Category Archives: Central Asia & South Caucasus News

Tajikistan’s TSB resumes transactions

JUNE 10 2016 (The Conway Bulletin) – Tojiksodirotbonk, Tajikistan’s second largest lender, said it resumed money transfer transactions, and that it continued to operate under the administration of the Central Bank. TSB, as it is commonly known, is awaiting confirmation from the EBRD for a funding lifeline of around $165m. The investment would give the EBRD a 25% stake in the bank.

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(News report from Issue No. 285, published on June 17 2016)

Newspaper risks closure in Azerbaijan

JUNE 14 2016 (The Conway Bulletin) – The editors of Azadlig, an opposition newspaper in Azerbaijan, said they had received a letter from their publisher that warned of a possible closure by the end of the month. Azadlig, which means freedom, has to pay an outstanding debt of around 18,000 manat ($12,500) by June 27. Azadlig editors said that the state-owned press agency owes the newspaper around 70,000 manat ($46,000) and that this is an attempt to silence opposition voices.

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(News report from Issue No. 285, published on June 17 2016)

Chinese company opens hospital near Georgian capital

TBILISI, JUNE 14 2016 (The Conway Bulletin) — Hualing Georgia, a private Chinese company, opened a 100-bed hospital near Tbilisi, increasing its commitment to a new urban development and entering the crowded healthcare services market.

The new hospital cost 4.5m lari ($2.1m) to build and is located at the Tbilisi Sea New City, which is being built on the shores of an artificial lake near Georgia’s capital city. Georgian PM Giorgi Kvirikashvili opened the hospital and highlighted the significance of the project.

“This hospital is really an important project for this district. I wish good health to everyone but it’s important to have this type of medical facility close to where you live, and in this district there was no hospital before,” Mr Kvirikashvili said at the inauguration ceremony.

Hualing has invested heavily in Georgia. In October 2015, the company built a new hotel Tbilisi Sea New City. In May, it also said it will build an elevator factory in Kutaisi.

The healthcare sector in Georgia is dominated by London-listed Georgia Healthcare Group (GHG), which controls around 27% of hospital beds. In May, it bought GPC, a drugmaker that controls a 15% share of the pharmaceutical market. BGEO, a holding company that owns Bank of Georgia, owns 65% of GHG.

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(News report from Issue No. 285, published on June 17 2016)

Kazakh airline to prepare an IPO

JUNE 16 2016 (The Conway Bulletin) – Peter Foster, CEO of Kazakhstan’s flagship airline Air Astana, said the company will seek financial advisors this autumn to prepare an IPO in 2018. Mr Foster said that the company will list in Kazakhstan and in other more liquid markets, such as London or Singapore. Britain’s BAE Systems owns 49% of Air Astana, Kazakhstan’s sovereign wealth fund Samruk-Kazyna owns 51%.

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(News report from Issue No. 285, published on June 17 2016)

Azerbaijan readies for first F1 race

JUNE 16 2016 (The Conway Bulletin) – Azerbaijan hosts its first Formula 1 Grand Prix in Baku on June 17-19, a race that an estimated 350m people will watch on TV around the world.

President Ilham Aliyev hopes that the race will give Azerbaijan’s profile a major boost, but human rights campaigners are also using it as an opportunity to highlight its poor human rights record.

The newly-built Baku Circuit, a 6km circuit through the city’s historical centre, is fast, allowing cars to hit speeds of up to 340km per hour, making it the fastest street track in the world, according to the organisers.

Spanish driver Fernando Alonso said that it was a unique circuit.

“It’s good both for drivers and in terms of the show for spectators,” he told the formula1.com website.

But in the host city, few Azerbaijanis share his excitement.

With oil prices down, Azerbaijan, which depends on income from oil and gas exports, is predicted to drop into a recession this year.

Official data has not been released but Radio Free Europe/Radio Liberty has estimated that the authorities have spent $250m on hosting the F1 race — roughly half the annual healthcare budget.

Locals said the Azerbaijani government should be concentrating on improving the country’s economy.

Bahruz, a 21-year old student in Baku, told the Conway Bulletin’s Azerbaijan correspondent that unemployment has been rising fast.

“Formula 1 is a waste of money. It just serves the government to build an image as a sport-loving country,” he said.

Mr Aliyev appears to have decided to promote Azerbaijan through hosting sports events and sponsoring teams. Azerbaijan had sponsored the team shirt of Atletico Madrid football club, sponsors the European football championship in France and last year hosted the first European Games.

Azerbaijan released several journalists and rights campaigners from prison this year but Rebecca Vincent, head of the Sport for Rights Campaign and a human rights activist said Mr Aliyev was trying to whitewash his government.

“Viewers should not be fooled. The smoke and mirrors distract from a more sinister truth,” she said. “A brutal human rights crackdown taking place behind the scenes.”

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(News report from Issue No. 285, published on June 17 2016)

Editorial: Kazakhstan’s financial stimulus

JUNE 17 2016 (The Conway Bulletin) – It’s been a tough year for Kazakh President Nursultan Nazarbayev, perhaps one of the toughest. The economy has flat-lined, worrying investors and locals, who have seen jobs disappear and the value of their tenge savings fall.

