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EBRD Supports Capital Markets in Kazakhstan

The European Bank for Reconstruction and Development (EBRD) on December 6th said it is further developing the financial markets in Kazakhstan by introducing a new local currency interest rate swap derivative - an Overnight Indexed Swap (OIS) - in which the overnight rate is exchanged for a fixed interest rate. An inaugural one-year OIS transaction, based on the Tenge Overnight Index Average (TONIA), was closed with one of the country’s largest lenders, Bank CenterCredit (BCC). The OIS market will allow banks and investors to better manage their interest rate risk, thus making the financial system more stable and financial markets in Kazakhstan more attractive. “The EBRD and Kazakhstan are making significant progress in the development of financial markets. This transaction reconfirms the role of TONIA as the interest rate benchmark in the country, stimulates local currency lending, and encourages more TONIA-linked swaps,” the EBRD’s Treasurer, Axel van Nederveen said. The EBRD believes the new derivative instrument fills an important gap in capital markets and is keen to participate in the development of this, not only as part of its commitment to local currency financial markets, but also as an active participant.

Turkmenistan-Iraq Natural Gas Deal: A Complex Balancing Act

The recent natural gas deal between Turkmenistan and Iraq has sparked both excitement and concern in the energy world. On November 8, representatives from the State Concern Türkmengaz met with a delegation from Iraq, led by the Minister of Electricity Ziad Ali Fadel, to discuss the export of natural gas from Turkmenistan to Iraq. As with any major energy agreement, this deal carries significant implications for both countries and the region as a whole. This opinion piece explores the positive aspects, potential challenges, and wider implications of the Turkmenistan-Iraq natural gas deal. The Turkmenistan-Iraq natural gas deal presents several positive aspects for both countries. Economically, the agreement opens up new opportunities for trade and investment, providing a boost to the economies of both nations. Additionally, it strengthens diplomatic relations between Turkmenistan and Iraq, fostering closer ties and collaboration in other areas. Moreover, the deal has the potential to enhance energy security in Iraq, diversifying its energy sources and reducing dependence on a single supplier. For Turkmenistan, this agreement represents an opportunity to tap into new markets and expand its natural gas exports. While the deal offers numerous benefits, it also comes with potential challenges and drawbacks. From Iraq's perspective, one concern is the possibility that it becomes overly dependent on Turkmenistan for its energy needs. This could create vulnerabilities and limit Iraq's flexibility in the energy market. Disputes over pricing and payment terms may also arise as aligning the expectations of both parties can be a complex process. Additionally, the agreement may face infrastructure and logistical challenges, such as ensuring efficient transportation and distribution of the natural gas. The influence of regional politics on the deal is another factor to consider, as geopolitical dynamics may impact its implementation. The Turkmenistan-Iraq natural gas agreement has the potential to significantly impact the regional energy market. It may alter the dynamics of gas supply and demand in the region, affecting other players and stakeholders. The agreement could prompt neighboring countries to evaluate their own energy strategies and explore new partnerships. Additionally, the deal could contribute to greater energy cooperation and integration in the region, paving the way for future collaborations and joint projects. As we consider the implications of this gas deal, it is crucial to examine its environmental impact and public opinion. The environmental consequences of increased natural gas extraction and consumption should be carefully assessed to ensure sustainable practices. Additionally, public opinion in both countries will play a significant role in shaping the perceptions and outcomes of the deal. Public engagement and transparency are vital to ensure that the interests and concerns of the citizens are taken into account. The Turkmenistan-Iraq natural gas deal represents a complex balancing act. It ultimately offers economic benefits, strengthens diplomatic relations, and enhances energy security while also raising concerns about energy dependency, pricing disputes, and logistical hurdles. The agreement will have implications for the regional energy market, influencing the strategies of neighboring countries and reshaping energy dynamics. As the process unfolds, it is crucial to...

Turkmen-U.S. Business Forum Held in Ashgabat

On December 5th, the tenth Turkmen-American business forum was held in Ashgabat, which was attended by the heads and representatives of relevant government and business structures of Turkmenistan and the United States, Turkmenistan’s Government website stated. According to the post, the forum demonstrated the focus of Turkmenistan and the United States on the further progressive development of mutually beneficial cooperation which meets common interests, the Turkmen Foreign Ministry said. The US delegation, headed by Executive Director of the Turkmenistan-US Business Council, Eric Stewart, included executives and representatives of well-known companies, including Case New Holland Industrial, Climate Compass LLC, Honeywell, John Deere, Palo Alto Networks, Visa, and Westport Trading Europe Ltd. The participants noted that the foreign policy course implemented by Turkmenistan under the leadership of President Serdar Berdimuhamedov, based on the principles of positive neutrality, increases the attractiveness of the Turkmen market for foreign investors. The priority areas of the Turkmen-US partnership include the energy sector, transport and communications, the agro-industrial sector, high technology, and the investment sector. At the same time, approaches to realizing the potential of trade and economic partnership were reviewed and identified, and plans for joint work in key areas were outlined. Special emphasis was placed on intensifying business ties. One of the results of the forum was the signing of a Memorandum of Understanding between Case New Holland Industrial and Turkmen entrepreneurs.

