JUNE 19 2013 (The Conway Bulletin) — Georgia’s Central Bank cut its key interest rate to 4% from 4.25% to try to stem falling consumer prices. This is the fourth interest rate cut by Georgia’s central bank this year. Falling consumer prices in Georgia illustrate the economic problems facing the wider region.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 140, published on June 24 2013)
JUNE 18 2013 (The Conway Bulletin) — The Kazakh government’s plan to unite pension savings in one fund is looking vulnerable.
Unveiled in January, the plan had been greeted with a decidedly mixed reaction. The idea was to draw efficiencies from a single scheme and to create a fund worth roughly $20b to dip into during an economic recession.
Detractors of the plan, that would see 10 private pension schemes and one state-run pension scheme unified under the Central Bank, said it would be uncompetitive.
Kazakhstan had been the first post-Soviet country to encourage private pension schemes and many bankers considered ditching them tantamount to being a turn-coat.
Now Halyk Bank, which has the largest private pension scheme in Kazakhstan, has said it would rather sell off its pension scheme for cash by the end of 2013 than swap it for shares in nationalised bank BTA.
In March, Kazakhstan deputy PM, Kairat Kelimbetov said that the three biggest pension schemes would be offered shares in state-run bank BTA in exchange. BTA went bankrupt in 2009 during the global financial crisis.
BTA bank is still distressed and had to re-structure its $11b debt for the second time last year.
Halyk Bank’s opinion counts as it is the biggest bank in Kazakhstan by volume of cash lent.
The move to switch Kazakhstan’s pension scheme was always going meet resistance. This is likely to be an unsettling period for the Kazakh banking sector.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 140, published on June 24 2013)
JUNE 21 2013 (The Conway Bulletin) — The UN has decreed the Pamir Mountains in Tajikistan a World Heritage Site, media reported, giving the Tajik tourist industry a boost but also potentially making development in the area more difficult. The Tajik National Park, which covers 18% of the country and most of the Pamir Mountains, is Tajikistan’s first World Heritage Site.
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(News report from Issue No. 140, published on June 24 2013)
JUNE 11 2013 (The Conway Bulletin) — Kazakhstan’s ministry of agriculture has declared a state of emergency in two small areas near the border with China to cull cattle infected with foot-and-mouth disease, media reported. Roughly 2,275 infected cows have been killed already this year. Outbreaks of foot-and-mouth disease occur annually in Kazakhstan.
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(News report from Issue No. 139, published on June 17 2013)
JUNE 13 2013 (The Conway Bulletin) — Foreign investment in Georgia, an important resource for the country, increased in Q1 2013 to $226m from $181m in Q4 2012, data from the national statistics agency showed. Reuters has previously reported that political fighting between President Mikheil Saakashvili and PM Bidzina Ivanishvili was deterring investors.
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(News report from Issue No. 139, published on June 17 2013)
JUNE 14 2013 (The Conway Bulletin) — Bloomberg News reported that Austrian prosecutors have accused nine bankers in Austria of bribing foreign bankers, including Adib Mayaleh, head of the Azerbaijani Central Bank. Mr Mayaleh denied he had taken a bribe. He has never been charged with corruption.
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(News report from Issue No. 139, published on June 17 2013)
JUNE 17 2013 (The Conway Bulletin) — The figures in the BP Statistical Review of World Energy can be dry but the stories behind the figures are important.
The 2013 edition is an important barometer for the energy-centric economies in Central Asia and the South Caucasus. The most telling figure for the region in this year’s edition of the review was that oil consumption in Kazakhstan grew by over 10% in 2012.
This is a large jump. In the countries covered in the review only Israel’s oil consumption increased at a higher rate. The global rise in oil consumption in 2012 was 0.9%.
The increase reflects Kazakhstan’s emergence from a sharp economic retraction triggered by the global crisis of 2008/9 when oil consumption fell.
Last year Kazakhstan, with a population of 17m, consumed 265,000 barrels of oil per day. By comparison, Uzbekistan, population 29.5m, consumed 82,000 barrels/day and Turkmenistan, population 5m, consumed 100,000 barrels/day.
Across the Caspian Sea, BP reported that Azerbaijan, population 9.3m, consumed 93,000 barrels of oil per day, a jump of 5.4%. This rise in Azerbaijan’s oil consumption, although not as big as Kazakhstan’s leap, still shows an increase in economic activity.
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(News report from Issue No. 139, published on June 17 2013)
TASHKENT/Uzbekistan, JUNE 10 2013 (The Conway Bulletin) — The black market currency traders in Taskhent’s bazaars are hardly inconspicuous.
“Dollars, dollars. Russian roubles,” they say.
Huge wads of cash change hands as people exchange dollars for Uzbek sums. The black market currency trade in Uzbekistan is big business and well established.
With the largest note worth a mere 1,000 sum (roughly 50 cents), the piles of money can be hefty. The trade is visible, but the police in Tashkent’s bazaars don’t step in; they’re taking a cut.
This currency black market has traditionally offered better rates than the banks. Exchanging $1,000 legally will give you about 2 billion sum, while on the black market you’ll receive around 2.7 billion sum.
Since February, the Uzbek government has banned people from buying cash dollars legally at all. Those needing hard currency must deposit money on debit cards which they can only use abroad.
When this ban on buying dollars came into force it sparked wild black market rate fluctuations and speculation that the government was out to smash this lucrative illegal trade. Such talk was short-lived, however, and the shadowy forces controlling the black market made a fortune on the exchange rate fluctuations.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 138, published on June 10 2013)
JUNE 3 2013 (The Conway Bulletin) — The Uzbek government announced that Russian mobile operator MTS was selling its assets in Uzbekistan for roughly $300m, media reported. Last year the Uzbek government accused MTS’s local subsidiary Uzdunrobita of tax dodging and suspended its operations. MTS said the allegations were false.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 138, published on June 10 2013)
JUNE 6 2013 (The Conway Bulletin) — Kazakhstan’s parliament reduced the 2013 state budget by 4% because of low prices for metal and other mining exports. Metals have become an important part of Kazakhstan’s export earnings over the past few years but a global recession and sanctions against Iran, previously a major customer, have hit earnings.
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Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 138, published on June 10 2013)
