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Power production rises in Kyrgyzstan

DEC. 14 2016 (The Conway Bulletin) — Electricity production in Kyrgyzstan was 2.5% higher in the first 10 months of the year compared to 2015, media quoted the statistics committee as saying. This is important for Kyrgyzstan because electricity, generated by its extensive hydropower system, is its main export. It is investing in the so-called CASA-1000 project to send electricity to Pakistan via Afghanistan.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)f

China dominates Tajik economy

DEC. 13 2016 (The Conway Bulletin) — Tajik media quoted an unnamed source in the state’s statistics committee as saying that foreign direct investment had risen sharply in the third quarter of the year, mainly due to heavy infrastructure investments by China. The source said that China made up around two thirds of the investments, highlighting just how influential it has become over Tajikistan.

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(News report from Issue No. 309, published on Dec. 16 2016)

Kyrgyzstan to relax registration rules

DEC. 14 2016 (The Conway Bulletin) — Kyrgyzstan is due to relax a rule introduced last month that had required foreign tourists to register at a local OVIR, an interior ministry unit, if they planned to stay in the country for more than five days, the Eurasianet website reported. It said that the Kyrgyz government would publish on Dec. 19 a list of 90 countries whose citizens needed to register within 30 days of arriving in the country. Tourist companies had complained that the rules introduced in November would be unworkable.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Tajik Banks

DEC. 16 2016 (The Conway Bulletin) — News that Tojiksodirotbank had resumed banking activities might have been a relief for its many customers, but it’s still keeping the Central Bank’s officials on the edge of their seats.

Injecting around $500m, as it did to save Tojiksodirotbank from going bankrupt, into the banking system was not a joke for the Tajik government. It is struggling to keep its somoni currency afloat against a strengthening US dollar and has faced a severe downturn in remittances from migrant workers, an important part of Tajikistan’s economy.

Tajikistan is one of the world’s most remittance-dependent countries. Transfers from workers abroad accounted for around half of the country’s GDP a few years ago.

Now, the picture might be different. The Central Bank has blamed the liquidity crisis in the banking sector on the shrinking remittances, projected to decrease again this year. In two years, between 2014-2015, remittances had fallen by 47% from $3.9b.

The combination of these events put increasingly pressure on the banking sector, which risked default earlier this year. The government intervention seems to have plugged the main hole, but the crisis is far from over.

With the bailout, the government inherited the banks’ shaky credit portfolio. For regular people, the pressure on the economy has made it increasingly difficult to pay back their debt. In addition, several state-owned companies that had borrowed heavily in previous years have started to show signs of insolvency.

The government knows well enough that it is simply not in a position to bail out its entire economy.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)f

Turkmenistan proposes discounts for airlines

DEC. 12 2016 (The Conway Bulletin) — In a move designed to increase its competitiveness for the lucrative trans-asia aviation market, Turkmenistan is offering large discounts to airlines that stop at its airport near Ashgabat, media reported. Uzbekistan and Kazakhstan have also tried to position themselves to attract international airlines flying from Europe to East Asia. Earlier this year, Turkmenistan unveiled a new terminal building.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)f

Mirziyoyev swears in as Uzbekistan’s second post-Soviet president

DEC. 14 2016 (The Conway Bulletin) — Shavkat Mirizoyev was formally sworn in as Uzbekistan’s second post- Soviet president.

At his swearing-in ceremony, Mr Mirizyoyev promised to continue along the path that had been set by his predecessor Islam Karimov.

“Today, as I assume the post of the President of the Republic of Uzbekistan, I comprehensively and deeply feel and realise as a head of state the very enormous responsibility on my shoulders,” he said according to his press office. “And (I promise) to continue the work of the great state and political figure, our dear teacher Islam Karimov.”

Although he has pledged to follow a course set by Karimov, Mr Mirizoyev has already worked to open up the country, making peace deals with neighbours, granting visa-free entrance to foreign nationals and promising to liberalise Uzbekistan’s strict currency rules.

