Kazakhstan’s national currency has taken a fresh tumble this week, provoking a new cycle of anxiety.
On July 20, the official exchange stood at 338 tenge to the dollar, but that had officially slid by July 28 to more than 350. As has become customary, however, street exchange shops are buying dollars at slightly higher rates, depending on the location. There were reports of a 365 rate in the capital, Astana.
Predictably, the slide has dominated news coverage and discussions on social media. Some comments under a piece on news website Nur.kz are illustrative.
“My pension savings are going to become toilet paper,” wrote one reader.
“Today I took my car to be repaired. The work has been estimated at 26,000 tenge. Now, because of the fall of the tenge, the cost has been changed to 37,000. And they haven’t put up our salaries,” wrote another.
Kazakhstanis are growing used to devaluation of their currency, not that it gets any easier. Rather than sliding gradually, the tenge has historically been allowed to plunge in one-off drops, as happened in February 2009, February 2014 and August 2015. Since that last drop, however, the currency has been allowed to float freely, adding a strong element of unpredictability.
The National Bank, which has become target of much popular criticism, defended itself from attacks on July 26.
Adil Muhamedjanov, director of the monetary operations and asset management department at the National Bank, told Tengri News that the free-float policy allowed for daily volatility according to numerous factors — primarily the price of oil and currency markets in Kazakhstan’s main trading partners.
Tajikistan’s largest industrial concern has for the first time revealed the scale of its debts and the picture is not a pretty one.
The Finance Ministry said this week that at the end of the first quarter TALCO had outstanding debts of 2.5 billion somoni ($318 million) and that the company was itself owed 465 million somoni ($59 million).
TALCO is unofficially the fiefdom President Emomali Rahmon’s brother-in-law and head of Oriyonbank, Hasan Asadullozoda (AKA Sadulloev), so the fate of the company is of great importance to the first family.
Despite production at the aluminum plant being on the increase, the company continues to lose money. The Finance Ministry links the losses to falling prices for the metal on the international market and the rise in cost for inputs.
The ministry and international advisors have recommended root-and-branch restructuring for the company and an overhaul of equipment.
Things used to be so much brighter at TALCO. In 2007, the company churned out a record 419,000 tons of aluminum. That fell through the years, down to 121,000 tons in 2014. Last year, TALCO’s primary aluminum output returned to growth for the first time in seven years, up to 139,000 tons,
TALCO’s alleged cash cow status for the first family makes it something of a sacred cow too.
So it didn’t go down well when a few years ago, when respected religious authority Haji Akbar Turajonzoda suggested selling off the plant and diverting the money to the giant Rogun hydroelectric dam that is being financed primarily off the back of hard-up Tajiks.
“This suggestion has been made so as to pull the country and its people out of the electricity crisis and so Rogun hydroelectric station could remain fully Tajik,” Turajonzoda said, suggesting that securing the money through sale of TALCO would obviate the need for foreign investment in the dam.
Kyrgyzstan’s state-run Kyrgyzaltyn gold company says a court in Canada has lifted a freeze on its stake in Toronto-listed Centerra Gold, which in turn owns the concession for the giant Kumtor gold mine.
Kyrgyzaltyn said in a statement on July 25 that the reverse of the freeze, which was imposed in 2014 during a dispute between Kyrgyzstan and several foreign companies, will apply to shares and dividends.
The Ontario Superior Court of Justice ruled on the case on July 20, according to the statement.
Sorting through this tangled web requires an effort of concentration, while the consequences of the resolution of this part of the puzzle on the ongoing dispute between Centerra and the government remain unclear.
The Ontario court-mandated freeze on Kyrgyzaltyn’s share in Centerra stems from suit filed by numerous companies arguing that they had been unjustly treated by the government in Bishkek.
One relates to Stans Energy, a mining company focused on the former Soviet region. An arbitration court in Moscow ruled in 2014 that Kyrgyzstan should pay Stans Energy $118 million in damages for revoking its license to the Kutessay II heavy rare earths deposit. The license was issued in 2009, during the corruption-riddled tenure of President Kurmanbek Bakiyev, and then revoked in 2012, after the leader was overthrown. Stans Energy sought the asset freeze at Centerra as a way of getting Kyrgyzstan to pay out its dues.
Tajikistan’s central bankers have issued another round of reassurances that they are not running out of cash, but they are again lobbying International Monetary Fund for a bailout just to be on the safe side.
