Tag Archives: society

Economic crisis worse than 2008/9, says Kazakh President

OCT. 19 2015, ASTANA (The Conway Bulletin) — In a rare candid assessment of the economic storm battering Central Asia and the South Caucasus, Kazakh President Nursultan Nazarbayev said the outlook for Kazakhstan’s economy was now worse than it had been during the 2007-9 Global Financial Crisis.

Mr Nazarbayev’s comments, made during a meeting with Kazakh PM Karim Massimov and published on the Presidential website, were the most candid so far by one of the region’s leaders.

And any comparison with the dark days of 2007-9, when the economies of Kazakhstan and its neighbours reversed nearly a decade of sharp growth, will hit a nerve.

“Our people must know the current situation, profits at businesses are dropping, income is falling and there is the possibility of job losses,” he said.

“This is a real crisis — more powerful than in 2007-2009.”

In 2006, according to World Bank data, Kazakhstan had been powering along and enjoying GDP growth of over 10%.

This dipped to 9% in 2007 before falling in 2008 to around 3% and in 2009 to just over 1%.

Consumers and mortgage holders defaulted on debt repayments in 2008-9 and Kazakhstan’s government had to buy up bankrupt banks. Although the Kazakh economy has recovered, the experience left deep financial and psychological scars.

And the crash this time has been just as sudden as the 2007-9 Global Financial Crisis.

In 2007-9, sub-prime mortgages in the US started the rout. This time, a sudden fall in oil and commodity prices and a loss of confidence in Emerging Markets, including in China, have been the triggers.

Currencies across Central Asia and the South Caucasus have fallen by around 40%, inflation is rising and trade volumes falling.

Kazakhstan has built up cash reserves from oil and gas sales but Mr Nazarbayev said that, although social programmes would be supported, businesses would not be bailed out.

“Companies should not expect the State to give them the means to survive. This will not happen,” he said.

Other leaders across Central Asia and the South Caucasus may not have been as forthright as Mr Nazarbayev on the economic outlook but they are facing the same stormy conditions.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Kazakh labour figures down

OCT. 19 2015 (The Conway Bulletin) – Over 11,000 people lost their jobs in Kazakhstan in the first nine months of the year, the ministry of social development said. The ministry monitors only a sample of private businesses, so the total numbers could be larger, according to Radio Free Europe. A chart produced by the Economist Intelligence Unit showed that the overall size of the Kazakh labour force is shrinking.

ENDS

(News report from Issue No. 253, published on Oct. 23 2015)

Kyrgyzstan elections disappoints many

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.”

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Kazakhstan’s bail-out for savers to cost $420m

OCT. 7 2015, ALMATY (The Conway Bulletin) — A Kazakh government bail-out for hundreds of thousands of savers who hold tenge denominated deposits hit by a currency devaluation in August could cost the state around $420m, according to the Bulletin’s calculations.

The bail-out adds to the lengthening bill that the Kazakh state is having to foot to weather a worsening economic storm that has hit the Central Asia and South Caucasus region.

It has spent billions of dollars propping up its currency and also said that it will give handouts and tax breaks to key industries heavily effected by the economic downturn such as car-makers and smaller oil producers.

And in an effort to shore up support immediately after the devaluation on Aug. 20, President Nursultan Nazarbayev said savers would be compensated for losses incurred when the Central Bank ditched the tenge’s peg to the US dollar and allowed it to drop heavily.

Now, at a press conference in Almaty, Alexander Trentyev, director of the consumer protection department at the Central Bank, for the first time hinted at the bill that the government was facing.

“The compensation will cover the period August 18 2015 to September 30 2016. Over 1.7m accounts totalling around 250b tenge are eligible for the government aid,” media quoted him as saying.

The tenge is currently trading at around 275/$1, a drop of around 46% from its value of 188/$1 just before the devaluation on Aug. 20. This means that the 250b tenge in bank deposits will convert to 365b tenge and cost the government $420m in compensation. Of course, though, as analysts have said, the tenge could well drop further in value before Sept. 30.

But there is a flip-side for savers. Their accounts will be frozen for 13 months until Sept. 30 2016.

This measure appears to have been adopted to prevent customers from rushing to withdraw their savings and turning them into US dollars after they received compensation.

