The ruble vs the tenge over the last 12 months. The sharp change in February indicates the first tenge devaluation. Since then, the ruble has continued to slide, again putting pressure on the tenge. xe.com.
As the price of oil falls, and as Russia’s Central Bank struggles to keep the ruble from hitting a new record low each day, Kazakhstan’s currency is facing pressure on two fronts. The major oil producer, whose economy is tightly linked to Russia’s, already sharply devalued the tenge once this year. But facing these new challenges, can the Kazakh National Bank hold its currency stable? And can Kazakhstan keep its books balanced?
Higher output and weaker global demand have pushed the price for benchmark Brent crude to $83 per barrel, its lowest in four years, down 27 percent since June. Oil, Kazakhstan’s chief export, is still above the government’s fiscal breakeven point of $65.5 per barrel, as calculated by the IMF. But it is below $90.6, where Kazakhstan faces a balance of payments deficit that puts further downward pressure on the currency. Moreover, trade with Russia is down 22 percent this year.
Kazakhstan’s “tenge weakened in forward markets last week, responding to a drop in the price of oil and sliding ruble,” Halyk Finance, an Almaty-based investment bank, said in an October 13 note. “The weakening of the Russian ruble and falling oil prices are the main fundamental reasons of the tenge weakening in forward markets.”
Russia is Kazakhstan’s main trading partner. And because of the falling price of oil, and the effect of sanctions the West has imposed on Moscow for meddling in Ukraine, the Russian currency has fallen nearly 20 percent this year. That has put the ruble-tenge exchange rate back where it was just before the tenge devaluation (see chart).
Lawmakers in Kyrgyzstan have voted overwhelmingly to adopt a tougher version of Russia’s so-called “gay propaganda” law. The Kyrgyz version mandates jail terms for gay-rights activists and others, including journalists, who create “a positive attitude toward non-traditional sexual relations.”
The vaguely worded bill passed its first reading on October 15 with a vote of 79 to 7, AKIpress reported (the 120-seat legislature is rarely full). During a meeting last week to discuss the bill, one lawmaker said the draft is not tough enough and proposed to increase sentences from up to one year to three. If it passes two more readings, the bill will go to President Almazbek Atambayev – a staunch Russia ally – for his signature.
One of the bill’s authors, Kurmanbek Dyikanbayev, often sounds as if he is repeating Kremlin talking points. Dyikanbayev told Radio Azattyk last week that he sponsored the bill to protect Kyrgyzstan’s “traditional families.” He also blames Western democracy for moral degeneracy and for encouraging homosexuality.
Bishkek-based LGBT-rights organization Labrys, whose advocacy would be outlawed by the bill, notes that the legislation contradicts numerous human-rights provisions in Kyrgyzstan’s constitution. Nika Yuryeva of Labrys said she fears the bill will encourage more violence against the LGBT community.
An Ontario court has frozen much of Kyrgyzstan’s share in its largest industrial asset, the Kumtor Gold Mine, adding an awkward new twist to the epic saga over the mine’s future.
Kumtor is fully owned by Toronto-listed Centerra Gold, which is one-third owned by Kyrgyzstan’s state-run Kyrgyzaltyn gold company. Since early 2012, Kyrgyzstan has been trying to increase its share in the high-altitude mine, which accounts for over 50 percent of the impoverished country’s industrial output and 10 percent of GDP in a good year. Early this year, the government and Centerra were moving toward an agreement that would increase Kyrgyzstan’s share in Kumtor to 50 percent, but negotiations have stalled as some lawmakers continue to demand the mine be nationalized.
The Ontario Superior Court of Justice ruling favors another investor with no role in the Kumtor dispute: Stans Energy, which says Kyrgyzstan has failed to pay the $118 million in damages awarded in Moscow this summer related to a different mine site, Kutessay II. In July, the Arbitration Court at the Moscow Chamber of Commerce and Industry ordered the Kyrgyz government to pay Stans in compensation for seizing the company’s license to Kutessay II, a heavy rare earths deposit.
Stans Energy announced on October 14 that the court order “prohibits the Kyrgyz Republic and Kyrgyzaltyn JSC ("KJSC") from selling, disposing, exchanging, assigning, transferring, pledging or encumbering 47,000,000 shares in the capital of Centerra Gold Inc. registered in the name of KJSC.”
