FEB. 19 2016 (The Conway Bulletin) – Companies in Uzbekistan are failing to pay staff their full salaries, eurasianet.org reported quoting figures from a state agency that showed fines totalling $500m being handed out for failing to pay salaries on time. This could be, eurasianet.org reported, a sign that worsening economic conditions are hitting Uzbekistan.
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(News report from Issue No. 269, published on Feb. 26 2016)
FEB. 16 2016 (The Conway Bulletin) – Uzbekistan’s Central Bank said it had suspended commercial lender Khamkorbank’s licence to trade in foreign currencies for six months due to unspecified violations of banking rules. The World Bank’s IFC and the Netherlands’ state-owned FMO both own stakes in Khamkorbank, 14.5% and 15% respectively.
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(News report from Issue No. 268, published on Feb. 19 2016)
FEB. 19 2016 (The Conway Bulletin) – Russian telecoms operator VimpelCom said it would pay a $795m settlement to resolve US and Dutch lawsuits focused on bribes it paid to top Uzbek officials in the late 2000s, a deal that highlights corruption by foreign telecoms companies in Uzbekistan.
The court settlement against VimpelCom is one of the largest settlements linked to bribery in US corporate history.
VimpelCom is majority owned by Russian billionaire Mikhail Fridman but is headquatered in Amsterdam and is also listed on the New York Stock Exchange. Telenor, the Norwegian telecoms company, also owns a 33% stake in VimpelCom.
Officials in the US and the Netherlands opened investigations against VimpelCom in 2014 for bribing Uzbek public officials to obtain a licence. The description of the corrupt official in the US court’s proceedings fits the profile of Gulnara Karimova, the president’s daughter, although her name is not explicitly mentioned.
The court said that, between 2006 and 2012, Unitel, VimpelCom’s subsidiary in Uzbekistan, paid $114m in bribes to operate in the country and to obtain 3G and 4G licences.
Two days before the settlement, VimpelCom released a report where it effectively admitted its guilt.
VimpelCom said it “would, among other things, acknowledge certain violations of the US Foreign Corrupt Practices Act and relevant Dutch laws and pay fines.”
Following the settlement Jean Yves Charlier, the VipelCom CEO, said: “The wrongdoing, which we deeply regret, is unacceptable.”
VimpelCom uses the Beeline brand. In Central Asia, Beeline also operates in Kazakhstan and Kyrgyzstan.
But VimpelCom is not alone in bribing its way into Uzbekistan’s mobile network. Swedish-Finnish telecoms company TeliaSonera has also admitted bribe paying in 2008 for access to Uzbekistan’s market.
For Uzbekistan, the telecoms corruption cases have confirmed widely perceived views that bribe paying is rampant and that, previously, major companies wanting to do business there had to deal with Ms Karimova. She was once thought of as a future president but has been under house arrest in Tashkent for two years.
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(News report from Issue No. 268, published on Feb. 19 2016)
FEB. 17 2016 (The Conway Bulletin) – Uzbekistan’s government published a list of 89 state-owned companies that it said will sell at least 15% of their shares to foreign investors this year. Last December, the government approved a law that aimed to attract foreign investors. The long list of companies open for investment includes cotton industry giant O’zbekyengilsanoat, telecoms operator Uzbektelekom and Uzbekistan’s postal service.
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(News report from Issue No. 268, published on Feb. 19 2016)
FEB. 16 2016 (The Conway Bulletin) – Swedish high street retailer H&M said that it has banned its suppliers since December from using cotton sourced from Turkmenistan in any of their products after allegations that the Turkmen authorities use child labour to pick the harvests. H&M, and other retailers, have previously banned suppliers from sourcing cotton from Uzbekistan for similar reasons. Campaigners accused IKEA of using cotton from Turkmenistan in its various products
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(News report from Issue No. 268, published on Feb. 19 2016)
FEB. 10 2016 (The Conway Bulletin) – GM Uzbekistan sold 1,269 cars in Russia in January, down 37% on the same period in 2015, media reported quoting the Automobile Manufacturers Committee of the European Business Association which releases data on sales. Russia is GM Uzbekistan’s main market. GM Uzbekistan is important because it is one of the few relatively successful projects with Western business in Uzbekistan. Low oil prices have caused a recession in Russia which has impacted the rest of the region.
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(News report from Issue No. 267, published on Feb. 12 2016)
FEB. 8 2016 (The Conway Bulletin) – Uzbek President Islam Karimov said “Western values” were the cause of “vulgar” practices, such as homosexual relations. Speaking to Uzbek press, Mr Karimov, 78, said that homosexuality for him was a form of a mental illness. Homosexuality is illegal in Uzbekistan and can be punished with up to three years in prison. Human rights groups regularly rate Uzbekistan as one of the most oppressive countries in the world.
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(News report from Issue No. 267, published on Feb. 12 2016)
FEB. 4 2016 (The Conway Bulletin) – Tashkent’s state-owned bus company Toshshahartranshizmat has started to trial free wifi on its buses around the Uzbek capital, media reported, a signal of just how ubiquitous wifi has become in Uzbekistan. Uzbekistan’s security forces closely monitor internet use. Uzbekistan is considered one of the most repressive countries in the world.
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(News report from Issue No. 266, published on Feb. 5 2016)
JAN. 26 2016, DUSHANBE (The Conway Bulletin) — Taliban militants attacked and badly damaged a power line sending electricity to Afghanistan from Uzbekistan, a warning sign for Tajikistan and Kyrgyzstan who are hoping to develop a power-supply network to Pakistan across Afghan territory.
The attack in the northern Baghlan district cut power to Kabul and underlined the Taliban’s ability to attack targets, seemingly at will, in the north of the country. Last year it captured the town of Kunduz near the border with Tajikistan. Russia and Central Asian governments have warned that a powerful Taliban threatens to destabilise the region.
Afghanistan has become an increasingly important trade and diplomatic partner for Central Asia. It has developed a series of power supply deals with Turkmenistan and Uzbekistan. Most ambitiously Afghanistan will also host an electricity power line running from Kyrgyzstan and Tajikistan to Pakistan, dubbed CASA-1000, and a gas pipeline running from Turkmenistan to India, called TAPI.
Both projects need a stable Afghanistan to be successful. The attack on the power line running from Uzbekistan to Afghanistan has severely reduced electricity to Kabul in the short-run and will make policy makers in Central Asia the West nervous in the long-run.
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(News report from Issue No. 265, published on Jan. 29 2016)
JAN. 29 2016 (The Conway Bulletin) – For policy makers involved in pushing the CASA-1000 and TAPI projects, reports from Afghanistan that the Taliban have attacked and badly damaged part of a power line sending electricity to Kabul from southern Uzbekistan is the stuff their nightmares are made of.
CASA-1000 is the World Bank-backed $1.1b project that will supply Pakistan with power from hydro-stations in Kyrgyzstan and Tajikistan. TAPI is the name of a pipeline that will pump gas from Turkmenistan to India.
Both projects will transit across Afghanistan and form part of a loose north-south Silk Road that US officials have been touting for the past decade. The rub is that they require a stable Afghanistan and that, it appears, is exactly what they don’t have.
If the Taliban are attacking power lines running from Uzbekistan to Kabul then what would stop them attacking a power line running to neighbouring Pakistan or a pipeline running to India?
For each project, the leaders now have to inspect their security systems once again. Costs and doubts about both projects will be rising.
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(Editorial from Issue No. 265, published on Jan. 29 2016)