Asia-Plus website on July 25 cited National Bank chairman Jamshed Nurmahmadzoda as saying that the amount of cash in circulation at the moment stands at around 6.6 billion somoni ($838 million), which he said was 36 percent more than at the same period in 2015.
Apparently pointing to the success of policies such as the widespread closure of small money exchange offices and the introduction of stiff criminal penalties for unauthorized money exchange operations, Nurmahmadzoda said it had now become the norm to conduct transactions in the local currency.
"Of course, this has created a great demand for the national currency and so we have accordingly increased its volumes in circulation to meet demand,” he said.
While it is hard to disprove any claims Nurmahmadzoda might care to make, it only takes a visit to one of Tajikistan’s several distressed banks to know that liquidity is far from healthy. At least three banks are teetering on the verge of bankruptcy. Some lenders have imposed withdrawal limits of 2,500 somoni ($315). And customers at the country’s largest bank, Tojiksodirotbank, are as much as it is possible choosing to move their accounts to other banks.
Nurmahmadzoda dismissed such worries, saying that Tojiksodirotbank is just suffering from management issues and that the country’s second biggest bank, Agroinvestbank, is doing perfectly fine. Even the normally circumspect IMF put lie to such brazen deception months ago.
Kazakhstan launched a rare exercise in consulting with the general public earlier this year to defuse spreading discontent, but the authorities are now bracing to pull the plug on the experiment and return to its more trusted heavy-handed measures.
This weekend, the government-initiated outreach commission on the land reforms rolled into the western city of Atyrau, which is notable for having mounted the largest protest rally against the proposed reforms in the spring.
While much of the discussion on July 23 was centered on the reforms themselves, there were also multiple impassioned demands for the release of jailed activists Max Bokayev and his friend, Talgat Ayan.
Organization of this session of the commission had not gone smoothly. One prominent member opposed to the reforms, Mukhtar Taizhan, had announced on his Facebook account that it was to be held on July 16, but the event was postponed. Commission chair and Agriculture Minister Askar Myrzakhmetov told Ak Zhaiyk newspaper that it was taking an unexpectedly long time to arrange the equipment to stream the event over the internet.
Once the date came around though, only 25 people in of 75-member body actually turned up, although the event was at least open to the public.
Amendments to the land law approved in November extended the period for which farming land could be rented to foreigners from 10 to 25 years. The law also set the terms for a series of land auctions that would have been open only to citizens of Kazakhstan. All the provisions have since been reversed amid widespread public opposition.
The Tajikistan edition of Russian newspaper Komsomolskaya Pravda has been shuttered following publication of an article that officials say cast aspersions on the country.
The offending piece, written by Russian journalist Sergei Ponomaryov, was indeed an exercise in crude stereotypes and drew on characters popularized by sketch show “Nasha Russia.”
The opening paragraph sets the tone for the rest of the article: “On the plane from Moscow to the ancient city of Khujand, the capital of northern Tajikistan and the second city in the country, mine was the only Slavic countenance. The rest was straight-up Ravshan and Jamshuds.”
The premise of the sketches featuring those migrant laborer characters was to show Tajiks as primitive and dimwitted, although nonetheless sometimes besting their exasperated Russian taskmasters. The 2011 film made from the TV show was banned in Tajikistan.
Sharif Hamdampur, editor of the Tajikistan edition of the tabloid, was quick to agree about the offensiveness of the article.
“When I read the article I understood that it respected neither journalistic nor professional ethical standards. In the article there are statements that insult Tajiks and the country as a whole,” Hamdampur said on July 21.
The editor said he appealed in vain with the newspaper’s top management to have the article spiked.
“Within two days, I took the decision to halt the activities of this newspaper in Tajikistan,” he said.”This is because this newspaper, with which I cooperate, has offended my nation and my government. He [the journalist] even says: ‘I went to the country of Ravshan and Jamshud’ and not to Tajikistan.”
In the wake of the deadly Almaty shootings, authorities in Kazakhstan are drawing up measures to step up the fight against extremism and considering the creation of a fingerprint and DNA register.
“Penalties for crimes of an extremist or terrorist character will be intensified through an increase in the minimum and maximum prison sentences. Rules will be brought in on the confiscation of property as a mandatory form of punishment for extremism and terrorism,” National Security Committee chief Vladimir Zhumakanov said at a government meeting on July 19.
The measures proposed had been drawn up before the July 18 events in Almaty, which authorities have said were the single-handed work of 26-year old Ruslan Kulekbayev, but they are now being discussed with fresh urgency.
One plank of the suggested new measures includes tightening control over the circulation of firearms.
