MARCH 6 2016 (The Conway Bulletin) – China handed over four prisoners jailed for drug trafficking over to Kazakhstan, Radio Free Europe/Radio Liberty reported. The deal, whereby the unnamed prisoners serve out their sentences in Kazakhstan, underlines the close relations between Kazakhstan and China.
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(News report from Issue No. 271, published on March 11 2016)
BISHKEK, MARCH 9 2016 (The Conway Bulletin) — Kyrgyzstan’s finance minister Adylbek Kasymaliyev asked the Eurasian Fund for Stabilisation and Development to double its aid to $427m to help the country weather both an economic downturn and the impact of joining the Kremlin-led Eurasian Economic Union.
Remittance inflows to Kyrgyzstan have fallen by 40%, the som currency has lost 25% of its value and major infrastructure projects have been cancelled over the past six months.
Mr Kasymaliyev said Kyrgyzstan had already spent more than the $255m of loans and grants that the Fund, managed by the Eurasian Development Bank had given it.
“We have already surpassed our limit of $255m by allocating $260m. For this reason, we have asked the Council to raise the limit to $427,” Mr Kasymaliyev told local media.
The funds will be used for a range of projects, including agriculture.
Importantly, though, analysts said that although Kyrgyzstan needed to protect itself against the regional economic crisis, it was under extra pressure from its entry last August into the Eurasian Economic Union. The government said the trade block, which includes Russia, Kazakhstan, Belarus and Armenia, would improve conditions for Kyrgyz business.
Instead, though, businesses have complained it has exposed them to unfair competition.
Ayilchy Sarybayev, an analyst based in Bishkek, said the cash would be used to subsidise Kyrgyz farmers.
“The fund is being raised because small and medium enterprises cannot compete with Kazakh and Russian ones now,” he said. “Kyrgyz entrepreneurs have started buying (more expensive) agricultural equipment from Kazakhstan and Russia (rather than from China).”
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(News report from Issue No. 271, published on March 11 2016)
MARCH 6 2016 (The Conway Bulletin) – A parliamentary committee in Norway opened an investigation into alleged corruption by state-owned aluminium producer Norsk Hydro in Tajikistan, the second probe in the last six months into bribery against a Norwegian government-owned company working in Central Asia and the South Caucasus.
Specifically, the Norwegian parliament now wants to see Hydro’s contract with Tajikistan’s state-owned aluminium plant TALCO. It challenged the notoriously secretive TALCO, the biggest industrial asset in Tajikistan, to reveal who its true beneficial owners are. Many believe that, via a network of offshore companies, it is Tajik President Emomali Rakhmon and his family.
Media quoted Jette Christensen, MP and a member of the committee, as saying: “We and the minister must find out who are the hidden owners, therefore this is an order to both Hydro and the minister. We also believe that we must see the entire contract Hydro had with TALCO Management Ltd.”
TALCO Management Ltd., the shell company for TALCO, is registered in the British Virgin Islands and is seen by many observers as a safe haven for corrupt practices.
Norwegian newspaper Dagens Naeringsliv wrote an in-depth story about the Hydro-TALCO case in mid- February, an article that appears to have triggered parliament’s renewed interest deals between the two companies between 1993 and 2003.
Hydro have denied the allegations and sent a 17-page reply to parliament. “There are no indications of Hydro having acted in violation of applicable laws, internal rules or guidelines,” Dag Mejdell, Hydro’s chairman, said in the statement.
“The company has zero tolerance towards corruption.”
The Norwegian government owns a 34.3% stake in Norsk Hydro.
In November 2015, Norway’s minister of industry sacked Svein Aaser, chairman of Telenor, a telecoms company under investigation for corruption in Uzbekistan in 2007/8 linked to payments for 3G licences. The investigation is ongoing.
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(News report from Issue No. 271, published on March 11 2016)
MARCH 10 2016 (The Conway Bulletin) – Russian carmaker AvtoVAZ has stopped exporting finished cars to Kazakhstan due to the introduction of new customs duties, Vedomosti reported quoting a source close to the company. The new taxes, introduced this year, increase the overall average price of an auto- mobile by $2,000. Instead, AvtoVAZ will expand its exports of car parts to its factories in Kazakhstan. This was confirmed to Kazakh media late on Thursday by an AvtoVAZ spokes- person.
