Tag Archives: Kyrgyzstan

Buy gold, not som, says Kyrgyz Central Bank chief

BISHKEK, FEB. 15 2017 (The Conway Bulletin) — In an interview with the Bloomberg news agency, Tolkunbek Abdygulov, head of the Kyrgyz Central Bank essentially told ordinary Kyrgyz that they should buy gold rather than keep their savings in the unpredictable Kyrgyz som.

Gold is considered a safe-haven for investors and savers whenever the global outlook is fragile but it holds added importance in Kyrgyzstan, which relies on the Kumtor gold mine to produce over a tenth of its GDP.

Like the rest of the region, an economic slowdown has hit the Kyrgyz economy, denting GDP growth and undermining the economy. The Kyrgyz som has slid from around 50/$1 to 69/$1.

Mr Abdygulov appeared to reference this som weakness in his interview with Bloomberg.

“Gold can be stored for a long time and, despite the price fluctuations on international markets, it doesn’t lose its value for the population as a means of savings,” he was quoted as saying.

Over the past couple of years, the Kyrgyz Central Bank has offered to sell gold in different sizes to ordinary Kyrgyz and to store it safely. Mr Abdygulov said that the Bank had sold around 140kg of gold through this system.

And the Central Bank appears to be leading by example. It has increased its purchases of gold while many other central banks have reduced theirs. Bloomberg data showed that Kyrgyzstan currently holds around $190m of gold in its reserves, four times the level of 10 years ago.

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(News report from Issue No. 317, published on Feb.17 2017)

Second former Kyrgyz PM registers for November’s presidential election

BISHKEK, FEB. 14 2017 (The Conway Bulletin) — Omurbek Babanov registered himself as a candidate for the Ata-Zhurt party in this year’s presidential elections in Kyrgyzstan, the second former PM to declare his intention of standing.

Mr Babanov was PM for eight months under President Almazbek Atambayev in 2011/12. He follows former PM Temir Sariev as declaring his candidacy early ahead of the election planed for November.

Like his rival, Mr Sariev, Mr Babanov, 47, had been forced to resign as PM in August 2012 over corruption allegations.

Both will be competing to replace Mr Atambayev who is stepping down after a single five year term, as stipulated by the constitution. Observers have said the vote could be one of the few genuinely competitive elections in Central Asia since independence from the Soviet Union in 1991.

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(News report from Issue No. 317, published on Feb.17 2017)

Kyrgyz finance ministry lays off 220 staff to save money

BISHKEK, FEB. 8 2017 (The Conway Bulletin) — Kyrgyzstan’s finance ministry laid off 220 employees to try and ease costs so that it can battle through a deep, and long, economic downturn.

Senior officials from the ministry defended the layoffs as part of a so- called “optimisation process” but in reality this was a simple cost cutting exercise and more evidence that the Kyrgyz economy is under strain. The cuts were aimed at low and mid ranking staff, often in regional offices.

Finance minister Adylbek Kasymaliev said: “As a result of optimisation, we will save between 30m and 60m som ($435,000 to $870,000).”

Kyrgyzstan is suffering from a recession in Russia, linked to the collapse in oil prices, which has destroyed jobs for migrants. Along with Tajikistan, Kyrgyzstan is one of the world’s most remittance-dependent countries.

Independent expert and head of the public council under the ministry of finance, Bakyt Satybekov, told the Conway Bulletin that the finance ministry, and other public bodies, had become bloated.

“It is good that the government optimised personnel at the ministry of finance and its subordinate authorities, it should have done this a long time ago to avoid duplication (of jobs) and to save money,” he said.

Mr Satybekov’s job lies outside central government. He is charged with monitoring the performance of the finance ministry.

Kyrgyzstan is not alone in slashing budgets and costs. Georgia has laid off mid-ranking Georgian army officers and Azerbaijan has slashed various social projects, such as a rural internet roll-out.

On the streets of Bishkek the layoffs were greeted with wry bewilderment. Surely, most people that a Conway Bulletin correspondent spoke to said, it would be better to fire the heads of the departments.

