Covid-19 – Eurasia Checkup Junewatchate 23Rd 2020

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. Monetary response and impact Interest rate reduced. Armenia’s central bank has cut its key refinancing rate to 4.5% from 5%. The national lender dropped the rate to 5% from 5.25% in April and to 5.25% from 5.5% in March after holding it unchanged in January. The country’s key dilemma presently is how to address what appears to be a second wave of coronavirus infections without bringing in measures that would substantially further impinge on economic growth this year. Inflation falls. Armenia’s consumer price index edged down 0.1% m/m in May, but rose 1.2% y/y. Armenia Dram - US Dollar Exchange Rate

Source: Trading Economics Limiting Russia role in power plant. The government has confirmed a decision to provide a loan worth Armenian dram AMD63.2 billion ($131 million) from the state budget, and raised by bond sales, to extend the operating life of unit 2 at the Armenian Nuclear Power Plant (also known as Metzamor Nuclear Power Plant). Citing economic considerations, the government said it would use only 60% of a $270mn Russian loan intended to finance the ongoing modernisation of the reactor at Metsamor. Armenian Minister for Local Government and Infrastructures Suren Papikyan said the amount of the unused credit was $107mn, adding that Moscow offered to extend the lending timeframe by two years on the condition Armenia agreed to use 80% of it for commissioning equipment and services from Russian companies. Papikyan proposed rejecting the condition and financing the remaining upgrades from the state budget.

3 Covid-19 – Eurasia Checkup Watchars Update

Azerbaijan

Reported cases: 13,207 + 2,545 (week-on-week)

Reported Deaths: 161 + 35 (week-on-week) Manat-US$ exchange rate: 1.70 0.3% (MTD) 0.0% (YTD)

Azerbaijan - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) June 23rd

Source: World Health Organization

Government actions & regulations Return of lockdown. The government announced that the strict quarantine regime that was in place during April and May and had been briefly lifted would once again be put in place from June 21st to July 5th in all of Azerbaijan’s major cities. SMS notification system also imposed. In addition to the closing of restaurants, most shops and services, residents will once again be forced to notify authorities before leaving their homes. The controversial SMS system received a great deal of criticism as it was both considered technically faulty and abused by both authorities and citizens for various purposes. Azerbaijanis are now only permitted to leave home "once a day for a maximum of two hours after receiving permission via text message" from the authorities, Prime Minister Ali Asadov said in a June 21st statement on Azerbaijan’s reinstatement of a tight lockdown to battle Covid-19. Borders remain closed. The government has extended the closure of the border until August 1st. The problem at the Azerbaijani border with Russia continues. This week, a number of the approximately 500 people stranded clashed with local police during a protest of Azerbaijan’s refusal to open the border. Migrants have been admitted in stages, but many remain nonetheless after several weeks of waiting. People active on social media have been very critical of both governments, and although Putin and Aliev have discussed the matter over the phone, the official Azerbaijani policy remains the same. Grand Prix cancelled. Azerbaijan has lost one of its big dates on the calendar. The country’s Formula One grand prix has been cancelled due to the coronavirus pandemic, with organisers also scrapping the Japan and Singapore dates as they aim for a reduced season of 15-18 races. The race in Baku had already been postponed from June and organisers said they had "explored every possibility" but run out of time. Controversy over Covid handling. There has also been a great deal of controversy surrounding other aspects of the government’s handling of the quarantine regime. The crackdown on dissenters last weekend was so extreme that many complained on social media about undue brutality by the police. Several videos went viral, including one of police dragging a man in his underwear from his home. One person who had been detained said that he was beaten for five hours.

4 Covid-19 – Eurasia Checkup Watchars Update

Police behavior in Azerbaijan has caught the attention of international bodies. The Commissioner of the Council of Europe made a statement on police brutality during the age of Covid-19 and mentioned Azerbaijan among problematic states in his speech. The commissioner noted that governments have been using the situation with the virus as an excuse to clamp down on freedom of expression and assembly, and he stressed that the use of excessive force needs to be stopped. Tensions with Armenia continue to rise. As tensions rise between Azerbaijan and Armenia, the Azerbaijani Ministry of Defence made a statement underscoring Azerbaijan’s ability to “hit any military infrastructure of the enemy.” This came following an announcement that Armenia plans to build a third road to the disputed region of Nagorno-Karabakh, which will go through what the international community believes to be Azerbaijani land and therefore violate international law.

Azerbaijan Manat - US Dollar Exchange Rate

Source: Trading Economics

GDP contracted 1.7% in 5M20. President Aliyev said on June 9th that Azerbaijan’s GDP fell by 1.7% in the first five months of this year as the coronavirus outbreak hit its economy, Interfax news agency reported. January- May inflation was below 3%, Aliyev was also cited as saying. ADB expects a 0.1% fall for 2021. GDP in Azerbaijan was now expected to contract by 0.1% in 2020, partly on lower oil prices, said the ADB. Last September it predicted Azerbaijani growth of 2.4% in 2020, while in April it gave an anticipated figure of 0.5%. Inflation in Azerbaijan was expected to drop slightly to 2.8% in 2020 and move up to 3.5% in 2021. World Bank expects a 2.6% contraction. The World Bank now sees Azerbaijan experiencing a GDP contraction of 2.6% in 2020 compared to the expansion of 2.3% it anticipated in January prior to the onset of the coronavirus crisis. “Growth in the South Caucasus is projected to decelerate to -3.1 percent this year as the sub-region faces growth headwinds from the Covid-19 pandemic and, subsequently, low commodity prices. Activity is expected to firm in Azerbaijan in 2021 as oil prices stabilize, but the overall recovery will be muted by lingering structural rigidities,” the World Bank said. TAP is nearly complete. Trans Adriatic Pipeline (TAP) company said it has completed the installation of the 105-km long offshore pipeline section linking Albania and Italy across the Adriatic Sea. According to John Haynes, TAP project director, the TAP project is now more than 95% complete and is expected to be finished by the end of this year. TAP’s shareholders are BP (20%), SOCAR (20%), Snam (20 %), Fluxys (19%), Enagas (16%) and Axpo (5%).

5 Covid-19 – Eurasia Checkup Watchars Update

Belarus

Reported cases: 59,023 +3,654 (week-on-week)

Reported deaths: 351 +33 (week-on-week) Ruble US$ exchange rate: 2.368 +1.7% (MTD) -11.0% (YTD)

