Tag Archives: Tajikistan

Editorial: Banks in Tajikistan

MAY 20 2016 (The Conway Bulletin) – The past nine months have been tough for Tajikistan. A recession in Russia has smashed into Central Asia and the South Caucasus, heavily denting the larger economies and taking great chunks out of the smaller ones. Tajikistan has suffered a sharp fall in remittances, the weakening of the somoni currency and a liquidity crisis in the banking sector.

This week’s news that TSB, one of the country’s largest commercial banks, needs a caretaker administration to help it navigate through problem loans is a sign of the fragility of the entire sector. After all, TSB holds around 33% of Tajikistan’s total loan portfolio.

But failing banks is not the only consequence of the economic downturn. Politically, Emomali Rakhmon’s regime has retrenched and used old-school Soviet techniques to tighten its grip on power.

The opposition has been outlawed and chased out of town, surveillance of pious Muslims has increased and a referendum that will extend Mr Rakhmon’s stay at the top now looms.

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(Editorial from Issue No. 281, published on May 20 2016)

Revenues fall at VimpelCom’s regional subsidiaries

ALMATY, MAY 12 2016, (The Conway Bulletin) – Revenues at Russian mobile operator VimpelCom’s Central Asia and the South Caucasus operations were sharply down in the first quarter of 2016 compared to the same period in 2015, a sign of the continuing economic malaise that has undermined consumer confidence in the region.

In Armenia, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, VimpelCom operates under the Beeline brand. Its customer base in the region shrank by 6% to just above 24m, roughly in line with figures released last month by its rival TeliaSonera.

In Kazakhstan, VimpelCom said that revenue from its mobile operations was just under 24b tenge in Q1, 10% lower than 2015, and that its subscriber base had fallen 4% to 9.2m.

The Kazakh mobile market has become increasingly competitive. Sweden’s Tele2 merged with Kazakhstan’s Altel earlier this year and has been undercutting its bigger rivals.

In its quarterly report, VimpelCom said that prices would stay low.

“Competition remains intense, however, although the company continues to maintain its commercially rational pricing strategy,” it said. “Beeline expects the competitive environment to remain challenging throughout 2016.”

And, other than in Uzbekistan were a new pricing strategy had sustained revenues, it was a similar story in other subsidiaries. In Georgia revenues were down 30% in US dollar terms and in Tajikistan down 27%.

VimpelCom said of the drop in revenue in Tajikistan that this was “mainly due to lower incoming international traffic as a result of fewer migrants living abroad due to the macro-economic slowdown in the region and a weakening local currency.”

A recession in Russia has heavily reduced job opportunities for migrant workers from Tajikistan, hitting remittances and economies in Central Asia.

Earlier this year, VimpelCom paid a fine of $795m after it admitted paying bribes in 2007/8 to access the Uzbek mobile market.

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(News report from Issue No. 280, published on May 13 2016)

Tajik bank asks EBRD for emergency loan

DUSHANBE, MAY 9 2016 (The Conway Bulletin) — In the most serious indication so far that Tajikistan’s banking system is beginning to buckle under the pressure of this prolonged economic downturn, Tojiksodirotbank admitted it was on the brink of a liquidity crisis and that it had applied to the EBRD for a loan to save it.

Representatives of TSB, as Tojik- sodirotbank is commonly known, flew to London to meet with EBRD officials on the sidelines of its Annual General Meeting.

“Tojiksodirotbank, one of the country’s systemically important banks, needs financial assistance in the current situation,” TSB said in a statement.

Neither TSB, nor the EBRD commented on the size or the timing of the loan.

In March, Tajikistan’s Central Bank invited EBRD representatives to propose solutions to a worsening financial situation. The Tajik som has fallen heavily in value against the US dollar and all-important remittances are down by around 50% because a recession in Russia has wiped jobs for migrants.

This year nervous savers have been withdrawing money from banks they fear are on the edge of bankruptcy.

Also, the proportion of so-called non-performing loans (NPLs) in the system has skyrocketed. The proportion of loans that were 60 days or more overdue grew from 9.9% at the end of 2013 to 24% at the end of 2014, according to official data. Media has also said that this figure may be nearer 33% now.

