Tag Archives: Tajikistan

Is Tajikistan preparing to unleash its Nashi?

MAY 20 2016 (The Conway Bulletin) — So, it’s becoming increasingly clear that the authorities in Tajikistan are using students to promote their causes.

Excellent reporting from our ‘Man in Dushanbe’ has exposed this practice. He has spoken to several students who have said their universities and teachers have forced them to either march in favour of government policies or demonstrate outside the embassies of countries which have irritated President Emomali Rakhmon by giving his enemies sanctuary.

This is a well-worn strategy in the former Soviet Union. When I was a correspondent in Moscow between 2006-9 I reported heavily on the growth of a youth group called Nashi and its various offshoots. Nashi was effectively a massive mobilisation of Russian youth, often whipped up into a frenzy to support various policies promoted by Vladimir Putin and Dmitri Medvedev, who was the Russian President at the time.

Their summer camps, set up in the dense forests of northern Russia, were an eye-opener. Pictures of opposition activists dressed up as prostitutes were placed around the site. In Moscow, Nashi rallies were rowdy affairs, nationalistic and with a violent undercurrent.

The movement in Tajikistan hasn’t reached these proportions yet and is less sophisticated but the authorities are still unleashing, while trying to control, the same forces.

It’s a crude, dangerous technique.

BANKING ISSUES

Sticking with Tajikistan, news that the country’s second largest bank has been placed under administration doesn’t come as a surprise. TSB has been listing heavily for a while. The strains on the Tajik economy have just become too great and it was only a matter of time before something gave. The important issue to monitor now is whether this is contagious and other Tajik banks also cave in.

It’s also important to keep the banking failure in context. The Tajik banking system may be weaker than its neighbours but all the Central Asian economies have been under the same pressures. Remittances from Russia have dried up, currencies have halved in value and GDP growth rates are being revised down. These banks were giving out soft loans for years and many of these will have turned bad.

If a bank in Tajikistan effectively says it doesn’t have any more money left, could banks in neighbouring Kyrgyzstan and Kazakhstan be experiencing the same problem?

ENDS

(News report from Issue No. 281, published on May 20 2016)

Afghan protest shows sensitivity of power line routes from Turkmenistan

MAY 15 2016 (The Conway Bulletin) — Thousands of Hazara, a minority group in Afghanistan, marched through Kabul to protest against the re-routing of a section of a power line that will transmit electricity from Turkmenistan to Afghanistan and Pakistan.

The protests shows just how sensitive the issue of routing various power lines and pipelines through Afghanistan has become as they generate income for communities. As well as this power line, Afghanistan will also host a power line dubbed

CASA-1000 which will send power to Pakistan from Tajikistan and the TAPI pipeline which will pump Turkmen gas to India

The government has said a route change for the Turkmenistan-Pakistan power line would cut costs.

ENDS

(News report from Issue No. 281, published on May 20 2016)

Tajik migration slows by 10%

MAY 18 2016 (The Conway Bulletin) – The Tajik ministry of labour said that outbound migration decreased by 10% in the first four months of 2016, compared to the same period last year. Around 200,000 Tajik labour migrants left the country in Jan.-April 2016. Around 87% of the migrants are men. Most of them head to Russia for work. Remittances from migrants are an important part of Tajikistan’s economy.

ENDS

(News report from Issue No. 281, published on May 20 2016)

Tajik ministers says everyone should have flag

MAY 14 2016 (The Conway Bulletin) – Ramadan Rakhimzoda, the Tajik minister of internal affairs, said that every Tajik household should fly a national flag as proof of patriotism. The flag is an important item in the construction of Tajikistan’s national identity. In 2011, for the twentieth anniversary of Tajikistan’s independence, President Emomali Rakhmon ordered what was then the tallest flagpole in the world to be built in Dushanbe.

ENDS

(News report from Issue No. 281, published on May 20 2016)

Tajik government steps in to save bank from going bust

DUSHANBE, MAY 18 2016 (The Conway Bulletin) — Tajikistan’s Central Bank placed Tojiksodirotbank (TSB) under its administration after the bank said it was on the brink of going bankrupt, the first major banking casualty of the current economic downturn.

TSB is the second-largest lender in the country and manages around a third of all loans in Tajikistan. Its collapse has shaken policymakers.

A senior official at the Central Bank, Mirzokhayota Yodgorov, replaced the bank’s chairman, Tojid- din Pirzoda. Sources in the banking sector also told local media that the EBRD could step in and inject vital cash into TSB.

“The question as to whether the EBRD will enter TSB’s capital will be resolved in June,” the source, quoted by Asia Plus, said.

According to the latest, unconfirmed, updates, the EBRD plans to buy a majority stake in the bank for $165m. The Tajik government could also step in and buy a 25% stake.

Earlier in May, TSB had said it was in talks to sell half of its shares to the EBRD.

Neither the EBRD nor the Tajik Central Bank commented but Tojiksodirotbank did release a fairly oblique statement confirming it had been placed under administration.

“The National Bank of Tajikistan Board in accordance with Articles 48, 49 and 50 of its Laws, to improve the financial situation of Tojiksodirotbank and protect the rights of its depositors and creditors on 18th May 2016 appointed a temporary administration in the bank for three months,” it said in a statement.

The banking sector in Tajikistan, hit by a deep economic downturn, has accumulated overdue loans and is faced with cash shortages. An IMF delegation earlier this year said that some of Tajikistan’s biggest banks were on the brink of default.

