Category Archives: Uncategorised

Kyrgyz reputation drop deters Chinese

BISHKEK, JULY 20 2016 (The Conway Bulletin) — Looking to woo investors from China and to boost stagnant domestic industries, Kyrgyzstan made a direct plea last month to Chinese businesses to buy into 43 different factories.

The problem is that, seven weeks on, none seem particularly interested. In an interview with The Conway Bulletin, Alkhanbek Imanaliyev, the CEO of Bishkek-based knit-wear company Ilbirs, blamed a fall in Kyrgyzstan’s image as a place to do business for the lack of interest. He hasn’t had a single visit from a Chinese company looking to invest in Kyrgyzstan.

“We welcome any investors as long as they don’t change the profile of the factory and retain local people as employees,” he said. “But raids and scandals around the Kumtor gold mining company intimidate them.”

Chinese investment has become a mainstay of business and infrastructure projects in Central Asia. China has openly looked to curry political favour through its investments.

But it hasn’t all been smooth.

Chinese companies generally prefer to import labour from China, raising tension with local workers. This has lead to fights, especially in Kazakhstan and Kyrgyzstan.

Over the past couple of years, groups of Kyrgyz locals have even raided foreign-owned business on horseback to settle disputes and to intimidate. This year, also, the Kyrgyz tax authorities raided a refinery owned by a Chinese company arrested the Chinese deputy director.

On the Kumtor Gold mine, the Kyrgyz government is locked in a protracted row with Toronto-listed Centerra Gold over its ownership.

All this appears to have undermined Chinese investors’ confidence, a major problem for Kyrgyzstan which is looking to boost investment.

Not everybody in Kyrgyzstan, though, was even happy about the initial offer made to Chinese investors. At the Soviet-era lamp factory in Maily-Suu, in west Kyrgyzstan, workers worry they could lose their jobs if the company is taken over.

“This factory ensures jobs for 2,700 people, which is roughly 12% of Maily-Suu town population,” Avazkan Arzykulova, head of the labour union at the factory, told The Bulletin. She has written to the Kyrgyz government asking them to block any sale to a Chinese company.

For now, though, it doesn’t appear as if Ms Arzykulova and her colleagues don’t have anything to worry about.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Gunman kills 5 people in Kazakh city, sparks terror attack warnings

ALMATY, JULY 18 2016 (The Conway Bulletin) — A lone gunman killed five people in Almaty, sparking a rare terror alert in Kazakhstan’s financial centre.

Initially Kazakh officials drew a link between the gunman, Ruslan Kulikbaev, who shot dead four policemen and a passerby and Salafism, a devout Arabic form of Islam blamed for terror attacks, suggesting that he had become radicalised while in prison for an earlier crime.

This triggered a red terrorism alert in Almaty. Shops closed; people stayed inside.

But before the day was out, officials changed their story and reported that Kulikbaev was a lone gunman with criminal rather than religious intentions who had killed a prostitute the day before his Almaty rampage. He was later captured alive.

For analysts critical of the government, officials’ quick use of the terrorism label, underlined their knee-jerk reaction to play the security card to bolster President Nursultan Nazarbayev’s popularity.

Others, though, were more sanguine.

This year Kazakhstan has warned about a growth in attacks linked to the IS radical group which has targeted Central Asia as a prime recruiting ground and Aidos Sarym, an Almaty-based analyst, said Monday’s terror alert would damage the country’s reputation for stability.

“It’s definitely terrorism and it may damage Kazakhstan’s stability and security image prior to EXPO 2017 (in Astana),” he said

ENDS

(News report from Issue No. 290, published on July 22 2016)

Oilfield in Kazakhstan issues bond

JULY 21 2016 (The Conway Bulletin) — Tengizchevroil (TCO), the Chevron- led consortium exploiting the Tengiz oilfield in western Kazakhstan, issued a $1b 10-year Eurobond with a 4% coupon, lower than previously forecast, RIA Novosti said. Earlier in July, TCO approved a $37b expansion plan, which will boost production at Tengiz by 45% by 2020.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Armenia proposes new tax code

