May 5, 2014

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Eurasia TOP STORY
1. New government appointed in Armenia
2. Kazakhstan "deeply" concerned over violence in Ukraine
3. Connectivity, Regional Cooperation Key to Growth in Central Asia and Beyond
4. Azerbaijani gas not big competitor to Russian gas: SOCAR official
Eurasia Kazakhstan
5. Kazakhstan expects to join WTO this year
6. New Special Envoy of Kazakh President at Baikonur appointed
7. Kazakhstan's new law to improve investment climate to be approved by end-2014
8. Kazakh CPI 0.6% in April
9. ADB to co-finance projects funded out of the National Oil Fund
On the website today
10. Great Game II
11. Turkish protestors back on the streets
12. Kyrgyzstan faces new gas shortages despite Gazprom takeover
Eurasia Other Central Asia
13. Kyrgyzstans accession to CU wont assist solution of inner economic and social
problems
14. Kyrgyzstan's south promised gas before May 9
15. Uzbekistan: One US dollar is worth almost 3,000 soms
16. Uzbekistan: Chinese bank allocates $350m for railway project
17. Uzbekistan plans to build transmission line worth $190m
18. Turkmenistan gradually going towards market regulation of prices
Eurasia Caucasus
19. Armenia's opposition Heritage Party: this is oligarchy government
20. Armenia's industrial output 2.8% down in Q1
21. Azerbaijan's SOCAR conducts ecological monitoring at oil fields
22. Georgian Annual Inflation 3.4% in April
Other frontier markets
23. Mongolias Media Laws Threaten Press Freedom

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Eurasia TOP STORY
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1. New government appointed in Armenia
bne
May 5, 2014

Armenia has appointed a new government ahead of joining the Russia-led Customs
Union. The impoverished South Caucasus country's tiny economy is expected to


receive a boost of up to 1% of GDP a year from membership of the bloc which is due
to be transformed into the Eurasian Economic Union in January 2015.

On May 3, Armenian President Serzh Sargsyan made the final appointments to Hovik
Abrahamyan's government: Sergo Karapetyan was appointed agriculture minister,
and Gabriel Kazaryan was appointed sport and youth minister. Earlier the president
appointed Ovannes Manukyan as justice minister, Aramais Grigoryan as energy
minister, Karen Chshmarityan as economy minister and Gagik Khachatryan as
finance minister.

Former Prime Minister Tigran Sargsyan resigned on April 3 after the government's
controversial pension reform plans were defeated in the country's constitutional
court. The court ruled that some provisions of the unpopular law were
"unconstitutional". The new law, which came into force on January 1, 2014, caused
widespread protests in Armenia, leading four opposition parties to question the law's
compliance with the country's constitution.

On April 14, by a presidential decree Hovik Abrahamyan, parliamentary speaker,
replaced Tigran Sargsyan as prime minister. Sargsyan said he had wanted to resign
earlier but the president dissuaded him from the move because of Armenia's ongoing
accession talks with the Russia-led Customs Union. Sargsyan was appointed prime
minister in April 2008.

His resignation was also linked to his pro-Western stance, while Hovik Abrahamyan
wants to strengthen Armenias bonds with Moscow.

Despite lacking direct overland links to the Customs Union member states, Armenia
is set to benefit from membership of the Moscow-led economic union mostly due to
expected Russian investment and cheap supplies of Russian gas. Former Economy
Minister Vahram Avanesyan estimated that Armenia's membership would add
between 0.5 and 1 percentage points to the country's annual economic growth.
Armenia's economy grew by 3.5% last year and 7.2% in 2012, according to the CIS
Interstate Statistics Committee.

Yerevan will also benefit from Moscow's promise to ease access to its labour market
for Armenians as remittances from Russia account for 10% of GDP. However, this
may complicate the demographic situation in the country further, increasing
emigration due to a lack of economic prospects and high unemployment in the
country - the unemployment rate was 16.2% in Armenia in the fourth quarter of
2013.

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2. Kazakhstan "deeply" concerned over violence in Ukraine
bne
May 5, 2014

Kazakhstan has raised concern over the growing violence in southern and
southeastern Ukraine and called for the conflict to be solved by peaceful means. The
statement maintains Astanas seeming neutrality over the crisis in Ukraine.

"Kazakhstan is deeply concerned by the escalating violence in Ukraine, including in
connection with the recent events in Odessa, Slavyansk and Kramatorsk. With deep


grief we note that those events have led to a large number of casualties," the
country's foreign ministry said in a statement on May 4.