“It is planned that there will be a strengthening of control over the circulation of firearms, and administrative penalties for violating rules in that area will be made stricter,” Zhumakanov said.
Interior Minister Kalmukhanbet Kasymov proposed at the same meeting that citizenship be stripped from people that had left the country to join extremist organizations overseas.
Kasymov’s ministry is now developing legislation on fingerprinting and DNA registration that will be brought to parliament by the end of the year. No details are forthcoming yet, however, about who would be included in such registers, which have sparked concern about privacy rights and ethical-legal objections over citizens’ right to presumption of innocence elsewhere in the world.
A court in Tajikistan has sentenced the leader of an ultraconservative Islamic Salafist movement to eight years in prison on charges of membership in an extremist organization.
As RFE/RL’s Tajik service, Radio Ozodi, reported on July 19, Muhammadi Rahmatullo’s case has been shrouded in secrecy and marked as classified information, so few details are known. This is not so unusual in Tajikistan of late as the government has become increasingly opaque about the multitude of criminal cases it pursues against its real and perceived opponents.
Not much is known about Rahmatullo.
He first emerged as a self-described Salafist in the early 2000s, when the current first established itself in the country, having been brought back by Tajiks that had taken refuge in Pakistan during the civil war. In 2008, Rahmatullo claimed in an interview that his movement counted 20,000 Tajik citizens.
The movement was banned by a Supreme Court decision after a wave of mysterious blasts in Dushanbe in 2009. Rahmatullo fell out of public view around that time. During that time, it is believed he busied himself converting migrants working outside Tajikistan, particularly in the regions of Russia, and studying at the Faculty of Shariah and Law of the International Islamic University in Islamabad, Pakistan. According to Radio Ozodi, Rahmatullo returned to Tajikistan in 2011, but what he got up is not a matter of public record.
At least four people, including three policemen and one civilian, were killed on July 18 in the heart of Kazakhstan’s largest city following an attack on a police station.
Police in Almaty said that the attack began around 11 a.m. local time as a man attempted to force his way into the Almaly district police station. The attacker shot a sentry guard and stole his weapon, officials said in a statement.
The suspect then shot two pursuing officers, the statement said.
Police say that during his escape, the gunmen tried to carjack a civilian, killing him in the process.
Authorities have detained a 27-year old native of the southern Kyzylorda region who is also suspected of killing a woman over the weekend. Police earlier said that another person connected to the attack remained on the loose.
There have scattered reports of separate attack around the city, suggesting a coordinated action, but the details remain highly confused.
Soon after the unrest began, police issued a statement to say an antiterrorism operation was underway and asked the public to avoid large crowds.
“Law enforcement authorities will in good time provide information about all suspect individuals and asks the public to be understanding toward the actions of police and special forces,” the Almaty police said in a statement.
The National Security Committee, or KNB, said in a statement that it had raised the terrorism alert in Almaty to red, which stands for critical. The statement said gunmen attacked the Almaly district police station and an Almaty branch of the KNB.
Tajikistan’s Finance Ministry has conceded that the national currency will continue to lose value, although it only expects it to happen gradually, over the coming three years.
Reuters reported on July 14 that Finance Ministry forecasts, drawn up as part of budget planning, see the somoni slipping from its current 7.9 to the dollar to 9.6 in 2017, 10.4 in 2018 and 11.2 in 2019. Inflation for those years is seen at 7 percent.
“This is just a forecast. There will be no devaluation. The rate depends on many factor, mainly external ones, and indicators of the gold and currency reserves,” a National Bank source told Reuters.
External factors indeed.
Russia’s Central Bank announced in March that the amount of money transferred to Tajikistan last year has fallen almost 67 percent, from $3.8 billion in 2014 to $1.28 billion last year. The figure in 2013 was $4.16 billion.
Still the National Bank appears bullish about the prospects.
“We believe that there will not be so much external pressure as in 2014, since we see a certain degree of progress in the Russian economy, despite the negative prognosis,” the National Bank source told Reuters.
Tajikistan’s arsenal for stabilizing the currency is severely depleted. Foreign reserves are dwindling at dangerously low levels. And the banking system is teetering on the verge of a total meltdown.
Accountholders at the main two banks — Tojiksodirotbank and Agroinvestbank — have for months had trouble getting their hands on their savings or withdrawing salaries paid through the lenders. And there is anecdotal evidence the rot is now spreading to more of the country’s half a dozen or so systemic banks. Customers at Eskhata Bank and Imon International have reported some instances of reduced liquidity.