Tag Archives: economy

Tajikistan publishes negative forecasts for Somoni currency

JULY 14 2016 (The Conway Bulletin) — Tajikistan’s finance ministry published a negative forecast for the somoni currency exchange rate over the next few years, saying that the economic crisis that has hit the region since mid-2014 could be far from over. According to the official forecast, the somoni will weaken against the US dollar by 21% next year and by a further 8% in 2018. This week the official exchange rate was 7.9/$1. Much like other currencies in the region, the Tajik somoni has lost a third of its value sine mid-2014, mainly because of a recession in Russia, weakness in oil and gas prices and a drop in confidence in Emerging Markets.

ENDS

(News report from Issue No. 289, published on July 15 2016)

Kyrgyzstan’s GDP falls by 2.3%

JULY 12 2016 (The Conway Bulletin) — Kyrgyzstan’s GDP fell by 2.3% in the first six months of the year because of lower gold prices. The Statistics Committee said that without accounting for the performance of the Kumtor gold mine, the country’s non-gold GDP grew by 1.2% compared to the same period last year. Higher gold prices since mid-June could now push up the country’s GDP.

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(News report from Issue No. 289, published on July 15 2016)

Azerbaijan’s economy shrinks, recession looms

JULY 14 2016 (The Conway Bulletin) — Azerbaijan’s Statistics Committee said its GDP shrank by 3.4% in manat terms in the first half of 2016, compared to the same period last year, a reflection of the negative impact that sustained low oil prices have had on the country’s economy.

This confirms concern voiced by international economists and ratings agencies that the Azerbaijani economy was going to contract this year.

Data from the state Statistics Committee showed that Azerbaijan’s GDP shrank in the first quarter of the year and now, although the data is patchy, the statistics appear to suggest that the second quarter of the year also showed that Azerbaijan’s economy had shrunk.

Azerbaijan is particularly vulnerable to low oil prices. Roughly 40% of its GDP is directly derived from oil and gas revenues. The last time that Azerbaijan’s economy shrank was in 2011 when its oil and gas production slipped.

ENDS

(News report from Issue No. 289, published on July 15 2016)

Kyrgyzstan’s debt hits $4b

JULY 4 2016 (The Conway Bulletin) — Kyrgyzstan’s ministry of finance said the country’s debt had hit $4b, a level that parliament set in 2014 as the country’s debt ceiling. Foreign debt accounts for $3.7b of this amount. China’s Exim Bank, the World Bank’s International Development Association and the Asian Development Bank are among Kyrgyzstan’s largest creditors. Kyrgyzstan’s debt/GDP ratio has now surpassed 60%, a level that local politicians have said is worrying.

ENDS

(News report from Issue No. 288, published on July 8 2016)

Georgia enters Association Agreement with the EU

TBILISI, JULY 1 2016 (The Conway Bulletin) — After two years of preparations, Georgia formally entered into an Association Agreement with the EU, a deal touted by its political leaders as another step towards EU membership and one which should also make it easier for Georgian companies to sell products to Europe.

Georgian PM Giorgi Kvirikashvili hailed the adoption of the Association Agreement as one of the most important days in the government’s stated mission of easing Georgia’s visa arrangements with the EU and even becoming an EU member state.

“It cements Georgia’s relations with a partner which, for years, has been our model and end destination”, he said in a press conference.

In a statement, the European Commission’s foreign affairs representative, Federica Mogherini, said the agreement will bring Georgia benefits but reforms were needed before more EU integration was possible.

“The EU is looking forward to further strengthening its cooperation with a country that is still working on crucial reforms in areas such as the rule of law, the accountability rules for public decision-makers and transparency,” she said.

At its core, the EU Association Agreement improves Georgian companies’ access to European markets in exchange for a commitment to improve the rule of law, health and safety standards and democracy.

The EU said that the benefits to Georgia are already being felt. It said that Georgian kiwis, blueberries, nuts, garlic and wine are more readily available in Europe.

On the streets of Tbilisi, most people welcomed further integration with the EU but were unaware of the details of the deal. Even those who had studied it said that it would take time for Georgian companies to get the most out of the agreement.

“The majority of Georgian companies are not ready to start exporting to the EU countries in terms of qualities and certificates,” said Ioseb Kobakhidze, managing director of Georgian Herbs, a dried fruit producer.

