Archive for November, 2007
News Roundup - November 30, 2007
CACI Analyst: Kazakhstan claims political role in the Middle East
Nursultan Nazarbayev accentuated common religious values and historical cultural ties during his three-day visit to Syria and, more clearly than ever before, emphasized the increasingly pro-Arab stance of Astana in the Middle East conflict…
CACI Analyst: OSCE maintains role in Central Asia despite conflict with Russia
The Organization for Security and Cooperation in Europe (OSCE) is engaged in a bitter battle with Moscow. The OSCE has already abandoned its efforts to monitor the Duma elections in December and is struggling to obtain Russian permission to observe the March 2008 presidential elections…
CACI Analyst: Genghiz Khan and movies in Central Asia
Several movies on Genghis Khan and related themes have recently appeared in Eurasian countries. Each of them, and especially the response to them by the general public, indicates geopolitical shifts in Eurasia, as well as the desire of the ethnic Russian elite to play a leading role in the Russian Federation and, possibly, in the entire post-Soviet space…
The Oil and the Glory: Bush creating new position of senior envoy for Russia, Caspian
Thomas Pickering, a former U.S. ambassador to Russia and among the country’s most respected statesmen, has been asked to return to the State Department as a special envoy with a broad portfolio in the Eurasian region, according to people with whom I’ve been talking…
AFP: Russia, Kazakhstan in focus at annual European security meeting
The OSCE gathers in Madrid Thursday for its annual meeting which will focus on Kazakhstan’s bid to chair the security watchdog and Russia’s threat to pull out of a key arms control pact…
RIA Novosti: Russia’s RusAl creates coal and energy JV in Kazakhstan
Russia’s aluminum giant United Company RusAl said on Thursday it had agreed with Kazakhstan’s state holding company Samruk on the establishment of a joint venture for coal production in the Central Asian state…
Hemscott: UC Rusal and Samruk to establish Kazakh coal and energy joint venture
United Company Rusal (UC Rusal) said it has signed a memorandum of understanding (MoU) with Samruk Holding to establish a joint venture that will develop coal mines in Kazakhstan’s Pavlodar region and also undertake projects in the energy sector…
Oil & Gas Eurasia: Kazakhstan drafts list of strategic hydrocarbon projects
A list of oil and gas licenses “having strategic significance” in Kazakhstan is being drafted by the country’s energy ministry, a source in the ministry said. The listed oil and gas licenses would be subject to the new law on subsoil use, which allows Kazakhstan to unilaterally terminate or demand amendments to contracts with energy companies…
Guardian Unlimited: Kazakh port revamp offers more grain export routes
Kazakhstan will this year export 200,000 tonnes of grain through its revamped port of Aktau on the Caspian Sea, with shipments rising to 300,000 tonnes in 2008, the state-owned grain exporter said on Thursday…
Mineweb: Frontier acquires 50% interest in Benkala, Kazakhstan
Frontier Mining Ltd (”Frontier” or “the Company”), the AIM listed Kazakhstan focused gold mining and exploration company, is pleased to announce that it has today completed its acquisition of a 50% interest in a joint venture company with rights to the Benkala copper-molybdenum-gold deposit located in northwestern Kazakhstan…
Mineweb: Central Asia Resources releases drilling results from Kepken gold prospect, Kazakhstan
Results of a further five holes were returned recently, increasing the total number returned to 31 drill holes for 4,419.6m at the Kepken prospect. The final 11 holes of the 42 hole program have been drilled and samples collected and dispatched, with results pending from the Alex Stewart laboratory in Kyrgyzstan…
The Moscow Times: Kazakh grain exports fall short
Kazakhstan will fall short of its planned 1 million tons of grain exports in November because of a shortage of rail wagons and extra charges on cargoes transiting Ukraine, senior government officials said Thursday…
News Roundup - November 29, 2007
Radio Free Europe / Radio Liberty: Key OSCE gathering set for U.S.-Russia clash over democracy
Russia and the United States look set to clash over human rights and democracy this week when OSCE foreign ministers meet in Spain to assess competing visions for the future of the world’s largest regional security organization…
Eurasia Insight: Hare Krishna community faces uncertain future
A year after authorities precipitously demolished their dwellings, members of Kazakhstan’s Hare Krishna community still find themselves in legal limbo. The Krishnas insist they are victims of religious persecution, while authorities characterize the case as a property-rights matter…
Oil & Gas Journal: Kazakhstan, Eni JV near Kashagan tax agreement
Kazakhstan’s Deputy Finance Minister Daulet Yergozhin said the ministry is moving forward with tax checks into the Eni SPA-led Agip KCO consortium just days ahead of a Nov. 30 deadline for a deal between the consortium and the government on the Kashagan oil field…
Eurasian Home Analytical Resource: New personnel for the new economy: Kazakhstan’s experience
At the Second Forum of Intellectuals of the CIS countries, which was held in November 2007 in Astana, I was moderating the panel on the youth’s access to education, culture, etc. On the second day of the Forum, Head of the Russian State Committee for Youth Vasily Yakemenko arrived in Astana to take part in the event…
Wall Street Journal: Cnooc to target Caspian Sea area but avoid Russia
