Tajikistan’s central bank last late week announced it was pulling the licenses of two of its troubled banks and is now trying to work out how to compensate account-holders.
That decision, publicized on February 24, comes only weeks after the National Bank committed to spending tens of millions of dollars on refinancing the lenders in question — Tojprombank and Fononbank.
Asia-Plus news website has cited National Bank representatives as saying that customers of the banks should not be concerned as they will get at least some of their savings back.
The law provides insurance of up to 17,500 somoni ($2,000) per depositor and that is, in theory, to be paid within two weeks of the announcement of the license withdrawal.
“Once the courts appoint administrators at these banks, the savings of those customers holding more than 17,500 somoni will also be reimbursed,” Asia-Plus cited the National Bank as stating.
Money will reportedly be paid as administrators go through the process of selling off the banks’ assets.
Assets on Tojprombank’s books include dozens of offices and an unspecified number of residential properties. Fonobank hold 37 items, including a main office, four branch offices and multiple residential properties.
The size of the banks’ client base is not readily available, so it is unclear how onerous a commitment all this will prove or whether the authorities are really in a position to make such guarantees given the lack of liquidity in Tajikistan’s financial system.
Neither bank has commented publicly on the developments.
Russian President Vladimir Putin met with the President of Tajikistan, Emomali Rahmon, in Dushanbe on February 27. Photo: Russian Presidential Press Service
Anybody expecting major developments out of Russian President Vladimir Putin’s visit to Tajikistan will be left disappointed as nothing of note appears to have transpired.
Putin exchanged the usual pleasantries with his Tajik counterpart, Emomali Rahmon, during their February 27 meeting in Dushanbe, while paying some very cursory and noncommittal lip service to the need to intensify defenses against potential threats spilling over from Afghanistan.
No mention was made of the Eurasian Economic Union, quashing suspicions for now that Tajikistan was considering finally relenting and joining the Moscow-led trading bloc. In fact, a very pointed reference was made in a speech by Rahmon to how talks addressed specifically bilateral relations.
“During the talks, we thoroughly reviewed the status and prospects of Tajik-Russian cooperation in the bilateral format and within international forums such as the United Nations, the Shanghai Cooperation Organization, the Commonwealth of Independent States, and the Collective Security Treaty Organization,” Rahmon said.
The most significant break for Tajikistan was signaled by Putin’s remark about his government considering a revision on a ban of Tajik citizens barred from traveling to Russia for one or other reason.
“We discussed this. And overall a solution has been found and we will work in line with an agreement reached with the president of Tajikistan,” Putin said.
Russian deputy prime minister Igor Shuvalov, who traveled with the visiting delegation, said that more than 200,000 Tajik citizens may currently be affected by travel bans. Shuvalov said bans would likely be waived for those people that had committed only minor violations of migration laws.
“Those that committed crimes or were in some way involved in illegal activity will, of course, not be granted permission to enter,” he said.
When top officials are fired in Tajikistan, it is usually with reassuring formulations about the person in question being moved to another job or retiring. The absence of such language typically suggests a fall from grace that in some instances serves as a prelude to a criminal prosecution.
So eyebrows were raised this week when President Emomali Rahmon on February 21 abruptly ordered the dismissal of US-educated deputy finance minister Umed Latifov without indicating what his fate is to be. The development had been linked with the much whispered-about elite infighting believed to be taking place over the country’s largest industrial asset — Talco aluminum manufacturer.
Latifov had not been in the job for long and was appointed only in July 2016. Before that, he was deputy head of the National Bank, a post he filled in May 2015.
His presumably lucrative background of working in US investment vehicles made his decision to return to his home country something of a surprise at the time. According to his LinkedIn profile, he completed a finance degree at Arizona State University and later obtained an MBA from Stanford University. He later dabbled in online startups and worked in various capacities at several investment firms.
When Uzbekistan suddenly decided this week to deny permission for an airline from Tajikistan to land in its capital, it might have been safe to expect an outcry.
Privately owned Somoni Air was due to carry a couple dozen paying passengers for the February 20 flight to Tashkent — the first along this route in 25 years — when it learned permission had been revoked.
Tajikstan’s Asia-Plus reported on January 21 that Uzbek authorities fired off an incensed letter laying all the blame at the feet of the Tajiks.
The letter argued that Somoni Air had filed a request to effect charter flights and not regular scheduled flights. It also claimed it only received the official paperwork authorizing the route on February 19, one day before the flight. That gave the insufficient time to adopt a decision, as the matter had to be considered by security services and air defense officials, the Uzbek letter stated.
