• KGS/USD = 0.01118 0%
  • KZT/USD = 0.00222 0%
  • TJS/USD = 0.09131 0%
  • UZS/USD = 0.00008 0%
  • KGS/USD = 0.01118 0%
  • KZT/USD = 0.00222 0%
  • TJS/USD = 0.09131 0%
  • UZS/USD = 0.00008 0%

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Kyrgyz Re-Exporters of Chinese Cars Will Soon Pay Higher Duties

The Russian authorities have introduced additional customs duties for cars imported from Eurasian Economic Union (EAEU) countries, according to the Ministry of Economy and Commerce of Kyrgyzstan. The ministry says that the Russian government amended the rules of collection, calculation, payment and recovery of the utilization fee for wheeled vehicles and trailers. From April 1st 2024, all citizens importing cars into Russia which were previously customs cleared in the EAEU countries will have to pay an additional utilization fee. This fee is charged for the ecological recycling of the vehicle at the end of its service life. "This approach will avoid situations where citizens and companies importing cars cleared in the EAEU countries receive unjustified advantages compared to car owners doing so in Russia and paying the taxes and fees established by law in full," reads a statement on a Russian government website. The EAEU includes five countries: Russia, Kyrgyzstan, Kazakhstan, Armenia and Belarus. The EAEU guarantees a single customs zone spanning the entire territory of these countries, meaning that import and customs clearance for a car in one of the EAEU countries means one can subsequently operate and sell it in any other EAEU country. Until now, Kyrgyz re-exporters of cars - mainly from China - have been successfully exploiting this loophole, as there is no utilization fee to pay when a car is cleared in Kyrgyzstan. As a result, cars imported from China and other countries cleared customs in Bishkek and were then freely shipped to automobile markets in major Russian cities. These cars imported to Russia from Kyrgyzstan are obviously cheaper than cars imported from other countries, including those imported directly by the manufacturer. The leader among countries importing new cars to Russia in 2023 was China, while Kyrgyzstan ranked second, despite the fact the Kyrgyz Republic does not have its own car manufacturing factories. According to Russian customs data, 13,600 cars were imported from Kyrgyzstan to Russia in December of 2023 alone. In total, Kyrgyzstan exported more than 70,000 cars to Russia last year. The so-called recycling fee was introduced by Russia in 2012, when the country joined the WTO. In August 2023, in order to protect Russian car manufacturers, the utilization fee in Russia was increased roughly nine-fold, forcing buyers to search for cheaper duty-free cars such as those imported via Kyrgyzstan.

Exclusive: Breaking Down Kazakhstan’s $21.6 Billion Claims Against International Oil Consortiums

The total amount of claims brought against the consortiums, North Caspian Operating Company (NCOC) and Karachaganak Petroleum Operating (KPO) is the largest in the history of Kazakhstan. In March 2023, PSA LLP, the authorized state institution overseeing these projects, brought forward claims in international arbitration in relation to Kashagan and Karachaganak for $13.5 billion and $3.0 billion, respectively. In addition, the Atyrau Region environmental regulator filed a claim for $5.1 billion against the NCOC consortium for storing too much sulfur on site, discharging wastewater without treatment, etc. The claims of PSA LLP cover the period 2010-19 and relate to the oil consortiums’ costs for carrying out large projects, as well as tenders and insufficient work completed. The shareholders of NCOC, which is developing the offshore Kashagan Field, include: KMG Kashagan (16.877% stake), Shell Kazakhstan Development (16.807%), Total EP Kazakhstan (16.807%), Agip Caspian Sea (16.807%), ExxonMobil Kazakhstan (16.807%), CNPC Kazakhstan (8.333%) and INPEX North Caspian Sea (7.563%). Their total investments over the period have not been disclosed, but, according to various estimates, exceed $60 billion – meaning the state is currently calling into question about 23% of all costs. The KPO consortium is Shell (29.25%), Eni (29.25%), Chevron (18.0%), Russia’s Lukoil (13.5%) and Kazakhstan’s state-owned KazMunayGas (10.0%). Investments in this oil and gas condensate field are estimated at $27 billion, hence the filed claim is significantly smaller both in absolute terms and as a percentage of costs, standing at about 11%. A production sharing agreement was signed in 1997 for Karachaganak and in 1998 for Kashagan, with the contracts to be in effect for 40 years. In 2022, the sole participant in PSA LLP became Samruk-Kazyna Trust Corporate Fund, part of the state holding National Welfare Fund Samruk-Kazyna, while Kazakhstan’s Ministry of Energy is currently entrusted to run PSA LLP. Say two, but mean three? NCOC and KPO dominate the industry through control of three fields. Tengiz, Kashagan and Karachaganak are the largest oil and gas fields in Kazakhstan. The country’s oil and gas condensate production in 2023 amounted to 89.9 million tons (about 1.8 million barrels per day), with the share of the “three whales” – as these projects are called – accounting for 67% of oil production: Tengiz with 28.9 million tons, down 1% versus the 2022 level; Kashagan with 18.8 million tons, a 48% increase; Karachaganak with 12.1 million tons, up 7% year-on-year. The stabilization contract for Tengiz was one of the first signed at the dawn of Kazakhstan’s independence in 1993, also for a term of 40 years, meaning it should be the first to expire in 2033. The shareholders of the Tengizchevroil JV are Chevron (50%), ExxonMobil (25%), KazMunayGas (20%) and Lukoil (5%). After completion of its FGP (Future Growth Project), Tengiz should produce about 900,000 barrels per day, a significant figure even by world standards. It is surprising that Kazakhstan has not yet raised or voiced any claims against TCO, even though the FGP budget has swelled from an initial $12 billion to $25 billion...