Chinese offshore-oil producer Cnooc Ltd. wants to buy assets in the prolific oil-producing region of the Caspian Sea but isn’t interested in Russia because the risks are too high, a senior company official said…
NASDAQ: Aureos Capital raises $50 mln from first closing of Central Asia fund
Aureos Capital said Wednesday that Aureos Central Asia Fund or ACAsF has raised US$50 million at its first fund closing. The fund is an initiative of Aureos Capital…
AltAssets: Aureos Central Asia Fund holds first closing on $50m
The Aureos Central Asia Fund has held a first closing on $50m. The fund is expected to raise $100m by June 2008. It will seek to invest between $2m and $10m in businesses in Kazakhstan and also in Azerbaijan, the Kyrgyz Republic, Georgia, Tajikistan, Turkmenistan and Uzbekistan…
Gazeta.KZ: RK Foreign Affairs Minister to participate in OSCE Ministerial Council
The Minister of Foreign Affairs of the republic of Kazakhstan, Marat Tazhin, will take part in OSCE Ministerial Council which will be held on November 29 - 30 in Madrid (Spain), as reported in the Foreign Affairs Ministry of the republic of Kazakhstan…
Kazinform: KPO announced completion of two infrastructure projects in Uralsk
Karachaganak Petroleum Operating B.V. (KPO) announced the successful completion of two large infrastructure projects totalling $5.45 million in the West Kazakhstan Oblast (WKO). The therapeutic department of the WKO Oblast hospital along with the Youth Sports School stadium have undergone complete refurbishments…
Ferghana.ru: Beijing is quite generous to Central Asian countries
China is out to reequip the Turkmen army. The Tajik Defense Ministry expects military hardware, equipment, and uniforms for soldiers and officers from China within the framework of the state credit ($3 million) next year, a source in the government of Turkmenistan said…
Hindustan Times: ‘Disco Dancer’ Mithun still a favourite in Kazakhstan
Jimmy, Jimmy, Jimmy, aaja, aaja, the song from Mithun Chakraborty’s 1982 blockbuster Disco Dancer is a favourite with Marina Maximova and many others from her country, Kazakhstan. But current heartthrob Shah Rukh Khan is unknown there…
News Roundup - November 28, 2007
Financial Times: Oil groups move to calm Kazakh dispute
A high-ranking foreign delegation arrived in Astana on Monday to discuss Kazakhstan’s demands for compensation for production delays and soaring costs at the Kashagan oilfield in the Caspian Sea…
Financial Times: KMG EP ‘knocking on the door’
KazMunaigas Exploration Production, the London-listed arm of Kazakhstan’s national oil company, hopes to get a stake in the troubled Kashagan development if the consortium running the project is restructured…
Financial Times: Kazakhstan to be offered deal by watchdog
Kazakhstan is facing rejection in its bid for the chairmanship of the Organisation for Security and Co-operation in Europe in 2009, when the security, democracy and human rights watchdog holds its annual meeting in Madrid this week…
Itar-Tass: Russia, Kazakhstan DMs sign cooperation accord
The Foreign Ministries of Russia and Kazakhstan have signed a cooperation agreement…
Eurasia Daily Monitor: Momentous implications of Azerbaijan-Georgia-Turkey railroad (part one)
Ignoring the anti-constitutional opposition’s calls for immediate regime change, Georgia began construction work on its section of the Baku-Tbilisi-Kars (Turkey) railroad on November 21…
Oil and Gas Eurasia: KPO launches new gas pipeline
Prime Minister of the Republic of Kazakhstan, Karim Massimov, WKO Akim, Baktykozha Izmukhambetov, and other RoK officials today visited the Karachaganak field and met with senior representatives from KPO’s major shareholders…
Neweurasia.net: National award winners to be announced Friday
On November 29 the Jury that includes well-known and respected people of our country will name the Persons of the Year 2007 in culture, business, medicine and art…
Cargonews Asia: Lufthansa hub move unlikely despite relief
The Russia-Lufthansa spat over use of Russian air space is still continuing but Lufthansa has got a fresh reprieve until the end of February. Lufthansa Cargo said “we have got some breathing space” for three months to decide what steps to take but indicated it could not bow to Russia’s demands yet…
News Roundup - November 27, 2007
Itar-Tass: Russia to transport oil to China via Kazakhstan
Russia plans transporting to China 5 million tons of oil a year via Kazakhstan, Russian Minister of Industry and Energy Viktor Khristenko said…
RIA Novosti: Russia to start oil supplies to China via Kazakhstan in 2008
Russia will start supplies of up to 5 million metric tons (36.7 million barrels) of oil per year to China via Kazakhstan from 2008, the industry and energy minister said on Monday…
Times Online: Kazakh oil company turns to BG in search for ally
BG Group is in talks with the London-listed subsidiary of Kazakhstan’s national oil company over new joint ventures in oil and gas…
Forbes: KazMunaiGas EP seeks more acquisitions, targets higher volumes
KazMunaiGas Exploration Production, the Kazakh oil and gas producer, is planning at least two more acquisitions as part of its effort to boost production and reserves, chief executive Askar Balzhanov said…
Eurasia Daily Monitor: Russia hopes to enter Caspian market with new Kashagan deal
In the covert “great game” currently playing out between Russia and the United States to control the hydrocarbon assets of the Caspian, a glittering new prize has appeared on the horizon. Kazakhstan’s massive offshore Kashagan oilfield is the world’s largest discovery in the last 30 years.
