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Kyrgyz Central Bank cuts interest rates

MAY 26 2015 (The Conway Bulletin) – The Kyrgyz Central Bank cut its interest rate to 9.5% from 11%, the first cut since 2013, because of a slowdown in consumer price inflation.

It did warn, though, that despite a slight economic improvement, the country faced uncertain times.

“There has been economy a slowdown in inflation. At the same time, economic growth continues to be influenced by external factors,” it said in a statement on its website.

“The economic situation in the country’s main trading partners is uncertain and continues to impact the slowing economic growth of our own country through foreign trade and remittances.”

Kyrgyzstan, like the rest of the region, has been coping with a slowdown in Russia’s economy, triggered by a sharp fall in oil prices. Remittances from Kyrgyz working in Russia is a major part of Kyrgyzstan’s economy. This has dented the value of the Kyrgyz som and accelerated inflation.

Overall, the Central Bank said that inflation had slowed to 6.4% in April, down from 10.5% at the end of 2014.

The Central Bank also said that GDP growth for January to April had measured 7% because of an increase in production at Kumtor, a gold mine. Without Kumtor’s contribution, GDP growth would have measured 4.2%.

ENDS

(News report from Issue No. 233, published on May 28 2015)

Russia tests drones in Tajikistan

MAY 25 2015 (The Conway Bulletin) – Russia’s military said it had started drills with drones in Tajikistan’s mountains aimed at potentially stopping Taliban forces, media reported. Russia and Central Asian countries are increasingly concerned about the threat from the Taliban.

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(News report from Issue No. 233, published on May 28 2015)

BP repairs oil platform in Azerbaijan’s Caspian Sea

MAY 21 2015 (The Conway Bulletin) – BP suspended operations for 22 days at its West Azeri platform in the Caspian Sea for planned maintenance work. The Azerbaijani government has put BP under pressure to maintain oil output at its fields.

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(News report from Issue No. 233, published on May 28 2015)

Azerbaijan and Russia push for closer ties

MAY 25 2015 (The Conway Bulletin) – The foreign ministers of Azerbaijan and Russia met in Moscow to discuss ways to strengthen bilateral relations, once again underlining how Azerbaijani foreign policy has shifted away from the West.

At the meeting Azerbaijani foreign minister and Russian foreign minister Sergey Lavrov signed a commitment to hold a series of consultations and meetings over the next couple of years.

Mr Lavrov described Azerbaijan as a strategic partner and said that trade between the two countries had increased by 16% last year.

Of course, Russia has to tread a fine diplomatic line in the South Caucasus where Azerba- ijan and Armenia are still officially at war over the disputed region of Nagorno- Karabakh. Armenia is a firm Russian ally and hosts a major Russian military base. It is also a member of the Kremlin-led Eurasian Economic Union.

Perhaps as a teaser, Mr Mammadyraov said in an interview after the meeting that although Azerbaijani would consider joining the Eurasian Economic Union, it could never actually become a member if Armenian-backed forces occupied Nagorno-Karabakh.

“If Armenia withdraws its troops, if the borders are opened, if there is a normali- zation of the situation, if there is an economic component between Armenia and Azerbaijan, who knows what will happen tomorrow,” he told the Russia 24 TV channel.

The Eurasian Economic Union is a Kremlin pet project. Kyrgyzstan, Kazakhstan and Belarus are also members.

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(News report from Issue No. 233, published on May 28 2015)

Armenia to privatise post office

MAY 27 2015 (The Conway Bulletin) – Armenia’s government said it would privatise the national post office group Haypost, potentially setting up one of the biggest sales of state assets this year.

One of the overriding reasons behind the sale is to modernise Haypost and its 900 branches around the country, Arman Sahakyan, head of the statement, said.

“With the help of investments we expect to modernize physical infrastructures, to restore around 250 post offices, to purchase mobile post vehicles, which will serve all Armenian communities including those 250 communities where there are no post offices at the moment. Transportation means will also be renovated, post-boxes will be placed at all 750,000 registered addresses of Armenia,” media quoted Mr Sahakyan as saying.

The Armenian government is under increased pressure to rebuff a worsening economic outlook.

Haypost, which is in desperate need of modernisation has been a prime candidate to attract an investor to buy it from the government and update the service.

The Armenian state wholly owns Haypost, although in 2006 it handed the management of the company over to a company registered in the Netherlands but owned by Argentinean-Armenian businessman Eduardo Eurnekian. It’s unclear from reports if Mr Eurnekian will be involved in the privatisation.

