German airbase in Uzbekistan: Illegal market for German goods

08.05.2013 22:03 msk Business Politics Central Asia Uzbekistan

The Strategic Military and Transport Base of the Federative Republic of Germany is located in the Uzbek town of Termez near the Afghan border; its maintenance costs several tens of millions of euros a year. The Germans use this civilian airport as a “trampoline” into Afghanistan since late 2001. The base houses several hundreds of servicemen who provide logistics for dispatching and receiving aircraft with cargo and troops. The exact amount of money the German government spends on the base is unverifiable. On the other hand, the base does not only mean expenditures. Since early this year, the base has turned into a source of significant side income for the German soldiers and officers.

Uzbekistan: New Ferghana Railway Plan Tweaks Tajikistan

13.03.2013 21:31 msk Ferghana Valley Business Tajikistan Uzbekistan

Uzbekistan’s plan to build a new rail line linking Tashkent to the Fergana Valley would mean eliminating the current international route through Tajikistan, which has relied on roughly $25 million a year in transit fees. Following the break up of the Soviet Union, Tajikistan’s rail lines have become marginalized and underutilized, such as this abandoned track in Tajikistan's Sughd Province.

“The Ministry of Truth” of Uzbekistan: Art of lying through teeth

04.03.2013 10:49 msk Analytics Business Politics Uzbekistan

Oh, what joy these Uzbek statistics are! They are optimistic like the president smiling surrounded by happy subjects depicted posters. It is also far from reality as the Akhborot news bulletin, which daily reports on the non-existent grandiose successes. Last but certainly not least, they shamelessly lie like the government-run newspapers. And they, of course, are only pieces in the large propaganda machine, which could perhaps be called the “ministry of truth,” which continuously spits out more and more “proofs” of wellbeing, thriving and the “great future.” However, it turns out that even this seemingly flawless state machine breaks down once in a while…

Uzbekistan 2012: Resume and forecast. Part II: Farewell, MTS!

25.01.2013 22:49 msk Business Russia Uzbekistan

Fergana continues publishing review articles on 2012 outcomes in Uzbekistan. The first article was on the cooling of political ties with Russia and its political bloc, which was one of the most discussed topics last year. The second article will cover a scandal related to booting MTS from Uzbekistan: how it happened, what MTS’ competitors did about it, and its impact on common citizens’ lives, economy and the overall cellular communications market.

Bishkek: The end of light and gas

20.12.2012 17:10 msk Business Kyrgyzstan

Frost has not lifted off Northern Kyrgyzstan for the past two weeks, reaching unfamiliar temperatures of -15 to -20 C. Now people often recall that only this autumn Kyrgyz officials assured the citizens that “the country is prepared for the winter season.” Of course everything turned out to be quite different. The people of Bishkek met winter face to face on 12 December, when gas was switched off in the suburbs and in some of the city’s boroughs. The situation got worse on 14 December, when the gas switch-off spread. Central heating has not been connected in all the houses in Bishkek, especially not in the newly built blocks, so the lack of gas became a catastrophe for Bishkek and its surroundings. People started using alternative methods of heating: stoves and heaters. The electricity grid could not handle the increase in pressure: electricity blackouts are back in the city.

Investigation: What happened to TeliaSonera in Uzbekistan?

15.10.2012 11:03 msk Business Uzbekistan

Communications company TeliaSonera has been shaken by a big scandal. A film shown on Swedish TV voiced suspicions that the management of this well known and large group of companies is involved in bribing powerful people and using corrupt business methods, in particular in regard to their Uzbekistan operations. The Swedish authorities reacted to the film quickly, and their police and independent auditors began an investigation, aiming to find out the legality of TeliaSonera’s deals to purchase companies in Uzbekistan. Following the initiative of their Swedish colleagues, Fergana has also decided to try to uncover the details of this curious and cautionary tale.

