AUG. 18 2015 (The Conway Bulletin) – At a meeting in Astana, information ministers from Azerbaijan, Turkey, Kazakhstan and Kyrgyzstan agreed to set up a news channel which will promote a so-called Turkic view of the world. These countries, and especially Azerbaijan, have become frustrated with what they view as biased coverage in Western media.
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(News report from Issue No. 244, published on Aug. 21 2015)
AUG. 10 2015 (The Conway Bulletin) – Kazakh president Nursultan Nazarbayev appointed Akhmetzhan Yessimov, formerly the mayor of Almaty, to head his set piece EXPO-2017 in Astana. Mr Yessimov is a trusted ally of Mr Nazarbayev and is tasked with bringing EXPO-2017 back on track after a major corruption scandal. Baurzhan Baibek, an official at Mr Nazarbayev’s Nur Otan, will be the new Almaty mayor.
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(News report from Issue No. 243, published on Aug. 14 2015)
AUG. 13 2015 (The Conway Bulletin) – Russia will host two naval exercises this year with the Azerbaijani and Kazakh navies, media reported quoting senior Russian officials. The drills will take place in the Caspian Sea. The first will be a bilateral exercise involving Azerbaijan and Russia. The second will be trilateral and also include Kazakhstan.
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(News report from Issue No. 243, published on Aug. 14 2015)
JULY 31 2015 (The Conway Bulletin) – Beijing beat Almaty in the race to host the 2022 Winter Olympics at a vote at a meeting of the International Olympic Committee in Kuala Lumpur. Almaty had been looking to become the only city in the former Soviet Union outside Russia to host an Olympic Games. President Nursultan Nazarbayev wants to burnish his image as the father-of-the-nation by hosting a major sporting event.
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(News report from Issue No. 242, published on Aug. 7 2015)
JUNE 30 2015 (The Conway Bulletin) – The Kazakh Central Bank bought a 10% stake in Kazmunaigas from the country’s sovereign wealth fund Samruk Kazyna for 750b tenge ($4b), a move analysts said was designed to help the state- owned energy company pay off debts generated by a sharp fall in oil prices.
This is the second reorganisation of Kazmunaigas since June. It earlier announced the sale of half its 16.8% stake in the Kashagan oil project to Samruk-Kazyna for $4.7b.
Analysts at Halyk Bank, a Kazakh bank, said the latest move shifted debt once again from Kazmunaigas to Samruk Kazyna to the Central Bank.
“If the first transaction raised the net debt of Samruk-Kazyna, the second lowered Samruk- Kazyna’s net debt, and the credit risk. By divesting of Kazmunaigas, Samruk-Kazyna reduced the most expensive part of its debt,” Halyk Finance senior analysts Sabit Khakimzhanov and Gulmariya Zhapakova said in a note to clients.
Delays at Kashagan and a sharp fall in oil prices have worsened Kazmunaigas’ financial affairs.
But, although unprecedented, the Central Bank’s purchase will change little in Kazakhstan’s oil sector. The two transactions may have helped Kazmunaigas achieve a better financial position in the short term, but both moves are temporary.
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(News report from Issue No. 242, published on Aug. 7 2015)
AUG. 3 2015 (The Conway Bulletin) – A court in Aktobe, west Kazakhstan, jailed eight men for 3-6 years for spreading Islamic extremist propaganda, media reported. Kazakhstan is becoming increasingly sensitive to the spread of Islamic propaganda. It worries that the radical IS group in Syria and Iraq is actively recruiting from Central Asia.
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(News report from Issue No. 242, published on Aug. 7 2015)
JULY 23 2015 (The Conway Bulletin) – In a report entitled “‘That’s When I Realized I Was Nobody’: A Climate of Fear for LGBT People in Kazakhstan”, Human Rights Watch said that homophobia in Kazakhstan was rife. Almaty is bidding to host the Winter Olympics in 2022. The HRW report was released on the eve of the IOC decision on who to award the Games to.
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(News report from Issue No. 241, published on July 23 2015)
JULY 17 2015 (The Conway Bulletin) – Net profit at KCell, Kazakhstan’s largest mobile operator, dropped by 23.6% in Jan-June compared to the same period in 2014 because of aggressive price competition, the company said.