Forbes: Raiffeisen offers to buy majority stake in Kazakh Temirbank
Austrian bank Raiffeisen International Bank Holding AG has made an offer to buy a majority stake in Kazakhstan’s Temirbank, Financial Times Deutschland reported, citing sources within the financial industry…
Gazeta.KZ: RK Finance Ministry to check Agip KCO
The Ministry of Finance of the Republic of Kazakhstan will execute tax check of Agip KCO, as reported today the RK Finance vice Minister, Daulet Ergozhin…
Reuters: Kazakhstan presses Western consortium over tax
Kazakhstan renewed its tax accusations against a consortium of Western oil companies developing the huge Kashagan oilfield on Monday ahead of a Nov. 30 deadline set for the talks…
Rigzone: KPO launches Karachaganak-Uralsk gas pipeline project
Prime Minister of the Republic of Kazakhstan, Karim Massimov, WKO Akim, Baktykozha Izmukhambetov, and other RoK officials visited the Karachaganak field and met with senior representatives from KPO’s major shareholders…
Interfax: KazMunaiTeniz, Lukoil to finish drilling Atash exploration well by autumn 2008
TOO Atash, a company formed on a parity basis between Offshore Oil Company KazMunaiTeniz and Lukoil Overseas, plans to complete construction of its first exploration well at the Atash section in the Kazakh sector of the Caspian sea in the third quarter of 2008, all three companies said in a joint pres release…
Interfax: S&P withdraws Eurasia Insurance Co. ratings
Standard & Poor’s Ratings Services has affirmed the financial strength and counterparty credit ratings of Kazakhstan-based Eurasia Insurance Co. (Eurasia) at ‘B’ with a stable outlook, and then, at the company’s request, withdrew the rating…
EnerPub: Gazprom continues gas talks in Turkmenistan
Following a recent trip to China, Russia natural gas giant Gazprom continues to move forward on natural gas deals - this time in Turkmenistan…
Eurasia Daily Monitor: West racing Russia for Turkmen gas
On November 23 in Ashgabat, Russian Prime Minister Viktor Zubkov and Gazprom president Alexei Miller held tense talks with Turkmen President Gurbanguly Berdimukhamedov on joint gas projects…
ExxonMobil Seeks a Bigger Piece of Action at Kashagan
The American oil giant ExxonMobil expressed the desire to take over as operator of the Kashagan project from the Italian Eni. According to sources in the government of Kazakhstan, this question that has been officially floated last week would need to be solved by the beginning of next year.
According to Interfax-ANI, the idea of ExxonMobil taking over the projects was first discussed by the U.S. Secretary of Energy Samuel Bodman and the Kazakh Minister for Energy and Mineral Resources Sauat Mynbayev last week at the World Energy Congress in Rome. In return for ExxonMobil winning the operatorship, the American official promised technological and financial aid in the execution of project. While there were no figures stated on what it would take for ExxonMobil to seal the deal, a compensation of up to tens of billions of dollars may not be unreasonable. This would be in line with the damages for the delay in oil production from the field repeatedly sought by the Kazakh authorities. As Dmitriy Aleksandrov, an analyst with the Russian brokerage Financial Bridge, noted in an interview with the business weekly Business and Power “the size of compensation is a question of negotiation. And if ExxonMobil takes upon itself any future financial expenses, then Astana will go with their proposal. It is clear that the sum will be in billions of dollars, and the final figure will depend on proportions of shares and conditions for the participation of all sides in the project.” The spectrum of possible outcomes is quite wide, the analyst reckons.
Of course, ExxonMobil (at that time just Mobil) vied for operatorship of the project throughout the negotiations leading to signing the Production Sharing Agreement in 1997. At that time, Eni was chosen as the operator of the field, mainly as a compromise choice for being the least contentious candidate among the companies in the consortium. ExonMobil apparently revisited this desire early in September this year when its representatives met with Prime Minister Masimov and President Nazarbayev in Astana following the Kazakh government’s announcement of its displeasure with Eni’s progress. At about the same time, the representatives of Total, the French oil company, met with Kazakh authorities as well to propose Total for the role of the operator. It is clear that these two rival bids will strengthen Kazakhstan’s negotiating position in talks with Eni, Exxon and Total about their future roles in the consortium. According to observers, however, ExxonMobil should have the upper hand in any serious negotiations given its deep pockets and the expertise of operating large-scale projects like Kashagan.
Until now, there were no public discussion on the planned increase in KazMunaiGas‘ share in the project. As Kazakh authorities indicated Kazakhstan will seek a greater involvement for the national oil company - an increased share in the project is nearly a given and a role as cooperator of the filed highly likely. According to some sources, Eni will probably give up some of its share instead of a penalty it will face as a result of the delays and cost overruns. And given that the consortium partners and the Kazakh authorities already came to a preliminary understanding of an increased share of KazMunaiGas in the consortium, it is likely that the process of redistribution has been discussed and will be completed soon.
