Tag Archives: Kyrgyzstan

Editorial: The SCO

JULY 1 2016 (The Conway Bulletin) — The Shanghai Cooperation Organisation (SCO) will expand next year to include Pakistan and India. Since its inception in Shanghai in 2001, the SCO has been led by China and Russia. It was formed to extend their influence over their shared near-abroad — Central Asia. SCO members include all the Central Asian states other than Turkmenistan.

Western analysts have previously referred to it as Russia and China’s version of NATO, mainly because of the very visible war games that it stages each year. But this is only one component of the SCO. More important, but less visible are the various social and economic projects conducted through the SCO apparatus. These have mainly involved China. Indeed it has given China a major footprint in the region and helped to extend its influence.

By opening up the SCO to Pakistan and India, the SCO is potentially changing its remit from a regional, Central Asia focused group to a far wider organisation that takes in the two most populous countries in the world. It may become less useful as an organisation to develop Central Asia and more useful as group for larger countries to discuss their problems.

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(Editorial from Issue No. 287, published on July 1 2016)

Kyrgyz Parliament approves BTA stake sale

JUNE 29 2016 (The Conway Bulletin) – The Kyrgyz Parliament approved the sale of a 15.4% stake in BTA Bank Kyrgyzstan to Kazakh investors. The stake previously belonged to Daniyar Usenov, former Kyrgyz PM, who fled the country after a revolution in 2010 toppled President Kurmanbek Bakiyev. The new Kyrgyz government took possession of his stake in BTA and sentenced him to 15 years in prison for abuse of power in 2013.

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(News report from Issue No. 287, published on July 1 2016)

Currencies: Kazakhstan’s tenge, Azerbaijan’s manat

JULY 1 2016 (The Conway Bulletin) – Since mid-2014, a strong US dollar and downward pressures on oil prices have hit economies across Central Asia and the South Caucasus.

Currencies in the region suffered and, despite all the efforts from Central Banks to keep the exchange rate steady by intervening in the market, the fall was inevitable.

Compared to two years ago, all currencies have lost between 15% to 50% of their value. Oil exporting countries (in green in the graph) have fared worse than oil importing countries (pictured in red).

The Kazakh and Azerbaijani Central Banks decided to abandon the currency peg to the US dollar in 2015, causing a plunge in the value of the tenge and the manat. In 2015, these two were among the worst-performing cur- rencies in the world, not just the region.

Oil importers have acted in the opposite direction. In Georgia and Kyrgyzstan, currencies stabilised in the second half of 2015 and Central Banks have tightly controlled exchange rates since.

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(News report from Issue No. 287, published on July 1 2016)

Kyrgyzstan’s Megacom bid fails

JUNE 17 2016 (The Conway Bulletin) – An auction for Kyrgyzstan’s state- owned Alfa Telecom was declared invalid after failing to receive any bids, a sign that investors find the company unattractive. In May, the government had postponed an earlier auction. Alfa Telecom, which owns the Megacom brand, was nationalised in 2014. The government said that it wants to raise $19b som ($280m) from its sale.

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(News report from Issue No. 286, published on June 24 2016)

SCO leaders gather in Uzbekistan for summit

JUNE 23 2016 (The Conway Bulletin) – The presidents of Kazakhstan, Kyrgyzstan and Tajikistan gathered in Tashkent to kick-start the summit of the Shanghai Cooperation Organisation (SCO), together with their colleagues from Russia and China and Uzbek host, President Islam Karimov. The members are set to vote on June 24 to begin the membership process for India and Pakistan, currently observer countries.

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(News report from Issue No. 286, published on June 24 2016)

Kyrgyzstan’s Supreme Court changes Askarov sentence

JUNE 22 2016 (The Conway Bulletin) – Kyrgyzstan’s Supreme Court said it would reconsider a life sentence levied against Azimzhan Askarov, a prominent human rights defender, on July 11. Police arrested Askarov in the aftermath of clashes in 2010 that toppled President Kurmanbek Bakiyev’s government for inciting ethnic hatred. Pressured by US lobby groups, who have held up Askarov as a human rights champion, the Court had announced in April that it would revise the sentence.

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(News report from Issue No. 286, published on June 24 2016)

Centerra gets Kyrgyzstan licence

JUNE 23 2016 (The Conway Bulletin) – Kyrgyzstan’s State Agency for Environmental Protection and Forestry extended an environmental permit for Canadian miner Centerra Gold to operate at the Kumtor mine until the end of the year. The company now needs official approval of its mine plan for 2016 by the end of June in order to continue its work at the mine.

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(News report from Issue No. 286, published on June 24 2016)

Business comment: BREXIT, Oil & Crisis

JUNE 24 2016 (The Conway Bulletin) – As the results of the referendum on Britain’s EU membership came in early on Friday, the decision to leave the EU has shaken the global market.

The Leave vote has hit the London stock market, where most of the companies focusing on Central Asia and the South Caucasus are listed. Economists now expect more volatility in the short term for the London Stock Exchange.

The so-called Brexit also negatively affected oil prices, sending both Brent and WTI down by 6% in just a few hours. Analysts have said that the period of uncertainty regarding oil prices will now last longer.

Currency markets were also hit, as the British pound lost value against the US dollar, effectively strengthening the greenback.

This had an immediate domino effect on currencies across Central Asia and the South Caucasus, where local currencies weakened against the US dollar.

The increasing uncertainty and volatility is now poised to harm, at least in the short term, local markets in the region, prompting elites in from Tbilisi to Astana to brace for more tough times. It will also hit global markets in general, forcing investors to flee to safety and this means missing out Central Asia and the South Caucasus.

Now both the Fed in the US and the Bank of England will have to revise their economic policies and this is likely to insulate further their economies and pull investment back from Emerging Markets.

In these uncertain times, countries in Central Asia and the South Caucasus cannot but hope that Western investors will go against the tide and continue investing in the region.

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(News report from Issue No. 286, published on June 24 2016)

EU bans Kazakh and Kyrgyz airlines

JUNE 17 2016 (The Conway Bulletin) – The European Union published an updated list of banned airline companies, which included 19 Kazakh and 13 Kyrgyz companies. Airline safety is still below international safety standards in Central Asia and the South Caucasus, according to most aviation agencies. Air Astana, part-owned by British BAE Systems, is the only airline allowed to fly to the EU.

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(News report from Issue No. 286, published on June 24 2016)

Manas halts trading before announcing Kyrgyz acquisitions

JUNE 23 2016 (The Conway Bulletin) – Australia-based Manas Resources said it halted trading on the Australian Stock Exchange as it prepares the announcement of new acquisition at its Kyrgyz operations. Manas is developing two gold mines in southern Kyrgyzstan. The trading halt is a precautionary measure adopted to avoid speculation over the company’s share price. Trading will resume on June 27, the company said.

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(News report from Issue No. 286, published on June 24 2016)