Russian hydrocarbons giant Lukoil is upping gas production in Uzbekistan. But as that gas is shipped abroad, local shortages are prompting Uzbek consumers to double their intake of dirty coal.
The private Uzdaily.uz website reported this week that Lukoil boosted gas production to about 4.3 billion cubic meters (bcm) in 2012, up from 2.6 bcm the year before. Output at the Khauzak-Shady-Kandym-Kungrad field jumped by 24.2 percent and production at Gissar, which started operating in late 2011, reached almost 1 bcm.
Uzdaily.uz said Lukoil plans to extract 4.4 bcm this year, 5.2 bcm next year and 8.2 bcm in 2015. Uzbekistan's total gas production stayed roughly level at 62.9 bcm in 2012, according to government stats cited by RIA Novosti.
One might think all this gas would help ease Uzbekistan’s chronic energy shortfalls. But growing gas exports seem to be contributing to widespread shortages and an increasing reliance on coal.
Citing a source at the state-run Uzbek Coal company, Tashkent’s mildly critical independent Novyy Vek weekly reports that, across the country, residents doubled coal consumption last year. Uzbek Coal projects consumption to jump by almost 300 percent to 2.4 million metric tons by 2020. Uzbekistan produced about 3.9 million metric tons of coal in 2012.
The U.S. intelligence community believes that the greatest threat facing Central Asia is internal, rather than emanating from Afghanistan, in contrast to recent statements by State Department, members of Congress and Pentagon officials who have lately been emphasizing Afghanistan-based Islamist threats to the region.
In an annual ritual, the U.S. director of national intelligence delivers the Worldwide Threat Assessment of the US Intelligence Community to the Senate, and the current director, James Clapper, did so Tuesday morning. Obviously such a report can make the world sound like a very dangerous place (Micah Zenko, of the Council on Foreign Relations, calls it the "World Cup of threat inflation"). But the section of the report dealing with The Bug Pit's beat is remarkably sober. While last year's report emphasized the threat to Central Asia from Afghanistan, this year's makes no such mention, instead focusing on the region's internal dynamics:
Gulnara Karimova, daughter of Uzbek President Islam Karimov, has finally broken her long silence about allegations that she is connected to two corruption cases being investigated in Europe, complaining to Swiss magazine Bilan that her “enemies” are taking advantage of the situation to undermine her reputation and griping that the “attacks” are distracting her from her charitable work.
In the interview published March 7, Karimova launched a fierce attack on Russian telecommunications company MTS (which left Uzbekistan last year amid a furious dispute with Tashkent) and its former director, Bekhzod Akhmedov, once believed to be Karimova’s right-hand man.
Akhmedov is a central figure in two European corruption investigations: a money-laundering probe in Switzerland and a Swedish investigation into allegations that Nordic telecoms giant TeliaSonera made dubious payments to enter Uzbekistan’s telecoms market in 2007 – a probe which forced the resignation of CEO Lars Nyberg last month.
According to company correspondence filed with a Swedish court, TeliaSonera officials negotiating with Akhmedov (who was head of their rival MTS at the time) to enter the market believed he was “the telecom representative of Gulnara Karimova.”
Karimova has no official role in Uzbekistan’s telecoms sector; officially, she is Uzbekistan’s ambassador to the United Nations, and she is also a fashion designer and a pop diva under the stage name Googoosha.
Forget gas and coal and cotton. Labor migrants are Uzbekistan's number-one export. And new data show their earnings jumped in 2012.
Russia’s Central Bank says migrant labor remittances sent from Russia to Uzbekistan totaled $5.7 billion in 2012, up 32.6 percent over 2011, when the figure was $4.3 billion. With Uzbekistan's 2012 GDP worth $35 billion (that's the official sum figure converted on the black market), remittances from Russia alone account for the equivalent of 16.3 percent of the economy (if you’re using Tashkent’s official exchange rate, they’re equivalent to 12 percent of GDP).
The Russian Central Bank figures only include official transfers (wired to Uzbekistan via Western Union-type money transfer systems), not cash carried home by migrants. And the figures are only for Russia. So, overall, remittances probably play an even greater role in the Uzbek economy.