Peace Following Kyrgyz-Tajik Clashes Allows Hydro Engineers to Visit Tajikistan

For the first time since the start of armed clashes on the Kyrgyz-Tajik border, business cooperation between the two countries has begun to return. Kyrgyz Energy Minister Taalaibek Ibrayev and his delegation recently visited a pair of Tajikistan's energy facilities, the Rogun and Nurek hydroelectric power plants (HPP), according to the press service of the Kyrgyz Ministry of Energy. Tajikistan's Deputy Minister for Energy Halmukhamadzoda Sobron showed Kyrgyz colleagues how the Rogun HPP is being built, as well as some special underground facilities and tunnels under the plant. Sobron described problems faced by Tajik hydro construction workers when using construction equipment at the site, and detailed the integrated stage-by-stage approach to building the main structures of the hydropower plant. "More than 15,000 hydro construction workers are involved in the construction of the Rogun HPP, more than 300,000 machines and equipment are operated, and skillful planning allows dozens of contracting companies to work simultaneously," Tajik power engineers emphasized. The Kyrgyz side noted that the exchange of experience in the construction of such grandiose facilities will be useful in the construction of Kambar-Ata HPP-1 in Kyrgyzstan. During the three-day visit, Kyrgyz power engineers also visited plants responsible for the production of hydromechanical equipment and for  the production of electrical equipment. During the meetings it was emphasized that after the border issue is resolved, the sides are ready to cooperate with each other again on all issues. Kyrgyzstan and Tajikistan are usually connected by high-voltage power lines, which play an important role in the regular supply of electricity to local residents living in the border areas. However, these lines are now out of operation. The problem with the border between the two countries arose after the collapse of the USSR. Essentially both parties claimed land that's rich in water resources, as the issue of agricultural irrigation is very relevant in the arid region. More than 30 years have passed since then, and the parties still cannot agree on the disputed territories. Because of this, conflicts periodically arise between citizens of border villages -- as well as residents of enclaves and border guards of Kyrgyzstan and Tajikistan -- including with the use of heavy weaponry. The last such conflict took place in the Batken region of Kyrgyzstan and Sughd region of Tajikistan in September 2022 -- at which time there were hundreds of deaths on both sides and civilian infrastructure was destroyed. Since May 2021, transportation by land or air between the countries remains closed. Trade and all business contacts have been suspended. To date, the two countries have agreed to demarcate about 90% of the disputed territories. Rogun HPP is a hydroelectric power plant under construction on the Vakhsh River. It is the largest HPP in Central Asia. Construction of Rogun HPP began in the 1970s, but in the 1990s work was stopped due to the collapse of the Soviet Union and the outbreak of civil war in Tajikistan. Construction resumed only in 2010 with the support of the World Bank. The first...

The Cost of Bread and Flour in Turkmenistan is Steeply Rising

According to local media, bread and flour are becoming much more expensive in Turkmenistan’s state stores. The price of a kilogram of flour is being quoted at 3.5 manat ($1 at the state rate or $0.18 at the black market rate), instead of the one manat ($0.30 at the state rate or $0.05 at the black market rate) previously. Similarly, the cost of a loaf of bread has increased to 2.5 manats ($0.72 or $0.13) from one manat ($0.3 or $0.05). The food ration limit has stayed the same despite the price increases: one person can still only purchase three loaves of bread and five kilograms of flour. In Turkmenistan, state and private stores have entirely different prices. Private stores offer everything, but many families often cannot afford the goods. Although the prices in state stores are significantly lower, scarcity is a common issue, and there's a rationing quota that caps the quantity of goods sold to each individual. Additionally, lines frequently form in state stores because of the influx of customers looking to purchase bread at reduced prices. This occasionally leads to sad consequences; according to Turkmenistan’s domestic mass media, a woman was killed in a fight in the Tashkhovuz region last summer while purchasing subsidized flour. People in Turkmenistan prefer to purchase flour imported from Kazakhstan over local flour found in state stores, in part due to the country's growing demand for flour and bakery products, according to a report by Tukrman News. For instance, people in the Maryam region claim that Kazakh flour costs just slightly more and is of higher quality. A 50-kilogram bag of local flour costs at least 180 manat ($51.50), while the price of Kazakh flour is 200 manat ($60.10). However, according to some shoppers, Turkmen flour smells bad and looks gray in color. It is not available in infinite quantities: there is still a five-kilogram per person ration quota in place. According to people cited by Turkmen news, in addition to the price of bread and flour, prices for fertilizers, irrigation water and leases for the use of state equipment have increased several times. Unfortunately, farmers who rent land from the government aren't receiving any additional income from the increase in retail purchase prices.

