Category Archives: Uncategorised

EU wants improved ties with Azerbaijan

FEB. 29 2016 (The Conway Bulletin) – On a trip to Baku, Federica Mogherini, a European Commission vice-president in charge of external affairs, said the European Union and Azerbaijan need to work hard to improve relations which have soured over the past few years.

Ms Mogherini made the comments during a two-day trip to Baku and to Armenia’s capital Yerevan.

“It is time for a new chapter in the relations between the EU and Azerbaijan. We need an all-round strategic partnership between us,” she said during a speech to the Southern Gas Corridor Advisory Council.

“We have not always seen eye to eye in all matters, and we know that differences will remain between us in some areas. This is normal in international relations and often in European and even national politics.”

Europe has been vocal over what it has said is a systematic crackdown by the Azerbaijani authorities against civil society and the media. The Azerbaijani government has responded by accusing Europe and the United States of meddling in affairs which aren’t theirs and of trying to stir a revolution.

The result has been a drift by Azerbaijan towards Russia.

Still, Europe and Azerbaijan have been working together on a pipeline network running from the Caspian Sea to central Europe.

Europe wants to reduce its reliance on Russia for gas and its sees Azerbaijan as the solution. The pipeline network is dubbed the Southern Gas Corridor.

Ms Mogherini was careful to avoid direct mention of human rights and media freedom in her speech but the underlying message would have been clear and her speech was an important step towards, tentatively, mending Azerbaijan-EU relations.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Azerbaijan drops currency tax

FEB. 23 2016 (The Conway Bulletin) – The Azerbaijani parliament formally dropped a plan to impose a 20% tax on all deals in foreign currencies. It voted to drop the bill, which had passed earlier in the year, after President Ilham Aliyev refused to sign it. The motive for the bill had been to protect Azerbaijan’s manat currency which has lost around half its value but critics said it was unfair and unworkable. Low oil prices have hit Azerbaijan hard. It is reliant on oil to earn export revenue.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

Government sells Air Kyrgyzstan

FEB. 24 2016 (The Conway Bulletin) — The Kyrgyz government said it is ready to sell off a 49% stake in Air Kyrgyzstan, the national carrier, as part of the state privatisation programme. The government owns Air Kyrgyzstan through the state-owned Fund of State Property Management.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

Kazakhstan cuts funding to sport

FEB. 25 2016 (The Conway Bulletin) – Samruk-Kazyna, Kazakhstan’s sovereign wealth fund, said it will cut funding to the Astana Presidential Sports Club, an umbrella organisation that sponsors everything from cycling to football to boxing. The club was officially set up in 2013 to promote Kazakhstan and Astana under the country’s yellow and blue colours. It received large sums of money. Successes included winning cycling’s Tour de France and FC Astana playing in the Champion’s League, football’s most high profile competition. Kazakhstan has been looking for ways to cut costs as the economic downturn bites.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

Striking Georgian miners storm office

FEB. 24 2016, TBILISI (The Conway Bulletin) — Part of a group of 1,500 striking Georgian miners stormed an office belonging to Georgian Industrial Group (GIG) who they accuse of paying salaries far below the market rate and of presiding over poor working conditions at its coal mine at Tkibuli.

The miners have now been on strike for 12 days. The scale of the strike, both its length and the number of strikers, makes it one of the most serious in recent Georgian history.

A video showed miners wearing heavy leather jackets climbing over a compound fence and then pushing in a gate to the GIG office in Tkibuli, central Georgia. Clearly angry and distressed, miners said that they earned $200 a month which, they said, was barely sufficient to survive on.

They want a 40% pay rise and an improvement in the mine’s health and safety record. Media said that 15 miners have died in separate accidents at the mine since 2009.

GIG has said that while it sympathises with some of the workers’ demands, it simply can’t afford to increase their salaries by as much as they want because of falling prices and demand for coal.

“Saknakhshiri GIG as a company of high responsibility will not issue unrealistic promises and will not make populist statements on the immediate increase of the salaries at this stage,” the company said in a statement after meeting the miners.

For the government, the strike piles more pressure on its various economic policies ahead of a parliamentary election later this year. A recession in Russia and a fall in its own currency has hit Georgia’s economy. Growth rates have been reduced, inflation is rising.

And the Tkibuli miners are not the only group of workers striking in Georgia. Media reported that workers at a glass factor in Ksani have also gone on strike.

