Tag Archives: Eurasian Economic Union

Oil export ban is illogical, says ex-Kyrgyz official

APRIL 1 2016 (The Conway Bulletin) – For the past six years, there has been an informal ban on petroleum exports from Kazakhstan to Kyrgyzstan, former president of Kyrgyzstan’s Oil Traders Association, Zhumakadyr Akeneyev, said at a conference in Bishkek. According to him this practice is illogical within the framework of the Eurasian Economic Union and it has caused a rise in illegal trading. Kyrgyzstan imports almost all its petroleum products from Russia.

ENDS

(News report from Issue No. 275, published on April 8 2016)

Editorial: Kazakh-Russian avaition row

APRIL 1 2016 (The Conway Bulletin) – Kazakh fans of the BBC’s motoring programme TopGear fans were not the only disappointed onlookers of the aviation spat between Russia and Kazakhstan that grounded Kazakhstan-bound Aeroflot flights and Russia-bound Air Astana flights for a few days.

For supporters of the Kremlin-led Eurasian Economic Union, the spat was embarrassing. How do two, apparently close, allies who inhabit the same economic and military groups, come to squabble over flight paths?

The diplomatic exchange between the two aviation regulators seems to have originated from a request put forward by Air Astana to fly over Russian territory to reach Ulaanbaatar, its newly-established destination in Mongolia.

This row now appears to have been resolved but the damage to the image of the various Russian-led regional groups, chiefly the Eurasian Economic Union, will be harder to repair.

Still, at least the Top Gear team will now be able to travel to Kazakhstan, via Moscow, for filming.

ENDS

(Editorial from Issue No. 274, published on April 1 2016)

Atambayev sacks head of Kyrgyz- Russian Development Fund

MARCH 14 2016, BISHKEK (The Conway Bulletin) — Kyrgyzstan’s President Almazbek Atambayev fired Nursulu Akhmetova, one of the most prominent women in Kyrgyz finance, as head of the Kyrgyz-Russian Development Fund barely a year after she took the job.

The $500m Kyrgyz-Russian Development Fund was set up last February to smooth Kyrgyzstan’s entry into the Eurasian Economic Union.

It was supposed to hand out grants and cheap loans to businesses to help them make the transition. Instead, in the seven months since Kyrgyzstan became a Eurasian Economic Union member, the Kyrgyz- Russian Fund has become a source for frustration for Kyrgyz businesses.

News reports quoted Mr Atambayev saying at her sacking: “I’ve spoken about this a few times with the Prime Minister. The Fund has not developed well, and the Government did not make it to work well.”

Kyrgyz businesses have accused the fund of changing the rules and making cash available only to large companies rather than small businesses.

Under Ms Akhmetova, the Fund had insisted that to qualify for loans or grants, businesses had to take out a minimum loan of $3m, contributing 20% itself.

For Mr Atambayev, the sacking is a personal disappointment. Before getting the job, on a three year contract, Ms Akhmetova had been head of the analytical department of the Presidential Administration. She was also its deputy director. Mr Atambayev would have worked with Ms Akhemetova personally.

Her replacement was named as Kubanychbek Kulmatov, a former mayor of Bishkek.

Analyst Emil Juraev said that the Fund still had a role to play if it can regain credibility under new leadership.

“The Russian-Kyrgyz Development Fund, if used well, can certainly have a significant positive effect on economic development of Kyrgyzstan,” he said. “However, so far there have been many reasons for concern about the ability of Kyrgyzstan to effectively and freely manage the funds.”

ENDS

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

Kyrgyzstan asks Eurasian Bank for crisis cash

BISHKEK, MARCH 9 2016 (The Conway Bulletin) — Kyrgyzstan’s finance minister Adylbek Kasymaliyev asked the Eurasian Fund for Stabilisation and Development to double its aid to $427m to help the country weather both an economic downturn and the impact of joining the Kremlin-led Eurasian Economic Union.

