Category Archives: Central Asia & South Caucasus News

War and smiles in Azerbaijani-Armenian disputed territory

SHUSHI/Azerbaijan, APRIL 22 2016 (The Conway Bulletin) — The high mountains, steep cliffs and green landscapes are a pleasure to the eye, but Nagorno Karabakh feels empty, quiet and sad.

From the Armenian border to Shushi, one of the disputed region’s larger towns, several ghost-like settlements hug the road.

Shushi itself is strewn with rubble but not from fighting that sparked earlier this month, the worst since a UN brokered ceasefire was imposed in 1994. This rubble was from fighting in the early 1990s when Christian Armenian-backed fighters took the town from Muslim Azerbaijani soldiers. The abandoned mosques lie testament to that.

Saro Saryan, an ethnic Armenian originally from Baku, brought out a bottle of vodka and insisted that it must be finished before morning was out. He fled Baku in 1990.

His son sat beside him, silent, eyes glued to his iPad. He was back from fighting against Azerbaijani forces.

Saryan, now flush with vodka, chipped in. “I’m extremely proud of my son for volunteering to fight on the front lines. Karabakh is a proud country and we’ll fight till the end for our historical right,” he said.

In contrast to Shushi’s emptiness, the streets of Stepanakert, the Armenian capital of Nagorno-Karabakh, are clean and filled with people. Military convoys rumble past, children ride bikes, a lady walks her dog.

The locals may flash a friendly smile but the stress of war is never far away. “Many families left Karabakh once the conflict resumed, it’s sad. But what can they do?” said 30-year-old Zara.

ENDS

(News report from Issue No. 277, published on April 22 2016)

Business comment: Doha dissappoints

APRIL 22 2016 (The Conway Bulletin) – Energy ministers in Baku and Astana were frustrated last week after a meeting of oil producers in Doha failed to agree to freeze oil production at January 2016 levels. Advocates of capping production had said that this would help oil prices rebound.

But Azerbaijani and Kazakh objectives at the meeting may have been slightly different to those of Saudi Arabia or Russia.

Certainly, they wanted a deal to push up oil prices but they also wanted to use any agreement as a fig leaf to cover up their sinking production levels.

Azerbaijani and Kazakh production and export volumes are too low to influence oil prices directly. They are price takers, not setters. The problem is that their ageing oilfields are simply uneconomical at $40 or even $60/barrel and this has forced producers out of the market.

Azerbaijan and Kazakhstan will continue to “freeze” production, because there’s nothing else they can do. Their production, and consequently their exports, are bound to fall again this year, according to all major forecasting agencies, from OPEC to the IEA and the EIA.

A recent survey of oil experts at PRIX said, for the first time since it started polling, that global oil exports are bound to fall in Q2. Azerbaijan and Kazakhstan will be part of this trend, the quarterly report said.

Had the Doha meeting succeeded, Azerbaijan and Kazakhstan could have hidden falling production figures behind an international agreement.

Now they have to face further oil price volatility, the main outcome of the failed Doha talks, and without a smokescreen to defend their lower output figures.

ENDS

(News report from Issue No. 277, published on April 22 2016)

Editorial: Civil rights in Georgia

APRIL 15 2016 (The Conway Bulletin) – A long battle against an eavesdropping law in Georgia was resolved by the country’s Constitutional Court. It deemed the bill unconstitutional and mandated its amendment within the next 12 months.

The controversial bill, which allowed government security agencies to have unrestricted access to communications across telecom networks, was the focus of a fierce battle between the Parliament, the President and civil society in late 2014.

The political coalitions in the Parliament split during the heated debate on the bill. Ultimately, a thin majority approved the bill.

At the time, President Giorgi Margvelashvili vetoed the bill. Parliament, though, voted to override the presidential veto — dealing a huge blow to Mr Margvelashvili’s authority.

With this final victory for those fighting the bill, Georgia will now have to drop legislation that infringed civil liberties and privacy of its citizens, handing civil society a rare victory over state agencies and giving Mr Margvelashvili his payback.

ENDS

(Editorial from Issue No. 276, published on April 15 2016)

EBRD praises Kazakh economy

APRIL 8 2016 (The Conway Bulletin) – The European Bank for Reconstruction and Development (EBRD) has defended Kazakhstan’s economic record over the past couple of years despite a sharp currency devaluation, rising inflation and thousands of job losses, media reported. Media quoted the EBRD’s chief in Kazakhstan, Janet Hackman, saying that Kazakhstan was not faced with an economic crisis because of steps it had taken recently to join the WTO and move to an inflation targeting monetary policy.