Unprecedented anti-government protests swept across Kazakhstan in April and May and in June gunmen alleged to have had links to radical Islamists in Syria attacked targets in Aktobe, killing several people.

Mr Nazarbayev has already staged a parliamentary election, a favourite tactic of his to shore up support. This worked only momentarily. Now he has had to spend big. He’s chucked $712m at the economy in a Keynesian attempt to breathe life into it and create jobs and wealth.

Will it work? It’s unclear. He’s picked small and medium-sized companies and house building to target. These are good targets. Mr Nazarbayev is looking to help out ordinary Kazakhs directly. And it’s the same message with the house-building.

Of course, though, there are serious pitfalls. The plan could be badly implemented, money wasted or stolen.

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(Editorial from Issue No. 285, published on June 17 2016)

WWF suspends Kazakh athletes

JUNE 15 2016 (The Conway Bulletin) – The World Weightlifting Federation said four Kazakh athletes, Svetlana Podobedova, Maya Maneza, Zulfiya Chinshanlo and Ilya Ilyin, took performance-enhancing drugs at the 2012 London Olympic Games. All four athletes will now be suspended from global competition, including the Rio Olympics this summer. Mr Ilyin, twice Olympic gold medallist, said he was shocked by the news and denied having taken drugs. The ban will be a major blow to Kazakhstan’s medal hopes.

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(News report from Issue No. 285, published on June 17 2016)

Kazakhstan links Aktobe attacks to Syrian imam

ALMATY, JUNE 14 2016 (The Conway Bulletin) — Kazakhstan’s interior minister, Kalmukhanbet Kassymov, said attacks earlier this month in Aktobe by two dozen armed men had been ordered from Syria, the strongest suggestion yet that the government linked the violence to the extremist group ISIS.

His comments appeared to clear up an inconsistency in the Kazakh authorities’ explanation on the motives behind the attacks.

After the initial attack on June 5 on two shops and a police outpost in Aktobe, the authorities had alluded to a link with ISIS but a few days later President Nursultan Nazarbayev then suggested they had been part of an attempted colour revolution sponsored by the West. Coloured revolution means, in the FSU, a pro-Western, foreign-funded movement.

Now, though, the government line appears settled.

Mr Kassymov said that up to 45 men had gathered in an apartment before the first attack.

“When they all gathered in an apartment, they listened to an address from a so-called imam, apparently from Syria, who said that they needed to carry out a sacred jihad,” Russian media quoted him as saying. “The investigation will prove this.”

He also said that the last few gunmen who had escaped the shoot- out on June 5 had now been captured or killed. He said that, in total, 18 gunmen had been killed and nine arrested.

Three security officers and four civilians were also killed in the attacks, in the most serious in Kazakhstan’s 25 years of independence.

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(News report from Issue No. 285, published on June 17 2016)

Uber starts operating in Kazakh capital, challenging gypsy cab system

ALMATY, JUNE 10 2016 (The Conway Bulletin) — Uber started operations in Astana, posing a major challenge to Kazakhstan’s taxi industry which, like much of the rest of the former Soviet Union, has been based on an informal gypsy cab system for generations.

But the San Francisco-based ride-hailing app said in a statement that the service would only be offered with electronic payments, potentially creating an obstacle in the stubbornly cash-oriented economy.

Traditionally, taxi rides in Kazakhstan are a matter of flagging any private car down and then haggling a price. Cash is the only way of paying.

Astana residents, backed this up. They said that fixed prices and cashless payments will act as a brake on Uber’s popularity.

“The inability to negotiate the price will surely make rides more expensive,” said Alberto, an expat working for an European consultancy in Astana.

“The city government is trying to eliminate gipsy cabs ahead of the EXPO next year, but the cashless-only payment option will deter local travellers from using Uber.”

Electronic payments make up around 15% of total commercial transactions in Kazakhstan, according to the Central Bank, compared to a global average of 25% and a European average of around 50%.

In Uber’s experience, the payment system could change, though.

Months after Uber rolled out its service in Baku in April 2015, the company listened to its customers’ demands and introduced a cash option for paying their rides.

Uber said it chose Astana for its growth opportunities. “Astana is a dream-city, a city of the future and big opportunities,” it said.

Uber is not the first taxi app to tap into the Kazakh market. A long-haul Russian service, called InDriver, launched in Kazakhstan,Uzbekistan and Kyrgyzstan. Users said InDriver’s clunky technology made it hard to use.

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(News report from Issue No. 285, published on June 17 2016)

Azerbaijan makes bank deal with Iran

JUNE 14 2016 (The Conway Bulletin) – Azerbaijan and Iran will launch their first joint bank next year, the countries’ central bankers told media. Elman Rustamov, Azerbaijan’s Central Bank chief, visited his Iranian counterpart Valiollah Seif in Tehran. Both laid the groundwork for the establishment of a new bank, a sign of the growing cooperation in the financial sector.

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(News report from Issue No. 285, published on June 17 2016)