Belarus - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) June 23rd

Source: World Health Organization Protests continue. Around 150 protesters and journalists were briefly detained in Minsk and several dozen opposition activists in other major Belarusian cities in the evening of June 19th during spontaneous street protests against President Lukashenko. Hundreds of demonstrators tried to form lines in central Minsk, while numerous drivers were honking their car horns in their support. The city authorities shut several central underground stations for several hours. But the number of their participants remains limited, at around 2,000- 3,000. The main body of demonstrators are students and young people. Protests have been building steadily. Political tensions in Belarus have started to increase since the arrest of Sergei Tsikhanovski, a nationally known popular blogger who is critical of the Belarusian authorities, on May 29th. He was arrested while he and his supporters were collecting signatures in support of his wife’s presidential bid in the western city of Grodna. On June 1st, four Belarusian human rights groups declared that the detained Tsikhanovski was a political prisoner and demanded his immediate release. In May-June, Belarusian law enforcers detained or arrested hundreds of anti-government protestors, activists and journalists in different regions of the country. Arrest of main opposition candidate. Leading opposition presidential candidate Viktor Babariko was arrested on money-laundering charges that sparked nationwide protests. Babariko was CEO of Belgazprombank for 20 years, the country’s largest private bank and which is owned by Gazprom. He quit to run for the presidency earlier this year and is the front-runner in the race against incumbent President Lukashenko. Babariko collected 425,000 ballot signatures as of June 18th, which is a record-high number for Lukashenko's rivals over the past two and a half decades. The necessary minimum is 100,000 signatures. Gazprom bank raided. Belgazprombank was raided by the police and put under administration by the Central Bank on June 15th. Most of the senior staff have been accused of money laundering and many have been detained. Since then, the State Control Committee has released more details of the charges against Babariko. “Currently, work is underway in a number of areas, including fraud with bills worth more than US$60 million,” Condemnation by the US and EU. Western governments released statements last week condemning Belarus' crackdown and arrest of peaceful demonstrators and opposition leaders. The embassies of the US and US in Minsk have slammed the Belarusian authorities for the June 19th crackdown on protesters. Meanwhile, on June 19th the EU urged Minsk "to immediately release" Babariko "and to guarantee full respect of the rule of law, including a fair and transparent investigation and the right to have access to a lawyer. Any investigation must be impartial and without political pressure".

6 Covid-19 – Eurasia Checkup Watchars Update

US extends sanctions. The United States has extended by one year its sanctions regime against ten officials in Belarus who have undermined the democratic processes in the country, including President Lukashenko, according to a notice published by the White House on June 11th. The US administration is taking a tougher line on the former Soviet republic compared with the European Union, which lifted most of its sanctions against Belarusian authorities in 2016, following a peaceful presidential election in October 2015.

Monetary response and impact Interest rate cut. The National Bank of Belarus (NBB) will cut its refinancing rate from 8% to 7.75% from July 1st, the regulator said in statement on June 22nd. The rate on overnight credits will be cut from 9% to 8.75% per annum; and the rate on overnight deposits from 7% to 6.75% per annum. Inflation rises. According to the central bank, consumer prices rose n annual terms by 4.9% in May, compared with 5.4% in April. Annual core inflation decelerated to 3.9% (4.5% in April 2020)."A constraining impact of disinflationary factors is stronger than was forecast. Inflationary processes in [the trade partner countries] of Belarus are slowing down at the higher rates. Against this background, the foreign central banks are actively lowering their key rates," the statement reads. US$1.25 Eurobond placement. Belarus has placed US$1.25 billion of US dollar-denominated Eurobonds – a five-year tranche worth US$500 million at 6.125% and a 10-year tranche amounting to US$750 million at 6.375%. Demand for the bonds exceeded US$4.8 billion. Belarus is offering long bonds maturing on February 24th, 2026 and February 24th, 2031. Government debt repayments. Belarus is due to repay US$3.6 billion in both external and domestic government debt in 2020 and US$3.3 billion in 2021. Belarus Ruble - US Dollar Exchange Rate

Source: Trading Economics Economy declines 1.8% y/y in 5M20. The economy declined by 1.8% year-on-year in January-May following a 1.3% y/y drop in January-April, the nation's statistics agency Belstat reported on June 17th. Industrial production contracts 3.9% in 5M20. Industrial production fell by 3.9% year-on-year in January- May, according to the national statistics agency Belstat. Specifically, mining and quarrying declined by 1.7% y/y in January-May, manufacturing by 4.1% y/y, and electricity, gas, steam, hot water and air conditioning supply by 3% y/y. EBRD expects a 5% decline in GDP. GDP will contract by 5% y/y in 2020 as a result of global coronavirus related shocks reducing foreign and domestic demand, while next year the country's economy will experience a 3.5% y/y recovery, according to the latest macroeconomic survey published by the European Bank for Reconstruction and Development (EBRD) in May. World Bank forecasts a 4% GDP decline this year. The World Bank forecasts a 4% y/y decline in the Belarusian economy in 2020 amid the snowballing coronavirus crisis.

7 Covid-19 – Eurasia Checkup Watchars Update

Georgia

Reported cases: 911 + 23 (week-on-week)

Reported deaths: 14 0 (week-on-week) Lari US$ exchange rate: 3.05 3.5% (MTD) – 6.3% (YTD)

Georgia - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) June 23rd

Source: World Health Organization Government actions & regulations First stage of constitutional amendment passed. Georgia’s parliament passed key constitutional amendments on electoral change in a first reading with the overwhelming support of lawmakers. Second and third reading approvals are needed, however, for the changes to make it into law. The voting will take place within the next two weeks. The drafted legislation foresees the introduction of a parliamentary composition based on 120 proportional and 30 majoritarian seats and fixing the threshold for entering the chamber at 1% of votes. The bill would also enact a constraint barring any single party that receives less than 40% of votes from claiming a majority of seats in the parliament, and hence, from forming the government on its own. Preparing for October elections. Opposition parties in Georgia are uniting to try to defeat the ruling Georgian Dream party in parliamentary elections in October. The ruling party of billionaire Bidzina Ivanishvili has gained popularity because of its handling of the coronavirus but opposition groups remain determined to reduce the ruling party’s influence. The coalition held a rally on June 20th, which was the one-year anniversary of what they call “Gavrilov Day” – the day that police forcibly dispersed demonstrators protesting the state visit of a Russian official. Members insisted that they followed the rules of social distancing and wearing PPE. Anti-lockdown protests. On June 19th, several groups of wedding service providers organized rallies in Tbilisi, Kutaisi, and Batumi demanding that the government allow open-air weddings. The protestors said that the government had not yet answered a petition submitted ten days earlier. They also accused the government of hypocrisy in allowing restaurants to fill up but not allowing open-air events. Rising tensions with Moscow. A coalition of civil society organizations issued a statement on June 16th claiming that a Chechen-ordered assassination plot towards a Georgian TV anchor had been undertaken with the backing of Moscow. Georgi Gabunia, a prominent TV personality, had addressed Vladimir Putin last year using harsh language. Another Georgian channel recently claimed that a hitman was arrested for using forged documents and that a subsequent investigation revealed his plot to murder Gabunia on the orders of Chechen leader Razman Kadyrov. The Kremlin has dismissed claims that it was involved in a plot to assassinate a Georgian journalist and TV host who made an expletive-laden attack on Putin live on TV last year.

8 Covid-19 – Eurasia Checkup Watchars Update

Monetary response and impact Support for the Lari. The National Bank of Georgia (NBG) offered US$40 million for sale on June 10th in a foreign exchange auction but sold less than US$30 million. The sale by the central bank was made at an average weighted exchange rate of GEL3.0372 to the US$. Since March 13th, when NBG stepped in for the first time in this sales phase to support the local currency, with a US$20 million sale, the national lender has sold nearly US$190 million.

Georgia Lari - US Dollar Exchange Rate

Source: Trading Economics

ADB cut its GDP forecast. The Asian Development Bank (ADB) has lowered its 2020 economic forecasts for Georgia. GDP was expected by the development bank to contract by 5% in 2020, down from the 4.9% growth that it forecast last September and the 0% it anticipated in April this year. Next year, Georgia could expect around 5%, the ADB said Georgian inflation was projected to slow to 5% in 2020 and 3.5% in 2021, compared to the central bank’s 3% target, the ADB added.

