Tajikistan’s anticorruption agency says it has uncovered an alleged embezzlement scheme at state bank Amonatbank, suggesting the crisis gripping the country’s lending sectors extends beyond just the lack of liquidity.
The deputy chairman of the Agency for State Financial Control and Combating Corruption, Davlatbek Hairzoda, said last week that the scheme has cost the government 31.6 million somoni ($4 million). Four bank employees are under investigation.
The timing is unfortunate since dwindling faith in the country’s private banks in Tajikistan has been driving many people to move their money to an institution perceived as being underpinned by state support.
Amonatbank chief executive Ruhullo Hakimzoda revealed last month that the banking crisis has compelled many state and private enterprises to move their business to his bank.
In the first half of 2016, Amonatbank’s client base for salary payments and bank card services increased by 20 percent, Hakimzoda said. No surprise there since workers whose wage packets are serviced by banks like troubled private lender Tojiksodirotbank have experienced severe complications in getting hold of any of their cash.
“Besides that, Amonatbank has seen an 11.8 percent increase in deposits, which is mostly accounted for by an outflow from other banks,” Hakimzoda said.
More customers has not translated into profits. Hakimzoda said losses in the first six months of the year came in at 6 million somoni ($760,000).
With the presidential election coming into view in Kyrgyzstan, parliament is bracing to effect new changes to the constitution — the eighth round of amendments since the country earned independence.
Speculation about possible tinkering with the founding law has been brewing since 2014. President Almazbek Atambayev stoked talk of imminent action at an end-of-year press conference in December, when he argued constitutional changes were necessary to successfully implement judicial reform.
“Sooner or later, the amendments are needed. If we want normal courts, we will have to change the constitution. Of course, the essence of it cannot be changed, we have to follow the path we chose,” Atambayev said.
Atambayev has repeatedly stated he has no plans to change the constitution to remain in power or become the prime minister after his term ends in 2017, so that remains off the table for now.
The latest constitutional initiative has ostensibly been spearheaded by members of parliament, who insist the consideration of their package of changes should be considered this fall. The MPs comes from four parliamentary factions: the Atambayev-linked Social Democratic Party (SDPK), the Kyrgyzstan Party, Onuguu-Progress and the Respublika-Ata Jurt opposition party.
There are about 30 amendments in play touching on areas including human rights and the authority of parliament, the judiciary, the president and the prime minister.
Around 200 oil laborers in the western Kazakhstan city of Zhanozen mounted five straight days of strike actions last week in protest at their employers’ plan to reduce working hours and cut salaries.
Memories are still raw in the city of events in December 2011, when a lengthy sit-in by striking oil workers culminated with unrest that was crushed with force by police, leaving more than a dozen dead.
The protest by employees of drilling company Burgylau took the form of them dropping tools for two hours daily. Notably, some of this news is being reported by loyal to the government, which represents a stark difference to 2011, when state media largely ignored industrial unrest in Zhanaozen.
One of the workers’ complaints is related to a string of what they are unfounded dismissals. Around 60 people have been fired in recent times, protesters said.
There is also unhappiness about the performance of trade unions. Workers have said the union has failed to address their complaints and they are demanding a change to the leadership. Unions in Kazakhstan are typically largely toothless bodies that do the companies’ bidding. Employees at Burgylau have said they want transparent reports on how their monthly 2,000 tenge dues to the body are being spent.
The union has defended itself from criticism, saying the strikes are unfounded and that rumors of unlawful dismissal were little more than rumors. It also said that it has received no reports that complaining workers are facing intimidation from the company, as has been claimed.
The organizers of the second edition of the World Nomad Games, to be held in Kyrgyzstan in September, have released a handsomely promotional video that is likely to whet the appetite of lovers of traditional sports.
The promo makes ample use of Kyrgyzstan’s remarkable natural beauty and draws on some familiar motifs, from the horseback archer to lashings of kumys.
This is Culture Ministry’s second attempt at a promotional campaign. A video released in May came under sustained criticism after internet sleuths discovered some footage had been filched from other filmmakers. This time around, the producers have outdone themselves and created a brief video that could just as well serve as an advertisement for Kyrgyzstan’s tourist board.
The World Nomad Games run from September 3 through to September 8 and will be held on the Issyk-Kul Lake resort town of Cholpon-Ata. The competition includes 23 types of sports and a variety of other cultural events intended to celebrate the heritage of nomadic culture. Organizers say competitors from more than 40 countries will participate.
The inaugural edition of the games, also held at Cholpon-Ata, took place in 2014 and drew contestants from 19 countries, including all the ex-Soviet Central Asian nations, Afghanistan, Mongolia, Turkey, Russia and some other less likely suspects like Brazil, Sweden and South Korea. (Some sources put the number of participating countries quite a bit lower, but who’s counting?)
The only suspect in the recent spate of shootings in Kazakhstan’s business capital, Almaty, has told investigators his only targets were people involved in the law enforcement system and that he avoided attacking civilians.
Ruslan Kulekbayev told his interrogators, according to transcripts obtained by Vremya newspaper and published on July 27, that his motivation was revenge and that although he is a devout Muslim, his actions were not religiously inspired.
“I wanted to take revenge on judges, prosecutors and police officers because I consider my (previous) convictions unfair. First I went to the Almaly district court, but I saw nobody in uniform there. From there I went to the Almaly police precinct and the first person I saw was the guy who came through the security checkpoint,” Kulekbayev reportedly told interrogators.
The Vremya profile of the suspected 26-year old attacker is highly detailed and describes a serial recidivist whose background shares features with the typical violent radical extremist as described Kazakhstan’s authorities, although distinct in some respects.
Kulekbayev first criminal conviction came in 2010, when he received a three-year suspended sentence for robbing a jeweler. In February 2012, he was detained at the railway station in his native city of Kyzylorda in possession of a pistol and religious literature. Kulekbayev said that although he prayed, he had no link to extremist groups.
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.