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KHUJAND, Tajikistan (TCA) — The International Finance Corporation (IFC), a member of the World Bank Group, says it is providing a $2.5 million loan in local currency to LLC MDO Arvand, one of Tajikistan's leading microfinance institutions, as part of an effort to support home ownership and drive economic growth in the Central Asian country. Continue reading
BISHKEK (TCA) — Parliament deputies and experts are dissatisfied with the results of the state mortgage program in Kyrgyzstan because it is not affordable for state employees. The monthly salary of a teacher with three years of experience is about 6,500 soms ($93), and with 30 years of experience — about 15,000 soms. With such salaries, they cannot afford a state mortgage loan, MPs said. The State Affordable Housing program started in March 2016 to improve the issuance of preferential mortgage loans to state employees. Loans are provided by banks, which are compensated for the difference between market and preferential loan rates. Since November 1, 2018, the rates on newly issued loans under the program have been reduced to 7-9% per annum. Previously, they were from 8% to 12%. The State Mortgage Company OJSC (SMC) is the program operator. According to the SMC head Baktybek Shamkeev, if a citizen wants to obtain a 1 million soms loan, the total family income should be 22-24 thousand soms (around $330) per month. If a person receives a loan of 2 million soms, the total monthly income should be 45-50 thousand soms. Most civil servants in the country do not have such an income, MPs said. Poor program implementation The State Mortgage Company is working poorly on the implementation of the Affordable Housing program because only a limited part of solvent citizens who work in the public sector have received mortgage loans, concluded the Accounting Chamber following the results of the company’s audit. The unavailability of state mortgage for the public sector was affected by the high interest rate resulting from the conclusion of agreements with partner banks with the provision of an added 5% annual rate along with a 3% rate (previously 5%) of a budget loan received from the Finance Ministry. The auditors advised to reduce the cost of state mortgage by reducing the income of the State Mortgage Company and commercial partner banks. Overpriced loans The Affordable Housing program may become unavailable, MP Marlen Mamataliev said. The State Mortgage Company has not achieved good performance due to very high down payment amount and interest rates, he explained. The SMC says that loans are issued at 9%, but in reality people get loans at 14-16%. In addition, the cost of apartments in the houses the company provides is very high, which does not comply with the principles of the Affordable Housing program. For instance, an apartment in a house built in Naryn costs $34.8 thousand. If a teacher or doctor receives it at 9%, he will have to pay 12 thousand soms per month for 15 years. After 15 years, the apartment will cost him $67 thousand. Shamkeev told MPs about the SMC plans to create its own housing stock. Replenishment of capital is planned due to the Government’s contribution, he added. According to the program, it was planned that construction companies would build housing at their own expense, and SMC would redeem. However, not all companies can afford building of...
ASHGABAT (TCA) — Apartments are now being sold in new residential houses located in the Olympic village in Turkmenistan’s capital Ashgabat, and Turkmen government officials and wealthy entrepreneurs are buying this elite residential property in an attempt to save their capitals by investing in real estate amid the ongoing depreciation of the national currency, the manat, the independent foreign-based news website Chronicles of Turkmenistan reports. Apartments cost from 780 thousand to 1.3 million manats ($223–$376 thousand using the official rate or $39–$66 thousand at the black market rate). Thirty-year mortgage loans are allocated to purchase apartments but 10% of the total amount needs to be paid straightaway. The website ATN reports that the priority is given to families with many children who share apartments with other families as well as residents who have dependent disabled relatives. Yet, according to the estimates of the news outlet, depending on the loan terms and conditions, an employee will have to make a monthly payment of about 2900 manats. With the average monthly salary of 1000-1500 manats, the majority of Turkmenistan’s population cannot afford to purchase the aforementioned accommodation. However, according to correspondents of Chronicles of Turkmenistan apartments are selling quite quickly. As of late October, 22 apartments out of 118 have been left in one of the apartment blocks. Turkmenistan’s officials and wealthy entrepreneurs are reported to be buying elite residential property not only for themselves, but for their children, grandchildren and even close family members. Moreover, many purchase the accommodation with manats, which are depreciating in their value, in an attempt to save their capitals by investing in real estate and for this reason the majority of apartments in elite houses are vacant. Apart from apartments in high-rise buildings, standard two-story cottages are sold in the suburbs. For instance, a new section of cottages located in the village of Choganly is under construction for the time being. These cottages cost much cheaper – 412 thousand manats ($118 thousand using the official rate or $20.6 thousand at the black market rate).
ASTANA (TCA) — At a joint session of Kazakhstan’s parliament on March 5, President Nursultan Nazarbayev said that "the time has come to focus on large social projects" in the country. Nazarbayev addressed the people of Kazakhstan with the "Five Social Initiatives of the President," which include the new opportunities to purchase housing for each family, reduction of the tax burden to increase the wages of low-paid workers, increase in the accessibility and quality of higher education and improvement of the living conditions of student youth, expansion of micro-crediting, and further gasification of the country, the president’s press service reported. Nazarbayev stressed that the new social initiatives are aimed at strengthening the social unity of Kazakh society and further improving the well-being of every Kazakhstani citizen. In particular, Nazarbayev suggested increasing the affordability of mortgage lending for Kazakhstan citizens by launching a program under which every working citizen could receive a mortgage loan in the national currency for purchasing housing at not more than 7 percent per annum (compared to 14-16% today) with initial payment of not more than 20 percent of the housing cost (30-50% today) and for up to 25 years (10-15 years now). To support low-paid citizens, the president suggested, starting from 1 January 2019, to reduce their tax burden 10-fold — down to 1 percent. As a result, a third of employees in Kazakhstan — or some two million people — will have their salaries raised without increasing the tax burden on the employers. Concerning gasification, Nazarbayev said that today, almost 50 percent of the country’s population has natural gas, but the central and northern regions of the country still have no access to gas. The president suggested construction of a gas pipeline along the route Karaozek (Kyzylorda province)-Zhezkazgan-Karaganda-Temirtau-Astana through borrowed funds including from international financial institutions. Nazarbayev ordered the Government and the National Bank to work out the mechanisms for implementation of his social initiatives.
