OCT. 6 2015 (The Conway Bulletin) — Azerbaijan hired US-based consulting firm Hill International on a $3.7m contract to manage the construction of the Baku Tower, a 50-storey skyscraper on the man-made Khazar island, outside the Azerbaijani capital. Avesta Group, an investment company linked to the Azerbaijani elite, has invested $2b into its Baku Tower project.
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 7 2015 (The Conway Bulletin) – Border guards at Baku’s airport blocked two Amnesty International researchers from entering the country and the Council of Europe said it was pulling out of human rights talks with Azerbaijan because of what it described as a deteriorating situation.
Both incidents highlight the worsening relations between the West and Azerbaijan.
The West has accused Azerbaijan of clamping down on human rights over the past couple of years. Azerbaijan, in retaliation, has said that the West has been trying to organise a coup.
The Council of Europe, an intergovernmental body that covers Europe and countries on its eastern fringe that used to lie inside the Soviet Union, has been meeting members of the Azerbaijani government since October last year to try and improve dialogue between it and various civic groups.
Now it has effectively said that the situation is hopeless.
“Despite this initiative, the overall situation of human rights defenders in the country has deteriorated dramatically,” the Council of Europe said in a statement. “An increasing number of human right defenders has recently been imprisoned, and the Council of Europe has received worrying reports about unacceptable detention conditions.”
Europe’s relationship with Azerbaijan is complicated. It has derided the government’s attitude towards human rights and free speech but it has also continued to woo Azerbaijan because it needs its gas. The risk for Europe is that the row over human rights will push Azerbaijan further towards Russia.
The same day as the Council of Europe said it was pulling out of talks with Azerbaijan, Amnesty International released a statement saying that two of its researchers were deported when they tried to enter the country through Baku airport.
“The deportation of our staff adds to a sad litany of journalists and human rights defenders being targeted, detained and jailed simply for carrying out their work,” an Amnesty International statement said.
The Azerbaijan government has not commented.
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 7 2015 (The Conway Bulletin) — Analysts in Kazakhstan have revised their inflation expectations down to 7.1% this year after official data showed that the consumer price index grew by only 1% in September.
Halyk Finance researchers said the numbers are much more encouraging than what they forecasted. This should keep inflation within the Central Bank target of 6-8%. Central Bank chairman Kairat Kelimbetov said he doesn’t rule out the possibility of a further increase in interest rates, after a new rate was set at the end of last week.
The Eurasian Development Bank (EDB) said in a report that Kyrgyzstan’s economy is poised to grow by 1.8% this year. This came after PM Temir Sariyev disclosed more optimistic numbers, pointing out that in Jan.- Sept. 2015, the country’s economy grew by 6%. The EDB said it expects a marginal slowdown in economic activity in Q4 2015.
The IMF has dramatically increased its forecast for Azerbaijan’s growth in 2015, from a meagre 0.6% in April to 4% in its latest report.
The international lender also revised inflation expectations downwards from 7.9% to 5% for 2015, more good news.
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(News report from Issue No. 251, published on Oct. 9 2015)
ALMATY, OCT. 5 2015 (The Conway Bulletin) — Following hard on the heels of Scandinavian rival TeliaSonera, Norwegian telecoms company Telenor effectively said it wanted to quit Central Asia and the South Caucasus when it announced that it would sell its 33% stake in Russian mobile operator Vimpelcom.
Vimpelcom owns several subsidiaries in Central Asia and the South Caucasus under its Beeline brand and allegations of corruption, much like those that have dogged TeliaSonera’s companies in the region, have gathered momentum over the past year.
Vimpelcom, which is headquartered in the Netherlands, has had a rough year losing about one third of its share value because of the worsening economic downturn in Russia and the general lack of profitability for telecoms companies across the Eurasian region.
Sigve Brekke, Telenor’s CEO, said the company was leaving the post- Soviet region to focus on its core operations in Europe but analysts said the real reason may well be the allegations of bribery levelled at the Vimpelcom subsidiary in Uzbekistan. Indra Overland, a research professor at the Norwegian Institute of International Affairs, said the corruption scandal involving Vimpelcom in Uzbekistan had damaged Telenor’s reputation.
