On August 30, Prime Minister Putin announced that Russia, which already has a 30% import duty on new cars and trucks, would raise its import tariffs on automobiles over the next few years. Import duties on cars were raised last year to protect Russia’s domestic auto industry, which faced competition from foreign cars. In addition to financial support for the auto industry, the Russian government also instituted a program this year similar to the U.S. cash for clunkers program.  The Russian version provided vouchers worth 50,000 rubles ($1,620) towards a new Russian-built automobile (either foreign or domestic-owned) to people who turned in a car more than 10 years old.  The government allocated 10,000 billion rubles ($324 million) to the program in March and added an additional 10 billion rubles in June.

So far, Russian automaker Avtovaz has benefited the most from the program, as up to 70% of all cars sold under the program have been Avtovaz-made Ladas. This weekend, Putin himself inaugurated a new motorway by in the Far East by taking a 2,000 km road trip in a sporty yellow Lada.

(more…)

auto · Putin · Russia · trade

www.neonomad.kz

The countries of the “Centro Asian Ring” — the geopolitical space including the Middle East, Afghanistan, Pakistan and Central Asia — are working to increase the reliability of their national power systems. Kazakhstan is developing electricity for export and other countries plan to benefit transits made by Kazakhstan’s network, which provides business development.

Kazakhstan, Uzbekistan and Tajikistan may resume parallel operation of its unified energy system. At this point, the “Centro Asian Ring” operates with a restriction in relation to the Tajik power system. According to head of KEGOK (Kazakhstan Electricity Grid Operating Company) Almasadam Satkaliev, the decision to adopt a united energy system will be finally adopted in September this year in Bishkek at a meeting of all participating countries.

(more…)

energy · Kazakhstan

astana10.com

Astana is bidding for the EXPO 2017, an international exposition and fair governed by the Bureau International des Expositions. This decision came after successful participation at EXPO 2008 in Spain, in which Kazakhstan took third place among 104 countries.The main competitors are cities such as Edmonton, Liege, and Lille.

The topic that was chosen to an EXPO 2017 was development of the future of energy and new types of energy – a topical problem in the world and especially in Kazakhstan. The EXPO’s mission to raise awareness on energy efficiency and develop renewable energy will help promote Kazakhstan’s role in global energy security and perhaps stimulate its own carbon-reduction strategy. Today, Kazakhstan’s population of 15 million, spread over the vast land, requires the expansion of a decentralized energy system in order to support small and medium-sized enterprises, industries and value chains. Kazakhstan is rich in both fossil fuels and renewable energy sources, such as hydro, wind, solar, biomass, and geothermal energy. Yet renewable resources currently account for only about 1% of the nation’s energy balance, and have considerable scope for further development.

(more…)

Investment · Kazakhstan

Silk Road Intelligencer reports that KazMunaiGas has signed off a deal to increase its stake in the operating company for the offshore Kashagan oilfield. KazMunaiGas will also invest $8 billion in Kashagan by 2014, but there will be further delays to the second phase of the project, according to the source. Visor Capital estimates that the consortium, comprised of Shell, Eni, Total, ExxonMobil, ConocoPhillips and Inpex, will invest a total of $47.5 billion.

The Kashagan production schedule will start in 2012-2013 at 300,000 bpd, ramping up to 1 million bpd in the second phase, which is delayed until 2018-2019. In the project’s third phase, production will be 1.5 million bpd.

With the increase of production at Kashagan alongside continued production from Tengiz,  Karachaganak, and other large oilfields the Kazakhstani oil and gas industry is expected to enter its “Golden Age.”

(more…)

foreign investment · Kazakhstan · oil & gas

Kazakhstan’s robust mining industry has weathered the global economic storm and should see strong growth within the next few years. Rising commodity prices helped pull the country out of recession in 2009 and rallying copper prices were particularly influential in this achievement, as Kazakhstan is currently the world’s 10th largest producer of copper. Gold naturally continues to attract investors on the back of positive developments regarding exploration and drilling.

Development of the metals and mining sector is one of the top-priorities for the economy. President Nazarbayev noted mining and metallurgical as one of the major conditions of forced diversification of the country’s economy in a recent message to the nation. Mining and metallurgy makes up 9.5% of the GDP, with exports of $8.5 billion last year that represented nearly one-fifth of total export volume.

