JAN. 28 2014 (The Conway Bulletin) — Azerbaijan’s state oil fund, SOFAZ, increased by 5.1% in 2013 to $35.9b, media reported. SOFAZ is the rainy day fund that the Azerbaijani government uses to save cash for future generations. It invests in major infrastructure projects such as oil pipelines and railway tracks.
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(News report from Issue No. 169, published on Jan. 29 2014)
JAN. 29 2014 (The Conway Bulletin) — Evidence is mounting that Turkmenistan, like neighbouring Uzbekistan, forces people to pick its giant cotton harvests each year.
A report by the opposition Alternative Turkmenistan News (ATN) group said that school children were forced into the cotton fields each year to harvest the crop.
Attention has focused more on Uzbekistan’s use of child labour in its cotton harvest; the UN’s International Labour Organisation (ILO) is supposed to be releasing the results of its investigation later this year into this practise.
But ATN said that the practise is also widespread across the border in Turkmenistan.
Of course, although still important, cotton is not as important to Turkmenistan’s economy as it is to Uzbekistan’s economy. Uzbekistan grows roughly three times the amount of cotton as Turkmenistan.
Even so, Turkmen President Kurbanguly Berdymukhamedov has made a point of underlining how he has opened up the country and its cotton industry has been no exception. The authorities there want to build new cotton spinning plants and to increase exports of raw cotton overseas.
Perhaps the ILO should also be making plans for a trip to Turkmenistan.
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(News report from Issue No. 169, published on Jan. 29 2014)
JAN. 23 2014 (The Conway Bulletin) — Azerbaijan’s Central Bank issued a stern warning to its domestic banks to tighten up checks they carry out on consumers before issuing loans. The Azerbaijani economy is booming but increasingly unsecured loans could derail this growth.
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(News report from Issue No. 169, published on Jan. 29 2014)
JAN. 24 2014 (The Conway Bulletin) — Azerbaijan’s Central Bank ordered domestic banks to stop giving out loans to consumers so easily.
In a strongly worded statement, Azerbaijan’s Central Bank said lenders had not been doing enough due diligence on the financial security of consumers they were lending cash to.
“The Central Bank has assigned banks to intensify activities on issue of loans and enhance control over the field in line with responsible lending principles with an eye to further amplify banking sector’s financial sustainability,” the Azerbaijani Central Bank said.
The Central Bank appears to be reacting to a number of warnings from analysts who said that poorly secured loans and rising consumer debt are major risks to Azerbaijan’s economy.
Azerbaijan’s fuel-powered economy has picked up pace again since stumbling during the global economic crisis of 2008/9. In 2014, the economy is expected to grow by around 5%.
But overconfidence and slack controls threatens this economic growth. The Central Bank’s own figures showed that lending to consumers increased by nearly a third last year.
The Central Bank also appears to accuse commercial banks of aggressively selling loans to consumers and also warned them not to give out misleading information over the financial responsibilities of taking out loans.
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(News report from Issue No. 169, published on Jan. 29 2014)
JAN. 22 2014 (The Conway Bulletin) — The UN is the latest international agency to predict strong economic growth for Uzbekistan in 2014. In its World Economic Situation and Prospects report it said that the Uzbek economy would grow by 7.1% next year compared to 8% growth last year.
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(News report from Issue No. 169, published on Jan. 29 2014)
JAN. 17 2014 (The Conway Bulletin) — Uzbekistan’s economy, according to President Islam Karimov at least, is buoyant.
In a briefing to government ministers on how Uzbekistan’s economy performed last year, Mr Karimov was fairly unequivocal.
He rattled off the numbers. GDP grew last year grew by 8%, industrial output—by 8.8% and agriculture by 6.7%. Meanwhile, he said, inflation was a lower-than-expected 6.8%.
These are all handsome numbers indeed. They’re also the official numbers. Uzbekistan’s economy probably doesn’t look in such rude health at street level where unemployment, spiralling prices and energy shortages are prevalent.
International financial organisations such as the IMF, though, have also said that Uzbekistan’s economy is growing at a rate similar to the one quoted by Mr Karimov. Mr Karimov said that the official 8% economic increase last year had been due mainly to a surge in foreign investments and also jumps in production in the agriculture and manufacturing sectors.
He was, though, modest enough to suggest that improvements could be made in a handful of sectors including boosting the efficiency of state-run companies and replacing aging infrastructure used on farms
The problem for Uzbekistan is that while the numbers sound good, the reality is different and ordinary people in Uzbekistan are not benefiting from the economic expansion that is so often touted as part of Mr Karimov’s legacy. NGOs in Moscow report a steady stream of Uzbeks heading to Russia for seasonal work.
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(News report from Issue No. 168, published on Jan. 22 2014)
JAN. 21 2014 (The Conway Bulletin) — The European Bank for Reconstruction and Development (EBRD) said Azerbaijan’s economy would grow by between 3-4% in 2014, a drop from 5.8% in 2013. In a report, the EBRD said a pre-election government spending spree in August and September had distorted and boosted Azerbaijan’s growth rates last year.
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(News report from Issue No. 168, published on Jan. 22 2014)
JAN. 18 2014 (The Conway Bulletin) — An estimated 4,000 people protested in central Yerevan against planned changes to the pension system. The protest dispersed quietly. The change in the pension law means that people aged 40 or under will have to pay 5% of their salary into a pension. Like other states in the former Soviet Union, Armenia needs to reform a pension scheme now considered overly generous.
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(News report from Issue No. 168, published on Jan. 22 2014)
JAN. 15 2014 (The Conway Bulletin) — Uzbek officials flew to Moscow to attend an inter-government committee on economic cooperation. At the meeting they signed a deal to improve relations and encourage cross-border investment. This is more significant than usual as, last month, Uzbekistan ratified a deal to join a CIS free trade zone.
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(News report from Issue No. 168, published on Jan. 22 2014)
JAN. 19 2014 (The Conway Bulletin) — Turkmenistan’s president, Kurbanguly Berdymukhamedov, said he was ending free gas in order to encourage people to consume energy more efficiently. The move is likely to irritate ordinary people who have become used to receiving free gas since 1993.
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(News report from Issue No. 168, published on Jan. 22 2014)
