Tag Archives: economy

Kazakhstan ratifies EU trade deal

MARCH 17 2016 (The Conway Bulletin) – Kazakhstan’s Senate ratified a trade deal with the European Union which Kazakh foreign minister Yerlan Idrissov said had far reaching implications. Mr Idrissov said: “The most important part of the new treaty is the trade section, which offers additional guarantees of stability to our European partners and will help raise Kazakhstan’s investment appeal.”

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(News report from Issue No. 272, published on March 18 2016)

Uzbekistan raises gas prices

MARCH 17 2016 (The Conway Bulletin) – Uzbekistan has approved gas price increases of 8.2% for its population from April 1, the second price rise in six months.

Utility prices across the region have been increasing over the past couple of years as local currencies have devalued and overall inflation has accelerated.

But they are still sensitive, emotive issues.

Gas and electricity have always been subsidised in the former Soviet Union, so people generally resent increases.

In October, the authorities raised gas prices by 7.2%. This time, other utilities will also rise in Uzbekistan, the government said.

The price of cold water will rise by 5.7%, central heating and hot water by 9% and electricity by 8.9%. Last year in Armenia, proposed electricity price rises triggered street demonstrations that forced the government to back down from increasing prices.

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(News report from Issue No. 272, published on March 18 2016)

Kazakhstan reveals Q4 GDP growth

MARCH 17 2016 (The Conway Bulletin) – Kazakhstan’s economy grew by 1.2% in Q4 2015, the same rate as in Q3, official data showed. Like the rest of the region, Kazakhstan’s economy has been under increasing pressure from a worsening economic outlook. Last year Q1 GDP growth measured 2.3% and Q2 1.7%. This year the government has predicted growth of just 0.5%.

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(News report from Issue No. 272, published on March 18 2016)

Kyrgyzstan’s GDP drops

MARCH 11 2016 (The Conway Bulletin) – Kyrgyzstan’s GDP was 7.8% lower in the first two months of 2016 compared to the same period in 2015, the country’s statistics agency said. The drop was linked to a sharp fall in gold exports which make up the bulk of Kyrgyzstan’s exports. Gold and silver production was down over 50%, it said. The data shows just how vulnerable Kyrgyzstan is to fluctuations in its core export.

ENDS

(News report from Issue No. 272, published on March 18 2016)

EBRD to help Armenia develop currency markets

MARCH 15 2016 (The Conway Bulletin) – The European Bank for Reconstruction and Development (EBRD), one of the biggest investors in the former Soviet region, signed a deal with Armenia’s Central Bank to help it develop dram-listed capital markets, to improve Armenia’s image as a reliable financial market.

The agreement is part of EBRD’s Local Currency Programme (LCP), which is also aimed at Georgia, Kyrgyzstan and Tajikistan.

“The EBRD provides local currency loans through procuring local currency funding or hedging, by entering into currency swaps with third party providers, such as the Currency Exchange Fund,” the EBRD said in a statement.

It’s been one of the EBRD’s stated aims to develop markets and financial tools which support local tools and reduce the dollarisation of economies.

“Expanding the availability of local currency financing is crucial for the growth of local businesses by providing them with fund at affordable rates and manageable risk,” Andre Kuusvek, EBRD director at the LCP said in a statement.

Strengthening and protecting local currencies has become especially important after the drop in oil prices globally exposed their vulnerabilities.

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(News report from Issue No. 272, published on March 18 2016)

Armenian economy expects low growth

MARCH 8 2016 (The Conway Bulletin) – The World Bank predicted that Armenia’s economy would grow at 2.5% this year, it’s lowest rate for five years. Last year, the World Bank said that Armenia’s economy grew by 3%. It said that the main problems facing Armenia were a recession in Russia and structural weaknesses in its own economy.

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(News report from Issue No. 271, published on March 11 2016)

Georgian wine exports increase

MARCH 7 2016 (The Conway Bulletin) – Imports of Georgian wine to Russia more than doubled in the first two months of the years compared to the same period in 2015, Georgia’s national wine agency reported. Wine is both an important export for Georgia and also an important cultural identifier. Russia recently lifted a ban on the import of Georgian wine.

