Tag Archives: business

Healthcare revolution in Georgia spurs private business boom

TBILISI, MAY 12 2017 (The Conway Bulletin) — While success and failure in Georgia’s acrimonious political arena are fragile, support for the Georgian Dream’s Universal Healthcare system has been consistently high.

Introduced in 2013, its advocates say that it has increased people’s access to healthcare and also given private companies such as Georgian Healthcare Group a huge boost.

In a survey by the International Republican Institute, 19% of respondents said that reforming the health service was the best thing that the government has done since winning power in 2012. The next most popular answer was achieving visa-free access to the EU, identified as important by 4% of respondents.

What the Georgian Dream government did was simple, said George Gotsadze, director of the Curatio International Foundation. He explained that it created a state- funded healthcare system that replaced an insurance-based system that only half the population had opted into.

“Prior to 2013, with public financing healthcare coverage was provided for 1.6m people out of 3.7m. The Universal Health Programme pretty much-expanded coverage to all the population of Georgia,” he said.

The government has also, effectively, cut out the middlemen insurers. It picks up the bills and pays the hospitals, run by private companies such as Georgian Healthcare Group, directly. In 2018, the Georgian government is expected to spend 3.1b lari on healthcare, up from 2.1b lari in 2015.

Most Georgians have seen a jump in the quality of their healthcare.

Teona, a Tbilisi resident gave birth to a premature child when she was six months pregnant. She said that she had incurred almost no expenses.

“My daughter was in an incubator for a long time. All I had to do was to bring diapers [nappies],” she said.

And this strategy has also spurred a major boom for business. Since 2013, Georgian Healthcare Group has expanded rapidly and now operates 35 hospitals. Spun off by Bank of Georgia, it listed on the London Stock Exchange in November 2015. Its shares have risen from 170p to 370p.

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(News report from Issue No. 328, published on May 12 2017)

Trade boosts between Kazakhstan and Uzbekistan

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APRIL 29 2017 (The Conway Bulletin) — Bilateral trade between Kazakhstan and Uzbekistan has increased by 37% already, Kazakh president Nursultan Nazarbayev said at a meeting with Uzbek president Shavkat Mirziyoyev in the south of the country. He was comparing the first three months of this year to the same period in 2016. Mr Mirziyoyev has made improving relations with Uzbekistan’s neighbours one of his main policy initiatives since taking over in September last year.

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(News report from Issue No. 327, published on May 5 2017)

Kazakhstan wants to act as OPEC of uranium

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MAY 2 2017 (The Conway Bulletin) — Kazakhstan wants to act as the OPEC of the uranium world, manipulating prices with its supply- side dominance, Samruk Kazyna director Berik Beisengaliyev said in an interview with Bloomberg News. Samruk Kazyna is the Kazakh sovereign wealth fund which owns 100% of nuclear agency Kazatomprom. Kazatomprom mines 40% of the world’s uranium. Earlier this year it said it would cut output, sending depressed uranium prices up.

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(News report from Issue No. 327, published on May 5 2017)

Georgia raises minimum capital requirements for banks

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TBILISI, MAY 5 2017 (The Conway Bulletin) — Georgia’s Central Bank will quadruple the minimum capital requirement that commercial banks have to hold to 50m lari ($20.5m), part of drive to reduce the number of small, weak banks in its financial system.

Acting on a recommendation from the IMF, the Georgian Central Bank said that commercial banks would need to hold capital of 30m lari by the end of the year, 40m lari by mid-2018 and 50m lari by the end of 2018. Currently the minimum capital requirement for a bank in Georgia is just $12.5m lari.

“It should be noted that in terms of minimum capital requirement Georgia has one of the lowest in the world, not in line with the financial sector’s development,” it said in a statement.

“The change was supported by the International Monetary Fund’s mission.”

Georgia and the rest of the Central Asia and South Caucasus region have been battling an economic downturn over the past three years that has eaten into the value of their currencies, undermined mortgage holders and companies holding large debt and bankrupted, or nearly bankrupted, a number of banks.

In Tajikistan only a government bail-out prevented a banking collapse; in Azerbaijan several small banks have been forced to close and the government has bought a majority stake in International Bank of Azerbaijan, the country’s biggest bank; in Kazakhstan the government has set up a bad loan fund for banks to dip into for support.

Georgia’s economy has survived the downturn in better shape than its neighbours – the lari proved more robust than the manat, which halved in value, but it still shook the banking sector. There are 17 banks operating in Georgia, the Central Bank said, roughly the same as 10 years ago. In 1995, there were 102 banks.

The two biggest, TBC and Bank of Georgia, are listed on the London Stock Exchange but many of the others are small, a legacy of the post- Soviet banking boom in the 1990s.

Last month the IMF approved a $285.3m loan on the understanding that Georgia would continue a series of economic reforms, including strengthening its banking sector.

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(News report from Issue No. 327, published on May 5 2017)

Kazakhstan expects $180m from Kashagan

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APRIL 28 2017 (The Conway Bulletin) — Kazakhstan’s sovereign wealth fund Samruk Kazyna and its state-run energy company Kazmunaigas will receive $180m from the Kashagan oil project in 2017, media reported, quoting Dauren Karabayev, a vice president at Kazmunaigas. The Kazakh economy has been flatlining since mid-2014 when oil prices collapsed. Kashagan, in the Caspian Sea, finally came onstream at the end of last year after a delay of three years.

