Peter comments on Ben’s Homebase post and highlights the real economical and political roots of “The Great Battle for Central Asia Gas” (ENG).

Our new author C thinks that singers in Tajikistan are experiencing stagnation and the population is eager to see and look to something new (ENG).

Firuz gives some thoughts on why the cost of food is rising so quickly (TAJ).

CXW takes a look at horseball, a modern version of the national Kyrgyz sport of kok boru (ENG).

Over at The Registan, Josh leaves Central Asian territory in order to discuss Russian-European energy issues. Which are - in the end - also relevant to the focal region of this blog.

Nordstream, Russia’s ambitious subsea gas pipeline, puts the spotlight on Europe’s energy markets and the old continent’s long term supply with Russian gas. Josh says:

[W]hat matters is that this pipeline will be a geopolitical disaster for the EU, as it would essentially lock them into being dependent on Russian energy beneficence for the foreseeable future.

Let’s accompany Josh on his trip to Europe, but let’s take the (geo)politics out of the equation for a while. (more…)

Every monetary reform costs 200 million US Dollars on average. 

Yet Turkmenistan seems to be ready to incur such costs in 2009 in order to conduct a denomination calculated at 1000 to 1 Turkmen Manat, the current monetary unit.

Is this a good news or a bad news? And what is the point of denomination?

Denomination is a way to augment a national currency - without changing its name - through exchanging the old bank notes into the new ones according to the ratio established by the Government. The aim of denomination is to regularize the currency circulation, to facilitate discount and settlements in country and, simultaneously, to convert prices, rates, salaries etc. at the same ratio.  Denomination was done in many countries, for example, in France, Israel, Poland and others. In the USSR, old Roubles were exchanged into new ones at a 10:1 ratio in 1961, January the 1st. Denomination in Russia was implemented in 1998 when new Rouble was exchanged for one thousand old Roubles.

Denomination is a process of changing the scale of prices at a certain rate.

In practice, all monetary reforms have been introduced as a means to fight the growing inflation – the process of money depreciation, and devaluation – significant drop of national currency rate in relation to foreign currency or a change in metal (gold) content of the national monetary unit. That is, during the times of countries’ economic crisis.

When it comes to Turkmenistan the logic of the forthcoming reform is clear – 2009 will see completion of all major projects that aim to considerably increase export of Turkmen gas to Russia, China, and, possibly, to Europe through the Caspian Sea.

In doing so, the Turkmen Manat, having got rid of three noughts, will have acquired if not gold, then gas cover. This would ensure the new Turkmen Manat does not hastily slip into the inflation precipice like the Manat did back in 1993 when the initial exchange rate of 2 Turkmen Manats to 1 US Dollar dropped to 15 TMM to 1 USD dollar within one month.
Prices are a different question. Denomination will inevitably cause increase in prices for all types of commodities and services. If currently the price of one litre of petrol is 300 Turkmen Manat (0.0125 USD) then how much will it cost in 2009?
Simple math will not help here because the microscopic cost of fuel is a result of a five-fold difference between the official exchange rate of 5,200 TMM to 1 USD and the actual purchasing power of our national currency that stands at 24,000 TMM to 1 USD.
If, after denomination, one litre of petrol will cost 0.3 TMM, then its dollar equivalent will increase at least fivefold.
Such a significant increase in the cost of petrol will inevitably result in increased prices for nearly everything. Produce, social services, commodities and public transport is by far an incomplete list of what Turkmen people will have to pay for much more in 2009 than they do now.
Implacable laws of economics will shatter an illusion of building a Golden Age where gas, bread, salt, petrol and housing bills can cost almost nothing in a separately taken country which is isolated from the rest of the world.

Arseny translates the post by Xxrock about the Kazakh government’s barely explainable step to modify the conditions of Asian Olympics-2011, which are to be held in Almaty. Now the officials want it to take place in Astana too. Additional reporting included (ENG).

Our new author Xxrock informs on the Kazakh government’s barely explainable step to modify the conditions of Asian Olympics-2011, which are to be held in Almaty. Now the officials want it to take place in Astana too (RUS).

Kamneed’s Friday Photo offers a selection of pictures, taken by our photo-blogger on the national holiday — the Republic Day — on October 25 (RUS).

Ben reflects on the continuing conflict between the oil companies consortium on Kashagan project and the Kazakh government (ENG).