Covid-19 – Eurasia Checkup Junewatchate 23Rd 2020
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Covid-19 – Eurasia Checkup JuneWatchate 23rd 2020 Covid-19 in Eurasia Population* Coronovirus** Mln Cases Deaths Economic uncertainty and political Armenia 2.96 21,006 372 instability – is the old normal returning? Azerbaijan 10.11 13,207 161 Georgia 3.99 911 14 Because of the easing of restrictions and the reopening of regional Belarus 9.45 59,023 351 Kazakhstan 18.72 18,231 127 economies, we will stop issuing this weekly report at end June. Kyrgyz Republic 6.49 3,519 41 Thereafter we will comment on any relevant Covid-19 events and Mongolia 3.26 215 0 Russia 145.92 598,878 8,349 assess the impact on respective economies and industries in separate Tajikistan 9.48 5,513 52 country focused reports and, as required, special updates. Turkmenistan 6.00 Ukraine 43.80 38,901 1,045 See our separate Covid-19 Russia Checkup report for more detailed Uzbekistan 33.34 6,500 19 information and analysis concerning Russia’s response and the Eurasia Total 293.52 765,904 10,531 economic impact in that economy. Source: *Worldometers, **WHO at June 23rd Currency Movement vs US Dollar, YTD* ▪ Concern over a second wave grows. Armenia, Azerbaijan, and Currency v US$* YTD, % Kazakhstan have re-imposed some lockdown restrictions as the Armenia Dram 481.13 -0.4% number of infections started to grow. Ukraine may also bring Azerbaijan Manat 1.70 0.0% Georgia Lari 3.05 -6.3% back some restrictions if the infection rate rises much further. Belarus Ruble 2.37 -11.0% ▪ Governments prepare recovery programs. But, while expressing Kazakhstan Tenge 401.25 -4.6% Kyrgyz Republic Som 75.02 -7.0% concern over a rise in the infection rate, all countries are Mongolia Togrog 2,811.65 -3.7% preparing programs to try and boost recovery prospects. The Russia Ruble 68.78 -9.9% Tajikistan Somoni 10.31 -6.0% tourism sector is a big target for many. Turkmenistan Manat** 22.00 -13.6% ▪ Interest rate cuts. Several Central Banks, including Armenia, Ukraine Hryvnia 26.60 -10.7% Uzbekistan Som 10,170.7 -6.2% Belarus, Kazakhstan, Russia, and Ukraine cut their policy rates Brent, $ p/bbl 43.19 -34.6% this month. This is part of the package of measures to help Afghanistan Afgani 76.96 0.4% companies and households. Iran Toman** 20,500 -34.9% Source: Bloomberg, Macro-Advisory ▪ Infections rise above 750,000. The number of new infections * as at June 23rd rose by almost 80,000 last week. 46,000 of these were in Russia. ** commercial or street rate Georgia reported only 23 new cases as it presses ahead with the Benchmark Interest Rates, % reopening of the tourism sector. Current, % AdJusted bbs, +/- ▪ Death rate is still low. The death rate in the Eurasia region is at Armenia 4.50% June -50 Azerbaijan 7.25% April N/C 35 per million (Russia is at 56 per million people). Georgia 8.50% April -50 ▪ Belarus protests. Protests continue in Minsk and other cities Belarus 7.75% June -25 Kazakhstan 9.50% June N/C after the arrest of the main opposition candidate for the August Kyrgyz Republic 5.00% Feb -75 presidential election. But, so far, there is no concern that these Mongolia 9.00% April -100 Russia 4.50% June -100 protests will expand beyond the usual political activists. Tajikistan 11.75% April -100 ▪ New PM in Kyrgyz republic. The parliament has approved a new Turkmenistan Ukraine 6.00% June -200 Prime Minister after the former PM was involved in a corruption Uzbekistan 15.00% June N/C scandal. Source: Central Banks, Macro-Advisory ▪ Kazakhstan delays privatizations. The planned privatization of * at June 23rd major state assets, including KazMunaiGaz, have been delayed GDP, $ billion and Growth, % GDP 2020E GDP, % Change YoY and may not now take place until 2022. bln, $ 2020E 2021E ▪ Mongolia election. The parliamentary election takes place on Armenia $13.0 -3.0% 3.5% June 24th. Azerbaijan $45.0 -2.7% 2.5% Georgia $50.0 -5.0% 2.5% ▪ Turkmenistan. There reports of hospitals being quarantined in Belarus $13.9 -5.0% 3.5% the country, despite the still official position of no virus infections Kazakhstan $157.0 -2.5% 4.0% Kyrgyz Republic $9.4 -3.0% 4.0% in the country. There are also reports of some rationing of basic Mongolia $12.5 0.5% 4.5% food items. Russia $1,568.0 -3.5% 2.5% Tajikistan $8.2 0.5% 4.0% ▪ IMF has not fully committed to the Ukraine loan deal. The IMF Turkmenistan $50.0 2.0% 5.5% said it will review Ukraine's compliance with the conditions of the Ukraine $136.0 -6.0% 4.5% Uzbekistan $55.3 1.3% 5.0% loan agreement in September. Only then will a decision be made Total, average $2,118.3 -3.3% 2.9% about the next tranche payment. Source: Bloomberg, Macro-Advisory No warranties, promises, and/or representations of any kind, expressed or implied are given as to the nature, standard, accuracy, or likewise of the information provided in this material nor to