Gayane Avakyan and TeliaSonera or Swedish Krona for Googoosha

21.09.2012 09:49 msk Business Uzbekistan

On 19 September a Swedish public television current affairs program called Mission: Investigate (Uppdrag granskning) by journalists Sven Bergman, Joachim Dyfvermarkand and Fredrik Laurin, reported on Swedish telecommunications company TeliaSonera’s entrance to Uzbekistan. According to the programme, TeliaSonera paid $320 million to Gibraltar-based company Takilant Ltd, a “local Uzbek partner”, in exchange for 3G licenses and a series of Uzbek phone numbers, which allowed it to start operating in Uzbekistan.

MTS Uzbekistan court case: “Faster, faster!”

14.09.2012 13:48 msk Business Uzbekistan

The case of Uzdunrobita, the Uzbekistan subsidiary of MTS, is swiftly moving towards the finish line. The hearings began on 27 August, and only in two weeks, the court managed to question all the participants and witnesses and publish case materials. Yesterday, on 12 September, oral arguments took place in the Tashkent city criminal court. Apart from absurd accusations about creating criminal groups to draw out capital, the managers of the company are accused of the regional subsidiaries operating without licenses. As Fergana discovered, the branch structure of the organisation was created by its previous owners and one of the most influential people in the country was directly involved in implementing it. It was most likely the same person who is hurrying the court and stands behind the seizure of the successful Russian business.

Planned Inefficiency in Uzbek Cotton Sector

03.07.2012 10:43 msk Business Uzbekistan

Pressure to meet production quotas is making life unbearable for many farmers in Uzbekistan, and some say they would sell up and emigrate if only they could. Although farmers are technically private leaseholders, they continue to be bound by a Soviet-style quota system for cotton, under which they have to grow at least 1.5 tons per hectare or face the consequences. They have to sell to government-controlled buyers at low prices, and the state then sells the cotton on the international market at a hefty mark-up.

Responsible Sourcing Networks recommends: Exposure to Uzbek cotton may seriously damage your reputation

07.06.2012 01:10 msk Business Uzbekistan

“From the field: Travels of Uzbek Cotton Through the Value Chain” is a recently published report on the specifics of the Uzbek cotton industry by the Responsible Sourcing Network (RSN). It represents a first part of a set of learning tools the RSN is developing for brands that want to know more about the production and characteristics of Uzbek cotton. Uzbekistan is the only country in the world where children are forced and organized by the government to harvest cotton which earns it over one billion dollars annually. RSN recommends that brands and retailers carrying cotton products should minimize their exposure to Uzbek cotton, the presence of which in a product implies both social and environmental risk and may seriously damage a company’s reputation.

Loss of time, business and freedom: that’s all foreign investors get in Uzbekistan

23.05.2012 20:56 msk Business Uzbekistan

Uzbek authorities make enormous efforts to fix the spoiled country’s reputation: it badly needs new investors instead of those it has had and used already. Tashkent runs a huge PR-campaign: forums, symposiums and even the Art Fashion Week, organized by Gulnara Karimova and her “Culture and Arts Foundation of Uzbekistan. Yet however, the West seems to have no illusions over the true state of things in Uzbekistan and shows its attitude by canceling the fashion show of the president’s daughter in New York, boycotting cotton from Uzbekistan and openly criticizing the existing regime for the numerous reported human rights violations.

US Befriends Kazakhstan Dictator, Now World's Largest Producer of Uranium

17.05.2012 21:10 msk Business Kazakhstan

Uzbekistan: What’s the use of “corn labyrinths” for tourism development?

10.02.2012 23:44 msk Business Uzbekistan

Villagers in Uzbekistan are freezing without natural gas which has been exported abroad

25.01.2012 21:53 msk Business Uzbekistan

Copper wealth of Nazarbayev. Global Witness claims against Kazakhmys

02.08.2010 10:10 msk Business Kazakhstan

Global Witness, the international anti-corruption organization, published the report, named "Risky business. Who controls Kazakhmys plc?" Based on independent investigation information, Global Witness affirms that Kazakhmys, the biggest Kazakhstani copper miner, did not share vital and financially important information with the investors when it was listing its shares at London Stock Exchange in 2005. The information included close corruption ties of senior management with President Nazarbayev. The experts demand to audit Kazakhmys again and publicly offer over half of company’s shares for investigation period in order to prevent possible interference of corrupted Kazakhstani regime in the corporate affairs, not reflecting the interests of minority shareholders.