DEC. 16 2016 (The Conway Bulletin) — After five years without a permanent home, the Tbilisi State Puppet Theatre, considered one of the best puppet theatres in the former Soviet Union, said that it was moving into a new home. Georgia’s ministry of culture is to build a new theatre for the group which should open in 2018.
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(News report from Issue No. 310, published on Dec. 23 2016)
ALMATY, DEC. 16 2016 (The Conway Bulletin) — The European Bank for Reconstruction and Development (EBRD) pledged to give Kazakh businessmen 200m euros to improve the country’s renewable energy sector.
For the EBRD the motivation is to boost Kazakhstan’s green energy production. Solar and wind generate only around 1% of Kazakhstan’s power at the moment. Hydro produces around 13% of its power and the rest is generated by smoke belching coal-powered stations.
“Once all the projects come on- stream, annual CO2 emissions are expected to reduce by about 600,000 tonnes, which would help the country to achieve its commitments to cut emissions under the Paris climate agreement,” the EBRD said in a statement.
The 2015 Paris Agreement was a global deal to cut carbon emissions.
Kazakhstan may once have turned its nose up at taking EBRD cash to produce green energy. Now, though, it is happy to go along with the concept. It is struggling to see off a steep economic downturn that has hit its revenues. Oil and gas are its major exports but prices have halved.
And, alongside a fall in revenues, Kazakhstan also needs to boost power. Its population has swelled and grown richer, demanding more power.
It still needs to replace a nuclear power station that was decommissioned in the 1990s. Plans to build a replacement have been scrapped for the time being and a thermal power plant that was being built on the shores of Lake Balkhash with South Korea has also been ditched this year because it was too expensive.
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(News report from Issue No. 310, published on Dec. 23 2016)
DEC. 21 2016 (The Conway Bulletin) — Tajikistan’s government said it would spend $490m, around a fifth of its total budget, on rescuing its banking sector from collapse.
It will pump the cash mainly into Tajikistan’s two biggest lenders, Agroinvestbank and Tojiksodirot- bank, to boost their liquidity and protect them from bankruptcy.
Both banks have neared collapse this year, only being saved by previous government bailouts. Earlier this month, Tojiksodirotbank was taken out of administration. It had been run by Central Bank officials since May.
Two smaller banks, Tajprombank and Fononbank, will also receive funds.
Abdusalom Kurbanov, the Tajik finance minister, said the government had no choice but to intervene heavily to save the banks.
“This decision is aimed at the sustainable development of the banking system, the preservation of public confidence in the banks and the return of deposits,” media quoted him as saying.
Tajikistan is the most remittance- dependent country in the world and a recession in Russia has sucked its economy dry. Its somoni currency has also fallen apart over the past couple of years as the US dollar strengthens and low commodity prices continue to undermine confidence in Emerging Markets.
Earlier this year, a run on the banks in Tajikistan betrayed just how nervous people had become over the stability of the banks. Many ATMs ran out of cash.
Tajikistan has asked for advice from both the European Bank for Reconstruction and Development (EBRD) and the IMF, although it has yet to take any financial aid. This is probably because, despite a handful of missions to Dushanbe, the IMF and Tajikistan couldn’t agree on a set of conditions to guarantee the loan.
On a visit to Central Asia in October, Juha Kahkonen, IMF deputy director for the Middle East and Central Asia, said that it had moved closer to agreeing conditions for a loan. It also described the state of the Tajik banking sector as dire.
“Discussions will continue in the coming weeks and we hope the programme can be agreed in the coming months,” he told Reuters on a trip to Almaty.
But he also said: “Their [Tajik banks] lending practices have not been very sound. Non-performing loans are about half of total loans.”
Central Bank data showed that the share of non-performing loans had risen to 58.7% of the banks’ loan portfolios from 37.8% in September.
Banking systems across the region are creaking. A Handful of smaller banks in Azerbaijan have gone bankrupt and several are under pressure in Kazakhstan. The region’s financial system has been fragile for years. After the 2008/9 Global Financial Crisis, Kazakh banks were left with one of the world’s biggest bad debt ratios, forcing the government to pump billions of dollars into the system.
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(News report from Issue No. 310, published on Dec. 23 2016)
DEC. 21 2016 (The Conway Bulletin) — Turkmenistan has accused Iran of not paying $2b of debt linked to gas supplies, media reported, threatening to sour carefully crafted friendly relations between the two neighbours.
The Russian service of Radio Free Europe/Radio Liberty quoted an unnamed Turkmen official as saying that Iran still owed it $2b for gas supplied since 2012. In return the Iranian state-run Fars news agency quoted an Iranian official as saying that Turkmenistan was using the tougher winter months, when Iran needs more gas, as a weapon. The Iranian official threatened to break off commercial links with Turkmenistan.
Turkmenistan and Iran have pulled together since Western sanctions were imposed on Iran in 2012 for its alleged determination to build a nuclear weapon.
During this time Turkmenistan’s gas supplies to Iran have doubled to 10b cubic metres. Iran also imports electricity from Turkmenistan.
The payment system, though, is complicated because of a series of barter deals. Earlier this year, Turkmenistan and Iran announced a deal through which Iran would take $30b of Turkmen gas over the next 10 years in exchange for $30b of technical assistance.
