Uzbekistan Weekly Roundup

South Korean President Lee Myung-Bak visited Tashkent and signed a $2.6 billion deal with Uzbekistan to build a gas chemical plant, AFP reported. Earlier this year, police raided a South Korean golf club at dawn and reportedly roughly searched members, angering not only the club's patrons but the larger business community with such harsh treatment. Yet South Korea is in Uzbekistan for the long haul, and patched over the incident, given its many investments. Seoul is interested in tapping Uzbekistan's vast mineral, hydrocarbons, uranium and precious metals resources, as well as helping Uzbekistan develop its textile industry, car manufacturing and communications, President Islam Karimov told reporters after his meeting with President Lee.

The Korean leader said more than 180,000 ethnic Koreans live in Uzbekistan, which was a stimulus to trade. The state-owned Uzbekneftegas energy company signed a contract with South Korea's GS Engineering and Construction, Samsung Engineering, Hyundai Engineering and the Korean Gas Corporation to build a gas-chemical plant in Ustyrt. Trade turnover reached $1.6 billion in 2010, Uzbekistan’s state media have reported. For Tashkent, South Korea offers some diversity from Russia, a long-time trading partner, and China, which has increasingly been buying up shares in Central Asian businesses and investing large amounts in infrastructure, and sometimes making Central Asian leaders uneasy

Meanwhile, Uzbek officials are still sorting out problems with debts they owe German companies, and have refused to cooperate with Oxus Gold, a British mining company that had worked in Uzbekistan for years before it was forced to flee last month. Oxus reportedly faced a hostile audit and essentially an asset seizure from the Uzbek government and the arrest and sentencing to 12 years of imprisonment of Said Ashurov, their chief metallurgist on what appear to be bogus charges of “espionage.” Amsterdam & Peroff, Oxus' lawyers, have addressed an open letter dated August 18 to Carolyn Lamm, a US attorney for White & Case who is currently the chairperson of the board of the American Uzbekistan Chamber of Commerce (AUCC), which maintains offices in Washington, DC and Tashkent.

The letter signed by Robert Amsterdam seeks the intervention of the AUCC, where Oxus is still represented, in obtaining Ashurov’s release, but expresses concern about Lamm's possible conflict of interest. Lamm has litigated on behalf of the government of Uzbekistan in a number of sensitive cases, including a dispute ultimately resolved between Coca Cola and Zeromax--a one-time investor in Oxus which was seized last year and put into bankruptcy.

Despite these harrowing indications of the untrustworthiness of Uzbekistan as a business partner, Tashkent is not losing customers. General Motors has constructed a new $521.8 million plant in a joint venture to produce small car engines and is also building a new air terminal for Tashkent with better security and convenience for foreign travelers. The new factpru currently employs 420 people and anticipates hiring 1,200, and young Uzbeks trained abroad have been put to work there. Mercedes Benz began selling buses to Uzbekistan’s transportation system last year, and other projects are moving forward. Western governments and companies need this Central Asian dictatorship not only for its resources, but as a key hub in US supply of NATO troops in Afghanistan. Last week service began on the long-awaited 75-kilometer Hairatan-Mazar-i-Sharif railroad, built by Uzbekistan Railways. Central Asia Online reports that the route is heavily guarded by Uzbek soldiers.

Uzbekistan is wary of the Russian-dominated Collective Security Treaty Organization (CSTO) and Commonwealth of Independent States (CIS) -- Karimov did not attend the CSTO's informal summit in Astana this month and will not personally attend the 20th anniversary CIS summit with other presidents September 2-3, and instead is sending Prime Minister Shavkat Mirziyoyev. At the CSTO summit, there was a three-hour discussion behind closed doors about "the destructive role" that social networks play in protests, such as in the Middle East, Russian Profile reported. The Central Asian regimes are looking to rein in Facebook, Twitter and other social media sites so they don't see a repeat of the Arab Spring in their own countries.

Even without collaborating with neighbors on the control of cyberspace, already Uzbek authorities have blocked Internet sites and ordered cell phone companies to turn over suspicious communications from any of the country's 24 million users, about 80 percent of the population. This month, officials launched a home-grown social media site called "Muloqot" which means "dialogue" in Uzbek, but some users are skeptical that it will become popular, says Inside the Cocoon. For one, it seems like a honey trap of sorts to get people talking and providing the government with the sort of personal information they need to control society better. It also faces competition, even given the constraints over the Internet in Uzbekistan. Russian sites like mail.ru and Odnoklassniki already have numerous people from Uzbekistan using them. Facebook already has 85,000 Uzbeks and some opposition groups and critical independent news site fan pages such as fergananews.com.

As the 20th anniversary of independence approaches September 1, the government is tightening up control of the mainstream media as well to present a favorable picture of Uzbekistan. In Namagan, local authorities charged three television journalists with extortion in a case that appeared to have implications for freedom of expression. Elena Urlaeva, a human rights activist based in Tashkent, travelled to Namangan to protest the handling of the case and was detained and beaten by local police, Radio Free Europe/Radio Liberty reported.