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(News report from Issue No. 327, published on May 5 2017)

KAZ Minerals CFO to take over as CEO

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APRIL 28 2017 (The Conway Bulletin) — KAZ Minerals, the Kazakhstan- focused copper produced listed on the London Stock Exchange, said that its current CFO Andrew Southam would be promoted to CEO from Jan. 2018. He replaces Oleg Novachuk who has been CEO for 11 years and is set to become the KAZ Minerals chairman.

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(News report from Issue No. 327, published on May 5 2017)

EBRD says may still lend to Azerbaijan despite EITI row

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MAY 4 2017 (The Conway Bulletin) — The European Bank for Reconstruction and Development (EBRD) may still lend Azerbaijan $500m for a gas pipeline linking the Caspian Sea to Europe despite Baku quitting the EITI, a global transparency watchdog.

The comments by EBRD chairman Suma Chakrabarti go against an EBRD statement last year which said Azerbaijan would have to pass the EITI’s transparency criteria to receiving funding. The EITI suspended Azerbaijan’s membership in March for failing to improve NGO laws, triggering Azerbaijani officials to walk out of the organisation.

Now, in an interview with Bloomberg, Mr Chakrabarti appeared to suggest that mission creep may be blurring the Oslo-based EITI’s remit.

“What’s happened on the EITI is very, very unfortunate,” Bloomberg quoted Mr Chakrabarti as saying. He then said that people were “worried about some of the criteria that are now being used in EITI”.

Azerbaijani officials complained that the EITI, an acronym for Extractive Industry Transparency Initiative, had drifted from its remit of improving accountability in mining and oil and gas sectors and was now acting as a watchdog on more general democracy issues.

In his Bloomberg interview, Mr Chakrabarti said that the EBRD is “progressing” its finance plans for the Southern Gas Corridor and will give a final decision by the end of 2017.

“The question really is whether the Azeris are adopting the principles, not just by saying they are but by showing transparency in what they do,” he said.

“That’s a judgment we’ll make.”

The $40b Southern Gas Corridor is a network of pipelines that should pump Azerbaijani gas from the Caspian Sea to Europe, reducing its reliance on Russia. It has political backing from the EU and business backing from BP and other multinational but corruption and human rights activists are critical of Azerbaijan and have said that Western companies and governments should not be dealing with it.

At the EITI, the head of its secretariat, Jonas Moberg, told The Conway Bulletin that Mr Chakrabarti’s interview hadn’t undermined its core mission of increasing accountability within the extractive sectors.

“Civil society needs to be able to hold their governments to account if the EITI is going to have a meaningful impact on how the oil sector is governed in a country,” he said.

Kazakhstan, Armenian, Kyrgyzstan and Tajikistan are also members of the EITI. The EITI criticised Tajikistan and Kyrgyzstan this year for making inadequate progress against its criteria.

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(News report from Issue No. 327, published on May 5 2017)

Air China to fly to Kazakh capital

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APRIL 27 2017 (The Conway Bulletin) — Air China said that it will start operating a direct flight between Beijing and Astana from June 1, highlighting the growth in the number of airlines flying directly to Kazakhstan. The route will help strengthen links between China and Kazakhstan. Air Astana already flies an Astana – Beijing service. Astana Airport is opening new passenger terminal too next month which will be able to process more passengers.

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(News report from Issue No. 327, published on May 5 2017)

Uzbekistan starts building oil refinery

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APRIL 27 2017 (The Conway Bulletin) — Uzbekistan started construction of a $2.2b oil refinery near the border with Kazakhstan, a project that will boost jobs and should also plug a yawning fuel supply gap.

The Jizzakh refinery will be Uzbekistan’s fourth and will produce more than 3.7m tonnes of gasoline, more than 700,000 tonnes of jet fuel and about 300,000 tonnes of other oil products annually, according to officials.

It will receive unrefined oil through a yet-to-be-built pipeline from Kazakhstan, helping to cement improving bilateral relations.

The refinery is the most high- profile project initiated under President Shavkat Mirziyoyev, Uzbek leader since September last year. He has made boosting jobs and improving bilateral relations with Uzbekistan’s neighbours his core policy initiatives.

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(News report from Issue No. 327, published on May 5 2017)

UzGazOil workers complain about salaries

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MAY 3 2017 (The Conway Bulletin) — Employees at Uzbekistan’s state- owned UzGasOil network of petrol stations have not been paid their salaries, the Radio Free Europe/Radio Liberty website reported. It said that in a rare show of worker defiance in Uzbekistan, the UzGasOil employees had complained directly to the management about their unpaid salaries. RFE/RL quoted one worker saying that he was owed about $125 for two months work. RFE/RL contacted UzGasOil, rebranded from Uzbekneftegaz this year, who denied that there was a problem. In Uzbekistan, protests by workers against company management are virtually unheard of.

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(News report from Issue No. 327, published on May 5 2017)