Tag Archives: Uzbekistan

Uzbekistan wants to sell stake in Coca Cola bottling plant

TASHKENT/JUNE 22 (The Bulletin) — the Uzbek government said it wanted to sell its 57% stake in its joint-venture with Coca-Cola, the largest soft drinks producer in Central Asia.

The sale of the two production plants in Uzbekistan, for an undeclared amount, highlights the government’s commitment to its much-vaunted privatisation process, a process that has touched most sectors of an economy that was once considered off-limits to foreign investors.

Uzbekistan’s State Asset Management Agency gave no other details on the potential sale but it is one of the country’s most-prized manufacturing assets and will attract interest.

In March, Coca-Cola said that it planned to invest $31m into the joint venture to “modernise and expand the production capacities of factories in Tashkent and Khorezm province”.

It also said in its statement at the time that it had increased capacity by more than a third in 2018 and by another third in 2019, reflecting large growth in the soft drinks market in Central Asia and also in Uzbekistan which has experienced an economic boom under Shavkat Mirziyoyev, president since 2016.

“According to the findings of the study conducted in 2019, the market is expected to grow by 1.8 times in the next 10 years due to the growth in population, income and the tourist inflow into the region,” Coca Cola said in its March statement.

This was shortly before the Uzbek government locked the country down to try to stem the spread of the coronavirus. Economists have said that the lockdown strategy, adopted by most countries, will tip Uzbekistan into a recession this year.

The sale of its stake in the Coca-Cola joint-venture is just the latest asset that the Uzbek government has put up for sale. Earlier this year it said that it wanted to find a foreign partner to run its airline, Uzbekistan Airways. It was unclear if a deal with Uzbekistan Airways may also involve selling off a stake.

ENDS

— This story was first published in issue 451 of the Central Asia & South Caucasus Bulletin on June 23 2020

— Copyright the Central Asia & South Caucasus Bulletin 2020

Uzbekistan to open up regional airports to foreign airlines

TASHKENT/JUNE 18 (The Bulletin) — Uzbekistan will allow foreign airlines to land at all its regional airports from Aug. 1, a move that it hopes will boost the country’s prospects as the preferred stopover for Europe-Asia air travel.

The route has become increasingly lucrative since China started to push its Belt and Road Initiative and is hotly contested between the Central Asian countries.

Uzbek officials said that they would trial the increased access to its airports for foreign airlines under what it dubbed its “Open Skies” policy. 

“Open Skies at the regional airports of Uzbekistan will be introduced using the fifth air freedom, which allows unloading and taking on board passengers, mail and cargo from or to the third country on the territory of the partner country,” media quoted Uzbekistan’s aviation authorities as saying.

The UN’s Fifth Air Freedom referenced by Uzbek officials allows airlines to stop at airports in third countries to pick up and offload passengers and cargo. Uzbekistan introduced this freedom at its main international airport at Tashkent in 2018. 

Like its neighbours, Uzbekistan has been trying to lure airlines to its airports. This year it also said that it would cut ground handling and refuelling fees. 

ENDS

— This story was first published in issue 451 of the Central Asia & South Caucasus Bulletin on June 23 2020

— Copyright the Central Asia & South Caucasus Bulletin 2020

Uzbek government sells Karimova’s Paris mansion for $10m

JUNE 18 (The Bulletin) — The Uzbek government has sold a luxury house in Paris previously owned by Gulnara Karimova, the eldest daughter of former Uzbek leader Islam Karimov, for $10m, media reported.  Ms Karimova has been in prison or under house arrest in Tashkent since 2014 when she was accused of financial crime. The state is trying to recover millions of dollars from her assets which it has said were stolen.

ENDS

— This story was first published in issue 451 of the Central Asia & South Caucasus Bulletin, published on June 23 2020

— Copyright the Central Asia & South Caucasus Bulletin 2020

Coronavirus undermines region’s projected growth

ALMATY/April 5 (The Bulletin) — The coronavirus will undermine what had looked like a strong year of economic growth in 2020 and instead knock the Central Asia and South Caucasus region into a recession.