Tajikistan’s financial sector is under stress because the value of remittances from migrant workers has shrunk significantly over the past two years, undermining the economy and, crucially, hitting customers’ ability to pay back their loans.

ENDS

(News report from Issue No. 281, published on May 20 2016)

Editorial: Banks in Tajikistan

MAY 20 2016 (The Conway Bulletin) – The past nine months have been tough for Tajikistan. A recession in Russia has smashed into Central Asia and the South Caucasus, heavily denting the larger economies and taking great chunks out of the smaller ones. Tajikistan has suffered a sharp fall in remittances, the weakening of the somoni currency and a liquidity crisis in the banking sector.

This week’s news that TSB, one of the country’s largest commercial banks, needs a caretaker administration to help it navigate through problem loans is a sign of the fragility of the entire sector. After all, TSB holds around 33% of Tajikistan’s total loan portfolio.

But failing banks is not the only consequence of the economic downturn. Politically, Emomali Rakhmon’s regime has retrenched and used old-school Soviet techniques to tighten its grip on power.

The opposition has been outlawed and chased out of town, surveillance of pious Muslims has increased and a referendum that will extend Mr Rakhmon’s stay at the top now looms.

ENDS

(Editorial from Issue No. 281, published on May 20 2016)

Revenues fall at VimpelCom’s regional subsidiaries

ALMATY, MAY 12 2016, (The Conway Bulletin) – Revenues at Russian mobile operator VimpelCom’s Central Asia and the South Caucasus operations were sharply down in the first quarter of 2016 compared to the same period in 2015, a sign of the continuing economic malaise that has undermined consumer confidence in the region.

In Armenia, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, VimpelCom operates under the Beeline brand. Its customer base in the region shrank by 6% to just above 24m, roughly in line with figures released last month by its rival TeliaSonera.

In Kazakhstan, VimpelCom said that revenue from its mobile operations was just under 24b tenge in Q1, 10% lower than 2015, and that its subscriber base had fallen 4% to 9.2m.

The Kazakh mobile market has become increasingly competitive. Sweden’s Tele2 merged with Kazakhstan’s Altel earlier this year and has been undercutting its bigger rivals.

In its quarterly report, VimpelCom said that prices would stay low.

“Competition remains intense, however, although the company continues to maintain its commercially rational pricing strategy,” it said. “Beeline expects the competitive environment to remain challenging throughout 2016.”

And, other than in Uzbekistan were a new pricing strategy had sustained revenues, it was a similar story in other subsidiaries. In Georgia revenues were down 30% in US dollar terms and in Tajikistan down 27%.

VimpelCom said of the drop in revenue in Tajikistan that this was “mainly due to lower incoming international traffic as a result of fewer migrants living abroad due to the macro-economic slowdown in the region and a weakening local currency.”

A recession in Russia has heavily reduced job opportunities for migrant workers from Tajikistan, hitting remittances and economies in Central Asia.

Earlier this year, VimpelCom paid a fine of $795m after it admitted paying bribes in 2007/8 to access the Uzbek mobile market.

ENDS

(News report from Issue No. 280, published on May 13 2016)

Tajik bank asks EBRD for emergency loan

DUSHANBE, MAY 9 2016 (The Conway Bulletin) — In the most serious indication so far that Tajikistan’s banking system is beginning to buckle under the pressure of this prolonged economic downturn, Tojiksodirotbank admitted it was on the brink of a liquidity crisis and that it had applied to the EBRD for a loan to save it.

Representatives of TSB, as Tojik- sodirotbank is commonly known, flew to London to meet with EBRD officials on the sidelines of its Annual General Meeting.

“Tojiksodirotbank, one of the country’s systemically important banks, needs financial assistance in the current situation,” TSB said in a statement.

Neither TSB, nor the EBRD commented on the size or the timing of the loan.

In March, Tajikistan’s Central Bank invited EBRD representatives to propose solutions to a worsening financial situation. The Tajik som has fallen heavily in value against the US dollar and all-important remittances are down by around 50% because a recession in Russia has wiped jobs for migrants.

This year nervous savers have been withdrawing money from banks they fear are on the edge of bankruptcy.

Also, the proportion of so-called non-performing loans (NPLs) in the system has skyrocketed. The proportion of loans that were 60 days or more overdue grew from 9.9% at the end of 2013 to 24% at the end of 2014, according to official data. Media has also said that this figure may be nearer 33% now.

Earlier this year the IMF said that TSB and its largest competitor, Agroinvestbank, were exposed to increased credit risk and could become insolvent.

ENDS

(News report from Issue No. 280, published on May 13 2016)

Court in Tajikistan sentences opposition

MAY 11 2016 (The Conway Bulletin) – A Tajik court sentenced Bakhtiyor Nazarov, son of former deputy minister of defence Abdukhalim Nazarzoda, to 22 years in prison for inciting riots and calling for a revolution. In September 2015, Nazarzoda allegedly organised a coup against President Emomali Rakhmon. The Tajik security forces later killed Nazarzoda and accused several members of the opposition Islamic Renaissance Party of masterminding the attack.

ENDS

(News report from Issue No. 280, published on May 13 2016)

Rights groups accuse Tajik government over internet blackout

MAY 12 2016 (The Conway Bulletin) – Rights groups accused the Tajik government of blocking several news websites for two days, including Asia Plus and Radio Free Europe/Radio Liberty. Tajikistan is building up to a referendum on May 22 on extending the President’s powers, creating a potentially nervy period. Media freedom lobby groups regularly rank Tajikistan as one of the least free countries in the world.

ENDS

(News report from Issue No. 280, published on May 13 2016)