Category Archives: Uncategorised

Chinese and European investors to buy Tajik fertiliser

JULY 28 2016 (The Conway Bulletin) — The Tajik government said that Chinese and European investors have shown interest in buying TojikAzot, a debt-ridden fertiliser plant in the southern province of Khatlon. TojikAzot stopped operations in 2008 when it halted gas imports from Uzbekistan. The company was privatised in 2002, when Ukrainian businessman Dmytro Firtash bought a 75% share in the company. Mr Firtash was later accused of illegally buying the plant and a local court invalidated the privatisation in 2014.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

IMF considers loan to Tajikistan

JULY 26 1 2016 (The Conway Bulletin) — Negotiations for a $500m IMF loan are continuing, Jamoliddin Nuraliyev, deputy chief of Tajikistan’s Central Bank told local media. The IMF has scheduled a visit to the country in August to lay out details for the loan. Mr Nuraliyev said that the country needs support to see it through a “difficult economic period.”

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Gazprom Kyrgyzstan repairs pipeline

JULY 26 2016 (The Conway Bulletin) — Maintenance work at the Bukhara-Tashkent-Bishkek-Almaty gas pipeline will result in gas cutoffs in several Kyrgyz towns, the press service of Gazprom Kyrgyzstan said. The pipeline is part of a Soviet-designed system pumping Uzbek gas to Kyrgyzstan and Kazakhstan and the repairs and gas cutoffs show just how antiquated the pipeline network has become.

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(News report from Issue No. 291, published on Aug. 1 2016)

Kazakh foreign ministry fires drunk diplomat

JULY 25 2016 (The Conway Bulletin) — Kazakhstan’s foreign ministry commented on the firing of an embassy worker in London, who was caught drunk driving last year. The ministry clarified that the unnamed person was not a diplomat, but a technician, who was removed from his post and sent back to Kazakhstan.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Hollande to visit Kyrgyzstan

JULY 27 2016 (The Conway Bulletin) — French President Francois Hollande told the new Kyrgyz ambassador to France that he is considering a visit to the Central Asian country in the near term, official media reported. Earlier this month, German Chancellor Angela Merkel visited Bishkek, her first to Central Asia. Her stopover in Bishkek en route to a conference in Mongolia was seen as a reward for Kyrgyzstan’s relative democracy.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Business comment: Centerra’s Good, Bad, and Ugly

AUG 1 2016 (The Conway Bulletin) — This month, Canadian miner Centerra Gold received permission from the Kyrgyz government to continue its operations at the Kumtor gold mine in the east of the country, increased its production guidance and said it will pay out dividends for the second quarter of the year.

Kyrgyzaltyn, which owns 32% in Centerra, will receive $2.3m in dividends.

This will be the first time Kyrgyzaltyn has received a dividend from Centerra since 2014, when a Canadian court froze its assets due to a pending court case. Last week, the Canadian court dismissed the case and this week it released Kyrgyzaltyn’s assets.

By only reading official press releases, the month of July must have been excellent for Centerra and Kyrgyzaltyn.

But there’s more, and it looks ugly in the medium term.

Centerra raised cash through loans and new shares to buy a majority stake in Thompson Creek a US-based miner focused on Canadian gold. The whole operation will be worth $1.1b.

But issuing new shares will anger Kyrgyzaltyn, which will see its stake in the company shrink to around 28.8%. This means less direct revenues from the Kumtor gold mine, which is 100% owned by Centerra. Essentially, the Kyrgyz government wants to bring the gold mine back under its control.

If relations between the Candian miner and the Kyrgyz government do worsen, the fate of the Kumtor gold mine, Kyrgyzstan’s largest mining asset, could become more uncertain than ever.

For both Kyrgyzstan’s economic outlook and also for its reputation as a place to do business, this is not good.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Angolan soldiers get injured in Kazakhstan

JULY 27 2016 (The Conway Bulletin) — Ten Angolan soldiers were injured in an explosion during an exercise in Kazakhstan, media reported. The injured soldiers were part of the Angolan team that was scheduled to participate in the International Army Games competition in Kazakhstan next week. It is unclear what caused the explosion.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Azerbaijani President sets referendum for constitutional changes

JULY 25 2016 (The Conway Bulletin) — Azerbaijanis will vote in a referendum on Sept. 26 on reforms to the Constitution proposed by President Ilham Aliyev that he says will create a stronger country but his opponents have said are designed to boost his own powers.

