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DUSHANBE (TCA) — Foreign diplomats have called on Tajikistan’s authorities to allow open access to the Internet across the Central Asian country, RFE/RL’s Tajik Service reported.
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DUSHANBE (TCA) — On May 3, journalists and media experts from Tajikistan, Uzbekistan, Kyrgyzstan, Kazakhstan, Russia and Afghanistan gathered to celebrate World Press Freedom Day in Dushanbe at the international conference Promoting Mass Media to the Sustainable Development of Peace and Democracy.
ALMATY, Kazakhstan (TCA) — In Kazakhstan, known for its unhealthy banking sector, taking out a loan involves a whole array of hidden costs, which causes outrage of citizens that borrow from the banks. We are republishing the following article on the issue, written by Almaz Kumenov, originally published by Eurasianet:
For a short while, the courts in Kazakhstan were siding with borrowers drowning under specious banking charges. Now, the authorities have had a change of heart.
Assel Isaliyeva, a 35-year-old anesthesiologist at an Almaty hospital, is anxious about what this means for her.
In 2014, she borrowed 700,000 tenge (about $4,600 at the time) from Forte Bank to refinance an earlier, more expensive loan, from Kaspi Bank. The original loan had been to pay for career-boosting training. The cash injection was supposed to be a leg-up, but it just about buried her.
As Isaliyeva and countless others have learned, banks in Kazakhstan lard their loan agreements with all manner of additional service charges. By the fall of last year, she had paid around 240,000 tenge ($900 at the updated, post-devaluation exchange rate) in loan-management fees alone.
“I am outraged. The banks were legally earning 20 percent [in interest] from [me] every year. And that was not enough for them. I had to go without a lot just so I could repay this loan,” Isaliyeva told Eurasianet.
Debt-ridden bank customers and their advocates are indignant about the levies they view as barely legal.
“Banks have dreamt up these charges just to make more money. Maintaining a loan account is not a banking operation. Banks are not entitled to receive payment for this,” said Rimma Sayfutdinova, a lawyer at a group called Karaganda Region Civil Council, which has represented bank customers in court.
Taking out a loan involves a whole array of hidden costs. Lenders charged customers for just accepting and processing loan applications. Another fee was assessed when the loan was actually paid out. And then borrowers had to pay for their liabilities to be administered, hence the loan-management fees.
“It is as if I had gone to the store, and in addition to paying for the shopping, I also had to pay the cashier for totaling up what I owed and handing me the things that I paid for,” Isaliyeva said.
Interest rates on loans and mortgages are crippling enough as it is – anywhere from 20 percent to 30 percent. But research published by the National Bank in February shows that once fees are factored in, banks in Kazakhstan have been offering long-term loans with a real annual interest rate of 56 percent.
Borrowers got some reprieve, however, when the banking regulator in July 2016 adopted a resolution clarifying what fees could be incorporated within the effective interest rate. The loan-management fee was not among the permitted charges.
This was the spark for a spate of lawsuits against banks as borrowers demanded repayment of fees. And to the plaintiffs’ delight, the courts ruled in their favor.
A tsunami of banking-related cases ensued. A cottage industry of law firms specialized in pursuing bank claims suddenly appeared.
The banks, meanwhile, have insisted that they are acting fully within the law. Halyk Bank, Kazakhstan’s largest lender, responded to complaints by pointing out that borrowers had willingly signed credit agreements detailing all the commissions.
But the head of the National Bank’s consumer-rights protection division, Alexander Terentiyev, told Eurasianet that the lenders had previously been warned that they were overstepping the mark.
“In 2012, we sent a letter to banks about the illegality of charging fees for managing a loan account,” he said.
Independent analysts argue that this kind of industry-wide exploitation is a leading reason for the chronically unhealthy state of the nation’s banking industry. The ratio of non-performing loans to total loans in Kazakhstan was 8.6 percent in March, according to official figures. The real number may be even higher.
“The lending market is not developing the banking sector. On the contrary, they are aggravating its condition by accumulating bad debts,” Peter Svoik, an economist known for his critical views of the state’s economic policies, told Eurasianet.
The government has poured billions of dollars into the banking system over the years in a Sisyphean effort to fix things. Only small amounts of money were returned.
Some top officials take the view that the banks are not wholly at fault though.
Supreme Court justice Akyltai Kasimov said in an interview in December that of all the “civil cases considered by the Supreme Court, 42 percent stem from disputes between citizens and banks.” And this state of affairs is not beneficial for the economy, he complained.
With this in mind, lawmakers have rallied to the side of the banks.
In January, the law was changed to ban the extra fees. But the amendments had a little-reported sting in the tail. Since the ban was only just coming into force, all retroactive claims effectively became null and void.
As if to confirm that, Sayfutdinova, the lawyer, told Eurasianet that since February the courts have been rejecting plaintiff petitions on the grounds that they did in fact willingly sign contracts and did agree to pay fees.
Now, even the borrowers who got the refunds in time are worried.
“Just imagine. Under these new circumstances, the bank could sue me, and I will have to pay back the fees,” Isaliyeva said.
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TASHKENT (TCA) — President of Uzbekistan Shavkat Mirziyoyev held a government meeting on May 2 to discuss deep processing of raw materials and expanding the production of export-oriented goods, the president’s press service reported.
In recent years, special attention has been paid to the industrial sector, and high-tech factories, technology parks, manufacturing enterprises have been commissioned in the country. In 2018, the growth of value added in the production of manufactured goods exceeded 10 percent for the first time.
However, much remains to be done in industrial diversification. For example, 69 percent of industrial production is related to raw materials or primary processing.
Non-ferrous metals, energy resources and fresh fruits constitute 52 percent of the total exports, which testifies to the fact that crude production still prevails over finished goods in the economy.
The meeting discussed issues concerning the growth in the number of enterprises creating high added value and exporting ready-made products, and the efficient use of existing potential and raw materials.
The President pointed to the lack of production of goods similar to those imported, the low level of processing crudes. In particular, only 25 percent of the mined copper is processed, 80 percent of zinc, 99 percent of molybdenum, 88 percent of silk, and 60 percent of raw leather are exported in unprocessed form.
The Ministry of Economy and Industry, the Ministry of Agriculture, and the State Committee of Geology were tasked at the meeting to draw up a list of goods industrial production of which will be established in 2019-2021 based on the existing raw material base and structure of imports.
The President urged to work out additional projects for the production of consumer goods in small industrial zones.
An important factor in the development of industries is government support. In accordance with the President’s decree on measures for the further development of industrial cooperation and the expansion of marketable goods’ production, signed on May 1, a mechanism is being introduced to support domestic industrial producers through government procurement.
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BEIJING (TCA) — Human Rights Watch (HRW) says that the Chinese authorities are using a “mass surveillance” app to profile, investigate, and detain Muslims in the northwestern Chinese region of Xinjiang, RFE/RL reported.
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NUR-SULTAN (TCA) — A court in Kazakhstan’s capital, Nur-Sultan, has begun to issue jail sentences against detained participants in a May Day protest against the country’s longtime leader, Nursultan Nazarbayev, and his family, RFE/RL’s Kazakh Service reported.
