Tag Archives: Kyrgyzstan

Czech investors in Kyrgyzstan’s hydro projects may be a false company

BISHKEK, JULY 17 2017 (The Bulletin) — The Czech company that Kyrgyz President Almazbek Atambayev was lauding for agreeing a multi-million-dollar deal to build new hydropower stations may not even exist.

Less than a week after a triumphant Mr Atambayev was quoted in media talking up Liglass, a company based in a provincial Czech town, as the new backers of a hydropower project that Russia backed out of in 2015, it has emerged that even his own diplomats were warning him that the company only appears to exist on paper.

Kyrgyzstan has staked much of its future economic potential on developing its hydropower. The deal was considered important because

Russia’s Rushydro pulled out of a $700m agreement to develop the hydropower stations in 2015.

Liglass had, according to Mr Atambayev, promised to pay $37m for a 50% stake in the Upper Naryn HPP, which includes two major hydropower projects, and to build and operate a string of smaller hydropower stations.

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(News report from Issue No. 337, published on July 27 2017)

Kyrgyz President promises smooth power transfer

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JULY 24 2017 (The Bulletin) — In a press conference lasting 3-1/2 hours, Kyrgyz President Almazbek Atambayev once again pledged his support in a presidential election set for October for PM Sooronbay Dzheenbekov and said that whoever won, there would be a peaceful transfer or power. Mr Atambayev is banned from standing in the election after the end of his single 7-year term. The elections are considered a test of Kyrgyzstan’s democracy.

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(News report from Issue No. 337, published on July 27 2017)

Kyrgyzstan sentences Akaev’s son-in-law

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JULY 18 2017 (The Bulletin) — A court in Bishkek sentenced Adil Toishanbayev, son-in-law of Askar Akayev — Kyrgyzstan’s first post- Soviet president, to 20 years in prison in absentia for various financial crimes including tax evasion. Mr Akayev was overthrown in a revolution in 2005. He now lives in Moscow. Mr Toishanbayev has been detained in Kazakhstan, Moscow and Dubai but never deported.

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(News report from Issue No. 337, published on July 27 2017)

Czech firm buys into Kyrgyz hydropower

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BISHKEK, JULY 10 2017 (The Bulletin) — Liglass Trading, a Czech company, signed a deal with the Kyrgyz government to buy into a major hydropower project that Russia pulled out of in December 2015 after a drop in oil prices and US-led sanctions triggered an economic recession.

The deal means Liglass will pay $37m for a 50% stake in Upper Naryn HPP, the company created to build and operate the Akbulun and Naryn-1 hydropower plants. It will also build 10 smaller hydro stations by end-202o.

Kyrgyz president Almazbek Atambayev hailed the deal.

“The arrival of large-scale private investment in Europe will serve as a strong signal to potential investors from around the world, confirming the readiness of Kyrgyzstan to create all the necessary conditions for doing business and effective implementation of mutually beneficial joint projects,” he was quoted as saying in a government press release.

RusHydro had planned to invest more than $700m into Kyrgyz hydropower before it quit in 2015.

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(News report from Issue No. 336, published on July 16 2017)

Comment: Turkey’s coup and its impact

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ISTANBUL, JULY 16 2017 (The Bulletin) — Finally we’ve made it to this finest of cities. It’s taken us a week since leaving Edinburgh to get here – via Yorkshire, Hampshire, Lord’s cricket ground, Warsaw, Prague (the airport only) and lovely, louche Odessa.

But at turns brooding and majestic; playful and frustrating, Istanbul is a place that commands love and loyalty. My wife and I are heading east on book research duty, hers not mine, and there was no reason to linger. Still, I insisted. It’s good for the temper, if not the waistline, to spend days here eating, drinking and strolling.

Coincidentally we are in Istanbul for the first anniversary of a failed coup attempt against Turkish President Recep Erdogan. A rebel army unit captured the bridge over the Bosphorus and tried to arrest Erdogan. They failed and the ramifications have been great.

Erdogan blamed the exiled cleric Fethullah Gulen for organising the coup and police have arrested at least 50,000 people for being ‘Gulenists’. This purge hasn’t been confined to Turkey. Pressure has been applied to Turkey’s allies in Central Asia and the South Caucasus too. Azerbaijan and Turkmenistan have been happy to comply, others less so, although Georgia has started to acquiesce.

With a resurgent Russia and a powerful China, Turkey’s influence in the region has waned since the 1990s but the coup anniversary is a reminder that events in Istanbul reverberate across the Anatolian plateau, over the Caspian Sea and on to the Tien Shan mountains.

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(News report from Issue No. 336, published on July 16 2017)

CASA-1000 is on schedule, leaders say in Tajik capital

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DUSHANBE, JULY 6 2017 (The Bulletin) — The CASA-1000 electricity generation and supply project, considered an essential Western-based link between Central Asia and South Asia, will be finished this year, as scheduled, leaders of the four nations working on its construction said at a meeting in the Tajik capital.

