JUNE 8 2016 (The Conway Bulletin) — An EgyptAir passenger plane flying to Beijing from Cairo diverted to Urgench airport in western Uzbekistan after Egyptian authorities received information that a bomb had been planted on the plane. The plane was evacuated and searched before being allowed to fly on to China after the Uzbek authorities gave the all-clear.
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(News report from Issue No. 284, published on June 10 2016)
JUNE 8 2016 (The Conway Bulletin) — Kairat Satybaldy, the eldest nephew of Kazakh President Nursultan Nazarbayev, and Vyacheslav Kim, both linked to Kaspi Bank, one of Kazakhstan’s most prominent high street banks, bought into AllurGroup, a carmaker with its main operations in Kostanai, in the north of the country. Through Alatau Invest Capital, a financial vehicle, Mr Satybaldy has said he wants to invest in the car-making industry.
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(News report from Issue No. 284, published on June 10 2016)
SHYMKENT/Kazakhstan, JUNE 6 2016 (The Conway Bulletin) — The authorities in Kazakhstan accused imprisoned Kazakh businessman Tokhtar Tuleshov of stirring protests across the country in April and May in an attempt to overthrow the government.
The protests morphed from a demonstration in Atyrau in the west of the country against proposed land reforms into country-wide demonstrations against the government and the worsening economic scenario.
President Nursultan Nazarbayev has already sacked a couple of ministers over the handling of the land reform issue as well as two senior interior ministry officials but some analysts said that he is still looking to deflect blame for the protests away from his government.
The National Security Committee have now said that Mr Tuleshov, who was arrested in Shymkent in the south of the country, in January on various corruption and gun running charges has been plotting for the past year to overthrow the government.
Quoting a National Security Committee spokesperson, media said that Tuleshov’s “plan included destabilising the situation in the country by creating flash points, organising protests and mass unrest.”
Over the weekend, police also arrested a deputy prosecutor-general and two senior military officers for involvement in the plan.
It’s not clear, though, how Tuleshov would have organised this from prison and other analysts were quick to rubbish the theory.
Rasul Zhumaly, a former Kazakh diplomat and now a political analyst, said that Tuleshov was too well-connected to the establishment to risk attempting a coup.
“He had powerful patrons in Russia and Kazakhstan, even among military representatives, and his activity in pro-Kremlin propaganda,” he said.
“It’s more likely that these official charges are nothing but an attempt to find a fall guy and make him responsible for everything.”
Tuleshov was based in Shymkent near the border with Uzbekistan. He was the representative of a Russia- linked military think tank in Kazakhstan and also the CEO of Shymkentpivo, one of the country’s biggest breweries.
In Shymkent, people said that Tuleshov had been targeted because officials coveted his business.
“Tokhtar had a big profitable busi- ness, his family had everything, so there was no need for him to go against current authorities,” said Galina, 38.
“It seems like his business was very attractive for someone.”
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 284, published on June 10 2016)
JUNE 8 2016 (The Conway Bulletin) — At a conference in Washington, Georgian defence minister Tinatin Khidasheli said that NATO should be doing more to secure Georgia as a member of the Western military alliance. She said that by approving Georgia’s NATO membership, the group would be sending a message to Russia that it can’t be intimidated. Georgia is desperate to join NATO but some members are wary of upsetting Russia.
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(News report from Issue No. 284, published on June 10 2016)
JUNE 8/9 2016 (The Conway Bulletin) — A court in Kazakhstan sentenced Talgat Yermegiyayev, the former head of the Astana EXPO-2017, and Kazhymurat Usenov, one of its former directors, to 14 and 2 years in jail for corruption. They are the two most prominent figures in a trial of 23 officials accused of stealing from the state budget. Yermegiyayev was found guilty of having embezzled 10.2b tenge ($31m).
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(News report from Issue No. 284, published on June 10 2016)
ALMATY, JUNE 6 2016 (The Conway Bulletin) — Kazakhstan’s energy minister Kanat Bozumbayev denied that the government was using multi-billion dollar fines against the consortium operating the Karachaganak gas and condensate field to negotiate more favourable terms to a Production Sharing Agreement (PSA) drawn up in 1997.
