Tag Archives: economy

Azerbaijan raises fuel prices

>>People in Baku worry that fuel price rises may also accelerate inflation>>

JAN. 12 2015 (The Conway Bulletin) — Oil prices may be falling on the world market but in Azerbaijan the cost of filling your car with either petrol or diesel has actually increased.

The government announced that it was putting the price of fuel up by 0.02 manat to 0.7 manat ($0.9) for a litre of petrol and 0.62 manat for diesel.

This sounds like a marginal increase only but, given the 50% drop in oil prices, actually represents a sharp rise.

Independent observers say that this is another attempt to fill the state budget, so dependent on oil revenue, with cash.

The government, though, has said the price increase was due to the inclusion of a road tax on oil products produced in Azerbaijan for domestic consumption, as well as imported from abroad.

In a suburb of Baku, 52-year-old taxi driver Ahmed Huseynov was waiting for customers at a taxi rank. It was a damp, dreary afternoon. The roads and rooftops were sodden and slippery after the first snows of the year.

“Every day we hear on the news that oil prices are decreasing which logically should have led to a decrease in fuel prices too,” he said. “I don’t understand the government’s decision.”

Azad Gayibov, 38, a school teacher and father of two, said the fuel price increases will mean careful budget planning for his family. “It does not mean an increase in fuel prices only, but also a deterioration in the entire economy.”

ENDS

(News report from Issue No. 214, published on Jan. 14 2015)

Markets: Inflation worries Central Asia and South Caucasus countries

JAN. 8 2016 (The Conway Bulletin) — Currency woes in 2015 quickly translated into inflation across the South Caucasus and Central Asia.

Kazakhstan can be singled out as the worst performer in this department as inflation grew by a staggering 13.6% in 2015.

It was only in November that the minister of economy Yerbolat Dossayev said inflation wouldn’t surpass 10% in 2015. He was clearly wrong.

Interestingly, food prices grew significantly in Kazakhstan (+10.9%), while in Kyrgyzstan it was precisely food items that kept inflation from going too high.

Kyrgyzstan’s 11-month inflation in 2015 was 6.8% overall, but food prices decreased by 4.8% (Jan. 5).

Geostat, the Georgian statistics service, said annual inflation amounted to 4.9% in December, a 0.6% deflation compared to the previous month driven by lower transport and fuel prices, another impact of low oil prices.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Armenia increases interest rates

>>Russian rate rise triggers Armenian reaction>>

DEC. 23 2014, (The Conway Bulletin) — Armenia’s Central Bank raised its key interest rate to 8.5% from 6.75%, a move widely interpreted as an attempt to keep up with its Russian counterpart.

Inflation in Armenia is creeping up, mainly because of anticipated price pressure triggered by joining the
Kremlin-led Eurasian Economic Union which ties the Armenian economy even more closely into the Russian economy.

In November Armenia’s annualised inflation was 2.6% up from 2.2% in October and economists have said that this trend is likely to accelerate.

But the Russian Central Bank’s defence of its rouble currency is also giving its allies a headache.

In mid-December to stop a run on the rouble, the Russian Central Bank raised interest rates overnight to 17% from 10.5%. This has forced its closest allies to follow.

Armenia is in a tight spot.

It is so reliant on Russia that it has become a virtual satellite state, and more so after it signed a deal to enter the Eurasian Economic Union.

Adapting to the Kremlin’s Eurasian Economic Union and the impact of this political-economic move will dominate Armenia in 2015.

ENDS

(News report from Issue No. 213, published on Jan. 7 2015)

Turkmenistan devalues the manat

JAN. 1 2015, (The Conway Bulletin) — Turkmenistan devalued its currency by 19% overnight to try and counter a slump in oil prices.

This was the first manat devaluation in seven years, underlining just how heavily former Soviet states have been hit by the drop in the price of oil and subsequent drop in the value of the Russian rouble.

Bloomberg News quoted data from the Turkmen Central Bank that showed the manat trading at 3.5 to the dollar, a drop from 2.85.

Oil prices are now around $50/barrel, half the price they were trading for earlier in 2014.

Turkmenistan’s economy has boomed over the past few years thanks mainly to gas sales. The price of gas is closely linked to the price of oil. Its main client is China but Europe has also been looking to woo Turkmenistan and so have states in the Gulf and the Indian Subcontinent.

The problem for Turkmenistan is most of its gas contracts are pegged to global markets.

Turkmen president Kurbanguly Berdymukhamedov promised plenty of new major infrastructure projects in 2015.

With falling revenues from oil and gas sales, these may now be at risk.

ENDS

(News report from Issue No. 213, published on Jan. 7 2015)

Armenia joins the Eurasian Economic Union

JAN. 1 2015, (The Conway Bulletin) — After a year long build up, Armenia joined the Russia-led Eurasian Economic Union (EaEU). The EaEU also includes Kazakhstan and Belarus. Kyrgyzstan will join in May. Critics of the project have said that it is a Kremlin power grab.

