Tag Archives: economy

Armenia to defend currency

NOV. 24 2014 (The Conway Bulletin) – Armenia’s Central Bank said it was prepared to spend millions of dollars propping up its currency, the dram, despite increased pressure to devalue.

Like other currencies across the South Caucasus and Central Asia region, falling oil prices and a devaluation in Russian rouble are pressuring the dram.

On Monday, Nov. 24, the dram was trading at 435 to $1, down 4% from Friday.

“The Central Bank reserves are enough to prevent any artificial fluctuations of the rate and secure financial stability,” the Central Bank said in a statement.

Perhaps but the warning signs are increasing and even the Central Bank’s statement smacks of desperation.

In the last three weeks, Reuters reported, the Armenian Central Bank has spent over $60m defending its currency.

Armenia is tied into Russia, politically, economically and emotionally. It has agreed to join the Kremlin’s Eurasian Economic Union in January and Russian business virtually runs the economy.

With oil prices and the rouble falling further it can only be a matter of time before currencies such as the dram also tumble again.

ENDS

(News report from Issue No. 210, published on Nov. 26 2014)

European Games to cost $8b Azerbaijan

NOV. 24 2014 (The Conway Bulletin) – Azerbaijan will spend an estimated $8b putting on the inaugural European Games next year, media reported, making it one of the most expensive international sports tournaments.

Most people in Azerbaijan support the government’s drive to host the games, which it will also use to showcase the country, but they also told the Bulletin that $8b was too extravagant and that an array of social problems, from low pensions to still crumbling healthcare and education systems needed the cash more urgently.

“This is ridiculous,” said Shahin Gasimov, 64, a retired teacher.

“I receive $200 pension a month. Spending $8b on the Games is not fair.”

Guler Hajiyeva, 22, a graduate student agreed. She said: “I’m sure that we did not need this in Baku. What we need is a better healthcare system, a quality education.”

However, Rauf Gulamov 32, an entrepreneur said that he thought the European Games will improve Azerbaijan’s international standing.

“I don’t know how much money would be fair to spend for this games. Maybe $8b is a lot, maybe not but I am sure that we need the Games and that they will be good.”

The Baku 2015 European Games will feature 16 Olympic and four non-Olympic sports. Alongside traditional sports such as athletics, swimming and gymnastics, new sports such as 3×3 basketball, beach soccer and karate will also be showcased.

ENDS

(News report from Issue No. 210, published on Nov. 26 2014)

Kazakhstan’s Alliance Bank completed debt deal

NOV. 19 2014 (The Conway Bulletin) – Kazakhstan’s Alliance Bank has completed a $1.2b debt restructuring deal and will now merge with Temirbank and ForteBank to become one of the biggest lenders in the country, Reuters reported. The government bought a stake in Alliance Bank in 2009. Temirbank and ForteBank are owned by billionaire Bulat Utemuratov.

ENDS

(News report from Issue No. 210, published on Nov. 26 2014)

Tajikistan’s somoni falls

NOV. 15 2014 (The Conway Bulletin) – The Tajik somoni currency has fallen by 7% against the US dollar this year and 2% in the last week, mainly due to the falling value of the Russian rouble, threatening its economic stability. Remittances from Russia account for around half of Tajikistan’s GDP.

ENDS

(News report from Issue No. 209, published on Nov.19 2014)

Stans Energy to quit Kyrgyzstan

NOV. 13 2014 (The Conway Bulletin) – Canadian miner Stans Energy said Kyrgyzstan was trying to revoke its licences for two rare earth mines that it owns. The row is part of a long-running dispute between Stans Energy and Kyrgyzstan. Stans Energy has said that it will quit Kyrgyzstan altogether, dealing another blow to the country’s investor image.

ENDS

(News report from Issue No. 209, published on Nov.19 2014)

Architect of Georgia privatisation dies

LONDON/United KIngdom, NOV. 19 2014 (The Conway Bulletin) — Kakha Bendukidze, one of the chief architects of Georgia’s radical privatisation drive under President Mikheil Saaskhvili, has died in London aged 58.