Mr Aliyev set the date for a referendum after formal approval from the Constitutional Court.

Among the proposed changes are the extension of presidential terms from five to seven years, the creation of the new positions of first vice- president and vice-president, and the abolition of the 35-year-old minimum age for presidential candidates.

As well as tinkering with the constitution, Mr Aliyev may be using the vote as a show of strength at a fragile time for his presidency. Azerbaijan’s GDP is set to shrink this year for the first time since 1995, inflation is rising and all-important oil exports have slowed. Earlier this year unprecedented anti-government demonstrations across the country shook the Azerbaijani establishment and demonstrated the depth of frustration felt by ordinary people.

Still, it is likely that the proposed reforms will be passed because of the generally high level of support for Mr Aliyev and also because he has purged his opponents over the last few years. Even so, on the streets of Baku candid opinion was divided over the merits of the proposed reforms.

Talking to the US-funded RFE/RL, a retiree said the changes were a good idea.

“The nation knows the president very well, so why bother with holding elections that often,” he said.

But not everyone is equally enthu- siastic. Some of the changes appear designed to limit free speech, specifically making it more difficult for people to gather in public.

Gulnur, a 29-year-old project manager, said she would vote against the changes.

“I am totally against constitutional changes which will hand extra power to this already long-running dictator,” she told The Conway Bulletin’s Azerbaijan correspondent. “To be honest, I have lost so much hope for any good changes in Azerbaijan.”

A 2009 referendum scrapped a two-term limit, allowing Ilham Aliyev, who took over from his father in 2003, to be president-for-life.

Azerbaijan has never held an election considered free and fair by Western election observers.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Cement plant expands in Uzbekistan

JULY 28 2016 (The Conway Bulletin) — Turkish company DAL Teknik Makina completed the expansion of one of the largest Uzbek cement complexes, the ministry of economy said in a statement. State- owned Almalyk Mining-Metallurgical Complex commissioned the expansion of the cement plant in the Jizzakh region near Samarkand, southern Uzbekistan, for $35.8m. The plant should now increase production of cement to 650,000 tonnes in 2016 and to around 1m tonnes thereafter. Last year, China’s Shanfang Cement pledged a $130m investment to build a new cement plant in Uzbekistan.

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(News report from Issue No. 291, published on Aug. 1 2016)

Volatility to weaken the Kazakh tenge

AUG 1 2016 (The Conway Bulletin) — It has taken Kazakhstan a long time, but it could finally have reached its goal of having a free-floating currency.

The nightmare of last August when the tenge depreciated sharply against the US dollar after the Central Bank removed its currency peg, seems over.

That was the uncertainty of having a Central Bank chief, Kairat Kelimbetov, who didn’t show resolve and authority, and the uncertainty of living through a period of falling oil prices.

Gradually, since November 2015, when Daniyar Akishev was made the Central Bank chief, Kazakhstan has switched to a more hands-off policy, allowing the tenge to slide as the market demanded.

This new policy created another kind of uncertainty. The tenge will float freely, swept by oil prices and the performance of other currencies in the region.

This could mean that, with oil prices sliding back towards $40/barrel and the US Federal Reserve planning to raise interest rates, Kazakhstan could soon be facing an even weaker tenge.

The tenge depreciated by 5% this month, to 354/$1 and the outlook for the next few months is not promising. Analysts have said that this could be the beginning of a gradual slide that only much higher oil prices could reverse.

In an oil price scenario that has come to be known as ‘lower for longer’, a three-figure oil price, as it was in 2014, will remain unlikely for a while.

In addition, the Russian rouble seems to be limping behind the US dollar, which is causing a negative ripple effect on currencies across Central Asia and the South Caucasus. Kazakhstan’s membership of the Eurasian Economic Union bloc is, in this case, a determining factor for the tenge.

Domestically, too, with apparent terror attacks in western Kazakhstan and unprecedented violence on the streets of Almaty, the situation is not looking good. Insecurity has never been a foundation for currency stability.

And then, of course, there is the economic headache of negative growth, and falling oil production which will continue to undermine the tenge.

The tenge is unlikely to thrive in this contingency.

The ‘$1 stores’ that mushroomed across Kazakhstan towards the end of last year, selling items at the fixed price of 300 tenge, might now be forced to adjust their price, possibly on a daily basis, to reflect a worsening exchange rate.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)