JULY 9 2015 (The Conway Bulletin) – Around 30% of the Kyrgyz population live in poverty, media quoted the National Statistics agency as saying. People are considered living in poverty if they survive on less than $45/day. Kyrgyzstan is one of the poorest countries in the world.
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(News report from Issue No. 239, published on July 9 2015)
JULY 3 2015 (The Conway Bulletin) – The amount of som held in Kyrgyz bank accounts has fallen by 11% since the beginning of the year, the Central Bank said, a reflection of the reduced confidence that people in Kyrgyzstan have of their national currency. The som, like other Central Asian currencies, has lost around a third of its value since November 2014.
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(News report from Issue No. 239, published on July 9 2015)
TBILISI, JULY 7 2015 (The Conway Bulletin) — Georgia’s Central Bank scorned as inadequate the government’s plan to cut spending in the face of a region-wide economic downturn.
The statement will increase tension between the Central Bank and the Georgian Dream Coalition government which have become embroiled in a row about oversight of commercial banks.
Central Bank chief Giorgi Kadagidze, who was appointed by the former government of President Mikheil Saakaashvili, and his allies have said the government’s criticism of him is politically motivated.
“Expenditures should be cut mostly at the expense of current spending,” the Central Bank said in a statement. “If the goal of the Parliament is to ease the loan burden caused by lari depreciation or to offset further downward pressure on lari, appropriate changes should be made in the [budget], which are not envisaged by the proposed draft of the budgetary amendments.” This is rare criticism.
Last month MPs voted to cut spending across different ministries. The lari has lost just over a quarter of its value since November 2014.
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(News report from Issue No. 239, published on July 9 2015)
JULY 6/7/8 2015 (The Conway Bulletin) – Indian PM Narendra Modi started an eight day tour of Central Asia and Russia with stops in Tashkent and Astana, an expedition he hopes will generate energy deals and shore up business links.
This is the first grand tour of Central Asia by an Indian leader, underlining just how seriously the country is now taking the region. But India is also playing catch up with China which has already established deep business and government level links in Central Asia.
The need to deepen relations was acknowledged by Mr Modi in a statement to media he released after meeting Kazakh president Nursultan Nazarbayev.
“I spoke about my vision for India’s relations with Central Asia,” he said.
“Kazakhstan is our biggest economic partner in the region. But, our relations are modest, compared to our potential. We will work together to take economic ties to a new level.”
Despite the rhetoric and good will that Mr Nazarbayev and Uzbek President Islam Karimov before him greeted Mr Modi with, no major deals were announced.
In Tashkent, the two sides said they discussed speeding up a deal to deliver uranium from Uzbekistan to India. In Astana, the Indian and Kazakh delegations also agreed a uranium supply deal and a mechanism to broaden military cooperation.
Mr Modi headed to the Russian city of Ufa on July 9 for a two day break from Central Asia to attend a meeting of the so- called BRICS, and a group that also includes Brazil, Russia, China and South Africa, and a summit of the Shanghai Cooperation Organisation (SCO). India is an observer member of the SCO, an economic/security group headed by Russia and China and focused on Central Asia.
He returns to Central Asia on July 11 with a meeting in Ashgabat with Turkmen leader Kurbanguly Berdymukhamedov before travelling to Kyrgyzstan and Tajikistan.
Mr Modi’s meeting with Mr Berdymukhamedov is arguably the most important.
India is the end destination for gas in an ambitious plan to build a pipeline from Turkmeni- stan across Afghanistan and Pakistan.
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(News report from Issue No. 239, published on July 9 2015)
JULY 3 2015 (The Conway Bulletin) – Year-on-year inflation in Georgian in May hit 4.5%, up from 3.5% a month previously, the official statistics said. This was the highest rate of inflation since September 2014 and confirmed an upward trend in 2015 driven mainly by alcohol, food and cigarettes.