A few days later, on July 21, Kazakhstan’s state monopolies committee also ordered KCell, owned by Sweden and Finland based Telia-Sonera, to return around 1.5b tenge ($800m) to its customers for overcharging, more evidence that mobile charges in Kazakhstan are falling sharply.
KCell CEO Arti Ots said: “Further intensification of competition, with notably aggressive pricing, has impacted our results for the second quarter of 2015.”
KCell’s competitors Tele2, also based in Sweden, also blamed a price war in Kazakhstan for lower-than-hoped for profits. Mats Granryd, the company’s CEO, said that prices in Kazakhstan are falling sharply.
“Kazakhstan is turning into a real bloodbath when it comes to pricing,” he told Reuters in an interview.
Mobile companies operating in Kazakhstan are competing to lower prices, in an effort to grab market share.
And the conse- quences of these pricing policies are filtering through. In earnings reports, both KCell and Tele2 said they have not been profitable in Kazakhstan in 2015.
Specifically, Kcell said that its sales in H1 2015 were down by 6.6% on the same period in 2014. It also said that service revenue dropped by 12.3%.
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(News report from Issue No. 241, published on July 23 2015)
JULY 20 2015 (The Conway Bulletin) – Lifting of international sanctions against Iran will give Kazakhstan’s steelmaking industry, and the ArcelorMittal plant at Temirtau in particular, a boost, Asset Isekeshev, Kazakh minister for industrial development, said.
ArcelorMittal Temirtau, near Karaganda, is one of the most important factories in Kazakhstan outside the oil and gas sector but it has struggled recently because of a drop in demand for steel from Iran.
“The lifting of sanctions against Iran could be a big plus for ArcelorMittal. This is a big market for us and this would allow us to stabilise operations,” Mr Isekeshev said at a press conference.
According to officials from ArcelorMittal Temirtau, Iran makes up around a third of its export market. Over the past few years, ArcelorMittal has tried to cut costs at the plant. It has laid-off thousands of workers and imposed salary cuts.
A new railway transport route from Kazakhstan, across Turkmenistan into Iran should also help ArcelorMittal exports.
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(News report from Issue No. 241, published on July 23 2015)
JULY 23 2015 (The Conway Bulletin) – Many Central Asian countries have pledged their support for a deal between Iran and Western countries over its nuclear programme that will allow sanctions to be lifted. The positive feeling is mutual. In April 2015, Iran’s Foreign Minister noted that there is “no ceiling for the expansion of relations with regional countries, whether in the Caucasus or in Central Asia”.
Central Asia and Iran have already been cooperating for some time.
December 2014 saw Europe via Iran the inauguration of the new Iran-Turkmenistan-Kazakhstan railroad, linking Central Asia to Iran’s southern ports. Iran has oil swap deals with both countries.
Turkmenistan also has gas pipelines running to Iran and in 2010 Iran sent equipment to Tajikistan for the construction of the Sangtuda-2 hydro- power plant.
Increased formal, and more flexible, cooperation will certainly benefit Central Asia. Iran will give Central Asia greater access to Middle Eastern and European markets. The energy export potential is attractive, particularly given that last year Russia said it would stop buying Central Asian gas, and Turkmenistan recently accused Gazprom of failing to pay debts. Supplying Europe with gas via Iran may be more feasible for Turkmenistan. The opening up of Iran also provides another legitimate partner in the region to counterbalance Russian and Chinese dominance, as is a key aim of the region’s “multi-vector foreign policy”.
However, it will also produce new competition in the region. In August 2014, before any nuclear deal was signed, Iran announced it would no longer import gas from Turkmenistan, instead building up domestic production. Having been excluded from markets for so long, Iran will want to build up its own trade partners rather than act as a transit country for Central Asia. Moreover, more Iranian oil on the market may cause a drop in oil prices, impacting Kazakhstan at already difficult times.
One thing is certain — new transport and energy infrastructure will need to be built for any Iranian reintegration to take place. China will no doubt be looking with interest at the opportunities this presents.
By Sarah Lain, Research Fellow at the Royal United Services Institute in London
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(News report from Issue No. 241, published on July 23 2015)
