Category Archives: Central Asia & South Caucasus News

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.

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(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.

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(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.

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(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.”

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

Uzbekistan unites economic zones

OCT. 29 2016 (The Conway Bulletin) — Uzbekistan’s three special economic zones will be ruled under a single, unified legal and tax regime, a presidential decree said. Uzbekistan’s government is trying to improve its business climate and this involves providing more transparent and consistent rules for special economic zones in Navoi, Angren and Jizzakh. It sees the SEZs as critical for attracting foreign investment. Korean Air has a transport hub, for example, at the Navoi SEZ.

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

Tethys deal with Kazakhstan’s Oilsol collapses

ALMATY, OCT. 27 2016 (The Conway Bulletin) — Guernsey-based oil company Tethys Petroleum said Kazakhstan-based investment group Olisol had failed to pay a final 9.8m Canadian dollars ($7.3m) instalment that it had promised in return for a stake in the company.

Olisol had been viewed as saviour by Tethys, which had been short of cash because of the collapse in oil prices since 2014 which has destroyed profits at energy companies, but failing to pay up on time effectively crushes the deal.

In a harsh statement, Tethys complained that despite its readiness to move forward, Olisol missed the payment deadline, jeopardising the deal.

“Olisol failed to provide Tethys with any of the C$9.8 million purchase price required to purchase the subscription shares under the Investment Agreement,” the company said, referring to the agreement the parties had signed in December 2015 and updated in April.

“Therefore, Tethys considers Olisol to be in breach of the Investment Agreement and reserves all of its legal rights.”

Tethys also said that Olisol also claimed to be entitled to a full refund of the $5.7m it had already invested in the company, because of mutated conditions.

Olisol could not be reached for a comment.

After a takeover offer from London-listed Nostrum Oil & Gas fell through in the summer of 2015, Tethys had placed all its hopes on Olisol, and its mystery backers, to inject enough money to settle its debts.

The battle for survival in Kazakhstan has become increasingly tough for Tethys, which is also involved in legal battles with its partners in Tajikistan, its other main focus in Central Asia.

Days before it announced that its deal with Olisol had fallen through, Tethys said that it had received a notice from Eurasia Gas Group, a local company which had worked with a Tethys subsidiary in Kazakhstan since 2012. Eurasia Gas said that it was suing Tethys Aral Gas for $2.6m for failing to deliver oil supplies.

This is part of a bigger row. Last month, Tethys Aral Gas had threatened to sue Eurasia Gas for $1.3m in unpaid oil supplies.

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

Turkmenistan sells cheap gas to China

OCT. 31 2016 (The Conway Bulletin) — Turkmenistan sold 23b cubic metres of gas to China in the first nine months of 2016 at a price of $185/1,000 cubic metres, according to official statistics published by China’s Border Administration. Supplies from Turkmenistan to China increased by 13% in the considered period, but Turkmenistan is the cheapest gas that China imports. The price that China pays is tied to loans and grants it sent to Turkmenistan over the years to develop its giant gas fields in the south of the country.

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

Kazakhstan receives loan from EBD

NOV. 1 2016 (The Conway Bulletin) — The Kazakhstan/Russia-led Eurasian Development Bank sent a 7.7b tenge ($23m) loan to KazTransGas- Aimak, the largest gas distributor in Kazakhstan, to upgrade the network in the northern Aktobe region. One of the key objectives of the overhaul is to expand the network to isolated villages that are cut off from the grid.

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

Georgian capital hotel boom given another lift as Hilton prepares to open

TBILISI, NOV. 1 2016 (The Conway Bulletin) — US-based hotel chain Hilton will finally open a new $31m four-star hotel in Tbilisi next year, its first in the Georgian capital, adding much-needed extra bedrooms in Georgia where both tourist and business visits are rising steadily.

The 14-storey Hilton Garden Inn hotel, which will open a few months behind schedule, will hold 165 rooms and be situated towards the western end of Tbilisi, an area which has become a hub for Georgia’s professional businesses and for many Western companies working in the country.

Hilton, which already owns a hotel in Georgia’s Black Sea coast of Batumi and in Baku and Yerevan, had announced in 2013 that it was to build the hotel which it had aimed to open by the end of 2016.

And the Hilton hotel is just the latest to be built in Tbilisi, which has been notoriously short of bedrooms for years but is experiencing something of a hotel building boom.

The National Agency for State Property this week also sold an ornate 100-year-old post office building in the centre of Tbilisi to Nevada, a local real estate company, for 5.7m lari ($2.4m). Nevada plans to convert the building into a 30-bedroom boutique hotel within 3-1/2 years.

Tourism in Georgia is on the rise. Georgia is positioning itself as an affordable summer and winter destination for people living in the former Soviet Union, and you are now as likely to see upwardly mobile young Kazakhs in Batumi as you are in any resort around the Black Sea. Improved ties with Russia have also triggered a rise in visitor numbers, as has relative stability in Iran and Iraq. Revenues from tourism grew to $2b last year, an 8.3% increase compared to 2014.

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