World Bank expects a 4.8% fall. Georgia's economy is set to shrink by 4.8% in 2020 versus a total decline in the South Caucasus region of 3.1%, the World Bank said late on June 8 as it released its updated Global Economic Prospects report. Georgia’s very high exposure to tourism means it will take a severe hit from the effects of the coronavirus pandemic, the report noted. Prior to the virus emergency, the World Bank in January estimated that Georgia would see 2020 growth of 4.3%.

Georgia’s government has forecast a GDP decline of 4% this year, while the European Bank for Reconstruction and Development (EBRD) has predicted a drop of 5.1%.

9 Covid-19 – Eurasia Checkup Watchars Update

Kazakhstan Reported cases: 18,231 +2,689 (week-on-week) Reported deaths: 127 + 39 (week-on-week)

Tenge-US$ exchange rate: 401.25 + 2.6% (MTD) – 4.6% (YTD)

Kazakhstan - Covid-19: Daily New Cases - June 23rd

Source: John Hopkins Government actions & regulations

Some restrictions reimposed. The governmental Commission to Prevent the Spread of Coronavirus Infection on June 18th introduced additional measures to stabilize the situation in Kazakhstan amid a rise in the incidence rate of Covid-19 infection in several regions of the country, according to the prime minister’s website. “In the cities of Nur-Sultan, Almaty, Karaganda, Shymkent, Pavlodar and Ekibastuz, the work of shopping and entertainment centers, trading houses, chain stores, indoor food and non-food markets, and bazaars will be suspended,” the website statement said. “The work of public catering facilities will be allowed only in the open air in a street format while maintaining social distance; the operation of public transport will be limited; the work of public places (parks, squares, embankments, beaches, water parks) and fitness centers will be suspended; the access to the street for people over 65 years old will be restricted. ”Settlements populated by 50,000 will see public places, such as parks, squares, embankments, and water parks suspended, while there will be restrictions on street access for people older than 65. Nazarbayev has the virus. Former president Nursultan Nazarbayev, 79, has tested positive for coronavirus and has gone into isolation. "Unfortunately, the virus did not bypass our First President. I wish Nursultan Nazarbayev a speedy recovery. He is a strong man. His whole life has been full of struggle, so I hope that he will easily overcome this challenge," President Tokayev tweeted on Thursday. House Speaker has the virus. The speaker of the lower house of Kazakhstan’s parliament, Nurlan Nigmatulin, has self-isolated following a positive test for the coronavirus, authorities said on June 17th. The speaker, Nurlan Nigmatulin, met Healthcare Minister Yelzhan Birtanov last week who then tested positive and is currently in hospital being treated for pneumonia. Privatizations postponed further. Sovereign wealth fund Samruk-Kazyna said on June 17th that Kazakhstan plans to float its state-owned oil and gas firm KazMunayGaz in 2022. The announcement comes after the fund declared plans to postpone the listing of 25% stakes in state-run companies once again. The privatizations were originally meant to end by 2020. Kazakhstan has only managed to float stakes in the world’s largest uranium producer KazAtomProm via three listings, leaving Samruk-Kazyna maintaining ownership of more than 75% of the firm’s shares. The fund’s managing director, Almasadam Satkaliyev, also told a briefing that a partial privatization of the state-owned railroad company, Kazakhstan Temir Zholy, will follow in 2023.

10 Covid-19 – Eurasia Checkup Watchars Update

Monetary response and impact

Interest rate unchanged. Kazakhstan’s central bank kept its policy rate unchanged at 9.5% at a rate-setting meeting on June 8th and added that it may consider easing monetary policy when global uncertainty decreases. The regulator cut its inflation outlook for 2020 to 8.0%-8.5% and forecast a GDP contraction of 1.8%, below its previously expectation of a 1.3% fall. Kazakh Tenge - US Dollar Exchange Rate

Source: Trading Economics Attracting crypto investment. Kazakhstan’s Minister of Digital Development, Innovation and Aerospace Industry, Askar Zhumagaliyev, revealed a plan on June 16th to attract nearly US$738 million via investments through various crypto industry-related activities within the next three years, the Astana Times reported citing a briefing in arliament. Zhumagaliyev noted that the cryptocurrency sector has been growing in Kazakhstan and that the country has 14 cryptocurrency mining farms that have attracted around US$201.7 million in investments. Commitment to OPEC quota. An OPEC+ ministerial panel is pressing Kazakhstan to better comply with its oil production cut quotas, according to a draft statement seen by Reuters. Kazakhstan exceeded its May oil output quota under the OPEC+ oil output cut agreement by 3.13 million barrels and will offset this by maintaining lower output in August and September, Energy Minister Nurlan Nogayev said on June 9th. The overproduction took place in the first 12 days of May, with the Central Asian nation since then keeping to its output targets in line with the quota, Nogayev noted. Industrial output rose by 4.8% y/y in 5M20. Kazakhstan's industrial output rose by 4.8% y/y in the first five months of 2020, according to the latest figures released by the country's State Statistics Committee. Growth was mainly supported by a rise in the country’s oil sector, which expanded by 5.4% y/y to 38.5 million tonnes in the period. Ore mining fell by 4.3% to 45 million tonnes in January-May. Retail sales decline 16.2% y/y in 5M20. Retail sales declined by 16.2% y/y in January-May, reaching a value of KZT3,543.7 billion (EUR7.74 billion), according to latest data published by the State Statistics Committee. GDP fell 0.5% in 5M20. Kazakhstan's short-term economic indicator, a narrower gauge of annual GDP growth, recording GDP shrinking by 0.5% y/y in January-May, according to latest data published by the country's State Statistics Committee. The construction sector grew by 5.9% y/y in January-May. The communications sector grew by 9.2% y/y, the transport sector contracted by 14.1% y/y and trade shrank by 12.3% y/y. Wheat exports to remain stable. Wheat exports from Kazakhstan are set to hold steady at 60.2 million tonnes in the 2020-21 marketing year, due to a larger crop, a Reuters poll of 17 analysts, officials and traders showed. Kazakhstan's refined copper output grew by 10.9% y/y to 208,922 tonnes in January-May, according to data published by the Statistics Committee. Copper giant Kaz Minerals accounts for most copper output in the country. China, one of the main consumers of Kazakh copper, produced strong demand for copper last year.

11 Covid-19 – Eurasia Checkup Watchars Update

Kyrgyz Republic

Reported cases: 3,519 + 957 (week-on-week)

Reported deaths: 41 + 11 (week-on-week) Som - US$ exchange rate: 75.02 -1.6% (MTD) - 7.0% (YTD)

Kyrgyz Republic - Covid-19: New Cases (Bar) June 23rd

Source: World Health Organization

Government actions & regulations

New prime Minister confirmed. Kyrgyzstan’s parliament confirmed Kubatbek Boronov, 55, as prime minister on June 17th after his nomination on June 16th. Boronov held the post of the first deputy prime minister in the previous cabinet and worked as the minister of emergency situations in the past. Former Prime Minister Mukhammedkalyi Abylgaziev announced his resignation on June 15th, citing an ongoing criminal investigation into the assignment of national radio frequencies. In his resignation announcement, he said that he had “nothing to do with this case, and the accusations made against me have no basis." Though investigators have not named Abygaziev as a suspect, lawmakers had raised suspicions over his role in the suspect sale of radio frequencies, which also involved a leading cable television company and a major telecoms company.