“Telenor has been badly burned by its implication in the corruption scandal in Uzbekistan,” he said.
News that Telenor wants to quit Central Asia and the South Caucasus is another blow to the region’s reputation as a place for Western companies to do business.
Overshadowed by an increasingly gloomy economic outlook which has forced currencies to devalue and inflation to rise, Western companies in Central Asia also appear to have had enough of the region’s suspect corporate governance record.
An allegation of bribery emerged against Vimpelcom subsidiaries during investigations in the US, Sweden and in the Netherlands last year. Prosecutors said Vimpelcom had paid a bribe to gain access to Uzbek mobile licences, similar to a charge levied against TeliaSonera.
Telenor’s shares could go up for sale for approximately $2.4b and analysts said Vimpelcom’s main stake- holder Mikhail Fridman might seize the opportunity to consolidate his ownership. Daniel Johansson, an analyst at Fondsfinans, told Bloomberg: “There’s zero chance that it will be someone else completely unknown, like a Western investor.”
Vimpelcom has not commented on speculation it could buy Telenor’s stake in its businesses.
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 8 2015 (The Conway Bulletin) — BP said it had temporarily stopped planned maintenance work at one of its platforms operating in Azerbaijan’s Azeri-Chirag-Guneshli (ACG) offshore oil field. BP, which operates ACG and holds a 35.8% share in the consortium, had said that its planned maintenance work at the Chirag platform which would shut the platform for 20 days from Sept. 17. It is unclear if the maintenance work has been completed.
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 6 2015 (The Conway Bulletin) – Highlighting the close relations between Azerbaijan and Turkey, the head of the Turkish General Staff, Hulusi Akar, visited Baku. In Baku, General Akar met his Azerbaijani counterpart and, as expected, emphasised Turkey’s support for Azerbaijan’s position on Nagorno-Karabakh which it disputes with Armenia.
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 6 2015 (The Conway Bulletin) – Car imports to Azerbaijan halved in the first eight months of the year, the Azerbaijani statistics committee said. It said in Jan-Aug, Azerbaijan imported 21,147 cars, down from 39,198 in the same period in 2014. Azerbaijan’s currency has devalued this year and new regulations mean imported cars have to take a higher grade of petrol than previously, making it harder to import older cars.
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 5 2015 (The Conway Bulletin) – An Azerbaijani shipping company is ordering three passenger ferries to run a new route across the Caspian Sea, evidence that the Caspian is becoming an important transport route for people and goods. Media quoted Azerbaijan Caspian Shipping Company as saying that each ferry would carry 80 people.
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 8 2015 (The Conway Bulletin) — Oil flows through the Baku-Tbilisi- Ceyhan pipeline fell by 1% in the first nine months of 2015 compared to the same period last year, an unnamed source at Azerbaijan’s state-owned energy company SOCAR told Reuters. Oil output in Azerbaijan has been falling over the past few years.
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(News report from Issue No. 251, published on Oct. 9 2015)
OCT. 1 2015 (The Conway Bulletin) — In the past few months of tumbling oil prices, analysts have discussed Azerbaijan and Kazakhstan and debated whether they could keep oil production steady.
The PRIX index, a young and fully independent barometer of the 20 major oil exporting countries, forecasts a fall in oil exports in Q4 2015 for both Azerbaijan and Kazakhstan, a stark change after a positive forecast in Q3 2015.
PRIX’s methodology is simple, as it collects forecasts on oil exports from around 300 analysts around the world. It has rapidly gained credibility due to the volume of data it generates.
John Friedman, analytical advisor at PRIX, said: “We’re still in a bear market for oil.”
He noted that exporters do not yet want to give in and cut exports despite low oil prices.
Indra Overland, project director at PRIX, said the situation in Azerbaijan was particularly worrisome.
“Oil production in Azerbaijan is clearly falling. This is due to resource depletion, though one could also argue that it is indirectly due to the unattractive climate for exploration and investment,” Mr Overland said.
Importantly, the PRIX index also highlights the agreement, or lack thereof, between the surveyed analysts. It is interesting to note that disagreement among analysts covering Azerbaijan and Kazakhstan has risen significantly, as oil prices and export data keep falling.
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(News report from Issue No. 250, published on Oct. 2 2015)