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(News report from Issue No. 239, published on July 9 2015)
JULY 7 2015 (The Conway Bulletin) – Remittances to Armenia in the first half of the year were down 33% to $408m, the Central Bank said. This is consistent with other countries in the south Caucasus which are struggling to cope with the fall out from a recession in Russia and a drop in oil prices.
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(News report from Issue No. 239, published on July 9 2015)
JULY 3 2015 (The Conway Bulletin) – Azerbaijan’s State Oil Fund, or SOFAZ, said that it had bought $500m worth of Chinese yuan, part of a policy to diversify its assets.
The purchase will also endear Azerbaijan to China, another unsaid reason for SOFAZ to buy yuan. China has been boosting its interest in the South Caucasus over past few years and Azerbaijan is looking for more allies.
“In order to further broaden and diversify the currency basket, SOFAZ has started making investments in Chinese Yuan,” SOFAZ said in a statement on their website.
And that wasn’t all. SOFAZ said it was looking at further exposure to China.
“Going forward, SOFAZ is planning to gain exposure to Chinese equity markets,” it said.
Azerbaijan’s oil fund is important because at $37b it is one of the biggest investment funds in the world. Its mission is to act as a social fund for the government to dip into in special circumstances and to fund large infrastructure projects.
It has begun to diversify its investments and, over the past couple of years, has built up a property portfolio in Europe and Asia.
It has been planning to buy into China ostentatiously to further diversify its investments.
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(News report from Issue No. 239, published on July 9 2015)
JULY 6 2015 (The Conway Bulletin) – To counter an increase in the number of Uzbek migrant workers returning home from Russia without work, Uzbekistan’s government has asked South Korea to increase the quota of workers it takes, RFE/RL reported. South Korea takes up to 22,500 migrant workers from Uzbekistan.
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(News report from Issue No. 239, published on July 9 2015)
BISHKEK/KYRGYZSTAN, JULY 9 2015 (The Conway Bulletin) — Timur, a car mechanic in Bishkek, was more sanguine than most about impending petrol price rises.
“I do not think the fuel price increase will bother me,” the 23-year-old said. “There are always ups and downs in fuel price.”
Analysts in Kyrgyzstan anticipate a fuel price rise of between 7-15% this year because of the introduction of an excise tax that the government has introduced to plug a hole it is finances.
It’s a price rise that is all but certain to irritate ordinary Kyrgyz who have seen the value of their som savings plummet over the past few months and inflation slowly accelerate.
Russian importers dominate Kyrgyzstan’s petrol imports and, effectively set prices. The Kyrgyz government, though, has said that it wants to bring in a tax on fuel that will make up a shortfall generated by a drop in income during the recent downturn in economic fortunes. Like the rest of Central Asia, Kyrgyzstan’s economy is closely tied to Russia. The Russian economy has floundered because of a fall in oil prices and Western-imposed sanctions.
In March, the Kyrgyz government said that it was going to slap the tax on fuel and alcohol. Initially, analysts said the new tax was needed to bring the country in line with its future partners in the Eurasian Economic Union. Kyrgyzstan is set to join the economic group, which also includes Kazakhstan, Belarus and Armenia, this year.
And on the streets of Bishkek, other than Timur, the mechanic, people were increasingly frustrated. Taxi drivers said that whatever happened they would pay more for petrol but the same fee to rent the car.
“Of course, it is bad because we, as taxi drivers, pay for fuel on our own. Whether the fuel price is moderate or high, we pay the same percentage to the taxi service owners [to hire the taxis],” said a young man driving his car.
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(News report from Issue No. 239, published on July 9 2015)
JULY 4 2015 (The Conway Bulletin) – Prices in Armenia have been dropping since January, its official statistics agency said. It said that overall inflation in June measured a 5.5% increase from the same month one year earlier. A drop in food prices has slowed inflation, the Central Bank said in a statement.
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(News report from Issue No. 239, published on July 9 2015)