JULY 15 2016 (The Conway Bulletin) — Armenia’s ministry of economy proposed slashing taxation on dividends in the draft of the country’s new tax code, official media reported. Armenia’s parliament approved the new tax code at a first reading on June 15. Artsvik Minasyan, minister of economy, said that scrapping dividend tax will lure more foreign investment to the country.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Car sales drop in Kazakhstan

JULY 20 2016 (The Conway Bulletin) — Kazakhstan’s car production shrank by 62.2% to 2,980 units in H1 2016, compared to the same period last year, according to the Statistics Committee. This fall in car sales is an important indicator of the health of the economy and people’s expectations as to where it is heading.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Azerbaijan’s gas corridor to be funded

JULY 20 2016 (The Conway Bulletin) — Azerbaijan’s finance minister Samir Sharifov said that his country is in talks with several international financial institutions to raise funds to pay for the construction of the so-called Southern Gas Corridor, a network of pipelines that will pump gas from the Caspian Sea to Europe. Mr Sharifov told the FT that the World Bank, the European Bank for Reconstruction and Development and the Asian Development Bank are all considering supporting the project.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Azerbaijan’s ministry of finance closes banks

JULY 21 2016 (The Conway Bulletin) — Azerbaijan’s ministry of finance and the Central Bank stripped four local lenders of their banking licence, a sign that the banking crisis in the country is far from resolved. Rufat Aslanli, chief of the Financial Market Supervisory Body, said that Dekabank, Kredobank, Parabank and Zaminbank, all small-sized banks, will be shut or reorganised and that their creditors will be refunded.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Turkey is a vital transit route for the region

JULY 22 2016 (The Conway Bulletin) — The brief closure of the Bosphorus Strait to oil tankers for a few hours on July 15/16 during a failed coup attempt was a reminder of just how critical a stable, reliable and open Turkey is for trade flows into and out of Central Asia and the South Caucasus.

The Bosphorus Strait connects the Black Sea with the Aegean Sea and the Mediterranean Sea. If it is closed, Georgia’s Black Sea ports of Poti and Batumi are cut off – key gateways for the region for a variety of goods.

It’s an essential corridor too for oil shipments from the Chevron-lead Tengizchevroil project in western Kazakhstan which sends oil via a pipeline around the Caspian Sea to the Russian Black Sea port of Novorossiysk where it is loaded onto tankers and sent out to the rest of the world via the Bosphorus Strait.

But it’s not just the Bosphorus Strait which makes Turkey a vital transit route for Central Asia and the South Caucasus. Turkey also hosts a series of oil and gas pipelines which will link the Caspian Sea to Europe, set to become an increasingly important market.

Samuel Lussac, Caspian research manager at Wood Mackenzie, said international conventions should prevent Turkey from closing the straits but, if it did, it would have major repercussions.

“This would have a massive impact, as you have more than 1 million barrels per day of Kazakh and Russian crude shipped from Novorossiysk,” he said.

He also said the BTC oil pipeline that runs from Baku to Ceyhan on Turkey’s Mediterranean coast was an important route.

“From a transit perspective, Turkey is critical for Azerbaijan. Most of Azerbaijan’s crude is transported via BTC which goes via Turkey,” he said.

And the region’s reliance on Turkey as a transit partner is growing. New gas pipelines connecting the Caspian Sea to Europe are currently being built, underscoring the importance of Turkish stability.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Turkmen President promotes his son

JULY 19 2016 (The Conway Bulletin) — Serdar Berdymukhamedov, son of Turkmenistan’s President Kurbanguly Berdymukhamedov, was appointed to an unspecified post in the country’s foreign ministry, the opposition website Alternative News Turkmenistan reported. According to the report, Serdar Berdymukhamedov previously worked in the now-dismissed state agency responsible for hydrocarbon resources.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Imports fell in Georgia

JULY 19 2016 (The Conway Bulletin) — Georgia’s Statistics Committee said that trade turnover had shrunk by 11% in H1 2016, compared to the same period last year, dragged down by dwindling imports. Overall, the fall in both exports and imports resulted in a smaller trade deficit of $2.3b. Turkey, Russia and China are Georgia’s main trading partners.

ENDS

(News report from Issue No. 290, published on July 22 2016)