Earlier this year the IMF said that TSB and its largest competitor, Agroinvestbank, were exposed to increased credit risk and could become insolvent.

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(News report from Issue No. 280, published on May 13 2016)

Court in Tajikistan sentences opposition

MAY 11 2016 (The Conway Bulletin) – A Tajik court sentenced Bakhtiyor Nazarov, son of former deputy minister of defence Abdukhalim Nazarzoda, to 22 years in prison for inciting riots and calling for a revolution. In September 2015, Nazarzoda allegedly organised a coup against President Emomali Rakhmon. The Tajik security forces later killed Nazarzoda and accused several members of the opposition Islamic Renaissance Party of masterminding the attack.

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(News report from Issue No. 280, published on May 13 2016)

Rights groups accuse Tajik government over internet blackout

MAY 12 2016 (The Conway Bulletin) – Rights groups accused the Tajik government of blocking several news websites for two days, including Asia Plus and Radio Free Europe/Radio Liberty. Tajikistan is building up to a referendum on May 22 on extending the President’s powers, creating a potentially nervy period. Media freedom lobby groups regularly rank Tajikistan as one of the least free countries in the world.

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(News report from Issue No. 280, published on May 13 2016)

CASA-1000 officially launched in Tajik capital

DUSHANBE, MAY 12 2016 (The Conway Bulletin) — Leaders from Tajikistan, Afghanistan and Pakistan flew to Dushanbe to officially launch the start of construction of the CASA- 1000 project, which they hope will give regional trade a boost.

CASA-1000 is the $1.2b World Bank backed project that policy makers hope will transform the economies of Kyrgyzstan and Tajikistan, bolster stability in Afghanistan and boost power supplies in Pakistan.

The plan is simple — to build an electricity supply route from hydro- power stations in Kyrgyzstan and Tajikistan, across Afghanistan and into Pakistan. But it has its detractors. Many analysts have argued that Afghanistan is simply too unstable to host a network of transmission lines and that power generation capacities in Kyrgyzstan and Tajikistan are too temperamental.

Still, in Dushanbe, at the official ceremony to kick off production, the leaders were upbeat.

Tajikistan’s President Emomali Rakhmon, hosted the ceremony. He said that the project would work and that it would have a number of positive side effects.

“This will promote solutions to a number of social, economic and environmental protection problems in all four countries,” he was quoted by media as saying.

The CASA-1000 transmission line will run for 1,222km and should be completed by 2018. It will transmit 1,300 megawatts of electricity, most of it to Pakistan.

Also at the ceremony were Afghan Chief Executive Abdullah Abdullah, Pakistani Prime Minister Nawaz Sharif, Tajik President Emomali Rakhmon, and Kyrgyz Prime Minister Sooronbai Jeenbekov.

Western diplomats conceived the plan a few years ago as part of a new north-south Silk Road, although it has been the various local leaders with finance from the World Bank who have pushed it through.

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(News report from Issue No. 280, published on May 13 2016)

Kyrgyz-Tajik CASA-1000, a ‘mad plan’ now nearing its launch

MAY 5 2016, DUSHANBE (The Conway Bulletin) — CASA-1000 is the power transmission project that most analysts dismissed as too madcap to work.

Conceived by US diplomats and regional officials sometime around 2010 when Hillary Clinton, then the US Secretary of State, was promoting her vision of a north-south Silk Road stretching from Central Asia to India, this was the project that was meant to fail.

Instead, Tajikistan, Kyrgyzstan, Pakistan and Afghanistan will officially launch its construction next week.

If all goes to plan, and security in areas of Afghanistan where the Taliban are active is a major concern, CASA-1000 should foster improved relations in the region and boost economies.

The World Bank is the project’s biggest backer, pledging more than half the estimated $1b cost to build the 1,222km transmission line and support systems.