“Technically, the change of operators is fully realistic,” emphasizes Mr. Aleksandrov. “And the conditions will be hardly unfavorable for Kazakhstan: Astana has numerous advantages in active negotiations with the Americans. For the United States, Kashagan oil is a strategic objective; therefore it is possible to try to pressure the Americans.” As far as further status of Eni is concerned, Mr Aleksandrov noted that the Central Asian market was too attractive to simply pack up and leave. “I do not think that Eni will decide to fully drop out from participation in the project, even if it is deprived of its status as operator”, recons the analyst.
Meanwhile, ExxonMobil chairman and CEO Rex Tillerson noted in the course of World Energy Congress that “the dialogue between the oil companies and the government of Kazakhstan about the participation in the development of the Kashagan field is proceeding very actively”. Answering a question from a journalist about whether the consortium partners will agree to increase KazMunaiGas’ share in the project to as that the government of Kazakhstan wants or whether they are intended simply to pay the (likely very steep) fine, Mr. Tillerson only repeated that “the negotiations go very actively in all aspects”.
Evan Feigenbau, the Deputy Assistant Secretary of State of the United States for South and Central Asia refused to elaborate on the fresh news from Rome while visiting Astana last week. “We would like the situation around Kashagan to be decided favorably for all. This sector is very important both from the point of view of the development of Kazakhstan and from the point of view of global energy “, commented Mr. Feigenbaum.
So far, both the Kazakh authorities and Eni have never suggested publicly that Eni’s position as the main operator would be seriously at risk. There has not been any reaction from either side to the latest news of ExxonMobil’s advances to gain the operator role either. And while the Energy Secretary Bodman may have lobbied on behalf of the company at the Rome energy summit, Deputy Assistant Secretary Feigenbaum’s response suggests that this was not a part of a new unified political front on behalf of the United States.
Who Is Responsible for the Inflation in Kazakhstan
From Yaroslav Razumov in Exclusive. The English version can be found here, the Russian version here.
We asked Petr Svoik, the well-known economist whose economical forecasts frequently (and unfortunately) come true and the person who had experience working for government, to comment on the situation of increasing prices. In our opinion, the present situation shows that the economical problems in Kazakhstan are for the large part caused by the ineffective administering process. How and why does it happen?
- Petr Vladimirovich, to which extent the government and in general state organs are responsible for the increase of inflation?
- Considering the present state structures it is extremely difficult to say which member of the Cabinet is responsible for prices. The Ministry of Finance is definitely not. The Ministry of Economics has never monitored this issue and no one from its leaders said something definite about it, although ideally it should not be the case. The Statistics Committee examines the level of prices but can not influence it. Traditionally only the National Bank was responsible for prices. The population, community and journalists used to address all questions about prices to the National Bank.
In the meantime, the National Bank is able to influence only the monetary factor and there are many more other important price factors.
The present uncontrollable increase in prices revealed the problems that were implicit for many years. The state and a number of experts affiliated with it were euphoric when in 1999 oil prices started to increase, resulting in increase of the National Fund and the 10 % GDP growth rate. However, they didn’t consider seriously the simple fact that this economy was built on export of raw materials and import of absolutely all necessary goods.
- The monetary and non-monetary factors of inflation are sometimes a discussion topic among independent experts. Which factors prevail in our country?
- The inflation is a complex event and involves many factors - both monetary and non-monetary and the latter dominate. However, this fact was ignored and the National Bank made the government and all of us think that only monetary factor causes the increase in prices. However, it is not the reality.
What do we have now? First, the infrastructure component of pricing in Kazakhstan is problematic. The Kazakh transport, electricity and public utility industries, which influence every price, are in archaic condition, lack needed capacities and are catastrophically ineffective in everything. More specifically, they lack energy-efficient technologies. These industries as well as others, for example, road industry, require large investments not only to maintain the present capacities but also to enlarge them. Until now these industries were maintained using old Soviet reserve and as it came to its end the new investments are required.
These investments will result in higher utility, electricity and transport tariffs as well as in higher prices on everything else. And the government can not think of the prevention methods.
Moreover, there is no theoretical understanding of what parts of the investments and restoration costs could be included into infrastructure and utility natural monopolies’ tariffs. Also it is not clear how to obtain the money needed for the part of investments excluded from tariffs. For example, what money resources and on what terms should the government invest in infrastructure and public utility companies? And if there is private investor, what is the procedure of repayment? There are no answers to these questions. As there is no the required legislation. Thus it’s the description of the first non-monetary factor that caused the price growth.
Second, the domestic goods are quite expensive and hardly compete with the similar products from CIS countries even at the local market. Let‘s take a random example of Russian and Kyrgyz milk and sausage products that are demanded over the goods produced by several domestic companies.
Thus there is no real competition, effectiveness and the production costs economy. Consequently, these inefficiences affect the price growth.
And what is the effect of the domineering import on the inflation processes?
- Depending on the exchange rate of dollar for the importer‘s currency the imported prices carry the external inflation. And it is not the end. Already high import prices are increased further by the customs including the bribery and the payments to bazarkoms. These costs are essential.
