Tag Archives: Kyrgyzstan

Hollande to visit Kyrgyzstan

JULY 27 2016 (The Conway Bulletin) — French President Francois Hollande told the new Kyrgyz ambassador to France that he is considering a visit to the Central Asian country in the near term, official media reported. Earlier this month, German Chancellor Angela Merkel visited Bishkek, her first to Central Asia. Her stopover in Bishkek en route to a conference in Mongolia was seen as a reward for Kyrgyzstan’s relative democracy.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Car sales fell in Tajikistan and Kyrgyzstan

JULY 19 2016 (The Conway Bulletin) — Tajikistan’s customs agency said that the country imported around 1,300 cars in H1 2016, a drop of 80% compared to the same period last year. Earlier reports said that car imports in Kyrgyzstan have also dropped in H1 2016. Tajikistan and Kyrgyzstan are two of the most remittance-dependent countries in the world and their economies have been hit hard by a recession in Russia.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Kyrgyz reputation drop deters Chinese

BISHKEK, JULY 20 2016 (The Conway Bulletin) — Looking to woo investors from China and to boost stagnant domestic industries, Kyrgyzstan made a direct plea last month to Chinese businesses to buy into 43 different factories.

The problem is that, seven weeks on, none seem particularly interested. In an interview with The Conway Bulletin, Alkhanbek Imanaliyev, the CEO of Bishkek-based knit-wear company Ilbirs, blamed a fall in Kyrgyzstan’s image as a place to do business for the lack of interest. He hasn’t had a single visit from a Chinese company looking to invest in Kyrgyzstan.

“We welcome any investors as long as they don’t change the profile of the factory and retain local people as employees,” he said. “But raids and scandals around the Kumtor gold mining company intimidate them.”

Chinese investment has become a mainstay of business and infrastructure projects in Central Asia. China has openly looked to curry political favour through its investments.

But it hasn’t all been smooth.

Chinese companies generally prefer to import labour from China, raising tension with local workers. This has lead to fights, especially in Kazakhstan and Kyrgyzstan.

Over the past couple of years, groups of Kyrgyz locals have even raided foreign-owned business on horseback to settle disputes and to intimidate. This year, also, the Kyrgyz tax authorities raided a refinery owned by a Chinese company arrested the Chinese deputy director.

On the Kumtor Gold mine, the Kyrgyz government is locked in a protracted row with Toronto-listed Centerra Gold over its ownership.

All this appears to have undermined Chinese investors’ confidence, a major problem for Kyrgyzstan which is looking to boost investment.

Not everybody in Kyrgyzstan, though, was even happy about the initial offer made to Chinese investors. At the Soviet-era lamp factory in Maily-Suu, in west Kyrgyzstan, workers worry they could lose their jobs if the company is taken over.

“This factory ensures jobs for 2,700 people, which is roughly 12% of Maily-Suu town population,” Avazkan Arzykulova, head of the labour union at the factory, told The Bulletin. She has written to the Kyrgyz government asking them to block any sale to a Chinese company.

For now, though, it doesn’t appear as if Ms Arzykulova and her colleagues don’t have anything to worry about.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Kyrgyzstan-operated Centerra finalises investments

JULY 20 2016 (The Conway Bulletin) — Canadian miner Centerra Gold said it finalised a financing deal with three investment banks to partially fund its takeover of Thompson Creek, a US-based miner. Centerra will receive 185m Canadian dollars ($142) from BMO Capital Markets, Credit Suisse Securities Canada and Scotiabank. Centerra Gold’s main asset is the Kumtor gold mine in Kyrgyzstan.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Briefing: Region’s economies sputter into life

JULY 22 2016 (The Conway Bulletin) — >>Malaise, downturn recession. What exactly going on in Central Asia and the South Caucasus?

>>All countries in the region are either growing slower than last year or, in some cases, their economies are even shrinking. The crisis is regional, although each country has shown its own specific problems.

>>This is the region-wide problem. I can see but what caused it?

