DEC. 3 2015 (The Conway Bulletin) – Kazakhstan’s Central Bank cancelled its monthly monetary policy meeting for the second consecutive month, disappointing markets which were looking for guidance on future policy. The Central Bank said that money markets were too unstable for it to announce policy. Critics said it had lost control of the tenge.
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(News report from Issue No. 259, published on Dec. 4 2015)
DEC. 2 2015 (The Conway Bulletin) – Kazakh president Nursultan Nazarbayev signed into law the creation of an agency under the ministry of justice that will be charged with the responsibility of approving funding to non-government agencies. The law has proved controversial with campaigners saying that it is similar to a law introduced by Russia which banned NGOs from taking funding from foreign organisations.
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(News report from Issue No. 259, published on Dec. 4 2015)
DEC. 2 2015 (The Conway Bulletin) — Kazmunaigas, Kazakhstan’s state-owned energy company, said it reached an agreement with international oil trader Vitol for the forward sale of crude oil for up to $3b, a deal that the debt-ridden Kazakh producer needs to maintain financial stability during a period of low oil prices.
Vitol will buy oil from Kazmunaigas’ share of oil produced at the Tengiz field in western Kazakhstan and then pumped by the CPC pipeline around the northern tip of the Caspian Sea to Novorossiysk in Russia.
Kazmunaigas, commonly known as KMG, will receive advance payments in the short term.
“It is expected that KMG will be able to draw the first tranche within 2-4 months,” the company said in a statement.
Neither company disclosed the amount of oil that will be traded and the duration of the contract, but a Bulletin calculation showed that the deal could range between 3 and 5 years, depending on how much of the 2-3m tonnes of oil KMG exports each year from Tengiz Vitol will buy and how big the discount is.
By committing to the sale of futures, Kazmunaigas earnsmuch needed cash in the short term to cover its outstanding debts. But there will be a reasonable discount which will manifest itself over the next few years.
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(News report from Issue No. 259, published on Dec. 4 2015)
DEC. 1 2015 (The Conway Bulletin) — Kazakh miner KAZ Minerals said it had produced its first copper from the Aktogay project in east Kazakhstan. KAZ Minerals,previously known as Kazakhmys, forecast that the Aktogay project will produce 15,000 tonnes of copper/year over the next decade.
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(News report from Issue No. 259, published on Dec. 4 2015)
DEC. 4 2015 (The Conway Bulletin) – Inflation in Kazakhstan to the year ending Nov. 30 measured 12.8%, the state’s statistics committee said. The sharp prices rises show the impact of the tenge devaluation on the economy. The main inflation driver has been food prices.
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(News report from Issue No. 259, published on Dec. 4 2015)
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.
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(News report from Issue No. 259, published on Dec. 4 2015)
DEC. 2 2015 (The Conway Bulletin) — Dutch marine engineering company Van Oord said it signed several contracts with Kazakhstan for a total value of $500m. Van Oord representatives accompanied the Dutch PM Mark Rutte during his official visit to Astana. One of the main projects will be to expand the port in the town of Prorva on the Caspian Sea coast near Atyrau in north-west Kazakhstan.
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(News report from Issue No. 259, published on Dec. 4 2015)
NOV. 30 2015 (The Conway Bulletin) — After nearly two decades of negotiations Kazakhstan joined the World Trade Organisation (WTO), a move that pleased Kazakh president Nursultan Nazarbayev but also pressured the Eurasian Economic Union to cut its import tariffs.
It has been a long-held ambition of Mr Nazarbayev to secure WTO membership for Kazakhstan and he scheduled a state-of-the-nation address on the eve of the accession to hail it as “a milestone in the history of independent Kazakhstan.”
But Kazakhstan’s WTO membership will have wider implications.
Kazakhstan is the first member of the Eurasian Economic Union (EEU) to enter the WTO since the Kremlin- led trade bloc came into existence on Jan. 1. This means Kazakhstan’s bilateral agreement with the WTO will effect the entire EEU.
The EEU includes Russia, Armenia, Kyrgyzstan — which joined the WTO before the EEU existed — and Belarus which is not a WTO member.
The WTO accession document specified that the new rules to which Kazakhstan has committed should also apply to the rest of the EEU.
“There are 23 commitments which contain measures to be undertaken by Kazakhstan and/or the competent bodies of the EAEU (Eurasian Economic Union),” the WTO said in Kazakhstan’s accession documents.
This means that the EEU’s high import tariff regime will have to be lowered to meet the agreement that Kazakhstan signed up to.
Fortunately, complying with WTO rules appears to be in line with the EEU’s aspirations.
Russian President Vladimir Putin said in October 2014 that the EEU would adapt to work with the WTO and in October 2015 EEU heads of states said they wanted to harmonise their tariffs to Kazakhstan’s new commitments under the WTO.
Molly O’Neal, a professor at the Johns Hopkins University, said reducing the tariff gap between the WTO and the EEU was one of the most important implications of Kazakhstan’s WTO membership.
“Kazakhstan had already agreed [with the WTO] to binding its tariffs on certain products at levels below the common tariff of the EEU,” Ms O’Neal told the Bulletin.
WTO accession should also mean dropping domestic regulations that favour Kazakh companies. This is particularly important in Kazakhstan’s extractive sectors.
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(News report from Issue No. 259, published on Dec. 4 2015)
DEC. 3 2015 (The Conway Bulletin) — The state-owned Kazakhstan Development Bank and Abu Dhabi-based lender Al Hilal signed an agreement on the development of Ijara, an Islamic banking financial instrument linked to leasing real estate. Earlier this week Kazakhstan’s Central Bank also said it is considering halving capital requirements for Islamic banks to 5b tenge ($16.2m).
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(News report from Issue No. 259, published on Dec. 4 2015)
DEC. 1 2015 (The Conway Bulletin) – Kazakhstan’s Central Bank issued its first 20,000 tenge note, depicting the Akorda presidential palace and a mock Arc de Triumphe in Astana and the Eli winged statue in Almaty’s central square.
When the idea of the blue, grey 20,000 tenge banknote was conceived in 2013, it would have been worth around $129.
Now, after two devaluations linked to the drop in oil prices and the fall of the Russian rouble, Kazakhstan’s 20,000 tenge is worth $65.
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(News report from Issue No. 259, published on Dec. 4 2015)
