German Partner Uzbekistan Plunders German Companies

Once-flourishing Uzbek-German trade is nosediving. German businessmen are coming forward with horror stories about doing business in Uzbekistan, a country where powerful, voracious families often seize profitable businesses or simply fail to pay for services rendered. But Berlin – eyeing a retreat from Afghanistan through Uzbekistan – is in no position to protest. 

"The German private sector, statistics show, is losing faith in Uzbekistan," Germany's international broadcaster Deutsche Welle (DW) reported on February 28. “German companies have filed complaints of stolen shares, missing payments and frozen profits.”

Bilateral trade fell 30 percent between 2010 and 2011, from 759 million euros to 518 million euros, the broadcaster said. Germany's Economics Ministry predicts a further 20 percent decrease in 2012.

More than twenty German construction companies, for example, built the Palace of Forums in the capital, Tashkent, in 2009. They are still owed some 60 million euros. "In total, experts estimate that up to 500 million euros are being withheld from German companies by Uzbek partners," DW concluded.

The Swiss-registered Zeromax conglomerate, widely believed to have been linked to the president's daughter Gulnara Karimova, was behind the Palace of Forums and other major construction projects. The company went bust in 2010, leaving behind huge debts. It’s unclear if Karimova suffered, or divested just in time. 

Instead of complaining, Berlin looks set to reward Tashkent, however. German Bundeswehr units will use the Northern Distribution Network and a base at Termez, in Uzbekistan’s south, to withdraw from Afghanistan this year and next. In exchange, Tashkent has made it clear it expects a windfall in leftover military equipment, not a lesson in transparency.