>>The US dollar strengthened so much in 2014 that it triggered a sharp drop in oil and commodity prices. This pulled dollars away from Emerging Markets, like our own patch. As commodity prices sank, Russia fell into a crisis that quickly turned into a recession. The depreciation of the rouble cut the value of salaries earned by migrant workers, triggering a slowdown in remittances to Central Asia and the South Caucasus.

>>Okay, but oil prices picked up again since the 13- year low point in January. Isn’t that good for energy exporters in Central Asia and the South Caucasus?

>>Higher oil prices have helped state-owned oil companies to relax their emergency mode, but they’re still too low to justify the region’s most expensive projects. Think of the Kashagan oil project in Kazakhstan’s sector of the Caspian Sea, or the upgrade of Azeri Chirag-Guneshli oil project in Azerbaijan. Plus there are negative signs for transparency over the re-organisation of government companies and structures in the energy sector in Kazakhstan and Turkmenistan.

>>And what about the other commodities, such as gold and aluminium?

>>Gold is a big component of Kyrgyzstan’s GDP as it depends on the performance of the Kumtor gold mine in the east of the country. This year, operational problems and corporate battles have slowed production, which has significantly hit Kyrgyzstan’s growth figures. It now could slip into a recession. Tajikistan, on the other hand posted a promising 6.6% GDP growth in the first half of 2016 and state-owned smelter TALCO increased aluminium production. But these numbers should be read with caution. TALCO also said that it is currently operating at a loss, as its production costs are 25% higher than market prices.

>>Right, so is it all bad?

>>Not necessarily. Dollarisation, as Georgia’s Central Banker said this week, is still a problem across the region and the currencies continue to be weak. But despite some devaluations and depreciations, most of them have kept steady in 2016, which is a sign that governments want to keep their economies stable and will spend their reserves to prop them up.

>>And for companies looking to do business in the region, how bad is it?

>>If in 2015 we saw scores of international companies running away from projects in Central Asia and the South Caucasus, this year we’ve seen promising developments, such as the final investment decision for the expansion of the Tengiz oil- field in Kazakhstan and the signing of the contract for the construction of the Rogun dam in Tajikistan, both multibillion-dollar commitments. French hypermarket Auchan has also opened up its long-awaited store in Dushanbe. Perhaps confidence is returning or at least a sense of “let’s just get on with it”.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Kyrgyz President signs CASA-1000 deals

JULY 19 2016 (The Conway Bulletin) — Kyrgyz President Almazbek Atambayev signed a range of laws that ratify domestic and international agreements on CASA-1000, an electricity transmission project that will send power from Tajikistan and Kyrgyzstan to Afghanistan and Pakistan. Loans from international lenders, including the World Bank and the Islamic Development Bank, will make up 70% of Kyrgyzstan’s total funding for the project.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Kyrgyz Election Commission unseats MP

JULY 11 2016 (The Conway Bulletin) — Kyrgyzstan’s Central Election Commission unseated MP Jyrgalbek Samatov after proving he had used fake documents to lodge his candidacy for a parliamentary election in October last year. The government’s election watchdog found that Mr Samatov had not relinquished his double Russian-Kyrgyz citizenship ahead of the election, which made him automatically unelectable. Mr Samatov later said he would sue the Commission.

ENDS

(News report from Issue No. 289, published on July 15 2016)

Kyrgyzstan defends shares in Centerra Gold

BISHKEK, JULY 11 2016 (The Conway Bulletin) — A court in Canada dismissed a notion put forward by three companies and a businessman locked in legal disputes with the Kyrgyz government that would have threatened state-owned Kyrgyzaltyn’s ownership of shares in Toronto-listed Centerra Gold.

The decision is a major victory, after years of wrangling, for Kyrgyzstan which wanted to ringfence a 32.7% stake in Toronto-listed Centerra Gold owned by state gold company Kyrgyzaltyn. It’s also a relief for Centerra Gold, which owns the Kumtor gold mine — Kyrgyzstan’s single largest industrial asset.

