Category Archives: Central Asia & South Caucasus News

Centerra expects to have to pay Kyrgyz fines

BISHKEK, FEB. 23 2017 (The Conway Bulletin) — In its 2016 results Toronto-listed Centerra Gold said that it expected to have to pay all or part of a set of fines handed out to it by Kyrgyz environmental bodies over what it had previously described as an attempt by the government to pressure it into ceding a larger stake in the Kumtor gold mine.

Centerra Gold is locked in a battle with the Kyrgyz government over ownership of the Kumtor mine. Kyrgyzstan owns a 32.7% stake in Centerra Gold but it wants to own a direct stake in the mine which generates about a tenth of its GDP.

Last year Centerra launched an action at an international arbitration court after a Kyrgyz judge ordered cash generated by the Kumtor mine to stay in the country.

“If the Company were obligated to pay these amounts, it would have a material adverse impact on the Company’s future cash flows, earnings, results of operations and financial condition,” Centerra said.

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(News report from Issue No. 318, published on Feb.24 2017)

Tajik president sack deputy finance minister

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FEB. 21 2017 (The Conway Bulletin) — Tajik president Emomali Rakhmon fired the country’s deputy finance minister Umed Latifov in a move that observers have said probably hints at in-fighting among Tajikistan’s elite over a murky deal between Russia’s Rusal aluminium producer and Talco, Tajikistan’s aluminium smelter and its most important economic asset. No official reason was given for sacking Mr Latifov who had been in the job since July last year.

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(News report from Issue No. 318, published on Feb.24 2017)

Azerbaijani authorities arrest two for spying

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FEB. 24 2017 (The Conway Bulletin) — Azerbaijan’s security service said that they had arrested two nationals Elsan Amirli and Elcin Babayev for spying. It said that the two men had been collecting information on the country’s security services on behalf of another country. It did not name the other country. The two men have been charged with treason.

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(News report from Issue No. 318, published on Feb.24 2017)

Kazakhstan plans new power plant

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FEB. 24 2017 (The Conway Bulletin) — Kazakhstan will build a new hydropower plant with a 25MW capacity on the Turgusun river in the east of the country, media reported quoting the Kazakh Development Bank. The 11.3b tenge ($36.2m) power plant will, it is planned, produce 23% of the region’s electricity as well as generate new jobs. Kazakhstan is trying to boost power production to meet an increase in demand triggered by migration and a rise in living standards.

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(News report from Issue No. 318, published on Feb.24 2017)

Tajikistan and Uzbekistan cancel flight at last minute

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DUSHANBE, FEB. 20 2017 (The Conway Bulletin) — After months of build- up and a successful dry-run, the start of a regular commercial flight between Dushanbe and Tashkent was cancelled at the last minute.

Both sides blamed the other for cancelling what would have been the first regular service between the Tajik and Uzbek capitals for 25 year and a tangible sign that relations between the two countries had started to improve after years of feuding.

Somon Air, Tajikistan’s main airline, was due to make the flight, a repeat of a one-off flight it made earlier this month. It said that Tashkent airport had contacted it and said that permission to make the flight had been withdrawn for security reasons. Tashkent airport denied this and said that the flight had been cancelled because Somon Air had failed to submit the correct paper- work in time.

Having tried to pin the blame on Tashkent airport for the flight failing to fly, Somon Air then admitted it had been at fault and promised to make the flight over the “next few days”.

Media later report that Somon Air had fired Alisher Rustamov, director of commercial operations, for failing to ensure that the flight took off.

Relations between Uzbekistan and its neighbours have improved markedly since Shavkat Mirziyoyev became president at the end of last year. His predecessor, Islam Karimov, was known to be cantankerous and relations with his neighbours had soured during his presidency. He died in September 2016 and his daughter, Gulnara, who had harboured ambitions to succeed him, was sidelined.

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(News report from Issue No. 318, published on Feb.24 2017)

Azerbaijani section of Southern corridor to work by 2020

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FEB. 19 2017 (The Conway Bulletin) — The so-called Southern Gas Corridor running from the Azerbaijani section of the Caspian Sea to Europe will be operational by 2020, Azerbaijani president Ilham Aliyev said at an international security conference in Munich. He said that the South Caucasus Pipeline was 80% complete, the TAP pipeline line was 35% complete and the extension on the Shah Deniz gas field was 90% complete.