And finally, the Uzbek authorities said Somoni Air still had no branch office in Tashkent and that the sale of tickets was accordingly not possible.
This is high bunkum even by the normally lofty standards of Central Asian officialdom.
A date for the Somoni Air maiden flight had been set weeks ago and widely advertised by media in both countries, which makes nonsense of the implication that Uzbek oversight bodies were somehow caught by surprise. As to the sale of tickets, Somoni Air has a website through which that can be done, so even this is unconvincing grounds for rescinding permission to operate. In any event, it is unclear how Somoni Air’s commercial strategy is supposed to be of any interest to Uzbek authorities.
The first regular scheduled flight between Uzbekistan and Dushanbe in 25 years was unexpectedly nixed on February 20 in an embarrassing anticlimax after weeks of anticipation.
Privately owned Tajik carrier Somoni Air said in a statement of apology to its customers that the flight was cancelled on the instructions of the airport in the Uzbek capital, Tashkent.
It is not clear what lies behind the cancellation of the flight and this threatens to descend into an all-too familiar round of mutual accusations.
State-run carrier Uzbekistan Airlines has blamed Somoni Air for the impasse.
“Somoni Air did not submit form “R,” which lists all the requisite conditions for completing an international flight. That is the main reason for this flight being cancelled,” a spokesperson for the airline told EurasiaNet.org.
The company promised a full explanation would be posted on its website by the end of the day, but that statement failed to materialize by the promised time.
An estimated 26 passengers had been due to travel on the flight.
Tajik news website Asia-Plus reported that disappointed customers were reimbursed or given tickets for the flight from the Tajikistan capital, Dushanbe, to Khujand. In the absence of a direct link to Tashkent, many people in Tajikistan traveling to Uzbekistan typically make their way to the northern city of Khujand and then cross the border overland.
It had all started so promisingly.
A trial flight between Dushanbe, and Tashkent was carried out on January 10. A total of 56 people, including Somoni Air representatives, journalists and regular passengers, flew on that occasion. The travelers were met with a great fanfare at Tashkent airport.
The president of Tajikistan’s son has only been mayor of the capital city for a few weeks and already life is improving.
In the old days, people traveling on public transport had little by way of mental stimulation beyond possibly staring blankly out of the window or reading a newspaper.
But now Mayor Rustam Emomali has instructed taxi and minibus drivers in Dushanbe to play musical paeans of praise to the country and, of course, President Emomali Rahmon himself.
Asia-Plus news website reported that the instructions were already being carried out on February 20.
One minibus driver said that they buy flash drives carrying patriotic duties from their own employers at 35 somoni ($4.50) a pop. City officials told Asia-Plus that the practice will soon be rolled out across all public transport vehicles.
The surge of patriotic song-writing followed the adoption of the 2015 law decreeing that Rahmon be officially designated “The founder of peace and leader of the nation.” That formulation, which is even more cumbersome in the original Tajik, is now used pretty much every time the president is referenced on state television. Beyond elevating Rahmon to para-demigod status, the founder of peace and leader of the nation law also granted the president de facto rule for life, since he will retain a degree of power even after or if he should ever step down.
It is not just the middle of the road, light entertainers that have volunteered (or been enlisted) to performs songs to flatter Rahmon. Hip-hop artists have got in on the act too.
A sudden shortage of dollars in circulation in Tajikistan has led to another dip in the value of national currency, the somoni.
At the start of the year, official figures showed the greenback trading at around 7.9 somoni. This week, currency exchange points were trading at just over 8 somoni to the dollar, but the US banknote was, in fact, hard to find at all.
The black market, which has come under intensified scrutiny in the past couple of years, was reportedly trading the US currency at around 8.30 somoni on February 17.
While major banks like Agroinvestbank, Tojiksodirotbank, Oriyonbank had no dollars to speak of, some smaller lenders had small amounts to go around, according to news website Asia-Plus.
Market watchers suspect that the reason for the sudden dollar crisis is linked to the recent effort by the government to recapitalize a number of distressed banks, which then proceeded to pay out account-holders who have been unable to withdraw their savings for several months. Worried about possible devaluations to the somoni, people getting their hands on that cash have quickly sought to convert it into relatively more secure dollars.
Tajikistan has mainly resorted to “administrative resources” to keep the currency on an even keel.