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(News report from Issue No. 279, published on May 6 2016)

Kyrgyzstan secures $1.7b loan to push CASA-1000 forward

MAY 5 2016, BISHKEK (The Conway Bulletin) — Despite securing a $1.7b finance deal to boost its power generating sector, Kyrgyzstan still has its work cut out to ensure that it can hit targets laid out in the ambitious CASA-1000 project which aims to send Tajik and Kyrgyz electricity to Pakistan and India, analysts said.

Next week heads of state from Kyrgyzstan, Tajikistan, Afghanistan and Pakistan are due in Dushanbe to officially launch CASA-1000, heralded as a new epoch in Central Asia and South Asia trade relations.

And Kyrgyzstan’s $1.7b credit line, organised last week with the Islamic Development Bank, the International Development Association and the European Investment Bank, has come only just in time.

Kyrgyzstan needs the cash to bolster its power generating capacity which has faltered over the past six months. In December 2015, transmission line faults damaged the 1,200MW Toktogul power plant, which generates 40% of Kyrgyzstan’s electricity. The outage triggered shortages and worried senior officials in the Kyrgyz government and their international partners.

At the same time, Russia pulled out of a $2b deal to build a dam and a 2,000MW power station at Kambar-Ata, on the Naryn river in central Kyrgyzstan, because a recession had sucked dry its funds.

Marat Kazakbayev, a political analyst based in Bishkek said Kyrgyzstan can currently meet its export demands but at a heavy cost.

“Electricity exports may be carried out at the expense of domestic electricity supply for the population of Kyrgyzstan,” he said.

For Kyrgyzstan, though, CASA- 1000 is a headline project that it simply must make work. The $1.2b project, backed by the World Bank, has been touted as a regional trade deal that will create wealth in mountainous Kyrgyzstan and Tajikistan, which have large power generating systems through their network of hydropower dams, and light houses and office blocks in Pakistan where electricity is in short supply.

The United States also views the project as an important way to lock Afghanistan into a global trade system and for it to generate some revenue as a transit country.

Still, as Indra Overland, research professor at the Norwegian Institute of International Affairs, said, even with the $1.7b loan secured, there is no guarantee that Kyrgyzstan’s power sector will be running at capacity by the time CASA-1000 is supposed to start in 2018.

“Kyrgyzstan has a problem of suboptimal internal organisation, lack of good governance,” he said. “It has plenty of hydropower potential to produce enough electricity for itself and for export. It should be a surplus country, but its infrastructure is lagging behind.”

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(News report from Issue No. 279, published on May 6 2016)

Tajik Pres. daughter becomes Parliamentary candidate

MAY 3 2016 (The Conway Bulletin) – Tajikistan’s Central Election Commission approved President Emomali Rakhmon’s daughter, Ozoda Rakhmon, as a parliamentary candidate. Ms Rakhmon is currently head of the Presidential Administration and will run for a seat in the upper house in a May 29 by-election. Democracy advocates have accused Tajikistan of nepotism in selecting public officials.

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(News report from Issue No. 279, published on May 6 2016)

Tajik officials flatter Rakhmon

MAY 3 2016 (The Conway Bulletin) -DUSHANBE– Regional officials in Tajikistan are imposing strict regulations on the appearance of youngsters they allow to meet President Emomali Rakhmon when he visits, media reported, exposing what critics say are heavily stage-managed processes designed to flatter the Tajik leader.

According to reports, Shahnoz Niyozova, a student from the northern town of Mastchoh was barred from meeting Mr Rakhmon when he visited for Navruz celebrations in March because she was not sufficiently tall or Aryan in appearance.

A leaked official letter from the town’s administration gave a rare insight into local administrations’ think.

“Those who wish to speak before the Leader of Nation must have beautiful Aryan appearance, be tall, and have sonorous diction,” it said.

Local officials generally handpick the most beautiful and eloquent youths to meet Mr Rakhmon. They recite poems or thank him for bringing peace to Tajikistan.

Most ordinary Tajiks regard these meetings, which are shown on national television, as a waste of time.

In Dushanbe, Firdavs, 28, told a Bulletin correspondent that it was hot air.

“No one really talks about stuff that matter, like economic and political issues,” he said. “From all the flatteries and poems, you would think that we do not have any problems.”

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(News report from Issue No. 279, published on May 6 2016)