It will also keep a high level of tenge in the currency markets, a policy the Central Bank has said that it favours.

What the authorities are desperate to avoid during this period of economic turbulence is civil unrest. The bail-out of savers appears designed to ward this off.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Georgia’s CAA to improve domestic aviation

OCT. 6 2015 (The Conway Bulletin) – Georgia’s Civil Aviation Authority (GCAA) presented a plan to develop four airstrips, a move that it hopes will help boost domestic air travel. The GCAA said it was looking for partners to develop the sites which is said would thrive off Georgia’s growing economy and status as a tourist destination.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Georgian inflation creeps up

OCT. 2 2015 (The Conway Bulletin) – Annualised inflation in Georgia in September measured 5.2%, the Georgia statistics service said, a small drop from August. The main driver of inflation has been a rise in the price of electricity, alcohol and cigarettes. Last month the Central Bank increased interest rates to try to beat rising inflation.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Georgian rugby earns second win

OCT. 7 2015 (The Conway Bulletin) – Georgia ended their Rugby World Cup with a 17-16 victory over Namibia, earning their second win in the tournament. This is and the only time that Georgia has won more than one match in a World Cup.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Uzbek migration to RU falls

OCT. 6 2015 (The Conway Bulletin) – Data from the Russian Migration Service showed a 17% fall in Uzbek migration into Russia during the first 9 months of 2015 compared to the same period last year. The economic downturn in Russia and the fall in the rouble-dollar exchange rate have discouraged Uzbek workers from travelling to Russia for jobs.

ENDS

(News report from Issue No. 251, published on Oct. 9 2015)

Kazakh government orders textbook publisher to redraw map of Ukraine

OCT. 1 2015, ALMATY (The Conway Bulletin) — Kazakhstan’s ministry of education ordered the Metkep publishing house to redraw a map used in one of its textbook which suggested Crimea was part of Russia.

Like most countries, Kazakhstan has not officially recognised Russia’s annexation of Crimea after a referendum last year in which the majority of people voted to leave Ukraine.

The Ukrainian embassy in Astana last week complained about the map in the school textbook, embarrassing the Kazakh government which needs to tread a fine diplomatic line between Russia and West.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Kazakh football team sneak draw in Champions League

ASTANA/ Kazakhstan, OCT. 2 2015 (The Conway Bulletin) — Just when the crowd began to think that it was all over, the ball slipped into the back of Galatasaray’s net. The Astana Arena, with 30,000 FC Astana fans inside, shook with celebration.

The third own-goal of a mad and exciting match sealed a 2-2 draw for FC Astana in the first ever Champions League football game played in Central Asia.

Incredulous FC Astana fans were besides themselves with joy at the unexpected result.

“I am not keen on football, but when there are games like this, I turn into a real football-freak” said Bota, a 27- year-old FC Astana fan. On her nails she had painted the Kazakh flag.

The atmosphere at the Astana Arena, a state-of-the-art stadium with synthetic grass and retractable roof, was electric and very patriotic. The 30,000 FC Astana fans were dressed in blue-and-yellow, the colours of Kazakhstan’s flag. They didn’t stop singing and chanting for the whole 90 minutes.

In Kazakhstan’s Premier League many seats are empty but not for this match against Istanbul’s Galatasary. On the pitch FC Astana were not just representing the Kazakh capital, they were representing the entire country.

“This game is a way to prove that we are not Boratstan,” said Bota in a reference to the fictional comic character called Borat. “We have a lot of things to show and be proud of.”

Kazakh fans hadn’t forgotten that Galatasaray forward Lukas Podolski tweeted a picture of Borat after his team were drawn in the same group as FC Astana. Every time he touched the ball, they booed.

FC Astana is essentially a state club, part of the President’s Sport Club Astana alongside an ice hockey and cycling team, and financed by the national fund Samruk-Kazyna.

And this historic football match helped distract many people from the increasing economic gloom. Perhaps with some irony, one of the FC Astana chants was “We believe in Astana. We do not care about devaluation.”

Whether they qualify or not for the next round of the Champions League, FC Astana will also host Atletico Madrid and Portugal’s Benfica this year.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)