Another dispute with Kyrgyz Republic. Kazakhstan has levelled accusations at neighbouring Kyrgyzstan of fraudulent customs figures and abetting the proliferation of largescale smuggling. Kazakhstan’s Finance Ministry said in a detailed statement that it was basing its allegations on data collected over an 18-month period. Over that time, Kyrgyzstan officially declared only one-tenth of the real value of goods being sent into Kazakhstan, costing huge losses to Kazakh coffers, the ministry said. Over a nine-month period in 2019, Kyrgyzstan declared it had exported KZT18 billion (around US$45 million) of goods to Kazakhstan. And yet Kazakhstan’s official data showed that it had imported KZT186 billion of goods over that timeframe, the Finance Ministry said.

Not the first time. This is not the first time that Kazakhstan has openly slammed its neighbor over the seemingly unchecked smuggling racket. Previous protestations have fallen on deaf ears, however. “Kazakhstan’s tax authorities have been conducting an online exchange of preliminary information about export declarations with Uzbekistan. From this year, we are doing the same with China. Work is also under way with other countries. Proposals for cooperation were also sent to the Kyrgyz government, but our requests to address this matter have gone unanswered,” the Finance Ministry said.

12 Covid-19 – Eurasia Checkup Watchars Update

Extended Russia’s military base … size and lease. Kyrgyzstan’s parliamentary committee approved a bill to increase Russia's annual fee for renting land for its military base located on the territory of Kyrgyzstan. The bill follows through with the ratification of a Kyrgyz-Russian protocol on amendments to an agreement on the conditions of usage and the status of the military base. This is a result of the Russian military base occupying 924.52 hectares, covering 58.32 hectares more than the area specified in the original lease agreement. The current annual rental fee of $4,502,495 will be increased by $291,600 after the amendments come into force, according to the bill.

Kyrgyz Som - US Dollar Exchange Rate

Source: Trading Economics

13 Covid-19 – Eurasia Checkup Watchars Update

Mongolia Republic

Reported cases: 215 + 18 (week-on-week)

Reported deaths: 0 0 (week-on-week)

Togrog-US$ exchange rate: 2,811.65 - 0.1% (MTD) -3.7% (YTD)

Mongolia - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) June 23rd

Source: World Health Organization

Government actions & regulations

Election date. The country’s parliamentary election will take place June 24th.

Mongolia’s industrial output down by 27.3% y/y in January-May. Gross industrial output reached MNT5.1 trillion (EUR1.61billion) in January-May 2020 in Mongolia, showing a decrease of MNT1.9 trillion (27.3%) year- on-year, latest official figures reveal. The downturn in economic activity is not unexpected as the country continues to deal with the local and international aspects of the coronavirus pandemic and a decrease in purchases of raw materials from the mining industry.

Mining and quarrying output contracts 34.6% y/y in 5M20. The mining and quarrying gross output stood at MNT3.3 trillion in the period and registered a MNT1.8 trillion (34.6%) plunge from the same period in the previous year, while manufacturing output fell by MNT230.3billion (16.1%). On the other hand, electricity, thermal energy and water output grew by MNT67billion (12.7%). The plunge in the mining and quarrying sector was driven by falling output in mining of coal and lignite by MNT1.3 trillion (down by 59.6% y/y), extraction of crude petroleum by MNT331.6billion (-78.9% y/y) and mining of metal ores by MNT113.6billion (-4.8% y/y).

IFC and World Bank start project to help transparency. The International Finance Corporation (IFC), a member of the World Bank Group, and the National Development Agency (NDA) are launching an institutional platform to help Mongolia’s government resolve investor grievances efficiently and transparently, thereby improving investor confidence. The platform, the Systemic Investor Response Mechanism (SIRM), will enable investors to register and track grievance resolutions at an early stage. The IFC and NDA partnership will also build a national database of investment climate issues faced by investors along with cases in which investment protection guarantees are said to have been breached.

14 Covid-19 – Eurasia Checkup Watchars Update

EBRD approves project to provide $4mn for climate change mitigation. The European Bank for Reconstruction and Development (EBRD) has approved a project to provide a US$4 million loan to Mongolian firm XacLeasing, including US$1 million by the Green Climate Fund (GCF), which finances investments in climate change mitigation and adaptation technologies by local businesses, the project description on the EBRD’s website revealed on June 11th

Mongolia Togrog - US Dollar Exchange Rate

Source: Trading Economics

15 Covid-19 – Eurasia Checkup Watchars Update

Tajikistan

Reported cases: 5,513 +353 (week-on-week)

Reported deaths: 52 + 2 (week-on-week) Somoni - US$ exchange rate: 10.308 - 0.4% (MTD) -6.0% (YTD)

Government actions & regulations

World Bank to support one-time payments to 50,000 families. Around 50,000 low-income families with young children in Tajikistan are set to receive a one-time payment of TJS500 (EUR43.32) as a form of emergency social assistance support by the World Bank-financed Tajikistan Emergency Covid-19 Project (TEC- 19). “To protect the health and nutrition of the youngest and most disadvantaged children, cash transfers have proven an efficient instrument of help to parents,” said Jan-Peter Olters, World Bank country manager for Tajikistan. “The World Bank is committed to supporting Tajikistan in being able to provide immediate and effective crisis response to the pandemic and help to reduce the socio-economic impacts on households.”

Easing of some restrictions. Tajikistan announced on June 15th its first easing of restrictions introduced due to the coronavirus (pandemic, allowing malls, restaurants, bazaars, hotels and other service providers to reopen following a two-month shutdown.

Borders remain shut. The country's state borders are set to remain closed along with mosques and mass transit facilities such as railway stations.

Criticism of media restrictions and control. Paris-based media watchdog Reporters Without Borders (RSF) has called on Tajikistan to withdraw newly approved legislative amendments aimed at levying heavy fines for false or inaccurate coverage of the coronavirus pandemic. RSF warned that the amendments could be used to clamp down on press freedom and lead to censorship. The Tajik government initially claimed there were no coronavirus infections in the country, which makes the official interpretation of “accurate” coverage of the pandemic vague at best.