Whether the supermarket or bazarkom «the sales business is entirely private. Still it is also akims» business. Through the land, rentals and infrustructure the local government controls everything from «bolashaks» to «„ramstores». The sales bussiness is obliged to pay a significant percentage of its income. My guess is from 20 to 25 %. Although it is just a conjecture as there are no specific researches to rely on. And this is also relevant to the question of price monitoring in Kazakhstan and who is responsible for it.
I can not estimate the increase in price of the import after it passes through customs, but here is the example from practice. The Kazakh businessman buys goods in Urumchi, delivery of one cubic meter volume of goods to Almaty costs 250 dollars for 1,5 km. But the delivery of the same cubic meter from Almaty to Astana costs 300 dollars for 1 km. It means that the Urumchi-Almaty transportation costs 50 dollars. Thus the rest 200 dollars were paid for something else. What part of this money is official customs taxes, profit of the transport company and what amount went for the structured bribery system?
Therefore, in conclusion it can be said that our economy – a) is noncompetitive in value, b) is highly corrupt, c) produces limited amount of goods and services, d) is inefficient in domestic production, i.e. not aimed at costs reduction. And all these factors result in higher prices. And the longer it gets the larger the influence.
- The initial increase of property prices and consequent price growth caused by mortgage loans are always associated with monetary factor …
- The property issue certainly had its impact on the inflation processes. However, it is not fair to blame banks as they also found themselves in difficult situation.
Kazakhstan has a dual economy. One part of this economy focuses on raw materials export and import of the foreign goods. The largest part of export earnings is accumulated in the offshore companies and National Fund and the rest is spent in the country as taxes, salaries and development funds. This additional currency initiates a substantial increase in purchasing capacity. However, this increase can be observed in the limited area of the country.
Those banks give loans using the external resources, which are borrowed at unreasonable interest rate. And this as well causes the inflation.
The above is one of the monetary problems. Another problem is that there are few options for investing the additional money, because of small number of domestic producers. Even assuming that all the production industry projects implemented since 1991 are functioning, the scale of industrial development is still not impressive. Consequently, the banks had to invest only to housing, office property and to giant trade centers. And it created so called “housing bubble” that everyone is worried about now.
So, the only banks that could function in this economy are export banks and they do not work with domestic passives. For example, let’s imagine there is one bank with geographical name. All the other banks do not have access to the export economy and its abundance of currency.
- It’s surprising that you are supporting the banking community. Especially after you criticized it 2-3 years ago.
- The banks can be blamed only for over active investments to property sector. But again it was the only possibility to invest. Also, banks had the unreasonably high margin when they could do well even with smaller interest rate. It is a simple fact - the smaller is the interest rate the stronger is the economy and longer is the economic cycle.
- And why the development cycle of Kazakhstan’s economy appeared to be so short – the “bubble” emerged within only several years?
- Unfortunately, in addition to small scale of our economy just half of transactions are made using tenge. Let’s take the official data without the black market’s unregistered circulation of cash. What is the ratio of credits in dollars to credits in tenge? Approximately fifty-fifty. What is the ratio of banking deposits? The same numbers. It means that half of the money in the economy is foreign currency. Consequently, the capacity of Kazakh economy is cut to half. It is the first reason.
The second reason. In my opinion, the present policy of the National Bank is harmful – it increased the refinancing rate to higher than the inflation level, practically stopping to grant loans to the second-tier banks. And the worst thing is not the rate but the unwillingness of the National Bank to give loans to commercial banks. This is very bad.
The correlation between the level of inflation and interest rate is arguable. In any case, the developed countries with independent credit emission do not apply it. The rates of Federal Reserve System, Japanese and EU banks are less than real inflation. If those countries applied the IMF and World Bank recommendations for the developing countries, their own development would have stopped. The developed countries connect their initial credit emission with the GDP growth rate. The emission involves the interval from 0 to maximum (rarely) 5%. The banks further raise the interest rate thus, the European and Japanese economies develop with 6-7 % interest rate. That is a normal practice. In our economy only the initial external rate is 8-9 % and it is further increased by the banks’ margins. That is why Kazakhstan experienced such a short economical cycle. The policy of the initial rate being higher than the inflation makes the loans forbidden. This policy is rather suitable for the inferior, undeveloped economies. However, in our country this rule is applied. Thus only foreign loans are available and those increase the level of inflation in the country.
- Then why the abundant in the last years foreign capital was invested into property and not, as there was no potential in industry, for example, to agriculture?
- Banks are interested in fast yielding investment projects. The agriculture lacked such projects until lately. This year the wheat industry experienced renewal. There is natural rent now, and the prices suddenly increased covering the costs 2-3 times. By the way the wheat is the only component of export that brings foreign currency into country. Unfortunately, this currency mainly goes to agriculture producers, common agriculture workers do not get advantages from the perfect world market conditions. At best they cover their costs. The city owners of hundred thousand hectares and elevators are the ones who enjoy the greatest profit. At least they are domestic owners and they carry the currency into the country. Probably, this would help develop the agriculture industry. Of course, if the land owners make investments to the agriculture and not to the city property.
- Which factors – monetary or non-monetary – had a greater influence on increased prices of bread at Kazakh market?
