OCT. 21 2015 (The Conway Bulletin) – Nurbek Elbayev, director of the Kyrgyz energy regulatory agency, said electricity tariffs will rise sharply over the next two years. The regulator will impose a 21% increase in August 2016 and a 29% rise in 2017. Electricity prices have risen across the region, triggering civil unrest.
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(News report from Issue No. 253, published on Oct. 23 2015)
OCT. 23 2015 (The Conway Bulletin) — Despite all the reassuring declarations coming from Astana and the Central Bank in Almaty, volatility will be a constant for the Kazakh currency over the next months. There is just no getting away from it.
On Wednesday, Kairat Kelimbetov, Kazakhstan’s Central Bank chief, said 277.5 tenge/ $1 is an acceptable rate as long as oil prices float around $50 per barrel. Already on Friday, Brent prices fell to $48 and the tenge followed to 278.2. Over the past fortnight it has lost 1.5% against the US dollar.
Other currencies fared better this week, maintaining their value. The Georgian lari was steady at 2.39/$1 and even the Kyrgyz som had a calm week below 69/$1.
Rumours of devaluation are more worrisome in Uzbekistan, where the sum is officially stable at around 2,663/$1, but the website dollaruz.com said informal rates on the Black Market are hitting over 5,700 sum/$1.
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(News report from Issue No. 253, published on Oct. 23 2015)
OCT. 23 2015, BISHKEK (The Conway Bulletin) — Japanese PM Shinzo Abe began a tour of the five Central Asian Stans designed to boost links with the region.
The trip started in Turkmenistan, where Mr Abe signed deals worth over $18b in the chemical and power sectors.
This was the first official visit by a Japanese PM to Turkmenistan, proof of the country’s growing status as a global energy exporter.
Stopovers in Dushanbe and Bishkek will also mark the first official visits to Tajikistan and Kyrgyzstan for a Japanese leader.
Central Asia has been attracting high-profile interest from Asian leaders over the past few years. In 2013, China’s President Xi Jinping completed a similar Grand Tour of the region and this year Indian PM Narendra Modi also visited all five Stans.
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(News report from Issue No. 253, published on Oct. 23 2015)
OCT. 15 2015 (The Conway Bulletin) – Kyrgyzstan released official results for its Oct. 4 parliamentary election that cemented the Social Democrat’s (SDK) grip on power. The SDK, the party of President Almazbek Atambayev, won 38 seats, up from 26 in 2010. Second was Respublika-Ata Jurt with 28 seats. The Kyrgyzstan party won 18 seats, Onuugu- Progress 13 seats, Bir Bol 12 seats and Ata-Meken 11 seats.
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(News report from Issue No. 253, published on Oct.16 2015)
BISHKEK/Kyrgyzstan, OCT. 9 2015 (The Conway Bulletin) — Parliamentary elections in Kyrygzstan on Oct. 4 may be being lauded around the world as a great success for democracy in a region normally more closely associated with dictatorship and the rule of the autocrat but in some circles the gloom is palpable.
And its many of Bishkek’s Western-oriented youth who are the most pessimistic. This was the group that rebelled most strongly against the edict that to register to vote you had to hand over your biometric data to the authorities.
Many decided that it was better to safeguard your personal data and lose the vote.
Sitting in a university canteen in Bishkek, a group discussed the election. None of them had voted and none of them regretted this.
“I do not regret that I did not go to elections because I knew who would win, it was the same people and parties as in the 2010 elections,” said 23-year old Syrgak Arkabayev, a student.
He also said that he would not submit his biometric data ahead of the 2016 presidential elections either.
And he’s not alone. An estimate said that up to a third of Kyrgyzstan’s population had also decided not to file their biometric data to the authorities. They said that the authorities can’t be trusted to safeguard the data.
But in any case, and this undermines the argument that democracy in Kyrgyzstan is in rude health, the dissenters said that there had been little motivation to vote in the election.
“I don’t think elections can change something in Kyrgyzstan,” said Gulzat Matisakova, 24.
Meerim Batyrkanova, 23, who helped an OSCE team to observe elections in Balykchy, a town on the shores of Lake Issyk-Kul told a Bulletin correspondent that she was disappointed with the preliminary list of deputies who won seats at the election.
“Mostly, there are the same faces of deputies, ministers and state officials in the list,” she said. “There will be no big changes in politics.”
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 7 2015 (The Conway Bulletin) — Banks in Kazakhstan and Kyrgyzstan are bracing themselves for tough times ahead. The currency crisis that has hit the region has, it feels, still a long way to run. Central Banks in both countries have pledged to help commercial banks in the short term to prevent falls in the values of the tenge and som from spiraling into panic and a run on the banks.
This is sensible.
