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Kyrgyzstan & Uzbekistan News

This Section is contributed by Kazkommerts Securities

March 15, 1999

Latest Kazakhstan Weekly News

o On 13 March 1999, the National Bank of the Kyrgyz Republic set the official Som/Dollar exchange rate at 31.2027 per one U.S. Dollar. (Reuters)

o Kyrgyzstan intends to cut its budget spending by Soms 290m (USD 9.2m), the Finance Minister Marat Sulatnov said at a briefing on 15 March. Most of the cuts will come from reducing the operating expenses of ministries and departments. Health care and education budgets will not be touched, he said. According to Sulatnov, the cut in budget spending is attributed to the fact that the government spent Soms 70m above the planned budget earmarked for social programmes in 1998. The Kyrgyz Parliament adopted the 1999 budget in January but noted, however, that it might be amended in the coming months. (Reuters)

o The National Bank of the Kyrgyz Rebublic (NBK) has reportedly intervened in some of the activities of the country's two largest joint-stock banks, Maksat and Insan. These moves were undertaken in compliance with the law "On the National Bank of the Kyrgyz Republic" and are aimed at strengthening the country's banking system. On 4 March the Maksat Bank was ordered to stop certain operations for the next six months. According to the NBK, the Maksat Bank's management had violated Kyrgyz legislation when re-purchasing the bank's shares. The Insan Bank failed to meet the NBK's prudential requirements. For the period of 5 March - 5 June 1999, the bank will be managed by the NBK. (Delovaya Nedelia)

o Kyrgyzstan will postpone payments of its principal external debt of Soms 230m (USD 7.37m) due in March until next April or May, the Finance Minister, Marat Sultanov, said at a briefing. He said that the government will only pay the interest in March and that it is currently negotiating to restructure the payment plan for the principal. Since the start of the year, Kyrgyzstan has repaid about USD 12m of its foreign and internal debts. (Reuters)

o The World Bank (WB) will provide USD 60-65m to Kyrgyzstan to support the implementation of 12 projects in 1999, the WB Country Director for the Central Asian states, Kiyoshi Kodera, said at a press conference on Saturday, 13 March. He said that the WB mission approved the performance of the projects on health care and agriculture financing in Kyrgyzstan and that in the next financial year, which starts in June 1999, the WB intends to prepare a number of new projects for Kyrgyzstan. These are expected to deal with irrigation, public transport, and land registration. The WB's representative has also proposed a comprehensive development programme to the Kyrgyz Government. The programme is guaranteed by the WB and aims at consolidating all the donor-supported projects in the country. (Reuters)

o The Kyrgyz government intends to negotiate with Kazakhstan in hopes that the latter will abolish a 200% import duty it imposed recently on a range of Kyrgyz commodities and foodstuffs. "Kazakhstan said that it was a temporal measure, and we hope that it will be lifted," Vice Prime Minister Boris Silaev said to Reuters. According to him, shipments of Kyrgyzstan's cargoes via Kazakhstan have been hindered recently as drivers have been asked to pay USD 2,000 per truck in place of the legal fees. (Reuters)

o The official Central Bank's Sum/Dollar exchange rate has been held at 111.54/USD since 2 February 1999. (Reuters)

o The Uzbek Government has announced an international tender to sell Almalyk Plant, a producer of detergents based in the Tashkent region. The plant was evaluated by the international company KPMG at a cost of USD 3.0m. Bids will be received until 3 April. It is expected that the results of the tender will be finalised in mid-April. (Reuters)

o Uzbekistan has cut natural gas supplies to Kyrgyzstan from 180,000 m³ to 62,800 m³ per hour because of unpaid debts. Kyrgyzstan inherited a debt of USD 3.8m to Uzbekistan from its predecessor, the state fuel company Kyrgyzgazmunaisat, which had failed to pay for the gas with flour supplies. Kyrgyzstan has already repaid USD 500,000 to Uzbekistan and now the Kyrgyz government has ordered that 23,000 tonnes of flour be ground from 25,000 tonnes of grain in the state reserve. The two governments are currently in talks to resume supplies. (Reuters)

o The President of Turkey, Suleyman Demirel, is arriving in Uzbekistan on 15 March for a two-day visit. He is expected to meet with his Uzbek counterpart shortly after his arrival. On 16 March the Turkish delegation will fly to the city of Samarkand to participate in the opening ceremony of the Uzbek-Turkish joint venture SamKOCauto. The company will produce trucks and busses. (Reuters)

o The Uzbek President Islam Karimov signed a decree on 1 March to introduce new regulations on residency. According to the decree, foreign citizens, including those of CIS countries, may reside in Uzbekistan only if they have a permit issued by law enforcement authorities. Foreign citizens (both of CIS and non-CIS countries) visiting Uzbekistan for more than three days must obtain visas. (RFE/RL)