Tag Archives: economy

Azerbaijan closes state enterprises

>>Pres. Aliyev cuts more government spending>>

FEB. 11 2015 (The Conway Bulletin) — Azerbaijani president Ilham Aliyev closed four state bodies in an effort to cut back on government expenses.

Although government officials avoided justifying the disbandment of the state-run companies Bakielektrikshabaka and Azerenerji, which were tasked with generating electricity in Baku and the regions, as well as the State Land and Cartography Committee and Baku Taxes Department, analysts said that cost-cutting was the clear motivator.

“I can’t recall four state bodies being terminated in one week until now,” an Azerbaijani analyst who wanted to keep his identity a secret, told The Bulletin.

“This is definitely about the oil price drop. The government should have done this before. It kept those bodies because of the easy oil money. Now the money is gone, they have had to disband these bodies.”

Ratings agencies have downgraded Azerbaijan’s sovereign debt rating and Mr Aliyev has also talked about reducing government expenditure. Last month it cancelled a multi-million dollar project to extend internet services to rural parts of the country.

Azerbaijan is reliant on energy to generate its income. BP, its biggest foreign investor, has already laid off 8% of its total workforce in Azerbaijan because of the slip in global prices. Oil has halved in value over the last seven months.

Mirvari Gahramanli, an Azerbaijani oil workers’ rights defender, told a local radio programme that the situation was likely to worsen.

“As oil prices go down, we expect more job cut in oil companies. Also, these people will have less chance to find new job places,” she said.
ENDS

(News report from Issue No. 218, published on Feb. 11 2015)

TAPI contractor

FEB. 10 2015 (The Conway Bulletin) — Turkmen officials are due to meet in Islamabad with counterparts from Pakistan, India and Afghanistan to decide on the contractor to build the TAPI pipeline, media reported. Sources said the leading candidate to build the pipeline to pump Turkmen gas to Asia is Total.
ENDS

(News report from Issue No. 218, published on Feb. 11 2015)

S&P downgrades SOCAR

FEB. 9 2015 (The Conway Bulletin) — The ratings agency Standard & Poor’s downgraded the Azerbaijani state energy company SOCAR to a negative outlook from stable because of the decline in global energy prices, Reuters reported. Standard & Poor’s downgraded Azerbaijan’s sovereign rating last month.
ENDS

(News report from Issue No. 218, published on Feb. 11 2015)

Pavlodar warns of Russian imports

>>Rouble devaluation makes Russian goods cheap>>

FEB. 6 2015 (The Conway Bulletin) — Local authorities in Kazakhstan said they are worried about cheap goods from Russia flooding its northern markets. The rouble has halved in value, making goods from Russia cheap for Kazakhstanis.

Duisenbai Turganov, vice-governor of the Pavlodar province, directed his concerns to Kazakh deputy PM, Bakhytzhan Sagintayev.

He said Russian goods flooding the Kazakh market could be classified as a dumping practice.

“Prices of Russian competitors are 30-60% lower than Kazakh suppliers can offer. This has a negative impact on the activities of the local industrial enterprises,” the tengrinews.kz website quoted him as saying.

The row piles more pressure on to the Eurasian Economic Union which has become tainted by commercial wars among the members. Belarus and Armenia are also members.

And we’ve seen this issue before. Since December, Kazakhs are crossing the border to buy cheap goods in Russia. Although quantities may be risible for Moscow, on the other side of the fence, buying Russian goods makes a difference for Kazakhs.

From cars, to poultry, to petroleum products, the large-scale entry of cheap goods from the north into Kazakhstan creates an imbalance in the Kazakh economy and puts local factories under stress.

