Fancy entering Uzbekistan’s telecom market? Russian mobile giant MTS's assets are up for auction and can be yours for about $300 million.
MTS, which was the largest mobile operator in Uzbekistan until last summer, withdrew from the country’s scandal-ridden telecom sector this year after it became embroiled in a shady taxation dispute that looked more like an official asset grab.
A "committee of creditors" of MTS's Uzbekistan subsidiary, O'zdunrobita, has decided to auction off the firm's assets, the Uzbek State Committee for Privatization, De-monopolization and Development of Competition announced through its Biznes-Daily Media website on June 3.
Officials set a reserve price at 600 billion sums (about $290 million at the official exchange rate), Biznes-Daily Media said. The deposit required to register for the auction is 20 percent of the reserve price ($58 million). Bidders may submit their applications by 6 p.m. Tashkent time on June 28. The auction will be held July 1.
In some ways, it's a deal. Last year, Michael Hecker, MTS's vice-president for strategy and corporate development, put the value of the company's Uzbekistan assets at over $1 billion.
Making sense of Uzbek economic figures is a difficult task. With no way to verify official data, observers must parse the limited information Tashkent drips out. And those official stats often appear more like a wish than reality.
So take the following in that spirit.
Citing parliamentary budget committee papers, the Novyy Vek newspaper reports that Tashkent posted a budget surplus worth 0.4 percent of GDP in the period from January to March this year.
The surplus stood at 86.7 billion sums ($41.6 million at the official exchange rate) in the first quarter of 2013, Novyy Vek said on June 4. Budget revenue was $2.58 billion (24.8 percent of the first quarter GDP) and expenditure totaled $2.53 billion (24.4 percent). The newspaper did not provide budget figures for 2012, but said the 2013 national budget was approved with a deficit of $575.5 million, or 1 percent of GDP.
"The main factors increasing the state budget's revenue … are the expanding tax basis and increasing tax collection," Novyy Vek reported, citing the parliamentary documents.
While local income and corporate tax rates have stayed largely unchanged over the past year, Tashkent increased the petrol tax by 20 percent in 2013 and has slapped unpopular new excise and customs duties on a wide range of imports, sparking inflation fears.
The U.S. State Department released its annual "Country Reports on Terrorism," which purports to summarize and analyze the "terrorist" threats around the world. Here is the report's summary of Central Asia in 2012:
Despite the absence of major terrorist incidents on their territory, governments in the five Central Asian states were concerned about the possibility of a growing threat connected to changes in the international force presence in Afghanistan in 2014. While some sought to reduce their countries’ vulnerability to the perceived terrorist threat, the effectiveness of their efforts was in some cases undercut by failure to distinguish clearly between terrorism on one hand and political opposition, or non-traditional religious practices, on the other.
On the occasion of last year's report, Myles Smith wrote on EurasiaNet that "For the most part, the report simply lists what authorities describe as terrorist attacks and as anti-terrorist operations, but uses qualifying terms – 'reportedly'; 'potentially' – that make it clear State is as in the dark on the nature of the events as the rest of us." A year later, there's really nothing to add to that analysis. But it's worth noting that, if the U.S. is spending increasing amounts of money, and making counter-terror assistance an increasingly large part of U.S. activity in the area, it might behoove Washington to be a little clearer about what exactly it is that this money and diplomatic effort are being directed at.
Looking at the individual country listings is instructive. Here is Tajikistan's summary:
Another foreign telecoms firm appears to have been paying millions of dollars to various charities in Uzbekistan, some of them linked to Gulnara Karimova, strongman Islam Karimov’s flamboyant daughter. The revelations come in the wake of reports that Nordic telecoms giant TeliaSonera paid Karimova’s charities to stop harassment from Uzbek officials.