Central Asians Continue Working in South Korea Despite Legal Issues

The authorities in the Republic of Korea have offered an option to citizens of Uzbekistan who are in the country illegally to return home without facing legal repercussions. To do this, they must voluntarily leave South Korea by February 29th to avoid being subject to deportation rules and be able to return legally in the future. According to the Agency for External Labor Migration of Uzbekistan, illegal migrants can apply for voluntary departure with the immigration service of Korea up until three working days before the expected date of departure. Applicants need to present their passport and an airline ticket. The service will then issue the migrant an identity card, with which Uzbekistani nationals will be able to return to their home country without hindrance. South Korea is one of the most popular destinations for Uzbeks, both for work and studies, with Uzbeks occupy fifth place by size of foreign diaspora in the country and numbering more than 69,000. Among them are a large number who are in Korea illegally; according to this indicator, Uzbekistan ranks third. The most popular scheme involves obtaining a D-4 visa, which is granted to foreign citizens who study the Korean language. Having received this and reached the Korean peninsula, citizens of Uzbekistan then start working and stay in the country illegally. In recent years, the Government of Uzbekistan has established regulations for legal and safe labor migration to South Korea, and at the start of 2024, the republic announced its intention to attract 100,000 Uzbeks to work in the country. Workers are required in sectors such as manufacturing, agriculture, services, and construction. To enter the South Korean workforce legally, Uzbeks need to pass language qualification exams and interviews. Labor migration to South Korea is also well established in neighboring Kyrgyzstan. Over the past 16 years, 5,000 Kyrgyz have been employed. Citizens of Kyrgyzstan can work there under a contract for four years and nine months, and receive more $2,000 per month. This year, Korea has allocated a quota for labor migrants in the amount of 3,300 people - an increase of 18% on 2023. By contrast, the issue of labor migration to South Korea from Kazakhstan is still at the negotiation stage. If the parties reach an agreement, Kazakhs will be able to work in Korea for three years - provided they successfully pass the language and professional tests. However, the lack of an agreement does not stop those who wish to earn money in Korea: according to the immigration service of Korea, since the beginning of 2023 about 7,000 Kazakh citizens have been staying in the country without labor visas. The number of companies interested in hiring illegal migrants in South Korea is constantly expanding for one simple reason: it's profitable. Migrants are not protected in any way in case of labor disputes, and they earn much lower wages than legal workers. Accordingly, the number of migrants who die working in dangerous industries is also increasing. From 2019 to 2022 alone, 61 Kazakh...

Kyrgyzstan’s Kumtor Begins Underground Gold Mining

The Cabinet of Ministers of Kyrgyzstan has said that underground gold mining at Kumtor can provide hundreds of millions of additional dollars to the country's budget. The deputy head of the Kyrgyz Government, Adylbek Kasymaliev, presided over a ceremony marking the beginning of work at the mine. The Kumtor deposit is one of the ten largest gold deposits in the world. The mine is located in the Issyk-Kol region in the permafrost zone at an altitude of 4,000 meters above sea level. Revenues from Kumtor account for roughly one-third of the state budget in Kyrgyzstan, with the mine producing about 17 tons of gold per year. "The feasibility study of the underground gold mining project developed by specialists speaks about its economic efficiency. According to preliminary data, with the help of an underground mining method, it will be possible to get 115 tons of gold. Taking into account the precious metal mined at the [site] by the open-pit method, this is a big step forward," said Almazbek Baryktabasov, President of the Kumtor Gold Company. Mining underground will help the company reach gold of a higher-grade ore, he said, and as a result, the company will be able to increase its tax payments. Until its nationalization in 2021, the Kumtor mine was owned by Canadian company, Centerra Gold. Earlier, the Canadian owners tried to extract gold through shafts. However, gold prices did not render this profitable, as the shaft method is much more expensive than the open-pit mining. Over the past ten years, however, the price of an ounce of gold has risen by more than $700 and is currently trading at just over $2,000. Before Kumtor was expropriated, Centerra Gold spent approximately  $180 million dollars on research related to underground mining. Today, the authorities have allocated an additional mining site next to the one where gold ore is already being extracted. According to some reports, the new site contains a denser concentration of the precious metal per unit of ore. Currently, at Kumtor's open-pit mine, it takes one ton of processed ore and more than 40 tons of extracted waste rock to produce 5-7 grams of gold. Underground mining could double that yield. Furthermore, underground mining is not as environmentally damaging as open-pit mining. For example, one of Kumtor's main environmental concerns is the destruction of glaciers which literally hang over the edge of the open pit.

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