The governor in Pavlodar may be talking peanuts to Russia, but these are vital components of the socio-economic makeup of the northern regions of Kazakhstan.
ENDS

(News report from Issue No. 218, published on Feb. 11 2015)

Kyrgyzstan and the EEU

FEB. 6 2015 (The Conway Bulletin) — Viktor Khristenko, chairman of the Kremlin-lead Eurasian Economic Union, said the final barriers to Kyrgyzstan’s entry to the group had been removed. He was talking to press after a meeting of the Eurasian Economic Union. Kyrgyzstan aims to join the EEU, which includes Belarus, Kazakhstan and Armenia, later this year.
ENDS

(News report from Issue No. 218, published on Feb. 11 2015)

Armenia raises interest rates, again

>>Inflation and Russian rouble devaluation are pressuring Armenian Central Bank>>

FEB. 10 2015 (The Conway Bulletin) — Armenia’s Central Bank increased its key interest rate to 10.5% from 9.5%, the third rate rise since December, because of rising inflation.

Data from the Central Bank showed that annualised inflation hit 4.3% in January which is at the top end of the government’s target range.

Central Banks across Central Asia and the South Caucasus have steadily been increasing interest rates to keep pace with Russian monetary moves. Russia is trying to defend its currency against both falling oil prices and the impact of sanctions.

Armenia’s economy is particularly tied into Russia’s economy. At the beginning of the year, Armenia also joined the Kremlin-lead Eurasian Economic Union which many see as a Moscow inspired political union.

Inflation in Russia has hit around 12% and is still rising. Economists said this would undoubtedly push the price of goods in Armenia up too.

Before the Central Bank raised interest rates in December, the Armenia’s interest rate had stood at 6.75%.
ENDS

(News report from Issue No. 218, published on Feb. 11 2015)

Kazakh gold/FX reserves increase

FEB. 6 2015 (The Conway Bulletin) — Kazakhstan’s net gold and foreign currency reserves increased to $28.2b in January from $28b in December and $24b from a year earlier, highlighting its ability to fight downward pressure on its tenge currency. Kazakhs worry about another devaluation.
ENDS

(News report from Issue No. 218, published on Feb. 11 2015)

EBRD AGM heading to Georgia

FEB. 10 2015 (The Conway Bulletin) — The European Bank for Reconstruction and Development has agreed to hold its AGM in Tbilisi in 2015. This will be the EBRD’s 24th AGM and the first to be held in the South Caucasus. For Georgia, the EBRD’s AGM gives it an opportunity to showcase Tbilisi.
ENDS

(News report from Issue No. 218, published on Feb. 11 2015)

Kazakhs protest against falling tenge

FEB. 9 2015 (The Conway Bulletin) — A handful of residents in Almaty staged another protest against the falling value of the Kazakh tenge. According to a Radio Free Europe report the protesters said they had taken out mortgages when $1 equalled 107 tenge. Now $1 equalled 186 tenge. Protests are rare in Kazakhstan but pressure on the tenge has angered people.
ENDS

(News report from Issue No. 218, published on Feb. 11 2015)

Georgia cuts growth rate

>>Russian woes continue to weigh on South Caucasus region>>

FEB. 6 2015 (The Conway Bulletin) — Georgia became the latest country in the South Caucasus/Central Asia region to downgrade its economic forecast for this year.

Finance minister Nodar Khaduri said growth would measure 4% in 2015, down from an earlier prediction of 5%.
Like its neighbours, the slowdown in Russia’s economy is also impacting on Georgia.

“Economic growth in Armenia and Moldova this year was zero percent. A drop is expected in economic growth in Ukraine and Russia due to well-known reasons,” media quoted him as saying.

Georgia’s economy is slightly better sheltered from the economic storm swirling around Russia. The depressed state of the Russian economy has hit Armenia hard and the fall in the price of oil has dented Azerbaijan’s economy.

Georgia, though, is not reliant on either the Russian economy nor on oil prices. That said, both still filter through and impact Georgia.

The Georgian Central Bank has already said it will likely raise interest rates later this month to try and combat the falling value of its lari currency.

“Considering the challenges in the economy today and analysing the numbers and data it is necessary that we start to revise the 5% growth prognosis and plan macroeconomic and fiscal indicators from the beginning so they adequately reflect the economic policy, and respond to these challenges,”” Mr Khaduri said.
ENDS

(News report from Issue No. 218, published on Feb. 11 2015)