Tajikistan Somoni - US Dollar Exchange Rate

Source: Trading Economics

16 Covid-19 – Eurasia Checkup Watchars Update

Turkmenistan

Reported cases: N/A N/A (week-on-week)

Reported deaths: N/A N/A (week-on-week) Manat (Commercial) US$ FX rate: 22.0 0.0% (MTD) - 13.6% (YTD)

Government actions & regulations

Hospitals quarantined. Despite not officially having any Covid-19 cases, Turkmenistan has reportedly locked down two major hospitals due to concerns of a possible coronavirus outbreak, RFE/RL reported. The sources said on June 15th that medical personnel at the Infection Hospital in Ashgabat had been barred from using phones and were not allowed to leave the facility for days. Turkmenistan further tightens food rationing. Turkmenistan has further tightened the rationing of basic food products at subsidized prices sold at state-owned grocery stores by introducing special registration books to track purchases, Turkmen.news website and RFE/RL reported. Turkmenistan has been experiencing food rationing for several years due to a five-year long crisis that was originally caused by weak hydrocarbon prices. Without a ration book, families are not allowed to purchase subsidized staples available in government stores, which include flour, rice, cooking oil, sugar and potatoes, RFE/RL said. Trade with Russia is growing. Russia says it paid US$300 million for gas imported from Turkmenistan in 2019, the Russian ambassador to Turkmenistan said. Russia’s Gazprom struck a deal in July 2019 to buy up to 5.5 billion cubic metres of gas annually from the Central Asian nation, following a preceding short-term 1.155 bcm deal. The two sides have not disclosed the price agreed under the contract. Blokhin noted at a briefing that gas purchases came on top of US$696 million in trade turnover between the two countries, bringing the total value of trade between the states to around US$1 billion. Resumption of cross-border trade with Iran. Iranian truckers can again cross the border with Turkmenistan following a recently agreed transit agreement after two and half months of holdups, according to the Financial Tribune citing ILNA on June 22nd.“Sarakhs checkpoint had been closed since April 1st, due to the outbreak of the coronavirus (Covid-19), because of which they held some 770 trucks up behind the border until Thursday (June 18th). With 30 of them entering the border, there are still 740 trucks waiting for permits,” Rouhollah Latifi, spokesman of the Islamic Republic of Iran Customs Administration (IRICA), was quoted as saying.

Turkmenistan Manat (Commercial Rate) -US Dollar Exchange Rate

Source: Chronicles of Turkmenistan

17 Covid-19 – Eurasia Checkup Watchars Update

Ukraine Reported cases: 38,901 + 4,915 (week-on-week) Reported deaths: 1,045 + 92 (week-on- week) Hryvnia-US$ exchange rate: 26.60 + 0.8% (MTD) - 10.7% (YTD)

Ukraine - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) June 23rd

Source: World Health Organization

Government actions & regulations

Referendum to allow foreign buyers of land. President Zelenskiy has submitted a bill to the nation's parliament to organize a national referendum that includes a question on selling land to foreigners. In all, there are amendments of national significance to 38 constitutional statutes that will be put to the referendum. Other issues listed include changes to Ukraine’s territory and laws that have expired. The referendum cannot apply to issues of taxation, fiscal policy or amnesty. Threat of a second lockdown. As Ukraine is facing a second wave of coronavirus (Covid-19), senior officials are calling for the reinstatement of the strict lockdown. On June 18th, the number of coronavirus infections in Ukraine swelled to 829 cases, setting a latest daily record. The same day, 23 deaths were reported from the Covid-19 disease caused by the coronavirus and 504 recoveries were confirmed, Health Minister Maksym Stepanov reported at his daily press briefing. Several regions may face a renewed severe quarantine/lockdown as of June 22, he said, though it will not have to be imposed nationally if citizens adhere to epidemiological recommendations. If the event they are not upheld, a Cabinet resolution approved on June 17th outlines the process of reintroducing quarantine/lockdown measures as of June 22nd, he said. Ukraine’s Cabinet decided at its weekly meeting on June 17th to extend the nation’s adaptive quarantine until July 31st. Arrest warrant request for former president. Ukraine’s General Prosecutor Office is petitioning the courts for an arrest warrant for former president Petro Poroshenko and is asking for bail to be set at UAH10 million (US$373,000), Ukrainska Pravda reported. Poroshenko has been under investigation by law enforcement agencies for several months in several cases that he claims are politically motivated. Ukrainian President Volodymyr Zelenskiy has made no secret of the fact that he personally dislikes the former president and current political rival. Investigation of Central Bank Governor. On June 17th, Ukraine's parliamentary finance committee approved a draft resolution to launch an assessment of the activity of Yakiv Smoliy, the governor of the National Bank of Ukraine (NBU), Interfax-Ukraine reported. The draft resolution, which will be submitted for a vote, recommends that Parliament create an investigative commission to examine the activity of top management of the NBU and the Deposit Guarantee Fund during 2014-19.

18 Covid-19 – Eurasia Checkup Watchars Update

IMF will decide on further payments in September. The IMF will decide on whether the government has met the conditions of the new US$5 billion Stand-by Agreement (SBA) agreed on June 9th in September when it is due to release the next tranche, IMF spokesman Jerry Rice said on June 19th, as cited by Ukrinform. "This program has just begun, and currently it is difficult to name a date of the first revision to take place. But I can say we're looking for September, Rice said. He reiterated that the stand-by program provides Ukraine with access to wider international financial support, including that from the EU. The Executor Board of the IMF has approved the 18-month-long stand-by funding program for Ukraine. The Ukrainian government thus got access to 3.6 billion SDRs (US$5 billion) and received the first tranche on June 12th. Interest rate cut. The National Bank of Ukraine cut the key policy rate to 6% from June 12th. This is the lowest level of the key policy rate since Ukraine gained its independence in 1991, the regulator said in a statement on June 11th."Consumer and investment demand is most likely to remain subdued for longer than forecast in April. On the one hand, this will keep inflation below the target level for longer than projected in the April forecast. On the other hand, this means that the Ukrainian economy will face a deeper contraction than expected. This requires the central bank to continue its monetary policy easing to support the economy as the country gradually lifts quarantine measures," the central bank added. Inflation fears. Ukraine is facing a very difficult situation when it comes to inflation, Ihor Petrashko, Economic Development, Trade and Agriculture Minister, was quoted as saying by Interfax Ukraine. "The macroeconomic forecast, which became the basis of the budget, provides for inflation of around 11%," he told a press conference in Kyiv on June 16th, Interfax Ukraine reported. "The NBU [the National Bank of Ukraine] envisaged inflation near 5.8-6%. We now have a disastrous situation with inflation. This is a very bad trend." According to the state statistics service, inflation in May 2020 slowed to 1.7% year on year from 2.1% in April, 2.3% in March. Inflation in 2019 was 4.1%. Ukraine Hyrvnia-US Dollar Exchange Rate

Source: Trading Economics Rating agency Moody's Investors Service upgraded Ukraine’s long-term issuer and senior unsecured ratings to B3, from Caa1, with a Stable outlook, on June 12. The main driver for the upgrade was “the easing of Ukraine's near-term funding challenges” due to the initiation of the stand-by loan program with the IMF that was finalized last week. Moody's estimates the new IMF agreement will open an opportunity for Ukraine to receive multilateral and bilateral financial support in the near term worth up to US$8.6 billion, or 6% of its 2020 GDP. Ukraine could return to the Eurobond markets in the fourth quarter of this year to raise circa US$1 billion, according to the US$5 billion Standby Agreement (SBA) agreed on June 9th with the International Monetary Fund (IMF). “The macro framework assumes that Ukraine will return to markets in 4Q20. The framework does not assume non-resident inflows in the domestic bond market for the remainder of 2020,” the IMF experts said, as cited by the Kyiv Post.

