DEC. 16 2016 (The Conway Bulletin) — Kazakh president Nursultan Nazarbayev unveiled a new monument in Astana to mark the 25th anniversary of independence from the Soviet Union. He ignored the fifth anniversary of the shooting dead of at least 15 people by police during riots in the western city of Zhanaozen.
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(News report from Issue No. 310, published on Dec. 23 2016)
DEC. 16 2016 (The Conway Bulletin) — Kazakhstan is being considered as a neutral territory to hold peace talks between Syrian rebels and pro-government forces, Turkish Foreign Minister Mevlut Cavusoglu said. Kazakh president Nursultan Nazarbayev wants Kazakhstan to play the role of global peace- maker and has previously said that Syrian peace talks could be held in Astana or Almaty. Kazakhstan has previously held two rounds of Syrian peace talks.
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(News report from Issue No. 310, published on Dec. 23 2016)
DEC. 23 2016 (The Conway Bulletin) — Land has been an emotional issue in Kazakhstan.
In the spring, Kazakhstan saw some of its biggest ever protests with thousands of people demonstrating over plans to give foreigners more rights to land. The protests worried the government and also drew attention to existing laws which granted 1kmsq of free land to every Kazakh. Land is cheap in Kazakhstan, the ninth largest country in the world with a population of just 17m.
Since then hundreds of thousands of people have applied to receive their free slice of Kazakh steppe. This is rough land with no infrastructure, exposed to some of the harshest weather conditions south of the Arctic.
Faced with a sharp economic downturn, Kazakh President Nursultan Nazarbayev has been eager to please. He’s promised to build the infrastructure needed to make the land liveable. The problem is the Kazakh government doesn’t have much money.
Instead, the Kazakh government wants to attract private investment. Primarily, it aims to encourage private construction companies to stimulate construction with affordable loans and to trigger a house-buying boom by subsidising mortgages.
The new government program is called Nurly Zher, which means Bright Land in Kazakh.
Economy minister Kuandyk Bishimbayev has said that the government expects GDP to increase by 7.7% during the whole period of the programme and create annually 25,000 jobs.
But experts are doubtful. Kazakhstan needs comprehensive structural economic reforms rather than government handouts.
Representatives from business and the economy say people can’t even afford subsidised mortgages. Commercial banks are also wary of handing out mortgages. A 50% devaluation of the tenge has triggered a lack of confidence. Bad debt levels are approaching danger levels. This is coupled to a lack of political will. Ministers usually implement government programmes initiated by the President but rarely initiate something of their own. The price of failure would be too great. The unwillingness to dig deep into problems and concentrate only on surface issues is typical of the Kazakh government and reflect a political stagnation .
By Aigerim Toleukhanova, the Bulletin’s Almaty correspondent
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(News report from Issue No. 310, published on Dec. 23 2016)
DEC. 20 2016 (The Conway Bulletin) — Wison Engineering, a Chinese construction company that specialises in the oil and chemical sectors, said it had been awarded a contract to build a liquefied natural gas (LNG) facility in the Zhambyl region of southern Kazakhstan by Astana Trans Oil, a Kazakh state- linked company. Wison said the deal was part of China’s Belt and Road economic policy to develop trade and transport links through Central Asia. It said the plant would be operational by 2018 but gave no financial details.
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(News report from Issue No. 310, published on Dec. 23 2016)
ALMATY, DEC. 21/22 2016 (The Conway Bulletin) — Iranian Leader Hassan Rouhani toured Kazakhstan, Kyrgyzstan and Armenia, a tour that underlines Iran’s ambitions in the region.
Western sanctions on Iran were eased this year, triggering a wave of enthusiasm of a potential return of Western business but, aside from a handful of high-profile deals, this has failed to materialise. Analysts have said that, instead, Iran and Mr Rouhani have turned their focus on Central Asia where they have built up strong business and economic ties over the past few years.
This was highlighted in a statement released by Mr Rouhani’s press team before he left Tehran. He said that Armenia, Kazakhstan and Kyrgyzstan formed a vital part of Iran’s trade corridors.
“We will gain access to Europe and the Black Sea through Armenia, and to the northern and eastern countries through Kazakhstan,” he said.
“Also, China is seeking to connect its railway to Tajikistan, Afghanistan and the Islamic Republic of Iran through Kyrgyzstan”.
And positive bilateral relations were on show throughout Mr Rouhani’s trip. Speaking after his meeting in Astana with Mr Rouhani, Kazakh president Nursultan Nazarbayev said: “An agreement was reached to strengthen the political influence of the two countries within the framework of international organizations such as the UN, the Organization of Islamic Cooperation, SCO.”
The issue of the UN is particularly important as Kazakhstan is starting two years as one of the non-permanent Security Council members.
Prior to landing in Kazakhstan, Mr Rouhani had visited Armenia. It has developed ties based on swapping its gas for Armenia’s electricity.
From Kazakhstan, Mr Rouhani travelled to Bishkek where he received public support from president Almazbek Atambayev for Iranian membership of the Russia and China led Shanghai Cooperation Organisation (SCO). Iran applied to join the group in 2008 but Western sanctions slowed its application. Now those sanctions have been lifted, Iranian membership has been talked of again.
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(News report from Issue No. 310, published on Dec. 23 2016)
ALMATY, DEC. 15 2016 (The Conway Bulletin) — Shrugging off a Romanian investigation into the privatisation in 2003 of its main refinery asset, KMG International, the Black Sea orientated subsidiary of Kazakhstan’s state-owned energy producer Kazmunaigas, reaffirmed its commitment to sell a 51% stake in the company for $680m to China’s CEFC.
