Nerves in Kazakhstan over the state of the national currency turned first to alarm, and now to pretty much outright panic.
Yielding to the inevitable, Prime Minister Karim Masimov announced on August in a special video message that the government would switch to a free-float currency exchange. The value of the tenge duly plummeted 26 percent against the dollar and was trading at 255 by the end of the day.
“On July 15 this year, the National Bank took a decision to widen the currency corridor in order to enable a more flexible and floating exchange rate for the tenge,” said Masimov. “But the situation on the global economy continues to worsen. The prices for the main export goods of our country — oil and metals — have continued to fall, which has had a negative effect on the economic growth.”
Masimov said a priority would be placed on shoring up social welfare, but such remarks will do little to stave off immediate reactions to the collapse of the currency.
TengriNews posted pictures online showing closed currency exchange points in Almaty, where traders are understandably concerned at making large losses in such uncertain times. Vedomosti newspaper reported that some are so desperate that they are offloading their tenge to buy Russian rubles, which is itself experiencing major tribulations, although in a more gradual manner than the tenge.
Alarm is spreading as well deepening as Kyrgyzstan’s som felt the shockwaves from its northern neighbor.
Step aside, CNN, and make room, Al Jazeera: an international news network is coming to break the current "monopoly" on news and promote a Turkic point of view.
Media scholars like John Merrill may welcome a diversity of perspectives in the global news flow as a counterbalance to Western news companies and their takes. The caveat is that the latest new channel is a brainchild of four autocracy-prone governments; primarily of Kazakhstan's president-for-life, Nursultan Nazarbayev.
The idea of a pan-Turkic news has been in the can for a while, but on August 18 information ministers signed a memorandum of understanding about the project in the Kazakh capital of Astana.
Kazakh communication officials said that Azerbaijan, Kazakhstan, Kyrgyzstan and Turkey have reached a conceptual agreement on the network, which will broadcast "Turkic cultural values" in the four countries' languages and English. It is unclear when the channel goes live.
But, already, Ali Hasanov, a senior aide of Azerbaijan's President Ilham Aliyev and the longtime presidential point-man for media matters, has his ideas.
Looking back to this summer’s European Games, he complained that “the great strides” made by his country “are hardly highlighted by some leading global media resources.” Rather, as the country’s star has risen, the “ media attacks based on preconceived, false accusations” only have increased, he claimed, the pro-government Trend news agency reported.
Unlike Russia’s ruble, Kazakhstan’s national currency has for several months managed to hold ground against the dollar, only for it to now slump dramatically and spread alarm of more retreats.
Several commercial banks on August 19 began around mid-morning to offer exchange rates as high as 198 tenge to the dollar, against the 188.5 tenge listed on the National Bank website.
The domestic KASE stock exchange was at same time running trades of 195 tenge to the dollar.
Stubbornly low oil prices appear to have combined with the battering of the Chinese yuan to finally force Kazakhstan’s hand. The apparent decision to allow the tenge to float will gravely dent the credibility of National Bank chairman Kayrat Kelimbetov, who promised as recently as July 15 that the currency would not slip below 190 in the coming quarter. And not speak of President Nursultan Nazarbayev, who promised after being re-elected in April that there would be no more sharp devaluations.
Economist Olzhas Hudaybergenov, who heads the Macroeconomic Research Center, wrote on his Facebook page that hopes the currency would resist lay in the hopes that oil prices would stick at around $55-60 mark. The global Brent benchmark slid below $50 last week and shows no immediate signs of rebounding.
“This means the need of a certain section of the business world for a sharp devaluation — it is not important whether it would happen suddenly or over a few days — will be met. I think the next few days will bring us some clarity on this,” he wrote.
Hudaybergenov said that he agreed with supporters of a correction to the tenge, who argue the move will boost competitiveness, save jobs and increase productivity.
Kazakhstan Paramount Engineering's three vehicles slated for production: the Arlan, Nomad, and Barys (from top to bottom) (photo:Kazakhstan Paramount Engineering)
Kazakhstan will start assembling armored vehicles as part of a joint venture with a South African company soon, with a factory scheduled to be constructed in Astana by the end of this year, local media have reported. The vehicles, slated both for local use and for export, are the latest products in Kazakhstan's burgeoning defense industry.
