Category Archives: Uncategorised

Editorial: Tajikistan’s remittances

JAN. 22 2016 (The Conway Bulletin) – When it comes to worker remittances from abroad, Tajikistan is the most heavily reliant country in the world.

Transfers from migrant workers, mostly residing in Russia, made up 42% of the country’s GDP in 2014.

But the economic downturn in Russia, which sent the rouble to its historical lowest against the dollar this week, and tougher border controls and regulations have made the life of many Tajiks impossible in Russian cities. Their return en masse to Tajikistan will undoubtedly put pressure on the local job market, which isn’t flourishing either, and also strain the Tajik somoni.

This week, Georgia also published remittances data, highlighting a 39% fall in transfers from Russia.

Together with shrinking trade turnover data, low remittances volumes are a barometer of the worsening economic environment across the entire former Soviet Union. They also underscore Russia’s role as the engine-room of economies in the former Soviet Union.

ENDS

(Editorial from Issue No. 264, published on Jan. 22 2016)

Inflation doubles in Kazakhstan

JAN. 21 2016 (The Conway Bulletin) – Inflation in Kazakhstan in 2015 measured 13.6%, nearly double the rate of 2014, media reported quoting the state statistics agency. The final tally confirms that prices increased rapidly after a tenge devaluation in August. The tenge has lost around 55% of its value since Feb. 2014.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Business comment: Wealth fund critics come out

JAN. 22 2016 (The Conway Bulletin) — At the end of December, Berik Otemurat, a senior official at Kazakhstan’s Central Bank, picked up the phone and called several newspapers to speak out against the way the sovereign wealth fund was being managed.

He was promptly sacked after his quotes started populating articles. He had said that Kazakhstan’s sovereign wealth fund to be doomed.

Mr Otemurat’s argument was that the sovereign wealth fund was risk averse and that it was pilfering away its cash on low yield investments making low returns.

Low oil prices and the economic slump would combine, he said, to wipe away the fund’s reserves in 6 to 7 years.

Timur Kulibayev, President Nursultan Nazarbayev’s son-in-law and powerful businessman, spoke out against Kazakh money managers to but he’s not in any real danger of losing his job.

He has criticised for months the behaviour of the Central Bank and, effectively, said their management of the economic crisis has been poor.

Mr Kulibayev repeated his criticism last week. His bottom line was: “The government cannot continue spending its reserves to prop up the tenge or the reserves will be extinguished in three years.”

Of course, Mr Kulibayev, the second-richest man in Kazakhstan, is in a much stronger position than Mr Otemurat, so his words will not make him a pariah of the elite. This parallel goes to show that there are only few people who can speak out against Kazakhstan’s economic policy and face no consequences.

The managers of the sovereign wealth fund have said they will change their policy this year. Let’s see if they can stop the drain.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Georgian PM gives $185,000 to Church

JAN. 16 2016, TBILISI (The Conway Bulletin) — Georgian PM Giorgi Kvirikashvili gave $185,000 to the Georgian Orthodox Church the day after taking office at the end of last year, local media reported by quoting official documents, attracting derision from opponents.

The donation was taken from the President’s Reserve Fund, a cash stockpile used for natural disasters and other emergencies such as the Tbilisi flood in 2015.

The President’s Reserve Fund totals $2m, meaning that the amount donated to the Church measured nearly 10% of its total value.

“The money-flow from the state to the Church is unstructured and we need to support the Church’s educational infrastructure,” the PM’s office said in a statement.

His opponents, though, have accused him of using funds ear- marked to save lives and rebuild homes and businesses after emergencies for his own political needs.

Eka Chitanava, Director of the Tolerance and Diversity Institute, an NGO working on religious freedom in Georgia, said: “The latest $185,000 donated by the PM is significant. The money was taken from the natural disaster budget, a fund they are not supposed to use for this.”

The Georgian Orthodox Church is one of the most powerful institutions in Georgia and its support would be useful to Mr Kvirikashvili and his Georgian Dream coalition in helping to win a parliamentary election scheduled for October.

It holds great sway over Georgia’s traditionally conservative society.

There was also frustration among ordinary Georgians over Mr Kvirikashvili’s donation.

“I understand the church is important,” Khatuna Gvelesiani, 30, said. “But to take it from a fund which should cover natural disaster, like the flood we had in June, can’t be justified. I am outraged.”

The Georgian Dream was the first political party ever to be endorsed by the Church in 2012 although this support has waned. It faces a tough battle to win the October election.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Protesters and police clash again in regional Azerbaijanji town

JAN. 18 2016 (The Conway Bulletin) – Police and protesters angry about worsening economic conditions in Azerbaijan clashed briefly in the town of Quba, north of Baku, three days after demonstrations sprung up in several regional towns.

Media reports from Quba said that police fired tear gas and rubber bullets to control the demonstration. Protesters are angry at a sharp rise in prices after a devaluation of the manat at the end of last month.