In December 2015, the National Bank ordered the closure of all unauthorized currency exchange points in the city. After that, only banks were able to perform foreign exchange operations. Anybody found violating this new arrangement could face jail terms of up to nine years. Also, banks are forbidden by law from selling somoni at more then 1.5 percent the rate established by the National Bank.
Screengrab from a promotional film produced by Tajikistan's aluminum giant Talco.
It is virtually axiomatic in Tajikistan that any major investor should, metaphorically speaking, expect to get their fingers burnt and then be forced to pay for a taxi to the hospital afterward.
Consider the long-running saga with Russian metals giant Rusal, which has after years of trials and tribulations finally left Tajikistan and with losses likely running into the dozens of millions of dollars.
Under a recently thrashed out deal, Tajikistan’s heavily indebted aluminum producer Talco has relieved Rusal of its two remaining assets in the country — the Sozidanie business center and the Hyatt Regency Hotel.
Talco will pay Rusal around $150 million over a 10-year period, RFE/RL’s Tajik service, Radio Ozodi, reported on February 14. A source familiar with the deal has told EurasiaNet.org that the foreign staff managing both facilities will leave the country, leaving Tajik personnel to take over.
Talks about the transfer of property had been going on for some time and likely turned a final corner in the last week of December, when Rusal chief executive Vladislav Soloviev traveled to the Tajik capital, Dushanbe.
Talco is controlled by Hasan Asadullozoda, brother-in-law of President Emomali Rahmon, so this is yet more of the country’s wealth falling into the hands of the ruling family. (That said, Asadullozoda is going through his own troubles with the rest of the family, so this is not quite as cozy as it may initially appear).
The transaction appears to put a definitive end to the long-standing row between Tajikistan and Rusal, which is owned by Russian billionaire Oleg Deripaska.
In the wake of the mayor of Tajikistan’s capital getting sidelined, his allies are now systematically being cleared out of jobs in and near the government.
On February 13, the executive committee of President Emomali Rahmon’s People’s Democratic Party assembled and decided to remove six leading party apparatchiks.
The changes were effected at Rahmon’s behest.
Tajikistan-focused news website Akhbor cited an unnamed source in the party as saying the process is intended to rid the city hall of ex-mayor Mahmadsaid Ubaidulloev’s cronies. New appointees will reportedly instead be the cronies of the new mayor, who also happens to be son of President Rahmon — Rustam Emomali. (Tajik sons take the first name of their father as a second name).
The authorities are trying to cast Emomali’s ascendancy to the mayor’s job as a much-needed injection of energy. Rahmon in December declared 2017 the year of youth and in that spirit gave his 29-year old scion a job for which he has little obvious background.
Acting quickly, Emomali dumped the sitting mayoral press secretary and the head of the city television station, Poytakht. Then on January 16, he fired the head of Dushanbe’s public records department, Saidhomid Mahmudov, who is Ubaidulloev’s cousin.
On February 7, less than a month after losing his mayoral post, Ubaidulloev resigned his seat on the Dushanbe city council, as did his ex-city hall chief of staff, Firuz Ulmasov.
The former NATO Central Asia liaison office in Tashkent. (photo: NATO)
Central Asians are more likely to see NATO as a threat rather than as a source of protection, according to a new survey.
The survey, by the American firm Gallup, polled residents of all the ex-Soviet republics except for Turkmenistan and Uzbekistan. All of the Central Asian states saw NATO as more of a threat than as protection. Tajikistan was the most anti-NATO state, with 34 percent seeing it as a threat and eight percent as protection. Next is Kyrgyzstan, at 19 percent protection and 30 percent threat; then Kazakhstan, 25 percent protection and 31 percent threat.
It's hard to imagine what NATO would possibly threaten in Central Asia. And while it's tempting to attribute this to exposure to Russian narratives about NATO, Tajikistan is the least Russian-speaking of all these countries, and Kazakhstan the most Russian-speaking, so that explanation isn't satisfying. (The Bug Pit is unable to come up with a better one, though.)
Note that NATO closed down its Central Asia liaison office in Tashkent last year, deciding that it would henceforth operate all of its modest cooperation programs in the region from Brussels.
Armenia also had a mostly negative response, with 20 percent saying NATO is a threat and only eight percent as a protection. Armenia's government makes not-insignificant efforts to maintain real cooperation with NATO, in spite of being a member of the NATO rival Collective Security Treaty Organization. But the fact that the only NATO country on Armenia's border is Turkey no doubt colors public opinion on the alliance.