Other companies, especially in the mining sector, have been laying off workers.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

Pegasus expoands to Azerbaijan

FEB. 23 2016 (The Conway Bulletin) — Turkish airline Pegasus said it will launch its new Istanbul-Gabala route to Azerbaijan on March 18. Pegasus will fly to the town of Gabala, in central Azerbaijan, three times a week.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

Stock market: Tethys and Olisol

FEB. 22 2016 (The Conway Bulletin) — Tethys shares have surged back from their historical low of 1.63p after the company announced a change in the agreement with Olisol, which will allow Tethys to raise cash via a loan in Kazakhstan.

John Bell, Tethys’ executive chairman said that “in entering into this agreement, Tethys has gained a strong in-country strategic partner which has committed to remaining a minority shareholder.”

Olisol has thus finally and concretely become Tethys’ partner. After months of sustained low oil prices and fickle exploration and production data, Tethys was looking for a cash injection to finance its operation and restore investors’ trust.

Now Olisol and, likely, Bank RBK will complete a loan transaction for $10m and the deal with Olisol will go ahead as agreed last November. The entire deal should be completed within the next two months, according to Tethys.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

Kazakh activist serves house arrest

FEB. 19 2016 (The Conway Bulletin) – Ermek Narymbayev, one of two Kazakh civil rights activists imprisoned last month for inciting social unrest, has been allowed to return home and serve out his sentence under house arrest, media quoted his wife as saying. Opponents of Kazakh president Nursultan Nazarbayev have accused him of cracking down on free speech.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

Kazakhstan slips towards recession

FEB. 23 2016, ALMATY/DUSHANBE (The Conway Bulletin) — Kazakhstan verged on acknowledging that its economy may actually shrink this year and a Tajik Central Bank official said it was in talks with the IMF for an emergency loan, more signals that a sharp regional economic crisis was deepening further.

Normally bullish about its own GDP growth predictions, the reconfigured Kazakh government GDP growth estimate of 0.5% is an important sign of the severity of the economic downturn linked to low oil prices. Kazakhstan had earlier predicted GDP growth in 2016 at 2.1%.

“If the cost of a barrel of oil is $40, GDP growth will be 2.1%, but we’ve taken the conservative approach and have assumed that the price of oil will costs $30 per barrel and that GDP growth will hit 0.5%,” journalists quoted Yerbolat Dosayev, the economy minister as saying. Oil is currently around $35/barrel.

Importantly, this new GDP growth estimate is far closer to that of international economist who have said that Kazakhstan’s economy could shrink in 2016. The last time that Kazakhstan’s economy dipped into a recession was in 2008.

Low oil prices and a recession in Russia which has wiped out essential remittance and business investment flows have hit Central Asia hard. The scale and speed of the downturn appears to have wrong-footed leaders, including Kazakh president Nursultan Nazarbayev and his advisers.

They have slashed government budgets and also sold off chunks of state-owned companies, but they haven’t been able to prevent the tenge from losing 50% of its value and inflation rising. Officials are now worried about anti-government protests.

On the southern fringe of Central Asia, Tajikistan, the world’s most remittance-reliant economy, has also been reeling from the impact of the downturn. It has called in the IMF to try to organise an emergency loan.

Jamoliddin Nuraliev, deputy head of Tajikistan’s Central Bank, told the FT that talks with the IMF had begun.

“It’s crisis time,” he said.

Tajikistan has depleted its currency reserves in its Central Bank trying to defend the value of it somoni currency. At the same time, data has shown that the flow of remittances from Russia have dropped by around half.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

Finally, McDonald’s set to open in Kazakhstan

ALMATY, FEB. 25 2016 (The Conway Bulletin) — McDonald’s said it will open its first restaurant in Kazakhstan on March 8 in central Astana, concluding the US food giant’s lengthy process for entering the Kazakh market.

The company previously said it planned to open its first restaurant in the second half of 2015. After years of rumours as to when McDonald’s would come to Kazakhstan, its first restaurant is now ready to open its doors.

The company plans to open a total of 16 restaurants in the next five years across the country.

In Kazakhstan, McDonald’s will partner with Kairat Boranbayev, a former head of Russo-Kazakh energy joint venture KazRosGas. Mr Boranbayev is also close to Kazakh President Nursultan Nazarbayev. His daughter Alima married Mr Nazarbayev’s grandson Aisultan.

McDonald’s said Mr Boranbayev’s involvement is purely related to business.

“Kairat [Boranbayev] has a diverse business background and a proven track record of running successful business ventures in his home country as well as our restaurants in Belarus,” Khamzat Khasbulatov, McDonald’s director in Russia, said in a statement.

In Kazakhstan, McDonald’s will face competition from KFC, Burger King and Hardee’s.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)