MAY 31 2014 (The Conway Bulletin) – Consumer prices in May fell by 0.8% compared to April, media reported. Food price deflation was the main driver of the overall drop, the national statistics office reported. It did not explain why food prices had dropped. Overall year-on-year inflation for end- April was 3.6%.
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(News report from Issue No. 187, published on JUNE 4 2014)
JUNE 3 2014 (The Conway Bulletin) -Annualised inflation in Georgia slipped back to 2.4% in May, its slowest rate this year, the national statistics agency reported. Compared to April, average prices dropped by 0.3%. Food prices dropped 1.7%. Georgia’s Central Bank is concerned about a generally slowing economy.
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(News report from Issue No. 187, published on JUNE 4 2014)
MAY 29 2014 (The Conway Bulletin) – At a ceremony in Astana, Russian President Vladimir Putin, Kazakh President Nursultan Nazarbayev and Belarusian President Alexander Lukashenko signed into existence the Eurasian Economic Union (EaEU).
The EaEU is the successor of the Customs Union and is designed to further integrate its members’ economies. The rhetoric has been of high praise for the EaEU but the reaction on the street has been markedly different, as a correspondent for The Bulletin discovered in Almaty.
Berik, a 35-year-old office worker wasn’t even sure of the treaty. “Who are the parties involved?” he said. “Belarus and Russia. I’m not sure, with them it could go either way. It could either be a success or a failure.”
An ethnic Russian lady hurrying along the street also said she doubted the value of the group. “It would have been better if they had not signed the treaty,” she said.
Other people agreed. Most had either not heard of the EaEU or said they doubted it would be positive.
One of the few people to support the formation of the Eurasian Economic Union was Saken a 50-year-old man who worked in real estate. He said that Soviet era ties remained and that the union would be stronger than if countries pursued their own agendas.
“In the Eurasian Union we will welcome troubled countries like Kyrgyzstan and Armenia, who are not really as stable as we are, but we will definitely help them, with the same friendship we used to relate to each other during the Soviet era,” he said.
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(News report from Issue No. 187, published on JUNE 4 2014)
MAY 28 2014 (The Conway Bulletin) – Kazakhstan’s parliament passed the first reading of a bill that will give a tax amnesty for people willing to repatriate cash held in offshore accounts.
The amnesty is designed to boost the size of the legal economy.
Ardak Tengebayev, deputy finance minister, said the plan would bring much needed cash into the Kazakh economy.
“We expect a turnover of 2 trillion tenge ($11b) and we hope that this sum will be reintroduced into the country’s economy,” he said
A similar amnesty in 2006-07 pulled in assets of $7b.
Not everybody, though, thought the amnesty was a good idea. Viktor Yambayev, chief of the Almaty Association of
Entrepreneurs, said the plan was designed to help only the country’s rich.
“This amnesty doesn’t affect the majority of the population. Instead, it benefits government employees, monopolist companies, extractive industries,” he told a Bulletin correspondent.
An amnesty may draw in some, much needed, cash into the Kazakh economy but another problem, the divide between the rich and poor, is intensifying.
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(News report from Issue No. 187, published on JUNE 4 2014)
JUNE 2 2014 (The Conway Bulletin) – Armenia’s government is considering increasing electricity prices for the second year running.
Ara Simonyan, deputy minister for energy, made the omission after questions from parliamentarians who were trying to find out whether rumours of a price increase had any substance.
“The electricity tariffs are not frozen in Armenia and shall be reviewed from time to time. There is no certain decision at the moment,” he said.
Last year the state’s body for regulating electricity prices raised the cost of a kilowatt hour to 38 drams from 30 drams. Now, media has reported, the government is considering putting up prices by another 20% to around 45 drams.
This is important because rising utility prices stirs anger.
Armenians have already vented their frustration this year against proposed changes to the pension system, triggering the downfall of one government. The new government has said that it will look again at the proposed changes which would have meant that people have to put 5% of their income towards their state pension.
Mr Simonyan said hydroelectric stations were unusually dry last year meaning that less electricity was generated and that this meant prices had to rise.
Regardless, if the government does take the decision to increase electricity prices, it could generate public resentment.
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(News report from Issue No. 187, published on JUNE 4 2014)
MAY 23 2014 (The Conway Bulletin) – Following the European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB), the Islamic Development Bank (IDB) pledged to lend Kazakhstan an extra $2b over the next three years. The deal was signed at the annual Astana Economic Forum.
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(News report from Issue No. 186, published on May 28 2014)
MAY 26 2014 (The Conway Bulletin) – The Eurasian Development Bank, set up to fund projects in Eurasian Economic Union (EEU) member states, agreed to lend Kyrgyzstan $20m to develop its agriculture, media reported. The EEU will replace the Customs Union which comprises of Kazakhstan, Russia and Belarus. Kyrgyzstan aims to join later this year.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 186, published on May 28 2014)
MAY 22 2014 (The Conway Bulletin) – Uzbekistan aims to keep economic growth at between 7% and 8% per year for the next four years, media reported quoting material from a business forum in Tashkent. Economic data from Uzbekistan should be treated with scepticism. Uzbekistan has been looking to develop its hi-tech sector.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 186, published on May 28 2014)
MAY 22 2014 (The Conway Bulletin) – The shadow economy in Kyrgyzstan is worth around 40% of the country’s economy, media quoted PM Djoomart Otorbayev as saying. He said agriculture was particularly affected and that he wanted to change this to bolster tax receipts. The figure highlights the complexity of managing the Kyrgyz economy.
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(News report from Issue No. 186, published on May 28 2014)
MAY 28 2014 (The Conway Bulletin) – Armenia’s Central Bank dropped growth rate predictions for 2014 by around a fifth mainly because of a slowdown in Russia’s economy.
All the Central Asian and South Caucasus countries are vulnerable to a slowdown in Russia’s economy but Armenia has perhaps been the first to warn publicly of the impact.
It said economic growth this year would now be between 4.1% and 4.8%, down from an earlier prediction of between 5.4% and 6.1%. Russia is by far Armenia’s biggest trading partner and Yerevan has been looking to join the Russia- led Customs Union to cement this relationship.
But sanctions imposed by the EU and US because of Russia’s annexation of Crimea from Ukraine earlier this year have impacted its economic growth and the domino effect means that this has weighed on economies across the former Soviet Union.
Russia owns much of Armenia’s businesses, supplies its gas and is a magnet for seasonal labourers from Armenia who generate an important remittance flow.
Armenia’s Central Bank also said a delayed copper mine and a weak tax regime also hindered economic growth rates.
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(News report from Issue No. 186, published on May 28 2014)
