Tag Archives: Kazakhstan

Syria peace talks to be held in Kazakh capital, says Cavusoglu

DEC. 4 2016 (The Conway Bulletin) — Turkey’s foreign minister Mevlut Cavusoglu said that peace talks between Syria’s government and rebel groups have now been scheduled for Jan. 23 in Astana. Kazakh president Nursultan Nazarbayev wants to promote Kazakhstan as an arena to host talks. This will be the third Syria-focused peace talks held in Kazakhstan. The Syrian government did not send delegations to the two previous talks in 2015.

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(News report from Issue No. 311, published on Jan. 6 2017)

Kazakh President reshuffles government

DEC. 28 2016 (The Conway Bulletin) — Kazakh president Nursultan Nazarbayev sacked economy minister Kuandyk Bishimbayev and foreign minister in a government reshuffle. He promoted 38- year-old Timur Suleimenov to take over the ministry. Previously,Mr Suleimenov had been a board member of the Eurasian Economic Commission, the civil service of the Eurasian Economic Union.Mr Bishimbayev had only been in the post since May. In the reshuffle,Mr Nazarbayev also moved foreign minister Erlan Idrissov, considered to be one of the most experienced Kazakh diplomats, to be the ambassador to Britain, a position he has previously held. His replacement is Kairat Abdrakhmanov, who had been Kazakhstan’s representative to the UN.

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(News report from Issue No. 311, published on Jan. 6 2017)

Kazakh Central Bank pulls KazInvestBank licence

ALMATY, DEC. 27 2016 (The Conway Bulletin) — Kazakhstan’s Central Bank revoked the licence of KazInvestBank, triggering concern over the stability of the Kazakh banking sector.

The Central Bank tried to play down the implications of pulling KazInvestBank’s licence but analysts said the failure of Kazakhstan’s 20th largest bank may be symptomatic of structural problems across the sector.

And, ominously, only four days earlier, on Dec. 23, sources had told Bloomberg news agency that the Central Bank had given Kazkommertsbank, Kazakhstan’s biggest bank, a $1.5b loan to maintain its cashflow.

Ratings agencies have been warning for most of 2016 that Kazakhstan’s banks were increasingly exposed to an economic downturn that has wiped 50% off the value of the tenge, flattened economic growth and dented living standards.

Oleg Smolyakov, the Kazakh Central Bank’s deputy chairman, said that KazInvestBank had allowed bad debts to build up to around 80% of its total portfolio.

“Irregularities in internal credit risk management procedures allowed borrowers with unstable situations, for example with negative equity, to build up higher debt levels and losses,” he said in a statement issued by the Central Bank.

The decision to close the bank is also an embarrassment for Daniyer Akishev who, only six months ago, said that all Kazakh banks were stable and had passed a stress test.

KazInvestBank, which is linked closely to the Kazakh elite, has declined to comment.

The banking sector in Kazakhstan is still recovering from the impact of the 2008/9 Global Financial Crisis. In a matter of months, Kazakh banks had built up large chunks of bad debt. This sunk three large banks, forcing the government to step in and spend billions of dollars propping them up.

Since then the Central Bank has tried to impose checks on balances on the banking sector, but analysts have always doubted their worth.

But it’s not only the Kazakh banking sector that is under pressure. The Tajik government has announced a rescue plan for its biggest banks and in Azerbaijan a handful of smaller banks have gone bankrupt.

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(News report from Issue No. 311, published on Jan. 6 2017)

Journalist flees Kazakhstan

DEC. 26 2016 (The Conway Bulletin) — Bekzhan Idrisov, editor of Radiotochka.kz, one of the leading news websites in Kazakhstan, said that he had fled the country because he increasingly feared that he would be arrested by the police on trumped-up charges.Mr Idrisov’s departure is a reminder of how under-threat many Kazakhs journalists feel. Several high-profile journalists were imprisoned in 2016.

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(News report from Issue No. 311, published on Jan. 6 2017)

Apartment block collapses in Kazakhstan

JAN. 2 2016 (The Conway Bulletin) — At least nine people died when an apartment building in the town of Shakhan, near Karaganda in central Kazakhstan, collapsed. The emergency services have said that the death toll could rise. The accident shows the often dangerous state of many of the Soviet-era buildings in Kazakhstan.