The Kazakh Central Bank said it would compensate savings accounts in tenge that have so far lost 46% in US dollar terms after the regulator moved to a free-float policy. Across the border, in Bishkek, the Central Bank laid out new measures to help customers pay their dollar- denominated mortgages, which have become more expensive as the som lost value.
When people lose confidence in their currency, as is happening across Central Asia and the South
Caucasus, Central Banks intervene. In both countries, new policies were adopted to limit the amount of loans in foreign currencies, to ensure stability in the market.
These short-term measures, however, may have serious repercussions down the road. Bailouts can have an adverse effect on these countries’ sovereign ratings and they could, in any case, be insufficient to reverse the economic downturn.
Let’s see how these policies fair against a falling currency market.
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 2-8 2015 (The Conway Bulletin) — The Kazakh tenge lost 1.5% of its value over the past week, ending at 274/$1.
Much of this perceived strength appears to lie with the Central Bank’s little secret — intervention. Despite promising never to intervene in the currency again, the Kazakh Central Bank has spent another $367.5m this week propping up its currency.
Over the border in Kyrgyzstan, the som crept briefly over 69/$1 on Oct. 6, before settling back to 68.9 in a week that saw little of the violent fluctuations of previous episodes. The Kyrgyz Central Bank also intervened in the market, selling $10.2m.
No doubt the successful and peace- ful parliamentary elections would have played well to the steady currency markets. European vote monitors were certainly impressed and that is good for Kyrgyzstan’s image.
The Georgian lari was also stable last week at 2.40. Positive economic data and a substantial stability in foreign reserves reassured lari holders.
The Tajik somoni continued its gradual devaluation against the dollar. By marginally weakening every week, the somoni has lost 2.5% of its value against the dollar over the past month.
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 8 2015 (The Conway Bulletin) – The Kyrgyz Central Bank said remittances from Russia fell by 27% in US dollar terms during the first eight months of this year compared to the same period last year. Cash flows from Russia increased by 18% in rouble terms, but a fall in the value of Russia’s currency against the US dollar meant that the real value fell.
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 7 2015 (The Conway Bulletin) — Analysts in Kazakhstan have revised their inflation expectations down to 7.1% this year after official data showed that the consumer price index grew by only 1% in September.
Halyk Finance researchers said the numbers are much more encouraging than what they forecasted. This should keep inflation within the Central Bank target of 6-8%. Central Bank chairman Kairat Kelimbetov said he doesn’t rule out the possibility of a further increase in interest rates, after a new rate was set at the end of last week.
The Eurasian Development Bank (EDB) said in a report that Kyrgyzstan’s economy is poised to grow by 1.8% this year. This came after PM Temir Sariyev disclosed more optimistic numbers, pointing out that in Jan.- Sept. 2015, the country’s economy grew by 6%. The EDB said it expects a marginal slowdown in economic activity in Q4 2015.
The IMF has dramatically increased its forecast for Azerbaijan’s growth in 2015, from a meagre 0.6% in April to 4% in its latest report.
The international lender also revised inflation expectations downwards from 7.9% to 5% for 2015, more good news.
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 9 2015 (The Conway Bulletin) – On Oct. 4, Kyrgyzstan held parliamentary election marked by significant improvements in the country’s democratic development.
The elections have demonstrated the viability of Kyrgyzstan’s constitution adopted in 2010 that delegated more powers to the parliament and prevents the emergence of autocratic political power. Six political parties out of a total of 14 were able to pass the national and regional threshold, adding an important element of political plurality.
The elections are significant for three main reasons.
First, despite earlier skepticism, the Social Democratic Party of Kyrgyzstan (SDPK), led by President Almazbek Atambayev gained only an estimated 38 seats out of total 120. This demonstrates that the president was unable to gain wide support despite his overwhelming influence over state media and the public sector.
Along with SDPK, the new parliament includes Respublika- Ata-Jurt bloc, Kyrgyzstan, Onuguu, Bir Bol and Ata-Meken parties.
Second, competing political parties tried to arrange their party lists to ensure both popularity and professionalism of their top members. As a result, the new parliament will include a greater number of powerful individuals better able to articulate their respective parties’ agendas. Greater professionalism in parliament can in turn boost the quality of political debates.
Finally, despite multiple cases of election fraud at voting booths and controversy surrounding a rushed collection of biometric data ahead of the elections, the electoral process was a progression towards greater transparency and accountability among political parties.
The government actively tried to eliminate fraud, while parties reported their campaign spending.
Televised debates featured representatives of competing parties who sought to distinguish themselves with creative policy solutions to pressing issues.
The new parliament will inevitably have a strong minority coalition either led by Respublika- Ata-Jurt block or will be composed of smaller parties aligning against SDPK.
But regardless of who will end up in the ruling coalition, the process of coalition formation is likely to be highly contentious and fraught with difficulties.
By Erica Marat, Assistant Professor at the College of International Security Affairs of the National Defense University, Washington DC
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 251, published on Oct. 9 2015)