"We call on all parties involved in the confrontation to immediately renounce violence
and the escalation of threats. We believe the urgent task now is to apply maximum
efforts to search for peaceful ways of resolving the contradictions and of stabilizing
the situation as soon as possible," the statement said.

"We urge all related parties to observe the Geneva accords of April 17 of this year.
We are convinced that the recent events must act as a serious signal of urgent need
for the restoration of peace, stability and security in Ukraine," the Kazakh Foreign
Ministry said.

Astana has mainly sided with Moscow over the Crimean crisis, with Kazakh President
Nursultan Nazarbayev showing "understanding" for Russia's position ahead of the
Crimean referendum on March 16. Kazakhstan later hailed the referendum as a "free
expression of will" of the population of Crimea under "the existing circumstances".
Nazarbayev's remarks made on the sidelines of the Nuclear Security Summit in the
Hague on March 25 that the unrest in Ukraine had been caused by a lack of
"tolerance and stability" in the country triggered a diplomatic row between the two
countries.

Although the diplomatic spat caused relations between Kyiv and Astana to
deteriorate, Kazakh Prime Minister Karim Massimov said on April 15 that the two
countries had agreed to "resume" economic cooperation. Speaking to students at
Moscow State University on April 28, Nazarbayev said relations with Russia and
Kazakhstan would "always be beneficial" for Ukraine and the political course adopted
by the new authorities in Kyiv shouldn't be judged hastily.

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3. Connectivity, Regional Cooperation Key to Growth in Central Asia and Beyond
ADB
May 4, 2014

Connectivity and regional cooperation remain critical to sustained economic growth,
an Asian Development Bank (ADB) seminar heard today. The seminar, Links to
Prosperity: Connectivity, Trade and Growth in Developing Asia, took place at ADBs
47th Annual Meeting of the Board of Governors in Astana.

The debate focused on how connectivity can drive growth in Central Asia and
beyond. Participants heard that economies in the region should work towards high-
speed, quality transit corridors between economic centers. Others suggested this
approach could be enhanced by adding value to goods in transit across the region.

Read more here: http://www.adb.org/news/connectivity-regional-cooperation-key-
growth-central-asia-and-
beyond?utm_source=news&utm_medium=email&utm_campaign=alerts









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4. Azerbaijani gas not big competitor to Russian gas: SOCAR official
Azernews
May 2, 2014

Azerbaijani gas is not a big competitor for the Russian gas at the European market.

The remarks were made by Vice President of Azerbaijan's state energy company
SOCAR Elshad Nasirov.

The volumes of Azerbaijan's gas supply to Europe will not be substantial for the
moment, he explained.

"We think that our deliveries of additional or alternative gas to Europe will be a step
in the diversification of supplies to the European Union, and we will fill the gap
between gas supply and demand until our gas will be ready to be supplied to
Europe," Nasirov said in an interview with CNN.

Read more here: http://www.azernews.az/oil_and_gas/66689.html


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Eurasia Kazakhstan
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5. Kazakhstan expects to join WTO this year
Kazinform
May 4, 2014

"Kazakhstan is expected to enter the WTO this year," President of Kazakhstan
Nursultan Nazarbayev said addressing the opening session of the Board of Governors
of the Asian Development Bank started in Astana.

Read more here: http://inform.kz/eng/article/2654931

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6. New Special Envoy of Kazakh President at Baikonur appointed
Kazinform
May 4, 2014

Serik Kozhaniyazov appointed Special envoy of the President of the Republic of
Kazakhstan at Baikonur complex, the official website of Akorda reports.

"Under the Presidential order Serik Kozhaniyazov appointed Special Representative
of the President of the Republic of Kazakhstan at Baikonur complex", the statement
reads.

Read more here: http://inform.kz/eng/article/2655106







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7. Kazakhstan's new law to improve investment climate to be approved by end-2014
Visor Capital
May 5, 2014

Kazakhstan's President, speaking at the 47th annual meeting of the ADB yesterday
said that Kazakhstan's new foreign investment law would be before the majalis
(lower house of Parliament) by July, and ratified by the end of 2014. He also
outlined the new laws were aimed to create a more favorable investment climate,
including allowing exemptions from corporate income tax (20%) for ten years, the
introduction of investment subsidy mechanisms, tax-stability clauses, and the easing
of foreign work permit procedures. In addition, the President said that a new
investment ombudsman office would be created.

