Category Archives: Uncategorised

Kyrgyz President says Russia should leave Kant

DEC. 1 2016 (The Conway Bulletin) — At a press conference, Kyrgyz president Almazbek Atambayev said that Russia would have to quit its air base at Kant near Bishkek. He didn’t elaborate or give any details but he did say that he wanted all foreign military to quit Kyrgyzstan. Russia has signed a deal with Kyrgyzstan to operate from Kant until 2032. It started operations at Kant in 2003. The US quit its airbase outside Bishkek in 2014.

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(News report from Issue No. 307, published on Dec. 2 2016)

Azerbaijan gets its F1 Grand Prix

DEC. 2 2016 (The Conway Bulletin) — >> Why was Azerbaijan so keen to have the European Grand Prix renamed? Why is this important to President Aliyev?

>> It’s a PR thing. Azerbaijan lobbied hard to host one of Formula One’s Grand Prix races. It was given the so-called European Grand Prix to host this year in Baku, a race that was generally seen as a success. The course wound its way through the old town of Baku, creating a real test for the drivers and a spectacle for the spectators. The organisers of the F1 series were keen to repeat the course next year and so were the Azerbaijani authorities. They insisted though that the European Grand Prix title gives way to Azerbaijan Grand Prix. F1 is one of the most watched sports in the world. Having its name on a Grand Prix will help Azerbaijan’s brand. Or at least that is what the Azerbaijani authorities think.

>> Okay, but what is the European Grand Prix? I thought that most of the races were named after their host country.

>> You’re right, most of the races are named after the host country but there has been a European Grand Prix for decades. It was originally an honorific title but as the sport professionalised it became a way for F1 to award more than one race to a single country. In essence they could host their own national F1 Grand Prix plus the European Grand Prix. The race disappeared after 2013 but was revived in 2016 for Baku.

>> Makes sense to name each race after their host country, if you ask me. Why, though, is Azerbaijan is so keen to host a Grand Prix? Is must be expensive.

>> It is very expensive, although the Azerbaijani authorities were coy on how much they spent putting the Grand Prix on. We do know, though, that it caused major problems for local residents who had to deal with street closures around the event. Hosting a Grand Prix is seen as a high point in Azerbaijan’s drive to promote itself through sport. It has sponsored the Atletico Madrid football team, with the slogan: “Azerbaijan: Land of Fire”, staged the 2015 European Games in Baku and is one of the host countries for the 2020 European Football Championships. Sponsoring the Atletico Madrid shirt was considered a success for Azerbaijan as the team reached the Champions League Final in 2014. They lost the match 4-1 to arch rivals Real Madrid. The Europeans Games were less successful. The Games proved unpopular with both spectators and athletes, with mainly second string athletes competing. A bus also crashed into a group of Austrian synchronised swimmers inside the Olympic Village shortly before the start of the Games, badly injuring three of them.

>> That’s quite an impressive range of sports that Azerbaijan has been hosting and supporting. What about their national teams? How do they stack up?

>> Other then wrestling, weightlifting and boxing, not great. The football team is ranked at 90th in the world, just behind Kenya but ahead of Togo. Azerbaijan has always been considered a global chess power, though.

>> And, finally, back to the European Grand Prix of 2015. Who won it?

>> German Nico Rosberg won the race in his Mercedes. He went on to win the Formula One Championships. The 31-year-old quit racing shortly afterwards, though, so he wont be back in Baku to defend his victory.

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(News report from Issue No. 307, published on Dec. 2 2016)

Georgia to protect mortgage holders as lari tumbles

TBILISI, NOV. 29 2016 (The Conway Bulletin) — Georgia’s government said it would protect home-owners who took out mortgages in US dollars and also that it would ban online consumer lending, reforms aimed at shoring up confidence in the government and its economic policies after the lari dropped to all time lows.

PM Giorgi Margvelashvili made the announcements after fresh economic data showed a drop in exports and lower-than-expected remittance flows from Russia had pushed the lari down to 2.56 against the US dollar by close-Dec. 1. This is 20% lower than it was valued at in June.

“According to our plan, loans which had been disbursed to individuals before Jan. 1 2015, and supported by real estate, would be recalculated in lari at a rate which is lower than the current by 20 points,” media reported him as saying.

