FEB. 4 2016 (The Conway Bulletin) — Hungarian low-cost airline company Wizz Air said it will open an operational base at Kutaisi airport in central Georgia. This will be Wizz Air’s first base in the South Caucasus. Wizz Air intends to use Kutaisi as its hub for new regional destinations.
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(News report from Issue No. 266, published on Feb. 5 2016)
FEB. 2 2016 (The Conway Bulletin) – Around 50 mortgage holders protested in Almaty because they said it was not possible to repay their debt after a devaluation of the tenge. This was the third protest by mortgage holders against banks this year, a rare sustained level of public discontent in Kazakhstan. The tenge has lost around 50% of its value. Last year, the Kazakh government gave banks $130m to refinance mortgages but protesters have said that more needs to be done. Analysts have said that one of the biggest issues the Kazakh government faces is growing consumer debt.
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(News report from Issue No. 266, published on Feb. 5 2016)
FEB. 5 2016 (The Conway Bulletin) – Iran is emerging from its economic exile with force and its impact is being felt across Central Asia and the South Caucasus.
The new petrol export deal with Tajikistan, together with recent deals with Kazakhstan’s Air Astana and the negotiations with Armenia and Georgia over gas supplies, is a testimony of the importance that countries in the region give to Iran as a trade partner.
Iran is still a net importer of gasoline but it is now close to opening a new 18m tonnes refinery on the Persian Gulf coast, which officials say “will change the gasoline balance in Iran” and could possibly turn the country into a net exporter.
For countries like Tajikistan this is good news as it means that Iran could become a supplier of oil for both Central Asia and the South Caucasus.
Tajikistan has previously bought all its refined petrol from Russia. With Iran’s re-emergence onto the scene this over-reliance on its former colonial master is reduced, giving Tajikistan a genuine choice on where to buys its petrol.
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(Editorial from Issue No. 266, published on Feb. 5 2016)
FEB. 2 2016 (The Conway Bulletin) — Azerbaijan’s Central Bank revoked the licence of Texnikabank, one of the country’s largest lenders, and handed back a licence to NBCBank after it said it was looking at a possible merger with a bigger rival.
The moves are part of a wider plan by the Azerbaijani Central Bank to tighten and strengthen Azerbaijan’s commercial banking sector.
The Central Bank said Texnikabank, one of Azerbaijan’s 10 largest banks by assets, did not comply with the minimum capital requirement of 50m manat ($31.3) and the capital adequacy ratio. Texnikabank became the seventh bank in Azerbaijan to lose its licence in the past few weeks.
It later handed NBCBank back its licence after it said that it had entered into negotiations with KredoBank and ParaBank about a possible merger.
Another commercial bank, Caucasus Development Bank, said it intends to merge with Gunay Bank and Atrabank.
Azerbaijan is trying to deal with the fallout from a sharp drop in the price of oil, its main export. This has hit its economy and its currency, the manat, putting increasing pressure on the banking sector.
There are currently 37 commercial banks operating in Azerbaijan.
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(News report from Issue No. 266, published on Feb. 5 2016)
FEB. 4 2016 (The Conway Bulletin) — Pakistani firm Grange Power agreed a deal with Armenia over the construction of a 234 MW gas-fired power station near Vanadzor in northern Armenia.
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(News report from Issue No. 266, published on Feb. 5 2016)
ALMATY, FEB. 1 2016 (The Conway Bulletin) — ArcelorMittal’s steel factory in Kazakhstan scrapped plans to raise workers’ salaries in June because of worries about continued weak market conditions for its products.
In January, ArcelorMittal increased salaries for its 14,000 workers at its steel plant in Temirtau, central Kazakhstan, by 6.8% and had promised another pay rise of 6.8% six months later, but in a letter to employees Vijay Mahadevan, the factory’s CEO, said that this was not now going to happen.
“Unfortunately, we have not fulfilled our plans for 2015, and therefore will not be able to pay the remainder of the wage increase this year,” he said.
“I know that this news will disappoint you, but no-one would benefit from a salary increase which will only put additional pressure on our company.”
A 50% drop in the value of the tenge and rise in inflation has hit workers’ real wages in Kazakhstan and forced many employers to raise salaries.
ArcelorMittal Temirtau is one of the biggest employers in Kazakhstan. It has had, though, tempestuous relations with its workers over salaries in the past few years and had to make thousands of staff redundant. The factory has added symbolic importance as President Nursultan Nazarbayev worked there before moving into politics.
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(News report from Issue No. 266, published on Feb. 5 2016)
FEB. 2 2016 (The Conway Bulletin) – Alik Aidarbayev, head of the Mangistau region of western Kazakhstan, said that only China has expressed serious interest in paying for the construction of a new oil refinery. The Mangistau region has been working on plans to build Kazakhstan’s fourth refinery for years. Mr Aidarbayev’s comments are important because they show both the financial power of China and the relative weakness of Russia. Kazakhstan has been looking to boost its refinery capacity for some time. It currently has three refineries.
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(News report from Issue No. 266, published on Feb. 5 2016)
FEB. 4 2016 (The Conway Bulletin) – IMF representatives met with Tajik government officials in Dushanbe to draw up funding plans for the $2b Rogun hydropower plant. The IMF has said that the World Bank-backed Rogun project, strengthening its banking sector and diversifying the economy are priorities for Tajikistan. Down- stream Uzbekistan has lobbied hard against the Rogun dam.
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(News report from Issue No. 266, published on Feb. 5 2016)
FEB. 2 2016 (The Conway Bulletin) — US oil company ExxonMobil said that it still thinks the giant Kashagan oil field in the Kazakh sector of the Caspian Sea will re-start production by the end of the year. ExxonMobil also said Kashagan will be one of its four key start-up projects for 2016. Other estimates forecast that repairs to essential pipeline infrastructure could drag on until 2017. ExxonMobil owns 16.81% in the international venture that operates Kashagan.
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(News report from Issue No. 266, published on Feb. 5 2016)
FEB. 3 2016 (The Conway Bulletin) — British Virgin Island-registered Chaarat Gold completed a feasibility study for a gold mine it is exploring in north-west Kyrgyzstan. The mine is Chaarat’s only asset. Dekel Golan, Chaarat’s CEO, said in an interview that the study revealed low production costs (around $650/troy ounce, including the government tax), which means the company will go ahead with the project.
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(News report from Issue No. 266, published on Feb. 5 2016)