The claimants — Canadian miner Stans Energy, Turkish construction companies Sistem and Entes and the Latvian citizen Valeri Belokon — had said that the Canadian court should freeze and seize the stake to enforce other arbitration rulings involving Kyrgyzstan. They said that the shares may be officially owned by Kyrgyzaltyn but that the Kyrgyz state was the beneficial owner.

The judge, Justice Conway, disagreed, though, and ruled that Kyrgyzaltyn and Kyrgyzstan could not be treated as the same entity.

The ruling means that the claimants will have to find other jurisdictions to pursue their legal claims against Kyrgyzstan.

ENDS

(News report from Issue No. 289, published on July 15 2016)

Briefing: Tajikistan’s Rogun dam project

JULY 15 2016 (The Conway Bulletin) — >>Right. Let’s get started. The Rogun Dam. What is it and what is it all about?

>>For Tajikistan and President Rakhmon, the Rogun dam project is vitally important. If it is ever built, and the plans have been knocking around since the Soviet era, the Rogun dam will be the tallest dam in the world at up to 335 m. It will also double Tajikistan’s power generation capacity. The problem is that the dam has proved highly controversial, domestically and internationally, and is also expensive to build.

>>Hang on. Slow down. This is a lot take on. So, Rogun is massive but why is it controversial?

>>It’s controversial because human rights group have accused the government of forcibly moving thousands of people away from the Vakhsh River valley, the area that will be dammed and flooded. The government has also imposed a Rogun dam tax on people to pay for the project. This has gone down badly with human rights groups. Externally, Uzbekistan, Tajikistan’s neighbour, hates the idea of the Rogun dam. It worries that the dam will divert water from irrigating its cotton fields.

>>How serious are Uzbekistan’s concerns?

>>Central Asia is a fragile region. If Uzbekistan is making threatening noises
towards Tajikistan, people need to take notice. Analysts and diplomats have spoken of water wars in Central Asia. I’m not saying that the Rogun dam is going to trigger a war but it is another pressure point that people need to watch.

>>Got it. So with all these obstacles and problems why is Tajikistan pushing for problems?

>>It’s become Rakhmon’s pet project. He probably has another five or ten years left in office and it really feels like he wants and needs the Rogun dam to be his legacy. It’s also become vitally important for Tajikistan’s electricity generation sector. Electricity is becoming an important export commodity for Tajikistan as it has signed up to be the main power generator for the so-called CASA-1000 project.

>>CASA-1000? What is that?

>>It’s the World Bank-backed project to build a power transmission network from Tajikistan to Pakistan. It will cost around $1.2b, cross Afghanistan and be operational, if it all goes to plan, by 2019. The challenge is both security and power generation.CurrentlyTajikistan, and to a lesser extent Kyrgyzstan, doesn’t have the capacity to generate enough power to meet its CASA- 1000 commitments. That’s where Rogun comes in.

>>And the financing? This seems to be an expensive project just when the region is trying to deal with a financial crisis. Where is the finance coming from?

>>Good question. We’re not entirely clear. We’ve only been told that it is a mix of government funds and private investment. Who the private investors are and what their motives are is unknown.

>>I see. So what next?

>>Well, the Tajik government awarded a $3.9b contract to Italian builder Salini Impregilo to start construction work on the dam. We’re still waiting for work to begin but Salini Impregilo has said it will kick off soon. This has been a stop-start project so actually seeing the diggers go in and the workers start to build the dam is important. If this does happen, it’ll dominate news headlines for years to come.

ENDS

(News report from Issue No. 289, published on July 15 2016)

Kyrgyz President arranges anti-extremist posters

JULY 14 2016 (The Conway Bulletin) — Kyrgyz President Almazbek Atambayev said that he arranged the financing of several posters across Bishkek designed to warn against the spread of more extreme foreign forms of Islam in Kyrgyzstan. Mr Atambayev was questioned on the posters during a joint press conference with German Chancellor Angela Merkel. He said that even minor changes in a country’s tradition, such as clothing or words, can foster radicalisation.

ENDS

(News report from Issue No. 289, published on July 15 2016)