The construction facility, in Astana's Zhana Kala free trade zone, will be completed by the end of this year, according to a report on Kazakhstan's Radio Totchka, citing a Ministry of Defense official. It's not yet known when the first vehicles will be produced, but at the start they will be 30 percent locally sourced, and by 2018 that figure will rise to 50 percent, the report adds.
"The facility will crank out up to 360 vehicles a year beginning in late 2015. Kazakhstan said the plant should meet the bulk of its military-vehicle needs. Plans are for a sizable percentage of the output to be exported," the Astana Times reported earlier this summer.
The former Soviet space is losing yet another Communist party.
This time around, a court in Kazakhstan’s business capital, Almaty, has ordered the liquidation of the Communist Party, according to a report in Radio Free Europe/Radio Liberty’s Kazakh service.
Party leader Toleubek Makhyzhanov told Azattyq that the ruling was made on August 3, but that he was informed only 10 days later.
This is not to say Astana has embarked on any kind of anti-communist hunt. An ersatz Communist People’s Party was created in 2004 with the tacit approval of the authorities.
While the newer party eschewed any genuinely opposition activities, the Communist Party of Kazakhstan, which was born out of the ashes of the ruling Soviet-era party once led by President Nursultan Nazarbayev, has long been a thorn in the side of the ruling order.
That has prompted Makhyzhanov to term the liquidation of his party as being politically motivated.
Azattyq cited Makhyzhanov as saying there were a few fundamental procedural issues with the Almaty court’s verdict.
“The case has been considered in the wrong jurisdiction. The Specialized Inter-district Economic Court of Almaty cannot issue this verdict when the central office of the party is in (the city of) Semey,” he was quoted as saying.
The Almaty court’s decision was based on the finding that the party purportedly only has 38,000 registered members, short of the 40,000 required by law. But the real figure of party members is 58,000, Makhyzhanov said. “Where did they get their figures from?” he told Azattyq.
The Communist Party’s opposition stand has earned it sustained pressure.
An S-300PS air defense complex delivered from Russia to Kazakhstan by train. (photo: MoD Kazakhstan)
Russia has donated five air defense complexes to Kazakhstan, a (small) part of a planned joint air defense system shared between Russia and its allies.
Kazakhstan's Ministry of Defense this week announced the delivery of five complexes of the S-300PS air defense system, which arrived by train from Russia to Almaty. The donation was announced first in 2009, then again last January, when Moscow said they would be delivered by the end of 2014.
More significantly, the donation was supposed to be of five divisions of the system, and a division consists of 12 complexes -- so Russia still has 55 more to deliver. The Kazakhstan MoD made no mention of any future deliveries, or the previous announcement, so it's not sure where things stand.
When the donation was announced last year, Russian Deputy Defense Minister Anatoliy Antonov said that with the move "we are strengthening not only Kazakhstan, but the air defense of the CSTO," referring to the Collective Security Treaty Organization, the Russia-led defense bloc that also includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan. (Armenia has the same system as Kazakhstan was just given, as does Belarus.)
The joint CSTO air defense system has been slow to get off the ground, though several military officials said at the end of last year that while they acknowledged that up to that point it was mainly just talk, now they were getting serious.
For all the ceremony that marked Kyrgyzstan’s entry into the Eurasian Economic Union, not much appears to have changed on the border with the only neighboring fellow member, Kazakhstan.
Speaking at a press conference on August 13, Damira Dootoalieva, chairman of the central committee of the Kyrgyzstan Traders Union, said a visit to the border had revealed that Kazakh officials are still not letting goods pass through unhindered.
“You can take across two or three bags, but large-scale cargo still cannot be transported into Kazakhstan. A lot of obstacles are being put in the way by the Kazakhs, including by their traffic police,” Dootoalieva said.
Dootoalieva said that a Porter Nissan van carrying goods from Kyrgyzstan was seized on the Kazakhstan side of the border of August 12, only hours after an inaugural ceremony attended by Kyrgyz President Almazbek Atambayev and his Kazakh counterpart, Nursultan Nazarbayev.
