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Uzbekistan opening

NOV. 4 2016 (The Conway Bulletin) — Since the passing of late-President Islam Karimov, Uzbekistan has been striding towards improving relations with its neighbours and, perhaps most importantly, its business climate.

This week’s decision to comply with International Labour Organisation regulations on freedom of assembly will allow the country to climb up the rankings of transparency and ease of doing business, as both workers and companies will, at least on paper, will enjoy more freedoms.

In early October, acting President and PM Shavkat Mirziyoyev also said that the authorities will have to ease up on ordering police raids on businesses, which investors have condemned as a way for public officials to ask for bribes. From Jan. 2017, police checks will have to be scheduled, unless there is a clear breach of the law.

Besides integrating better policies in its closed and strict regulatory system, Uzbekistan also seems to be opening up to new trade routes, as it has re-kindled its air link to London. This will open up in December.

Regular flights from Uzbekistan to Europe’s financial capital have suffered hiccups over the past decade and they were finally recently suspended. Uzbekistan Airways’ proposal to re-open the route, even just for a short term, could be important to put Tashkent back on the investors’ map.

All the recent improvements in Uzbekistan’s business sector, however, cannot overshadow problems with political and human rights. In December, Mr Mirziyoyev will be elected president. If Uzbekistan wants to convince investors, he will have to make progress in relaxing its regime and grant more freedoms.

ENDS

(News report from Issue No. 303, published on Nov. 4 2016)

Azerbaijan and Georgia pledge closer economic ties

OCT. 27/28 2016 (The Conway Bulletin) — Under orders from Azerbaijani President Ilham Aliyev to seek out more economic opportunities, economic development minister, Shahin Mustafayev, travelled to Tbilisi to meet his counterparts and mull over various deals.

The meeting is important because it shows how Azerbaijan is looking to boost economic links with its immediate neighbours to help it through an economic downturn. As well as increasing trade with Georgia, Azerbaijan has reached out to Iran and Russia.

Official data showed that last year Azerbaijan invested a record $500m into Georgia’s economy. SOCAR, its state-owned energy company, is one of the most highly visible brands in Georgia with 120 fuel filling stations. Pipeline politics have also brought the two neighbours closer. Georgia is a host country for various oil and gas pipelines running from Azerbaijan’s Caspian Sea coast to Turkey and Europe.

And after their meeting in Tbilisi, Georgian officials said that they expected trade between the two countries to increase further.

“Businessmen of Azerbaijan and Georgia will soon start joint business projects to move forward the economy of the two countries,” media quoted Maya Mikeladze, a Georgian Presidential adviser, as saying.

Analysts were more cautious, though. Natig Jafarli, an Azerbaijani economist and opposition activist, said that in current economic conditions a boost in business deals was unlikely. Georgia was still important to Azerbaijan, though.

“Georgia is a window to Europe for Azerbaijan and a major transit corridor,” he said. “Baku will continue to play a vital role in the economy of Georgia.”

ENDS

(News report from Issue No. 303, published on Nov. 4 2016)

KAZ Minerals posts strong Q3

OCT. 28 2016 (The Conway Bulletin) — Kazakhstan-focused copper miner KAZ Minerals posted a strong Q3 operational report, more than tripling production compared to the same period last year, mainly due to the coming online of the Aktogay and Bozshakol projects.

ENDS

(News report from Issue No. 303, published on Nov. 4 2016)

Russia threatens Tajikistan over flights

NOV. 3 2016 (The Conway Bulletin) — Russia could suspend flight connections with Tajikistan next week, if the countries fail to reach an agreement on flights originating from the new Zhukovsky airport in Moscow, TASS quoted unnamed Russian government sources as saying. Tajikistan’s Aviation Committee had refused to grant permission to companies that operated out of Zhukovsky. Delegations from both governments met in Kyrgyzstan to negotiate a deal, but failed to reach an agreement.

ENDS

(News report from Issue No. 303, published on Nov. 4 2016)

Kazakh C. Bank aims to hire foreign managers

OCT. 28 2016 (The Conway Bulletin) — Kazakhstan’s Central Bank aims to hire foreign managers to oversee spending of the foreign currency- denominated element of its pension fund, worth around $5b. The hiring process could kick-start next year, according to one source at the Central Bank. Foreign currency-denominated assets make up around 21% of the $20b pension fund. The Central Bank aims to increase the share to 23% this year.

ENDS

(News report from Issue No. 303, published on Nov. 4 2016)

Comment: An unexpected PR boost for Kazakhstan’s prisons, writes Kilner

NOV. 4 2016 (The Conway Bulletin) — It’s not often that Kazakhstan gets praised for its prison system. Not very often at all.

And there is a reason for this. There have been improvements over the last few years but the overwhelming majority of its prisons are based on crumbling Soviet-era infrastructure accompanied by an uncompromising Soviet-era mindset. There is no Norwegian cuddliness here.

These are mainly cold, uncomfortable and dangerous places. Stories from Kazakh prisons are hooked on riots, Islamic extremism recruitment, hunger strikes and deaths — both suicides and apparent suicides.

It’s the same story across the rest of Central Asia. Human rights groups and the media criticise governments for not investing enough time or money into their prison systems and the governments get defensive.

Except in last week’s Financial Times, when Kazakhstan scored what must have been a wonderful piece of prison PR.