Kyrgyzstan’s Economy Grew Strongly in 2022 and So Far in 2023, Says IMF

Kyrgyzstan’s Economy Grew Strongly in 2022 and So Far in 2023, Says IMF The economy of Kyrgyzstan performed strongly in 2022, expanding at 6.3% despite the headwinds from the difficult regional environment. Tax revenue improved sharply, and public debt declined to 49% of GDP. Headline inflation fell from 14.7% in December 2022 to 9.2% in October 2023, Nikoloz Gigineishvili, head of an International Monetary Fund (IMF) mission that held consultations with the Kyrgyz Republic during November in Bishkek said in a statement on December 4th. The current account deficit widened significantly to 43.6% of GDP in 2022 as non-oil imports increased by 26% of GDP and gold exports were suspended, while re-exports to Russia were not captured in official statistics, the statement said. Growth is expected to remain at around 4% in the medium term, and inflation to decline to mid-single digits. However, further escalation of the war in Ukraine and secondary sanctions which could further weaken the Russian economy and result in the return to Kyrgyzstan of migrant workers could reduce trade and growth, the IMF statement concludes.

Window to Europe for Uzbekistan to Remain Open Until December 2027

The European Union has decided to extend the validity of the General System of Preferences Plus (GSP+) for beneficiary countries, including Uzbekistan, for the next four years until December 31st 2027. This decision gives serious impetus to the development of Uzbekistan's private sector, providing easier access to the European market, stimulating closer cooperation between European and Uzbek companies, and leading to significant savings at borders. As a result of the measures taken to strengthen trade relations with the EU and expand the global geography of Uzbekistan's exports by the end of 2022, 628 enterprises (an increase of 116 on the corresponding period in 2021) were exporting local products to European markets in the amount of U$647-million. This is more than double the $292-million figure recorded in 2020. In particular, within the framework of the GSP+ textile industry products worth $177.4-million were exported to the EU markets (an increase of 126.4% compared to 2021), agriculture and food industry products totaled $19.7-million (a 103% increase), the electrical industry recorded $9-million (a 117% increase), whilst the chemical industry totaled $138.3-million (a 4.7-times expansion). In 2022, thanks to GSP+, Uzbek exporters saved $30.65-million in duties, thus signaling a major contribution by the EU to the development of the private sector in Uzbekistan. Over the period from 2019 to 2022, EU investment in the private sector in Uzbekistan has grown more than tenfold.

Turkmenistan Preparing for Accession to Global Methane Pledge Program

The upcoming Climate Change Conference to be held in Dubai became the main topic of a recent cabinet meeting held by President Serdar Berdimuhamedov. At the meeting, Foreign Minister Rashid Meredov reported on preparations for participation in the 28th Conference of the Parties to the UN Framework Convention on Climate Change (COP-28) to be held from November 30th to December 12th. Turkmenistan's accession to the Global Methane Pledge (GMP) program will be announced at the meeting as one of the main steps in countering climate change. At the meeting, Meredov proposed that Turkmenistan “continue cooperation with international organizations and partner countries in the framework of joint projects and programs aimed at fulfilling GMP conditions at a national level.” In other words, in order to meet GMP quotas, Turkmenistan is counting on the support of and joint projects with international organizations and partner countries. Advisor to the President on Oil and Gas Issues, Ashyrguly Begliyev reported on the work of the Natural Gas Research Institute of the State Concern, Turkmengaz and the Institute Nebitgazylmytaslama of the State Concern, Turkmenneft. Their work is related to the fulfillment of the conditions of the GMP. Begliyev also spoke about taking “concrete steps to reduce methane emissions into the atmosphere, including through the use of modern technologies in the fields of energy, industry and transport.” Precisely what actions will be taken remain unclear, however. Deputy Prime Minister Batyr Amanov, who oversees the oil and gas industry, also reported on cooperation with German partners to increase the volume of hydrocarbon production. In particular, the importance of modernizing gas compressor stations subordinated to Turkmengaz was emphasized.