OCT. 8 2010 (The Conway Bulletin) — Kazmunaigas, Kazakhstan’s state energy company, may borrow up to $14b to fund its $20b investment programme instead of raising cash through an IPO, CEO Kairgeldy Kabyldin said. Kazakhstan wants to speed up development of its energy sector and Mr Kabyldin had said Kazmunaigas was considering an IPO.
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(News report from Issue No. 11, published on Oct. 14 2010)
OCT. 13 2010 (The Conway Bulletin) — Georgia started a visa-free entry regime for citizens of Russia’s north Caucasus. They are allowed to stay in Georgia without a visa for 90 days. Georgia said it decided to waive the visa requirements to boost trade across the Caucasus mountains. Russia called it a provocation.
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(News report from Issue No. 11, published on Oct. 14 2010)
OCT. 12 2010 (The Conway Bulletin) — Azerbaijan will increase defence spending by 89.7% in 2011, Finance Minister Samir Sharifov said. The extra investment will raise defence spending to 19.6% of the total government budget. Mr Sharifov said half the money would be used to buy military hardware and the rest spent on special projects.
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(News report from Issue No. 11, published on Oct. 14 2010)
OCT. 14 2010 (The Conway Bulletin) — Fuelled by oil and gas exports, Azerbaijan’s economy grew by over 800% between 2000 and 2009. Its defence spending nearly, but not quite, kept up. The Stockholm International Peace Research Institute (SIPRI) estimated that over the same period, Azerbaijan’s defence budget grew by 500%.
But in June this year, Azerbaijan said it would boost defence spending in 2010 by 30% and now finance minister Samir Sharifov has said that in 2011 it will rise by nearly 90% to $3.13b.
SIPRI said that in 2000 Azerbaijan spent $251m on defence. By 2011, then, its annual defence spending will have increased by more than 1200% since 2000, outstripping economic growth.
In terms of government spending, Mr Sharifov said in 2011 Azerbaijan will spend nearly 1/5 on defence. As a proportion of its GDP it will be around 6.5%. The world’s top spenders spend up to 8% of their annual GDP on defence.
But if Mr Sharifov was explicit on the numbers, he was less explicit on how the extra cash would be spent. He said that half of it would go on buying new equipment directly and the rest on special projects. Azerbaijan’s main military concern is tension with Armenia around the disputed Nagorno-Karabakh region. Azerbaijan and Armenia are still officially at war.
Armenia-backed forces have controlled Nagorno-Karabakh since a ceasefire in 1994 after a war in which around 30,000 people died. Soldiers from both sides still die each year in skirmishes around the mountainous region and the EU has warned the situation could deteriorate.
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(News report from Issue No. 11, published on Oct. 14 2010)
OCT. 14 2010 (The Conway Bulletin) — Foreign investors will this year beat the $2.8b they invested into Turkmenistan’s energy sector in 2009, Reuters quoted a government official as saying. Turkmenistan has been diversifying its export markets to Europe and China.
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(News report from Issue No. 11, published on Oct. 14 2010)
OCT. 3 2010 (The Conway Bulletin) — The Iranian and Tajik energy ministers endorsed a memorandum of understanding on improving cooperation between the two countries on a range of issues from industry to social affairs, Iran’s Fars news agency reported. Iran and Tajikistan have worked on improving ties through the year.
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(News report from Issue No. 10, published on Oct. 7 2010)
SEPT. 27 2010 (The Conway Bulletin) — Kazakhstan banned the export of buckwheat, a favourite cereal in the former Soviet Union, because of shortages caused by a summer drought. It also said the drought had hit its grain harvest which would only be 13.5m tonnes this year, the bottom end of previous forecasts.
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(News report from Issue No. 9, published on Sept. 30 2010)
SEPT. 27 2010 (The Conway Bulletin) — Azerbaijan will start investing part of its $20b oil fund in equities for the first time to boost returns, the fund’s chief investment officer Israfil Mammadov told Bloomberg. He declined to say what proportion of the State Oil Fund of Azerbaijan (SOFAZ) would be invested in equities.
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(News report from Issue No. 9, published on Sept. 30 2010)
SEPT. 16 2010 (The Conway Bulletin) — Azerbaijan will keep its manat currency pegged to the US dollar and the euro while its economy improves, the head of the Central Bank, Elman Rustamov, told Bloomberg. Azerbaijan pegged the manat’s exchange rate in March 2009 during a downturn in the global economy.
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(News report from Issue No. 8, published on Sept. 23 2010)
SEPT. 23 2010 (The Conway Bulletin) — Azerbaijan’s economy is reliant on oil and gas. It has rebounded this year after a heavy slump in the world economy and oil prices combined in 2009 to knock growth.
In August, the ratings agency Moody’s upgraded the Azeri banking sector to stable from negative, reflecting Azerbaijan’s improving economy. Moody’s said the Azeri economy remained vulnerable to external shocks but “the banks are also benefiting from relatively stable macroeconomic conditions”.
In an interview with Bloomberg, the head of Azerbaijan’s Central Bank, Elman Rustamov, echoed this sentiment. He said Azerbaijan’s economy would grow by 4-5% this year compared to a 14% fall in 2009 but that he wanted to keep Azerbaijan’s currency, the manat, pegged at 0.803 to the US dollar for the rest of the year.
Mr Rustamov said the manat peg was important to stop the currency strengthening too quickly and damaging the non-oil sector’s recovery.
The manat has gained 12.5% against the dollar since redenomination in January 2006.
Oil makes up 93% of Azerbaijan’s exports and the average price per barrel has been 37% higher this year compared to 2009, Mr Rustamov said. Oil production will remain at around 50m tonnes this year, roughly the same as 2009. In 2008, Azeri oil production was 44.5m tonnes.
Mr Rustamov said that inflation would rise to about 10% this year.
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(News report from Issue No. 8, published on Sept. 23 2010)
