Monochrome by Centil Law: Money flows

The states seem to have maintained the balancing act, and are now eager to disburse funds to recover national economies, expanding projects, boosting private sector activity, all while facing the rising threat of a second wave.

Kazakhstan's Development Bank announced its anti-crisis plan for 2020 to recover the national economy post COVID-19. The measures will include fuelling of trading activity, supporting exports, and help in maintaining tax revenues, with over $5bn committed to these plans. The bank also intends to restructure loans for projects financed in tenge.

Kazakhstan’s Energy Minister revealed plans to build a new gas processing plant and modernise the compressors at the Kashagan field. The current maintenance works at the site aim to increase daily oil production to up to 450,000 barrels by 2022. Upon completion, the new plant could yield additional 8m tonnes of oil. Oil price predictions, in turn, look promising.

While the plan to privatise most state-owned shares in major companies by 1 June is pushed back in part due to the pandemic, the Uzbek government put up 100% shares in Nukus Polimer for sale via an online auction at a base price of just under $7m. The state already sold 49% in Uzbekistan Airways, 24% in Uzbekneftegaz and 10% in each of Navoi and Almalyk MMCs.

Meanwhile, the Almalyk mining complex plans to invest $250m to increase production of non-ferrous and precious metals. The first development program includes reaching 60m tons of ore production during the period 2020-2024, with additional 290,000 tons of copper, 38 tons of gold and 203 tons of silver. Renaissance Heavy Industries, under Turkey’s Renaissance Holding, will be contracted to build a copper ore enrichment plant.

Kazakh Invest and Kazakhstan Investment Development Fund intend to attract investments from UK companies and international tech giants for the creation of a Caspian Digital Hub in Aktau, an extension to the TransCaspian Fiber Optic project, jointly signed by Kazakhstan and Azerbaijan last year. One of the hurdles is power supply to the hub, something the parties are yet to address.

In line with Mirziyoyev’s decree to attract foreign shareholders to the tourism industry, signed in 2018, the state shares in Hotel Uzbekistan were sold to Bashan investment group Pte Ltd for $23.2m. The Singaporean investor now holds 80.13% shares and is expected to invest up to $1m in 18 months. The question hangs on how such investments will play out in the post-COVID-19 world.

President Mirziyoyev approved additional state support to fuel domestic tourism. New measures include the halving of the income tax from 1 June until year end, the suspension of tourist tax until 1 January 2021, and the right to defer asset tax payments, in case of the need to carry over financial losses to next year. An alleged surge in infections late this week may put these plans on hold.

In Turkmenistan, to strengthen its national currency, President Berdimuhamedov signed a decree to set up a Foreign Currency Reserve Fund within the Central Bank, as presented by Deputy Prime Minister Mushshikov. All ministries, state-owned trading companies and their subsidiary enterprises are to transfer their foreign currency incomes to the fund in full.

During the video conference with the United States, Afghan and Uzbek Foreign Ministers agreed to consider the establishment of a Free Economic Zone at the Termez border to encourage bilateral trade. Parties also discussed the benefits of building railways along the Mazar-e-Sharif - Herat - Bahramcha and Mazar-e-Sharif - Kabul - Torkham routes to boost freight volumes.

Kyrgyzstan’s Prime Minister Abylgaziev went on temporary leave, caught amidst investigations in a corruption scandal, caused by the allegedly illegal transfer of ownership of Ala-TV’s radio frequencies to Veon’s Beeline, and the accusations of the government’s assistance in the implementation of this deal. In Abylgaziev’s absence, Deputy Prime Minister Boronov will be in charge of his duties.

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