DEC. 1 2014 (The Conway Bulletin) – The devaluation of the manat, the Kyrgyz currency, and slowing economic growth have combined to push inflation in Kyrgyzstan up to 8.5%, the World Bank said in a report quoted widely by local media. The World Bank also said that it expected inflation to keep rising towards 10%. This could mean social trouble.
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(News report from Issue No. 211, published on Dec. 3 2014)
DEC. 2 2014 (The Conway Bulletin) – A sharp downturn in Russia’s economy has squeezed migrants, particularly from Tajikistan which is so heavily dependent on remittances, Reuters reported. Reuters highlighted one migrant worker who said that he had been paid 25,000 roubles ($536) a month but that this had been cut to 15,000 roubles.
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(News report from Issue No. 211, published on Dec. 3 2014)
NOV. 28 2014 (The Conway Bulletin) – Azerbaijan’s parliament approved a government budget for 2015 that contains a 5.7% spending increase despite global oil prices continuing to fall (Nov. 28).
The Azerbaijani government agreed on its budget when oil was averaging around $90/barrel.
It is now closer to $70/barrel and some commentators said the government was taking a huge risk by not reducing its expenditure.
Economist Natig Jafarli a senior figure in Azerbaijan’s opposition group said: “The country’s economy depends on oil at $66 directly and $80 indirectly. They should have had developed non-oil sector too and they haven’t.”
Mr Jafarli’s references to direct and indirect incomes for the government’s budget is to cash paid in directly by the National Oil Fund and cash from taxes and other duties paid indirectly by oil companies and exporters.
And he may have a point. Certainly the IMF agrees.
In a report last month, the IMF said that Azerbaijan’s economy was particularly vulnerable to fluctuations in oil prices because of its excessive decency on it.
Other opposition figures said that they expected social problems next year because of a budget squeeze triggered by the falling oil prices.
If opposition and international economists’ claims that Azerbaijan is over-dependent on oil are correct then the current global oil price squeeze will leave it, and the government’s 2015 budget, exposed.
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(News report from Issue No. 211, published on Dec. 3 2014)
DEC. 1 2014 (The Conway Bulletin) – In the first eleven months of this year Tajikistan equalled its top post-independence annual production figure for gold, the country’s Asia-Plus news agency reported.
Like its record cement production figure, posted earlier this year, the increase is due to Chinese investment.
The yield of 3 metric tonnes (mt) is modest by regional standards — neighbouring Uzbekistan produces 90 mt/year and Kyrgyzstan 10-20 mt/year — but it’s still important to Tajikistan, one of the most impoverished countries in the world.
Chinese-Tajik Zeravshan Gold Company is responsible for over two thirds of Tajikistan’s total gold output. And this underlines China’s increasingly tight grip over Tajikistan’s economy. Without China, Tajikistan’s gold and cement industries would be in a far more perilous state.
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(News report from Issue No. 211, published on Dec. 3 2014)
DEC. 2 2014 (The Conway Bulletin) – Kazakhstan’s gold and foreign currency reserves have grown by 15.8% this year, media reported quoting the Central Bank’s press service. This war-chest is important because the Central Bank has said it is prepared to spend to defend the tenge currency against falling oil prices and a drop in the Russian rouble.
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(News report from Issue No. 211, published on Dec. 3 2014)
NOV. 26 2014 (The Conway Bulletin) – Prices of basic food products are rising in Dushanbe, local media reported, because of a fall in the value of the Tajik somoni. Tajik news agency Asia-Plus reported that a bag of flour now sold at 175 somoni, up from 165 somoni a week earlier, and that vegetable oil cost 44 somoni up from 40 somoni.
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(News report from Issue No. 211, published on Dec. 3 2014)
NOV. 27 2014 (The Conway Bulletin) – German engineering company Bosch said it would open a 1,600sqm warehouse, that’s about a third of the size of a football pitch, in Tbilisi to supply power-drill equipment to Georgia, Armenia and Azerbaijan. The opening of the Bosch warehouse is a vote of confidence in the region’s economy.
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(News report from Issue No. 211, published on Dec. 3 2014)
NOV. 25 2014 (The Conway Bulletin) – Kazakhstan is on the brink of accession to the World Trade Organisation (WTO), the WTO’s director-general, Roberto Azevedo, said in a report. Kazakhstan has been negotiating to join the WTO since the late 1990s and joining the group would give its credibility a boost.
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(News report from Issue No. 210, published on Nov. 26 2014)
NOV. 21 2014 (The Conway Bulletin) – Russia’s lower house of parliament passed a law that ratified deeper economic cooperation with Kyrgyzstan, part of the process towards Kyrgyz accession into the Kremlin-led Eurasian Economic Union (EaEU). The deal will mean a $1b windfall in cash and loans from Russia to Kyrgyzstan.
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(News report from Issue No. 210, published on Nov. 26 2014)
NOV. 21 2014 (The Conway Bulletin) – Azerbaijan’s economy is overly dependent on oil revenues, making it vulnerable to fluctuations in energy prices, the IMF said. The warning is particularly pertinent now as oil prices have fallen around 40% over the last few months.
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(News report from Issue No. 210, published on Nov. 26 2014)