Remittance inflows to Kyrgyzstan have fallen by 40%, the som currency has lost 25% of its value and major infrastructure projects have been cancelled over the past six months.

Mr Kasymaliyev said Kyrgyzstan had already spent more than the $255m of loans and grants that the Fund, managed by the Eurasian Development Bank had given it.

“We have already surpassed our limit of $255m by allocating $260m. For this reason, we have asked the Council to raise the limit to $427,” Mr Kasymaliyev told local media.

The funds will be used for a range of projects, including agriculture.

Importantly, though, analysts said that although Kyrgyzstan needed to protect itself against the regional economic crisis, it was under extra pressure from its entry last August into the Eurasian Economic Union. The government said the trade block, which includes Russia, Kazakhstan, Belarus and Armenia, would improve conditions for Kyrgyz business.

Instead, though, businesses have complained it has exposed them to unfair competition.

Ayilchy Sarybayev, an analyst based in Bishkek, said the cash would be used to subsidise Kyrgyz farmers.

“The fund is being raised because small and medium enterprises cannot compete with Kazakh and Russian ones now,” he said. “Kyrgyz entrepreneurs have started buying (more expensive) agricultural equipment from Kazakhstan and Russia (rather than from China).”

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

Kazakh President praises EEU

FEB. 25 2016 (The Conway Bulletin) – At a meeting with the new chairman of the Eurasian Economic Commission (EEC), former Armenian PM, Tigran Sargsyan, Kazakh President Nursultan Nazarbayev reaffirmed his support for the often derided Eurasian Economic Union (EEU). The EEC is the civil service that runs the main operations of the EEU. Critics of the EEU have said that it is a Kremlin project dreamt up to increase its political power over other members. As well as Kazakhstan and Russia, members include Armenia, Belarus and Kyrgyzstan.

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(News report from Issue No. 269, published on Feb. 26 2016)

Kyrgyz businesses say the odds are stacked against them in the EEU

BISHKEK, FEB. 25 2016 (The Conway Bulletin) — Kyrgyz farmers and exporters of agricultural products have said that the Eurasian Economic Union (EEU), a group centred around the Kremlin that was supposed to boost its members’ economies, has undermined their businesses by exposing them to unfair competition.

The insight collected by The Conway Bulletin’s correspondent in Bishkek, undermines claims by President Almazbek Atambayev that joining the EEU in August was a positive move for Kyrgyzstan.

Sergey Ponomarev, head of the business lobby group AMTSS and a former PM adviser, said that cheaper Belarusian goods had hit Kyrgyzstan’s key export market in neighbouring Kazakhstan.

“In Belarus, prices for animal feed are largely subsidised by the state, which makes their products cheaper on the Kazakh market,” he said. Mr Ponomarev said that the Belarus government subsidises its farmers’ animal feed, something the Kyrgyz government doesn’t do.

Data released by Kyrgyzstan’s state statistics committee last month showed that in 2015 exports of clothes fell by 50%, fruit and vegetables exports fell by a third and tobacco exports by 28%.

This has partly to do with the worsening economic conditions in the region but also because of the more competitive export markets created by the EEU.

Tilek Toktogaziyev, the owner of a greenhouse in Bishkek. which sells various fruit, vegetables and berries, said: “Local farmers cannot trade their vegetables, and some of them have stopped farming altogether.”

Previously, business owners have complained of extra red tape after joining the EEU but they hadn’t complained of excessive competition.

One business owner, though, was more positive. Dastan Omuraliev, the manager of Organic, a company producing fruit juices, said: “With entering the Eurasian Economic Union, it became easier to pass our goods through the Kazakh border.”

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

Kyrgyz business blames EEU for poor outlook

FEB. 5 2016, BISHKEK (The Conway Bulletin) — Frustrated Kyrgyz businessmen and company owners are blaming a worsening economy on joining the Russia-led Eurasian Economic Union (EEU) last year.

