Category Archives: Uncategorised

Arcelormittal’s troubles in Kazakhstan

OCT. 17 2016 (The Conway Bulletin) – ArcelorMittal, the world’s largest steelmaker, has shown signs of trouble in its operations in Kazakhstan due to the fall in commodity prices.

In early 2014, it laid off around 1,000 workers. The subsequent devaluation of the tenge currency seemed to have fixed its cost problems but as the US dollar strengthened against all commodities, effectively pushing prices down, the company felt the bite of lower revenues.

In 2015, it cut worker salaries by 25% only to later face a court order that deemed the move illegal. Later in 2015, when the tenge sank after the Central Bank ditched the peg to the US dollar in August, ArcelorMittal Temirtau’s former boss Vijay Mahadevan said that the tenge value needed to be even lower for the company to effectively cut costs.

But exchange rate fixes are only one-off solutions that cannot ensure long-term stability.

Earlier this year, the company predicted a 13% drop in net income and cancelled a promised pay raise to its employees, lowering their benefits instead. And in September, the government lodged a veiled accusation against ArcelorMittal Temirtau for allegedly slowing production to keep revenues low and avoid a higher tax bill. The company said this week it had resumed full production, to avoid further problems.

But the headaches are still there, despite the potential growth of the Iranian market, vital for ArcelorMittal, after most sanctions were lifted this year.

Besides the thousands that it currently employs, the plant in Temirtau holds symbolic value, as President Nursultan Nazarbayev worked there in his youth.

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)

EBRD gives loans to Tajik farmers

OCT. 18 2016 (The Conway Bulletin) – The EBRD and the EU will partner to implement a 42m euro ($46.5m) programme to support farming in Tajikistan. A first tranche of 15m euros was provided to Arvand, a microfinance organisation, to make available to small agri- business borrowers. The EBRD, which is contributing 20m euros to the project, said that another development bank will soon join the project. Despite being the largest employer, the agricultural sector in Tajikistan is lacking investment and planning.

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)

Comment: Russia eyes entry into the West’s CASA-1000, says Kilner

OCT. 21 2016 (The Conway Bulletin) — It appears as if Pakistan is losing confidence in the West’s headline power transmission project in Central Asia — CASA-1000. It’s been talking to Russia and Turkmenistan about covering an anticipated shortfall in electricity from Tajikistan and Kyrgyzstan, undermining a core pillar of the project.

CASA-1000 is the World Bank funded project that will, when it is built in 2018, send electricity generated by hydropower stations in Kyrgyzstan and Tajikistan to consumers in Pakistan via Afghanistan.

The $1.2b project was supposed to spearhead what Hillary Clinton, when she was US Secretary of State, had described as a new north-south Silk Road. The West has disengaged from Central Asia to a large extent since the drawdown of it militaries from Afghanistan in 2013 and 2014, making new projects like CASA-1000 so important. The aim was to empower Tajikistan and Kyrgyzstan, tie both Pakistan and Afghanistan into a wider Central Asian economic sphere and restore confidence in the West’s commitment to the region.

But it may not be going to plan.

Leaders from Tajikistan, Kyrgyzstan, Afghanistan and Pakistan gathered earlier this year to mark the start of CASA-1000’s construction. They shook hands and smiled. Now it seems that Russian and Turkmen leaders should also have been there.

Pakistan has, openly, been courting both Russia and Turkmenistan as back up energy suppliers. Its leaders appear to doubt the ability of both Kyrgyzstan and Tajikistan to produce enough power during the freezing winters when their domestic demand spikes and water levels in their reservoirs, which feed the hydropower plants, fall.

There are also question marks over whether the Soviet-era infrastructure that both Kyrgyzstan and Tajikistan are relying upon can cope with the demands of CASA-1000. The World Bank has promised funds to both Tajikistan and Kyrgyzstan to boost power production but it may not be enough and it may come too late, in any case.

Russia has already told Pakistan that it will happily feed its power into CASA-1000 to make up the shortfall but, and this is the point, this would undermine the ethos of the project.

With Russia riding to the rescue, CASA-1000 risks making the West’s strategy in Central Asia look muddled.

By James Kilner, Editor, The Conway Bulletin

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)

Uzbek acting-President approves mass amnesty

OCT. 14 2016 (The Conway Bulletin) — Uzbekistan acting president Shavkat Mirziyoyev approved an amnesty for hundreds of inmates to mark the 25th anniversary of the country’s constitution in December, media reported. Reports said that women, inmates under 18 and over 60 and those who don’t pose any risk to society would be freed. Mr Mirziyoyev is on a charm offensive ahead of an election in December that is expected to give him the presidency on a permanent basis. Islam Karimov, who ruled from 1991, died in September.

