Tag Archives: economy

Armenian court says pension reform is illegal

APRIL 3 2014 (The Conway Bulletin) — Armenia’s Constitutional Court ruled that the government’s flagship pension reforms were illegal, triggering a fresh crisis at the top of the Armenian political spectrum.

The ruling was a major blow to the government which has stubbornly stuck to its pension reform agenda despite increasing levels of public discontent. It also appeared to come as a surprise.

The following day Tigran Sargsyan resign as Armenia’s PM, although he did not link his resignation explicitly with the Court’s ruling. There have been perpetual rumours about his health and other job offers.

Later this month, the government also faces a vote of no confidence in parliament. Opinion polls have shown that its popularity has sunk to fresh lows.

And most of this unpopularity stems from the pension reforms.

Thousands have marched against changes which were introduced at the start of the year. The reforms stated that everybody born after Jan. 1 1974 would have to pay 5% of their salary into a state pension fund. The state has promised to match private contributions to the pension fund up to a maximum of $61 per month.

But now the Constitutional Court has ruled that the pension reforms introduced by the government restrict the rights of its citizens.

The problem for Armenia is, similarly to other countries in the former Soviet Union, it simply has to reform its state pension system to pay for its aging population and to compensate for the large grey economy.

ENDS
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(News report from Issue No. 179, published on April 9 2014)

Russia to Georgia remittances drop

MARCH 31 2014 (The Conway Bulletin) — Remittances from Ukraine and Russia to Georgia fell during the first two months of the year, media reported, quoting Central Bank statistics. Cash from Russia is still the largest proportion of remittances to Georgia, nearly half, but the statistics said it was down by around 6% from a year earlier.

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(News report from Issue No. 178, published on April 2 2014)

Grey economy is 40% of Armenia’s GDP

APRIL 1 2014 (The Conway Bulletin) — The grey economy in Armenia generates roughly 40% of GDP, media quoted human rights activist Karen Andreasyan as saying. Mr Adreasyan said that the high proportion of GDP generated by the grey economy creates problems in tax and customs areas.

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(News report from Issue No. 178, published on April 2 2014)

Fitch says Kazakhstan’s bad loans will increase

APRIL 1 2014 (The Conway Bulletin) — The 20% devaluation of the tenge earlier this year will trigger an increase in bad debt, Roman Kornev, director of financial institutions at Fitch Ratings said. The Kazakh government wants to reduce the amount of non-performing loans on banks’ portfolios.

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(News report from Issue No. 178, published on April 2 2014)

Government spending grows in Kazakhstan

MARCH 26 2014 (The Conway Bulletin) — Kazakhstan’s parliament approved increased government spending to compensate people for the 20% drop in the value of the tenge and counter rising inflation.

Overall, Kazakh government expenditure will increase by 6% to $39.1b.

The increase is more evidence of the inflationary effect of the currency devaluation on Feb. 19. Shops have increased their prices and large corporations have boosted salaries.

To calm public frustration, Kazakh president Nursultan Nazarbayev promised to increase pensions, public sector salaries and student grants. Parliament’s decision to increase government spending is simply making good on these promises.

The Kazakh government will fund the budget increase by transferring cash from the National Fund, where it keeps profits from oil revenues.

ENDS
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(News report from Issue No. 178, published on April 2 2014)

Tajik food prices increase

APRIL 1 2014 (The Conway Bulletin) — Prices of basic agriculture products such as potatoes, carrots and tomatoes have risen by as much as 60% this year, media reported. A note from the ministry of agriculture said that the price rises were a seasonal issue triggered when farmers try to sell the last of the previous year’s harvest.

ENDS
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(News report from Issue No. 178, published on April 2 2014)

Utility prices rise in Uzbekistan

APRIL 1 2014 (The Conway Bulletin) — The Uzbek authorities have increased the price of utilities by roughly 10%, media reported. For most of last year, reports from Uzbekistan have documented price rises and inflationary pressures. These have been frustrating parts of Uzbekistan’s population.

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(News report from Issue No. 178, published on April 2 2014)

Wire transfer ban may hit remittances to Uzbekistan

APRIL 1 2014 (The Conway Bulletin) — Uzbekistan’s Central Bank ordered commercial banks to stop taking wire transfers from Russia’s Zolotaya Korona, threatening the country’s remittances lifeline.

Remittances are crucial to Uzbekistan. According to the World Bank, remittances from Russia account for roughly 16% of Uzbekistan’s GDP.

This figure, although, large still underplays the importance of remittances to the Uzbek economy.

They are an essential lifeblood to the much of the population, feeding entire families and beating away poverty.

It makes the unexplained announcement by the Uzbek Central Bank all the more puzzling. Zolotaya Korona, which means Golden Crown, is the most popular system for Uzbeks working in Russia to wire cash home.

Forcing users onto another system, creates an additional barrier.

A couple of days after issuing the ban, the Uzbek Central Bank said it banned Zolotaya Korona because it thought that it was in poor financial health.

Officials at Zolotaya Korona, which is based in the Siberian city of Novosibirsk, have declined to comment on the Uzbek Central Bank’s decision.

In January, around a dozen Azerbaijani banks cut their links to Zolotaya Korona. They said that deals with the Russian company just weren’t profitable enough.

In 2012, Armenia’s Central Bank banned Zolotaya Korona from operating there because it was stopping some people using its services.

Whatever the reason for the Uzbek Central Bank’s sudden ban on Zolotaya Korona, the poor in Uzbekistan will suffer.

(News report from Issue No. 178, published on April 2 2014)

Fuel prices rise in Kyrgyzstan

MARCH 24 2014 (The Conway Bulletin) — The price of fuel in Kyrgyzstan has increased by as much as 6.7% since the beginning of the year, media reported. An official from an industry lobby group blamed increased import prices from Russia for the rise. Fuel price rises, especially sharp ones, can generate discontent.

(News report from Issue No. 177, published on March 26 2014)

Kazakhstan devises new anti-money laundering rules

MARCH 19 2014 (The Conway Bulletin) — Kazakhstan will launch new rules by end-2015 aimed at stemming the flow of cash from businesses to offshore accounts, media quoted the head of analysis at the Kazakh financial police, Olzhas Bektenov, as saying. Kazakhstan has been under pressure to tighten its anti-money laundering regulations.

(News report from Issue No. 177, published on March 26 2014)