Of the six countries in the region that have declared states-of-emergencies and infections of the coronavirus, only Kazakhstan has officially said that its economy will shrink in 2020 but analysts expect others to follow.

Kazakh economy minister Ruslan Dalenov said on April 2 that the combined impact of the coronavirus and a fall in oil prices mean that Kazakhstan’s economy will shrink by 0.9% in 2020.

Oil is Kazakhstan’s main export and with prices dropping by 40% to around $35/barrel because of a price war and a drop in demand triggered by the spread of COVID-19, the disease caused by the coronavirus, Mr Dalenov said oil exports would fall.

“A decrease is also expected compared to previously approved growth rates in the manufacturing industry, agriculture, construction and the services sector, including trade,” he said. 

Kazakhstan had previously predicted GDP growth of 4.5% for 2020. It last went into a recession in 2016 after a previous oil price collapse.

In Armenia, the Central Bank is still predicting GDP growth this year but only of 0.7%, down from an earlier prediction of 7.6%.

Other countries have held off giving predictions on the economic cost of the spread of the coronavirus although they have all said that their original growth estimates are likely to be heavily reduced.

ENDS

— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Checkpoints appear around Uzbekistan to stop travel during pandemic

APRIL 5 (The Bulletin) — Uzbek officials said that the number of people infected with the coronavirus had increased by 32 to 298. The government has ordered the population of its key cities to self-isolate and people are only allowed out of their homes to buy food and go to the doctor.

Police checkpoints have appeared around the country to stop the people from travelling and army reservists have been mobilised.

ENDS

— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Central Asia and the South Caucasus tighten coronavirus lockdowns

YEREVAN/April 5 (The Bulletin) — Battling to stop the spread of the coronavirus, governments in Central Asia and the South Caucasus intensified lockdowns that ban people from leaving their homes.

At least 17 people have died across the region with the COVID-19 disease caused by the coronavirus, although analysts think the real figure could be many more. Health ministries and international donors are now worried that the region’s underfunded and under-resourced hospitals and health systems will buckle if there is a surge in infections.

On March 26, Armenian deputy PM Mher Grigoryan appeared to betray his nervousness about whether Armenia’s health service could cope with rising infections.

“We have an obvious problem, which is outstanding everywhere else in the world and it is important to solve here in Armenia,” he was quoted as saying. “It is the modernisation and re-equipment of the healthcare system. Here, too, we must take measures.”

In the region, only Tajikistan and Turkmenistan have not reported any infections, to the derision of observers who think it is unlikely that either country has escaped the coronavirus that has been ripping across the world since it appeared in central China in December. 

Armenia and Kazakhstan have been worst hit by the coronavirus, with 822 and 569 people infected by April 5, but Kyrgyzstan appears to be most vulnerable economically. Kyrgyz President Sooronbai Jeenbekov has already asked for emergency financial support from the IMF.

As for the intensified lockdowns, the Kazakh authorities have told people that they can only leave their homes every other day and in Azerbaijan people have to notify the police via an app or an SMS if they are going out onto the street.

In Armenia, where PM Nikol Pashinyan had only a few weeks ago said that the coronavirus could easily be beaten, the government has ordered all businesses, restaurants and cafes to close until at least April 10.

He has been criticised for holding referendum campaign rallies in March that may have contributed to the spread of the coronavirus.

“Compared to Azerbaijan and Georgia, our corona infection stats are higher. Am I the first to say that the reason for this is the referendum campaign?” said Samvel Grigoryan, a public health analyst. 

A referendum on the status of the country’s top judges had been set for April 5. This has now been postponed.

Armenia’s government has said that the rate of infection is slowing, but people told The Bulletin’s correspondent that they are worried.

“We need to obey,” said Margarita Aghayan, 56, who is confined to her two-room apartment in a Yerevan suburb with her husband, her daughter and granddaughter.

“I feel very scared. I feel horror. I am scared of the people who don’t take this seriously.”