We believe that many investors would welcome improvements in the areas outlined
by the President, although until the specific details of the proposed new bill are
unveiled, it is too early to draw specific stock impacts.


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8. Kazakh CPI 0.6% in April
Visor Capital
May 5, 2014

Kazakhstan's National Statistics Agency yesterday announced that CPI inflation in
April was at 0.6% MoM and 3.9% YtD. The main driver of inflation last month was
an increase in food prices by 1.0% MoM, followed by non-food items (0.6%) and
services (0.2%). We believe the data indicates the Government remains on target
for its 6-8% target for 2014 CPI.

Industrial prices saw a 0.3% growth in April (12.0% YoY), with goods rising 0.3%
(12.3% YoY), and services flat MoM (8.6% YoY). The monthly breakdown saw
tobacco prices rise 2.5%, electric equipment up 3.2%, paper and products up 1.8%,
rubber and plastic products rise 1.6%, textile products up 1.5% and foodstuffs and
drinks rise 1.4%.

We maintain our 2014F inflation forecast of 12.1%.

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9. ADB to co-finance projects funded out of the National Oil Fund
Tengrinews
May 4, 2014

Asian Development Bank has signed a framework agreement with Kazakhstans
Government on co-financing projects financed out of the Kazakhstans National Oil
Fund, a Tengrinews.kz journalist reports.

Read more here: http://en.tengrinews.kz/finance/Asian-Development-Bank-to-co-
finance-projects-funded-out-of-the-National-Oil-253332/






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On the website today
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10. Great Game II
Ben Aris in Moscow
May 2, 2014

The April 17 deal that brought Ukraine back from the brink of war may be coming
apart at the seams, though its true significance is that it was agreed at all. Rather
than an end in itself, the deal is a harbinger of how events will play out in the region
for the foreseeable future.

The Geneva meeting brought together US Secretary of State John Kerry, Russian
Foreign Minister Sergei Lavrov, his Ukrainian counterpart Andrii Deshchytsia, and the
EU foreign policy chief Catherine Ashton. The deal agreed after seven hours of tense
negotiations calls for the disarming of illegal groups in Ukraine, such as the pro-
Russia militia that has taken over police stations and other buildings by force in
eastern Ukraine.

All the state property captured by the various "separatist" groups is supposed to be
returned to the state though as of the end of April it still had not been and a
general amnesty was offered to all but those involved in a capital crime, in an effort
to restore peace and reduce tensions. In political terms, the interim Ukrainian
government agreed to start consultations about devolving more constitutional
powers to the regions a key Russian demand, which hopes to keep Ukraine out of
Europe's orbit by building closer ties with the Russophile east of the country.

Read more here: http://www.bne.eu/content/great-game-ii

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11. Turkish protestors back on the streets
bne
May 2, 2014

Thousands of demonstrators defied an official ban on demonstrations at Istanbuls
Taksim Square on May 1, resulting in violent clashes with police, who used tear gas
and water cannon to force protesters away from the square.

Protesters started gathering in the Besiktas district near Taksim Square at early on
May 1, with the first clashes breaking out at around 08:00. Over 140 protesters were
detained by police during around five hours of fighting, according to Hurriyet Daily
News. Ninety, including 19 police, were injured in the clashes, according to a
statement from the Istanbul governors office.

The Turkish government had issued a ban on May Day protests in Taksim Square,
the epicenter of mass anti-government protests last year. However, the
Confederation of Progressive Trade Unions and members of opposition parties
including the Republican Peoples Party insisted they would take their protests to the
iconic square.

Read more here: http://www.bne.eu/content/turkish-protestors-back-streets






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12. Kyrgyzstan faces new gas shortages despite Gazprom takeover
bne
May 2, 2014

Kyrgyzstan's southern regions have had their gas supplies cut off for more than two
weeks, the country's national gas utility reported on April 30. The shortages are the
result of the failure of Russian gas giant Gazprom, which now owns Kyrgyzgas, to
reach agreement with Uzbek suppliers.

According to the Kyrgyz gs company, Uzbekistan's UzTransGas suspended gas
supplies on April 10. Uzbekistan has regularly cited payment arrears for suspending
gas supplies to Kyrgyzstan in recent years. However, on April 30 Kyrgyzgas insisted
UzTransGas still has not resumed gas supplies, despite an advance payment of
$70,000,.

The cut off coincided with Gazprom's take over of Kyrgyzgas for a token price of $1.
The key to the deal was the Russian giant's pledge to both invest $600m in Kyrgyz
gas distribution networks and pay off its debt of $40m to Uzbek and Kazakh
suppliers.