The Tajikistan-Afghanistan border, for much of its 800 miles as open as this. (photo: The Bug Pit)
Russia's Central Asia security bloc held a summit in Kyrgyzstan this week, and the main item on the agenda appeared to be the ostensible danger of increased tension in the region as a result of the U.S./NATO pullout from Afghanistan, which is supposed to start next year. But the outcome of the summit subtly highlighted how the alliance's members -- Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan -- have differing agendas vis-a-vis regional security.
At the summit, the organization reportedly decided to "step up control" on the border between Afghanistan and Tajikistan, which would be the weak link in any security cordon between Afghanistan and the ex-Soviet world. What that means is unclear, though: Russia has been pushing Tajikistan to allow it to again police that border, as it did until 2005. But Tajikistan has been fairly adamant that it doesn't want the Russians to come back. Russia's ambassador to Tajikistan told Reuters a couple of weeks ago that Moscow wants to bring back its border troops to Tajikistan, though such a deployment would "of course" have to be agreed upon by Tajikistan, as well. Tajikistan's government has been notably silent on the issue lately, so it's not clear whether they might be mulling a change of policy and allowing Russian border troops again.
Along with this, Russia is continuing its alarmist rhetoric about the dire consequences of the U.S. pullout in 2014, reports RIA Novosti:
Malaysia's state-owned Petronas oil and gas company will jettison all its hydrocarbon investments in Uzbekistan this year, a company representative has said. Meanwhile, a small company registered in an offshore tax haven is eager to ramp up its exploration projects in the Central Asian country.
"This decision by Petronas is final. The Uzbek government is now preparing documents that will make it possible to legally complete the process of exiting from upstream projects," an anonymous source at the company told Russia's RIA Novosti news agency on May 24. The move is in line with "the company's general strategy to optimize its activities in the region."
The source said that Petronas had already stepped away from production-sharing agreements on two projects: a gas condensate field on the Ustyurt Plateau adjacent to the Aral Sea and the Boysun oil and gas field in the Uzbekistan's south. These PSAs were signed between 2008 and 2010, RIA Novosti said.
It is unclear exactly why Petronas is bowing out. Large foreign investors in Uzbekistan have been known to face harassment from excessively attentive officials looking for kickbacks. But the company has been scaling back operations in Uzbekistan for some months, declaring in April that one project turned out to be commercially unfeasible. Overall oil and gas production in the country has fallen in recent years.
Uzbekistan President Islam Karimov meets NATO Secretary General Anders Fogh Rasmussen during the former's visit to Brussels in 2011. (photo: NATO)
NATO is opening a liaison office in Tashkent -- but don't read too much geopolitical significance into the move. A number of Russian-media outlets have reported the move, seeing in it yet another piece of evidence that Uzbekistan is moving away from Russia (leaving the Collective Security Treaty Organization) and toward the West (cooperating with the U.S. on military transit to and from Afghanistan, getting increasing military aid from Washington).
But a NATO official tells The Bug Pit that this is simply a regular rotation of its officials, in this case from Astana to Tashkent. And it will coordinate all the alliance's activities in Central Asia:
The NATO Liaison Officer’s mandate is to further strengthen relations, dialogue and practical co-operation with all Partner states in the region. The NATO Liaison Officer has previously been based in Astana, Kazakhstan.
As part of a regular regional rotation process and following an agreement with the government of Uzbekistan, the NATO Liaison Officer in Central Asia will soon (in June-July 2013) open a new office in Tashkent. From there he will also cover Kazakhstan, the Kyrgyz Republic, Tajikistan and Turkmenistan.
The office will have the status of a diplomatic mission and be headed by a national of a NATO member state. A small number of staff will support the work of the NATO Liaison Officer. In addition to working with the governments of the respective Partner states with a view to strengthening long-term bilateral co-operation, the NATO Liaison Officer will also support the Alliance’s public diplomacy activities as well as co-ordination with other international actors in the region.
Tashkent news/analysis website UzMetronom says the NATO move isn't a big deal -- yet.
Here's looking at the world's worst economy cabin.