ENDS

— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Uzbekistan wants to be taken off list that restricts trade with the US

APRIL 3 (The Bulletin) — Uzbekistan has asked the United States to remove it from the list of countries which falls under the Jackson-Vanik Amendment that restricts US trade relations, media reported. The Jackson-Vanik Amendment was introduced in 1975 and restricts US trade with countries with a poor human rights record and which ban emigration. Uzbekistan is still subject to the Jackson-Vanik Amendment, although it has opened up since 2016 when the reclusive Islam Karimov died and Shavkat Mirziyoyev took over as president. Since then, Mr Mirziyoyev has lifted restrictions on Uzbeks leaving the country, invited back various human rights and media groups and moved to cut out forced labour in its cotton sector.

ENDS

— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Kazakh car factory to start producing Chevrolets

APRIL 1 (The Bulletin) — Kazakh car factory SaryarkaAutoProm in Kostanay launched the start of production of Chevrolet cars under licence from Uzbekistan’s state-owned UzAuto. Company officials said that it wanted to produce 26,000 cars in the first year, rising to 100,000 in later years. The expansion into Kazakhstan was planned by UzAuto before the spread of the coronavirus.

ENDS

— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Uzbekistan asks Asian Development Bank for loan

APRIL 1 (The Bulletin) — Uzbekistan asked the Asian Development Bank (ADB) for a $1b loan to help its economy deal with the shock of a protracted lockdown to defeat the coronavirus. The government had earlier said that it wants to set up a $1.1b fund to help business deal with the impact of the coronavirus. Pres. Shavkat Mirziyoyev has also said that he will cut taxes for businesses and the rates that people pay for electricity, water and gas. Alisher Usmanov, an ethnic Uzbek Russia-based billionaire, gave $20m to a charity building a new hospital to treat patients infected with COVID-19.

ENDS

— This story was first published in issue 441 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

COMMENT: Governments will be judged on how they deal with the coronavirus

MARCH 26 (The Bulletin) — With the global impact and disruption of Covid-19 becoming apparent, it is time to see what the governments of Central Asia and the South Caucasus are made of. Their responses now will forge their reputations. They will be judged.

And, so far, reactions have been wildly different.

Turkmenistan and Tajikistan appear to be pretending that the Covid-19 pandemic is not happening. Neither country has reported cases and in Tajikistan people are being encouraged to continue with their lives as normal. Last weekend thousands of people gathered to celebrate the Persian New Year and President Emomali Rakhmon has barely broken with his official engagements. In Ashgabat, President Kurbanguly Berdymukhamedov has talked up herbal remedies to the pandemic.

Berdymukhamedov and Rakhmon may be the Central Asian versions of Nero. While Rome burnt for a week in 64AD, Emperor Nero fiddled, or at least that is the popular perception.

Elsewhere the reaction of governments to the Covid-19 pandemic has been more mainstream.  Kazakhstan, Uzbekistan, Georgia and Armenia have all ordered lockdowns over their main cities and announced economic packages that will support business. Kyrgyzstan has applied to the IMF to help dampen its own Covid-19 epidemic which appears linked to people in the more religious and conservative south of the country returning home from the Hajj in Saudi Arabia.

In Azerbaijan, the approach has veered away from the orthodoxy, as it often does. Instead of offering the government grants and loans favoured by other countries to keep business running and to buy extra supplies and resources for its health service, Azerbaijani President Ilham Aliyev set up a special fund that would accept donations from companies, government agencies and the wealthy.

Never one to miss an opportunity to self-promote, top billing on the website currently goes to Aliyev and his wife, Mehriban, who is also the vice-president, for donating their salaries for 2020 to the fund. The website doesn’t say how large these donations were.

Covid-19 will shrink growth rates and possibly even economies across the region. The people of Central Asia and the South Caucasus are used to big, interventionist and, some would say, authoritarian government. Now these leaders have the opportunity to show their people that this power can be used to good effect in a national emergency.

ENDS

— This story was first published in issue 440 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020