Category Archives: Uncategorised

Business Comment: Azerbaijan’s hunt for partners

NOV. 18 2016 (The Conway Bulletin) — Despite slowing domestic production and overall exports, Azerbaijan is stubbornly reaching out to building partnerships with other countries to sell its oil.

Last week, the government and state-owned SOCAR mulled the launch of a pilot programme with Egypt to send 2m barrels of oil to refine in Egyptian plants. In recent weeks, Azerbaijan also planned to send oil to Belarus and Ukraine and to build an oil terminal in Benin, of all places.

Sending oil to its former Soviet sisters Belarus and Ukraine would probably be feasible from a technical point of view, but analysts have shown that Azerbaijan might just not have enough oil to provide for its domestic demand and for the pipeline contracts it already has in place.

SOCAR is sending increasingly less oil through its main export pipelines, posting a 4% decrease via Baku-Tbilisi-Ceyhan, an 11% decrease via Baku-Supsa and an 11% decrease via Baku-Novorossiysk in the first ten months of 2016.

And in the first three quarters of the year, SOCAR posted an 8.7% fall in production due to the drop in the price of oil.

SOCAR’s poor performance in 2016 begs the question of whether the company’s bullish plans to export oil to new destinations and invest in West Africa make economic and financial sense. If there is any sense in this at all, it is difficult to find.

With oil prices still hovering around $50/barrel, SOCAR and its multinational partners in Azerbaijan will maintain low production figures, and this will certainly not boost exports.

The question is, now, who does Azerbaijan turn to to boost its client base.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Kazakh Central bank puts Nazarbayev on bank note

ALMATY, NOV. 15 2016, (The Conway Bulletin) — Kazakhstan’s Central Bank unveiled a new 10,000 tenge bank note depicting a portrait of President Nursultan Nazarbayev, for the first time, next to an image of Astana, the capital city he built on the Kazakh steppe.

Mr Nazarbayev’s critics immediately criticised him for using the bank notes to embellish what they say is already a flourishing personality cult. Daniyar Akishev, head of the Kazakh Central Bank, though, brushed aside complaints and said the bank note was designed to celebrate 25 years of independence from the Soviet Union.

“All Kazakhstan’s achievements since independence are inextricably linked to the first president of the Republic of Kazakhstan, Nursultan Nazarbayev,” he said.

Kazakhstan has been producing eye catching banks notes for years. It won the International Banknote Society’s banknote of the year award in 2012, 2013 and 2014. It’s colourful notes have generally included a historical figure one one side and a modern monument on the other, a meshing together of old and new.

Mr Nazarbayev, president since independence from the Soviet Union in 1991, has worked hard to create a united nation with a Kazakh identity. He has used monuments, slogans and banknotes to achieve this.

Many, though, say that his own personal brand, though, has grown too imposing. In 2011, Almaty city government unveiled a statue outside a park of a suited Mr Nazarbayev sitting on stone.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Court jails IS activists in Azerbaijan

NOV. 16 2016 (The Conway Bulletin) — A court in Baku jailed seven men for fighting for the radical IS group in Syria. Countries in Central Asia and the South Caucasus have been fighting to contain a recruitment drive by IS in the region. The men were jailed for between 2-1/2 and 14 years. They had been arrested once they returned home from fighting with IS.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Kyrgyzstan’s Atambayev orders investigation into corruption by rivals

BISHKEK, NOV. 13 2016, (The Conway Bulletin) — Kyrgyz president Almazbek Atambayev appeared to be taking his revenge on opposition groups who quit the government last month over his plans to hold a referendum in December that would change the country’s constitution.

Media reported that he had held a meeting with the head of the National Security Committee, Adil Segizbayev. At the meeting Mr Segizbayev told Mr Atambayev that the government of Belize had passed on information that a handful of Kyrgyz politicians had helped Maxim Bakiyev, the hated son of deposed former Kyrgyz president Kurmanbek Bakiyev, set up bank accounts in the Central American country.

Mr Segizbayev did not give any names out but in accompanying photos of documents linked to the case, the names of former justice minister Almanbet Shykmamatov, former general prosecutor Aida Salyanova and MP Omurbek Tekebayev are all clearly visible. They form the core of a group of MPs in the Ata Meken party who pulled down Kyrgyzstan’s coalition government last month. They have said the allegations, which haven’t shifted into charges yet, are unfounded.

