Tag Archives: Kazakhstan

Kazakhstan plans a freight company

NOV. 11 2016 (The Conway Bulletin) — Kazakhstan’s national airline Air Astana and its state-owned railway company Temir Zholy will combine next year to create a new air freight company, media reported. It quoted a Temir Zholy official as saying that Kazakhstan wanted to exploit its position between Asia and Europe to boost its economy by acting as a logistics and cargo hub. Uzbekistan has already developed plans to set itself up as a similar transport hub.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Comment: Kazakh electricity plans

NOV. 18 2016 (The Conway Bulletin) — The Kazakh government has cancelled plans to build either a thermal or nuclear power station despite saying for the past decade that an upgrade to its power generating system was vital.

At a press briefing earlier this month in Astana, Kazakh Energy Minister Kanat Bozumbayev said that, despite predictions of the opposite, Kazakhstan actually now has a surplus of power.

“We see no deficit within the next seven years, so we see no [need to build] new facilities such as a nuclear power plant within the next seven years,” he said. This is an important statement for two reasons. Firstly Bozumbayev is doing future generations of Kazakhs a disservice. Secondly he is not being honest with this current generation of Kazakhs.

Both the short-termism and the dishonesty are worrying. Kazakhstan needs more power. Just ask people living in Almaty who have to deal with an increasing number of brownouts. As the country has modernised and grown wealthier, electricity consumption has soared. World Bank data showed that in 2013, Kazakhstan’s per capita electricity consumption was 4,892 kilowatt hours, up from a post-Soviet low in 1999 of 2,838 kilowatt hours.

At the same time, Kazakhstan’s population has grown from just under 15m people in 1999 to just over 17m people in 2015.

Kazakhstan prevaricated for years with various suitors over building a new nuclear power station, its Soviet-era nuclear power station had been decommissioned in 2001, but earlier this year said it had scrapped the idea.

In September, Kazakhstan and Korea’s Samsung also finally admitted that its mothballed $2.5b plan to build a coal-fired power station on the shores of Lake Balkhash to feed electricity to Almaty had also been scrapped.

And here’s the hard truth, the real reason that Kazakh officials said they don’t need a new power station is that Kazakhstan’s finances are currently not up to funding the construction of one.

Last year, Samsung Engineering CEO Park Jung-heum said he had mothballed the Balkhash thermal power project “because of an issue with the Kazakhstan government over the guaranteed purchase of the power to be produced from the project.”

Power generation plans in Kazakhstan have become the latest victim of the economic downturn. The government should admit this and lay plans to boost production as soon as they can afford to.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Kazakhstan cuts interest rate

NOV. 14 2016 (The Conway Bulletin) — Kazakhstan cut its key interest rate by 50 basis points to 12%, its fourth cut since May, as it looked to give industry a boost. The Central Bank said more cuts were likely but that these came with a potential inflation risk. The Central Bank had raised rates to a high of 17% in February to counter inflation.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

EXPO bridge collapses in Kazakhstan

NOV. 16 2016 (The Conway Bulletin) — A decorative bridge linking two pavilions in Kazakhstan’s headline EXPO-2017 project collapsed, only a few months before the exhibition is scheduled to open. Media reported that nobody was injured, unlike Kazakh pride. President Nursultan Nazarbayev has set much store in using EXPO-2017 to promote the country.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Qazkom and Halyk Bank eye merger to create Kazakh bank giant

ALMATY, NOV. 15 2016, (The Conway Bulletin) — Kazakhstan’s largest lenders, Halyk Bank and Qazkom, are in talks to merge and create a super- sized bank with strong links to the Kazakh elite that would dwarf its rivals, according to sources quoted by Reuters.

Reuters quoted two anonymous sources, who both confirmed that talks were under way and that the merger could be agreed after Halyk redeems a $638m Eurobond in May 2017.

Importantly, one of the sources said that the idea behind the merger traces all the way up to the presidential family.

President Nursultan Nazarbayev’s daughter Dinara and her husband Timur Kulibayev coown Halyk Bank. Kenes Rakishev, son-in-law of Mr Nazarbayev’s close ally Imangali Tasmagambetov, owns Qazkom. Mr Tasmagambetov is minister of defence.

Qazkom which rebranded last month from Kazkommertsbank, gave a guarded denial that a merger was about to happen. Halyk Bank did not comment.

“Responding to recent rumours, I can say that Qazkom has neither made nor received offers regarding a merger with Halyk Bank,” Qazkom’s press officer, Sergei Chikin, told media

A merger would form a banking superpower in Kazakhstan, four times larger than its biggest competitor, Tsesnabank, owned by Adilbek Dzhaksybekov, head of the Presidential Administration. Analysts, though, are skeptical at the prospects of a merger, which would create a bank with a 40% of the loans market.

“Even if the talks are proved true, the Central Bank is unlikely to allow a merger that would monopolise the market,” Rasul Rysmambetov, director of the Public Fund Financial Freedom, told the Inform-Kazakhstan news agency.

