Mortgage holders picket a bank in Almaty, Kazakhstan, in a demand for their loans to be refinanced following the dramatic fall in value of the national currency, the tenge.
In a reprisal of impromptu rallies seen earlier this year, around 30 mortgage holders in Kazakhstan’s business capital picketed banks on September 19 demanding their loans be refinanced.
Frustration is mounting among many debtors that a program ordered by President Nursultan Nazarbayev for the central bank to provide commercial lenders with 130 billion tenge ($380 million) to refinance loans is failing to take full effect.
The rallying mortgage holders, who complained that their debts had not been refinanced, called during their picket for them to be granted 1 percent interest rates and five-year repayment periods.
But Zhanna Sadykova, a member of the Let's Leave Housing for the People, claimed in remarks to EurasiaNet.org that banks are refusing to grant those terms.
Those suffering the most are people like 64-year old pensioner Tatyana Alenkina, who obtained a dollar mortgage worth $35,000 in 2008 to buy an apartment. She repaid $27,000, but a paltry monthly pension worth 35,000 tenge (devalued to $89 by the collapse of the national currency) means she can no longer keep up with payments.
“They kicked me out of my apartment in the evening, they won’t let me into my apartment any longer. I cannot find my things. I am going hungry. Now I’m living in a basement,” Alenkina told EurasiaNet.org.
The National Bank has said that as of September 1, almost 18,000 refinancing requests out of a total of more than 24,200 have been fulfilled. Protesters blamed banks for disruptions to the refinancing program.
Turkmenistan’s President Gurbanguly Berdymukhamedov has made a major stride toward being enshrined sultan-for-life after the country’s token lawmakers approved major changes to the constitution.
Parliament and the Council of Elders at a joint session on September 14 waved through an increase of presidential terms from five to seven years and agreed to scrap the 70-year age limit for pretenders to the highest office in the land.
These fixes ensure that Berdymukhamedov, 59, will be able to remain in situ for as long as he pleases.
Speaking at the Council of Elders assembly, a gathering of town seniors from all across the country, Berdymukhamedov claimed that the amendments had been adopted at the request of the people.
The new constitution was “drafted by all our people on the basis of multiple suggestions from the country’s citizens, political parties, representatives of civic associations, state bodies, scientific organizations, lawyers and international experts,” he said.
Signing off on the new constitution, Berdymukhamedov said the revised document would give the country a new thrust of energy.
Berdymukhamedov, a dentist by training, came to power in late 2006 following the sudden death of Saparmurat Niyazov, who granted himself lifelong leader status in 1999. He was reelected to a five-year term with 97 percent of the vote in 2012.
The next presidential elections will take place in 2017 and involve participation of three political parties — the Democratic Party, the Agrarian Party, and the Industrialists and Entrepreneurs Party. All those parties are transparently bogus entities clumsily designed to convey the notion of a plurality that barely anybody accepts at face value.
All the same, Berdymukhamedov opined that the spirit of competition between parties would create a fresh mood in the country.
Dariga Nazarbayeva, Kazakhstan’s deputy prime minister and the eldest daughter of the president, has supported a novel solution for using up cannabis crops growing wild in the countryside: turn them into paper.
Kazakhstan has long battled with its virulent wild cannabis crop, which grows freely in the Chui Valley — a much-beloved part of the region among avid aficionados of the weed. As Interior Minister Kalmukhanbet Kasymov explained, authorities are at a loss to police the huge areas covered by the plant.
“Of course, covering all 140,000 hectares (140 square kilometers) is not possible. Cannabis grows all over the country. So we have to decide what to do with it. Either destroy it or use it for economic development,” Kasymov said.
Deputy Investment and Development Minister Albert Rau said at a government meeting on August 8 that proposed methods for utilizing hemp would entail processing measures that destroy the active narcotic ingredient.
A statement on the government website notes somewhat redundantly that research has revealed that cannabis plants could be turned into a type of cellulose that lends itself to transformation into all kinds of paper: banknotes, wrapping paper and office paper. Even textiles and foodstuffs. This is nothing new to admirers of hemp. Indeed, as the North American Industrial Hemp Council notes, hemp has been used to produce paper and textiles for at least 12,000 years.
And as Nazarbayeva approvingly noted at the government meeting, the cost of the paper produced would be low.
Ever the optimist, Tajikistan’s President Emomali Rahmon is again pleading with the global Islamic community for financial assistance to develop his country.
Speaking at the 12th World Islamic Economic Forum in Indonesia this week, Rahmon appealed to prosperous Muslim countries to give a helping hand to struggling Muslim nations, including his own.
Rahmon proposed changing banking procedures to simplify the transfer of grants and lowering interest rates for loans.