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(News report from Issue No. 271, published on March 11 2016)

Russia gives Kyrgyzstan grants

MARCH 6 2016 (The Conway Bulletin) – Russia gave Kyrgyzstan a $30m grant to help it cover holes in its finances that have appeared during the economic downturn. Specifically the grant was supposedly earmarked to finished building new accommodation for police and army recruits. The economic downturn has hit Kyrgyzstan hard, whipping millions off is budget. Russia curries favour with Central Asian states by handing out grants or cheap loans.

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(News report from Issue No. 271, published on March 11 2016)

Economic downturn threatens to shut Georgian factories

MARCH 11 2016, RUSTAVI, Georgia (The Conway Bulletin) — The growing economic malaise is starting to bite in Georgia. Just ask 51-year-old Manana who works at the Azot chemical plant in Rustavi, an industrial town around 25km from Tbilisi.

The factory, which employs 2,000 people, is faced with closure within a month unless it can secure a reduction in the price it pays for gas.

“I don’t know what I would do, if they really close for good,” she said. Her face wrinkled, she sighed and then turned towards the entrance of the Soviet-built factory. Today she would work but she wasn’t sure what the future held.

This is a story playing out across Georgia, where industrial unrest is growing as the lari currency drops in value and inflation starts to rise. Like the rest of the region, vital remittances from abroad, mainly Russia, have fallen and frustration is growing with the government.

Factories and mines are reporting worker unrest and bosses are warning of closures and redundancies.

Revaz Karanadze is an activist with the Tbilisi Solidarity Network, a grassroots organisation supporting regional labour protests. She said falling global oil prices had undermined the economy.

“The economic situation in the region, and especially oil-producing neighbour Azerbaijan, hits the factory and mining,” she said.

The Azot chemical plant produces fertilisers, as well as ammonia, sodium cyanide, nitric acid and liquid oxygen. It uses more than 300m cubic meters of gas per year, the highest consumption in Georgia. Two-thirds of its costs are gas.

The problem is that it negotiated an 8 year price deal for gas in 2011 when oil prices, which drive gas prices, were around $115/barrel. They are now around a third of that price.

Georgian ministers and SOCAR, the Azerbaijani state-owned company that supplies the gas, have said that a deal is in sight but Manana, the factory worker, was less optimistic.

“They always say it’ll get better, but we are not the only ones struggling. Who knows what tomorrow will bring,” she said.

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(News report from Issue No. 271, published on March 11 2016)

Turkmen President sacks more senior government officials

MARCH 5 2016 (The Conway Bulletin) – Over the past few weeks Turkmen President Kurbanguly Berdymukhamedov has sacked and reprimanded several government officials accusing them of corruption and providing fake data, a shake up that may betray his frustration with slowing economic and social projects.

The latest officials to feel Mr Berdymukhamedov’s wrath were Akmyrat Mamedov, head of the country’s Statistics Committee, and Batyr Halliyev, the meteorological service. They were both sacked for “short- comings at work”.

And apparently signalling that more sackings were likely, Mr Berdymukhamedov said the government was not immune from corruption. He cited the case of former deputy PM, Baimurat Khodzhamukhamedov, who was found guilty last year of taking bribes of $1.5m.

He went on to harshly criticise the head of the State Commodity and Raw Materials Exchange, a local market for commodities.

Just days earlier, Mr Berdymukhamedov had reshuffled government officials in the National Security Service and the Border Service.

In countries as reclusive as Turkmenistan, government appointments give an insight on the political equilibrium within the country.

Mr Berdymukhamedov is known for publicly shaming officials for incompetence and strongly advocating against corruption. Opposition activists abroad, though, say that these charges are generally fabricated to crack down on dissenting or inefficient bureaucrats.

A regional economic crisis has hit government budgets across the region. Although reclusive and not given to releasing anything other than the most positive economic data, information leaking out of Turkmenistan suggests that this downturn has hit it hard too. Currency controls and a deferment of government salaries have all been muted.

The mass sackings is another signifier that all is not well at Mr Berdymukhamedov’s court.

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(News report from Issue No. 271, published on March 11 2016)