Under the State Program, the Eurasian Development Bank and Kazakh company Syrymbet signed an agreement on a tin production project. According to the signed documents the bank is to give the company a $48.7 million loan for up to 10 years to finance extract and enrichment of ore to the production of metallic tin. The complex will use the ore from Syrymbet, the only tin mine in Kazakhstan and the largest in Central Asia. The equipment will be acquired in Russia, Kazakhstan and foreign countries. According to the EBRD, the realization of the projects will create about 3,500 thousand jobs in Kazakhstan and Russia in the near future.

(more…)

Kazakhstan · Mining & Metallurgy

The number of internet users in Kazakhstan increased by 66% over the past three years. According to experts, the growth of the internet audience will continue and increase not less than 10% every year.

There is a growing interest to Kazakhstan’s content due to increasing number of Kazakhstani sites, including online stores, news sites, social media as KazTube.kz, Yvision.kz, Kiwi.kz and others. Social media (blogs, forums, microblogging, etc) has long captured the minds of ordinary internet users in Kazakhstan. Now businesses are paying more attention and are actively using social media to build and manage public opinion, attract new consumers, and enhance brand awareness. However, Kazakhstani social media is still catching up to its international counterparts.

Microblogging is not widespread in the corporate sector in Kazakhstan, but large companies Tuborg, Beeline, Samsung Kazakhstan, Technodom, Sulpak and others already harnessing the potential of Twitter. KCell and KazMunayGas are Facebook users. Moreover, many managers and even top managers use their personal accounts in social networks to promote their companies by updating their statuses, adding news reports, photos and videos of presentations. Companies are starting to use the potential of social media to conduct marketing research and initiate a discussion about products and services.

(more…)

facebook · Kazakhstan · social media

The August issue of Policy Matters analyzes the potential consequences of international financial reform on Russia’s financial markets and on Moscow’s competitiveness as an emerging financial center. It also summarizes the regulatory and legislative measures that Russia has recently adopted as well as those currently in the pipeline, and presents many of the key people in government, banking and academia who are shaping Russia’s financial market reforms.

To request a copy, please click here.

finance · PBN · Policy Matters

This week the government approved the Roadmap for the Development of Islamic Finance for 2010-2012 as part of Kazakhstan’s goal to establish the Regional Financial Center of Almaty (RFCA).

Developed by the RFCA, the Ministry of Communications, Ministry of Industry and New Technologies, Ministry of Finance and the National Bank of Kazakhstan, the Roadmap outlines the development and implementation of Islamic finance in Kazakhstan and will create conditions for their activities.

Already, the Abu Dhabi-based Al Hilal Islamic Bank opened its doors earlier this year. The bank plans to invest $200-250 million in Kazakhstan with further investments planned. Opening of the second Islamic Bank in Kazakhstan is planned for the end of this year.

(more…)

financial center · Investment · Islamic Finance · Kazakhstan

Reprinted from Kyiv Post, August 5.

Ukraine’s energy sector – natural gas, oil, atomic, electricity, coal, coal-based methane, shale gas, wind, solar and bio-fuels – is without a doubt the key to making the country a more powerful, dependable and integrated regional and international player. This sector can create thousands of new jobs and improve the livelihood of average citizens residing in depressed regions like the Crimea, Donbass and Western Ukraine, which are home to abundant natural resources.

Opening the market for investment and new technologies together with energy policy reforms could finally move Ukraine into the system of European energy interconnections that will make eventually this country less reliable on a single energy supplier.

(more…)

energy · Gas · Gazprom · reform · RosUkrEnergo · Ukraine · Yanukovych

USD to RUB

Source: Russian Central Bank

The Russian RUB has reached its highest value to the dollar in almost three months. This growth parallels the increase of world crude oil prices, which in late July approached the USD 80 per barrel mark. For the first time in the post-crisis market it is possible to confidently say that investors are lured to Russia, the world’s largest energy exporter, and analysts forecast the continuation of growth of RUB to USD throughout H2 2010.

As of 4 August 2010, the RUB gained to the USD and reached 29.7958, the strongest RUB performance since May.  Similarly, the RUB gained to EUR, reaching 39.3749 (Finmarket).

(more…)

Ruble · Russia