RM consultancy.
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— This story was first published on Feb. 6 2018 in issue 360 of The Conway Bulletin
FEB. 6 (The Conway Bulletin) – Support from the Central Bank pushed the Kyrgyz som up to 68.4/$1 from 69.31/$1, its biggest single-day leap since April 2017. It has come off slightly since then but the som is still trading at around an eight month high.
Analysts said that there were no fundamental reason why the som should jump in value and instead said that the move was likely down to quiet support from the Central Bank. The Kyrgyz Central Bank has a reputation for intervening to support the som if it looks to be dropping too low.
In November and December, the som had been flirting at lows not seen since the start of 2016 when oil was below $30/barrel and Russia’s economy, the driver for Central Asia, had been in recession.
Aside from the Kyrgyz som, most of the currencies shifted down a couple of ticks, while the Georgian lari, breaking its bull-run, stayed level.
With oil and the rest of the global commodities coming off highs, it is likely that there will be some reverses over the next few weeks.
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>>This story was first published in issue 360 of The Conway Bulletin
BISHKEK, JAN 4 (The Conway Bulletin) — A court in the Kyrgyz capital sentenced Kanatbek Isaev, an opposition politician, to 12 years in prison for corruption after a high profile trial that critics of the government described as a politically motivated farce.
The imprisonment of Isaev, who was arrested in May, five months before a presidential election, further crushes opponents of President Sooronbay Jeenbekov and his ally and predecessor Almazbek Atambayev.
It has also triggered a wave of criticism over the Kyrgyz authorities apparent selective clampdown on corruption which has focused on critics of the government — politicians, businessmen and journalists.
Discussing press freedom in Kyrgyzstan, CIVICUS Alliance, a global network of civil rights groups, said in a tweet: “The new president of #Kyrgyzstan has a choice: continue to attack government critics, or break with the legacy of his predecessor and allow for public discussion on the challenges facing the country.”
Last year, the popular news website Zanoza was fined $400,000 for insulting the president and an opposition TV station was closed down. On Dec. 19, police raided NTS, the TV station of Pres. Jeenbekov’s main rival in the October election Omurbek Babanov. He has fled abroad since his failed presidential bid, renounced his political ambitions and accused the authorities of closing down NTS.
Isaev, the jailed MP, is a former mayor of Tokmok and was a high profile supporter of Mr Babanov before his arrest. The corruption charges date back to 2008-10, when he was Tokmok mayor.
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— This story was first published on Jan. 5 2018 in issue 356 of The Conway Bulletin
DEC. 25 (The Conway Bulletin) — Kazakh President Nursultan Nazarbayev and Kyrgyz President Sooronbay Jeenbekov promised to improve ties at a meeting in Bishkek. Relations between Kazakhstan and Kyrgyzstan strained in October during a Kyrgyz presidential election when outgoing Kyrgyz president Almazbek Atambayev accused Mr Nazarbayev of trying to meddle.
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— This story was first published on Jan. 5 2018 in issue 356 of The Conway Bulletin