Mr Atambayev can’t stand for another term as president next year and his rivals worry that he is tinkering with the constitution so that he can take over as an empowered PM once he leaves the presidency.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Kazakhstan’s Kashagan provides oil update

NOV. 14 2016 (The Conway Bulletin) — Kazakhstan’s giant Kashagan oil field produced 1.5m barrels of oil in its first month of operations, official media reported. In daily terms, Kashagan produced an average of 52,600 barrels, far below the minimum threshold of 75,000 barrels/day that the consortium said it needs to produce to keep extraction commercially viable. The Kazakh government had previously said it expects Kashagan to reach an average of 90,000 barrels/day before the end of the year.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Kazakhstan plans a freight company

NOV. 11 2016 (The Conway Bulletin) — Kazakhstan’s national airline Air Astana and its state-owned railway company Temir Zholy will combine next year to create a new air freight company, media reported. It quoted a Temir Zholy official as saying that Kazakhstan wanted to exploit its position between Asia and Europe to boost its economy by acting as a logistics and cargo hub. Uzbekistan has already developed plans to set itself up as a similar transport hub.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Tajikistan holds first President’s Day

NOV. 16 2016 (The Conway Bulletin) — Tajikistan celebrated its first President’s Day, the latest in a series of awards designed to virtually deify President Emomali Rakhmon.

According to press reports, school children read poems they had written about Mr Rakhmon, libraries displayed various books that Mr Rakhmon has written and military units paraded under the slogan “Our president, our leader”.

Officially, the new holiday was designed to celebrate 25 years of independence but critics of Mr Rakhmon have said that this is just the latest step in an increasingly aggressive move to create a dominating personality cult. They say that this is a knee-jerk reaction to worsening economic conditions, the growing threat of the Taliban in Afghanistan and, simply, old age and an accelerating sense of his own mortality.

Mr Rakhmon has accrued a number of titles over the years including Leader of the Nation, and Founder of the Peace and Accord.

Earlier this year, too, he introduced a national flag day and the Eurasianet website reported that Tajikistan had introduced a Diplomat Day on Sept. 29, the 23rd anniversary of his first speech to the United Nations General Assembly.

Over the past few years, Mr Rakhmon has rounded on his opponents – tracking down and imprisoning alleged Islamists, outlawing his nearest rivals, the Islamic Renaissance Party of Tajikistan – and promoted his son and daughter into increasingly powerful positions.

In power since the mid-1990s, Mr Rakhmon, who is 64-years-old, has also changed the constitution to, seemingly, allow his son to take over as president from him.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Comment: Kazakh electricity plans

NOV. 18 2016 (The Conway Bulletin) — The Kazakh government has cancelled plans to build either a thermal or nuclear power station despite saying for the past decade that an upgrade to its power generating system was vital.

At a press briefing earlier this month in Astana, Kazakh Energy Minister Kanat Bozumbayev said that, despite predictions of the opposite, Kazakhstan actually now has a surplus of power.

“We see no deficit within the next seven years, so we see no [need to build] new facilities such as a nuclear power plant within the next seven years,” he said. This is an important statement for two reasons. Firstly Bozumbayev is doing future generations of Kazakhs a disservice. Secondly he is not being honest with this current generation of Kazakhs.

Both the short-termism and the dishonesty are worrying. Kazakhstan needs more power. Just ask people living in Almaty who have to deal with an increasing number of brownouts. As the country has modernised and grown wealthier, electricity consumption has soared. World Bank data showed that in 2013, Kazakhstan’s per capita electricity consumption was 4,892 kilowatt hours, up from a post-Soviet low in 1999 of 2,838 kilowatt hours.

At the same time, Kazakhstan’s population has grown from just under 15m people in 1999 to just over 17m people in 2015.

Kazakhstan prevaricated for years with various suitors over building a new nuclear power station, its Soviet-era nuclear power station had been decommissioned in 2001, but earlier this year said it had scrapped the idea.

In September, Kazakhstan and Korea’s Samsung also finally admitted that its mothballed $2.5b plan to build a coal-fired power station on the shores of Lake Balkhash to feed electricity to Almaty had also been scrapped.

And here’s the hard truth, the real reason that Kazakh officials said they don’t need a new power station is that Kazakhstan’s finances are currently not up to funding the construction of one.

Last year, Samsung Engineering CEO Park Jung-heum said he had mothballed the Balkhash thermal power project “because of an issue with the Kazakhstan government over the guaranteed purchase of the power to be produced from the project.”

Power generation plans in Kazakhstan have become the latest victim of the economic downturn. The government should admit this and lay plans to boost production as soon as they can afford to.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Kyrgyz exports fall

NOV. 10 2016 (The Conway Bulletin) — In the first nine months of the year, Kyrgyzstan said that its exports had fallen by 9% and imports by 4.5%. The data confirms the view that the economies of Central Asia are still being squeezed by an economic downturn triggered in 2014 by a drop in oil prices. The drop in oil prices tipped Russia’s economy into a recession. Russia is the regional economic driver.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Kazakhstan cuts interest rate

NOV. 14 2016 (The Conway Bulletin) — Kazakhstan cut its key interest rate by 50 basis points to 12%, its fourth cut since May, as it looked to give industry a boost. The Central Bank said more cuts were likely but that these came with a potential inflation risk. The Central Bank had raised rates to a high of 17% in February to counter inflation.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)