Read more here: http://www.bne.eu/content/kyrgyzstan-faces-new-gas-shortages-
despite-gazprom-takeover



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Eurasia Other Central Asia
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13. Kyrgyzstans accession to CU wont assist solution of inner economic and social
problems
24.kg
May 2, 2014

"Kyrgyzstan's accession to the Customs Union won't assist to solution of inner
economic and social problems," the member of "Kyrgyzstan against accession to the
CU" movement and Demokraticheskiy alliance party Marat Bayazov said today at the
press conference.

Read more here: http://www.eng.24.kg/cis/170307-news24.html

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14. Kyrgyzstan's south promised gas before May 9
24.kg
May 3, 2014

"Kyrgyzgas OJSC promises to provide gas supply of Osh before the Victory Day," the
Mayor of Osh Aitmamat Kadyrbayev said to 24.kg news agency.

Read more here: http://www.eng.24.kg/community/170316-news24.html






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15. Uzbekistan: One US dollar is worth almost 3,000 soms
Uznews.net
May 2, 2014

The government, banks, and official state media are pretending not to notice how
changes in the exchange rate are affecting the country.

Meanwhile black market currency traders are buying up US dollars for 2,980 soms
per dollar and re-selling them for 3,000 soms.

Read more here: http://www.uznews.net/en/economy/26151-one-us-dollar-is-
worth-almost-3000-soms

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16. Uzbekistan: Chinese bank allocates $350m for railway project
Trend
May 5, 2014

Chinese Eximbank and the Uzbek National Bank of Foreign Economic Activity signed
a loan agreement worth $350 million for the construction of the railway line through
the Kamchik pass in the east of the country, Uzbekistan Railways representative told
Trend on April 30.

Read more here: http://en.trend.az/capital/business/2270411.html

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17. Uzbekistan plans to build transmission line worth $190m
Trend
May 4, 2014

Uzbekenergo State Joint Stock Company started to prepare the Ellikala-Karakul 500
kV high-voltage transmission line construction project with a preliminary cost of $
190 million, a representative of the power company told Trend on April 30.

Read more here: http://en.trend.az/capital/energy/2270361.html

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18. Turkmenistan gradually going towards market regulation of prices
Trend
May 3, 2014

Turkmenistan has taken another step in gradual transition to the market price
regulation, namely, in the fuel and energy complex, according to the analytical
article of Turkmen Dovlet Habarlary (TDH) state news service.

Read more here: http://en.trend.az/capital/business/2270155.html






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Eurasia Caucasus
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19. Armenia's opposition Heritage Party: this is oligarchy government
News.am
May 2, 2014

The new government, which Armenias newly appointed PM Hovik Abrahamyan has
formed, is a government of oligarchy.

Opposition Heritage Party Board Secretary Stiopa Safaryan noted the above-said at a
press conference on Friday. First, the bulk of the ministers belongs to the large
businessmens circle.

Read more here: http://news.am/eng/news/207288.html

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20. Armenia's industrial output 2.8% down in Q1
News.am
May 2, 2014

Armenia's industrial output registered a 2.8 percent decline in the first quarter of
2014 as compared with the same period last year, making AMD 274.3 billion or $663
million, National Statistical Service reported.

Read more here: http://news.am/eng/news/207300.html

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21. Azerbaijan's SOCAR conducts ecological monitoring at oil fields
Azernews
May 2, 2014

Azerbaijan's state energy company SOCAR has conducted ecological monitoring at
the March 8 and Sangachal-Duvanni-Khara-Zira fields in the Azerbaijani sector of the
Caspian Sea.

The news was announced by SOCAR on May 1.

Read more here: http://www.azernews.az/oil_and_gas/66676.html

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22. Georgian Annual Inflation 3.4% in April
Civil.ge
May 4, 2014

Annual inflation was 3.4% in April, slightly down from 3.5% in March, according to
the state statistics office, Geostat.

Read more here: http://civil.ge/eng/article.php?id=27195






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Other frontier markets
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23. Mongolias Media Laws Threaten Press Freedom
UB Post
May 4, 2014

For more than 70 years, one fixture of Mongolian life was not unlike that of its
closest neighbors. During the Soviet period, the sole source of information in the
then-satellite state was the state-run Mongolian National Broadcaster.

Read more here: http://ubpost.mongolnews.mn/?p=8987