MAY 19 2015 (The Conway Bulletin) – Kazakhstan aims to join the World Trade Organisation (WTO) by the end of the year, PM Karim Massimov said at a meeting with Lithuanian government officials in Astana. Kazakhstan has been negotiating to join the WTO since the early 1990s.
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(News report from Issue No. 232, published on May 20 2015)
MAY 19 2015 (The Conway Bulletin) – The IMF weighed into the debate surrounding the tenge when it said the Kazakh Central Bank had enough cash to defend the currency against a sudden devaluation. The Central Bank has been under increased pressure to follow neighbours and devalue its currency.
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(News report from Issue No. 232, published on May 20 2015)
MAY 18 2015 (The Conway Bulletin) – Kazakhstan could buy a 29.25% stake in the Karachaganak oil and gas project in the north of the country when Shell completes its buyout of BG Group next year, BG Group said in its annual report.
Kazakhstan has been looking to increase its stake in various projects. Karachaganak was one of the last major operations that the Kazakh government took a stake in. It bought a 10% stake in Karachaganak for $3b in 2012.
Now, with Shell buying BG Group, Kazakhstan has the opportunity to buy a far larger chunk of Karachaganak.
“It is possible that the Republic of Kazakhstan may claim to have a right to acquire the Group’s interest in the Final Petroleum Sharing Agree- ment governing the operation of the Karachaganak gas and con- densate field in the event of a change of control of BG Group following a takeover bid,” BG Group said.
The Kazakh government hasn’t commented.
Karachaganak is one of BG Group’s most prized posses- sions, accounting for 9% of its revenues in 2014. Analysts have said that BG Group’s stake maybe worth around $4.4b.
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(News report from Issue No. 232, published on May 20 2015)
MAY 20 2015 (The Conway Bulletin) – The IMF and the European Bank for Reconstruction and Development (EBRD) both delivered withering assessments of the economies of Central Asia and the South Caucasus, piling pressure on governments across the region.
Not since the global financial crisis of 2008 and 2009 has the region been under such economic strain, the IMF said in its assessment.
“Exchange rate developments, such as the appreciation of the US dollar and the depreciation of the rouble, are compounding the problem,” media quoted Juha Kähkönen, deputy director of the IMF’s Middle East and Central Asia Department, as saying at the presentation of the report in Kazakhstan on May 19.
The region’s average growth rate this year, the IMF said, would slow to 3.3% from 5.3% in 2014.
A collapse in the price of oil and the value of the rouble have knocked economies in Central Asia and the South Caucasus. Currencies have nosedived, losing around a third of their values in only a few months, governments have scrambled to cut budgets and companies have laid off hundreds of workers.
All the data, in short, paints a turbulent portrait of the last few months and an equally troublesome outlook for the next couple of years.
Mr Kähkönen’s statement came only a few days after the EBRD had issued a similar warning at its AGM in Tbilisi. It drew attention to the sharp fall in remittances to the region from Russia and the impact this would have.
“As the Russian economy has declined, remittances from Russia to Central Asia and to eastern Europe and the Caucasus have been declining at an alarming rate,” the bank said in a statement.
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(News report from Issue No. 232, published on May 20 2015)
MAY 16 2015 (The Conway Bulletin) – China Railway Group has signed a deal with the Kazakh government to build a light railway network around Astana ahead of the city’s high-profile EXPO- 2017, media reported. The light railway will be 22km long and have 18 stations. Kazakhstan is spending heavily on EXPO-2017.
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(News report from Issue No. 232, published on May 20 2015)
MAY 16 2015 (The Conway Bulletin) – In a potentially damaging hit to Kazakhstan’s hopes of hosting the 2022 Winter Olympic Games, 27 current or former Olympic athletes wrote to the International Olympic Committee to ask it to pressure the Kazakh government into ditching a new law that bans so-called gay propaganda.
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(News report from Issue No. 232, published on May 20 2015)
MAY 7 2015 (The Conway Bulletin) – The World Bank said it expects Kazakh GDP to grow by 1.3% this year, a drop of 0.5% on a previous estimate. It said growth rates would rise in 2016 to 2.8% and to 3.9% in 2017. A fall in global oil prices and a drop in the Russian rouble have hit C.Asia.
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(News report from Issue No. 231, published on May 13 2015)
MAY 8 2015 (The Conway Bulletin) – En route to Moscow for the 70th anniversary celebration of the Soviet Union’s victory over Nazi Germany, China’s President Xi Jinping visited Astana. Official media said the two presidents affirmed their close ties.
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(News report from Issue No. 231, published on May 13 2015)
MAY 12 2015 (The Conway Bulletin) – Around 140 people working for the oil services company KazStroyService have gone on strike in west Kazakhstan demanding an increase in wages, media reported. Kazakhstan is sensitive to strikes. In 2011, 16 people died during fighting between protesters and police at a strike in west Kazakhstan.
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(News report from Issue No. 231, published on May 13 2015)
MAY 13 2015 (The Conway Bulletin) – The Kazakh Central Bank has created a $700m fund to help people pay their mortgages, a move designed to ease Kazakhstan’s mountain of bad consumer debt.
Banks in Kazakhstan have one of the highest ratios of non-performing loans in the world, a legacy of the 2008/9financial crisis. Now, with a new financial crisis linked to the drop in global energy prices and a sharp fall in the performance of the Russian economy, also hitting Kazakhstan’s mortgage holders, policy makers have been looking for ways to ease the burden.
Low-income households are the principal target of the measure, according to official sources. Families at risk will be able to access new credit at advantageous rates, in order to pay off their outstanding bill.
Around 20,000 loans obtained between 2004 and 2009 should be affected by this measure. The largest contribution will go to Kazkommertsbank, which will receive $205m and refinance the debt of 12,500 borrowers.
The rationale is simple. Policymakers have argued that people taking out mortgages between 2004-9 were relatively uneducated in the practise and may have been mis-sold a product or taken out debt that they could not finance.
Most mortgages during this period were also taken out in US dollars. The
Kazakh tenge has dropped markedly against the US dollar since then, making the loans harder to service.
Some analysts, though, have questioned the spirit of the measure.
Quoted on Forbes.kz, financial analyst Murat Temirkhanov said: “The word ‘refinancing’ has little to do with this measure. It should be described as a restructuring, i.e. an exchange of bad loans for cheap money from the state.”
Still, the new measure has the potential to revive the financial market in Kazakhstan.
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(News report from Issue No. 231, published on May 13 2015)
