Tag Archives: Azerbaijan

Editorial: Protests grow in Azerbaijan

JAN. 15 2016 (The Conway Bulletin) – Protests in Azerbaijan’s peripheral regions could be soothed only with a resolute measure, the government thinks. President Ilham Aliyev decided to strike out VAT from flour and wheat products, one of the chief demands of the dozens of protesters that took the streets on Jan. 12-13 in several towns around the country.

The question, however, remains — will this one-off measure placate emotions?

Azerbaijan always had a fiery population, ready to manifest their discontent. The recent crackdown on freedom of expression and the virtual – and factual – suppression of any opposition led many to think that Azerbaijan would not allow the public to have a voice any longer.

Azerbaijanis have instead showed their, very real, anger. Video footage from opposition sources shows protesters and police clashing.

The economic downturn is threatening stability across the South Caucasus and Central Asia and poses a challenge to the authorities. How they, and how the protesters respond, is critical.

ENDS

(Editorial from Issue No. 263, published on Jan. 15 2016)

Turkmenistan retrieves another oilman body

JAN. 11 2016 (The Conway Bulletin) – The Turkmen authorities retrieved the body of another missing Azerbaijani oil worker in the Caspian Sea. A storm hit an oil field in the Azerbaijani sector of the Caspian Sea shortly before Christmas, triggering a fire that killed 33 people. It was the worst offshore oil rig accident since Piper Alpha, in the North Sea, in 1988. Some of the bodies have been found in the Turkmen sector of the Caspian Sea.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

Currencies: Azerbaijan’s manat, Kazakhstan’s tenge

JAN. 15 2016 (The Conway Bulletin) — In Azerbaijan, people took to the streets to protest against inflation and unemployment. The manat grew slightly to 1.58/$1, but what angers people most is the increase in prices, especially for imported goods.

In Kazakhstan, the tenge depreciated further to 366/$1, a 6% drop on the previous week. Many worry now that there could be no end to the downward spiral.

In Tajikistan, the somoni lost an additional 2% this week, trading at 7.38/$1. The currency slide in the country doesn’t seem to slow.

In Kyrgyzstan the Central Bank has kept the som stable at 75.9/$1 by intervening several times in the currency market. The Georgian Central Bank also protected the lari with a few interventions. In Azerbaijan and Turkmenistan, the governments imposed further restrictions on the trade of foreign currencies, by limiting licenses to banks, airports and, in Azerbaijan’s case, hotels.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

Protesters clash with police in Azerbaijan

JAN. 13 2016 (The Conway Bulletin) – Protests against rising prices broke out in at least five regional towns in Azerbaijan, the most serious and widespread civil unrest linked to an economic downturn that has shaken Central Asia and the South Caucasus over the past 18 months.

In Siyazan, about an hour’s drive north of Baku, heavily armed riot police fired tear gas and rubber bullets at crowds of young men who pelted them with stones. Later, reports said that at least 50 people had been detained by the police.

Footage shot on mobile phones and released on the opposition Meydan website showed police in full body armour carrying shields backed up by armoured vehicles marching towards groups of young men.

In other protests in regional towns, groups of men argued with officials and complained about losing jobs and a drop in living standards.

The following day, the Azerbaijani authorities released a statement that blamed various opposition parties for organising the protests. Azerbaijan’s opposition, which has seen its ranks thinned by a series of arrests and imprisonments over the past couple of years, said that the protests had been spontaneous.

Hours later the government appeared to back down over one of the protesters’ main demands — to stop prices from rising — by ordering a VAT exemption on flour and wheat.

A sharp fall in oil prices has hit Azerbaijan hard. It devalued its manat currency twice last year, halving its value. The government has also cut welfare and infrastructure projects.

There have been small-scale protests in Azerbaijan and in Georgia and Armenia, but these were the most violent and widespread.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

Azerbaijan’s President puts on a brave face

JAN. 11 2016 (The Conway Bulletin) – Apparently putting a brave face on an increasingly poor economic outlook, Azerbaijani president Ilham Aliyev said at a government meeting that the country’s GDP had actually grown last year by one percentage point. He also said that Azerbaijan needed to reduce its dependency on oil, something that most analysts have been urging for some time.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

Azerbaijan manat drops 50% after peg is ditched

DEC. 21 2015 (The Conway Bulletin) – Azerbaijan’s Central Bank cut the manat from its US dollar peg just before Christmas, immediately triggering a 50% fall in its value.

This was, in effect, the second currency devaluation by Azerbaijan in 2015. The manat started 2016 trading at 1.56 /$1, 50% lower than it had been a year earlier.

