JUNE 18 2016 (The Conway Bulletin) – Armenia’s state-owned power distributor Electro Power Systems Operator said it will export around 1b kWh of electricity to Iran in 2016 from itsHradzan and Yerevan thermal power plants. Armenia and Iran have signed an agreement on the exchange of Iranian gas for Armenia’s electricity.
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(News report from Issue No. 286, published on June 24 2016)
JUNE 21 2016 (The Conway Bulletin) – The Almaty city administration is rolling out parking meters across the city, the first in Kazakhstan. Almaty SpetsTekhParking, the company that will manage the service, said that the fee will beof100tenge/hour ($0.30). Almaty citizens reacted in online forums. Some highlighted a possible waste of public funds, but some hailed the measure as a potential life-saver for the city, which suffers from a chronic pollution problem.
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(News report from Issue No. 286, published on June 24 2016)
ALMATY, JUNE 21 2016 (The Conway Bulletin) — Kazakh President Nursultan Nazarbayev reshuffled several government positions, naming a new mayor for Astana and a new chief of the presidential administration, perhaps giving an indication of how he sees his succession playing out.
Former Astana mayor Adilbek Dzhaksybekov was named chief of the presidential administration, taking the place of Nurlan Nigmatullin, who was quickly made Speaker of parliament.
Mr Nazarbayev thanked and lauded both for their services.
“Mr Nigmatullin worked with me for many years with skill and professionalism, proving himself during hard times,” Mr Nazarbayev said. “Mr Dzhaksybekov has previously worked in this position, for which we need a person with experience and equilibrium.”
The head of the presidential administration is one of the most powerful positions in the Kazakh political system, marking a major promotion for the 61-year-old Mr Dzhaksybekov.
For Mr Nigmatullin, known as the “Grey Cardinal” for his deal making abilities and loyalty to Mr Nazarbayev, the position of Speaker of parliament is an important one. According to the Kazakh constitution, if Mr Nazarbayev resigns or dies in office, he will take over as president.
Importantly, too, Asset Issekeshev, former minister of innovation and development was named mayor of Astana, replacing Mr Dzhaksybekov.
Mr Issekeshev, 44, is seen as a rising star. As mayor of Astana, he will be the face of the capital city, when it hosts the EXPO next year.
Mr Nazarbayev is 75-year-old but has yet to lay out a coherent succession plan. He has ruled over Kazakhstan since independence from the Soviet Union in 1991.
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(News report from Issue No. 286, published on June 24 2016)
ALMATY, JUNE 23 2016 (The Conway Bulletin) — In a surprise move, Kazakhstan’s parliament voted to approve a moratorium laid down by President Nursultan Nazarbayev earlier this year on reforms to the country’s land code.
Although the vote doesn’t change the process, it does confirm that Mr Nazarbayev and the Kazakh elite have delayed controversial changes to the land code until at least January.
The changes to the land code, that would have made it easier for foreigners to own and rent land, triggered a wave of protests across the country in April and May. These were the largest popular protests against Mr Nazarbayev since he took office in 1991, forcing him to announce the moratorium.
He also heaped blame on government officials for the mishandling of the land code reform that had been designed to attract much-needed foreign investment.
Like the rest of the region, Kazakhstan has been dealing with a sharp economic downturn that has hit its finances. It is heavily reliant on sales of oil and gas for its income, both of which has plummeted in value since mid-2014.
There were some suspicions that the land reform proposal were being used by opponents of Mr Nazarbayev to whip up a popular revolt against him.
The authorities accused the boss of a brewery in Shymkent for attempting a coup.
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(News report from Issue No. 286, published on June 24 2016)
DUSHANBE, JUNE 20 2016 (The Conway Bulletin) — China’s CNPC and France’s Total have started arbitration proceedings against Tethys Petroleum, a British oil company focused on Central Asia, for failing to make payments to their joint oil project in Tajikistan.
Tension has been rising between Tethys and its partners at the Bokhtar oil field over the perceived slow progress of its development. Earlier this year, the Tajik government said that it would take back the 25% stake in the Bokhtar field that Tethys, CNPC and Total were developing if progress wasn’t speeded up.
Last year Tethys, the lead partner, missed two payments towards the Bokhtar field. Like the rest of the oil industry, Tethys has been hit by the sharp fall in oil prices over the past year. At the start of this year it was forced to patch together a deal with Olisol, a Kazakh oil company.