“What is Putin’s favorite female name?” roars the announcer of a Vladimir Putin-themed quiz at the opening of Putin Pub in Bishkek on Saturday October 11. “Alina!” the crowd chants back in unison, referring to the former Olympic gymnast, Alina Kabaeva, long rumored to be the Russian president’s lover. “Not Lyudmila?” the announcer goads, name-checking Putin’s ex-wife. “No way!” comes the decisive reply.
Aside from the quiz, ubiquitous Putin paraphernalia, and alcoholic drinks named after both Kabaeva and Putin’s political patron-turned-rival, the late Boris Berezovsky, the Putin Pub, located in a southern suburb of Bishkek, has a strangely familiar feel. The pub’s smart phone-wielding administrator, a stout man with a mane of black hair and a pencil-thin beard, seems to have been in charge of every newly opened Bishkek restaurant-pub in recent memory, for instance.
In a nod to the stealth military operation that laid the foundations for Moscow’s annexation of Crimea, wait staff wear the word “#вежливыелюди” (Polite People) stenciled on the reverse of their uniforms. Thankfully these waiters are far more communicative than the unexplained army types who mysteriously surfaced on the Crimean Peninsula in February before calls for a referendum to join Russia. But bringing the onion rings while they’re still warm seems to be a challenge, as it is for waiters in almost every Bishkek gastro-pub.
A band of treacherous radicals will swoop into Tajikistan’s capital and seize power tomorrow at 3 p.m.—at least that’s what senior government officials seem to fear. To thwart their nefarious plans, prosecutors are visiting schools, telling children to avoid provocations; someone in government has shut down a bunch of Internet sites; and with a straight face the nation’s highest court has branded the hazy, little-known Facebook group terrorists.
Last weekend, Group 24, as the proto-opposition movement is known, called on Facebook for supporters to gather in one of Dushanbe’s main squares on October 10 and demand free elections and an end to the rule of long-serving strongman Emomali Rakhmon. Within hours, dozens or possibly hundreds of websites including Facebook and YouTube became inaccessible. Authorities would not say why. Instead, riot police closed off a large patch of Dushanbe, the capital, and, in a rare show of police strength, dispersed a mob – actors they’d brought in for the occasion, as it later turned out.
On October 8, the Interior Ministry deployed armored personnel carriers at entrances to the city. Ministry officials say the troop movements – which are anything but routine – are related to the president’s trip to a CIS Summit in Belarus.
President Nursultan Nazarbayev is in Brussels putting the finishing touches to a landmark agreement with the European Union, cementing ties with Europe even as Astana pushes ahead to join the Russian-led Eurasian Economic Union.
Nazarbayev met Jose Manuel Barroso, president of the European Commission, on October 9, to “confirm the conclusion of negotiations” on the Enhanced Partnership and Cooperation Agreement, the EU said.
The agreement – three years in the making – aims to boost cooperation in around 30 policy areas including trade and foreign and security policy, it said, and will “significantly deepen political and economic ties” between Kazakhstan and the EU (Astana’s largest trade partner and a major consumer of its energy exports).
The agreement is a far weaker deal than the Association Agreement signed by Ukraine this year, but is still the most ambitious deal to be concluded between the EU and any Central Asian state.
It “puts a strong emphasis on democracy and the rule of law, human rights and fundamental freedoms,” the EU stated, although it failed to specify how.
The visit was marred by news that France is investigating possible kickbacks involving a helicopter deal with Kazakhstan, and probing allegations that Nazarbayev put indirect pressure on Brussels to close a bribery case against Kazakhstani oligarchs.
There was also controversy over Kazakhstan’s human rights record.
French investigators are probing suspected kickbacks paid over a lucrative helicopter deal with Kazakhstan, Le Monde has revealed.
The report emerged the day before President Nursultan Nazarbayev heads to Brussels to cement Kazakhstan-European Union ties. Embarrassingly, it alleges the Kazakh president used a €2 billion contract with Marseille-based Eurocopter (since renamed Airbus Helicopter) to pressure Belgium to drop bribery charges against three Kazakhstani oligarchs.
