Tag Archives: Kazakhstan

McDonalds finally opens its first restaurant in Kazakhstan

MARCH 8 2016, ALMATY (The Conway Bulletin) – Hundreds of people queued for their first taste of McDonalds in Kazakhstan when it opened its inaugural restaurant in Central Asia in Astana.

McDonalds has teamed up with Kazakh businessman Kairat Boranbayev, whose daughter is married to Kazakh president Nursultan Nazarbayev’s grandson, to bring its burgers to Kazakhstan.

The opening of McDonalds’ restaurant is a boost for Mr Nazarbayev who is looking to bolster support ahead of elections despite a worsening economic slowdown.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Business comment:

MARCH 11 2016 (The Conway Bulletin) – Kazakhstan is AvtoVAZ’s largest export market but a duty introduced at the start of the year by the Kazakh government to support its car making industry, has, apparently, destroyed it.

The number of AvtoVAZ cars delivered to the country jumped in 2015 due to the tenge-rouble currency imbalance for the first part of the year.

From the end of 2014 the rouble started collapsing, but the Kazakh Central Bank stubbornly kept the tenge at 185/$1.

This made imports very cheap, undermining Kazakhstan’s own carmaking industry but boosting AvtoVAZ.

In the first half of 2015, car sales were down by one-third. For the year, sales were down 40% to 97,446 units, the lowest level since 2012.

Even President Nursultan Nazarbayev weighed in and said that it was wrong for Kazakhs to buy cheaper products abroad and push the domestic industry out of the competition.

The Kazakh government also looked into subsidising the local automotive sector and impose import duties — an issue that must surely have raised concerns for both the World Trade Organisation and the Eurasian Economic Union.

The new $2,000 car import tax has also had an almost immediate effect. It has made imports unsustainable. It has simply priced them out of the market, denting consumer choice and, also, Kazakh- Russian relations.

Kazakhstan and Russia are supposed to be allies. The Eurasian Economic Union, a Kremlin project, was supposed to protect the area from interventionist duties. Where was it when Kazakhstan said it was going to impose its $2,000 import levy on car imports.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Editorial: NPLs in Kazakhstan

MARCH 11 2016 (The Conway Bulletin) – Women banging pots, blowing whistles and wearing grey capes in the streets of Almaty last January alarmed observers.

They were protesting about mortgages and how difficult it was to repay these loans after a devaluation of the tenge. In other words, this was yet another alarm bell about non-performing loans in Kazakhstan.

The country was battered with toxic loans in the aftermath of the Global Financial Crisis of 2007/8 and some banks, directly or indirectly, asked for help from the government.

And the government has only just started to offload these banks — think BTA and Kazkommertsbank’s merger last year.

Now, though, new data suggests that there may be another round of dodgy debt to deal with. This time the government needs to act early to stop borrowers from tipping the fragile banking system into the red again. It has the funds and it now also has the experience. This time round, there are few excuses for the Kazakh government and the Central Bank.

ENDS

(Editorial from Issue No. 271, published on March 11 2016)

EU criticises Kazakhstan

MARCH 10 2016 (The Conway Bulletin) – The European Parliament issued a rare strongly worded statement criticising a recent crackdown on media in Kazakhstan. “MEPs are deeply concerned about the climate for the media and free speech in Kazakhstan, where strong pressure on independent media outlets includes some being closed down, and news agency directors and journalists being detained, placed under criminal investigation and sentenced to prison,” it said.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Kazakhs bad debt worsens

MARCH 9 2016, ALMATY (The Conway Bulletin) — Non-performing loans, a major signifier of the banking sector’s economic health, have started to rise again in most large Kazakh banks, data showed.

Other than Kazkommertsbank, which wrote-off swathes of non-performing loans last year after it merged with debt-ridden BTA Bank, only Halyk Bank of the big lenders improved its loan portfolio in 2015.

Halyk Bank is owned by business- man Timur Kulibayev and his wife Dinara Nazarbayeva, daughter of Kazakh Pres. Nursultan Nazarbayev. Tsensabank, Bank Centre Credit and the Kazakh subsidiary of Russia’s Sberbank all saw the ratio of non- performing loans in their portfolios worsen.

Kazakhstan is sensitive to the proportion of non-performing loans held by its banks because after the 2008/9 Financial Crisis it was considered to have one of the worst ratios of bad to good loans in the world.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Oil output to rise in Kazakhstan

MARCH 10 2016 (The Conway Bulletin) – Kazakhstan will raise its target annual oil production in 2016 by 5% to 77m tonnes if oil prices remain at around $40/barrel, media quoted energy minister Vladimir Shkolnik as saying. This is important because a rise in both production and price would give government revenues in Kazakhstan a much-needed lift.

ENDS

(News report from Issue No. 271, published on March 11 2016)

China gives up Kazakh prisoners

MARCH 6 2016 (The Conway Bulletin) – China handed over four prisoners jailed for drug trafficking over to Kazakhstan, Radio Free Europe/Radio Liberty reported. The deal, whereby the unnamed prisoners serve out their sentences in Kazakhstan, underlines the close relations between Kazakhstan and China.

ENDS

(News report from Issue No. 271, published on March 11 2016)

AvtoVaz cuts exports to Kazakhstan

MARCH 10 2016 (The Conway Bulletin) – Russian carmaker AvtoVAZ has stopped exporting finished cars to Kazakhstan due to the introduction of new customs duties, Vedomosti reported quoting a source close to the company. The new taxes, introduced this year, increase the overall average price of an auto- mobile by $2,000. Instead, AvtoVAZ will expand its exports of car parts to its factories in Kazakhstan. This was confirmed to Kazakh media late on Thursday by an AvtoVAZ spokes- person.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Inflation hit utilities in Kazakhstan

MARCH 9 2016 (The Conway Bulletin) – Utility tariffs in Kazakhstan were 11.2% higher in February this year compared to February 2015, the state statistics agency said. The biggest cost rise was a near 20% increase in sewage charges imposed on households. Heating and hot water prices have risen by nearly 6% and rubbish collection by around 5%. The data is more evidence of a rise in the cost of living in Kazakhstan after the currency lost around 50% of its value last year.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Kazakhstan acquits reporter’s charges

FEB. 29 2016 (The Conway Bulletin) – A court in Almaty acquitted Yulia Kozlova, a journalist for nakanune.kz which is often critical of the authorities, of drug related charges. Ms Kozlova has said that the charges were politically motivated. Acquittals in Kazakhstan are extremely rare. It may be that the authorities are trying to deflect a barrage of negative criticism accusing them of cracking down on independent media.

ENDS

(News report from Issue No. 270, published on March 4 2016)