DEC. 4 2014 (The Conway Bulletin) – Kazakhs are becoming more comfortable paying for products on their credit and debit cards, the research website ranking.kz said. It said that for the year to the end of October transactions using either credit or debit cards had risen by 22%. This increase should aid consumer spending.
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(News report from Issue No. 212, published on Dec. 10 2014)
DEC. 5 2014 (The Conway Bulletin) – Remittances from Russia have declined by around 6%, the head of the Tajik Central Bank, Abdujabbor Shirinov, told the IMF. Western media groups and analysts have said that the decline in income from Tajiks working in Russia and sending cash back home — a vital funding flow — had been greater.
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(News report from Issue No. 212, published on Dec. 10 2014)
DEC. 8 2014 (The Conway Bulletin) – The amount of transactions completed online in Azerbaijan more than doubled in the first 11 months of the year to 5.6m manat, media reported. The statistic is an indicator that Azerbaijan’s economy is maturing.
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(News report from Issue No. 212, published on Dec. 10 2014)
DEC. 8 2014 (The Conway Bulletin) – Tajikistan continues to attempt to increase its appeal to investors, even as its investment climate looks difficult — some would say too difficult — to all but the state-affiliated companies of its political allies.
During a recent meeting with UN Secretary-General for Trade and Development (UNCTAD) Mukhisa Kituyiin in Geneva, Tajik Foreign Minister Sirodzhiddin Aslov asked UNCTAD to conduct an independent study of the country’s investment policies.
With the country’s debt at $2b according to the ministry of finance, the need for a foreign capital injection is clear. Tajikistan’s ranking in the World Bank’s Doing Business study is 167th of 189 countries with lousy scores for categories such as ‘paying taxes’ and ‘getting electricity’. Both local and foreign businessmen complain of state corruption.
Tajikistan has also applied for a sovereign credit rating for 2015. When the agencies release their verdicts next year, it could make for interesting reading.
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(News report from Issue No. 212, published on Dec. 10 2014)
DEC. 9 2014 (The Conway Bulletin) – Foreign direct investment (FDI) in Georgia, vital for its economy, soared to $508m in the third quarter of 2014, its highest quarterly intake for six years.
The data from Georgia’s national statistics office also showed that China had contributed $149m, 29% of the total. This is double China’s previous record FDI injection in Georgia. By way of comparison, the entire quarterly FDI for Georgia in Q2 2014 was $151m.
These figures are good news for Georgia but it has to tread carefully.
Clearly an increase in FDI is good. Georgia’s economy is reliant on FDI as a major source of income. When Georgia and Russia fought a brief war in 2008, FDI dried up, hurting the economy.
But an influx of Chinese money poses new problems and new strains. China has opened a cultural office in Tbilisi and Southern China Airline now offers direct flights to Urumuqi in the west of the country.
Chinese companies, though, often prefer to fly in workers from China rather than hire local workers, straining relations with local communities.
Of course, Georgian policymakers will welcome the rise in Chinese investment. They must also manage it carefully.
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(News report from Issue No. 212, published on Dec. 10 2014)
DEC. 5 2014 (The Conway Bulletin) – At a press conference in Astana with visiting French president Francois Hollande, Kazakhstan’s President Nursultan Nazarbayev called on the West to relax sanctions against Russia imposed for its alleged support of rebel forces in the east of the country. The sanctions on Russia have had a knock-on effect on Central Asia.
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(News report from Issue No. 212, published on Dec. 10 2014)
NOV. 30 2014 (The Conway Bulletin) – The Uzbek government is creating a job programme for migrants returning from Russia, official media reported. Uzbek media must be regarded with scepticism but, with news of its job-creation scheme, perhaps the government is acknowledging a downturn in Russia’s economy and its knock-on effects.
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(News report from Issue No. 211, published on Dec. 3 2014)
DEC. 2 2014 (The Conway Bulletin) – In talks ahead of a ceremony to mark the inauguration of a train line running from Kazakhstan to Iran via Turkmenistan, Kazakh president Nursultan Nazarbayev urged his Turkmen counterpart, Kurbanguly Berdymukhamedov, to join the CIS Free Trade zone. Mr Berdymuakhamedov has been opening Turkmenistan to global trade.
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(News report from Issue No. 211, published on Dec. 3 2014)
DEC. 2 2014 (The Conway Bulletin) – Inflation in Kazakhstan is beginning to edge up to the psychologically important double digit zone. The Kazakh statistics committee said prices rose by 0.7% in November after a 0.5% increase in October.
This is a precarious position for the Kazakh Central Bank. Annualised inflation already measures 7.6%. It won’t be long, if the current trend continues, until it hits 10%.
The problems are two two-fold and well-known — Russia and the drop in the price of oil.
These two issues have combined to produce something of an economic storm for Kazakhstan. And its options are limited. The Central Bank devalued — without warning — its tenge currency by 20% in February. For its currency to retain any credibility, it has had to pledge to protect it from further devaluation.
There is already a lot of economic uncertainty in Kazakhstan. Rising inflation is adding to that.
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(News report from Issue No. 211, published on Dec. 3 2014)
NOV. 28 2014 (The Conway Bulletin) – The depreciation of the Russian rouble has hit Kazakhstan’s energy sector, media reported.
Kazakh media said Samruk-Energo, the state-owned energy company, had cancelled rouble-denominated contracts with Russian clients.
“We have suspended power supplies over the lingering Russia’s currency devaluation. Supplies are no longer economically viable for Kazakhstan-based power plants. Loss of the markets is an important issue,” media quoted Almasadam Satkaliyev, head of Samruk-Energo, as saying.
This is important as it shows how Kazakh industry is beginning to lose out from a depreciating rouble. It’s an issue that could threaten to upset otherwise close relations between the two neighbours.
Kazakhstan has signed up to the Russia-led Eurasian Economic Union and has a host of other friendly treaties in place.
The problem is that the Kazakh Central Bank has pledged not to devalue its currency after knocking 20% off its value earlier this year. This means that Kazakhstan will have to look elsewhere to sell its power or accept a vastly reduced price.
Mr Satkaliyev also said that Kazakhstan was looking to replace coal supply contracts with Russian clients.
“Russia’s economy is not ready to import Kazakhstan’s coals at higher prices. Russia has adopted a program to replace Kazakhstan’s coal,” he said.
“A second factor is the continuing devaluation of the Russian rouble. All the contracts rely on the Russian rouble; therefore for the Kazakh side it is of great importance to ensure economic viability of supplies.”
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(News report from Issue No. 211, published on Dec. 3 2014)