19 Covid-19 – Eurasia Checkup Watchars Update

Uzbekistan

Reported cases: 6,500 + 939 (week-on-week) Reported deaths: 19 0 (week-on-week) Som US$ exchange rate: 10,170.7 - 0.3% (MTD) - 6.2% (YTD) Uzbekistan - Covid-19: Daily new cases June 23rd

Source: WHO

Government actions & regulations Turkish Airlines resumes flights from Turkey to Uzbekistan since July 1. The flights from Istanbul to Tashkent will be operated on Tuesdays, Wednesdays, Saturdays and Sundays, the flights from Tashkent to Istanbul will be operated on Mondays, Tuesdays, Fridays and Saturdays.

Monetary response and impact No rate cut for now. Uzbekistan’s central bank kept its policy rate unchanged at 15% on June 11th. The regulator said it would not ease its monetary policy until it saw a steady trend towards lower inflation. Monthly inflation slowed to 0.3% in May from 1.7% in April. The central bank maintains a full-year consumer price index forecast of 11%-12.5%, seeing risks on both the supply and demand sides. Pressing the banks to cut the margin. Deputy Prime Minister and Economy Minister Jamshid Kuchkarov has urged local lenders to reduce lending rates to 21% for businesses and 24% for consumer loans from the current 26% rates in order to encourage economic activity. Uzbekistan Som-US Dollar Exchange Rate

Source: Trading Economics

20 Covid-19 – Eurasia Checkup Watchars Update

Uzbekistan plans to achieve 2% GDP growth in 2020, Deputy Prime Minister and Economy Minister Jamshid Kuchkarov said on June 10th. His statement came after international financial organisations, such as the European Bank for Reconstruction and Development (EBRD) and the World Bank, projected 1.5% growth for the Central Asian nation this year. "We were also tasked by Uzbek President Shavkaat Mirziyoyev to increase industrial output by 3.5% and we plan to achieve it by resuming operation of the enterprises closed during the pandemic quarantine, providing them with working capital and reviewing the credit rates," Kuchkarov said in a televised interview. More investment in wind power. Abu Dhabi Future Energy Company (Masdar) has agreed a deal to build and operate a 500 MW wind farm project in Uzbekistan, the Abu Dhabi media office said in a tweet on June 9th. The Uzbek government is targeting the generation of 21-25% of the country's electricity from renewable energy sources by 2031. Last June, President Shavkat Mirziyoyev signed a law ratifying the charter of the International Renewable Energy Agency (IRENA) - a decree from the same month set the goal of allocating US$5.3 billion to 810 investment projects to develop renewable energy up until 2022. Masdar earlier this year signed an agreement for a 400 MW and US$600 million wind farm project in Uzbekistan’s Navoi Region. In November last year, Masdar signed a contract for the construction of a 100 MW photovoltaic power plant in Navoi Region. Masdar was also previously announced as the winner in Uzbekistan’s first ever competitively tendered solar power public-private partnership. The number of officially registered unemployed people in Uzbekistan has skyrocketed to 2 million, up from the 1.35 million seen before the coronavirus (Covid-19) outbreak, Kun.uz news website reported on June 7th, citing Minister of Employment Nozim Husanov. The real number of unemployed individuals could potentially be much higher due to employment statistics in Central Asian nations tending to lack accuracy. Around 550,000 migrant workers in Uzbekistan could not travel to other countries this year for work due to the pandemic - this accounts for part of the rise in the number of officially unemployed people. Uzbekistan is the most populous country in Central. The Uzbek government said it had scrapped the excise taxes on imported cars. The move marked the first step towards ending the government’s de facto monopoly on Uzbekistan’s car market. The majority of cars driven in the country are locally produced Chevrolets that come from a plant originally set up in a joint venture between South Korea’s Daewoo Motors. The stake was subsequently taken over by General Motors before being sold to the government. Most Uzbeks only buy locally made cars due to the excise tax along with an import duty of US$3 per cubic centimeter of engine volume leading to imported cars being priced at more than double their original price. President Mirziyoyev’s decree aimed at the abolition of the excise tax did not mention the import duty.

21 Covid-19 – Eurasia Checkup Watchars Update

Appendix 1: Benchmark & Policy Interest Rates

Armenia - Benchmark Interest Rate, % Azerbaijan - Benchmark Interest Rate, % Belarus - Benchmark Interest Rate, %

Source: Central Bank of Armenia Source: Central Bank of Azerbaijan Source: National Bank of Belarus

Georgia - Benchmark Interest Rate, % Kazakhstan - Benchmark Interest Rate, % Kyrgyz Republic - Benchmark Interest Rate, %

Source: National Bank of Georgia Source: National Bank of Kazakhstan Source: National Bank of Kyrgyz Republic

Mongolia - Benchmark Interest Rate, % Russia - Benchmark Interest Rate, % Tajikistan - Benchmark Interest Rate, %

Source: Mongolbank Source: Central Bank of Russia Source: World Health Organisation

Turkmenistan - Benchmark Interest Rate, % Ukraine - Benchmark Interest Rate, % Uzbekistan - Benchmark Interest Rate, %

No Information - approx 2.1%

Source: National Bank of Ukraine Source: National Bank of Ukraine Source: Central Bank of Uzbekistan

22 Covid-19 – Eurasia Checkup Watchars Update

Appendix 2: Monetary & Fiscal Indicators & Forecasts The forecasts for 2020-21 will change as the impact of the virus, and any government actions, becomes better understood. Please check separate country reports for more detailed information and updates, Growth Indicators Population GDP, $bln GDP/Cap US$GDP p/Cap US$ Upside, % GDP, % Change mln 2020E 2020E PPP $ to PPP 2020E 2021E 2022E

Armenia 3.0 $13.0 $4,392 $9,178 109% -3.0% 3.5% 4.5% Azerbaijan 10.1 $45.0 $4,447 $16,011 260% -2.7% 2.5% 2.5% Belarus 9.5 $50.0 $5,291 $17,742 235% -5.0% 2.5% 2.0% Georgia 4.0 $13.9 $3,484 $10,152 191% -5.0% 3.5% 4.0% Kazakhstan 18.7 $157.0 $8,382 $24,738 195% -2.5% 4.0% 4.0% Kyrgyz Republic 6.5 $9.4 $1,446 $3,447 138% -3.0% 4.0% 4.5% Mongolia 3.3 $12.5 $3,823 $12,209 219% 0.5% 4.5% 4.5% Russia 145.9 $1,568.0 $10,746 $27,147 153% -3.5% 2.5% 2.5% Tajikistan 9.5 $8.2 $867 $3,061 253% 0.5% 4.0% 4.5% Turkmenistan* 6.0 $50.0 $8,319 $17,129 106% 2.0% 5.5% 5.5% Ukraine 43.8 $136.0 $3,106 $9,233 197% -6.0% 4.5% 3.5% Uzbekistan 33.4 $55.3 $1,657 $6,240 277% 1.3% 5.0% 5.5% Source: Respective National Statistics Services, Worldometers, Macro-Advisory Ltd estimates

Monetary Indicators Inflation, eop % YoY Policy Rate, eop % YoY FX Rate v US Dollar, eop 2020E 2021E 2022E 2020E 2021E 2022E 2020E 2021E 2022E