- At the time of “perestroika” reform, at the final years of the USSR, the country received rich harvest. But the system was so unbalanced that it couldn’t be gathered. Zhvanetsky had an exceptional statement: the rich harvest was the last straw that completely ruined the USSR economy. That was a really funny joke.
What do we have? Kazakhstan long ago received the advantage of high oil prices, but for the population it resulted only in high prices of gasoline at the local market. Now we have higher prices on wheat, however, instead of profit people get higher prices for bread.
Why? It is a question for the government. The independent government should establish the national social and economical policy that will provide the total surplus from favorable prices.
Then it should redistribute this surplus in the country more or less fairly and effectively in economical sense.
At present time, there is no government structure (or even a person) that could be responsible for prices, understand the pricing situation and influence it.
The government is absolutely unable to make the necessary actions in this sphere. For instance, now it is forming wheat stocks by artificially lowering the purchasing price. The world market price is 250 dollars, while government pays only 200 dollars. Prime minister calls for the actions from “akims”, but the government itself uses anti market measures to market entities.
Now, from all said you can make a judgement which factors were crucial for the inflation.
News Roundup - November 26, 2007
New Europe: ExxonMobil wants to become Kashagan field operator
US energy giant ExxonMobil is seeking to become the operator of the project to develop Kazakhstan’s Kashagan offshore Caspian oil field, whose oil reserves are put at a minimum of seven billion barrels and its total oil reserves at 38 billion barrels…
The Oil and the Glory: Exxon’s sharp elbows
New Europe has an interesting story on the prospect of ExxonMobil assuming control of developing Kazakhstan’s supergiant Kashagan oilfield. The issue is important, since amid tight oil supplies for the next few years we’re talking about the eventual export of some 1.5 million barrels of oil a day from the field…
Forbes: Kazakhstan’s TuranAlem and Kazkommertsbank IDR’s affirmed at ‘BB+’ - Fitch
Fitch Ratings affirmed Kazakhstan’s largest commercial banks — Bank TuranAlem (BTA) and Kazkommertsbank’s (KKB) — long-term foreign currency issuer default ratings at ‘BB+’ and short-term foreign currency IDR at ‘B’…
Forbes: Kazakhstan’s Temirbank rating affirmed at ‘BB-’ with stable outlook - Fitch
Fitch Ratings said it affirmed the ratings on Temirbank reflecting the Kazakh bank’s high credit risks due to rapid expansion of its retail loan portfolio against slowing growth rates in the third quarter…
BusinessWeek: Turkmen gas pipeline work to begin soon
Construction of a new pipeline to carry natural gas from Turkmenistan to Europe via Russia could begin ahead of schedule in the first half of 2008, the resource-rich nation’s president said Friday…
Financial Times: Kazakhstan sets up $4bn fund
Kazakhstan has put together a $4bn (€2.7bn, £1.9bn) stabilisation fund to help its economy weather the credit squeeze stemming from the US subprime mortgage crisis, the Kazakh central bank governor has told the Financial Times…
Neweurasia.net: Where are the strong families in Kazakhstan?
This is the question that I have been interested in since morning. So, I studied the statistical data and took the most recent published figures (which are for January-March 2007) and divided the number of divorces on the number of marriages…
Banking Business Review: Bank Hapoalim acquires Kazakhstan Bank
Bank Hapoalim has completed the acquisition of Demir Kazakhstan Bank, which is claimed to be the first bank in Kazakhstan and in all of Central Asia to be purchased by an Israeli bank…
World Nuclear News: Nuclear power plans for Kazakhstan firm up
Two small nuclear power reactors will operate in Kazakhstan from 2015, according to a government decision. The first-of-a-kind VBER-300 units will likely be sited at Aktau on the Caspian Sea…
Global Voices: Kazakhstan: Economic crisis aftermaths
In the aftermath of slight economic and financial crisis, which the government prefers to call a “correction of the market”, the bloggers keep on discussing its consequences…
RIA Novosti: Kazakhstan reports outbreak of drug-resistant tuberculosis
Kazakhstan’s health ministry said Wednesday that the number of people, infected by drug-resistant tuberculosis is on the rise in almost all of the country’s regions…
United Press International: Analysis: KazMunayGaz’s prosperity rises
s much of the world faces an economic slowdown because of record-high energy prices, oil exporters are enjoying windfall profits, with Kazakhstan’s KazMunayGaz wallowing in record profits…
Interfax: KPO consortium begins building Karachaganak-Uralsk pipeline
The Karachaganak Petroleum Operation (KPO), an international consortium that is developing the Karachaganak gas condensate field in western Kazakhstan, has began building a Karachaganak-Uralsk pipeline on Friday…
Relatives and acquaintances have expressed concern over the fate of a self-described philosopher and political analyst in Kazakhstan who was forcibly admitted to a psychiatric facility…
Guardian Unlimited: Total wants quick deal on Kashagan, return to Iran
France’s Total hopes for a swift end to the dispute between Kazakhstan and operators of its giant Kashagan oil field, but a formal deadline of Nov. 30 will be hard to meet, the head of Total said…
