Monochrome: Kyrgyzstan’s PM resigns

Date: Apr 2018

During the height of the scandal surrounding Kyrgyzstan’s Smart City project, an accident occurred at a thermal power station during a particularly cold snap. There was much speculation that, sooner or later, the crisis would cost the Kyrgyz Prime Minister Sapar Isakov his job. Alas, this is exactly what happened on Thursday. For the first time since Kyrgyz independence, the parliament expressed a no-confidence vote and prompted Isakov to resign. He is likely to be replaced by the current head of the president’s administration Mukhammedkaly Abylgaziev, who today called for the unification of all political forces.

Kazakhstan’s President Nazarbayev has criticised the poor performance of Eximbank, Bank of Astana and Qazaq Banki, which immediately tried to reassure customers by stressing that all the regulator’s requirements have basically been fulfilled. No one seems to be too panicked as customers have not rushed to withdraw their money. However, issues remain; the president has ordered the swifter adoption of amendments to the law on currency regulation and raised the issue of developing long-term loans.

As the Samruk-Kazyna’s 2018-2028 strategy is being updated, the Kazakh sovereign wealth fund will remove extra levels of management, which President Nazarbayev believes complicate the decision-making process. With Kazakhstan now entering the third stage of economic development, the country is introducing digital technologies everywhere. Nazarbayev also noted that investors are interested in the national fund’s assets. It seems we can expect a new wave of privatisation.

How might the states of Central Asia and the Caucasus benefit from China’s grand new investment initiative, and what are the effects on the transit countries? Read this concise and interesting article from The Economist to understand more.

A major financial crisis is believed to be brewing in Iran thanks to tens of billions of US dollars in toxic debt. The Central Bank of Iran (CBI) is trying to restore order, but a complicated combination of problems, including remaining sanctions, corruption and banks’ low liquidity, mean that the only salvation may be state support and the consolidation of the country’s thirty banks.

The Kandym gas processing plant launched by Mirziyoyev, Novak and Alekperov will process just over 8 billion cubic metres of gas per year. The complex, which cost over $3 billion, will produce purified gas, gas condensate, sulphur and other useful products. The plant is so big that a whole town will soon develop around it! In parallel, changes in gas prices are prompting Lukoil to negotiate amendments to the production sharing agreement terms for the Gissar project, another of its endeavours in Uzbekistan.

A very complex knot of geo-political-economic issues must be solved by Turkmenistan and Uzbekistan during President Berdimuhamedow’s visit to Uzbekistan next week. The countries must make important decisions relating to several transport corridor projects, including from China to Turkey, as well as the access of Uzbekistan’s oil and gas corporation Uzbekneftegaz to the Caspian shelf. Want a deeper dive? Here is an interesting article on Central Asia’s transport potential.

Uzbekistan’s microfinancing market is gradually developing, with the first product likely to be rolled out soon by Uzbekistan’s local mobile operator, Beeline. The project, currently being tested through local bank Aloqabank, will offer loans of up to $200 for up to 30 days. There is no data on interest rates, but it is assumed that interest rates will not be predatory, in line with the recommendations of the Central Bank. The equivalent market in Kazakhstan is developing well and the IFC recently allocated a $82 million credit line.

The Indian agro industry produces roughly 90 million tonnes of fruit per year. It now intends to export mangos, pineapples and bananas to the Kazakh market and, from there, to neighbouring countries. Whilst pineapples and bananas have been on our shelves for some time, mangos are still a rare and delicious exotic fruit. It could be argued that India’s national drink is mango lassi, which tastes like Uzbekistan’s famous Mirzachul melons!

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