When the countries of Central Asia end up on a list, they’re usually at the bottom (or the top, depending on how you look at it, as in “most-corrupt”). A new ranking is no different: Three of the region’s national air carriers, surprise, have placed among the world's worst.
Business Insider, an online magazine, has ranked economy-class cabins and found the flag carriers of Turkmenistan, Uzbekistan and Tajikistan offer passengers a “most unpleasant in-flight experience,” measured by "seat comfort, in-flight entertainment, cabin cleanliness and condition, quality of meals served, and service efficiency."
The magazine compiled its list from ratings made available by airline reviewer Skytrax. It then "adjusted each measure to be out of 100, and averaged them to produce a final score that reflects the overall in-flight experience."
The magazine and Skytrax offer little quantitative data to back the rankings, which may lead regular Central Asia travellers to quibble or ask why some of the region’s fly-by-night airlines did not make the list.
Perhaps the judges have never been stranded on the runway in Osh waiting for East OK Avia to fetch them. Maybe the judges who sampled UTair simply met violent deaths. One EurasiaNet correspondent likes to tell a story from Ariana Afghan Airlines: As the plane tilted forward for landing, passengers in the front of the cabin got acquainted with the contents of an overflowing toilet in the rear.
Federal authorities in Idaho have arrested an Uzbek man on suspicion of conspiring with the Islamic Movement of Uzbekistan, a Washington-designated terrorist group, and providing the organization with bomb-making training.
The arrest of Fazliddin Kurbanov, 30, comes only weeks after news emerged that the alleged Boston Marathon bombers hailed from the former Soviet Union. It is likely to fuel growing concerns in the United States about terror threats emanating from the ex-Soviet states, which regional leaders are already eager to exaggerate to justify their widespread repression against followers of Islam.
Some media in Uzbekistan have seized the opportunity to link Kurbanov to refugees who found asylum in Idaho after Uzbek authorities opened fire on unarmed civilian protestors in the eastern town of Andijan in 2005. Tashkent has long alleged it was battling Islamic militants that day and has sought to tar the refugees as radicals. But the Uzbek media attempts to make a connection are extremely tenuous.
The Associated Press reports that Kurbanov was arrested May 16 in Boise after a grand jury charged him with "conspiracy to provide material support to a foreign terrorist organization," "conspiracy to provide material support to terrorists," and "possession of an unregistered explosive device." The indictment alleges that Kurbanov provided money and computer software to the Islamic Movement of Uzbekistan (IMU) "to be used in preparation for and in carrying out an offense involving the use of a weapon of mass destruction."
After causing a storm of speculation by alleging that Uzbek President Islam Karimov had suffered a heart attack in March, exiled opposition leader Muhammad Solih has said he sees no role for himself in a post-Karimov Uzbekistan.
In an interview with the Moscow-based Fergana News website published on May 16, Solih – who many feel discredited himself with the rumor – insisted his information on Karimov's heart attack and subsequent bedridden condition was accurate and said that Karimov’s appearance looking alive and well on state television several days after the reports surfaced did not contradict his information.
Solih said it had taken his group 15 hours to verify the heart attack and confirm it with "several sources" inside the Uzbek government. "According to our information, the day Karimov suffered a heart attack he had an argument with his daughter, Gulnara [Karimova]," Solih told Fergana News editor Daniil Kislov.
Solih explained that the argument between father and daughter was caused by Karimova’s "frivolous" behavior: Uzbekistan's powerful security service, the SNB, intercepted material compromising Karimova before it appeared in the Russian press to "save the family."
That part is certainly credible: Karimova is a dilettante, an aspiring pop star and fashion designer who posts sultry pictures of herself wearing negligee on the Internet: Enough to embarrass any father.
"And she is partially to blame for his suffering such an attack," Solih explained, "but I absolutely did not think that there would be such a fuss about the heart attack because something similar could happen to anyone."