the suitability or otherwise of the information to your particular circumstances. Macro-Advisory Limited does not accept any responsibility or liability for the accuracy, content, completeness, legality, or reliability of the content contained in this note. © Copyright Macro-Advisory Limited Covid-19 – Eurasia Checkup Watchars Update Armenia Reported cases: 21,006 +2,973 (week-on-week) Reported deaths: 372 + 70 (week-on-week) Dram-US$ exchange rate: 481.13 + 0.7% (MTD) - 0.4% (YTD) Armenia - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) June 23rd Source: World Health Organization Government actions & regulations Armenia extended its state of emergency through July 13th. On the same day, four people – including a former Deputy Minister of Justice – were arrested for protesting the state of emergency in front of the National Assembly building. Police claimed that the protestors were violating rules of public gathering, while the protestors themselves said that the measure was unconstitutional. Although they were let go after several hours, dozens of others had also gathered outside police headquarters as a show of support for those arrested. Prime Minister Pashinyan fired several prominent officials recently after it became known that the head of the Armed Forces, Artak Davtyan, held a big wedding party for his son in violation of state of emergency restrictions. In addition to Davtyan, the Director of the National Security Services and Head of Police were all dismissed. Identification requirements. Armenian citizens are required to carry ID with them when outside their homes. Pashinyan said that this measure was taken to increase efficiency in filing administrative violations. Those who fail to abide by the rule will be fined AMD10,000. Pashinyan also said that in addition to the police, representatives of other government bodies will also become involved in enforcing rules compliance. Opening air travel. In another post-lockdown move, Armenia’s Deputy Prime Minister, Tigran Avinyan, said last week the government planned to reopen international flights from mid-July to help the tourism industry. Fake news. Efforts to contain the virus have been hindered by the dissemination of misinformation in Armenia. Last week, the US ambassador to Armenia said that American taxpayer money would no longer support a controversial health news website, Medmedia.am, following an open democracy investigation. Criminal case opened against oligarch, Gagik Tsarukyan. A figure from the regime of Serge Sargsyan, Gagik Tsarukyan has remained on the political scene as an MP and leader of the Prosperous Armenia Party, the largest opposition faction in the National Assembly. It holds 25 of the chamber's 132 seats. Last week, the National Security Service announced three charges made against the MP, including tax evasion of more than US$60 million, voter fraud and the illegal acquisition of land, and a long-since excused rape charge was re- announced. Although he has political immunity against prosecution, there is an effort to have him prosecuted. 2 Covid-19 – Eurasia Checkup Watchars Update Case against ex-President. The criminal court of appeal granted bail to ex-president Robert Kocharyan, who faces charges of overthrowing the constitutional order and bribery. The court ruled that 65-year-old Kocharyan, currently undergoing treatment at a hospital in the capital, should be released once he has posted bail of AMD2 billion (US$4.2 million). The former head of state faces up to 15 years in prison if convicted of the charges. He has rejected the charges as politically motivated. Controversial road program to Nagorno-Karabakh. International observers are criticizing Armenia’s decision to build a third highway between Armenia and the disputed region of Nagorno Karabakh. The construction of this new highway leading from the territory to the southern part of Armenia will “continue the illegal settlement, plunder, exploitation of natural resources” and further the “intentional change of the demographic situation,” according to the Azerbaijani Foreign Affairs Ministry. These statements were echoed by the European Parliament. The move comes at a time of heightened tensions between the two countries. Complains that aid is not getting through. Despite the government’s having created a wide range of assistance programs to help people and businesses during the period of the crisis, some workers complain that they have yet to receive their due funds. As funding has in many cases been transferred to the accounts of employers, employees say that their bosses are withholding money that should be allocated out of greed. One major supermarket chain threatened to fire employees who accepted government handouts. Also, a textile factory refused to follow government orders to shut down out of fear that workers would not receive their promised handouts.