EurasiaNet Business & Economics - Rampant Corruption Makes Kyrgyzstan a ãFaltering Stateä

BUSINESS & ECONOMICS

RAMPANT CORRUPTION MAKES KYRGYZSTAN A "FALTERING STATE"
12/21/05

Some entrepreneurs in Kyrgyzstan characterize the country’s current business climate as anarchic, featuring a drastic increase in official corruption since the ouster of former president Askar Akayev in March. The mounting disorder in Kyrgyzstan has prompted one international organization to dub Kyrgyzstan a "faltering state."

The new administration, headed by President Kurmanbek Bakiyev, came to power amid vows to curb corruption and promote democratic values. But it has made little tangible progress is reaching those goals. [For background see the Eurasia Insight archive]. As Bakiyev continues to struggle to consolidate his power, bureaucrats on various levels are taking advantage to their regulatory authority to effectively extort money from entrepreneurs and entities, local businessmen say. Bribe rates have risen between 200-500 percent, according to entrepreneurs, who all spoke to EurasiaNet on condition of anonymity.

A 2005 survey conducted by the international anti-corruption group Transparency International confirmed that graft is a serious problem in Kyrgyzstan, as Bishkek ranked in the top 20 percent of most-corrupt countries. [For additional information click here]. Within the Central Asian context, however, Kyrgyzstan ranked behind only Kazakhstan in the corruption index. Corruption in Tajikistan, Turkmenistan and Uzbekistan was deemed more problematic than in Bishkek, according to the Transparency International survey.

"It’s one thing to write an anti-corruption plan, it’s another thing is to implement [it]," said Aigul Ahmatjanova, director of Transparency International Kyrgyzstan, referring to the Bakiyev administration’s performance.

One Kyrgyzstan-based Western entrepreneur said conditions in Bishkek are now worse than during the Akayev era. "Investors knew if something had to be fixed, you could fix it with the Akayev family. Now there’s uncertainty of who has the power in country," he said.

The investment mood has dampened noticeably over the past year. A survey conducted by the International Business Council (IBC), a Bishkek-based NGO that promotes entrepreneurial activity, showed that foreign investors are scaling back their plans for Kyrgyzstan in 2006.

David Grant, IBC’s director, suggested that even under a best-case scenario, it would take some time for the Bakiyev administration to bring corrupt practices under control. "Dealing with corruption is not [something that can be achieved] overnight," Grant said. "If they [authorities] are serious about eradicating corruption, it takes minimum five years to see differences."

Some international experts are concerned that Kyrgyzstan is in danger of being caught in a downward spiral. Crisis Group, a Brussels-based organization, issued a report, titled "Kyrgyzstan: A Faltering State," that argued for urgent international action to prevent the Central Asian country from slipping into failed-state status. "There is a growing sense that it [the Bakiyev administration] is barely less corrupt than its predecessor [Akayev’s] and perhaps less competent. The security services are slipping out of government control, raising the prospect of more chaos and criminality," said the report, which was released December 16.

The report described Kyrgyz law-enforcement agencies as "severely demoralized" and lacking resources. Meanwhile, worker discontent is growing, underscored by the labor strife last summer at the Karakeche coal mines in Naryn province. The mines are responsible for producing half the country’s coal.

"Rather than face up to these problems, the government has been struggling with internal dissent," the report said. "Two of its best-known members, acting Prosecutor General Azimbek Beknazarov and acting Foreign Minister Roza Otunbayeva, have been ousted and may now form the nucleus of a new opposition movement." [For background see the Eurasia Insight archive].

The Brussels-based Crisis Group called on the Bakiyev administration to immediately tackle corruption and associated problems. An increase in the international community’s commitment to promoting democratization was also needed, the report added. "Otherwise, there is a real risk that the central government will lose control of institutions and territory, and the country will drift into irreversible criminality and permanent low-level violence," the report stated.

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