“For example, if the rate today is 2.5 lari per dollar, the credit will be calculated at a rate of 2.3 lari per dollar.”

And Mr Margvelashvili also said that the government would ban credit agencies which lend money via the internet and also look to increase excise duty on cigarettes.

The changes are among the most radical presented by a government in the South Caucasus/Central Asia region since an economic downturn linked to a collapse in oil prices and a recession in Russia. Earlier this year, Kazakhstan announced similar measures to protect mortgage holders who had borrowed in US dollars.

Following Mr Margvelashvili’s intervention, the Georgian Central Bank also called for calm. It said that the sudden fall in the value of the lari was a short term adjustment that would steady.

“We expect that devaluation will stop shortly,” it said in a statement. “We would recommend society and economic agents not to make harsh decisions, which will negatively affect themselves.”

The Central Bank blamed the drop on the strengthening US dollar, the weak rouble and poor Georgian economic data.

Georgia’s GDP grew in the 12- months to the end of October by 1.3%, less than half the rate for the same period in 2015. Remittances from Russia, so vital to the economy, have been low.

And people are worried. David, a Tbilisi resident in his late 20s, said that he had a mortgage for $15,000 which he had taken out when the lari was valued at 2.19 against the US dollar. He said that the fall in the value of the currency had meant it was now virtually unpayable.

“I got this credit for my home, so if the dollar continues to rise, I will have to sell my home and give the credit back,” he said. “I don’t know what else I can do.”

Tamta, a Tbilisi resident, was also worried. “I am trying not to think about this otherwise I’ll go crazy,” she said. “Thank God nobody in my family has a mortgage in dollars.”

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(News report from Issue No. 307, published on Dec. 2 2016)

Azerbaijani Central Bank defends economy policy

DEC. 1 2016 (The Conway Bulletin) — Azerbaijan’s manat currency dropped to its lowest ever level against the US dollar, continuing a decline that has wiped 18% off its value since June.

The collapse in the value of the manat, linked to still-subdued oil prices and weaknesses in the Russian economy, is stoking inflation. The lack of confidence in the manat has also triggered a run on US dollars, with many high street banks and exchange offices running out of the greenback.

On Nov. 30, the Azerbaijani Central Bank was forced to defend its policies.

Elman Rustamov, the Central Bank chief, told parliament that he was pursuing a tight monetary policy but he also admitted that the banking system was under strain.

“There are similarities between stabilisation and development,” he said. “If we don’t achieve macroeconomic stability, no investor will have confidence in us.”

International economists expect Azerbaijan’s economy to shrink by around 3% this year, underscoring the problems it is facing. In September, in an effort to prop up its manat currency, the Central Bank raised interest rates to 15% from 9.5%.

But on the streets of Baku, the mood is glum. A Bloomberg reporter said that only one of the nine banks he visited on Nov. 28 sold US dollars. Importantly too, he reported that the Black Market exchange rate for buying US dollars with manat was 5% higher than the official rate, an indication of the lack of confidence in the currency.

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(News report from Issue No. 307, published on Dec. 2 2016)

Uzbeks prepare to back Mirziyoyev as their second post-Soviet president

TASHKENT, DEC. 2 2016 (The Conway Bulletin) — Even last month, it was clear to Uzbeks who was going to win a presidential election on Dec. 4.

“It is already known who is going to be our new president,” laughed Farkhod, 55, a resident of Samarkand. “But still I am fine with him.”

The “him” is Shavkat Mirziyoyev, Uzbekistan’s PM and acting president since Islam Karimov died on Sept. 2.

And on a tour of Uzbekistan’s two main cities — Tashkent and Samarkand — Mr Mirziyoyev appeared to be a genuinely popular choice to replace Karimov. He’s also had the advantage of looking presidential by leading Karimov’s funeral and hosting various world leaders, such as Russian president Vladimir Putin and Turkish president Recep Erdogan.

For Saidaziz, 21, a student in Tashkent, stability was the key issue. “I am going to vote for Mirziyoyev, as it seems that he is going to continue the line of Islam Karimov,” she said.

Not everybody is as enthusiastic, though. An Uzbek academic who preferred not to be named said that Mr Mirziyoyev had a reputation for being excessively strict.

