NOV. 14 2014 (The Conway Bulletin) – Prince Andrew, fifth-in-line to the English throne, flew out to Baku for talks with President Ilham Aliyev, the Daily Mail newspaper reported. It’s unclear why Prince Andrew made the trip although he was Britain’s special trade representative.
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(News report from Issue No. 209, published on Nov.19 2014)
NOV. 14 2014 (The Conway Bulletin) – Kyrgyzstan’s Ata Meken party, one of three parties in the ruling government, said it supported nationalising the Kumtor gold mine. Kumtor is the focus of a row between Kyrgyzstan and its Canadian partner Centerra Gold. Ata Meken may have chosen this populist policy to bolster itself ahead of a parliamentary election next year.
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(News report from Issue No. 209, published on Nov.19 2014)
NOV. 12 2014 (The Conway Bulletin) – The Uzbek sum currency has fallen to its lowest levels against the US dollar in independent Uzbekistan’s 23 year history, pushing up the price of food and threatening social stability.
On the Black Market, an essential measure of currency rates, the exchange rate in Tashkent hit the 3,450 sums to $1. The skyrocketing currency price is a mirror of Russia’s economic troubles.
A Tashkent resident told the Conway Bulletin that a kilogram of mutton now costs between 25,000 and 30,000 sums, compared to 20,000 sums in the summer.
Prices of bread, sugar and grain-based cereals have also risen by roughly 25% over the past three months, he said.
“As if the recent increase in utility costs was not frustrating enough, the government’s inaction to stem price increases because of a foreign currency adds insult to injury,” the source said.
The Tashkent resident was referring to a 10% increase imposed by the government on utility prices on Oct. 1.
This insight is important because it provides a first- hand snapshot of how frustration is building in Uzbekistan over food price increases and the rising cost of utilities.
Ordinary Uzbeks have also had to put up with fuel and gas shortages. Social pressure is building.
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(News report from Issue No. 209, published on Nov.19 2014)
NOV. 12 2014 (The Conway Bulletin) – In a ratcheting up of tension, Armenia promised “grave consequences” after Azerbaijan shot down one of its military helicopters. Azerbaijan said that the Armenian helicopter had attacked its positions. Armenia said it had been on a training exercise.
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(News report from Issue No. 209, published on Nov.19 2014)
NOV. 15 2014 (The Conway Bulletin) – Samruk-Kazyna, Kazakhstan’s national investment fund, has signed a $40m deal to sponsor the shirts of the top Istanbul football club Galatasaray, Turkish media reported. With the Kazakh economy under increased pressure, economists and ordinary Kazakhs may question the worth of the deal.
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(News report from Issue No. 209, published on Nov.19 2014)
NOV. 12 2014 (The Conway Bulletin) – Looking to reduce the threat of sabotage, Russia’s energy ministry asked Kazakhstan to use a pipeline through Ukraine to export its crude oil.
The offer was first made in September, but was only reported by Reuters this month when the state-owned energy transport company, KazTransOil, called for local companies to participate in the bid. Although volumes have not yet been agreed, the agreement should allow Kazakh oil to run through the Druzhba (friendship) pipeline, built in 1964, whose Southern branch terminates in Hungary and the Czech Republic.
By agreeing to help fill the Druzhba pipeline, Kazakhstan is stepping directly into the ongoing civil war in Ukraine and the surrounding proxy conflict between the West and Russia.
For Russia, the benefits are fairly obvious. It wants to retain some use for the major Druzhba pipeline and would be able to charge Kazakhstan rent for using it. Russia would also reduce its risk exposure to the pipeline.
For Kazakhstan, the benefits are less obvious. Taking on the route is a major geopolitical headache.
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(News report from Issue No. 209, published on Nov.19 2014)
NOV. 13 2014 (The Conway Bulletin) – Uzbek border guards shot and killed a Kyrgyz man on their shared border, US-funded Radio Free Europe/Radio Liberty reported, only a few days after two other men were injured in a similar incident. Tension has been rising along the Kyrgyz-Uzbek border, threatening stability in Central Asia.
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(News report from Issue No. 209, published on Nov.19 2014)
NOV. 17 2014 (The Conway Bulletin) – Tajikistan claims it is on track for a cotton production target many thought unrealistic when the government announced it earlier in the year.
Avesta.tj, the Dushanbe-based news agency, quoted the country’s ministry of agriculture as saying 373,000 tonnes of its 408,000 tonne target have already been gathered.
Cotton plays a key part in Central Asia’s economy, although it is controversial as human rights campaigners have criticised all the Central Asian states of using forced labour to pick the harvest.
In 2013, the US State Department Trafficking in Persons report said: “Some Tajik children and possibly some adults were subjected to agricultural forced labor in Tajikistan — mainly during the fall 2012 cotton harvest — but this exploitation occurred to a lesser degree than in 2011.”
That may be because cotton production itself has become steadily less profitable. Typically, Tajikistan exports raw cotton to Russia, China, Turkey and Iran. Efforts to develop finished cotton products in the country’s mills have been harmed by chronic electricity shortages that tend to begin right after the season finishes.
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(News report from Issue No. 209, published on Nov.19 2014)
NOV. 14 2014 (The Conway Bulletin) – In an unusually strongly worded intervention, Georgian President Giorgi Margvelashvili warned parliamentarians the country faced a political crisis unless they pull together, media reported. Mr Margvelashvili’s statement was made in reference to the sacking of defence minister Irakli Alasania earlier this month.
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(News report from Issue No. 209, published on Nov.19 2014)
NOV. 19 2014 (The Conway Bulletin) – In Kazakhstan, November 15 is the Day of the National Currency, a little-known holiday for workers in the financial sector.
With the Kazakh tenge under pressure again despite a 20% devaluation earlier this year, they and the national currency will be grateful for the rest.
The tenge was born in 1993, after Kazakhstan’s independence from the Soviet Union.
It had a bumpy ride with initial inflation, matching concerns about the viability of an independent Kazakhstan. The exchange rate against the dollar jumped from an initial 4.75 to 35 within two months.
A dollar peg provided some stability — even if it was shaky — for the tenge during the second half of the 1990s but the Russian and Asian crises forced a new market- driven devaluation. Between April and September 1999, the tenge lost one third of its value against the greenback.
A corner, though, was turned at the start of the 21st century and with Kazakhstan maturing as a country so did its currency. Fiscal responsibility helped keep down inflation in the early 2000s, oil prices slowly rose, giving Kazakhstan’s fledging energy sector a boost.
Then came two devaluations of 20%. The first in Feb. 2009 and the second five years later.
With the US Federal Reserve easing its policy of cheap money and preparing to raise interest rates, pressure on emerging currencies, including the tenge, is likely to increase.
Aged 21, the tenge has already had an eventful existence.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 209, published on Nov.19 2014)
