Tag Archives: economy

Kazakh government to generate billions

OCT. 8 2014 (The Conway Bulletin) – The Kazakh government said it would restructure Kazakhstan’s sovereign wealth fund Samruk-Kazyna in order to generate $11.2b in sales and savings.

Costs will be cut and unwanted assets sold off through the much vaunted, but still-to-emerge, People’s IPO.

The government wants to half the number of companies administered by the fund and sell up to 10% in selected strategic national companies such as electric grid operator KEGOC, energy holding Samruk-Energo, railroad major Kazakhstan Temir Zholy, and the national nuclear agency KazAtomProm.

Samruk-Kazyna is the main tool through which the Kazakh government controls companies. The fund accounts for 10.5% of Kazakhstan’s GDP and its assets are valued at $100b.

The timing of such a large restructuring is important. Economic growth rates across the region have been halved over the past few months as Russia’s sanction-hit economy tips into recession.

It may just have been time to for the Kazakh government to get serious about cutting costs and raising revenue.

ENDS

(News report from Issue No. 204, published on Oct. 15 2014)

Kyrgyzstan wants to export meat to Russia

OCT. 14 2014 (The Conway Bulletin) – As part of Kyrgyzstan’s move towards membership of the Russia-led Customs Union, it has started preparing to export processed meat to Russia, media reported.

This is, potentially, significant as it shows just how the Customs Union, which turns into the Eurasian Economic Union, can help the poorer parts of the former Soviet Union.

It also shows how Russia is looking to its neighbours and allies for economic support to help it cope with the sanctions that the West has thrown over it.

Armenian cheese producers, for example, have said that they could export more cheese to Russia to make up for the shortfall of from France and other parts of the European Union.

Now the Kyrgyz news website 24.kg has quoted the agriculture minister as saying that he had spoken to his Russian counterpart and asked for guidance on bringing the meat processing industry in Kyrgyzstan up to standard for imports to Russia.

“Until now, the export of this product is prohibited. We asked about test batches in order for our businesses to start to explore the markets of Russia in anticipation of entering the Customs Union,” he said.

“The Minister gave a positive response and concluded a verbal agreement.”

Kyrgyzstan intends to join the Eurasian Economic Union, which also includes Belarus and Kazakhstan, next year. Armenia has also agreed to join the bloc.

ENDS

(News report from Issue No. 204, published on Oct. 15 2014)

No devaluation, Kazakh minister says

OCT. 9 2014 (The Conway Bulletin) – Kazakh economy minister Yerbolat Dossayev refuted speculation the Central Bank was planning to devalue the tenge again this year, media reported. Kazakhstan’s economy has stalled since sanctions started to bite Russia. Kazakhstan has already devalued its currency by 20%.

ENDS

(News report from Issue No. 204, published on Oct. 15 2014)

Azerbaijan increases defence budget

OCT. 13 2014 (The Conway Bulletin) – Azerbaijan will increase its defence spending next year by just over 3%, keeping up with inflation, IHS Janes Defence reported quoting the Azerbaijani finance ministry. Azerbaijan has been increasing its defence spending through the last few years.

ENDS

(News report from Issue No. 204, published on Oct. 15 2014)

Azerbaijanis worry about oil price fall

BAKU/Azerbaijan, DEC. 5 2014 (The Conway Bulletin) — Global oil prices have collapsed since the summer, hitting governments, currencies and ordinary people. Baku, the Azerbaijani capital, was built on oil and this slide has, perhaps, been keenest felt here.

Matanat Guliyeva’s husband works for a private oil company. She said: “Salaries have been late for the last two or three months. We have to reduce our budget, as we are uncertain whether my husband’s wage will arrive next week or not.”

Funds directly from oil sales or from taxes generated by oil sales, power Azerbaijan’s state budget. Earlier this month the government passed a budget that increased spending next year but some people in Azerbaijan are now worried about possible economic turmoil triggered by the falling oil prices.

Aytekin Gasimova 18, said she follows news about oil prices closely because an oil price means that her father, who works in local market in Moscow, will also earn less.

“I’m mostly concerned about my tuition fee,” she said. “It seems my family may have difficulties in paying for my education.”

Nijat Qafurov, 43, a bank worker is more optimistic. He said that people’s income will not decrease due to oil prices drop. Instead, he said, if prices keep falling, the government will cut infrastructure projects, not salaries.