“As far as I know, Karimov did not choose Mirziyoyev as his successor, as he was aware of the methods the latter prefers to use,” he said in hushed tones between sips of tea in a Tashkent cafe.

Still, for most Uzbeks, Mr Mirziyoyev’s moves to open up the country and to create jobs through major infrastructure projects are welcome.

The economy has been in the doldrums for two years and needs stimulating. Alexander, a 54-year-old plumber in Tashkent said that a change of president would have little impact on ordinary people.

“The elite will decide who becomes president, without our participation, but there won’t be any revolution from ordinary Uzbeks,” he said. “Creating a stable political system, like the one in America is more important task.”

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(News report from Issue No. 307, published on Dec. 2 2016)

Uzbekistan’s acting-president signals changes to currency controls

NOV. 29 2016 (The Conway Bulletin) — Uzbekistan’s acting-president Shavkat Mirziyoyev published a draft decree on the presidential website laying out what appeared to be a manifesto to liberalise some of the tightest currency controls in the world.

In the draft decree, Mr Mirziyoyev wrote that restrictions would be lifted on foreign companies working in Uzbekistan and on Uzbeks taking money out of the country.

The document said that the main aims of the reforms were to “stimulate growth of the country’s export potential, improve the competitive- ness of domestic producers in foreign and domestic markets” and to “create equal conditions for all participants of foreign economic activity during their foreign exchange operations and the prohibition of the practice of privileges and preferences to individual companies or sectors”.

Specifically, the document said Uzbeks would be allowed to take up to $10,000 out of the country. Currently, Uzbeks are banned from taking cash out of the country. Foreign companies working in Uzbekistan have also complained about restrictions on repatriating profits. Under the draft regulations this should be easier.

Uzbekistan also operates a dual exchange rate with the official and the Black Market rate varying widely.

The draft legislation on the presidential website didn’t specifically tackle the issue of the dual exchange rates but loosening currency controls should bring them together.

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(News report from Issue No. 307, published on Dec. 2 2016)

Turkmenistan and Afghanistan open railway

NOV. 29 2016 (The Conway Bulletin) — Turkmenistan and Afghanistan opened a long awaited rail link which should ease trade, especially shipments of refined fuel. Turkmenistan’s economy relies of gas sales, mainly to China, but it has been looking to diversity into refined fuel and electricity exports and it sees Afghanistan as a potentially important market. It has built a 540,000 tonne oil product terminal at the Ymemnazar customs point on the border with Afghanistan.

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(News report from Issue No. 307, published on Dec. 2 2016)

BTC flows to drop, according to Azerbaijan’s state budget

NOV. 25 2016 (The Conway Bulletin) — The Baku-Tbilisi-Ceyhan (BTC) pipeline will drop oil transport next year, according to a forecast in Azerbaijan’s state budget. In 2017, BTC will transport 31m tonnes, down from 32.5m tonnes that the government forecast for this year. In 2016, exports via BTC increased, but the share of Azerbaijan’s SOCAR in pipeline sales decreased in favour of its foreign partners.

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(News report from Issue No. 307, published on Dec. 2 2016)

Tajik and Kyrgyz military fire shots

NOV. 28 2016 (The Conway Bulletin) — Shots have been fired by Tajik and Kyrgyz border guards on their shared border, Radio Free Europe/Radio Liberty reported. The border is one of the most tense in Central Asia. RFE/RL said that nobody had been injured in the fighting and that it wasn’t clear if the shots had been fired into the air as warnings or had been aimed at security personnel.

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(News report from Issue No. 307, published on Dec. 2 2016)

Domestic violence rises in Azerbaijan

NOV. 29 2016 (The Conway Bulletin) — Giving a rare insiders’ view of domestic life in Azerbaijan, MP Elmira Akhundova said that violence against women by their husbands was rising. Media quoted her as saying that punishments must be increased for men who kill or injure their wives. Official government statistics have said that domestic violence in Azerbaijan has halved over the past couple of years because, the authorities have said, of harsh new punishments. Activists, though, have refuted this and said that the government simply makes up the numbers for its own benefit.

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(News report from Issue No. 307, published on Dec. 2 2016)