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(News report from Issue No. 311, published on Jan. 6 2017)

China to build textile factory in Kazakhstan

DEC. 16 2016 (The Conway Bulletin) — An investment company representing Xianyang city in central China and Kazakhstan’s Khlopkoprom-Cellulose plan to jointly build a textile factory in southern Kazakhstan, they said at a press conference. The factory will cost $100m to build and will create 2,000 jobs. The factory would be operational by 2019 and, if it does materialise, will please international economists who have been urging Kazakhstan to diversify its economic base away from mining and hyrdocarbons. Khlopkoprom- Cellulose is a factory already operating near the site that the new plant would occupy. It produces cotton products used in the medical sector.

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(News report from Issue No. 310, published on Dec. 23 2016)

EBRD loans Kazakhstan €200m to develop renewables

ALMATY, DEC. 16 2016 (The Conway Bulletin) — The European Bank for Reconstruction and Development (EBRD) pledged to give Kazakh businessmen 200m euros to improve the country’s renewable energy sector.

For the EBRD the motivation is to boost Kazakhstan’s green energy production. Solar and wind generate only around 1% of Kazakhstan’s power at the moment. Hydro produces around 13% of its power and the rest is generated by smoke belching coal-powered stations.

“Once all the projects come on- stream, annual CO2 emissions are expected to reduce by about 600,000 tonnes, which would help the country to achieve its commitments to cut emissions under the Paris climate agreement,” the EBRD said in a statement.

The 2015 Paris Agreement was a global deal to cut carbon emissions.

Kazakhstan may once have turned its nose up at taking EBRD cash to produce green energy. Now, though, it is happy to go along with the concept. It is struggling to see off a steep economic downturn that has hit its revenues. Oil and gas are its major exports but prices have halved.

And, alongside a fall in revenues, Kazakhstan also needs to boost power. Its population has swelled and grown richer, demanding more power.

It still needs to replace a nuclear power station that was decommissioned in the 1990s. Plans to build a replacement have been scrapped for the time being and a thermal power plant that was being built on the shores of Lake Balkhash with South Korea has also been ditched this year because it was too expensive.

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(News report from Issue No. 310, published on Dec. 23 2016)

Kazakh bank appoints new CEO

DEC. 20 2016 (The Conway Bulletin) — ForteBank, one of the biggest banks in Kazakhstan, appointed Magzhan Auezov, who had been CEO of Kazkommertzbank for one year until mid-April, as its new CEO. Mr Auezov, a career banker, was brought into Kazkommertzbank to oversee its merger with BTA Bank. He left Kazkommterzbank, now rebranded as QazQom, in April to head the local banking lobby group. As well as taking over as CEO of ForteBank, Mr Auezov has also been made the CEO of Kassa Nova Bank. Both banks are majority owned by Bulat Utemuratov, considered to be close to Kazakh president Nursultan Nazarbayev.

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(News report from Issue No. 310, published on Dec. 23 2016)

Kazakh presenter resigns after fake news

DEC. 20 2016 (The Conway Bulletin) — Ruslan Smykov, a presenter with the Kazakh TV news channel First Channel Eurasia, resigned after he broadcast a fake news interview with a Russian TV host. It’s unclear why Mr Smykov broadcast the fake interview but the incident does highlight the weak editorial control in the Kazakh media.

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(News report from Issue No. 310, published on Dec. 23 2016)

Institutional loans

DEC. 23 2016 (The Conway Bulletin) — It’s been a good couple of weeks for inter-governmental banks’ Central Asia and South Caucasus portfolios. They have lent heavily in the region, supporting infrastructure projects from gas pipelines in Azerbaijan to solar and wind power projects in Kazakhstan.

It’s a win-win situation. The institutional banks want to lend the money that their shareholders – nation states – and their constitutions require. Demand may be a better way of putting it.

For Kazakhstan and Azerbaijan, the funds are a welcome source of cash at a time of economic constraint. Their economies are under huge pressure at the moment from the sustained low oil prices. Azerbaijan’s GDP has shrunk this year and Kazakhstan’s is stagnant.

They were once attractive options to lend to for commercial banks looking for decent exposure in Emerging Markets. Now they would find it difficult to raise the cash without paying prohibitively expensive interest rates.

That’s where the loans from intergovernmental banks come in. They are cheap and chunky.

The latest round of loans came with the involvement for the first time of the Asian Infrastructure Investment Bank (AIIB).

This it the China-based bank that was set up on Christmas day last year but only started operations in January this year. It has now invested $600m in a loan to Azerbaijan’s Southern Gas Corridor company which is helping to build the TANAP gas pipeline from the Caspian Sea to Europe.

The AIIB has put down a major marker, then, and potentially set itself up as a challenger to the traditionally West-based intergovernmental banks that have previously dominated.

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(News report from Issue No. 310, published on Dec. 23 2016)