On a week-long trip to Kazakhstan, FT editor Lionel Barber wrote in a diary-style entry that he had been inspired by Jonathan Aitken, a British Conservative politician who went to jail for perjury, to look around a Kazakh prison. Aitken had written glowingly about them in a book he’d been paid to write by Kazakh President Nursultan Nazarbayev.

Barber was also impressed.

“It is unlikely to be wholly representative, compared with the former Soviet gulags in Kazakhstan. But its rooms are spotless; there are curtains and large glass window panes without bars, all of which would be seen as suicide risks elsewhere,” he said of prison 66/10 outside Astana which he was shown around.

Prison 66/10 is one of Kazakhstan’s new showcase prison and he knows it, but he also dangerously underplays the awfulness of most of the Kazakh prison system. Since 2011, when prisoners rioted and sliced open their stomachs in protest at the poor conditions, Kazakhstan has improved its prison system but perspective is needed.

Roger Boyes, a columnist at the London Times newspaper, picked up this theme. He said high-profile former politicians and visitors, such as Aitken and Tony Blair and Barber, were being used to whitewash Kazakhstan.

“He should have asked to see the basement,” Boyes wrote of Barber’s comments on Kazakh prison 66/10. “That’s where the truths are buried.”

By James Kilner, Editor, The Conway Bulletin

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(News report from Issue No. 303, published on Nov. 4 2016)

Armenian airline to compete with Russian

NOV. 1 2016 (The Conway Bulletin) — The newly-established Armenia carrier said it is ready to compete with the low-cost Russian company Pobeda, which started flights linking Armenia to Moscow and Rostov-on-Don. Armenia’s CEO, Robert Hovhannisyan, said that his company will fly from the more central Yerevan airport, which will give the local carrier a competitive advantage on Pobeda, which flies to and from Gyumri, Armenia’s second city. Pobeda is a low-cost subsidiary of Russia’s Aeroflot.

ENDS

(News report from Issue No. 303, published on Nov. 4 2016)

Turkmen President reinforces cigarette ban

NOV. 2 2016 (The Conway Bulletin) — Turkmen President Kurbanguly Berdymukhamedov reprimanded the country’s interior minister, Isgender Mulikov, for ineffectively combating the illegal sale of cigarettes. Shortly after the presidential remarks, which aired on state TV, local reporters said that cigarettes disappeared from the shelves of several stores in Ashgabat. Opposition website Alternative News of Turkmenistan said the shopkeepers were responding to a direct order from the ministry. In January, Turkmenistan introduced an informal ban on the sale of cigarettes.

ENDS

(News report from Issue No. 303, published on Nov. 4 2016)

Uzbekistan ratifies ILO treaty on assembly

OCT. 28 2016 (The Conway Bulletin) — In an apparent bid to improve its international business image, Uzbekistan ratified a UN convention that protects workers’ freedom of association and businesses’ rights to form lobby groups.

Acting President Shavkat Mirziyoyev signed into law Convention no. 87 of the International Labour Organisation (ILO), a UN agency, which had originally been drawn up in 1948.

It is the 154th country, and the last in Central Asia and the South Caucasus, to ratify the Convention. Notably, the US, China and India are among the countries which have not ratified the Convention.

And for Uzbekistan this is something of a landmark. It has been the focus of criticism from international human rights activists, who denounced repression of the opposition and the lack of independent platforms for alternative dialogues.

Many Western clothing companies boycott Uzbek cotton because of its links to forced labour.

Foreign companies have also complained about the difficulties of operating in Uzbekistan, considered one of the most repressive countries in the world, and the ratification of the ILO convention may improve their lobbying potential.

ENDS

(News report from Issue No. 303, published on Nov. 4 2016)

Kazakhs look for public sector jobs as business cuts staff to see off econ downturn

ALMATY, OCT. 29 2016 (The Conway Bulletin) — Official statistics showed that there are now more people working in Kazakhstan’s state sector than in private business, a reflection of how the economic downturn has cut into the job market.

The State Statistics Committee said that 51% of the total labour force in Kazakhstan now worked in the public sector, up from 46% in 2014 and 47% in 2015.

The jump in the proportion of the labour force working in the public sector, though, is only partially driven by an rise in state sector jobs.

The main driver has been a cut in the number of jobs in private enterprise.

Accurate data on these job losses is patchy but anecdotally there are many stories of cuts.

Madina Kuan quit her job at a media firm to look for a better one.

“I thought it would be easy to find a new one but I’ve now been jobless for six months,” she said. “My brother, as well, works in the oil sector in west of Kazakhstan and his company doesn’t have a job for him. They did not fire him though but instead just asked him to wait until things improve.”

A sharp fall in oil prices and a recession in Russia triggered a collapse in Kazakhstan’s currency. Despite fighting talk from the government, inflation has grown and businesses have been cutting staff.

The finprom.kz website has reported that the number of people employed by Kazakh private businesses has shrunk but that the public sector has increased the number of hires.

Kuralay Orazgeldy, who used to work in Almaty’s department of budget planning said people were attracted to public sector jobs because of the stability.

“Turnover is very high, staff changes often,” she said. “The salary is stable, everything is paid on time and often workers are rewarded but I can’t say that salary equals to the volume of work.”

ENDS

(News report from Issue No. 303, published on Nov. 4 2016)