Tag Archives: business

Comment: Iran deal will give Central Asia an economic boost

JULY 23 2015 (The Conway Bulletin) – Many Central Asian countries have pledged their support for a deal between Iran and Western countries over its nuclear programme that will allow sanctions to be lifted. The positive feeling is mutual. In April 2015, Iran’s Foreign Minister noted that there is “no ceiling for the expansion of relations with regional countries, whether in the Caucasus or in Central Asia”.

Central Asia and Iran have already been cooperating for some time.

December 2014 saw Europe via Iran the inauguration of the new Iran-Turkmenistan-Kazakhstan railroad, linking Central Asia to Iran’s southern ports. Iran has oil swap deals with both countries.

Turkmenistan also has gas pipelines running to Iran and in 2010 Iran sent equipment to Tajikistan for the construction of the Sangtuda-2 hydro- power plant.

Increased formal, and more flexible, cooperation will certainly benefit Central Asia. Iran will give Central Asia greater access to Middle Eastern and European markets. The energy export potential is attractive, particularly given that last year Russia said it would stop buying Central Asian gas, and Turkmenistan recently accused Gazprom of failing to pay debts. Supplying Europe with gas via Iran may be more feasible for Turkmenistan. The opening up of Iran also provides another legitimate partner in the region to counterbalance Russian and Chinese dominance, as is a key aim of the region’s “multi-vector foreign policy”.

However, it will also produce new competition in the region. In August 2014, before any nuclear deal was signed, Iran announced it would no longer import gas from Turkmenistan, instead building up domestic production. Having been excluded from markets for so long, Iran will want to build up its own trade partners rather than act as a transit country for Central Asia. Moreover, more Iranian oil on the market may cause a drop in oil prices, impacting Kazakhstan at already difficult times.

One thing is certain — new transport and energy infrastructure will need to be built for any Iranian reintegration to take place. China will no doubt be looking with interest at the opportunities this presents.

By Sarah Lain, Research Fellow at the Royal United Services Institute in London

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(News report from Issue No. 241, published on July 23 2015)

Georgian parliament passes banking law

JULY 17 2015 (The Conway Bulletin) – Georgia’s parliament passed a final reading of a bill that strips supervision of the country’s commercial banking sector from the Central Bank. The World Bank had urged the government to drop the bill. President Giorgi Margvelashvili now has to sign the bill into law although he has said he may veto it.

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(News report from Issue No. 241, published on July 23 2015)

McDonald’s chooses Kazakh capital

JULY 17 2015 (The Conway Bulletin) – US fast food giant McDonalds will open its first store in Kazakhstan this year in Astana, media reported quoting city officials. Last year McDonalds said it had agreed a franchise deal with businessman Kairat Bornabayev.

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(News report from Issue No. 241, published on July 23 2015)

Georgian electricity price rises approved

TBILISI, JULY 22 2015 (The Conway Bulletin) — Georgian state regulators approved a price increase for electricity, a rise that will irritate consumers and also the power companies who said the rise was not enough to cover the cost of production.

Electricity prices have become a major political issue across Central Asia and the South Caucasus because falling local currencies have forced up the cost of imports needed to fuel power stations.

In Armenia, thousands of people have protested for weeks about a sharp increase in electricity prices.

Perhaps mindful of the political fallout, Georgia’s regulators tried to limit price increases. The price rises appear to vary enormously between 2% and 30% depending on consumers’ overall annual use.

Zurab Gelenidze, CFO of Georgian Industrial Group, said the price rises were not enough. “The sustainability of the entire system will become questionable,” he told media.

Also reacting to the price rises, PM Irakli Garibashvili said the government would give out subsidies to some lower income families.

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(News report from Issue No. 241, published on July 23 2015)

Kazakh airline makes profit

JULY 23 2015 (The Conway Bulletin) – Air Astana, the Kazakh airline part-owned by Kazakhstan’s sovereign wealth fund Samruk Kazyna and BAE Systems, said that profit was $8.3m in the first half of the year compared to a $36.5m loss in the same period in 2014. The main driver of the increased profit was the cheaper price of jet fuel.

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(News report from Issue No. 241, published on July 23 2015)

Uzbekistan plans to build new car plant

JULY 20 2015 (The Conway Bulletin) – General Motor’s subsidiary, GM Uzbekistan, and Uzavtosanoat said they will build a second car plant in Uzbekistan, according to Ruslan Batyrov, head of media at Uzavtosanoat. The two companies already own a car plant near Andijan, eastern Uzbekistan.

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(News report from Issue No. 241, published on July 23 2015)

Georgians learn to love their US fast food

TBILISI/Georgia, JULY 23 2015 (The Conway Bulletin) — US fast-food chain Wendy’s has just opened its sixth restaurant in Georgia, Dunkin’ Donuts its eighth. Despite a general economic downturn, the fast-food scene in Georgia has exploded over the past year or so.

The lone McDonald’s in central Tbilisi had since the 1990s been the only US fast-food restaurant in the country. Now locals can choose between Wendy’s, Dunkin’ Donuts, Burger King, KFC, Subway and Domino’s Pizza.

And Georgians, whose culture hinges around long meals with friends and family, have turned the fast-food sector into a social scene of their own.

The fast food restaurants in Tbilisi are often filled with women dressed in high heels and their best dresses, men in buttoned-up shirts, young children in their Sunday clothes and teenagers sporting the latest fashion.

“We come here every Saturday,” Nitsa, 13, said as she started to tuck into her burger at a Wendy’s restaurant in central Tbilisi. “We like the food a lot, but we also just love to sit here and talk for hours.”

Families come for a day out and young couples for a romantic dinner. Most are also looking for a change from Georgian food.

Tamuna Mosidze, who was pregnant, had another reason for choosing to eat in one of McDonald’s fast-food restaurants.

“It’s the best service in town and you know the ingredients are quality,” she said.

And the US fast-food restaurants appear to have noticed this distinctive Georgian feel about their restaurants.

Sophie Chogovadze, head Marketing Wendy’s and Dunkin Donuts, said: “We wanted to make it about the experience, to make it more than just tasty food.”

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(News report from Issue No. 241, published on July 23 2015)

Turkmen minister visits Afghanistan

JULY 23 2015 (The Conway Bulletin) – Turkmenistan’s foreign minister Rashid Meredov will travel to Afghanistan for talks with his Uzbek counterpart, media reported. Turkmenistan has become increasingly worried about the build up of Taliban forces on its borders. It also has an interest in stability in Afghanistan because of the proposed TAPI pipeline that will pump gas to Pakistan and India.

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(News report from Issue No. 241, published on July 23 2015)

Turkmen port receives investment from Japan

JULY 22 2015 (The Conway Bulletin) – Japanese officials said they want to invest in the Caspian port of Turkmenbashi on the western shores of Turkmenistan. The port is currently being expanded and could become a major hub.

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(News report from Issue No. 241, published on July 23 2015)

Turkmenistan hopes to finish East-West pipeline

JULY 23 2015 (The Conway Bulletin) – Turkmenistan hopes to complete construction of is 300km East- West gas pipeline by the end of the year, local media reported quoting government officials. The pipeline is important because it will pump gas from Turkmenistan’s fields in the east to the Caspian Sea for shipment to Europe.

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(News report from Issue No. 241, published on July 23 2015)