Speaking a couple of days after the un-pegging of the manat, Azerbaijani president Ilham Aliyev said officials had had no choice but to effectively devalue the manat.

“The main reason for the change in the manat’s rate was a decline in oil price by three times. It means that the change was inevitable,” Reuters quoted him as saying.

This is a major climb down from an earlier position held by Mr Aliyev and the Central Bank. At the start of 2015 he told media that a devaluation was definitely not on the cards only to order a 33% cut in the value of the manat in Feb. 2015.

Since then , in the past 10 months, the Azerbaijani Central Bank has spent billions of dollars trying to defend the value of the manat despite analysts warning that a devaluation was needed. When Kazakhstan ditched its own peg to the US dollar in August, triggering a 40% drop in the value of the tenge, this second devaluation of the manat became an inevitability.

Azerbaijan has been particularly exposed to the drop in oil and gas prices — down to 11-year-lows. Oil and gas sales make up around 95% of its export revenue and 75% of total government revenues. To counter the sharp fall in prices, down by around 75% since July 2014, the Azerbaijani government has slashed spending on infrastructure and social projects.

Fitch, the ratings agency, said the devaluation was needed but that it would hurt the banking sector.

“The sharp exchange rate adjustment eases the oil shock’s fiscal impact by boosting the local-currency value of oil revenues and a floating currency should help stabilise reserves,” it said. “The devaluation will hurt the banking sector, which has large amounts of foreign- currency denominated loans.”

The government has imposed currency controls over foreign exchange transactions. It said that people wanting to exchange over $500 worth of manat now needed to present a formal ID.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Azerbaijan finds two bodies in the Caspian Sea

JAN. 4 2015 (The Conway Bulletin) – Azerbaijan’s emergency ministry confirmed that it had recovered two bodies from the Turkmen sector of the Caspian Sea thought to be those of workers washed overboard during a storm and fire on an oil rig in December. 33 workers died in the fire, the worst offshore oil rig platform disaster since the North Sea Piper Alpha fire in 1988.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Azerbaijan and Kazakhstan diversify investment strategies

ALMATY, JAN. 8 2016 (The Conway Bulletin) — Kazakhstan and Azerbaijan will diversify the investment portfolios of their Sovereign Wealth Funds in 2016 away from low yield bonds and currency holdings to high- risk equity and property investments.

Slow global economic growth has forced Sovereign Wealth Funds to ditch conservative investment strategies in search of higher yields and Kazakhstan and Azerbaijan are following a trend.

Bloomberg News quoted Berik Otemurat, director at the Kazakh Central Bank’s National Investment Corporation, as saying: “We’re sitting on a huge pile of cash and not making real returns. It’s especially urgent to address this, given the gloomy outlook for oil prices and reduced inflows into the National Fund.”

Azerbaijani officials have said that they want to increase the cap on real estate investment in its investment portfolio to 10% from 5%for 2016, as well as raising the cap for equity investment to 15% from 10%. SOFAZ, Azerbaijan’s oil fund, has been buying up high-profile property for the past couple of years and it started 2016 by buying a 19th century palazzo in Milan for 97m euro.

“In 2016, SOFAZ will be implementing investment policy, which makes it possible to get the maximum yield at low risk of capital loss,” SOFAZ said of its of strategy.

But Indra Overland, research professor at the Norwegian Institute of International Affairs, said Sovereign Wealth Funds follow market trends, rather than set them, which generates a risk that will buy at the top, rather than the bottom, of the market.

“This change is probably driven by a combination of desperation over low oil price, dissatisfaction with historically low returns on bonds and worries about the stability of financial markets, especially related to China,” Mr Overland said.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Service companies sign deals with Azerbaijan

DEC. 22-29 2016 (The Conway Bulletin) — Norway’s Agility, Britain’s KCA Deutag and British-Azerbaijani joint venture SOCAR-Cape all signed contracts with BP and Azerbaijan’s state-owned energy company SOCAR to provide services to off- shore energy projects in the Caspian Sea. These separate deals show Azerbaijan’s reliance on Western technology to operate and service its oil and gas projects.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Azerbaijani businessman denies accusations

DEC. 22 2016 (The Conway Bulletin) — Malta-based Oil Transportation and Shipping Services, owned by Azerbaijani businessman Mubariz Mansimov, denied any allegation of its association with the BMZ Group, owned by Turkish President Recep Tayyip Erdogan’s son. Russia accused the BMZ Group of smuggling oil on behalf of the Islamic State. Relations between Russia and Turkey have broken down after a Turkish fighter-jet shot down a Russian fighter-jet over Syria in November.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)