If the deal, first put together in May, does go ahead it will be a relief to the Kazakh government which has been trying to raise much needed cash to see it through a steep economic downturn linked to a sharp drop in oil prices.
For China, the 51% stake in KMG International would give it control over the Petromida refinery on Romania’s Black Sea coast near Constanta, which has a refining capacity of 5m tonnes of oil a year. The company also controls hundreds of petrol stations across Romania, Bulgaria, Moldova and Georgia through the Rompetrol brand.
KMG International’s CEO, Zhanat Tussupbekov, said the financial backing of CEFC would allow the company to expand.
“The strategy of KMG International with its new major shareholder aims at developing major projects, Romania being the business priority,” he said.
“We plan to increase the refining capacity to 10m tonnes of crude per year, to build up to 200 new fuelling points, to develop industrial services in upstream and downstream areas, as well as to build a co-generation plant on Petromidia platform.”
Importantly, though, the deal still needs regulatory approval from the EU, Romania and China.
The original deal for the sale had stalled because of a Romanian investigation into the purchase of Rompetrol, which owned the Petromida refinery, by Dinu Patriciu in 2003 for $760m. He sold the refinery four years later for $1.6 to Kazmunaigas. Patriciu died in 2014. The investigation into the deal doesn’t appear to be concluded.
Kazmunaigas International owns 55% of the company that owns the Petromida refinery. The Romanian government owns the other 45% of Petromida.
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(News report from Issue No. 310, published on Dec. 23 2016)
DEC. 20 2016 (The Conway Bulletin) — The Fitch ratings agency downgraded the rating of Kazakhstan’s third largest bank Tsesnabank to B from B+ because of a drop in the quality of its loan portfolio. The downgrade and drop in loan quality are a reflection of the pressures that the Kazakh economy is under. The tenge has lost around half its value in the past couple of years, pressuring households with foreign currency loans and mortgages.
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(News report from Issue No. 310, published on Dec. 23 2016)
DEC. 20 2016 (The Conway Bulletin) — Kazakhstan has exported 7.9m tonnes of grain this so far this year, Kazakh deputy agriculture minister Kairat Aituganov said at a press conference, a 12% increase on 2015. Grain is an increasingly important part of the Kazakh economy. Overall, Mr Aituganov said that agricultural production in Kazakhstan had increased this year by 4.5%.
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(News report from Issue No. 310, published on Dec. 23 2016)
DEC. 21 2016 (The Conway Bulletin) — Kazakh security forces arrested 16 people for allegedly stirring ethnic hatred and belonging to terrorist groups in four coordinated raids across the country. The Kazakh government has blamed radical Islamists for trying to recruit young men into the ranks of IS.
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(News report from Issue No. 310, published on Dec. 23 2016)
DEC. 23 2016 (The Conway Bulletin) — >> So Kazakhstan is hosting peace talks on the war in Syria. This sounds like a major deal.
>> It is and it isn’t. This is actually the third talks in Kazakhstan on the Syria war. The previous two rounds have proved to be more of a talking shop than a forum to find peace. They were only attended by the disparate opposition groups and so were limited. They produced a declaration that called for parliamentary elections and fighting terrorism but little else. Fairly anodyne stuff when there is a vicious civil war going on. There are also other peace talks going on, mainly the UN-backed Geneva talks, to try to sort out the war in Syria that has killed hundreds of thousands of people and forced many more to flee their homes.
>> When were the previous talks? Who was involved?
>> There were two rounds of talks last year, in May and in October. The only groups to attend were the disparate rebels. The extremist group IS was not invited. The talks generated a lot of headlines for Kazakhstan but no tangible impact to the war in Syria. These next talks also feature Russia, Turkey and Iran and could be altogether more serious if they do go ahead. These are the three powers who are exerting the main influence over Syria at the moment. The US and other Western powers have been left out in the cold. These talks though are more aimed at influencing the main talks going on in Geneva, rather than coming up with a stand-alone solution.
>> Right. So negotiations with the US are happening elsewhere?
>> Yes. They are not officially going to be at the peace talks in January in Astana.
>> So, what is Kazakhstan’s role?
>> It hosts the talks and will also mediate, if needed. It’s a great headline generator for Kazakhstan. President Nursultan Nazarbayev craves more attention. He wants to be taken more seriously and has tried to position Kazakhstan as a neutral venue to solve the world’s problems. He organised a summit of the OSCE member states, something that hadn’t been done since 1999, in Astana in 2010. He has also hosted a meeting of the Iran talks. This involves the US, Russia, Britain, France and China. Next year, Kazakhstan starts a two year posting as a non permanent member of the UN Security Council. And, perhaps most brazenly, Nazarbayev has also created his own peace prize.
>> What do you mean? Nazarbayev has a peace prize?
>> Yes, that’s right. We reported on it when it was announced in October. It comes with a $1m cheque. The first prize went to King Abdullah of Jordan for taking in 1.5m Syrians refugees and for making the Middle East a nuclear free zone. Nazarbayev plans to hand it out every year so it’ll be interesting to see who he gives the prize to in 2017. A Syria connection would be a good bet.
>> Back to these Syria talks. What will come out of them?
>> It’s all very fluid at the moment. Russia and Turkey appear to have given their consent to Kazakhsta-based peace talks but nothing has been heard from the Assad regime and Iran or the rebels. It’s highly unlikely that the rebels and the Assad regime will convene in one place so, even if they do go ahead, you’re likely to get an unbalanced view of things. The government forces may turn up this time but not the rebels.
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(News report from Issue No. 310, published on Dec. 23 2016)