He had recently undergone minor heart surgery and there was no suggestion of foul play.

A biologist who became a wealthy businessman towards the end of the Soviet Union, Bendukidze is best known for being the economy minister under Mr Saakashvili. Under Bendukidze, Georgia pursued one of the most aggressive privatisation schemes in the world.

This massive privatised and tax cutting drive — dubbed Bendunomics — attracted both praise and criticise. Praise from international organisations, such as the World Bank and the IMF, which champion private ownership over state ownership but criticism from rivals who pointed out that lucrative assets which had formerly belonged to the state ended up in the hands of Mr Saakashvili’s allies.

Before he was appointed economy minister in 2004, Bendukidze was a high profile businessmen in Russia advocating a low tax regime and reduced state intervention. He had been on close terms with Mikhail Khodorkovsky, who was arrested and imprisoned on tax evasion charges, largely interpreted as being linked to his various challenges to Russian President Vladimir Putin.

After Mr Khodorkovsky’s arrest and imprisonment, Bendukidze decided that it was time to leave Russia and he readily accepted a position in Mr Saakashvili’s revolutionary government.

A larger than life figure, both in terms of his size and booming personality, Bendukidze left Georgia earlier this year after the current government started to arrest and prosecute high- profile members of the previous administration for various economic crimes. Over the last few months Bendukidze had been advising the new president of Ukraine, Petro Poroshenko, and had been expected to take up a government position.

ENDS

(News report from Issue No. 209, published on Nov.19 2014)

Weak rouble hits Armenia wine

NOV. 17 2014 (The Conway Bulletin) – The falling value of the Russian rouble is hitting vital wine exports to Russia, the head of the Armenian wine-making union, Avag Harutyunyan, told media. Russia is the biggest market for Armenian wine and brandy. Mr Harutyunyan said that Armenia would export 30% less wine this year than last year.

ENDS

(News report from Issue No. 209, published on Nov.19 2014)

Car imports drop in Azerbaijan

NOV. 17 2014 (The Conway Bulletin) – Azerbaijan imported 52,000 cars in Jan-Oct this year, a drop of 38.5% from the same period in 2013, media reported quoting the state statistics agency. The drop is likely attributable to a combination of weaker economics and new emissions regulations.

ENDS

(News report from Issue No. 209, published on Nov.19 2014)

Food prices rising in Uzbekistan

NOV. 12 2014 (The Conway Bulletin) – The Uzbek sum currency has fallen to its lowest levels against the US dollar in independent Uzbekistan’s 23 year history, pushing up the price of food and threatening social stability.

On the Black Market, an essential measure of currency rates, the exchange rate in Tashkent hit the 3,450 sums to $1. The skyrocketing currency price is a mirror of Russia’s economic troubles.

A Tashkent resident told the Conway Bulletin that a kilogram of mutton now costs between 25,000 and 30,000 sums, compared to 20,000 sums in the summer.

Prices of bread, sugar and grain-based cereals have also risen by roughly 25% over the past three months, he said.

“As if the recent increase in utility costs was not frustrating enough, the government’s inaction to stem price increases because of a foreign currency adds insult to injury,” the source said.

The Tashkent resident was referring to a 10% increase imposed by the government on utility prices on Oct. 1.

This insight is important because it provides a first- hand snapshot of how frustration is building in Uzbekistan over food price increases and the rising cost of utilities.

Ordinary Uzbeks have also had to put up with fuel and gas shortages. Social pressure is building.

ENDS

(News report from Issue No. 209, published on Nov.19 2014)

Kazakhstan to sponsor Turkish football team shirts

NOV. 15 2014 (The Conway Bulletin) – Samruk-Kazyna, Kazakhstan’s national investment fund, has signed a $40m deal to sponsor the shirts of the top Istanbul football club Galatasaray, Turkish media reported. With the Kazakh economy under increased pressure, economists and ordinary Kazakhs may question the worth of the deal.

ENDS

(News report from Issue No. 209, published on Nov.19 2014)