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)

Armenia approves missile deal with Russia

OCT. 14 2016 (The Conway Bulletin) – Armenia’s parliament approved a missile defence deal with Russia that will mean it relies increasingly heavily on the Kremlin for its defences, media reported. Russia already maintains a large military base in Armenia, seen as essential for keeping its various enemies (mainly Azerbaijan and Turkey) at arms length. Importantly, officials also said that the missile defence deal with Russia did not cover the region of Nagorno-Karabakh which Armenia disputes with Azerbaijan.

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)

Oil output stagnates in Azerbaijan

OCT. 17 2016 (The Conway Bulletin) — Azerbaijan produced 31.27m tonnes of oil and gas condensate in the first nine months of the year, the State Statistics Committee said, a drop of 0.3% from last year. Oil is the mainstay of the Azerbaijani economy and the government has been urging oil companies, in particular BP, to increase the amount of oil they produce. Gas production, the statistics committee said, has risen.

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)

Success of conservative party reflects Georgian society

TBILISI, OCT. 18 2016 (The Conway Bulletin) — The success of the Alliance of Patriots party in Georgia’s parliamentary election this month underlines the spread of conservative views amongst ordinary Georgians, analysts said.

The group, set up in 2012, became the first minor party under a new constitution to break through the 5% barrier to automatically win six seats through the proportional representation element of the election in the 150 seat parliament.

The Alliance of Patriots sees itself as staunchly pro-religion and nationalistic, views which, Tbilisi-based analyst Zaal Anjaparidze said, were reflective of a shift in public opinion.

“Opinion polls in Georgia for the last four years have been showing some rise in Euro sceptic thinking and the alienation of parts of Georgian society from liberal values,” he told The Bulletin, views held by other Georgian political commentators.

“They have succeeded in occupying this niche and capitalising on it during the election campaign.”

The Alliance of Patriots may also have an influential role to play in the next parliament as natural allies of the ruling Georgian Dream coalition which is also close to the Orthodox Church. Many of the Georgian Dream’s supporters have said that they want to change the Georgian constitution to state that marriage can only be between a man and woman.

Detractors of the constitutional amendments say it is discriminatory, anti-liberal and contrary to the values of the EU which Georgia aspires to join but its supporters know they have the backing of a large section of the public, as reflected by the success of the Georgian Dream and the Alli- ance of Patriots.

In Tbilisi, Soso, a scientist, reflected the views of many people.

“Before being an Orthodox Christian, I am Georgian,” he said. “Same sex marriage is against our tradition, our beliefs and against the true essence of being Georgian. Such an amendment is absolutely necessary.”

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)

Kazakhstan looks to ban Salafism

ALMATY, OCT. 14 2016 (The Conway Bulletin) — Kazakhstan appeared to signal that it would ban Salafism, a form of Islam, after its new minister for religious affairs, Nurlan Yermekbayev, described it as “unacceptable”.

Mr Yermekbayev’s comments, at his first press conference as minister for religious freedom, will strengthen analysts’ views that the ministry, created last month, was designed to clamp down on religious freedom.

“We consider that for Kazakhstan, Salafism is an unacceptable and destructive religious movement. In

general, Kazakhstan’s society has a negative attitude to this alien understanding of faith, leading to radicalism,” the official Astana Times newspaper quoted him as saying.

“Our future work will focus on preventing the spread of literature and the work of the websites promoting the ideology of Salafism.”

Salafism is an ultra-conservative form of Islam that has its roots in Egypt. It has been blamed for the spread of radical Islam.

Previously, Wahhabism, has been blamed for encouraging a series of terrorist attacks in Kazakhstan and banned by the government.

But Kazakh officials have now blamed a series of gun attacks in Aktobe, in the west of the country, in June on a group of Salafists.

Kazakhstan, like its neighbours, has been clamping down on pious Muslims, increasingly worried that they are destabilising the country and acting as a possible fifth column.

Human rights groups have described the clamp-downs as attacks on human rights and free speech.

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)

Kazakh energy company drills wells

OCT. 19 2016 (The Conway Bulletin) – Roxi Petroleum, a Kazakhstan-based oil and gas company, said it had successfully drilled new wells at its BNG Contract Area, a group of oil fields in western Kazakhstan. Roxi said the drilling of the A6 deep well had been challenging, but that the expansion of the field was continuing as planned. On the day of the announcement, its stock price increased by 18% to 10.5p in London.

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)

Remittances grow in Georgia

OCT. 14 2016 (The Conway Bulletin) — Remittance data from Georgia showed an overall increase of 3.6% for the first nine months of the year compared to the same time in 2014, although cash from Russia continued to fall, media reported. Russia is the biggest source of remittances to Georgia, and the rest of the Central Asia and South Caucasus region. It sent only $282m to Georgia in Jan. – Sept., down 12.3%. Remittances from Greece stood at $93m (up 1%) and from the US at $89m (up 11%). The data is important because is shows that, unlike its South Caucasus and Central Asia neighbours, Georgia is not overly reliant on remittances from Russia.

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)