“For about three hours, we tried to get it released. As to how we did that, you understand how these things are done,” Dootoalieva said, adding that money exchanged hands.
When the Kazakh customs officials were asked on what grounds the van had been stopped, they responded only that they would be remaining in place for another 100 days, Dootoalieva said.
At the same press conference, Sergei Ponomaryov, president of the Association of Markets, Trade Enterprises and Service Industries of Kyrgyzstan, said teething problems appeared to be down to poor preparation.
Azerbaijan's ships compete in the inaugural Caspian Cup naval skills competition. (photo: MoD Russia)
The first-ever "Caspian Cup" naval skills competition has ended with Russia, unsurprisingly, the winner. But it was Azerbaijan's performance that garnered the most headlines, for all the wrong reasons.
In the final tally, Russia won with 65 points, Kazakhstan came in second with 48, and Azerbaijan brought up the rear with 33 points. The other two Caspian naval states, Iran and Turkmenistan, chose not to compete.
Reporting on the event was spotty, and it's not entirely clear what happened. But from what can be gleaned from the reporting out there, at the first stage of the contest Azerbaijan's entry, Patrol Cutter G-122, had some kind of problem. "Not everything worked out for the Azerbaijani team, their equipment and weapons let them down," said Dmitry Gorbatenko, the chief judge of the competition, on August 6. "They will change the ship and on August 7 Azerbaijan will be able to perform and show off their mastery in this contest."
The same day, though, Azerbaijan's Defense Ministry responded, saying that "Russian websites" were spreading information "that does not fully reflect the reality of the situation."
"The press service of the Ministry of Defense officially reports that minor problems were quickly solved on the scene by our sailors," the ministry said in a statement. "At the current time the warships taking part in the competition are successfully continuing to compete in the crew skills and equipment capabilities [competitions]. Contrary to the published information, our soldiers have successfully carried out all tasks which have been assigned up to now, have destroyed all sea and air targets, achieving an excellent result."
A row has erupted in northern Kazakhstan over the erection of a monument to Russian Tsar Nicholas II, who is reviled by many Kazakhs for his association with the bloody suppression of an uprising in 1916.
The bust to Tsar Nicholas II, who was murdered by the Bolsheviks following the 1917 Russian Revolution, was put up by local businessman Pyotr Vanger outside a church in the village of Arkhangelskoye, just south of the border with Russia.
On August 10, the statue was moved inside the village’s Russian Orthodox church following an outcry on social media about a monument revering somebody perceived as a Russian despot appearing in public.
“The monument has been taken inside, into the church,” Tengri News quoted local authorities as saying. “The decision to take it inside was made by the entrepreneur himself, to avoid questions.”
The statue has so far avoided the fate of a monument to Soviet leader Josef Stalin in southern Kazakhstan which was torn down earlier this year after generating a similar controversy.
That statue was removed from its pedestal in May, after villagers had re-erected it following its toppling in a hurricane last summer.
Village authorities ruled that they had acted without planning permission. But the case had wider political connotations as many were enraged at the reverential treatment of a Soviet leader whose policies caused the death of millions of people in Kazakhstan and elsewhere in the Soviet Union.
Statues to Russian and Soviet despots are sensitive for Astana, which is eager to promote its own sovereignty without antagonizing its powerful neighbor and close ally Russia.
The choice of Yesimov to clean up the mess at EXPO-17 following embarrassing revelations that officials had been siphoning off millions from funds intended to organize the international fair suggests he still enjoys Nazarbayev’s confidence. That suggests the 64-year-old former mayor is still a frontrunner to succeed Nazarbayev when a transition of power eventually takes place.
Yesimov’s replacement as mayor of the country’s largest and richest city has been named as Baurzhan Baybek, a top official in the ruling Nur Otan party.
The president was full of praise for Yesimov as he introduced Baybek as his successor in Almaty on August 9. The hundreds of people whose homes were damaged in a mudslide that hit the city last month without early-warning procedures being activated might not be so effusive.
Baybek’s appointment marks him as an up-and-coming politician whose movements will be closely tracked as he climbs the political ladder.