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Azerbaijani president sacks long-time minister Mammadov from transport ministry

FEB. 13 2017 (The Conway Bulletin) — Azerbaijani president Ilham Aliyev sacked his powerful and long-serving minister of transport, Ziya Mammadov, continuing a purge of his top officials that stretches back to 2015.

In a presidential decree, Mr Aliyev announced that he was disbanding the current transport ministry from where Mr Mammadov has built up a web of political patronage and abusiness empire worth millions of dollars. In its place Mr Aliyev created a new transport and telecoms ministry headed by Ramin Guluzade, 40, head of the communications and IT ministry since January 2016.

The abrupt dismissal, given without an explanation, marks a heavy fall from grace for Mr Mammadov, considered one of the most powerful government ministers and a confident of Mr Aliyev.

His son,Anur Mammadov, ran most of his businesses and had been lined up to partner with Donald Trump in a hotel venture in Baku until December whenMr Trump pulled out of the deal.

Neither Mr Aliyev nor Mr Mammadov have commented on the dismissal and the merger of the transport and telecoms ministries.

In 2015, Mr Aliyev also sacked two other long-time ministers,

Eldar Mahmudov and Ali Abbasov. They were never charged with corruption but days after they were dismissed from the security and telecoms ministries, police arrested several high-ranking officials for bribe-taking.

Mr Mammadov and his son have always cut controversial figures. As well as being linked to US President Trump, rumours of money laundering, corruption and links to the Iranian military, contacts still not allowed for US companies under sanctions, have dogged them.

Journalists based in Baku have said that the Mammadovs’ business empire is based on contracts awarded to their construction companies by the transport ministry.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Uzbek president to visit Kazakhstan

FEB. 14 2017 (The Conway Bulletin) — Continuing his outreach to neighbours, Uzbek president Shavkat Mirziyoyev said that he would also visit Kazakh president Nursultan Nazarbayev in the first half of 2017. The potential emergence of Uzbekistan as an economic powerhouse in Central Asia under Mr Mirziyoyev, who took over from the presidency after Islam Karimov died in September, may challenge Kazakhstan’s dominance.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Buy gold, not som, says Kyrgyz Central Bank chief

BISHKEK, FEB. 15 2017 (The Conway Bulletin) — In an interview with the Bloomberg news agency, Tolkunbek Abdygulov, head of the Kyrgyz Central Bank essentially told ordinary Kyrgyz that they should buy gold rather than keep their savings in the unpredictable Kyrgyz som.

Gold is considered a safe-haven for investors and savers whenever the global outlook is fragile but it holds added importance in Kyrgyzstan, which relies on the Kumtor gold mine to produce over a tenth of its GDP.

Like the rest of the region, an economic slowdown has hit the Kyrgyz economy, denting GDP growth and undermining the economy. The Kyrgyz som has slid from around 50/$1 to 69/$1.

Mr Abdygulov appeared to reference this som weakness in his interview with Bloomberg.

“Gold can be stored for a long time and, despite the price fluctuations on international markets, it doesn’t lose its value for the population as a means of savings,” he was quoted as saying.

Over the past couple of years, the Kyrgyz Central Bank has offered to sell gold in different sizes to ordinary Kyrgyz and to store it safely. Mr Abdygulov said that the Bank had sold around 140kg of gold through this system.

And the Central Bank appears to be leading by example. It has increased its purchases of gold while many other central banks have reduced theirs. Bloomberg data showed that Kyrgyzstan currently holds around $190m of gold in its reserves, four times the level of 10 years ago.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Work permits for foreigners increase in Kazakhstan

FEB. 13 2017 (The Conway Bulletin) — Kazakhstan handed out over 36,700 work permits to foreigners last year, data from the PM’s website showed, an increase from 32,000 in 2015. China dominates with 12,699 permits, down from 13,373 in 2015. The issue of Chinese labourers working on energy and infrastructure projects part-funded by China is sensitive as ordinary Kazakhs accuse them of taking their jobs and receiving preferential treatment. After China, Turkish citizen received the second largest number of work permits in 2016 with 3,502.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Armenia to receive power development lend from Iran

FEB. 16 2017 (The Conway Bulletin) — Iran will lend 83m euro to build a third power transmission line from Armenia, the Iranian media reported. Iran has become an increasingly important importer of electricity from Armenia over the past few years. Armenia has also increased imports of Iranian gas. Relations between the two neighbours have blossomed.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Tajik aluminium smelter and Rusal near deal

FEB. 16/17 2017 (The Conway Bulletin) — Talco, the Tajik aluminium smelter owned through a series of offshore companies by the family of President Emomali Rakhmon, has struck a deal to end a long-running dispute with Russia’s Rusal, both Eurasianet and RFE/RL reported.

