DEC. 1 2014 (The Conway Bulletin) – Kyrgyz PM Djoomart Otorbayev said the country would sign treaties on Dec. 23 with Russia, Belarus and Kazakhstan that effectively amount to an accession agreement to the Kremlin-led Eurasian Economic Union at the start of 2015. Armenia has already signed an accession deal.
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(News report from Issue No. 211, published on Dec. 3 2014)
NOV. 21 2014 (The Conway Bulletin) – Russia’s lower house of parliament passed a law that ratified deeper economic cooperation with Kyrgyzstan, part of the process towards Kyrgyz accession into the Kremlin-led Eurasian Economic Union (EaEU). The deal will mean a $1b windfall in cash and loans from Russia to Kyrgyzstan.
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(News report from Issue No. 210, published on Nov. 26 2014)
NOV. 24 2014 (The Conway Bulletin) – Armenia’s Central Bank said it was prepared to spend millions of dollars propping up its currency, the dram, despite increased pressure to devalue.
Like other currencies across the South Caucasus and Central Asia region, falling oil prices and a devaluation in Russian rouble are pressuring the dram.
On Monday, Nov. 24, the dram was trading at 435 to $1, down 4% from Friday.
“The Central Bank reserves are enough to prevent any artificial fluctuations of the rate and secure financial stability,” the Central Bank said in a statement.
Perhaps but the warning signs are increasing and even the Central Bank’s statement smacks of desperation.
In the last three weeks, Reuters reported, the Armenian Central Bank has spent over $60m defending its currency.
Armenia is tied into Russia, politically, economically and emotionally. It has agreed to join the Kremlin’s Eurasian Economic Union in January and Russian business virtually runs the economy.
With oil prices and the rouble falling further it can only be a matter of time before currencies such as the dram also tumble again.
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(News report from Issue No. 210, published on Nov. 26 2014)
NOV. 6 2014 (The Conway Bulletin) – The Asian Development Bank (ADB) has predicted that inflation in Kyrgyzstan will hit 10% in 2015 after it joins the Russia-led Eurasian Economic Union. The biggest jump in prices, the ADB said, will be a 30% rise in petrol when prices are brought into line with Kazakhstan and Russia.
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(News report from Issue No. 208, published on Nov.12 2014)
NOV. 7 2014 (The Conway Bulletin) – Armenia plans to re-establish its Interior Ministry ahead of joining the Russia-led Eurasian Economic Union.
PM Hovik Abrahamian said that several ministries would be merged together to create an Interior Ministry, which was abandoned in 2002.
“Nineteen ministries is too many for Armenia,” the official Armenpress news agency quoted Mr Abrahamian as saying. “In the future we will turn the Ministry of Emergency Situations and the Ministry of Local Government into the Ministry of Internal Affairs as it is the case in many European countries.”
In the former Soviet space the Interior Ministry is one of the more powerful government institutions. It has its own army and is tasked with imposing internal security and order. In 2002, Armenia disbanded the Interior Ministry and handed these pseudo military powers to the police force. This will now revert back to the Interior Ministry.
Armenia is joining the Eurasian Economic Union in the New Year, a group that already includes Belarus and Kazakhstan alongside Russia. Kyrgyzstan is also intending to join.
All these countries have a strong Interior Ministry. It’s likely that joining the Eurasian Economic Union and re-establishing the Interior Ministry in Armenia are linked.
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(News report from Issue No. 208, published on Nov.12 2014)
BISHKEK/Kyrgyzstan, NOV 5 2014 (The Conway Bulletin) — It would seem to be a done deal. Despite parliamentary opposition from an unlikely cast of nationalists and liberals — as well as serious concerns on the street — Kyrgyzstan appears to be primed to join Russia, Kazakhstan, and Belarus in the Eurasian Economic Union in 2015.
And, of course, Armenia will accede on the same day.
But accession will be problematic for many Krygyz. The Customs Union, from which the Eurasian Economic Union will emerge, mandates higher tariffs on imports from third countries. China’s share of Kyrgyzstan’s import pie is 55%, dwarfing Russia and Kazakhstan’s combined share of 25%.
Prices for goods from cars to household items will go up significantly. Kyrgyz President Almazbek Atambayev has ceded that inflation is likely to jump in the short term after joining the Eurasian Economic Union.
Such price hikes would be hard to swallow anywhere; in a poor country like Kyrgyzstan, they will be punitive. Many people in Bishkek are afraid and everyone from taxi drivers to professionals, is quick to share their concerns.
One Bishkek-based foreign national in the NGO sector underscored this analysis. “Many fear that the lifeblood of Kyrgyzstan’s economy, cheap goods ranging from cars to shower curtains to raw materials imported from China, will either stop flowing due to newly-imposed tariffs or will dramatically rise in price,” he said, preferring to remain anonymous.
Of course, Russia and Kyrgyzstan are bound in many ways. As many as 500,000 Kyrgyz citizens work in Russia, and Russian news media is widely watched in Kyrgyzstan.
There are, of course, silver linings to Kyrgyzstan’s accession. Kyrgyz citizens working in other EEU countries will not need to register with the police for stays of less than 90 nights. Currently, a Kyrgyz citizen staying longer than five nights is compelled to register.
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(News report from Issue No. 207, published on Nov. 5 2014)
OCT. 27 2014 (The Conway Bulletin) – Kyrgyz president Almazbek Atambayev has said inflation will increase in Kyrgyzstan when it joins the Customs Union, which is morphing into the Eurasian Economic Union next year. He also said the country no alternative to joining the Russia-led economic bloc, highlighting the Kremlin’s tightened grip over Kyrgyzstan.
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(News report from Issue No. 206, published on Oct. 29 2014)
OCT. 10 2014 (The Conway Bulletin) – As expected, Armenia signed a deal in Minsk with Russia, Belarus and Kazakhstan to join the Eurasian Economic Union. The Eurasian Economic Union will come into effect from Jan. 1 as the successor of the Customs Union. The Kremlin sees the Eurasian Economic Union as a counterbalance to the EU.
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(News report from Issue No. 204, published on Oct. 15 2014)
OCT. 8 2014 (The Conway Bulletin) – Russian PM Dmitri Medvedev visited Armenia two days before it officially signed up to become the fourth member of the Russia-led Customs Union/Eurasian Economic Union. Mr Medvedev was visiting an agriculture exhibition in Yerevan but, more importantly, his visit will be seen as another show of support for Armenia.
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(News report from Issue No. 204, published on Oct. 15 2014)
OCT. 10 2014 (The Conway Bulletin) – An estimated 10,000 people rallied against Armenia’s government in central Yerevan, media reported, the biggest protest since a presidential election last year.
Opposition rallies, calling for the government to resign, are relatively commonplace in Yerevan. The issue is whether they turn violent or grow so large that the government has to react to them.
In 2008, eight people died in clashes between the security forces and demonstrators after elections.
The protest in Yerevan was the culmination of severally carefully choreographed anti-government demonstrations around the country.
And the protagonists were the same. Former president Levon Ter-Petrosian, a canny opponent for current president Serzh Sargsyan, addressed the crowd. He is credited with whipping up the anger that led to the clashes in 2008.
The protesters actual demand are hard to decipher. They, broadly, want their lives improved and the economy strengthen. No easy task for the government which is having to navigate the country through a tricky economic environment.
What is different now is the opposition’s cry that moving into Russia’s Eurasian Economic Union and away from the European Union is partly to blame for the general malaise. If the opposition can harness this, they may make more headway.
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(News report from Issue No. 204, published on Oct. 15 2014)