ENDS

(News report from Issue No. 233, published on May 28 2015)

Azerbaijani traders grumble about European Games

BAKU/Azerbaijan, MAY 28 2015 (The Conway Bulletin) — For 20 years Sugra, a weather-beaten 72-year-old, has pulled up vegetables, and picked off fruit, that she has grown in her small yard in the village of Sabirabad. She collects them together and brings them to market in Baku, 100km away.

The European Games, set for next month in Baku, will change that, though.

“We were told that vehicles from the regions will be allowed in Baku only from 10pm to 5am during the Games. This makes our work very complicated,” she said. “Why do I even need this Games? How will I sell my stuff? I have to go to Baku, in my town, I can’t sell all these.”

The authorities in Baku have said that they are concerned about traffic jams building up in the city during the European Games. Limiting cars and lorries from the provinces will reduce these jams.

Ziyafet, 44, who sells vegetables in the next door to Sugra Guliyeva said the police officer had already warned her to stay away from the city when the Games are taking place.

“I will lose contacts with my costumers,” she said. “Some want chicken, some want milk. I have to refuse them all.

These insights are important. The government is keen to showcase Azerbaijan through the inaugural European Games but human rights activists have accused it of cracking down on dissenters during the build up to the event.

But it is not only market traders who are grumbling. Taxi driver Akif, 36, said they had been told that they cannot work during the Games.

Only specific taxis, the purple London Cabs, will be allowed in the city.

“When we heard about the games, we were glad that this might give business a boost as many people will visit the city and we will have more costumers,” he said. “Now we are told we won’t be allowed to work. This is a huge loss for us. I don’t know how I will feed my family.”

ENDS

(News report from Issue No. 233, published on May 28 2015)

Kazakhstan extends ban Russian oil products

MAY 26 2015 (The Conway Bulletin) – Kazakhstan extended a ban on the import of higher grade oil- products from Russia until June 20, the ministry of energy said, potentially enflaming a growing trade row between the two neighbours.

This is the second extension to the ban on A92/93 diesel fuel, first imposed for 40 days on March 5 to protect domestic producers against cheap Russian imports.

The Russian rouble has roughly halved in value over the past year, mainly because of the slump in oil prices, while the Kazakh Central Bank has defended its currency vigorously.

This created a large imbal- ance in prices.

This year Moscow and Astana have banned various products under the guise of breaking health regulations. In reality, though, Commentators have said the various ban on foodstuffs has been a low-level trade war.

The irony is that Kazakhstan and Russia are supposed to have reduced trade barriers after the creation of the Eurasian Economic Union which also includes Belarus, Armenia and Kyrgyzstan.

Separately, the Kazakh energy ministry also announced it was increasing petrol prices slightly.

The government controls petrol prices. It has previously reduced them.

ENDS

(News report from Issue No. 233, published on May 28 2015)

Four Georgian UNM MPs quit

MAY 25 2015 (The Conway Bulletin) – Four Georgian MPs quit the main opposition group the United National Movement (UNM), including the party’s executive secretary Zurab Japaridze. The UNM is former Georgian president Mikheil Saakashvili’s party. About a dozen UNM MPs have quit but Mr Japaridze is the most high profile.

ENDS

(News report from Issue No. 233, published on May 28 2015)

Azerbaijan develops a drone

MAY 19 2015 (The Conway Bulletin) – Azerbaijan’s weapons manufacturers have developed a drone, media reported. Azerbaijan, which is still officially at war with Armenia, has been increasing military spending. It has close links with the Russian and Israeli defence sectors.

ENDS

(News report from Issue No. 232, published on May 20 2015)

Tajik bank switches to Islamic banking code

MAY 20 2015 (The Conway Bulletin) – Tajik bank Bonki Rushdi Tojikiston (BRT) will switch to Islamic banking rules after striking a deal with the Saudi Arabia- based Islamic Development Bank, media reported.

BRT will be the first Islamic Bank in Tajikistan. Its conversion shows the increasing appeal of Islamic banking, after banks in Kazakhstan, Kyrgyzstan and Azerbaijan agreed to switch.

BRT aims to complete the conversion by mid-2015.

“This will open the door to numerous other operators iden- tifying the opportunities inherent in the sharia compli- ant financial system,” Khaled Al-Aboodi, head of the Islamic Corporation for the Development of the Private Sector was quoted as saying. Islamic Corporation for the Development of the Private Sector is the unit within the Islamic Development Bank which helps banks convert to Islamic banking rules.

Reuters reported that Islamic banking has grown more popular across the world but has been slower in taking off in Muslim dominated countries that are officially secular. The popularity of finance raised through a sukuk, an instrument that adheres to Islamic banking rules, has also grown in popularity in the region. Earlier this year, the part state-owned International Bank of Azerbaijan said it wanted to issue a sukuk worth $200m to $300m.

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(News report from Issue No. 232, published on May 20 2015)