OCT. 9 2014 (The Conway Bulletin) – Kazakh economy minister Yerbolat Dossayev refuted speculation the Central Bank was planning to devalue the tenge again this year, media reported. Kazakhstan’s economy has stalled since sanctions started to bite Russia. Kazakhstan has already devalued its currency by 20%.
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(News report from Issue No. 204, published on Oct. 15 2014)
OCT. 7 2014 (The Conway Bulletin) – The Kazakh government has backed a plan to expand the Tengizchevroil oil project in the west of the country despite cost estimates running higher than expected, Reuters reported. Tengizchevroil, led by Chevron, is one of Kazakhstan’s most successful oil projects.
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(News report from Issue No. 203, published on Oct. 8 2014)
OCT. 7 2014 (The Conway Bulletin) – France is investigating alleged kickbacks during deals between French and Kazakh companies four years ago, the AFP news agency reported quoting a judge on condition of anonymity. The judge said the case was opened in March 2013 and that three people have been charged. The case will be an embarrassment to Kazakhstan.
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(News report from Issue No. 203, published on Oct. 8 2014)
BISHKEK/Kyrgyzstan, OCT. 8 2014 (The Conway Bulletin) — Ashraf Ghani, Afghanistan’s new president is on a mission to transform his war-torn country with a shredded economy into a regional force. If he is successful, Central Asia may find in its southern neighbour a strong trading partner and occasional rival rather than the Taliban-tainted bogeyman regional governments have traditionally portrayed it as.
Central Asia’s security-first approach to Afghanistan is understandable. Both Tajikistan and Uzbekistan have had to deal with Islamic extremists linked to the Taliban and other Afghan militants. Neutral Turkmenistan is also taking a newly assertive stance towards events in Afghanistan. Turkmen forces were reported as entering Afghan territory to beat back Taliban that had settled on the two countries’ border (Sept 17).
But Central Asia’s economic ties to Afghanistan are expanding. The long-stalled Turkmenistan- Afghanistan-Tajikistan rail link, which will eventually connect the country to China, looks increasingly likely to happen, while Turkmen gas may one day transit Afghanistan on its way to China.
Mr Ghani is keen to see Afghanistan as a player. His stated ambition to turn the country into an exporter of electricity may make Kabul a rival to both Tajikistan and Kyrgyzstan. The revival of Afghan agriculture may put pressure on scarce regional energy resources.
It is perhaps noteworthy that upon receiving notes of congratulations from all five Central Asian presidents following his inauguration, Mr Ghani’s warmest words were for Kazakhstan and Nursultan Nazarbayev (Sept.29). “Kazakhstan is an important friend and positive example,” he told Kazakh foreign minister Erlan Idrissov at his inauguration.
If Mr Ghani can take Afghanistan on a similar journey, then the country will be ready to both compete and cooperate with Central Asia.
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(News report from Issue No. 203, published on Oct. 8 2014)
OCT. 6 2014 (The Conway Bulletin) – Kazakhstan issued its first US-dollar sovereign debt since 2000 to finance state investments and contain a growing budget deficit.
The government hired Citibank, HSBC and JP Morgan to arrange the deal, which attracted large demand from investors, who purchased $2.5b in 10- and 30-year fixed- income securities.
After a year of significant changes in the banking sector and a 20% currency devaluation, Kazakhstan is not the safest country for financial speculation but analysts talked up the country’s strengths.
“The ministry of finance raised a similar sum in the local market last year, but this time the operation was denominated in dollars which attracted investors in a market hungry for yields,” Sabina Amangeldi, senior analyst at Halyk Finance in Almaty, told the Conway Bulletin.
“The position of the government is reassuring since the country has a net creditor position. The compliance with ICMA’s (nternational Capital Market Association) test clauses demonstrated Kazakhstan’s good will with respect with the global investment community.”
Kazakhstan seems to have seized perhaps the last moment to issue sovereign debt coupons, since the policy of tapering and a possible raise of the current minimal interest rates by the US Treasury in Washington would see US dollars move from emerging markets and back to the United States.
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(News report from Issue No. 203, published on Oct. 8 2014)
OCT. 3 2014 (The Conway Bulletin) – Media reports suggested that Kazakhstan’s headline oil producing project, the Kashagan site in the Caspian Sea, will not start production until 2017. Kazakh officials have said that they expect the project to start production in 2016 but unnamed insiders have said this is unlikely.
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(News report from Issue No. 203, published on Oct. 8 2014)
OCT. 6 2014 (The Conway Bulletin) – Kazakh President Nursultan Nazarbayev has had a ringside view on some of history’s most important moments. This includes the collapse of the Soviet Union and the final years of Mikhail Gorbachev’s time in power.
And, for perhaps the first time, Mr Nazarbayev gave his views on Mr Gorbachev to a correspondent from the tengrinews.kz website.
“I had to work in the system during the Soviet period and I was one of the critics of Gorbachev’s reforms, who believed that socialism could be corrected and we could move on,” he said.
“He had the expression of ‘socialism with a human face’ but no one understood what this was. Probably he wanted something close to a market economy. But if public companies are controlled by corporate market principles, the problem, as you see, is successfully solved.”
Rather than giving a historical insight of working under Mr Gorbachev, this statement may have been Mr Nazarbayev’s real point. He wanted to promote the idea of strong state- owned companies working in a market economy and also highlight the example of China, now an important ally of Kazakhstan.
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(News report from Issue No. 203, published on Oct. 8 2014)
OCT. 7 2014 (The Conway Bulletin) – Repairs and upgrades to Kazakhstan’s three oil refineries should mean that by 2016 or 2017 the country is self-sufficient in petrol, Kazakh energy minister Vladimir Shkolnik said in comments to parliament. Kazakhstan’s energy ministry has ruled out building a fourth oil refinery to meet demand.
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(News report from Issue No. 203, published on Oct. 8 2014)
OCT. 6 2014 (The Conway Bulletin) – Visa free travel for citizens of 10 countries will be extended by three months to Oct. 15 2015, said the head of the Kazakh state tourism board, Rashid Shaikenov (Oct. 6). Mr Shaikenov also said the experiment, which started in July, had increased tourism by 13%.
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(News report from Issue No. 203, published on Oct. 8 2014)
OCT. 2 2014 (The Conway Bulletin) – Turkmenistan’s president Kurgbanguly Berdymukhamedov ended a meeting of the leaders of the countries that border the Caspian Sea by saying that it was their right to build a pipeline across the inland water, media reported.
The meeting — which included the leaders of Russia, Turkmenistan, Kazakhstan, Iran and Azerbaijan — broke up without any major deals although they did agree not to allow NATO forces into the region.
Perhaps the most important single element of the meeting, though, were reports from Astrakhan, the venue in Russia for the meeting, that appeared to push the possibility of a sub-Caspian Sea gas pipeline nearer.
This has been touted before but has never been put into action. The cost has previously been considered too great but now, with demand for energy increasing from Europe, it may make business sense to build the pipeline.
There is also the extra added consideration that most of the infrastructure needed to pump the gas on from Azerbaijan to Europe has already been built or is scheduled to be built soon.
This week Azerbaijan’s president welcomed the deputy PM of Turkmenistan to Baku. Last week the head of Azerbaijan’s energy company SOCAR was in Ashgabat. There may be some reason behind all this activity. One to watch.
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(News report from Issue No. 203, published on Oct. 8 2014)