In the past two years, both Qazkom and Halyk have cleaned up their toxic assets, which built up during the Global Financial Crisis of 2008/9. Qazkom had also bought Kazakhstan’s once-largest lender BTA Bank, now riddled with non- performing loans. It also changed ownership, with Mr Rakishev sidelining founder Nurzhan Subkhanberdin.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Kazakh police detains Aktobe FC chief

NOV. 9 2016 (The Conway Bulletin) — Anti-corruption police in Kazakhstan detained Dmitriy Vasilyev, director at Aktobe Football Club, for embezzling 300m ($882,000) of public funds, official media reported. Mr Vasiliyev allegedly paid illegal premiums for Aktobe’s performance in Kazakhstan’s Premier League. FC Aktobe is owned by the finance department of the local government.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

Kazakh beer king imprisoned for funding coup

ALMATY, NOV. 8 2016 (The Conway Bulletin) — A closed court in Astana sentenced Tokhtar Tuleshov, the self- styled beer king of southern Kazakhstan, to 21 years in prison for attempting to stage a coup against Kazakh leader Nursultan Nazarbayev.

Prosecutors had said that Tuleshov had financed a series of anti- government protests in April and May that focused on land ownership. The breadth of the protests and their leaderless nature unnerved Mr Nazarbayev. Police arrested the protest organisers and charged Tuleshov, detained in January for unrelated charges of illegally owning weapons and fraud, with financing the demonstrations.

Tuleshov made his millions through the Shymkentpivo brewery, one of the biggest in Kazakhstan, in the southern city of Shymkent.

His supporters say that he has been framed and point out that it is not possible for him to have paid for the protests from prison.

An ostentatious and dapper figure, Tuleshov used to drive through the scruffy streets of Shymkent in a chauffeured Rolls Royce. Birthday parties for his daughter were lavish affairs with pop stars flown in to sing and guests dressing up in outlandish fancy dress.

The trial was held behind closed doors with journalists only allowed into the courtroom for the final verdict. Human rights activists have said that the arbitrary and closed nature of the trial worried them and could set a precedent.

Analysts have also speculated that Mr Nazarbayev and other senior members of the government from the central and northern tribes in Kazakhstan used Tuleshov to send a warning to high-ranking members of the southern tribe not to challenge their dominance.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

Kazakh government holding seeks Japan loan

NOV. 9 2016 (The Conway Bulletin) — Baiterek, a Kazakh government holding, said it secured a $300m loan from Japan’s SMBC, part of the Sumitomo group. The agreement, signed during President Nursultan Nazarbayev’s visit to Japan, will support the supply of high-tech equipment. The Kazakhstan Development Bank, a subsidiary of Baiterek, will receive the funds and finance joint projects with Japanese companies.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

Comment: C.Asia and S.Caucasus eye up a Trump presidency, says Kilner

NOV. 11 2016 (The Conway Bulletin) — Donald Trump, the incoming US president, has a long list of issues that need tackling in Central Asia and the South Caucasus, not least the dominance of China and Russia.

Central Asia, in particular, has traditionally been an arena where the world’s great powers have shadow-boxed, testing each other’s strengths and weaknesses. This is just as true today as it was during the 19th century’s Great Game between Russia and Britain. Now, though, China has entered the fray and the West is led by the US and not Britain.

Since NATO withdrew most of its forces from Afghanistan in 2013/14, US interest in Central Asia has waned and it has ceded diplomatic, economic and cultural influence to Russia and China.

When she was Secretary of State between 2009 and 2013, Hillary Clinton promoted a new north-south Silk Road running from Central Asia to India. This was to be US soft power in action, a commercial push to rival influences exerted by China through its loans and by Russia through its diplomatic and energy levers. It hasn’t shaped up to much, and Clinton wont now be able to see it through, but Trump, a businessman and reality TV star, may be well-placed to invigorate this north-south Silk Road.

Governments in Central Asia and the South Caucasus will also be watching his policies on NATO, Russia and Iran.

Georgia has, perhaps, the most to be concerned about. It has struck out on a determinedly Western direction and needs a strong US and NATO as a counterpoint to Russia. If the US’ commitment to NATO wanes, Georgia will be more vulnerable to Russian aggression. Certainly its two breakaway states, Russia-backed Abkhazia and South Ossetia, will feel emboldened.

Barack Obama brought Iran back into the international community by partly lifting sanctions linked to the development of its nuclear sector. Its reemergence was heralded in Central Asia and the South Caucasus as an opportunity. They will be looking to a US led by Trump to boost, and not deflate, Iran’s place in the world. They want Iran to be an economic driver.

And the US’ relationship with Russia is important too. If US-Russia relations don’t improve, and the Russian economy continues to shrink, this filters through to Central Asia and the South Caucasus.

They will be looking for an improvement in US- Russia relations to generate a boost for the Russian economy.

By James Kilner, Editor, The Conway Bulletin

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(News report from Issue No. 304, published on Nov. 11 2016)

Tethys says Kazakh police raided its offices

ALMATY, NOV. 6 2016 (The Conway Bulletin) — Guernsey-registered Tethys Petroleum accused Kazakh police of raiding the offices of its subsidiaries in Kazakhstan days after a financing deal with Kazakhstan- based Olisol collapsed.

Tethys also said it had sacked Alexander Abramov, a principal at Olisol and director at Tethys, the day after the police raids . It accused Mr Abramov and Olisol of triggering the raids.

“We understand that the case was initiated by Mr Abramov. On November 2, 2016 the investigation division of the Internal Affairs Department of Almaty conducted searches of the Company’s offices,” Tethys said. Mr Abramov and Olisol have not commented.

Tethys, which operates oil and gas fields near the Aral Sea, also accused Olisol of other underhand business tactics.

The company said that its two main gas supply contracts were terminated shortly before a deadline for Olisol to pay its proposed investment. This allowed Olisol to back out of the agreement.

Essentially Tethys accused Olisol of deliberately scuppering its finance plans. Tethys had been relying on investment of $10m from Olisol, in return for equity, to push through a tough period for the energy industry.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)