And this sense of being able to ride out economic uncertainty rebounded around Baku.

Azer Mammadov, 28, a construction worker, said that the Azerbaijani government has enough money to save the economy.

“I am sure, they have kept some money for such days, and will not let people starve,” he said. “The government will manage it somehow.”

ENDS

(News report from Issue No. 212, published on Dec. 10 2014)

Turkmenistan to boost electricity exports to Iran

OCT. 5 2014 (The Conway Bulletin) – As well as boosting gas exports to neighbouring Iran, Turkmenistan now wants to increase electricity supplies. Under President Kurbanguly Berdymukhamedov, Turkmenistan has become a major energy exporter across the Middle East. Earlier this year it agreed to boost gas supplies to Iran.

ENDS

(News report from Issue No. 203, published on Oct. 8 2014)

Kazakhstan returning to the bond market

OCT. 6 2014 (The Conway Bulletin) – Kazakhstan issued its first US-dollar sovereign debt since 2000 to finance state investments and contain a growing budget deficit.

The government hired Citibank, HSBC and JP Morgan to arrange the deal, which attracted large demand from investors, who purchased $2.5b in 10- and 30-year fixed- income securities.

After a year of significant changes in the banking sector and a 20% currency devaluation, Kazakhstan is not the safest country for financial speculation but analysts talked up the country’s strengths.

“The ministry of finance raised a similar sum in the local market last year, but this time the operation was denominated in dollars which attracted investors in a market hungry for yields,” Sabina Amangeldi, senior analyst at Halyk Finance in Almaty, told the Conway Bulletin.

“The position of the government is reassuring since the country has a net creditor position. The compliance with ICMA’s (nternational Capital Market Association) test clauses demonstrated Kazakhstan’s good will with respect with the global investment community.”

Kazakhstan seems to have seized perhaps the last moment to issue sovereign debt coupons, since the policy of tapering and a possible raise of the current minimal interest rates by the US Treasury in Washington would see US dollars move from emerging markets and back to the United States.

ENDS

(News report from Issue No. 203, published on Oct. 8 2014)

Pensions to rise in Georgia

OCT. 7 2014 (The Conway Bulletin) – Georgia’s finance minister, Nodar Khaduri, said that he wanted to increase the monthly pension pay out next year by around 5%. Unlike many of its neighbours whose economies are suffering because of a slow-down in Russia’s sanction-hit economy, Georgia is experiencing something of a boom.

ENDS

(News report from Issue No. 203, published on Oct. 8 2014)

Sliding rouble pressures Kazakhstan’s tenge

OCT. 31 2014 (The Conway Bulletin) – A 40% drop in the value of the rouble this year is placing extreme pressure on Russia’s main trade partners, including Kazakhstan, experts have said.

Banking analysts have said that it is increasingly likely the Kazakh Central Bank will have to follow the rouble and devalue its own tenge currency for the second time this year.

The Tengrinews website quoted Raimbek Batalov, director at Raimbek Group, as saying that the fluctuating value of the tenge was hurting exporters. Kazakh goods are now far too expensive for their main export market — Russia.

And reports have emerged from across Kazakhstan that people are rushing to banks to sell their tenge before an imminent devaluation.

Falling oil prices and sanctions imposed by the West have pressured the rouble while the Kazakh Central Bank has insisted on keeping the tenge pegged to the US dollar since its 20% devaluation in February.

Luca Anceschi, professor of Central Asian Studies at the University of Glasgow explained that the rouble was introduced in 1993 to reduce Kazakhstan’s dependency on the rouble. Instead, he said, the opposite has happened.

“The policies pursued since 1993, if anything, have de facto re-established such dependency,” he said.

Increased economic integration with the Eurasian Economic Union gives Kazakh President Nursultan Nazarbayev even less room to manoeuvre.

A second devaluation, to keep pace with Russia’s currency slide, must be approaching fast despite the Central Bank’s denials.

ENDS

(News report from Issue No. 207, published on Nov. 5 2014)

IMF cuts Armenia growth rate

SEPT. 30 2014 (The Conway Bulletin) – The IMF cut its growth estimate for Armenia to 2.6% this year from 3.6% earlier and to 3.3% in 2015, down from an earlier estimate of 4.3%.The downgrades are in line with other agencies who adjusted Armenia’s growth figures downwards because of the impact of sanctions on Russia’s economy.

ENDS

(News report from Issue No. 202, published on Oct. 1 2014)