Mr Mirziyoyev also announced key positions in his cabinet including promoting Abdulla Aripov, his ally, as PM and demoting Rustam Azimov who had been finance minister. Mr Azimov’s demotion took analysts by surprise as he had been seen as one of the key ministers now running the country. By contrast, Mr Aripov had been sacked by Karimov in 2012 and only reinstated to the cabinet after he died in September.

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(News report from Issue No. 309, published on Dec. 16 2016)

Russia to start sending more oil to China via Kazakhstan

ALMATY, DEC. 15 2016 (The Conway Bulletin) — Russia will increase oil shipments to China via Kazakhstan by 28.5% in 2017, giving Kazakhstan’s income a much-needed boost from transit fees.

The deal also comes a few days after Russian state-owned Transneft said that it would stop taking Kazakh oil at the Caspian Sea port of Makhachkala because the consistency of its blend had changed.

Rosneft, Russia’s state-owned giant, will export 9m tonnes/year to China via the Kazakhstan-China pipeline, up from the current 7m tonnes/year, according to traders interviewed by Reuters. The pipeline, with a capacity of around 15m tonnes/year, has been utilised below capacity for years since its completion in 2009.

Russia needs to increase its export capacity to China to fulfil contracts signed in 2013. New pipelines are being built in Siberia to send Russian gas directly to China but, for now, it still needs to use Kazakhstan’s infrastructure.

The actual value of the deal has not been revealed but it will be a boost for Kazakhstan which has been struggling economically since oil prices collapsed in 2014.

This was some positive news for KazTransOil, a few days after Transneft said it would stop accepting Kazakh oil at its Caspian port of Makhachkala, citing incompatibility with the Ural blend. KazTransOil will re-route its exports to Russia via the Atyrau-Samara pipeline from Jan. 1, 2017. This is a route that KazTransOil already uses to export some oil.

The Transneft decision came after Lukoil, Dragon Oil and Mitro International decided to pull out of Makhachkala and re-route exports to the Baku-Tbilisi-Ceyhan pipeline.

The Kazakh crude, Transneft said, is not sulphurous enough to be blended with Russian oil.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Azerbaijan to switch to fully floating currency in 2017

DEC. 12 2016 (The Conway Bulletin) — Azerbaijan plans to switch to a fully floating currency next year, the Central Bank said, signalling more turbulence for the manat.

The Central Bank has relaxed the manat’s peg to the US dollar twice in the past couple of years, allowing it, in effect to lose half its value. It has also been managing a fall of around 19.5% since June to trade at 1.79/$.

Media quoted the head of the Central Bank, Elman Rustamov, as saying that macro-stability meant that the time was now right to move to a fully floating currency.

Many Azerbaijanis would disagree, though.

As The Conway Bulletin has reported previously, many ordinary Azerbaijanis have lost confidence in the manat and have been trying to withdraw their savings and convert them into US dollars. Many banks in Baku have run out of US dollars.

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(News report from Issue No. 309, published on Dec. 16 2016)

Russian police arrests Tajik men for plotting attack

DEC. 12 2016 (The Conway Bulletin) — Police in Moscow said that they had arrested citizens of Moldova and Tajikistan who had been planning a series of attacks. Security services said that the men were linked to the radical IS group and had been acting under the orders of a commander based in Turkey. Intelligence agencies worry that Central Asia has become a key recruiting ground for IS.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)

Oil output drops in Azerbaijan

DEC. 14 2016 (The Conway Bulletin) — Azerbaijan produced around 1.5% less oil and gas condensate in the first 10 months of the year, media quoted its statistics committee as saying, reflecting its inability to maintain production. Azerbaijan has previously used OPEC oil cuts as a fig leaf to explain its falling production. The reality is, though, that it hasn’t been able to maintain output.

ENDS

(News report from Issue No. 309, published on Dec. 16 2016)