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(News report from Issue No. 288, published on July 8 2016)

Landslide blocks vital Armenia-Georgia-Russia road

TBILISI, JULY 7 2016 (The Conway Bulletin) — Emergency workers will, over the next few days, finish clearing a landslide that has blocked for a fortnight the only road linking Armenia and Georgia to Russia.

The landslide has exposed just how reliant Armenia, and to a lesser extent Georgia, is on the Upper Lars highway as a link to Russia. The only other direct land routes across the Caucasus mountains to Russia thread through the breakaway Georgian regions of South Ossetia and Abkhazia and are currently closed.

Georgian and Armenian officials said that the stretch of road near the border with Russia and Georgia should reopen on July 12. It has been blocked since the landslide hit on June 23.

And the blockage has forced politicians to look at how reliant they are on this single route into and out of Russia. At a cabinet meeting, Armenian PM Hovik Abrahamyan said that relying on the Upper Lars route was dangerous.

“It is time to explore alternative routes,” media quoted him as saying. Armenia is largely isolated in the South Caucasus. It borders two sworn enemies, Turkey and Azerbaijan, and sees Russia, through Georgia, and Iran, to its south, as its only possible partners.

While trade with Iran has improved and could grow further with the easing of Western sanctions on Iran, Armenia’s reliance on Russia has grown markedly.

Armenia turned down an Association Agreement with the EU in favour of joining the Kremlin-led Eurasian Economic Union. This also includes Belarus, Kazakhstan and Kyrgyzstan. Armenia is the only country that doesn’t share a border with other members.

In need of alternatives to the Upper Lars route, Armenia asked Georgia to consider opening routes through South Ossetia and Abkhazia, regions Georgian forces fought Russia for control over in a 2008 war.

Apparently appreciating the seriousness of the scenario, Georgia’s PM Giorgi Kvirikashvili agreed to start talks, marking a potential important shift in relations between Georgia and its rebel regions.

ENDS

(News report from Issue No. 288, published on July 8 2016)

Uzbek CBank orders foreign cash limit

JULY 5 2016 (The Conway Bulletin) — Uzbekistan’s Central Bank ordered banks to impose a $300 monthly limit on card withdrawals abroad, possibly an effort to limit exchange rate speculation. The previous limit was set at $100/day. Uzbeks typically withdraw cash in US dollars and local currencies when travelling abroad to hoard and hedge against the sum currency, which has steadily weakened against the US dollar in recent months.

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(News report from Issue No. 288, published on July 8 2016)

Kazakhtelecom improves corporate governance ahead of a potential IPO

ALMATY, JULY 4 2016 (The Conway Bulletin) — Aleksander Klebanov, one of Kazakhstan’s richest men, bought a 24.47% stake in Kazakhtelecom, the state-owned telecoms company, in a move to improve corporate governance ahead of a planned IPO in London.

Mr Klebanov’s Sobrio Ltd, a London-registered shelf company, bought shares from two companies officially owned by Aigul Nuriyeva, the 8th richest Kazakh according to Forbes. She was widely perceived as holding these companies on behalf of Mr Klebanov.

Wary of past corporate governance flops, Kazakhtelecom said the transfer of shares would improve transparency ahead of an IPO.

“The deal was conducted for Kazakhtelecom ownership structure optimisation and transparency purposes in preparation for a possible IPO,” the company said in a press release.

For two years, Kazakhtelecom has mulled over an IPO in London.

Samruk-Kazyna, Kazakhstan’s sovereign wealth fund, owns 52% of Kazakhtelecom. Earlier this year, Kazakhtelecom’s subsidiaryAltel merged with Tele2, a Swedish telecoms company, in an effort to boost its mobile profile.

ENDS

(News report from Issue No. 288, published on July 8 2016)

Tajikistan forces shops to accept credit cards

JULY 1 2016 (The Conway Bulletin) — Shops in Tajikistan larger than 40 square metres will now have to accept payment by both credit cards and bank cards or face a $1,000 fine under regulation passed in 2014 that has now come into force. The imposition of the 2014 rules may be linked to a cash shortage in Tajikistan whichhave caused liquidity problems for its banks.

ENDS

(News report from Issue No. 288, published on July 8 2016)

Inflation in Georgia falls, again

JULY 4 2016 (The Conway Bulletin) — Georgia’s statistics committee Geostat said annualised inflation dropped to 1.1% in June, its lowest since December 2013, piling pressure on the Central Bank which has tried to boost price rises through interest rate cuts. Importantly, prices for food and non-alcoholic beverages fell by 2.6%.

ENDS

(News report from Issue No. 288, published on July 8 2016)