Armenia 1.7% 3.0% 4.0% 4.0% 3.5% 3.5% 480 470 470 Azerbaijan 3.0% 3.3% 3.0% 7.25% 7.0% 6.8% 1.70 1.90 1.90 Belarus 7.0% 6.0% 5.0% 8.0% 8.0% 8.0% 2.40 2.30 2.25 Georgia 5.0% 4.0% 2.8% 8.5% 8.0% 7.0% 3.1 3.0 2.9 Kazakhstan 7.0% 6.0% 5.0% 9.00% 8.00% 7.50% 420 400 380 Kyrgyz Republic 9.0% 7.0% 5.0% 5.00% 5.00% 4.25% 80.0 77.0 73.0 Mongolia 8.0% 7.0% 6.0% 9.0% 9.0% 8.0% 2,800 2,750 2,725 Russia 4.5% 3.7% 3.5% 4.50% 4.50% 4.00% 70.0 68.0 65.0 Tajikistan 11.0% 8.0% 8.0% 11.5% 11.5% 11.0% 10.2 10.7 10.7 Turkmenistan 12.5% 11.0% 10.0% 2.4% 3.0% 4.0% 3.5 4.2 5.0 Ukraine 6.0% 4.0% 3.0% 8.0% 8.0% 7.5% 27.0 28.5 29.5 Uzbekistan 16.5% 14.0% 12.0% 15.0% 14.5% 12.0% 10,300 10,600 11,000 Source: Respective National Statistics Services, Macro-Advisory Ltd estimates

Government Finances Budget Balance, % GDP CA Balance, % of GDP Public Debt, % GDP 2020E 2021E 2022E 2020E 2021E 2022E 2020E 2021E 2022E Armenia -4.5% -3.0% -2.0% -9.0% -7.5% -7.0% 57% 56% 55% Azerbaijan -4.5% -3.0% -2.0% -7.5% -4.5% -2.0% 32% 36% 36% Belarus -3.0% -2.5% -2.2% -4.5% -3.5% -3.5% 60% 62% 62% Georgia -4.0% -3.0% -2.0% -9.0% -8.0% -6.0% 56% 54% 54% Kazakhstan -5.0% -2.2% -1.5% -5.5% -4.0% -2.5% 25% 26% 25% Kyrgyz Republic -6.5% -4.5% -2.5% -14.0% -11.0% -9.5% 65% 65% 62% Mongolia -4.0% -4.5% -4.0% -15.5% -12.9% -10.3% 85% 86% 90% Russia -3.5% -0.2% 0.2% 0.5% 1.0% 2.0% 17% 16% 16% Tajikistan -5.0% -4.0% -3.5% -7.0% -4.5% -4.0% 55% 56% 57% Turkmenistan -3.0% -2.5% -2.5% -3.0% -3.6% -3.6% 28% 30% 33% Ukraine -5.0% -2.4% -2.4% -3.0% -3.5% -3.0% 61% 55% 53% Uzbekistan -4.0% -3.0% -2.0% -8.5% -6.0% -5.0% 28% 25% 26% Source: Respective National Statistics Services, Macro-Advisory Ltd estimates

23 Covid-19 – Eurasia Checkup Watchars Update

Appendix 3: Russian government actions Date Action 3-Feb Restriction on entry by Chinese citizens, except through Sheremetevo airport 20-Feb Ban on entry by Chinese citizens 26-Feb Control of arrivals from South Korea, China and Italy 1-Mar Ban on entry by Iranian and South Korean citizens 5-Mar Cancellation of St Petersburg International Economic Forum (June) 6-Mar Self-isolation of arrivals from China, South Korea, Iran, France, Germany, Italy and Spain 11-Mar Moscow ban on events with more than 5000 Most flights to Italy, Germany, France and Spain suspended 13-Mar Ban on entry to Italian citizens and foreigners arriving from Italy 14-Mar Russia closes land border with Poland and Norway Moscow school attendance optional 16-Mar Flights to Europe limited to Sheremetevo connections to major capital cities Border with Belarus closed Russia limits entry by all foreigners until 1 May (diplomats and similar excluded) 19-Mar All persons arriving in Russia to observe mandatory 14 day quarantine First patient with Covid-19 dies 21-Mar Public and private medical facilities must register qualified personnel in a centralized database 25-Mar President Putin visits Moscow's main isolation hospital at Kommunarka 26-Mar President Putin addresses nation, announces non-working week Government announces cessation of all international flights from March 27th 28-Mar Moscow announces closure of cafes, restaurants and non-essential shops 30-Mar Prime Minister Mishustin closes borders to all traffic 4-Apr Russia closes air connections with other countries 10-Apr Tightening of Moscow quarantine - non-essential businesses close, permit regime introduced 11-Apr From April 15th, QR codes required in Moscow and Moscow region for car journeys 16-Apr President announces cancellation of May 9th parades 18-Apr President signs decree automatically extending visas and other permits to June 15th 19-Apr Easter services in empty churches, some illegal gatherings, some regions allow services 20-Apr Demonstrations in Vladikavkaz 22-Apr All Moscow residents suspected of COVID infection, or with respiratory difficulties, must stay home 24-Apr CBR cuts rates to 5.5% 28-Apr President extends non-working period to May 11th 30-Apr Prime Minister Mishustin announces infection, Belousov is acting Prime Minister New testing regime starts in Moscow 6-May Governors allowed to relax self-isolation regime from May 11th 7-May Moscow announces limited re-opening, self-isolation in place till May 31st 8-May Mishustin returns to work 11-May President announces new economic support package 12-May Factories and non-customer businesses re-open in Moscow 14-May Random testing regime announced in Moscow 18-May President holds special meeting on emergency situation in Dagestan 20-May Sobyanin says multi-functional centers will re-open in Moscow 27-May Sobyanin extends self-isolation period to June 14th 2-Jun President approves economic recovery plan 8-Jun Mishustin relaxes travel restrictions for hardship cases 8-Jun Moscow City significantly relaxes movement and business restrictions 19-Jun Eastern Economic Forum (normally in September) cancelled Source: Macro-Advisory, from Russian media sources

24 Covid-19 – Eurasia Checkup Watchars Update

Appendix 4: Kazakhstan government actions

Date Action 12-Mar School holidays brought forward to March 16th 13-Mar First cases in Kazakhstan recorded 13-Mar President cancels Norouz holiday (March 22nd-23rd) and Victory Day (May 9th) celebrations 15-Mar Kazakhstan declares state of emergency - national quarantine Entry ban for all foreigners except diplomats and official delegations 17-Mar Lockdown announced in Nur-sultan and Almaty - divided into sectors to reduce movement Movement restrictions, non-food retailers close, restaurants delivery only 22-Mar Cessation of rail, air and road connections with Nur-sultan and Almaty 25-Mar Ban on export of nine food staple items 27-Mar Payment holiday on all loan payments from March 16th to June 15th 28-Mar Tougher quarantine in Nur-Sultan and Almaty 10-Apr President addresses government and nation, extends state of emergency to end April 12-Apr Non-working regime in Almaty extended to April 30th 18-Apr 72-hour visa-free regime suspended until November 1st 27-Apr State of emergency prolonged until May 11th Some internal flights resume 11-May State of emergency lifted, quarantine remains in Nur-Sultan and Almaty 17-May Air Astana announces resumption of 30% of internal routes by end of May 18-May Cafés, restaurants, and religious buildings allowed to reopen outside quarantine areas 22-May Kazakhmys copper mine stops work for 10 days because of infection outbreak 7-Jun Air passengers from abroad avoid quarantine with a certificate 8-Jun Kazakhstan stops counting asymptomatic cases 14-Jun Health Minister announces coronavirus infection, Prime Minister enters self-isolation Source: Macro-Advisory, from media sources