“It would be better to fire heads of some departments and their deputies in the ministry who secure their places for years rather than firing ordinary people from the regions,” said Jeenbek, a Bishkek resident.

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(News report from Issue No. 316, published on Feb. 10 2017)

$9.5m sock-making factory opens in northern Kyrgyzstan

BISHKEK, FEB. 4 2017 (The Conway Bulletin) — Kyrgyz sock-maker Textile Trans opened a new $9.5m factory in the Chui region of northern Kyrgyzstan, a rare example of manufacturing investment in one of the the former Soviet Union’s poorest countries.

Textile Trans said the factory would employ 150 people and that it would producewoollen socks and tights mainly for the local market.

PM Sooronbay Jeenbekov opened the factory. He said that it was going to give a boost to the whole country.

“This is a significant event not only for the Chuiregion, but for the whole country. With the opening of this enterprise we will decrease the dependence of Kyrgyzstan on imports of textile products in the form of fabric, which will reduce production costs for local garment manufacturers,” local media quoted him as saying.

A loan of $7.5m from the Russian- Kyrgyz Development Fund helped Textile Trans pay for the new factory. The Russian-Kyrgyz Development Fund was an organisation set up in 2015 by the Kremlin as a sweetener for Kyrgyzstan to join the Eurasian Economic Union.

And this sort of investment is important in Kyrgyzstan. Around 50% of its GDP is linked to fragile remittance flows from workers living abroad, mainly in Russia, and another 10% or so of the country’s wealth is derived from the Kumtor gold mine in the east of the country. This is owned by Centerra Gold, although the Kyrgyz government owns a 27% stake in the Toronto-listed company.

Analysts have been calling for Kyrgyzstan to diversify its economic base away from gold mining and labour exports, and news that Textile Trans has opened a new factory will be welcomed.

Tourism is another major potential revenue flow that Kyrgyzstan wants to tap into.

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(News report from Issue No. 316, published on Feb. 10 2017)

Kyrgyzstan to sign deal with EU

FEB. 9 2017 (The Conway Bulletin) — Kyrgyzstan and the EU may sign a new general cooperation agreement next week to replace a deal that has not been updated for 20 years, media reported by quoting the EU ambassador in Bishkek, Cesare de Montis, as saying. There is an element of window dressing in this deal but it is still an important agreement for Kyrgyzstan.

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(News report from Issue No. 316, published on Feb. 10 2017)

Comment: Sariyev puts himself forward for presidency, says Kilner

FEB. 4 2017 (The Conway Bulletin) — Temir Sariyev, until April 2016 Kyrgyzstan’s PM, put himself forward to run in a presidential election set for later this year, the first salvo in what could be a genuinely competitive vote to replace the incumbent Almazbek Atambayev.

The 53-year-old Sariyev had made it known since his resignation as PM over alleged links to corruption allegations that he still harboured ambitions to hold high office, and his candidacy for the top job via his Ak-Shumkar party, will not surprise observers. If anything, Mr Sariyev is considered an insider and could be a natural heir apparent for Atambayev who, as laid out by the constitution, is leaving the presidency after his single term in power.

He has not yet named a preferred successor although some analysts have said that this, in time, may end up being Sariyev.

Sariyev was Atambayev’s economy minister for four years before becoming PM in May 2015, the fifth PM since a revolution in 2010. At the time of his appointment analysts thought that with Sariyev, the government finally had a figurehead who had the political nous, backing and resilience to survive the country’s notoriously cut-throat politics. This was not to be the case, though, and he was forced to resign only 11 months later over his alleged links to a corrupt road building scheme.

A staunch proponent of close links with the Kremlin, Sariyev was the PM who, with Atambayev as president, took Kyrgyzstan into the Eurasian Economic Union, which also includes Belarus, Armenia and Kazakhstan.

Kyrgyzstan was the last to join in August 2015 and has always been its most reluctant member, with many businessmen and MPs blaming it for hindering Kyrgyzstan’s economy. Sariyev, though, has always backed its membership, a controversial stance in Kyrgyz politics.

But then Sariyev has always appeared to court controversy.