A court in 2014 ruled against Talco, in a ruling that focused on a breach of contract a decade earlier, meaning that it needed to pay Rusal up to $375m.

Now, Eurasianet and RFE/RL reported, Talco will pay Rusal the full amount it has been fined plus an extra sum for control of the Hyatt hotel and a business centre in Dushanbe, which Rusal had owned.

The deal appears to allow both sides to save face and also for Rusal to quit Tajikistan.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Second former Kyrgyz PM registers for November’s presidential election

BISHKEK, FEB. 14 2017 (The Conway Bulletin) — Omurbek Babanov registered himself as a candidate for the Ata-Zhurt party in this year’s presidential elections in Kyrgyzstan, the second former PM to declare his intention of standing.

Mr Babanov was PM for eight months under President Almazbek Atambayev in 2011/12. He follows former PM Temir Sariev as declaring his candidacy early ahead of the election planed for November.

Like his rival, Mr Sariev, Mr Babanov, 47, had been forced to resign as PM in August 2012 over corruption allegations.

Both will be competing to replace Mr Atambayev who is stepping down after a single five year term, as stipulated by the constitution. Observers have said the vote could be one of the few genuinely competitive elections in Central Asia since independence from the Soviet Union in 1991.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Spar opens new stores in Azerbaijan and Georgia

FEB. 15/16 2017 (The Conway Bulletin) — The Dutch convenience store chain Spar opened up more stores in Azerbaijan and Georgia, part of its drive to increase its global coverage. Spar said that it had opened three more stores in Baku at the end of last year, following the opening of its first store in the Azerbaijani capital in December 2015. In Georgia, Spar also opened another store, bringing to 21 its total for Georgia. Spar has expanded outside its central Europe heartland by both owning its stores directly and granting an independent retailer the rights to use its brand.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Armenia’s tumbling interest rate

FEB. 17 2017 (The Conway Bulletin) — >> How dramatic has these interest rates cuts been?

>> Very. Like a downhill skier racing to the bottom of the run, Armenia’s Central Bank have been determined and dogged. In mid-2015, the interest rate had been 10.5%. Now it’s at 6%, its lowest ever level. In November and December 2015, the Central Bank slashed rates by 1.75% but otherwise it has been a steady path, generally knocking off a quarter of a percentage every month or so.

>> But why has the Armenian Central Bank been in such a hurry to cut rates?

>> Basically, deflation has become the main driver of Armenian economic policy in the past couple of years. Price rises started to slow down in mid-2015, a sign of the tough economic times triggered by the recession in Russia. Within 12 months, prices had tipped into deflation. Earlier this month, the Central Bank said that although food prices had started rising again, non-food items were still dropping in price.

>> And what about going forward? Has there been any forward-looking guidance from the Armenian Central Bank?

>> A bit. The Central Bank has said that prices will remain soft in 2017 because the domestic economy is still limping along. It said non-food items, gas and electricity prices had all fallen in price. By cutting rates, it is trying to stoke economic activity. The risk is that a fall in interest rates will weaken the dram. It is now valued at 486/$1, its lowest since March 2016 and about 20% weaker than it was in mid-2014.

>> Is it a similar story in Georgia and Azerbaijan, Armenia’s neighbours?

>> Not exactly. In Georgia there has been some deflationary pressure on prices but not to the extremes seen by Armenia. Its Central Bank had also cut interest rates but it has now reversed this trend and actually put up rates last month. It also said that inflation would start rising this year. In Azerbaijan, as reported in The Conway Bulletin last week, prices are rising and fast. The major problem there has been the collapse in the currency. Azerbaijan is far more reliant on oil prices than Armenia or Georgia and has seen its currency halve in value over the past couple of years. This drop in the value of the currency has pushed up inflation.

>> What can Armenia do to stop deflation?

>> The deflation is slowly curbing itself. Food prices are rising and non-food prices are not falling as fast. Armenia’s economy closely follows Russia. The Russian economy is improving as oil prices rise, helping Armenia to recover too.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)

Armenia’s C.Bank cuts interest rate

FEB. 14 2017 (The Conway Bulletin) — Armenia’s Central Bank cut its key interest rate yet again to 6% from 6.25%, hoping to give its economy a boost. Armenia has now slashed its interest rate from 10.5% in 2015. The Central Bank’s biggest worry is deflation. Annualised deflation in January measured 0.6%, the Central Bank said.

ENDS

(News report from Issue No. 317, published on Feb.17 2017)