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(News report from Issue No. 310, published on Dec. 23 2016)
DEC. 16 2016 (The Conway Bulletin) — Azerbaijan will introduce an online visa application system from Jan. 10 2017 as it tries to bolster revenues from tourism.
With an economic downturn biting deep and wiping out essential profit from oil sales, Azerbaijan’s government has turned to tourism to try to plug the gap, an industry it has previously shunned. Azerbaijan’s government’s government collects 75% of its revenues from oil sales.
The head of the State Agency of Public Service and Social Innovations İnam Kerimov said that e-visa applications would improve the efficiency and transparency of the visa application process.
“At the moment the portal is in the test phase, but it will be completely ready till the 10th of January, 2017,” he said.
“Foreigners will be able to apply for visas and obtain them without waiting in the queue and collecting documents.”
A visa for a stay of up to 30 days will cost $20 and be emailed to the applicant within three days of the application being sent in.
In 2010, Azerbaijan scrapped a visa-on-arrival system for Westerners at Baku airport, making it far more difficult to enter the country. In that time it has rowed with Europe about media rights and free speech, while also hosting a series of high profile sporting and cultural events such as the European Games and the Eurovision Song Contest.
Corruption, and scepticism are rife in Azerbaijan, and people quickly questioned the motive behind the e-visa move and the tourism development drive.
“The authorities are trying to fill their expensive hotels,” said Irada, 45. “This system won’t benefit ordinary citizens.”
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(News report from Issue No. 310, published on Dec. 23 2016)
DEC. 23 2016 (The Conway Bulletin) — It’s been a rollercoaster and with all good rollercoasters after a hair-raising ride you end up where you started.
This, of course, is Georgia’s lari currency. While it hasn’t quite ended 2016 where it started, and there are a few more days to go, it has been quite a ride. The lari opened 2016 at 2.41/$. On Dec. 22, the lari was trading at 2.75/$, a slight improvement from a year-low of 2.81 on Dec. 21 after the Central Bank intervened to give its currency a bit of strength.
It’s been on the slide since June when it peaked at 2.12/$. That’s a drop of 32.5% in six months. Like I said, it’s been quite a ride.
Essentially, the lari’s problems are Emerging Market currency problems.
They have been hit by a strengthened US dollar, security wobbles and by sustained low oil prices. Chuck in the poor performance of the Russian economy and stagnant local economic growth and its easy to see why the lari has been hammered. Worse-then-expected economic data and the Georgian Central Bank’s slashing of interest rates to try to boost growth have also weighed against the it.
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(News report from Issue No. 310, published on Dec. 23 2016)f
DEC. 21 2016 (The Conway Bulletin) — A court in Tbilisi sent two former high-ranking government officials to prison for 9-1/2years for murder and perverting the course of justice. The two men, David Akha- laia and Giorgi Dgebuadze, were senior police officers in the interior ministry under the former government of Mikheil Saakashvili. The EU and the US have warned the Georgian Dream government not to politicise the justice system.
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(News report from Issue No. 310, published on Dec. 23 2016)
TBILISI, DEC. 21 2016 (The Conway Bulletin) — The China-led Asian Infrastructure Investment Bank (AIIB) pledged to lend Azerbaijan’s Southern Gas Corridor company (SGC) $600m to finance its share of the TANAP gas pipeline that will pump gas from the Caspian Sea to Europe.
The loan heaps more cash from international institutions onto the project. Media reports said that the World Bank had also pledged $800m to the project. This follows loan deals last week from the Asian Development Bank and previously from the European Bank for Reconstruction and Development (EBRD).
Announcing its loan, the AIIB said that TANAP was a vital infrastructure project.
“This crucial upgrade of energy infrastructure between Asia and Europe will further strengthen the economy of Azerbaijan while underpinning energy security in Turkey, as well as several countries in southern Europe,” a statement quoted AIIB’s vice President and chief investment officer, DJ Pandian as saying.
The World Bank also said that TANAP was vital to support.
The total cost of TANAP is slated to be between $10b and $12b. SOCAR, Azerbaijan’s energy company, owns a 58% share in the project; Turkey’s Botas owns a 30% stake and BP owns a 12% stake.
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(News report from Issue No. 310, published on Dec. 23 2016)
DEC. 22 2016 (The Conway Bulletin) — China’s Singyes Solar Technologies won a contract to design, build and operate a 100MW solar farm in Uzbekistan, media reported. The $147m project, located near Samarkand, is the biggest overseas project won by Singyes. State- owned Uzbekenergo is the client, although the Asian Development Bank (ADB) is the main financier of the project. The ADB wants Uzbekistan to generate more of its power via renewable energy.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 310, published on Dec. 23 2016)
DEC. 16 2016 (The Conway Bulletin) — Heavy snowfall has partially blocked the main highway from Russia into Georgia. The highway crosses the Caucasus Mountains and is the main route into and out of Georgia. Media reported that lorries and vans have been banned from driving along the S-3 road from Mtskheta and Lars. A landslide blocked the road in June for three weeks, causing product shortages in Georgia and Armenia, which also depends on it for supplies.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 310, published on Dec. 23 2016)
