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Analysis: Brexit splits region’s stocks

JULY 1 2016 (The Conway Bulletin) — Britain’s vote to leave the European Union, nicknamed Brexit, worried investors who ditched risky assets for safe havens such as gold and government bonds. And the ripple of nervous activity spread to Central Asia and the South Caucasus.

Prices in the immediate aftermath for most stocks fell sharply, by 17% in the case of Kazakhstan copper producer KAZ Minerals.

Oil and gas-linked stocks followed a fall in Brent crude prices downwards. Tethys Petroleum was down 15% (the dotted purple line on the graph) and Roxi Petroleum lost 9%.

Only one company gained from Brexit. This was Toronto-listed miner Centerra Gold which followed the rising price of gold. Brexit forced investors to look for less risky shares, pushing a rise in gold prices, which climbed above $1,300/ounce.

In the following days, most of the shares bounced back in line with global investor sentiment but the split between gold – and gold-linked shares – and the rest was clear from the initial impact.

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(News report from Issue No. 287, published on July 1 2016)

Cargolux Airlines International gets Turkmen permission

JUNE 27 2016 (The Conway Bulletin) – Luxembourg-based logistics company Cargolux Airlines International has received permission from the Turkmen government to increase the number of flights to Turkmenbashi, a transport hub on the Caspian Sea shore. Since July 2015, Cargolux has connected Luxembourg City and Turkmenbashi with eight flights per week.

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(News report from Issue No. 287, published on July 1 2016)

Georgia’s economy grows by 2.1%

JUNE 30 2016 (The Conway Bulletin) — Data from Georgia’s state statistics agency Geostat showed that the economy had grown by 2.1% in the 12 months to end-May, a slow down from the 4.3% annualised growth to the end of April. Georgia’s government has estimated GDP growth of 3% for 2015. Like the rest of the region, Georgia has been dealing with the double dangers of a recession in Russian and a drop in oil prices.

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(News report from Issue No. 287, published on July 1 2016)

Blast at an oil storage kills seven in Turkmenistan

JUNE 29 2016 (The Conway Bulletin) — A blast at an oil storage facility in Turkmenbashi in western Turkmenistan killed seven people, local media reported. A government official later denied the report but it would be unusual for a report of this nature to be erroneous. If it is confirmed, the incident will be a blow to the reputation of Turkmenistan’s main Caspian Sea port.

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(News report from Issue No. 287, published on July 1 2016)

Kerry to visit Georgia

JUNE 30 2016 (The Conway Bulletin) – In a potential boost to Georgia’s aspirations to join NATO, US Secretary of State John Kerry will travel to Tbilisi on July 6, the US government said. The following dayMr Kerry will then travel on to Kiev. Joining NATO is a major component of Georgia’s foreign policy. Georgia has supported NATO’s military operations in Afghanistan and the US in Iraq over the past 15 years.

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(News report from Issue No. 287, published on July 1 2016)

Kyrgyzstan considers luxury bill

JUNE 27 2016 (The Conway Bulletin) – In an effort to raise cash to pull through a long financial downturn, Kyrgyzstan’s economy ministry has prepared a bill that would impose an additional tax on luxury cars and large and expensive apartments, media reported. The prospect of a so-called luxury tax is a fairly radical departure from the norm in Central Asia where the rich are relatively lightly taxed.

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(News report from Issue No. 287, published on July 1 2016)

Kazakhstan aims to reduce black economy

JUNE 26 2016 (The Conway Bulletin) — Looking to reduce the size of the black economy and to increase the size of tax receipts, Kazakhstan has unveiled plans to force people to declare their income. Media reported that civil servants and employees of state-owned companies will have to declare their full income by 2017, with everybody else following by 2020. The black economy in Kazakhstan has been growing as people try to avoid paying taxes.

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(News report from Issue No. 287, published on July 1 2016)

Armenian MP’s approve Russian air defence deal

JUNE 30 2016 (The Conway Bulletin) — MPs in Armenia approved the government’s decision to join its air defence system with Russia’s. The move pulls Armenia further into Russia’s sphere of influence. Russia already maintains one of its largest overseas bases in Armenia. It has been increasing cooperation with its neighbours since relations with the West deteriorated over fighting in Ukraine.

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(News report from Issue No. 287, published on July 1 2016)

Kyrgyz Supreme Court is unlikely to release rights defender Askarov

BISHKEK, JUNE 30 2016 (The Conway Bulletin) — Kyrgyzstan’s Supreme Court may be set to review the case of imprisoned human rights activist Azimzhan Askarov but analysts have said that he is unlikely to be released in a process designed to appease the United States and the United Nations.

Askarov’s case is controversial because he was described as a political prisoner by the United States last year, angering Kyrgyzstan. Kyrgyz politicians view him as a troublemaker who has stirred ethnic tension in the south of the country.

Police arrested Askarov after ethnic violence in Osh killed nearly 400 people in 2010. Askarov, an ethnic Uzbek who investigated police brutality, was accused and convicted of inciting the violence and also being part of a gang that killed a policeman. His supporters have always said that he is a political prisoner.

The United Nations Human Rights Committee effectively weighed in on the row between Kyrgyzstan and the US earlier this year when it said that a Kyrgyz court should review the case.

And in a surprise move, the Kyrgyz Supreme Court said last week that it would do just this, raising hopes held by rights defenders that Askarov may be set free from his life sentence.

But Emil Juraev, a political analyst, said that although there were allegations of mistreatment, the UN can only pressure for a review of the case and not for a prisoner to be released.

“This time they called the Kyrgyz court to review the case, as they said it was not valid last time,” he said. “It’s likely, that the court will not change its decision.”

His sentiment was backed up by rights defender Aziza Abdirasulova.

“I worry that the court will only review this case as such and not follow demands to release Askarov due to violations during the process,” she told the Conway Bulletin’s Bishkek correspondent. “Besides, there is a risk that nationalist and radical groups will disrupt the process.”

The Supreme Court is due to consider the case on July 11.

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(News report from Issue No. 287, published on July 1 2016)

Kazakhstan to introduce civil service code

ALMATY, JUNE 24 2016 (The Conway Bulletin) — Kazakhstan’s government said that it wants to introduce a code of conduct focused for its civil servants to improve their image with the public.

Maksat Musin, head of the Kazakh civil service, said in a statement on the government’s website that he wanted the new code to improve standards in general.

“The full aims of the code have not yet been set out but the general principles are already established, these are to be modest and ethical,” he said.

Kazakhstan’s government has previously tried to improve the quality and professionalism of its civil service. In 2013 it introduced a special set of exams to try and recruit a cadre of new, professional civil servants.

Still, ordinary Kazakhs were scornful of the potential decree. They said that the government was fond of making empty policy statements about improving government structures and employees which make little or no impact.

“I think it’s some kind of superficial idea to pretend that the government is doing something,” said Nurbek, an Almaty-based student. “The main problem with our government officials is corruption and this is really bad. That’s what they should be working on instead of pretending that they are doing something.”

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(News report from Issue No. 287, published on July 1 2016)