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(News report from Issue No. 271, published on March 11 2016)
MARCH 4 2016 (The Conway Bulletin) – The Uzbek government wants to invest around $294m to increase production and efficiencies in its gas sector, mainly to boost the Ustyurt chemical plant.
State-owned Uzbekneftegaz co- owns the Ustyurt chemical plant with South Korea’s Lotte Chemicals. The $4.1b project was opened in October and is considered key to Uzbekistan’s future economic plans.
The Uzbek government will directly invest around $236m in the Sharkiy Berdakh gas fields near the Aral Sea to complete the new booster compressor station it is building with Ukrainian firm Sumy. The state-run Fund for Reconstruction and Development will provide an additional $58m through a loan.
Uzbekistan is in the top 15 gas producing countries in the world and sees it as the bedrock of its future economic plans. It’s a gamble, though. Uzbekistan and its partners have committed to large energy projects, with fixed up-front costs, as energy prices continue to bounce along record lows.
If it all goes to plan, the project will be completed in November 2016 and output at the gas fields will be increased by 15% to around 2b cubic metres annually. Improved infrastructure will allow Sharkiy Berdakh to supply the Ustyurt plant, located around 100km away in the remote Karakalpakstan region of western Uzbekistan.
The Ustyurt chemical complex has a processing capacity of 4.5b cubic metres per year. It has been designed to turn Uzbekistan into a gas processing hub for Central Asia and also Russia.
Uzbekistan is also looking to invest in its largest chemical complex, Navoiazot. The government issued a $393m loan last week to extend its nitrogen and ammonia facilities.
The Uzbek government has put 49% of Navoiazot, in central Uzbekistan, up for sale to foreign investors in a recent drive to privatise state assets to raise funds to ward off a worsening economic slowdown.
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(News report from Issue No. 271, published on March 11 2016)
MARCH 9 2016 (The Conway Bulletin) – Utility tariffs in Kazakhstan were 11.2% higher in February this year compared to February 2015, the state statistics agency said. The biggest cost rise was a near 20% increase in sewage charges imposed on households. Heating and hot water prices have risen by nearly 6% and rubbish collection by around 5%. The data is more evidence of a rise in the cost of living in Kazakhstan after the currency lost around 50% of its value last year.
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(News report from Issue No. 271, published on March 11 2016)
FEB. 29 2016 (The Conway Bulletin) – A court in Almaty acquitted Yulia Kozlova, a journalist for nakanune.kz which is often critical of the authorities, of drug related charges. Ms Kozlova has said that the charges were politically motivated. Acquittals in Kazakhstan are extremely rare. It may be that the authorities are trying to deflect a barrage of negative criticism accusing them of cracking down on independent media.
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(News report from Issue No. 270, published on March 4 2016)
FEB. 29 2016 (The Conway Bulletin) – Kyrgyz MPs have said that they are once again going to debate a controversial bill dubbed the “foreign agents’ law”. The bill was touted last year as being similar to one passed by Russia in 2012 that made it more difficult for NGOs to receive funding from overseas. The West has been increasingly concerned by what it has said is a trend by Kyrgyzstan to move towards Russia and away from the more liberal values that it had once appeared to embrace.
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(News report from Issue No. 270, published on March 4 2016)
MARCH 2 2016 (The Conway Bulletin) – A Kazakh court fined the consortium operating the Karachaganak gas and condensate field in the north of the country 526b tenge ($1.5m) for environmental damage. The court said the KPO consortium emitted around 43.8 tonnes of pollutants into the atmosphere between April and July 2015. KPO consortium shareholders include BG Group, ENI, Chevron, Lukoil and state-owned Kazmunaigas.
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(News report from Issue No. 270, published on March 4 2016)
FEB. 26 2016 (The Conway Bulletin) – Ratings agency Standard & Poor’s downgraded the credit ratings for Baiterek Holding from BBB-/A-3 to BB+/B. S&P said “the likelihood of extraordinary government support to the consolidated Baiterek group [is] almost certain”. It said its negative outlook mirrors that of the agency’s latest assessment of Kazakh sovereign credit. Baiterek’s subsidiaries include the Development Bank of Kazakhstan and the Investment Fund of Kazakhstan.
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(News report from Issue No. 270, published on March 4 2016)
