Uzbekistan Promises Wealth, Delivers Chickens

Uzbek President Islam Karimov hopes to lure big spenders to Tashkent with promises of fixed tax rates and less bureaucracy. But while he hatches plans to spend big in the capital, authorities in rural areas are taking farcical steps to shore up their failing economies. 

Karimov signed a decree on April 10 allowing foreign companies that spend over $5 million to have their tax rate fixed at the time of investment for ten years, and not be subject to Uzbekistan’s unpredictable legislative process. The president’s decree also warns local powerbrokers and police officers to lower bureaucratic hurdles, which have scared off foreign companies in the past. 

Maybe the measures will help soften Uzbekistan’s image after a series of scandals, allegedly orchestrated by foreign-owned companies’ Uzbek partners, forced some big investors to liquidate their assets, which were quickly bought for cheap by the government. “The central thrust of the plan to draw foreign companies appears based on making conditions more predictable,” the Associated Press said of the decree. 

Tashkent has recently lured in one name-brand company, Hyatt International. Hyatt will lend its name to a five-star, $113 million hotel being built in the capital as a joint project between the Tashkent municipality (which has pledged $71 million) and the Fund for the Reconstruction and Development of Uzbekistan ($42 million), Regnum reports. The 249-room hotel is part of a $140 million government plan to attract tourists to the oft-forgotten Central Asian capital. (It’s unclear if authorities will address the country’s famous visa hurdles as part of the plan.)

Tashkent likes to boast it managed to turn the global economic crisis into a period of impressive expansion. Official figures claim growth reached 8 percent in 2010 (though inflation rose to 12 percent the same year), according to figures cited by the AP.

Reports from the ground, however, contradict the government’s rosy figures. 

Radio Free Europe reported on April 10 that doctors and teachers in the eastern Bukhara region are being paid in baby Serbian chickens—10 chicks each for public sector workers. While the government says the plan is voluntary and will help increase domestic production of eggs and poultry, some residents told RFE/RL they had received the chicks against their will. Average salaries for government employees outside Tashkent are about $100 a month.

Frequent reports in recent months have also highlighted gas shortages in the gas-rich country. Some villages have been disconnected from natural gas as the government exports the blue fuel in exchange for hard currency. Local authorities claim the disconnections are due to residents’ failure to pay their bills, and sometimes cite dwindling resources, even though the country has reserves of well over 1 trillion cubic meters. 

So while Karimov promises foreign businessmen luxury and wealth, he seems to have no such plan for the Uzbek people.