The IMF’s Deputy Managing Director David Lipton gave a statement on default risks and creditor relationships that suggests the organization will continue to support Ukraine even if it decides to follow through on the threat of last month’s legislation allowing it to ignore payments to creditors like the consortium of institutional investors like Franklin Templeton and T.Rowe Price as well as sovereign creditors like Russia and still receive the IMF bailout. The statement was made with the stipulation that “…allow us to continue lending to a member state when it has arrears with private creditors, providing it’s fulfilling all its other commitments that it’s made to us.”
All of this comes in the midst of a vicious negotiation of debt restricting in Ukraine, where the country’s negotiators are attempting to institute a haircut on the amount of debt owed to international creditholders, but creditors are holding firm thanks to the promise of the $17.5 billion bailout by the IMF.
Ukraine has some $2.6 billion worth of bonds maturing in July 2017, and interest payments on the principal alone has taken the government close to insolvency. David Lipton has stated, pointedly, that one of the IMF’s interests is in incentivizing the Russian Federation, who holds $3 billion of Ukrainian government debt, to assist in the restructuring in order to stave off a full blown default.
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- Prime Minister of Pakistan Nawaz Sharif has announced that he wants closer relations with Central Asia to transform into a deep economic partnership during a one-on-one meeting with Tajik President Emomali Rahmon. Both leaders stressed the importance of investment on a number of fronts – this is the second visit to a Central Asian country that Sharif has made in the past month, the first one being to Turkmenistan.
- UN Secretary General Ban Ki-moon has visited Central Asia, and has been called on by numerous human rights groups to “confront Uzbekistan’s leadership on the country’s appalling human rights record.” Amnesty international led the charge, citing the numerous incidents of forced cotton harvesting, as well as police brutality and torture.
- The Kashagan oilfield in Kazakhstan, one of the largest supergiants in the world, announced it is aiming to achieve first-phase output of up to 370,000 barrels of oil per day by the end of 2017, an aggressive goal. The oil field first began production in September 2013, but it was halted a few weeks later after leaks were detected in its pipes and the oilfield was shut down for years-long repair times. Output is expected to resume in 2016 – buoying the consortium of companies who are behind its development like Eni, Exxon Mobil, Royal Dutch Shell, Total, CNPC, and state-run company KazMunaiGas.
- Iranian authorities have arrested the former Vice President under former President Mahmoud Ahmadinejad – while the report is scant on details, it could indicate a crackdown on the hardliners in favor of continuing the aggressive nuclear enrichment program for weapons development that has been the cause of the divide between the West and Iran in the past 6 years. This is part of a larger trend of a clampdown on Ahmadinejad’s former administration, which was accused of widespread corruption.
- The Diplomat has an interesting article on Centerra Gold’s difficulties with the Kumtor gold mine in Kyrgyzstan, particularly that the company has received only a one-month extension on tis emissions and waste permits last week thanks to legislative gridlock. The Kyrgyz government in 2013 threatened to terminate the engagement, and many members of Parliament have repeatedly called for the nationalization of the mine. Read it here.
- Tajikistan’s government has officially ended a block of Facebook and Youtube it had imposed after an online announcement appeared detailing a police chief’s defection to the Islamic State. However, the block on Radio Free Europe was not lifted – the most recent blocks have been the most wide-ranging in recent years, indicating the government is attempting to stifle online opposition.
- President Almazbek Atambaev of Kyrgyzstan called on citizens on the anniversary of major instances of Kyrgyz-Uzbek ethnic violence to maintain peace. Some 400 Uzbeks were killed during clashes in Osh in June 2010 following the ousting of former dictator Bakiev. Even the US Embassy in Kyrgyzstan issued its own statement, cautioning the need for unity, rule of law, and ethnic accord.