Predictably, the Kyrgyz government has pulled out of the "Smart City" project. The official reason given was the failure to prepare the project documentation and feasibility study on time. This withdrawal from the investment agreement will arguably not have any legal consequences for the government, as the agreement had not yet entered in force. That said, it seems unlikely that Huawei would have signed the agreement without an obligation to compensate the company should the project collapse due to the government’s actions. This whole case may yet end up in arbitration or litigation.
There’s a dispute in Kyrgyzstan regarding amendments to the law on electronic payments. The regulator is threatening to ban the replenishment of e-wallets using mobile phone balances. Mobile operators are not happy about this, as their main source of income in recent years has been Internet packages and related services. However, the regulator questions why you should need to top up your phone at a terminal and then transfer this money to an electronic wallet, when you can already top up the wallet directly from the same terminal?
Kazakhstan is planning to break into the global market of corporate investments in fundamental scientific research. This is part of a global trend of increased corporate investment in research prompted partly by the fact that governments’ main expenditure is on social needs and various state services, rather than on science. However, scientific progress must be prioritised and financed, a fact transnational corporations are gradually realising. The good news is that the World Bank has provided a loan to fund the training of 25,000 scientists to work on scientific programmes in Kazakhstan.
Standard & Poor’s may lower the ratings for 17 Kazakh banks. According to analysts, since the Kazakh government allocated almost $9 billion to save the banks last year, they cannot expect further support this year. The agency also believes that the banks’ capitalisation indicators remain unsustainable and that the level of asset quality will remain one of the main shortcomings of the Kazakh banking system in 2018. It is likely that the National Bank will continue its policy of tightening supervision.
Yesterday, Astana hosted a large meeting of four of the five Central Asian presidents. According to Kazakhstan’s President Nazarbayev, “The economy, trade, infrastructure, logistics and other issues – we will have an opportunity to solve all of them. We do not need external help to tackle the issues of the Central Asian countries.” These issues definitely cannot be resolved without all the states in the region joining forces, with such initiatives fitting in the modern world.
Turkmenistan’s President Berdymukhamedov opted not to attend the meeting of the other Central Asian leaders in Astana in favour of embarking on a tour of the Middle East with meetings in the UAE and Kuwait. These governments are likely to be invited to participate in the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project. Should they accept, this would probably help to temper security issues in Afghanistan. However, construction on the Afghan section of the pipeline already began early this year.
In line with its IPO in 2019, KazMunaiGaz has offered a minority stake to Shell. Shell is considering the proposal and, though it is still too early to discuss the deal’s finer details, rumours suggest that a 20% stake could be sold. The goals of a possible Shell entry are not entirely clear either, but this may be connected to the sanctions on Russia. If Shell’s activity in Russia is limited, why not consider entering the largest Kazakh oil and gas company, just next door?
The Uzbek National Security Service (NSS) has been renamed the State Security Service, as President Mirziyoyev completes the first stage of his NSS reforms. The relevant decree notes that the absence of a legislative act that clearly defined the status, tasks and limits of authority facilitated the service’s unjustified interference in all areas of state activities. Uzbekistan now needs to draft a separate statue, rather than a decree, that will regulate the special security services.
Germany’s KfW Development Bank will allocate a €9 million grant to Uzbekistan for the implementation of the third phase of its healthcare programme. The funds will be spent on medical equipment, the introduction of new medical care methods, and a medical waste removal project. The programme is a joint project between the Uzbek Ministry of Health and the German Society for International Cooperation (GIZ) within the framework of the “Public Health in Central Asia” project.
On a separate note, Centil’s Head of Marketing, Zosia Demkowicz, attended The Lawyer European Awards in London last night, where Centil was shortlisted for the “Law firm of the year: Russia, Ukraine and the CIS” Award for the second year in a row. Although the accolade ultimately went to the well-deserving Egorov Puginsky Afanasiev & Partners, we are very proud to have been shortlisted alongside such prestigious firms within our region and would like to thank The Lawyer for consistently recognising Centil’s pioneering and innovative approach to legal services.