BISHKEK (TCA) — According to the Ministry of Labor and Social Development of Kyrgyzstan, 360.2 thousand people from low-income families receive monthly state benefit payments, and most of those families have children (275.9 thousand). The number of applicants for state benefits grows by 2% a year. In 2018, the State will allocate 5.330 billion soms from its budget for this purpose, which is 1.8 billion soms more than in 2017. The criteria for determining the family’s poverty are being revised now. "Ownership of a car or a tractor, a land plot that generates income, as well as a livestock is now taken into account," Labor and Social Development Minister Taalaykul Isakunova said on March 2 at a Parliament’s meeting to discuss the implementation of legislation on state benefits. Meanwhile, the minister is not sure that these benefits are effective and help people get out of poverty. “No studies have been conducted on this issue. As for me, I believe this does not help," the minister said. In Kyrgyzstan, 271,000 families live below the subsistence minimum, which is 4,900 soms ($72) per person per month, MP Ruslan Kazakbaev said. According to him, 120 thousand families spend less than $1 a day. "In rural areas, one-day expenditures of one family do not reach even one dollar,” he said. The implementation of the law "On State Benefit Payments" adopted in 2017 has many shortcomings, Kazakbaev added. "About 7-8 billion soms is necessary to implement the law but there are no sources of financing," he said. "According to the International Labor Organization, about 580,000 children work in Kyrgyzstan, and 13% of children receive state benefits, while 27% do not receive this support from the state," the MP said. He stressed the importance of increasing benefits to families in real need, and families with children with disabilities. Poverty still high According to World Bank experts, poverty is decreasing in Kyrgyzstan. Nevertheless, about 1.6 million of the country’s six million population lives below the poverty line defined at 31,151 soms per capita per year. The extreme poverty is still high, 0.8% of the population. Eight out of ten people living below the poverty line live in rural areas. Households that are large with young children have a much higher probability of living below the poverty line. Agriculture and services are still the main sectors of the economy in terms of employment. A third of the population and about 36% of those among the poorest persons works in the agricultural sector. Labor incomes per capita have increased, which together with the increased remittances allowed raising welfare and reducing poverty. Yet these remittances were mostly used to increase private consumption and the construction of housing rather than investment in the economy. Significant territorial differences affected the poverty reduction, which fell significantly in Bishkek and Jalal-Abad cities due to significant economic growth and a more active trade development. According to the WB forecast, poverty reduction is expected this year. A modest increase in agricultural and construction growth forecasts and...
BISHKEK (TCA) — Special attention of government agencies, the media and general public is currently paid to the quality of construction works in Kyrgyzstan. The reason was the recent collapse of a building under construction in the southeast of Bishkek. The Avangard Style construction company, a leader of the country's construction market with a 19-year history, is constructing that high-rise building. A 740 square meters extension facility under construction (where a sports complex should be) attached to the main building collapsed because of violation of construction rules and the lack of state architectural and construction supervision. As a result, 11 construction workers suffered. Construction works were suspended until the end of the clarification of the cause of the collapse, the State Inspectorate for Environmental and Technical Security said. The Inspectorate did not give its permission to continue construction of the building. After the investigation, the facility will be demolished. The Avangard Style company will pay an administrative fine for non-compliance with the technology for construction and installation works. According to official data, Temirlanbek Sultanov is the head and founder of Avangard Style. The company belonged to the current presidential adviser Kalykbek Sultanov until 2011, when he was appointed Minister of Transport and Communications of Kyrgyzstan. Under Kyrgyzstan’s law, officials are not allowed to be engaged in commercial activities, but civil servants who own businesses come out of the situation by re-registering their companies to trusted persons or close relatives. It was not the only case of collapse at facilities under construction. Last May, as a result of a strong wind, part of the wall of a building under construction collapsed into a yard of the neighboring residential multi-storey building in downtown Bishkek. Fortunately, there were no casualties. Prosecutor General's Office conclusion According to the Prosecutor General's Office, officials of the State Inspectorate for Environmental and Technical Safety did not conduct mandatory construction supervision over the construction of the 14-storey multi-apartment house at the intersection of Tokombayev and Sukhbaatar streets (Southern Highway) in Bishkek, constructed by Avangard Style LLC. After the incident, the officials of the State Technical Inspectorate, in order to conceal their illegal actions, entered into collusion with the construction company’s employees and compiled and registered forged acts on allegedly completed works from May to August 2017, the Prosecutor General's Office said. The permission to carry out construction works expired on July 28, 2017 and was not extended in accordance with the established procedure. The Prosecutor General's Office has initiated a criminal case for abuse of office and forgery. Triple control Construction companies should be responsible for the safety of residential buildings which they sell to citizens. According to the legislation, buildings under construction are subject to triple control. Project authors should carry out their own supervision, developers or customers - technical control, and the State Inspectorate for Environmental and Technical Safety - architectural and construction supervision. Developers should monitor the input control of all building materials and equipment used. Construction companies should ensure control over all technological operations...
