DEC. 3 2013 (The Conway Bulletin) — Azerbaijan’s government increased the price of petrol by about a third, its first increase in seven years, media reported. It’s too early to say what impact the price rises will have on communities as they will come into force on Jan. 1 2014, but local media has already reported several small scale protests.
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(News report from Issue No. 163, published on Dec. 4 2013)
NOV. 25 2013 (The Conway Bulletin) — Georgia has resumed sending tangerines to Russia after a seven-year gap, news organisations reported quoting Georgian officials. The resumption of fruit exports to Russia is another indication of the normalisation of Georgia- Russia relations after a brief war in 2008.
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(News report from Issue No. 162, published on Nov. 27 2013)
NOV. 11 2013 (The Conway Bulletin) — Hundreds of people in Armenia protested outside the PM’s office in Yerevan against a proposal for them to pay 5% to 10% of their salary into pension funds. Countries across the former Soviet Union are grappling with changing generous legacy pension systems.
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(News report from Issue No. 162, published on Nov. 27 2013)
NOV. 26 2013 (The Conway Bulletin) — A third of the population of Armenia live in poverty, a survey by the Armenian national statistics office said. Most alarming for policy makers was data that showed poverty levels in Armenia were the same in 2012 as in 2008. Armenia’s economy has been slow to recover from the 2008/9 global financial crisis.
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(News report from Issue No. 162, published on Nov. 27 2013)
NOV. 21 2013 (The Conway Bulletin) — Kazakhstan’s parliament passed a tax rise on alcohol and cigarettes which will balance prices with Russia and Belarus, its partners in the Customs Union, but could also anger ordinary people.
President Nursultan Nazarbayev voiced his approval for a law on so-called luxury goods in October during a party congress and also called for higher wealth taxes.
Besides higher taxes for large houses and powerful cars, the law specifically targets alcohol and cigarettes, which Mr Nazarbayev called “evil passions”.
The law will double the excise duties on strong alcoholic beverages in 2014, progressively reaching in 2016 a level of 1,600 tenge (about $10.50), more than three times the current value. On cigarettes, the increase will be 30% every year.
Russia has limited the amount of spirits that can be transported across the borders of the Customs Union in order to avoid price dumping. In Kazakhstan prices and excise taxes on alcohol and cigarettes had been lower than in Russia and Belarus. The new tax rises should change this.
Parliamentarians also justify the law because they said it would curb smoking and excessive drinking.
Other analysts, though, said increased prices could just push alcohol consumption underground and increase smuggling.
More tax increases for Kazakhstan’s wealthy are expected in the future. In the same speech in October that Mr Nazarbayev called for an increase in taxes on property, alcohol and cigarettes, he also called for a rise in income tax for the rich.
“Now when the wealthy class has expanded they can and should contribute towards social responsibility,” he said. “In our country a millionaire and a worker pay the same 10% income tax. We should think about it.”
Watch this space.
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(News report from Issue No. 162, published on Nov. 27 2013)
NOV. 15 2013 (The Conway Bulletin) — Kazakhstan’s new Central Bank chief, Kairat Kelimbetov, said he wanted to move the Bank to Astana from Almaty. Mr Kelimbetov replaced the independent-minded Grigory Marchenko as the Central Bank chief in October. Reports have said Kazakh President Nursultan Nazarbayev wants the Central Bank in Astana.
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(News report from Issue No. 161, published on Nov. 20 2013)
NOV. 15 2013 (The Conway Bulletin) — Concluding its mission to Azerbaijan, the IMF said that the country’s economy was moving in the right direction although it needed to restructure its biggest bank, the state-owned International Bank of Azerbaijan.
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(News report from Issue No. 161, published on Nov. 20 2013)
NOV. 19 2013 (The Conway Bulletin) — Kazakhstan’s agriculture minister Asylzhan Mamytbekov said he is not going to intervene to stop bread price rising. Higher utility bills and problems with getting loafs to market have increased bread prices in recent months in southern Kazakhstan. Bread price rises are a potential source of social discontent.
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(News report from Issue No. 161, published on Nov. 20 2013)
NOV. 20 2013 (The Conway Bulletin) — Kazakh President Nursultan Nazarbayev has made clear he wants to transform, relatively, Kazakhstan’s economy.
He wants to sell stakes in the three banks that the state had to bail out in the 2008/9 global financial crisis, unify and nationalise Kazakhstan’s pension schemes and launch a handful of companies onto the stock exchange.
There’s a lot to do and that, analysts said, is probably the driving force behind his recent reshuffle.
Last month Mr Nazarbayev installed Kairat Kelimbetov, well-known for his loyalty, as head of the Kazakh Central Bank. Analysts also said the promotion on Nov. 5 of Bakhyt Sultanov from deputy head of the presidential administration to finance minister was driven by a similar motivation.
“The new budget, which carried an increase in taxation, the lifting of the pension age and the possible elimination of the so-called new-born cheque are controversial matters,” said Nygmet Ibadildin an Almaty-based analyst. “The promotion (of Sultanov) shows that the president is fully in control.”
Eldar Madumarov, an economics professor in Almaty, agreed. He also said that Bolat Zhamishev’s move from finance minister to regional development minister should be considered a promotion and not a demotion.
“Zhamishev is deemed to be responsible and was moved to be regional development minister,” he said.
Since clashes between protesters and police in 2011 killed 15 people in western Kazakhstan, the Kazakh government has prioritised improving life in the regions.
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(News report from Issue No. 161, published on Nov. 20 2013)
NOV. 15 2013 (The Conway Bulletin) — Azerbaijan has made decent economic progress but more needs to be done to continue to encourage business to develop, the IMF said in a statement after it concluded an assessment of the country’s economy.
The IMF said in general it supported the Azerbaijani Central Bank’s plan to force banks to strengthen their capitalisation levels. It was concerned, though, about the health of the state-owned International Bank of Azerbaijan (IBA).
“The mission calls for combining this capitalisation with the restructuring of this bank (the IBA) in line with internationally accepted practices,” the IMF said in a statement.
The IBA is so large and important to Azerbaijan’s banking sector, the IMF explained, that it needs to be reformed. Earlier this year, the IBA said it would increase its capitalisation levels to 500 million Manat (about $640 million).
In December 2012, the Fitch ratings agency downgraded the IBA’s credit rating because it said its capitalisation levels were too low.
Overall, the IMF said the Azerbaijani authorities were on the right track with reducing non-oil deficit levels.
“Azerbaijan’s near-term economic prospects are generally favourable, with overall gross domestic product growth projected at 5% in 2013 and 2014, following the successful stabilization of oil output,” the IMF concluded.
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(News report from Issue No. 161, published on Nov. 20 2013)