The investigation into the Eurocopter deal (signed in 2010 when Nazarbayev was welcomed to France by Nicolas Sarkozy, then French president) on suspicion of money-laundering, corrupting public officials and receiving stolen goods began in 2012 and has been conducted in the utmost secrecy, Le Monde reported.
Last month two former Sarkozy associates who held top jobs in his administration were arrested on suspicion of involvement in paying kickbacks over the contract, the newspaper said, naming them as Jean-Francois Etienne des Rosaies, a former adviser to Sarkozy, and Nathalie Gonzalez-Prado, a former senior official at the Elysee palace.
The probe was sparked by the appearance of “suspicious funds” (more than €300,000) in the account of Etienne des Rosaies, the report said, adding that two unnamed “intermediaries” and a lawyer had been indicted.
Sarkozy is also “suspected of having put pressure in 2011 on the Belgian Senate,” at Nazarbayev’s request, over a bribery and money-laundering probe involving three Kazakhstani oligarchs as a condition for the helicopter deal going ahead, Le Monde claimed. The report did not name the oligarchs.
Tajikistan has coupled one of its habitual Internet blocking sprees with an alarming show of police strength in central Dushanbe. The two cautious moves together appear designed to persuade a cowed population that heeding online calls for revolution is a bad idea.
Losing access to several websites simultaneously – typically social media and news sites – has become a regular fact of life for Internet users in Tajikistan. The latest filtering, which the government has denied imposing and Internet Service Providers have refused to admit on record, is unusual only in that Amazon.com, rarely cited as an agent of revolution, has been included on the blacklist. Northern Sughd Oblast, home to Tajikistan’s second-largest city, Khujand, has been almost completely offline since October 4.
Truth is no longer something expected from the government’s hated telecoms regulator, which consistently denies it blocks websites. Internet Service Providers (ISPs) have a strong incentive to follow suit by attributing the bans to “technical problems,” or face the possibility of losing their licenses. But one provider speaking anonymously to Russian news agency Interfax was reported as saying October 6: "We have received an order from the communications service [to block] a list of websites: Facebook, vk.com, lenta.ru, youtube.com, mk.ru, amazon.com, ru.wikipedia.org and dozens of web anonymizers that allow bypassing these blockings."
With elections to Kyrgyzstan’s ever-volatile parliament just a year away, it is an uneasy time to be a private businessman in the Central Asian country. According to managers at one of the country’s most popular media outlets, the pre-election shakedown has begun.
As politicians prepare for the 2015 ballot, the competition over votes and the resources necessary to secure them is expected to be intense. One way of fundraising is to turn to the time-honored tradition of corporate raids – raiderstvo in Russian – at key moments in the political calendar. Now Vechernii Bishkek, a profitable media outlet whose Russian-language newspaper has a weekly circulation of over 50,000 copies, is claiming that it has fallen victim to a raid from “people close to President [Almazbek] Atambayev.”
Vechernii Bishkek’s ownership structure is complicated. In 2000, the paper – and, significantly, its wholly owned print house – fell into the hands of Adil Toygonbaev, the son-in-law of then-President Askar Akayev. Toygonbaev secured a 50-percent stake in the holding company from one of its two owners before reportedly expropriating it entirely in a move that simultaneously relieved his family’s regime of the paper’s critical reporting and added the country's best-selling Russian-language newspaper to the family's list of assets.
At PEN International there is a tradition: During the organization’s general assemblies, empty chairs are left prominently vacant as a reminder of imprisoned writers and journalists around the world.
This year, for the free expression watchdog’s 80th anniversary – marked this week in Kyrgyzstan’s capital, Bishkek – three empty chairs reminded the assembly of three Central Asian men imprisoned for their writings and activism: Azimjon Askarov from Kyrgyzstan, Ilham Tohti from China and Vladimir Kozlov from Kazakhstan.
PEN President John Ralston Saul noted that Kyrgyz President Almazbek Atambayev extended a personal invitation to the organization. During a private meeting, Atambayev himself raised the case of Askarov, an Uzbek journalist and rights activist serving a life sentence for complicity in murder and other crimes connected to the June 2010 ethnic violence. Human rights groups have pointed to glaring irregularities during his trial and say Askarov was framed to stop him from documenting police abuse. While PEN and the president “disagreed” over the continuing imprisonment of Askarov, the fact that the president invited PEN to discuss the issue with him was itself “significant,” Saul said.