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(News report from Issue No. 318, published on Feb.24 2017)

Kazakhstan cuts interest rates as economy improves

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ALMATY, FEB. 20 2017 (The Conway Bulletin) — Kazakhstan’s Central Bank cut its key interest rate by one percentage point to 11%, its lowest level since it introduced its this key rate in September 2015, and delivered one of its most upbeat assessments of the economy for years.

Central Bank chief Daniyer Akishev said that improved global economic outlook, a rise in oil prices and a slowdown in inflation had allowed him to cut the rate. At the beginning of last year, Kazakhstan’s interest rate had measured 17%.

Both the rate cut and the renewed confidence in the economy will be a relief to investors and to ordinary Kazakhs who have had to deal with an avalanche of grim economic data since oil prices collapsed in mid-2014.

“We took into account the positive impact of external factors. Sustainable world oil prices above $50 per barrel, improving global eco- nomic prospects and moderate inflationary background in our trading partners,” Mr Akishev told journalists.

“Among internal factors there has been a significant slowdown in inflation, which creates lower inflationary and devaluation expectations amongst people, as well as the ongoing de-dollarisation of bank deposits.”

Inflation had been a major worry after the tenge devalued by 50% in 2015. It had started to rise fast last year but has since slowed and the Kazakh Central Bank said that it would ease to between 6.5% and 7% this year from 8.5% last year (Feb. 22). The Central Bank also said that inflation in 2018 could drop as low as 5%.

The Kazakh economy is the biggest in Central Asia and is an important driver of regional economic growth.

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(News report from Issue No. 318, published on Feb.24 2017)

Georgia expects new funding from IMF

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FEB. 21 2017 (The Conway Bulletin) — Georgia’s economy minister Giorgi Gakharia told Reuters in an interview that he expected a new funding deal with the IMF to be concluded at the end of its two week mission which started on Feb. 15. Mr Gakharia said that the IMF would be looking to link a funding mechanism to structural reforms of the economy and that Georgia’s main challenges were “pension reform, reform of capital markets, other structural reforms”. Georgia had agreed a three year $136m standby deal with the IMF that had been due to run until July. Reuters said that it had been allowed to lapse, though, because of disagreements over reforms.

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(News report from Issue No. 318, published on Feb.24 2017)

Two Tajik banks lose licences

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DUSHANBE, FEB. 24 2017 (The Conway Bulletin) — Tajikistan’s Central Bank withdrew operational licences for Fononbank and Tajprombank, two months after it unveiled a $490m plan to save its banking sector from collapsing under the weight of bad debt.

It two terse statements, the Tajik Central Bank avoided giving details on just why it had withdrawn the banks’ licences but it did say that it was studying the banks’ various issues.

Tajik media later reported that customers of Fononbank and Tajprombank were unable to withdraw their savings.

A depreciation in the value of the Tajik somoni and a general economic downturn linked to a recession in Russia, which generates much- needed jobs and remittances, has pressured Tajikistan’s banking sector.

The government has already pumped millions of dollars into the country’s two biggest banks, Agroinvestbank and Tojiksodirot. It also promised in December to support Fononbank and Tajprombank. The government has also been talking to the IMF about receiving funds and the European Bank for Reconstruction and Development (EBRD).

Neither the IMF nor the EBRD has committed any funds yet, although the EBRD pledged last year to buy an undisclosed stake in Tojiksodirot for $100m.

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(News report from Issue No. 318, published on Feb.24 2017)

Congolese rebel group captures Georgian pilot

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FEB. 23 2017 (The Conway Bulletin) — A Congolese rebel group called M23 has captured one of the pilots of a Georgian helicopter that crashed in January, media reported quoting a government spokesman. He said that Soso Osurauli, a former military pilot, had been working as a civilian contractor in the Congo. The other pilot was rescued by government forces.

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(News report from Issue No. 318, published on Feb.24 2017)