This is important because CASA- 1000, which will generate electricity through hydropower stations in Kyrgyzstan and Tajikistan and distribute it to Afghanistan and Pakistan, is the main transnational Central Asia project backed by the West and its financial institutions. The US government has even described it as an important part of a new north-south Silk Road.

The West has lost influence in Central Asia over the last few years to Russia’s military expansionist strategy and China’s trade-orientated ‘Belt and Road’ policy.

Looking to allay fears that timings had slipped, Pakistan’s PM Nawaz Sharif, Afghan President Ashraf Ghani, Kyrgyz PM Sooronbay Jeenbekov and host Tajik President Emommali Rakhmon lined up to talk up progress.

Pakistani news agencies quoted Mr Sharif as saying: “We must make efforts to ensure that the project is completed well in time.”

There are still major security and operational concerns over CASA-1000, though, which need to be solved.

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(News report from Issue No. 336, published on July 16 2017)

Kyrgyz court fines website $400k for insulting Atamayev

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BISHKEK, JULY 3 2017 (The Bulletin) — A court in the Kyrgyz capital ordered ProMedia which runs Zanoza, one of the most lively and well-respected news websites in the country, to pay President Almazbek Atamayev damages of $400,000 for offending his dignity in a case that has raised questions over Kyrgyzstan’s commitment to free speech.

Immediately after the verdict, one of the co-founders of Zanoza, Dina Maslova, said that the media outlet simply couldn’t pay the fine and that, unless an appeal court overturned the verdict, it would have to close down.

“We criticise the president if it is needed because this is our work,” she said. “This is an irritation for the political authorities just before a presidential election. But we are going to appeal the decision. This case mostly harms the reputation of the judicial system and image of the country.”

The other co-founder of ProMedia and Zanoza is Naryn Idinov. He is under a travel ban linked to the defamation charges.

The charges trace back to a series of articles published by Zanoza and the local language service of the US- funded Radio Free Europe/Radio Liberty in 2015 and 2017 which quoted opposition activists describing Pres. Atambayev as corrupt and describing his lavish lifestyle.

The charges against Radio Free Europe were dropped after the head of the service, Tom Kent, flew in for talks with Mr Atambayev. In exchange for dropping the charges, Mr Kent replaced the head of the local language service.

This option wasn’t available to Zanoza. Still, Ms Maslova, the co- founder, was defiant and said that if Zanoza was forced to close, they would simply open up another website under another brand.

For Kyrgyzstan, the damage to its image as the most liberal of the five Central Asian states was instant. Free speech campaigners said that they had been warning of a gradual erosion of rights for the past couple of years.

And ordinary people on the streets of Bishkek were also concerned about the implications.

“Other media agencies may be intimidated by such large fines and will strengthen their (self) censorship. The reader will be limited in his or her choice and will not trust the media, especially when they talk about the President,” said Begaiym Adzhikeeva, a Bishkek resident.

Some analysts have linked the defamation case against Zanoza to a presidential election scheduled for October.

Mr Atambayev is stepping down after a single term in office, as stipulated by the constitution, but his preferred successor is facing an increasingly acrimonious contest.

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(News report from Issue No. 335, published on July 3 2017)

Kyrgyzstan Air wants China investment

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JUNE 28 2017 (The Bulletin) — Kyrgyzstan Air has asked China’s Hainan Airlines to buy a 49% stake in the company, media reported. It had said earlier in the year that it wanted to sell off a 49% stake but didn’t say to whom. China, which has been investing heavily in Central Asia, was the obvious option. Hainan Airlines has not commented.

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(News report from Issue No. 335, published on July 3 2017)

Kyrgyz CB keeps interest rate steady

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JUNE 28 2017 (The Bulletin) — Kyrgyzstan’s Central Bank kept its key interest rate steady at 5% because of rising inflation and economic growth. The rate decision is good news as it will be seen as a positive assessment of the Kyrgyz economy which has been battling against a downturn over the past three years or so. Inflation in Kyrgyzstan is currently running at around 3.8%. At the end of last year it was recording deflation.

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(News report from Issue No. 335, published on July 3 2017)

Currencies: Kyrgyzstan’s som

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JULY 3 2017 (The Bulletin) — The Kyrgyz Central Bank said that the economy was picking up, electing to keep interest rates steady, but Kyrgyzstan’s som currency has continued to fall. It is now trading at around 69.2/$1, its lowest since March. If its drops through the 69.4/$1 barrier it will hit its lowest value since September.

The turnaround in the currency has been startling and highlights just how vulnerable the currencies of Central Asia are to the whims of their governments. Analysts said that the recent drop in the value of the Kyrgyz som from 67.2/$1, its highest level since mid-2015, has been controlled and bears the hallmarks of a managed decline.

Analysts have warned that inflationary pressures have been built into the Kyrgyz economy. A decline in the value of a national currency is one way that inflation seeps out. The Central Bank said that inflation was now around 4.4%, a large jump from the end of last year when it was measuring deflation.

GDP growth for the first five months of the year was over 6%, outpacing expectations.

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(News report from Issue No. 335, published on July 3 2017)