Category Archives: Uncategorised

Georgian Central Bank keeps rates steady

MARCH 9 2016 (The Conway Bulletin) – Georgia’s Central Bank kept interest rates steady at 8%, saying that inflation was due to slow and dip into its target zone. Like the rest of the region, Georgia has been increasingly worried about inflation pressure building up in its economy. Prices and salaries have been rising as the value of the lari has fallen. Overall inflation in February was 5.6%.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Georgia and Gazprom agree deal

MARCH 7 2016, TBILISI (The Conway Bulletin) — Russia’s state-owned gas company Gazprom reached an agreement with the government of Georgia to supply gas via Armenia, renewing a deal that has bound the two countries together.

The deal had been in jeopardy after negotiations over additional gas supplies to Georgia from Russia were frozen. But both the Kremlin and Tbilisi see the Armenia gas supply arrangement as a useful dialogue forum and forced it through.

After last-minute negotiations, Kakha Kaladze, Georgia’s minister of energy, confirmed a deal.

“We have reached an agreement with Gazprom, now we just have to sign it,” he told media.

The deal, Mr Kaladze said was similar to the earlier one, with Georgia receiving 10% of the total gas Gazprom sent to Armenia. Georgia, which has been transforming itself into a transit hub for the South Caucasus, had wanted cash instead of gas for the arrangement but Russia refused to budge.

The renewed deal between Georgia and Gazprom will also be a relief to Armenia, which is reliant on supplies from Russia. It has struck deals with Iran but Russia remains its most important partner.

Until the first quarter of 2016, Armenia will continue paying s discounted rate of $165/thousand cubic metres, which Gazprom cut by 12.% last September.

Armenia and Gazprom will have to negotiate a new price for gas for the rest of the year.

Earlier, on March 4, Georgia signed a deal with Azerbaijan to receive an extra 500,000 cubic metres of gas. It had been in negotiations with Azerbaijan, Iran and Russia for months to seal the deal.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Business comment:

MARCH 11 2016 (The Conway Bulletin) – Kazakhstan is AvtoVAZ’s largest export market but a duty introduced at the start of the year by the Kazakh government to support its car making industry, has, apparently, destroyed it.

The number of AvtoVAZ cars delivered to the country jumped in 2015 due to the tenge-rouble currency imbalance for the first part of the year.

From the end of 2014 the rouble started collapsing, but the Kazakh Central Bank stubbornly kept the tenge at 185/$1.

This made imports very cheap, undermining Kazakhstan’s own carmaking industry but boosting AvtoVAZ.

In the first half of 2015, car sales were down by one-third. For the year, sales were down 40% to 97,446 units, the lowest level since 2012.

Even President Nursultan Nazarbayev weighed in and said that it was wrong for Kazakhs to buy cheaper products abroad and push the domestic industry out of the competition.

The Kazakh government also looked into subsidising the local automotive sector and impose import duties — an issue that must surely have raised concerns for both the World Trade Organisation and the Eurasian Economic Union.

The new $2,000 car import tax has also had an almost immediate effect. It has made imports unsustainable. It has simply priced them out of the market, denting consumer choice and, also, Kazakh- Russian relations.

Kazakhstan and Russia are supposed to be allies. The Eurasian Economic Union, a Kremlin project, was supposed to protect the area from interventionist duties. Where was it when Kazakhstan said it was going to impose its $2,000 import levy on car imports.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Tajik court sentences IRPT activists

MARCH 7 2016 (The Conway Bulletin) – A court in the Tajik town of Isfara jailed three men to up to 11 years in prison for offences linked to their memberships of the now banned Islamic Renaissance Party of Tajikistan (IRPT). The Tajik authorities banned the IRPT, the country’s only real opposition party last year, and has since been imprisoning its members. The West has criticised this as a crackdown.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Editorial: Small hydro in Armenia

MARCH 11 2016 (The Conway Bulletin) – Data from Armenia has shown that small hydro power stations now generate a significant amount of the country’s power.

Of course this could be a good thing, reducing Armenia’s dependency on its aging nuclear power station. It also needs to be viewed with a degree of concern.

Many of these power stations actually do more harm than good to the environment. They are often built in fragile parts of the eco-system without much, if any, planning. They can damage and harm the environment.

And there is a whiff of corruption surrounding them or at least nepotism. Many of these small hydro-power stations are owned or linked to, members of parliament and even government.

Armenia needs to impose proper oversight on the sector, building up trust in its intentions. If it is properly regulated, small hydro-power stations could be a benefit to the environment and to ordinary Armenians. If it isn’t, it’ll be a blight on the environment and on the country’s governance reputation.

ENDS

(Editorial from Issue No. 271, published on March 11 2016)

US sends military to Georgia, Tajikistan and Kyrgyzstan

MARCH 10 2016 (The Conway Bulletin) – Georgia, Tajikistan and Kyrgyzstan are among the three most dependent countries on US aid to pay for their military, the eurasianet.org website reported by quoting a Washington lobby group. In 2014, Georgia received $158m of US military aid, out of a total budget of $387m; Tajikistan received $29m of US aid out of $104m in total and Kyrgyzstan received $90m out of a total military budget of $252m.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Editorial: NPLs in Kazakhstan

MARCH 11 2016 (The Conway Bulletin) – Women banging pots, blowing whistles and wearing grey capes in the streets of Almaty last January alarmed observers.

They were protesting about mortgages and how difficult it was to repay these loans after a devaluation of the tenge. In other words, this was yet another alarm bell about non-performing loans in Kazakhstan.

The country was battered with toxic loans in the aftermath of the Global Financial Crisis of 2007/8 and some banks, directly or indirectly, asked for help from the government.

And the government has only just started to offload these banks — think BTA and Kazkommertsbank’s merger last year.

Now, though, new data suggests that there may be another round of dodgy debt to deal with. This time the government needs to act early to stop borrowers from tipping the fragile banking system into the red again. It has the funds and it now also has the experience. This time round, there are few excuses for the Kazakh government and the Central Bank.

ENDS

(Editorial from Issue No. 271, published on March 11 2016)

Azerbaijan’s row over weapons

MARCH 4 2016 (The Conway Bulletin) – Russian deputy PM Igor Rogozin flew to Baku to meet with Azerbaijani president Ilham Aliyev for talks over a shipment of weapons which Azerbaijan is apparently refusing to pay for, media reported. It was unclear if Azerbaijan didn’t want to pay for the weapons, as a form of protest over military aid Russia has given to its enemy Armenia, or whether it couldn’t pay because of the worsening impact of the economic slowdown.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Sasol considers project cut in Uzbekistan

MARCH 9 2016 (The Conway Bulletin) – Due to sustained low oil prices, South Africa’s Sasol is considering dropping its gas-to-liquids project in Uzbekistan. In Uzbekistan, Sasol operates jointly with Malaysia’s Petronas and state-owned Uzbekneftegaz. The project cost stands at around $5.6b. Sasol said it will make a final decision on the project in the first half of the year.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Interest rates rise in Azerbaijan

MARCH 4 2016 (The Conway Bulletin) – Azerbaijan’s Central Bank raised its key interest rate to 7% from 5% to support its manat currency, the second interest rate increase in less than a month. It increased rates on Feb. 15 to 5% from 3%. The manat currency has lost 50% of its value in the past year. This is the highest rate since 2009.

ENDS

(News report from Issue No. 271, published on March 11 2016)