In a wide-ranging statement that discussed various parts of its business, Tethys said that CNPC and Total had filed their lawsuit against its subsidiary, Kulob Petroleum, at the International Court of Arbitration in Paris in May. Tethys, CNPC and Total each own one-third of the Bokhtar licence.
“The filed arbitration request is in relation to the Notice of Dispute received by Kulob Petroleum on Jan. 8 2016,” it said in a comment on the press release. Neither CNPC nor Total have commented.
The reference to Jan. 8 was to a notice that CNPC and Total filed against Tethys for breaking the terms of production sharing agreement (PSA) at the Bokhtar development.
For Tajikistan, the disagreements and delays to developing the Bokhtar field are a major disappointment. When Tajikistanagreed the deal to develop a 36,000 square km area in 2013, optimism was high that the development would deliver some of the hydrocarbon wealth it has watched neighbouring Turkmenistan and Kazakhstan grow rich off.
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(News report from Issue No. 286, published on June 24 2016)
JUNE 21 2016 (The Conway Bulletin) – UnionPay International, the global branch of Chinese bank organisation UnionPay, said it will expand its operations in Uzbekistan, through an agreement with UzCard, an interbank payment system. The company, which operates in all Central Asian countries except Turkmenistan, is looking to expand its coverage at ATMs and card payments across the region.
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(News report from Issue No. 286, published on June 24 2016)
JUNE 24 2016 (The Conway Bulletin) – It may sound like a technicality but the move to allow Georgia’s PM to keep his position and campaign to be an MP is an important one.
Rules that meant a sitting PM had to resign before an election were archaic and a hangover from the previous system of government that had steered more power to the president. Then, the PM and parliament were democratic window dressing, a talking house designed to buffer a highly centralised presidential system.
This system needed reform, and it has finally been given this makeover.
Changes to Georgia’s political system, which shifted power from the presidential palace to parliament and the PM, have made its politics more open and vital.
A parliamentary election in October promises to be a hard-fought affair between rivals who have grown to hate one another.
By allowing PM Giorgi Kvirikashvili to keep his job and campaign to become an MP, Georgia is strengthening and modernising its parliamentary system of government.
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(Editorial from Issue No. 286, published on June 24 2016)
JUNE 18 2016 (The Conway Bulletin) – Azerbaijan’s Statistics Committee said electricity production fell by 7% in the first five months of the year to 9.3b kWh, compared to the same period last year. Azerbaijan’s thermal power plants, which generate the bulk of electricity in the country, produced 10% less electricity than last year. Hydroelectric power plants increased production by 15%.
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(News report from Issue No. 286, published on June 24 2016)
JUNE 24 2016 (The Conway Bulletin) – As the results of the referendum on Britain’s EU membership came in early on Friday, the decision to leave the EU has shaken the global market.
The Leave vote has hit the London stock market, where most of the companies focusing on Central Asia and the South Caucasus are listed. Economists now expect more volatility in the short term for the London Stock Exchange.
The so-called Brexit also negatively affected oil prices, sending both Brent and WTI down by 6% in just a few hours. Analysts have said that the period of uncertainty regarding oil prices will now last longer.
Currency markets were also hit, as the British pound lost value against the US dollar, effectively strengthening the greenback.
This had an immediate domino effect on currencies across Central Asia and the South Caucasus, where local currencies weakened against the US dollar.
The increasing uncertainty and volatility is now poised to harm, at least in the short term, local markets in the region, prompting elites in from Tbilisi to Astana to brace for more tough times. It will also hit global markets in general, forcing investors to flee to safety and this means missing out Central Asia and the South Caucasus.
Now both the Fed in the US and the Bank of England will have to revise their economic policies and this is likely to insulate further their economies and pull investment back from Emerging Markets.
In these uncertain times, countries in Central Asia and the South Caucasus cannot but hope that Western investors will go against the tide and continue investing in the region.
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(News report from Issue No. 286, published on June 24 2016)
JUNE 17 2016 (The Conway Bulletin) – The European Union published an updated list of banned airline companies, which included 19 Kazakh and 13 Kyrgyz companies. Airline safety is still below international safety standards in Central Asia and the South Caucasus, according to most aviation agencies. Air Astana, part-owned by British BAE Systems, is the only airline allowed to fly to the EU.
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(News report from Issue No. 286, published on June 24 2016)