ENDS

(News report from Issue No. 276, published on April 15 2016)

Azerbaijan’s Bank needs more capital, says Fitch

APRIL 13 2016 (The Conway Bulletin) – Ratings agency Fitch said the International Bank of Azerbaijan needs to increase its proposed 500m ($328m) manat capital injection to repair its solvency problems. IBA, which is Azerbaijan’s largest bank, wrote off around 3b manat ($2b) of non-performing loans, but has another 3b manat or more of troubled assets, according to Fitch. A sharp depreciation of the manat last December hit the value of assets in Azerbaijan’s banking sector.

ENDS

(News report from Issue No. 276, published on April 15 2016)

Kazakh mobile operator maintains dividend

APRIL 12 2016 (The Conway Bulletin) – Kcell, Kazakhstan’s largest mobile operator, said it would pay out 50% of its 2015 profits in dividends, disappointing investors and analysts, who expected a higher return. At 117 tenge per GDR ($0.35), this year’s dividend is lower than the $1.54 per GDR it gave out last year. Analysts at Halyk Bank expected the dividend to be around 70% of Kcell’s profits this year. Kcell revenues fell 10% in 2015 as tougher competition and an economic downturn combined to hit sales.

ENDS

(News report from Issue No. 276, published on April 15 2016)

UK company to build a hydropower plant in Georgia

APRIL 14 2016 (The Conway Bulletin) – UK-based investment company Geopower signed an agreement with Georgia’s energy ministry to build a new hydropower plant on the Mtkvari river. The new plant, located near Dzegvi, a village 20km north of Tbilisi, will cost $24m and will have a capacity of 15.7MW. Small hydropower stations are spreading across the South Caucasus to meet the region’s energy needs.

ENDS

(News report from Issue No. 276, published on April 15 2016)

Editorial: Kazakh President’s travels

APRIL 15 2016 (The Conway Bulletin) – Kazakhstan’s President Nursultan Nazarbayev is fond of grandstanding foreign tours and he was at it again this week.

Generally, when a top world leader visits Astana, the next morning official media boasts deals worth billions of dollars. And it’s the same story when he travels. Mr Nazarbayev likes a multibillion dollar deal headline, even if some of the finer details show it to be hollow, at least in part.

This was the case in Tehran where Mr Nazarbayev signed a $1b trade deal with his Iranian counterpart Hassan Rouhani. In essence there appears to be little substance to this deal.

After Tehran, Mr Nazarbayev flew to Istanbul in an important show of support for President Recep Tayyip Erdogan who is at loggerheads with Russia.

The last stage of the tour is to neighbouring Uzbekistan. Mr Nazarbayev arrived last night in Tashkent for a meeting likely to focus on the economic challenges faced by the region.

ENDS

(Editorial from Issue No. 276, published on April 15 2016)

Kazakhstan copper producer posts 12% drop in revenues

ALMATY, APRIL 11 2016 (The Conway Bulletin) — Kazakhstan-focused copper producer Central Asia Metals posted a 12% decline in revenues in 2015, a drop it said was linked to the fall in commodity prices.

Although copper cathode production grew by 8.4% to 12,071 tonnes in 2015, a new high for the company, the average selling price for copper declined by 21%, bringing down earnings.

And with lower copper prices, Central Asian Metals said that the Kazakh government also earned 14% less from the mineral extraction tax it applied to its sales than it did in 2014.

On a more positive note, the company said that it had received permission from the government to expand its 15,000 tonnes/year copper recovery plant at the Kounrad mine.

And it also said that it will maintain its dividend payment, despite the tough market conditions.

Nick Clarke, CEO of Central Asia Metals, said: “While many resource companies are cutting dividends, we are pleased to be able to honour and exceed our dividend policy.”

The total dividend the company will pay for 2015 amounted to 12.5p, the same level as last year.

Russia continues selling weapons to Armenia and Azerbaijan

APRIL 9 2016 (The Conway Bulletin) – Russia said that it will continue to sell weapons to both Armenia and Azerbaijan, Russian PM Dmitri Medvedev told Russian media, despite the worst outbreak in violence earlier this month between the two neighbours since 1994. Mr Medvedev said that if Russia stopped selling weapons to Armenia and Azerbaijan, they would simply buy them from another country which would, potentially, by more dangerous.

ENDS

(News report from Issue No. 276, published on April 15 2016)