Tag Archives: economy

Export rate falls in Kyrgyzstan

MAY 13 2016 (The Conway Bulletin) – Kyrgyzstan’s Statistics Committee said that revenues from exports fell by 25.8% to $287.1m in Q1 2016, compared to the same period last year. Notably, revenues from gold exports shrank by 2.6 times. Centerra Gold, the Canadian company exploiting the Kumtor gold mine, had said that delays in shipments had hit sales. Kumtor is Kyrgyzstan’s largest asset.

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(News report from Issue No. 281, published on May 20 2016)

Georgia’s trade shifts west

MAY 19 2016 (The Conway Bulletin) – Georgia’s trade flows are increasingly shifting westwards, data from the Statistics Committee showed. Trade turnover with EU countries grew by 11% in Jan.-April 2016 compared to the same period in 2015. Georgia’s trade with CIS countries, on the contrary, fell by 15%. Importantly, overall exports decreased, while imports grew.

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(News report from Issue No. 281, published on May 20 2016)

Tajik government steps in to save bank from going bust

DUSHANBE, MAY 18 2016 (The Conway Bulletin) — Tajikistan’s Central Bank placed Tojiksodirotbank (TSB) under its administration after the bank said it was on the brink of going bankrupt, the first major banking casualty of the current economic downturn.

TSB is the second-largest lender in the country and manages around a third of all loans in Tajikistan. Its collapse has shaken policymakers.

A senior official at the Central Bank, Mirzokhayota Yodgorov, replaced the bank’s chairman, Tojid- din Pirzoda. Sources in the banking sector also told local media that the EBRD could step in and inject vital cash into TSB.

“The question as to whether the EBRD will enter TSB’s capital will be resolved in June,” the source, quoted by Asia Plus, said.

According to the latest, unconfirmed, updates, the EBRD plans to buy a majority stake in the bank for $165m. The Tajik government could also step in and buy a 25% stake.

Earlier in May, TSB had said it was in talks to sell half of its shares to the EBRD.

Neither the EBRD nor the Tajik Central Bank commented but Tojiksodirotbank did release a fairly oblique statement confirming it had been placed under administration.

“The National Bank of Tajikistan Board in accordance with Articles 48, 49 and 50 of its Laws, to improve the financial situation of Tojiksodirotbank and protect the rights of its depositors and creditors on 18th May 2016 appointed a temporary administration in the bank for three months,” it said in a statement.

The banking sector in Tajikistan, hit by a deep economic downturn, has accumulated overdue loans and is faced with cash shortages. An IMF delegation earlier this year said that some of Tajikistan’s biggest banks were on the brink of default.

Tajikistan’s financial sector is under stress because the value of remittances from migrant workers has shrunk significantly over the past two years, undermining the economy and, crucially, hitting customers’ ability to pay back their loans.

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(News report from Issue No. 281, published on May 20 2016)

Turkmenistan to discuss WTO membership

MAY 14 2016 (The Conway Bulletin) – A WTO delegation travelled to Ashgabat to hold talks with Turkmen officials on strengthening cooperation. Turkmenistan has been negotiating its future WTO membership since 2014. Turkmenistan is the only Central Asian state which is neither a member or an observer country in the WTO.

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(News report from Issue No. 281, published on May 20 2016)

Business comment: Corporate Governance in Central Asia

MAY 13 2016 (The Conway Bulletin) – These are tough times for corporate governance and the general business climate in Central Asia.

In rapid succession, news of a raid at a gold company in Kyrgyzstan, the seizure of a Kazakh refinery in Romania, an allegedly fraudulent scheme to fake sales of Uzbek cars and the freezing of a murky hotel sale linked to two exiled Kazakhs in New York came to our readers’ attention over the past two weeks.

Since the raid at its subsidiary’s office in Bishkek, Centerra Gold has reiterated its readiness to cooperate with the authorities and the government to negotiate a solution. We think the raid was a way for the government to flex its muscles.

A bizarre scheme to fake car sales from Uzbekistan to Russia was unearthed this month, perhaps reminding us of how two plus two is not always equal to four in Central Asia. Undoubtedly, the current economic crisis has sparked more corruption.