Guardian Unlimited: Raiffeisen CEO says in talks on Kazakh acquisition
Austria’s Raiffeisen International is in ongoing acquisition talks with several Kazakh banks Chief Executive Herbert Stepic told Reuters in an interview. “We are in discussions with several banks, not just with one,” said Stepic, whose bank is flush with fresh cash after a 1.2 billion-euro ($1.8 billion) rights issue this year…
Eurasia Daily Monitor: Nazarbayev orders defense and security reforms
Last week, Kazakhstan’s President Nursultan Nazarbayev again called for the reform of the country’s defense and security structures. On November 15, he ordered the various heads of the defense and security bodies to prepare detailed proposals for restructuring their agencies, as part of the ongoing administrative reforms in the country…
Radio Free Europe / Radio Liberty: Kazakh journalists see tighter internet control ahead
Independent journalists in Kazakhstan say authorities have signaled their desire to place domestic Internet content under stricter government regulation…
Neweurasia.net: Winds of change
Kazakhstan’s financial markets were hit hard by the US subprime crisis. That’s not surprising when one looks at the national banks’ exposure to international credit markets…
Neweurasia.net: A warm-up in relations between Ashgabat and Baku
On 19 November, the Azerbaijani governmental delegation headed by the Deputy Foreign Minister Halaf Halafov came to Ashgabat to participate in the subsequent round of Turkmen-Azerbaijani talks on cooperation in the field of oil and gas industry…
Xinhua: Romania, Kazakhstan to co-op in transporting oil
Romania and Kazakhstan will cooperate in transporting Caspian oil to European consumer markets, the Romanian and Kazakh presidents stressed in a joint press statement on Thursday…
The president of Kazakhstan’s state-run nuclear power company Kazatomprom has revealed that the company intends to swap some of its shares in a uranium mine in exchange for stakes in Chinese nuclear power projects, domestic media reported today…
News Roundup - November 20, 2007
EurasiaNet: Appearance of damaging audio tapes perhaps linked to Aliyev trial
Leaked tape recordings that expose allegedly illicit practices by members of President Nursultan Nazarbayev’s administration may be connected to the trial of former presidential son-in-law Rakhat Aliyev, local political analysts believe…
Reuters: Kazakhstan’s ZhaikMunai sets range for London IPO
ZhaikMunai, an independent Kazakh oil and gas company, set an indicative price range of $13-$16 per global depositary receipt (GDR) for its planned listing on the London Stock Exchange, it said on Monday…
Hemscott: Hambledon to raise 4 mln stg in placing; 1st Sekisovskoye gold bar in Dec
Hambledon Mining PLC said it is raising about 4 mln stg before expenses through the placement of 22.97 mln new shares to cover its immediate needs and provide a significant contingency for any commissioning problems…
Gazeta.KZ: Gold and currency reserves of Kazakhstan grew up by 2.8% in the first half of November
International reserves of Kazakhstan in the whole (in current prices) including National Fund assets (according to preliminary data, USD 20 333.8 million) grew up 2.8% and amounted USD 38 521,7million, as reported by KZ-today agency referring to RK National Bank information…
Forbes: KazMunaiGaz buy of 75 pct stake in Rompetrol cleared by EU
The European Commission said it has cleared Kazakh national oil company KazMunaiGaz (KMG)’s proposed acquisition of 75 pct of Rompetrol Group’s share capital…
The Moscow Times: Nazarbayev not concerned by slowdown
Kazakhstan’s economy is not threatened by a global credit crunch and a construction slowdown may put growth on a more sustainable path, President Nursultan Nazarbayev said Thursday…
Forbes: Chagala forms joint venture to operate recreational facility in Kazakh town
Chagala Group Ltd said it has signed a joint venture agreement with Kazakhstan-based Maverick to renovate, own and operate an accommodation and recreational facility…
Forbes: Frontier Mining says Kazakhstan government approves Benkala project subsoil use
Frontier Mining Ltd said the government of Kazakhstan has approved the company’s Benkala copper project subsoil use contract, confirming the ownership interest in Benkala of the joint venture company in which Frontier has a 50 pct interest…
ABCmoney.co.uk: Severstal extends offer for Celtic Resources to Dec 7; has 45.6 pct acceptances
OAO Severstal said its Centroferve Ltd subsidiary has extended its revised offer for Celtic Resources Holdings to Dec 7…
Rigzone: KPO celebrates FPSA 10th anniversary
In 1997, an international consortium including BG Group, Eni, Chevron and LUKOIL reached a major milestone with the conclusion of the FPSA in Washington DC. The FPSA established the formal relationship between the operating venture and the Republic of Kazakhstan and it continues to govern the development of the giant Karachaganak field…
kazinform: Kazakh Leader to visit Slovakia, Romania and Hungary
President of Kazakhstan Nursultan Nazarbayev will pay state visits to Slovakia, Romania and Hungary on November 20-24…
Canada Newswire: Alhambra Resources Ltd. - third quarter operational updates
Alhambra Resources Ltd. is pleased to provide a number of operational updates on its Uzboy Project located in north central Kazakhstan for the period ending September 30, 2007…
Reuters: Kazakh Halyk Bank 9-month income up sharply
