Caspian Business Journal

Weekly Roundup: January 10 – 16

 This week:  Tajikistan begins selling shares to the public for investment into its Rogun Dam project, Kazakhstan discusses the possible appreciation of its currency, Azerbaijan begins a regional tourism infrastructure project, and The Caspian Business Journal discuss Georgia’s new Economic Liberty Act.  Read More…

Tajikistan:  Rogun Dam Project Opens for Local Investors

According to regional news agencies, starting on January 6, 2010, the Government of Tajikistan began opening sales centers throughout the country for the purchase of shares in the long-delayed Rogun Dam project.  The project was first envisioned during the Soviet period and ground was broken back in 1976, however the project has been mired in delays and a lack of sustained funding since. 

As Eurasianet is reporting, over $90 million USD was raised on just the first day shares were on offer in Tajikistan.  The government has opened approximately 600 “sales points” throughout the country, with a total of five million shares available for public purchase, valued at almost $1.5 million.  The Rogun Dam and accompanying hydroelectric plant is designed produce domestic energy and additional capacity for export and has been a high level priority for every government in Tajikistan since independence.

It is estimated that $6 billion USD will be required to get the project up and running.  

Kazakhstan:  Tenge Expected to Appreciate in 2010

With the global financial crisis and accompanying regional recessions drawing down, Kazakhstan is anticipating a rebound in both investment and the oil prices that helped power the Kazakh economy in the last few years.  The national currency, the Tenge, is expected to rise against the dollar with the increase in oil prices in 2010.  According the Chairman of the Central Bank of Kazakhstan, Grigory Marchenko,  “The tenge will appreciate but not sharply.” (SRI)

The central bank will widen the trading band for the tenge on February 5 to between 127.50 and 165 tenge per dollar, a range that the central bank intends to keep until March 20, 2011 according to the Silk Road Intelligencer.

Throughout 2009 the central bank repeatedly intervened in the currency market to keep the Tenge within the officially set trading band of 148 to 151 per dollar (SRI).

Azerbaijan:  New Tourist Development Announcement in Sheki

According to officials in Azerbaijan, the development of a $10 million tourism development project in Sheki (located in northern Azerbaijan) is underway.

The projects goal is to increase tourism to the Sheki region, and highlight several of Azerbaijan’s ancient sites located in the region.  “The project envisions building a tourist information center, hotel, organizing cultural tourism, etc,” according to reports from News.az. 

The total of the project is $9.611 million, of which $8.1 million will be borrowed as a loan; the remaining funds will be allocated by investors. The project should be completed within five years. (Source:  US-Azerbaijan Chamber of Commerce).

Georgian Economic Liberty Act:  Will It Promote Long-Term Growth?

Emerging market investors with an interest in Georgia had a timely gift this Christmas as parliament passed a major component of the much debated Economic Liberty Act, a slate of bold constitutional reforms that would place strong limitations on the state’s involvement in the economy [1]. Along with a host of other measures, the act would ban any increase in the number of licenses or regulatory boards, cap the debt to GDP ratio at 60%, limit the expenditure to GDP ratio at 30%, enforce a budget deficit ceiling of 3% of GDP (in line with European Union guidelines) and disallow tax increases except through referenda. It was this last item that saw passage on Christmas day in a standalone bill…Read More  (Source:  The Caspian Business Journal)