The seizure of KMG Romanian refinery allows us to look back into the murky deal that first brought Kazakh state-owned business into Romania. Authorities didn’t seem impressed with acrobatic financial manoeuvres performed by former managers at Rompetrol. They’re now seeking damages and a court sentence might negatively affect China’s CEFC, which just bought into the venture.

Lastly, it’s not a surprise that a US court froze the sale of a hotel owned by Mukhtar Ablyazov and Viktor Khrapunov, two Kazakh businessmen and arch-rivals of President Nursultan Nazarbayev. They seemed to be needing some cash but their involvement in court cases in Kazakhstan, the US and Europe turns their transactions into red flags.

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(News report from Issue No. 280, published on May 13 2016)

Manat stabilised, says Azerbaijan’s Bank chairman

MAY 9 2016 (The Conway Bulletin) – Elman Rustamov, chairman of Azerbaijan’s Central Bank, said the manat currency will maintain a stable exchange rate with the US dollar for the rest of the year, dismissing rumours of further depreciation. The Central Bank devalued the manat in February 2015 and later, in December, ditched the currency peg to the US dollar. It is now worth half its Jan. 2015 value.

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(News report from Issue No. 280, published on May 13 2016)

Loan plugs Kazakh government’s deficit

MAY 11 2016 (The Conway Bulletin) – Kazakhstan’s ministry of finance said it has agreed to take a $1b loan from the World Bank’s International Bank for Reconstruction and Development to plug a budget deficit that has opened up since an economic downturn hit the region. Finance minister Bakhyt Sultanov, said the loan will have a 20-year maturity and will be used to pay for government expenses in 2016.

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(News report from Issue No. 280, published on May 13 2016)

Tajik bank asks EBRD for emergency loan

DUSHANBE, MAY 9 2016 (The Conway Bulletin) — In the most serious indication so far that Tajikistan’s banking system is beginning to buckle under the pressure of this prolonged economic downturn, Tojiksodirotbank admitted it was on the brink of a liquidity crisis and that it had applied to the EBRD for a loan to save it.

Representatives of TSB, as Tojik- sodirotbank is commonly known, flew to London to meet with EBRD officials on the sidelines of its Annual General Meeting.

“Tojiksodirotbank, one of the country’s systemically important banks, needs financial assistance in the current situation,” TSB said in a statement.

Neither TSB, nor the EBRD commented on the size or the timing of the loan.

In March, Tajikistan’s Central Bank invited EBRD representatives to propose solutions to a worsening financial situation. The Tajik som has fallen heavily in value against the US dollar and all-important remittances are down by around 50% because a recession in Russia has wiped jobs for migrants.

This year nervous savers have been withdrawing money from banks they fear are on the edge of bankruptcy.

Also, the proportion of so-called non-performing loans (NPLs) in the system has skyrocketed. The proportion of loans that were 60 days or more overdue grew from 9.9% at the end of 2013 to 24% at the end of 2014, according to official data. Media has also said that this figure may be nearer 33% now.

Earlier this year the IMF said that TSB and its largest competitor, Agroinvestbank, were exposed to increased credit risk and could become insolvent.

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(News report from Issue No. 280, published on May 13 2016)

Strong GDP growth, says Turkmen President

MAY 7 2016 (The Conway Bulletin) – Turkmen president Kurbanguly Berdymukhamedov said that the country’s GDP was 6.3% higher in January-April 2016 than the same period in 2015. The EBRD has predicted Turkmenistan’s GDP will increase by 6.5% this year and 7.1% in 2017. Last year, Mr Berdymukhamedov devalued the manat currency by 19% and imposed austerity measures, phasing out free gas supplies and other subsidies.

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(News report from Issue No. 280, published on May 13 2016)

Electricity output increases in Turkmenistan

MAY 10 2016 (The Conway Bulletin) – Turkmenistan’s ministry of energy reported that in Jan.-April 2016, the country produced 7.6b kWh of electricity. This is 1.6% higher than the same period last year. Turkmenistan is looking to expand electricity exports to neighbouring Iran and Afghanistan and plans to construct 15 gas turbine power plants by 2020.

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(News report from Issue No. 280, published on May 13 2016)