Mr Bozumbayev’s comment contradicts statements by shareholders in Karachaganak. Russian oil company Lukoil said in its Q1 report that Kazakhstan’s total claims for the renegotiation of the Karachaganak contract have grown to $1.8b, up from $1.6b it had highlighted in April.
At a press conference in Astana, Mr Bozumbayev tried to shrug off the allegations.
“The reason I do not comment on these issues is that my words are then taken out of context and I read that Kazakhstan wants to sue,” media quoted him as saying. “Kazakhstan is holding friendly negotiations with the shareholders of the Karachaganak project.”
Mr Bozumbayev’s comments are the most clear to date that the Kazakh government is holding direct talks with the Karachaganak partners on a new PSA deal.
Essentially, the Kazakh government wants a greater share of the profits from Karachaganak. Last week, the FT reported that the Kazakh government had rejected a $300m deal to settle the dispute.
The consortium is Eni (29.25%), BG (29.25%), Chevron (18%), Lukoil (13.5%) and Kazmunaigas (10%).
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(News report from Issue No. 284, published on June 10 2016)
JUNE 8 2016 (The Conway Bulletin) — ALWA, a German plastics manufacturer, bought a 15% stake in Orient Finance Bank, an Uzbekistan-based lender, for 9.3b sum ($3.2m), news agency Trend reported. The bank was able to sell the stake by increasing its capitalisation. This is in line with the government policy of selling off stakes in state-owned or state-participated assets.
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(News report from Issue No. 284, published on June 10 2016)
JUNE 8 2016 (The Conway Bulletin) — The Kazakh government said it will have to recalculate costs for the construction of a petrochemical technopark in a Special Economic Zone near Atyrau, due to the depreciation of the local currency. Nurlan Rakhmetov, managing director at Samruk-Kazyna, the country’s sovereign wealth fund, said costs will rise. As of June 1, the local consortium building the technopark has received 40.7b tenge ($120m) from the state budget.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 284, published on June 10 2016)
JUNE 6 2016 (The Conway Bulletin) — Russian PM Dmitri Medvedev said that state-owned gas company Gazprom will invest around $1.5b in Kyrgyzstan’s energy infrastructure and that it will cancel export duty on oil and oil products. Mr Medvedev made the statement while in Bishkek on an official visit. Oil and petroleum products make up 51.9% of Kyrgyz imports from Russia.
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(News report from Issue No. 284, published on June 10 2016)
ALMATY, JUNE 10 2016 (The Conway Bulletin) — Currencies across the Central Asia and South Caucasus region have stabilised this year after losing 30% to 50% of their value in 2015 thanks, in part, to record high interest rates but governments are now having to deal with deflation.
As well as raising interest rates to their highest level since the Global Economic Crisis of 2008/9, Central Banks bought heavily to defend their currencies. The Kazakh Central Bank said it bought $3.7b in Jan.-May 2016 and in Georgia, the Central Bank intervened twelve times in just two months, although on a smaller scale.
And both Central Banks have now started unwinding high interest rates, hoping to spark economic activity.
Earlier this year the Kazakh Central Bank cut its key interest rate to 15% from 17%. Georgia’s Central Bank cut its interest rate to 7.5% from 8% and promised further cuts. New data from Georgia’s statistics agency highlighted the challenge. It said that prices in May dropped by 0.4%, the third consecutive month of falling prices. Year-on-year inflation in May measured 2.1%, down from a high of 6.3% in November.
And this scenario is playing out across the region.
Last month Armenia’s Central Bank said that year-on-year inflation measured minus 1.9% and immediately cut interest rates by 0.5% to 7.75%.
But Alex Nice, an analyst at the Economist Intelligence Unit, said that the region’s weak banking systems and high levels of dollarisation means that there is little Central Banks can do to impact economic activity.
“The exchange rate is a more powerful lever for managing prices in the economy [than the official interest rate],” he said.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 284, published on June 10 2016)