Similarly to the earlier protests, police moved in after the end of the stand-off and detained dozens of demonstrators.

There have been no other demonstrations since.

These were the most serious civil disturbances this year in Central Asia and the South Caucasus linked to the economic slowdown and have worried the Azerbaijani government.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Russia quits Kyrgyz hydropower project

JAN. 20 2016, BISHKEK (The Conway Bulletin) — Kyrgyzstan started the hunt for a new investor for its $2b Kambar-Ata-1 hydropower project, which was supposed to transform the country into a major electricity exporter, after MPs officially voted to cancel a deal with Russia.

At the end of last month, Kyrgyz President Almazbek Atambayev said that Russia simply didn’t have enough money to finance the project any more. MPs said that they had little choice but to cancel the deal with Russia so that a search for a new investor could begin in earnest.

Dastan Bekeshev, considered a liberal progressive MP, told a Conway Bulletin correspondent that it would be hard to find a new investor at the moment.

“Kyrgyzstan will seek investors, but I am sceptical to this idea because this is an issue of geopolitics and not simply investment from foreign countries,” he said.

The cancellation of the Kambar- Ata-1 project, signed between Kyrgyzstan and Russia in 2008, is a major blow to Kyrgyzstan and one of the biggest casualties of the deepening economic malaise. And, as Mr Bekeshev said, in the current economic climate, it may be difficult for Kyrgyzstan to attract another investor.

China, the most obvious substi- tute, is trying to deal with its own economic slowdown.

Russia’s withdrawal from the Kambar-Ata-1 hydropower project also shows that Russian influence in Central Asia is waning as its economic power dips.

On the streets of Bishkek, opinion was divided on the impact of Russia’s withdrawal from the project.

Aliaskar, 23, said that Russia had promised and failed to build many infrastructure projects in Kyrgyzstan.

“They said they would build gas pipelines and improve infrastructure under the Eurasian economic union, but all these things would be implemented in 50 years from now,” he said.

But Alisher, 24, said the scuppered hydropower project deal wouldn’t damage relations between Kyrgyzstan and Russia. “There are other spheres in the Kyrgyz economy where Russia has positively contributed like importing Russian gas, forgiving debt, providing security in the region and other pillars,” he said.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Ketchum enters Azerbaijan

JAN. 21 2016 (The Conway Bulletin) — US PR firm Ketchum signed a so- called exclusive affiliation deal with Azerbaijan-based Red Communications, which will expand the company’s operations into its 17th country. Red Communications was previously affiliated with Ketchum’s Moscow office. Ketchum said it will work with Red Communications on international PR campaigns.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Kazakh leader’s nephew gets KNB post

JAN. 20 2016 (The Conway Bulletin) – Samat Abish Nazarbayev, the 37- year-old nephew of president Nursultan Nazarbayev, was appointed deputy head of the KNB, Kazakhstan’s intelligence service, the eurasinet.org website reported. Samat Abish Nazarbayev is the son of Bolat Nazarbayev, President Nazarbayev’s brother. By appointing him to a senior position in the KNB, Pres. Nazarbayev is strengthens his control over it.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Azerbaijan imposes capital barriers

JAN. 19 2016 (The Conway Bulletin) – Azerbaijan imposed some of the most stringent currency controls in the region to try and halt the slide in its manat currency and to stop a feared wave of capital outflows as the economic storm that has hit the region strengthens.

The most draconian measure was an immediate 20% tax on purchases of property, securities and other investments in foreign currencies.

“People should know that the central bank, other government agencies are in a position to prevent the manat from falling sharply,” Azerbaijan’s Central Bank chief, Elman Rustamov, said in televised comments clearly aimed at shoring up public support. Last week sporadic clashes broke out in regional towns between angry protesters and police.

The Azerbaijani manat has lost 50% of its value in six months and people have lost confidence in the country’s financial system.

Mr Rustamov also said that the Central Bank held enough currency reserves to support the manat, despite a series of reports which suggested that it was running out of money after trying to defend its value unsuccessfully throughout 2015, and that several smaller banks would soon have to merge.

Other measures unveiled by Mr Rustamov to try to boost public support in the manat included allowing people to pay back loans of up to $5,000 at the manat/$ exchange rate prior to the last devaluation on Dec. 21 and cancelling tax on manat bank deposits and dividends.

Azerbaijan has been one of the hardest hit by the economic slowdown that has hit the region. Its economy is dependent on oil which has sunk in price to around $28/barrel from around $115/barrel in July 2014.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)

Kazakhstan increases uranium output

JAN. 19 2016 (The Conway Bulletin) – Kazakhstan increased its uranium production by nearly 5% last year to 23.8m tonnes, media reported quoting the Kazakh nuclear agency Kazatomprom. Kazakhstan is the world’s largest producer of uranium. Kazakhstan has been increasing uranium production for a decade. Analysts have said that uranium exports may be a good future bet as countries look to boost nuclear power.

ENDS

(News report from Issue No. 264, published on Jan. 22 2016)