MAY 19 2015 (The Conway Bulletin) – Kazakhstan aims to join the World Trade Organisation (WTO) by the end of the year, PM Karim Massimov said at a meeting with Lithuanian government officials in Astana. Kazakhstan has been negotiating to join the WTO since the early 1990s.
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(News report from Issue No. 232, published on May 20 2015)
MAY 19 2015 (The Conway Bulletin) – The IMF weighed into the debate surrounding the tenge when it said the Kazakh Central Bank had enough cash to defend the currency against a sudden devaluation. The Central Bank has been under increased pressure to follow neighbours and devalue its currency.
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(News report from Issue No. 232, published on May 20 2015)
MAY 15 2015 (The Conway Bulletin) – Azerbaijan’s Constitutional Court ruled that loans taken out in US dollars before the 30% devaluation of the Azerbaijani manat in February have to be repaid in full. Borrowers had hoped the Court would agree for debt to be repaid in manat at the lower rate.
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(News report from Issue No. 232, published on May 20 2015)
SUMQAYIT/Azerbaijan, MAY 20 2015 (The Conway Bulletin) — Absheron, the narrow peninsula surrounding Azerbaijan’s capital Baku, gives a remarkable insight into the country’s patchy oil-funded growth.
Dystopian industrial decay, dirty villages of crumbling homes and bleak oil fields of rusty drills share the same few dusty square miles with newly built sumptuous seaside resorts, whitewashed villas and long stretches of crowded beaches dotted with flashy restaurants and garish wedding palaces.
The coexistence of opposites is arguably not a harmonic one. Embarrassed by the deteriorating state of Absheron’s infrastructure and the dire living conditions of much of its population Azerbaijan’s political elite seems to have opted for the creation of a Potemkin-façade of disproportionate lavishness.
Along the modern highway connecting Heydar Aliyev International Airport to the resort town of Buzovna high marble walls veil the view of surrounding shantytowns and oil spills.
Azerbaijan’s government indulges in creating unrepresentative showcases of the country, while the huge revenues of the oil and gas industry centred in and around Absheron, fail to filter down to the local inhabitants.
The uneven distribution of both profits and investments is epitomised by the fate of Sumqayit, Absheron’s biggest town. A thriving industrial centre during Soviet times, this northern shore town of concrete blocks and wide alleys now feels abandoned.
Resentment towards the government is high in Sumqayit and the town has become a breeding ground for religious extremism. Last year there were reports that Sumqayit had become a hotbed for Syria-bound would-be jihadists and a string of arrests and search operations were carried around town.
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(News report from Issue No. 232, published on May 20 2015)
MAY 18 2015 (The Conway Bulletin) – Uzbeks’ lack of confidence in the som has weakened Uzbekistan’s banks, reduced their capital and hit their ability to pay salaries and pensions.
This was the withering assessment of Ulugbek Mustafayev, a deputy chairman of Uzbekistan’s Central Bank, according to a report by the US-funded Radio Free Europe/Radio Liberty (RFE/RL).
RFE/RL said it had seen a copy of a letter, dated April 10 and stamped “official use only” written by Mr Mustafayev to Uzbek PM Shavkat Mirziyoyev.
The letter gives a vital, and rare, insight into official Uzbek thinking on monetary policy. It’s virtually unheard of for a senior official to speak out against his or her bosses.
In the letter, Mr Mustafayev said a lack of confidence by the population in the som currency had pushed people into relying on the black market and US dollar payments over bank accounts. He said that this had created a shortfall in capital of more than 2 trillion som ($620m) and that state pensions and salaries to interior ministry officials, the defence ministry and other government workers were not being paid.
The regional financial crisis and the fall in the som/dollar exchange rate has reduced the population’s trust in the national currency and in financial institutions.
Most transactions in Uzbekistan are reportedly carried out in cash. Mr Mustafayev said that consumers had paid in far less than expected into Uzbek banks in the first quarter of the year.
The Uzbek system, already frail, is becoming weaker, Mr Mustafayev said in his letter.
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(News report from Issue No. 232, published on May 20 2015)
MAY 20 2015 (The Conway Bulletin) – The IMF and the European Bank for Reconstruction and Development (EBRD) both delivered withering assessments of the economies of Central Asia and the South Caucasus, piling pressure on governments across the region.
Not since the global financial crisis of 2008 and 2009 has the region been under such economic strain, the IMF said in its assessment.
“Exchange rate developments, such as the appreciation of the US dollar and the depreciation of the rouble, are compounding the problem,” media quoted Juha Kähkönen, deputy director of the IMF’s Middle East and Central Asia Department, as saying at the presentation of the report in Kazakhstan on May 19.
The region’s average growth rate this year, the IMF said, would slow to 3.3% from 5.3% in 2014.
A collapse in the price of oil and the value of the rouble have knocked economies in Central Asia and the South Caucasus. Currencies have nosedived, losing around a third of their values in only a few months, governments have scrambled to cut budgets and companies have laid off hundreds of workers.
All the data, in short, paints a turbulent portrait of the last few months and an equally troublesome outlook for the next couple of years.
Mr Kähkönen’s statement came only a few days after the EBRD had issued a similar warning at its AGM in Tbilisi. It drew attention to the sharp fall in remittances to the region from Russia and the impact this would have.
“As the Russian economy has declined, remittances from Russia to Central Asia and to eastern Europe and the Caucasus have been declining at an alarming rate,” the bank said in a statement.
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(News report from Issue No. 232, published on May 20 2015)
MAY 14 2015 (The Conway Bulletin) – At its two-day annual general meeting in Tbilisi this year, the European Bank for Reconstruction and Development downgraded the host nation’s economic growth rate from 4.2% to 2.3% in 2015.
The EBRD’s latest report predicted overall stagnation in 2015 across all its 35 countries in the former Soviet Union and the Middle East. This is mainly due to a drop in oil prices and pressure on currencies generated by a strong US dollar.
Specifically, the EBRD said it had downgraded Georgia’s economic growth prospects because of the stronger than expected impact of the regional financial crisis centred on Russia. This expressed itself in lower remittances from abroad and a heavy drop in the value of national currencies.
Money transfers from abroad in April were down 25% on 2014 and the Georgian lari has also lost 34% of its value against the US dollar since November 2014.
These dreary economy forecasts pile extra pressure on the Georgian Dream coalition government although EBRD president Suma Chakrabarti did have some more comforting words for his hosts.
He said that Georgia was still performing better than average and has the strong potential for economic growth in the future.
“I don’t think it will be too long before Georgia will be able to take advantage of its productive potential going forward and the economic fundamentals here are sound,” he said.
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(News report from Issue No. 232, published on May 20 2015)
MAY 20 2015 (The Conway Bulletin) – Consumer prices in Armenia rose by 5% in the first four months of the year, media reported quoting the National Statistics Agency. This rise represented a steady, but not alarming, price inflation.
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(News report from Issue No. 232, published on May 20 2015)
MAY 7 2015 (The Conway Bulletin) – The World Bank said it expects Kazakh GDP to grow by 1.3% this year, a drop of 0.5% on a previous estimate. It said growth rates would rise in 2016 to 2.8% and to 3.9% in 2017. A fall in global oil prices and a drop in the Russian rouble have hit C.Asia.
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(News report from Issue No. 231, published on May 13 2015)
MAY 12 2015 (The Conway Bulletin) – Kyrgyzstan’s GDP in the first four months of 2015 was about 7% higher than for the same period in 2014, Chinara Turdu- bayeva, head of the state’s statistics committee, told media.
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(News report from Issue No. 231, published on May 13 2015)
