NOV. 12 2013 (The Conway Bulletin) — The EBRD raised its GDP growth outlook for Uzbekistan this year to 7.7% from 7.5%, media reported. Inflation, though, it said, would grow at 11% in 2013, one of the quickest rates in the region. Uzbekistan is cagey about releasing economic data.
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(News report from Issue No. 160, published on Nov. 13 2013)
NOV. 12 2013 (The Conway Bulletin) — Armenia’s Central Bank lowered its interest rate to 8% from 8.5% after data showed that inflation had dropped. Annualised inflation dropped to 7.1% in October from 8.2% in September, still well above the Central Bank’s target range between 2.5% and 5.5%.
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(News report from Issue No. 160, published on Nov. 13 2013)
NOV. 12 2013 (The Conway Bulletin) — Turkmenistan’s gas-powered economy is still booming and will continue to grow rapidly in the future. That’s the latest assessment, in any case, from the IMF.
The IMF said growth would top 10% in 2013 and 2014, slightly lower than the previous two year. Even with the slight growth rate slowdown, Turkmenistan still has one of the fastest growing economies. Most of the growth is coming from exploiting huge natural gas reserves, the fourth largest in the world.
China has become Turkmenistan’s biggest customer, taking over from Russia, but other smaller clients are also playing an increasingly major role.
This dependence on gas, though, is also a potential weakness, the IMF warned. It said that a sharp downturn in the global price of gas could pose real problems for the Turkmen economy.
It also said that Turkmenistan needs to relax currency rules and reform its mainly state-run banking sector.
Alongside gas, cotton has become an increasingly important part of Turkmenistan’s economy. This week, Turkmenistan said it was looking to pull in $1b worth of investment to build factories to process raw cotton into goods.
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(News report from Issue No. 160, published on Nov. 13 2013)
OCT. 31 2013 (The Conway Bulletin) — With Uzbekistan being a secretive sort of place, grabbing titbits of genuine economic data to analyse is important.
This is where Russia’s Central Bank has helped out. It said on Oct. 31 that labour migrants from Uzbekistan sent $1.6b back home in the second quarter of the year, that’s April, May and June.
For the poor of Central Asia, Russia is the obvious place to head to for work. It is the former colonial master, speaks the same language and needs plenty of labourers.
In the first quarter of 2013, Uzbek migrants sent $1b back home. Most of the migrants, like many from Central Asia, work in the construction industry in Russia. Altogether, it looks as if migrant workers send roughly $5b to $6b back to Uzbekistan every year which equals about 10% of Uzbekistan’s total GDP.
Uzbekistan doesn’t publish remittance data, making the Russian Central Bank data so important.
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(News report from Issue No. 159, published on Nov. 6 2013)
NOV. 1 2013 (The Conway Bulletin) — Assets under the management of the State Oil Fund of Azerbaijan (SOFAZ) have risen by $1.7b to $35.8b this year, media reported. SOFAZ is Azerbaijan’s sovereign wealth fund. It has been on an overseas spending spree over the past couple of years. Around 65% of its assets are in Europe.
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(News report from Issue No. 159, published on Nov. 6 2013)
OCT. 8 2013 (The Conway Bulletin) — Azerbaijan may ditch pegging its manat currency to the US dollar in the medium term and move to a free float, Khagani Abdullayev, deputy head of Azerbaijan’s Central Bank said in an interview with the Conway Bulletin.
The Azerbaijani manat has been pegged to the US dollar since March 2009. The Central Bank hitched it to the US dollar to secure it during the financial crisis. Now, though, the scenario has changed and Azerbaijan’s economy is starting to grow quickly again, putting the currency under pressure.
“In the near future the plan is the continuation of the peg while a managed float is planned for the mid-term,” Mr Abdullayev said after giving a lecture in Washington DC.
On the economy, he also said cash still made up roughly half the transactions in Azerbaijan.
“The Central Bank will continue to increase its efficiency as Azerbaijan transitions to a more cashless society. Currently 50% of M3 is made up of cash,” Mr Abdullayev said. M3 is a technical reference to money supply.”
Islamic Banking has become increasingly prevalent in Asia and Mr Abdullayev said that although Azerbaijan wouldn’t actively promote this brand of finance, it would play a role in the future.
“The development of Islamic finance in Azerbaijan is a long term objective,” he said.
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(News report from Issue No. 158, published on Oct. 30 2013)
OCT. 23 2013 (The Conway Bulletin) — Kazakhstan will complete the merger of its private pension schemes into a single national programme by the middle of next year, media quoted the Central Bank chief, Kairat Kelimbetov, as saying. The original plan had been to merge 11 pension funds in Kazakhstan into a single $21b programme by the end of 2013.
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(News report from Issue No. 158, published on Oct. 30 2013)
OCT. 24 2013 (The Conway Bulletin) — Kazakhstan increased its state-imposed cap on fuel prices by 7 tenge to 117 tenge ($0.76) per litre of 92-octane petrol. Prices for the lower grade 80-octane petrol and diesel were left unchanged.
The closure of the refinery in Shymkent for scheduled repairs has triggered localised fuel shortages in the weeks prior to the price hike, scheduled for November.
In Southern Kazakhstan fuel was sold only through coupons and in limited quantities. Lines of cars queued at petrol stations that quickly ran out of 92-octane fuel and supplied only the 80-octane version.
Fuel price rises hurt consumers and tension is brewing in Kazakhstan.
According to the Kazakhstan Fuel Association (KFA), a fuel industry lobby group, routine repairs at the Shymkent refinery caused the shortage. It is only one of three refineries in Kazakhstan.
The government has instead blamed a general global increase in oil for the rise on the petrol price cap.
Ordinary drivers are even more frustrated. They blame owners of petrol stations for holding back supplies until the fuel price cap had been raised.
They’ve also had to stomach a higher price increase than originally flagged up.
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(News report from Issue No. 158, published on Oct. 30 2013)
OCT. 18 2013 (The Conway Bulletin) — The size of Azerbaijan’s non-oil sector has grown by 10.4% since last year, the country’s statistics department said quoting figures comparing the first nine months of this year with the same period in 2012. Expanding the non-oil sector is considered key to sustaining Azerbaijan’s economic expansion.
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(News report from Issue No. 157, published on Oct. 23 2013)
OCT. 17 2013 (The Conway Bulletin) — Azerbaijan’s government has complained to Russia about the apparent mistreatment of one of its nationals by police in Moscow, media reported.
The complaint is important because it sets Azerbaijan at loggerheads, once again, with Russia over the sensitive topic of migrant workers.
Police in Moscow arrested Orhan Zeylanov, a 25-year-old migrant worker from Azerbaijan, on Oct. 15 for the apparent murder of a Russian man a few days earlier.
The murder was blamed for triggering a riot in a Moscow suburb, the worst anti-migrant violence for years.
TV footage from the arrest of Mr Zeylanov showed police kicking him. The TV commentator also referred to him as “the killer” before any formal court proceeding had started.
The row renews the debate over how migrant workers are treated in Russia.
It also, importantly, focuses attention on relations between Azerbaijan and Russia.
These have grown steadily more strained over the past few years. Azerbaijan has challenged Russia’s gas dominance and created an alternative energy supply route for EU states.
Azerbaijan has also become cosy with the United States. In short, its energy wealth has allowed it to act increasingly independently from Russia.
Compared to other former Soviet countries, remittances from workers in Russia make up only a small proportion of Azerbaijan’s economy, 3% according to the World Bank, but it is still important.
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(News report from Issue No. 157, published on Oct. 23 2013)