ENDS

(News report from Issue No. 213, published on Jan. 7 2015)

Inflation climbs in Tajikistan

>>Central Bank has already increased interest rates this year>>

DEC. 29 2014, (The Conway Bulletin) — Inflation in Tajikistan jumped to over 7% in 2014, the Central Bank said, around double the rate in 2013.

The final figures for the year are not yet out but the Central Bank said annualised inflation up to the end of November had been 6.8% and that this would creep up again when December’s data was analysed.

Tajikistan raised its interest rates in October to 6.9%, its highest level since 2012, up from 4.8% earlier in the year, to try and steady its economy against rising inflation.

With remittances from Russia, which contribute to around 50% of GDP, dropping because of a slowdown in the Russian economy, Tajikistan is facing up to an increasingly tough time.

News that inflation is rising just adds to the headache.

ENDS

(News report from Issue No. 213, published on Jan. 7 2015)

Azerbaijan to increase grain reserves

JAN. 5 2015, (The Conway Bulletin) — Azerbaijan has said that it will increase by 50% the size of its grain reserves, media reported. Azerbaijan wants to hedge against grain harvest fluctuations by increasing its stored supply to 750,000 tonnes from 500,000 tonnes. Its intervention will push up grain prices.

ENDS

(News report from Issue No. 213, published on Jan. 7 2015)

Book review: Central Asia’s golden age

JAN. 7 2015, MONTREAL (The Conway Bulletin) — Readers looking for an accessible overview of one of the world’s most advanced societies 1,000 years ago, and also a peak at Central Asia’s glory days, should reach for Frederick Starr’s ‘Lost Enlightenment: Central Asia’s Golden Age from the Arab Conquest to Tamerlane’.

The author, an academic based at Johns Hopkins’ School of Advanced International Studies in Washington DC,
takes the reader back to the world of flourishing Silk Road, long before the Russian tsarist armies arrived to colonise the “untamed” steppes and impose rule from Moscow. Starr focuses on the years 800 through to 1100, painting a milieu where education, philosophy and critical thought were highly valued and scholars were revered. The book takes readers right up to the ascension of the Mongols in Central Asia.

Starr is strongest when he describes the conditions that allowed trade to blossom in this period. He describes how Samanid rulers, operating around their capital of Samarkand, took care to limit taxes on locals, understanding that the ultimate success of their state and society rested on the continuing prosperity of traders and producers.

The strength of local mining, which yielded refined tin, lead, copper and other metals, also buttressed the local economy, Starr explains, which then allowed the Samanids to create an export-based economy.

The details in this book gives the reader the opportunity to fully grasp the intellectual activity of the age, and appreciate why orthodoxy — philosophical, religious, or otherwise — failed to take route in most
of the region.

>>’Lost Enlightenment: Central Asia’s Golden Age from the Arab Conquest to Tamerlane.’ 680 pages, Princeton University Press (13 Oct. 2013)

ENDS

(News report from Issue No. 213, published on Jan. 7 2015)

Kyrgyzstan to join Eurasian Economic Union

>>Membership to become political ahead of elections>>

DEC. 23 2014, (The Conway Bulletin) — Kyrgyzstan signed a deal that will make it the fifth member of the Eurasian Economic Union (EaEU) in May.

At a meeting in Moscow, Russian President Vladimir Putin said the union, which from Jan. 1 includes Belarus, Kazakhstan and Armenia as well as Russia, would benefit from Kyrgyzstan’s membership.

“All the participants of this integration process are already experiencing its real benefits,” media quoted Mr Putin as saying.

“We are convinced that Armenia and Kyrgyzstan’s membership in the Eurasian [Economic] Union meets the key national interests of both countries.”

Many analysts, though, and people on the streets of Bishkek questioned whether there would be any real economic benefit. Instead, they said that Kyrgyzstan had joined the Eurasian Economic Union for political rather than economic reasons.

Kyrgyzstan is, largely reliant on Russia for economic and military support, but its membership of the Eurasian Economic Union is likely to become a political issue later this year in the run up to its parliamentary election, scheduled for October.

In an interview with Russian state-linked newspaper Rossiskaya Gazeta before the official signing ceremony, Kyrgyz president Almazbek Atambayev waived aside concern.

“When making decisions, we guide solely by economic expediency,” he said.

“This step will revive our industry, strengthen security, open borders with neighbouring countries, improve the standard of living of the people. Entry into this union opens up new opportunities for economic development.”

ENDS

(News report from Issue No. 213, published on Jan. 7 2015)

Russia econ problems hit Georgia

DEC. 18 2014, (The Conway Bulletin) — In an interview with Reuters, Georgian PM Georgy Margvelashvili said
that the downturn in the Russian economy had hit Georgia’s alcohol and water exports hardest. Russia allowed imports of water and wine from Georgia last year after a ban in 2006.

ENDS

(News report from Issue No. 213, published on Jan. 7 2015)