He is remembered in Kyrgyzstan for playing a key role in urging people to storm the security services headquarters in Bishkek in 2010 at the start of a revolution that would overthrow president Kurmanbek Bakiyev.

The question for Sariyev now is whether he can build his support — and he needs both support from inside the political system and support from the electorate — if he is going to win the election in November. His tenureship as PM was not an overly happy one and there were no anguished protests when he left office.

By James Kilner, Editor, The Conway Bulletin

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(News report from Issue No. 316, published on Feb. 10 2017)

Putin schedules visit to Tajikistan and Kyrgyzstan

JAN. 27 2017 (The Conway Bulletin) — Russian President Vladimir Putin is due to fly to Dushanbe for a state visit that Russian and Tajik media have hinted may coincide with a formal application from Tajikistan to join the Kremlin-lead Eurasian Economic Union (EEU). Mr Putin will also travel to Bishkek on the same trip which Russian media said would take place “in the near future”.

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(News report from Issue No. 315, published on Feb. 3 2017)

People report looting at plane crash site in Kyrgyzstan

FEB. 1 2017 (The Conway Bulletin) — Reports have appeared in Kyrgyz media that a cargo plane which crashed into a village next to Manas airport last month was carrying iphones and other electronic equipment in a smuggling operation based at the airport. Eyewitnesses also told the RFE/RL website that some of the first members of the emergency services looted the crash site. “One policeman took off his shirt and filled it with mobile phones,” RFE/RL quoted a young boy as saying.

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(News report from Issue No. 315, published on Feb. 3 2017)

Start of CASA-1000 pushed back to 2020

BISHKEK, FEB. 1 2017 (The Conway Bulletin) — A delay in handing out a contract to build two converter stations has pushed back the start date of the CASA-1000 project which aims to send electricity generated by hydropower stations in Tajikistan and Kyrgyzstan to Afghanistan and Pakistan.

Pakistan’s Express-Tribune newspaper quoted an unnamed Pakistani official as saying that French engineering company Alstom had asked for more time to put in a bid to build two converter stations.

“Four countries that are part of the project – Tajikistan, Kyrgyzstan, Afghanistan and Pakistan – have agreed to give relaxation in the timeframe keeping in view the request of Alstom, which is a credible name and a major supplier of converter stations across the world,” the newspaper quoted the official as saying.

“Now, this project is likely to be ready in 2020.”

CASA-1000 had been due to start up either at the end of this year or in 2018. It is backed by the World Bank and is considered a vital economic and strategic link between Central Asia and South Asia, binding the two regions together, providing an export product for Tajikistan and Kyrgyzstan and electricity for Pakistan and Afghanistan.

The two converter stations are vital to the CASA-1000 project. One will be sited in Tajikistan and the other in Pakistan.

The value of the tender has not been released but the names of the companies bidding for it have been. They are the US’ GE, Japan’s Mitsubishi, Germany’s Siemens and Alstom.

For the West the CASA-1000 project also has major significance as the physical implementation of the north-south Silk Road trade route that Hillary Clinton touted in 2011 when she was US Secretary of State.

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(News report from Issue No. 315, published on Feb. 3 2017)

Kyrgyz civil leaders criticise crackdown on Facebook as an “invasion of human rights”

BISHKEK, JAN. 25 2017 (The Conway Bulletin) — Rights groups and civil society leaders in Kyrgyzstan have criticised the government for moves to monitor Facebook for comments critical of the president.

The row centres on the Kyrgyz National Security Committee’s (GKNB) move to identify and monitor 45 Facebook users who have criticised President Almazbek Atambayev. Facebook in Kyrgyzstan is one of the few mediums ordinary people use to express political opinions.

But Klara Sooronkulova, a former judge of the Constitutional Court who was sacked in 2015 because of a disagreement with Parliament over the use of people’s biometrics data said the move was wrong. “It is invasion of privacy and violation of human rights,” she told The Conway Bulletin.

A Bishkek analyst who preferred to remain anonymous said politics may be motivating the clampdown.

“The next presidential elections are coming [ in October],” he said. “They are taking measures to control chaos by trying to control who criticises the President.”

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(News report from Issue No. 314, published on Jan. 27 2017)