Kazakhstan’s Halyk Bank reported on Monday a sharp rise in net income for the first nine months of the year and said it was likely to beat its expectations for the whole of 2007…
The Oil and the Glory: The coming oil plateau
Why is Big Oil behaving so gingerly in its negotiations to save its position in Kazakhstan’s Kashagan oilfield? One reason is that it’s the only oilfield discovery in the last 17 years capable of producing more than 600,000 barrels a day…
News Roundup - November 19, 2007
Financial Times: Kazakhstan in nuclear deal with Beijing
Kazakhstan has agreed to share its uranium resources with China in exchange for equity in Chinese nuclear power facilities in a strategic deal that brings together the world’s fastest growing uranium and nuclear electricity producers…
United Press International: Analysis: Azeri-Kazakh energy cooperation
In a small but significant move, the Azeri government is reaching out to its Caspian neighbors Kazakhstan and Russia as the ongoing development there produces a financial windfall for all…
The Huffington Post: The dictator penalty
Chevron boasts of being “Kazakhstan’s largest private oil producer.” Political opposition leaders, suppressed and often jailed by President-since-1991 Nursultan Nazarbaev, charge that his corrupt regime is supported not just by direct oil income but by huge illegal kickbacks…
Voice of America: US supports diversification in Caspian oil market
The Caspian region of Central Asia is home to some of the world’s largest oil and gas discoveries in recent decades. A top U.S. diplomat says western countries are eager to expand capacity and production, and support plans to build a second pipeline in the region…
Reuters: BP to use Azeri state tankers for Kazakh crude
Azerbaijan’s state shipping company Caspar said on Friday it will begin tanker oil shipments with BP on Saturday from a Kazakh port to Iran…
ReliefWeb: Guterres wraps up fruitful first visit to Central Asia
UNHCR chief, António Guterres, has concluded his first visit to Central Asia by agreeing to boost refugee assistance in the Kyrgyz Republic and by urging Kazakhstan to play a greater role in addressing global asylum-migration issues…
Eurasia Daily Monitor: Russia-led block emerging in OSCE
Moscow is lining up the member countries of the Collective Security Treaty Organization (CSTO) — Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan — in a Russia-led bloc within the Organization for Security and Cooperation in Europe…
News Roundup - November 16, 2007
Eurasia Daily Monitor: Kazakhstan adjusts its relations with Arab states
On November 5 Kazakh President Nursultan Nazarbayev arrived in Damascus for a three-day visit. Both Nazarbayev and his Syrian counterpart, Bashar al-Assad, seemed satisfied with the talks, which covered investments, bilateral trade, and political ties…
Financial Times: Unicredit sees Asian growth after bank deal
Unicredit, the Italian bank, plans to use its acquisition of Kazakhstan’s ATF Bank as a springboard to expand further into central Asia. The $2.1bn deal was completed on Thursday…
Forbes: Chevron’s Kazakstan Tengiz oilfield jv fine reduced to 309 mln usd
Chevron’s Tengiz oilfield joint venture in Kazakhstan has had its fine for environmental violations at the oilfield reduced to 309 mln usd on appeal, roughly half of the initial fine of 609 mln usd…
Forbes: ATF Bank ratings raised to ‘BBB+’ - Fitch
Fitch Ratings said it upgraded ATF Bank’s long-term foreign currency issuer default rating to country ceiling ‘BBB+’ from ‘BB-’ after UniCredit SpA completed its acquisition of 95.6 pct stake in the Khazakh bank…
Forbes: KazakhGold says Gold Lion to place 6 to 8 mln GDRS in co at 26.5-27 usd each
KazakhGold Group Ltd said Gold Lion Holdings Ltd plans to offer about 6 to 8 mln existing shares in the company, in the form of an aggregate of 6 to 8 mln Global Depositary Receipts (GDRs) at a price range of 26.50-27.00 usd per GDR…
PR Newswire: Kazakhstan responds to international financial instability
According to a statement, the Kazakh Government is confident that the ountry’s economy will continue to grow amid instability on global financial markets…
Canada East: European Minerals trims Q3 loss to US$1M; Kazakhstan gold production imminent
European Minerals Corp. with gold production about to start at its development in Kazakhstan, said Thursday it had a pre-tax loss of US$1 million in the third quarter, compared with a year-ago loss of $2 million…
Gazeta.KZ: “Kazakhstan - EU” conference is scheduled to be held in Brussels by the end of November
“Kazakhstan - EU: results and horizons of cooperation” conference is scheduled to be held in Brussels by November 27, as reported by the agency with reference to the “Nur Otan” People’s Democratic Party press service…
Canada News Wire: Arawak announces Q3 2007 results and operations review
Arawak has enjoyed a successful third quarter, with significant exploration success complementing strong production growth, especially in Kazakhstan…
Asia Sentinel: Rebuilding the legendary Silk Road
Led by the Asian Development Bank, a flock of agencies and countries will pour as much as US$18.7 billion into the moldering infrastructure of the Stans — the landlocked countries of Central Asia that were formerly under the yoke of the Soviet Union — building a network of roads, airports, rail lines and seaports…
Radio Free Europe / Radio Liberty: More leaked recordings target presidential party
New audio recordings have appeared on Kazakh opposition websites that purport to shed further light on top-level corruption…
