DEC. 3 2014 (The Conway Bulletin) – The presidents of Turkmenistan, Kazakhstan and Iran formally opened a railway line that will connect the three countries. At the event in Ashgabat, the leaders said that the railway line would increase trade between Central Asia and Iran and help ignite a new north-south Silk Road.
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(News report from Issue No. 212, published on Dec. 10 2014)
DEC. 9 2014 (The Conway Bulletin) – Foreign direct investment (FDI) in Georgia, vital for its economy, soared to $508m in the third quarter of 2014, its highest quarterly intake for six years.
The data from Georgia’s national statistics office also showed that China had contributed $149m, 29% of the total. This is double China’s previous record FDI injection in Georgia. By way of comparison, the entire quarterly FDI for Georgia in Q2 2014 was $151m.
These figures are good news for Georgia but it has to tread carefully.
Clearly an increase in FDI is good. Georgia’s economy is reliant on FDI as a major source of income. When Georgia and Russia fought a brief war in 2008, FDI dried up, hurting the economy.
But an influx of Chinese money poses new problems and new strains. China has opened a cultural office in Tbilisi and Southern China Airline now offers direct flights to Urumuqi in the west of the country.
Chinese companies, though, often prefer to fly in workers from China rather than hire local workers, straining relations with local communities.
Of course, Georgian policymakers will welcome the rise in Chinese investment. They must also manage it carefully.
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(News report from Issue No. 212, published on Dec. 10 2014)
DEC. 9 2014 (The Conway Bulletin) – Kazakhstan unveiled a project to build a six-lane 66km ring-road around Almaty which they hope will both ease congestion in the city and provide a new financing model for major infrastructure projects.
The FT reported that the number of cars in Almaty has exploded by 50% in the last five years. Anybody walking around its choked-up streets at rush hour will be able to taste the exhaust fumes in the air.
With support from the European Bank for Reconstruction and Development (EBRD), Kazakhstan has launched a plan to raise $680m in what has been dubbed its first internationally-tendered public-private partnership scheme.
Importantly, as the EBRD’s infrastructure chief, Thomas Meier, said the project is a test of Kazakhstan’s attractiveness and in particular law changes made this year. Most important of these was that any disputes concerning infrastructure developments would be settled by international arbitration.
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(News report from Issue No. 212, published on Dec. 10 2014)
NOV. 30 2014 (The Conway Bulletin) – The Uzbek government is creating a job programme for migrants returning from Russia, official media reported. Uzbek media must be regarded with scepticism but, with news of its job-creation scheme, perhaps the government is acknowledging a downturn in Russia’s economy and its knock-on effects.
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(News report from Issue No. 211, published on Dec. 3 2014)
DEC. 2 2014 (The Conway Bulletin) – In talks ahead of a ceremony to mark the inauguration of a train line running from Kazakhstan to Iran via Turkmenistan, Kazakh president Nursultan Nazarbayev urged his Turkmen counterpart, Kurbanguly Berdymukhamedov, to join the CIS Free Trade zone. Mr Berdymuakhamedov has been opening Turkmenistan to global trade.
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(News report from Issue No. 211, published on Dec. 3 2014)
LONDON/United Kingdom, DEC. 3 2014 (The Conway Bulletin) — Western security analysts over-hype the impact of radical Islam on Central Asia, a new paper by two academics said.
The paper, published by the London-based think tank Chatham House and written by John Heathershaw of Exeter University and David Montgomery of Pittsburgh University, said that there were six key areas where myths on the impact of radical Islam had been wrongly propagated.
There wrongly propagated myths were: There is a post-Soviet Islamic revival; to Islamicise is to radicalise; authoritarianism and poverty cause radicalisation; underground Muslim groups are radical; radical Muslim groups are globally networked; political Islam opposes the secular state.
“The paper demonstrates that while the six claims are made consistently in secular security discourse (with one exception) they are not justified in practice,” Mr Heathershaw and Mr Montgomery wrote.
The paper chose to study reports written by the respected Brussels-based think tank International Crisis Group (ICG) over the last five years. The paper uses ICG reports because it, rightly, described the ICG as the most consistent and serious on the region.
“Once one sees through the myth of post-Soviet Muslim radicalization, it is possible to see that there is nothing essential to former Soviet Central Asia that generates religious radicalisation,” the report said.
This research is important because the spectre of Muslim radicalism is used so often in the discourse by leaders in Central Asia to justify clamp-downs in human rights and media. It also forms, as this paper describes, an important part of the prism through which the West views Central Asia.
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(News report from Issue No. 211, published on Dec. 3 2014)
DEC. 2 2014 (The Conway Bulletin) – Inflation in Kazakhstan is beginning to edge up to the psychologically important double digit zone. The Kazakh statistics committee said prices rose by 0.7% in November after a 0.5% increase in October.
This is a precarious position for the Kazakh Central Bank. Annualised inflation already measures 7.6%. It won’t be long, if the current trend continues, until it hits 10%.
The problems are two two-fold and well-known — Russia and the drop in the price of oil.
These two issues have combined to produce something of an economic storm for Kazakhstan. And its options are limited. The Central Bank devalued — without warning — its tenge currency by 20% in February. For its currency to retain any credibility, it has had to pledge to protect it from further devaluation.
There is already a lot of economic uncertainty in Kazakhstan. Rising inflation is adding to that.
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(News report from Issue No. 211, published on Dec. 3 2014)
DEC. 1 2014 (The Conway Bulletin) – Roughly 120 university lecturers in Armenia born since 1974 have quit their jobs because of government plans to change the pension system, the London-based NGO Institute for War and Peace Reporting (IWPR) said. IWPR said this equalled about a quarter of the total number of university academics under the age of 45 in Armenia.
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(News report from Issue No. 211, published on Dec. 3 2014)
NOV. 28 2014 (The Conway Bulletin) – The depreciation of the Russian rouble has hit Kazakhstan’s energy sector, media reported.
Kazakh media said Samruk-Energo, the state-owned energy company, had cancelled rouble-denominated contracts with Russian clients.
“We have suspended power supplies over the lingering Russia’s currency devaluation. Supplies are no longer economically viable for Kazakhstan-based power plants. Loss of the markets is an important issue,” media quoted Almasadam Satkaliyev, head of Samruk-Energo, as saying.
This is important as it shows how Kazakh industry is beginning to lose out from a depreciating rouble. It’s an issue that could threaten to upset otherwise close relations between the two neighbours.
Kazakhstan has signed up to the Russia-led Eurasian Economic Union and has a host of other friendly treaties in place.
The problem is that the Kazakh Central Bank has pledged not to devalue its currency after knocking 20% off its value earlier this year. This means that Kazakhstan will have to look elsewhere to sell its power or accept a vastly reduced price.
Mr Satkaliyev also said that Kazakhstan was looking to replace coal supply contracts with Russian clients.
“Russia’s economy is not ready to import Kazakhstan’s coals at higher prices. Russia has adopted a program to replace Kazakhstan’s coal,” he said.
“A second factor is the continuing devaluation of the Russian rouble. All the contracts rely on the Russian rouble; therefore for the Kazakh side it is of great importance to ensure economic viability of supplies.”
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(News report from Issue No. 211, published on Dec. 3 2014)
DEC. 1 2014 (The Conway Bulletin) – The devaluation of the manat, the Kyrgyz currency, and slowing economic growth have combined to push inflation in Kyrgyzstan up to 8.5%, the World Bank said in a report quoted widely by local media. The World Bank also said that it expected inflation to keep rising towards 10%. This could mean social trouble.
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(News report from Issue No. 211, published on Dec. 3 2014)