“In our view, with a view to lowering the impact of global crises and other current issues in the developing Islamic world, especially among countries that do not have an outlet to the sea, it is necessary to create a specialized bank or a financial support fund,” he said. “I am certain that this would to a great extent enable the successful resolution of current problems before us, as well as strengthen the unity of the Islamic umma on the trajectory toward peace and stability,”
The Tajik government suggests electricity infrastructure like the proposed CASA-1000 grid, mineral exploration, farming and tourism could be promising targets for investment.
Rahmon said conditions were highly favorable in his country for investment and that reforms had been enacted to promote private enterprise. This will come as a surprise to the business community in Tajikistan, which has become used to operations in conditions of rampant corruption and cronyism.
Since the start of the year, Rahmon has been doing the rounds in monied Muslim countries like Saudi Arabia and the United Arab Emirates in the hope of drumming up investment for his cash-strapped country. Those efforts have yielded few notable results, however.
The latest desperate measures by Turkmenistan’s government to alleviate pressure on the national currency have reportedly sparked panic among the population and prompted many to begin stockpiling food.
Alternative News of Turkmenistan (ANT) website reported last week that the Central Bank had suspended currency convertibility for private enterprises, including those trading in food and similar basic items.
The website on July 26 cited its sources as saying that President Gurbanguly Berdymukhamedov would be personally granting permission to individual companies to buy and sell foreign currencies.
With companies in Turkmenistan unable to secure foreign cash, they are unable to pay suppliers, causing a shortage of imported goods on the local market. As ANT notes, similar restrictions were introduced in October but were not extended to companies dealing in food goods and industrial materials.
Some entrepreneurs should theoretically be able to draw on bank accounts in foreign denomination to continue their transactions, but ANT cited an unnamed government official as saying that only a handful of companies had positive balances on the dollar accounts.
“We have returned back to the days [of former president Saparmurat Niyazov],” the source told ANT.
Without referring to the ANT reports, the Central Bank this week tried to inject a note of reassurance by noting in a statement that it was creating all conditions necessary for currency convertibility.
“The private sector, as well as citizens, can without interference convert foreign currencies as established under the law,” the statement said.
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.
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.
A pyramid scheme in Uzbekistan that reeled many high-profile celebrities into its net is now costing officials their job.
Since investigations began in mid-June, the fraud allegedly engineered by well-known businessman Ahmad Tursunbayev has caused enough ripples to knock dry political programing off the airwaves in favor of at least three television programs devoted to the case to date.
Among the officials to have lost their job are Behzod Mirsoatov, prosecutor for the Chinasky district of Tashkent out of which Tursunbayev operated. On July 25, the district head of police also got the chop and is now being questioned as a witness in the case. There are also unconfirmed reports that the head of the district is next for the metaphorical firing squad.
The removal of relatively important local officials signals a rare concession to restive public sentiment in Uzbekistan, although the story is actually a little less straightforward than that.
Tursunbayev’s suspected scam consisted simply of promising 100 percent yearly returns on investments made either in cash, gold or other assets, mainly cars. The bulk of his clients — estimated at between 40,000 and 80,000 people — appear to have been naive Uzbeks unused to market speculation.
Uzbekistan’s transition to a market-based economy has been negligible over the past 25 years and untrained investors are ripe subjects for fraudulent get-rich quick scams.
Against all odds, however, despite the unfolding scandal, Tursunbayev continues to enjoy some support from the public. Victims of his scheme have drowned prosecutors with letters — not to demand his punishment, but instead to ask that he be released, so that he might return their money and jewelry.
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.
Evidence is mounting that the economic situation is getting grimmer in Turkmenistan, although the government is giving nothing away.
Chronicles of Turkmenistan, a foreign-based news website, reported on a meeting of local businessmen in which attendants were asked to gather money to support the government.
These events took place last month, but details are emerging only now.
The CoT account begins on June 8, when President Gurbanguly Berdmukhamedov met with representatives of the country’s business community. Two days later, the Union of Industrialists and Entrepreneurs summoned a meeting of the same businessmen to make their unusual request. The list of attendees was drawn up by union chairman Alexander Dadayev, who issued the appeal, CoT reported.
“Our deeply esteemed president, speaking before you all, spoke about the global economic crisis, which has led to a sharp drop in prices for energy resources,” Dadayev is quoted as having said by CoT’s unnamed source. “In this difficult time, we members of the national business community should help our country and our dear president.”
Getting down to brass tacks, Dadayev suggested every person present in the room pony up $100,000.
Asked whether the money would be returned, either directly or through future tax breaks, Dadayev apparently said no guarantees could be given. Threats were more forthcoming, however.
“Those that do not pay the sum will have their oxygen cut off. You know that the [Union of Industrialists and Entrepreneurs] has the means to do this,” he reportedly said.
As for regular members of the public, they are now having more trouble getting their hands on money sent to them from abroad.