APRIL 10 2015 (The Conway Bulletin) – In a rare anti-government protest in Kazakhstan, dozens of homeowners demonstrated in Astana about the extra pressure they are under to meet US dollar denominated mortgage repayments, media reported. The Central Bank cut the value of the tenge by about 20% this year and is under pressure to do so again as the rouble remains low.
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(News report from Issue No. 227, published on April 15 2015)
APRIL 3 2015 (The Conway Bulletin) – Timur Kulibayev, one of Kazakhstan’s richest men and son-in-law of President Nursultan Nazarbayev, criticised the Central Bank’s handling of the growing economic fallout, a rare show of dissent by a senior member of the Kazakh elite.
At a business forum in Almaty, Mr Kulibayev said he was “not satisfied with the work of the Central Bank”, specifically with regards to the lack of liquidity.
“How can entrepreneurs get access to liquidity?” he said. “How can lending become more affordable? When we travel to the regions, these are the questions we are asked.”
The fallout from a slide in the value of the Russian rouble and a drop in the price of oil has hurt economies in Central Asia and the South Caucasus, piling pressure on its leaders and businesses. Mr Kulibayev owns Halyk Bank, one of Kazakhstan’s biggest banks.
Once feted as a leader–-in-waiting, Mr Kulibayev has become increasingly out-spoken and isolated.
The National Chamber of Entrepreneurs (NCE), a powerful organisation which he heads, has repeatedly criticised the Central Bank’s support for the national currency despite devaluation pressure.
Last month, Umut Shayakhmetova, the CEO of Halyk Bank also said in an interview that the Central Bank was hurting the economy by not allowing the currency to free-float.
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(News report from Issue No. 226, published on April 8 2015)
APRIL 3 2015 (The Conway Bulletin) – The Uzbek sum dropped by 17% on the black market immediately after incumbent president Islam Karimov won a presidential election at the end of last month, data showed.
In Uzbekistan, the black market is vital to monitor as it most accurately tracks the value of the sum against the US dollar. Bank rates are fixed.
Uzmetronom, an independent news source, said the sum is trading at 4,200-4,500 sums per $1 on the black market, double the official rate. The website didn’t give any reasons why the sum had fallen so sharply after the election. Generally, though, the drop in remittance from Russia, the fall in energy prices and a fall in the value of the rouble have pressured the sum’s value.
Prices for basic goods are also rising, which is putting pressure on minimum wage workers.
Elections in both Uzbekistan and Kazakhstan this spring were supposed to bring about stability and reinforce trust. Instead, though, they may be bringing more instability.
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(News report from Issue No. 226, published on April 8 2015)
APRIL 3 2015 (The Conway Bulletin) – Inflation in Georgia will hit 5% by end-2015, Central Bank chief Giorgi Kadagidze told Bloomberg. Mr Kadagidze said the devaluing lari was the main reason for the predicted inflation rise. Official statistics said annualised inflation measured 2.6% in March.
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(News report from Issue No. 226, published on April 8 2015)
APRIL 2 2015 (The Conway Bulletin) – Azerbaijan’s Central Bank chief, Elman Rustamov, said that he believed the Azerbaijani government budget for 2016 would be based on oil costing around $50 per barrel, media said.
This is significant as Azerbaijan struggles to make a profit if oil prices are stuck at around $50 per barrel.
Effectively, then, Mr Rustamov is predicting the problems facing Azerbaijan’s economy will continue into next year.
At the end of last year Azerbaijan’s government had to cut various projects because oil prices had collapsed. Azerbaijan’s economy is hugely dependent on energy. International advisers have said that the government needs to concentrate on diversifying its economy away from oil and gas. Reform has been slow, though.
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(News report from Issue No. 226, published on April 8 2015)
APRIL 5 2015 (The Conway Bulletin) – Around 1,000 people gathered on the outskirts of Baku to demonstrate against a stalling economy and a crackdown on civil rights. The authorities sanctioned the rally. Some opposition said the real aim was to nullify genuine anti-government protests.
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(News report from Issue No. 226, published on April 8 2015)
APRIL 3 2015 (The Conway Bulletin) – Alcohol prices in Georgia have increased by 10% over the past year, the national statistics agency said.
Alongside the rising price of food (3.7%) and healthcare (6%) the cost increase in Alcohol is a major driver of overall inflation. Annualised inflation for March measured 2.6%, up from 1.3% in April.
Analysts blame a fall in the value of the lari currency for this price rise but new taxes slapped on alcohol from March 1 have also driven up prices.
The government increased tax on beer by 50% and on hard liquor by 100%. It has said the tax will bring in an extra 100m lari ($45m) and harmonise Georgia’s tax laws with the EU.
And for now, it appears, thirsty consumers and bar owners in Tbilisi are shouldering the price rises.
Cory Greenberg, owner of Dive Bar in Tbilisi said distributors wanted more for a litre of beer but he has promised to keep prices steady.
“Not so much for charity, but because it is smart,” he said. “Let the others raise their prices and business will come to us.”
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(News report from Issue No. 226, published on April 8 2015)
APRIL 4 2015 (The Conway Bulletin) – Kazakhstan’s sovereign wealth fund has spent $8b, or 10% of its total, over the past nine months supporting the tenge currency against devaluation pressure, media reported quoting official statistics. The size of the drop gives a good indication on the severity of the economic downturn.
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(News report from Issue No. 226, published on April 8 2015)
APRIL 2 2015 (The Conway Bulletin) – Roughly 55% of Georgians feel the country is heading in the wrong direction, a new poll for the US political group International Republican Institute (IRI) said.
This is a higher proportion than at any time since September 2009, during the aftermath of a brief war against Russia in 2008, when 63% of respondents said the country was heading in the wrong direction.
It is also, and this is important, the first time since March 2010 that a higher proportion of people have said that Georgia is heading in the wrong direction rather than the right direction. The IRI poll is, perhaps, the most accurate in Georgia and is a decent weather-mast to judge the general mood.
And it’ll make nasty reading for the governing Georgian Dream coalition which is having to deal with various economic problems as well as internal squabbling and accusations that it is using the Georgian justice system to settle old scores with officials who served under former president Mikheil Saakashvili.
In the IRI poll people’s main worries were the economy and Russian aggression. Over 60% of the respondents said the economy had worsened in the past couple of months and 76% said that Russia was the main threat to Georgia.
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(News report from Issue No. 226, published on April 8 2015)
APRIL 2 2015 (The Conway Bulletin) – Chinese company CITIC has agreed to build a vital fourth Kazakh oil refinery in Aktau, Forbes Kazakhstan reported. The deal was arranged during a trip last month to China by Kazakh PM Karim Massimov. The project should cost around $6b and will be completed within 5 years.
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(News report from Issue No. 226, published on April 8 2015)