25 Covid-19 – Eurasia Checkup Watchars Update

Appendix 5: Ukraine government actions

Date Action 4-Feb Ukraine International Airlines stops flights to China 20-Feb Ukraine nationals evacuated from China - quarantined in Poltava, sparking local protests 2-Mar First patient identified, infected in Italy 10-Mar Flights to European countries reduced 12-Mar National quarantine for 3 weeks Schools closed Events with more than 200 people banned Air connections with Italy closed 13-Mar Borders closed First death 16-Mar President addresses nation, closing bus, rail and air travel, and closes metro Foreign nationals barred from entry for two weeks 17-Mar All air connections closed Major cities close all retail outlets except pharmacies, food retail, gas stations, banks Government announces economic measures 3-Apr Measures to strengthen quarantine, lasting till April 24th 8-Apr Government says quarantine likely to be extended 17-Apr Kyiv Police say they will stop people entering churches 18-Apr Zelensky says that quarantine measures may be relaxed after April 24th 4-May Quarantine extended to May 22nd 11-May Limited re-opening of shops, parks and restaurants 15-May President orders mass testing 18-May Government announces that beaches will open this year 23-May Above ground public transport and shops smaller than 1000 square meters re-open in Kiev 25-May Kiev metro to open 5-Jun Army draft for school and college leavers cancelled 15-Jun International flights resume Source: Kiev Post, Macro-Advisory, from media sources

26 Covid-19 – Eurasia Checkup Watchars Update

Appendix 6: Uzbekistan government actions

Date Action 21-Feb March investment summit cancelled 4-Mar Block on entry by citizens of 40 countries with coronavirus infections 15-Mar Bar on entry for all foreigners All universities and schools closed for 3 weeks 16-Mar Suspends international air and road connections All citizens arriving from abroad must observe 14 day quarantine Spiritual Board of Muslims cancel Friday prayers 19-Mar President orders US$1 billion fund for Covid-19 fight, to be financed from abroad 22-Mar Tashkent shuts down all public transport, only disinfected taxis will operate Government announces border closure 27-Mar First death from coronavirus 1-Apr Self-isolation regime imposed in Tashkent and other regional centers 18-Apr Quarantine extended to May 10th Uzbekistan sends 5 million medical masks to Russia 20-Apr Private medical institutions allowed to carry out coronavirus tests 25-Apr Some retailers and businesses allowed to re-open 8-May Government divides territories into red, yellow, and green zones for different quarantine levels 9-May Ban on mass events and visiting veterans for Victory Day holiday 14-May Government extends lockdown until June 1st, some businesses allowed to re-open 3 regions declared coronavirus-free: Dzhizakskaya, Kashkarinskaya and Ferganskaya 24-May Minister of Health warns restrictions may be tightened 14-Jun Government says it will allow flights from countries with good epidemiological situations Quarantine extended to August 1st Source: Macro-Advisory, from media sources

27 Covid-19 – Eurasia Checkup Watchars Update

Who are we? ▪ Macro-Advisory is an independent Eurasia-based consultancy providing international companies and investors with strategic advisory services throughout the CIS-Eurasia region ▪ Macro-Advisory’s coverage footprint includes the entire CIS-Eurasia region plus Mongolia ▪ For our clients we carry out market and sectoral analysis, risk assessments, and deep due- diligence work across all of the key industry sectors in all of the countries in the region ▪ We keep our clients fully informed of the relevant trends and events which impacts their business ▪ We assist local business teams and management in headquarters to help ensure a strategic focus and success for our clients’ businesses ▪ We are experts on the Eurasian Economic Union (EaEU) and help our clients assess the opportunities and implications of the economic bloc ▪ We are experts in the operation of the Chinese promoted Belt & Road Initiative (BRI) and in helping our clients understand the opportunities arising from this expanding trade and transport network Our Competitive Advantages ▪ Local. From our base in Moscow we cover the entire CIS-Eurasia region. We have an available network of industry specialists across the region to assist with project work as required. We also have offices in London, Washington, and New York, from which we are able to regularly engage with our clients. ▪ Independent. We are independent and this allows us to offer completely impartial advice. We combine coverage of economics, politics, industry and social trends to provide the most comprehensive analysis for our clients. ▪ Experienced. The combined experience of our key personnel living and working in the CIS- Eurasia region is over 150 years. ▪ Network. We have built a substantive network of contacts in government and regulatory agencies as well as in other relevant bodies. This allows us to consult with decision makers and policy influencers, and to gain better insights into evolving events. ▪ Commercial. All of our reports come with commercially relevant and, more importantly, actionable recommendations. ▪ Reports. All of our clients get regular reports updating and providing analysis of economic and industry data as well as an assessment of all relevant news and events which are important for companies and investors in the region. ▪ Briefings. We host regular client briefings, including quarterly events with specialist guest speakers. We also organize formal presentations for clients, including at management and

board level.

28 Covid-19 – Eurasia Checkup Watchars Update

Reports Suite* Russia Macro Monthly. This monthly update provides a record of all of the events which investors in Russia are interested in, such as economics, politics, monetary policy and all business related developments. This publication also has updated economic forecasts for Russia and all of the CIS-Eurasia states. We also provide reviews of all new books published which are focused on or which may influence the Eurasia region. In Context. Whenever a topic arises which is both topical and of concern to our clients, such as the questions and threats posed by sanctions, we issue quick response notes to place the topic into a proper context. In these notes we highlight the areas of concern and set out our opinion about what to expect next and how to prepare for it. Eurasia country reports. We issue regular updates for all of the countries in the CIS-Eurasia region. These will cover not only macro and political events but will also highlight business trends and focus on opportunities for investors, both existing and emerging. These reports also look at and explain any risks in respective investment scenarios. Industry reports. The bulk of the work we undertake for our clients, for example, strategic industry analysis, is customized and is exclusive for the client. But, from time to time, we cover the general trends and focus on opportunities for investors in sectors which we believe have high growth potential. Over the past year we have issued reports covering agriculture, e-commerce, insurance, pharmaceuticals, construction, and many others. Thematic reports. In this series of reports we look at interesting and emerging themes which have relevance across the CIS-Eurasia region and are not exclusive to one country. We issue regular updates on the development of the Eurasia Economic Union (EaEU), the expanding Belt & Road network and the investment opportunities arising from this, Caspian Corridor developments, and others. Political briefings. For our clients we issue regular updates covering sensitive political issues in all of the countries of Eurasia. In these tightly controlled reports we are able to offer an un-biased and frank opinion about the events and set out the implications for businesses and investment risk.

*Refer to our web site (www.macro-advisory.com) for a full list of available reports

29 Covid-19 – Eurasia Checkup Watchars Update

Contacts

Moscow: +7 495 139 4703

London: + 44 208 798 0742

Tokyo: +81 3 5219 1520

Washington: +1 914 494 3344

Email: [email protected]

Website: http://macro-advisory.com/

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.