The criticism of the EEU, whether it is accurate or not, is a major problem for Kyrgyzstan’s leadership which dragged the country into the trade bloc despite deep-rooted unease from ordinary Kyrgyz. Also in the EEU are Russia, Kazakhstan, Belarus and Armenia.

In Bishkek, Azamat, who was selling cars, said Kyrgyzstan had aligned itself with the wrong countries.

“While we are in the Customs Union we will have nothing to develop,” he said.

The Customs Union is the old name for the EEU, which analysts have said was dreamt up by the Kremlin to extend its political control.

Western sanctions and a collapse in oil prices have tipped Russia’s economy into a recession. It has cancelled overseas projects, including a hydropower plant in Kyrgyzstan, and remittance flows from Kyrgyz workers in Moscow have fallen by around 40%. Inflation is rising in Kyrgyzstan and economic growth rates are being cut – a familiar story across the region.

Emil Umetaliev, a former Kyrgyz economy minister who now owns a travel company, told The Conway Bulletin that the EEU has been a major hindrance to small and medium sized companies, rather than the help that had been promised.

“The Eurasian economic union tends to organise countries’ interdependence on resources,” he said. “It does not encourage small and medium enterprises to develop and does not have a friendly investment climate.”

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Critics say the Kyrgyz-Russian Fund is failing

BISHKEK, JAN. 26 2016 (The Conway Bulletin) — Businesses, company owners and lobby groups in Kyrgyzstan have criticised the Kyrgyz- Russian Investment Fund, launched with great fanfare in 2014 ahead of Kyrgyzstan’s entry into the Kremlin- led Eurasian Economic Union, as ineffective.

The criticism will sting as it comes after Russia withdrew support for a $2b hydropower project in Kyrgyzstan. It also underlines the Kremlin’s waning influence in Central Asia.

“The Kyrgyz-Russian Investment Fund does not have enough resources to keep the economy stable, as it cannot substitute a drop in remittances which used to come from Kyrgyz labour migrants in Russia and

revenues from re-exporting Chinese goods through Kyrgyzstan,” Uluk Kydyrbayev, head of the National Alliance of Business Associations lobby group, told The Bulletin.

An anti-crisis plan presented by the government on Jan. 26, which placed the Fund at its core, triggered an outpouring of frustration by businesses.

The Kyrgyz-Russian Investment Fund measures around $500m and was supposed to act as source of cheap credit for Kygyz businesses. At least some of this cash, though, has been used to bail-out mortgage holders who have seen their debts spiral with the devaluation of the som against the US dollar.

Like the rest of the region Kyrgyzstan is trying to navigate its way through a worsening economic crisis. One of the consequences is a fall in remittances from Russia.

Tilek Toktogaziyev, head of an organic food company, said that the Kyrgyz-Russian Fund had been a failure and had favoured big business over small business.

“The credits are only given to big companies who have break-even activities in past three years and have been present in the market for a long time,” he said.

He said the lowest credit the Fund gives is $3m. To win this loan, the company owner also has to make a contribution of 20%.

ENDS

(News report from Issue No. 265, published on Jan. 29 2016)

Armenia and EU starts negotiations

DEC. 7 2015 (The Conway Bulletin) – Armenia and the European Union started negotiating a new treaty that would deepen bilateral relations in trade, energy, the environment and transport. The negotiations are particularly poignant as Armenia is now a member of the Russia-led Eurasian Economic Union. Two years ago, too, Armenia rejected a deal to deepen ties with the EU.

ENDS

(News report from Issue No. 260, published on Dec. 11 2015)

Kazakhstan joins the WTO

DEC. 1 2015 (The Conway Bulletin) – Kazakhstan officially joined the World Trade Organisation. The deal to join the WTO will force changes to the Kremlin-led Eurasian Economic Union.

ENDS

(News report from Issue No. 259, published on Dec. 4 2015)