Gas and other energy exports earned Tashkent $5.03 billion in 2012, according to government statistics. (Cotton earned $1.25 billion.)
The question of whether, or how, to give military aid to Uzbekistan is probably the hottest question among Central Asia policymakers in Washington these days. The U.S. has agreed to leave some equipment behind for its partners in Central Asia after its forces withdraw from Afghanistan, and Uzbekistan has made clear that it has high expectations for the sort of equipment that it will get. But some in Washington are concerned that giving military equipment to Uzbekistan would only abet the misrule of President Islam Karimov, who heads one of the most repressive governments on the planet. This question will undoubtedly be at the top of the agenda this week when a large delegation from Uzbekistan, headed by Foreign Minister Abdulaziz Komilov, visits Washington.
Publicly, the U.S. says it can provide military aid to Uzbekistan while still respecting human rights. At a recent congressional hearing, U.S. Assistant Secretary of State for South and Central Asia Robert Blake said that "the approach we have taken with Central Asia helps proactively strengthen the region’s capacity to combat terrorism and counter extremism, while encouraging democratic reform and respect for human rights.” But Blake didn't provide specifics. And It's easy to say you can give military aid while respecting human rights, but the devil is in the details. Meanwhile, behind closed doors there are discussions about expanding donations or sales of U.S. military equipment to Uzbekistan.
Wedding Plov comes with slices of kazy (horse sausage) at the Plov Center in Tashkent.
Each day around lunchtime, Tashkent’s plov cognoscenti start gathering in the shadow of the city's landmark TV tower. Theirs is an open secret: the best plov money can buy.
Follow the groups of men, or your nose, to the appropriately named Plov Center for a fix of Uzbekistan's beloved rice-based dish.
In Uzbekistan plov rules supreme – the country practically runs on this hearty staple, which is based on rice simmered for hours in a broth of seared meat chunks, carrots, onions, garbanzos, garlic, dried fruit and spices. The Plov Center does not disappoint. In an outdoor kitchen, five cauldrons bubble away over wood fires, permeating the air with the scent of cooked meat, rice and spices.
Forget about fancy surroundings or over-attentive service: At the Plov Center the food is the draw. The Center's cavernous hall, which can hold about 500 people, is no-frills. Clusters of men, interspersed with a few families, peck at shared platters of plov with forks, though fingers – the traditional utensil – are acceptable.
The Plov Center specializes in variations of Wedding Plov, a rich blend, which, as the name suggests, is usually served on special occasions. You can have Wedding Plov with the meat of your choice – lamb or beef. Slices of kazy, smoked horsemeat sausage, are optional, though no true celebration is complete without a serving of Central Asia’s favorite ungulate.
The platter of plov is accompanied by small roundels of nan bread and a choice of two salads – diced tomatoes and onions or pickled vegetables. Pots of green tea help with digestion.
With prices ranging between 4,500 sums and 8,900 sums ($2.25 - $4.50 at the official exchange rate) for a generous serving, at the Plov Center your belt may need loosening but your finances will not take much of a hit.
Soap opera writers in Uzbekistan need not look far for inspiration.
This spring, the state-run Uzbektelefilm studio is scheduled to release a series on the inner workings of a fictional local mobile phone company, Silkphone.
The private Podrobno.uz website reports that the 100-part series will be filmed at the Uzbekistan national broadcasting company, O'zbekiston. Director Andrey Afrin says he will employ over 100 actors and the first 20 episodes of “Steps of Life” will air in May and June.
As they turn Silkphone into Uzbekistan’s leading mobile provider, the soap’s main characters – young female manager Dilyafruz and her underlings – will tangle with "important topics such as love and betrayal, problems of morality and rethinking mistakes,” says Podrobno.
The topic may prompt some observers to snigger: Over the past year two large international telecoms firms working in Uzbekistan have been embroiled in scandals linked to the strongman president’s socialite daughter, Gulnara Karimova. Russian giant MTS was summarily closed and its assets seized last year when authorities accused the company of tax evasion. MTS was forced to write off over $1 billion in assets and said the state was trying to expropriate its business. An appeals court later ordered the assets returned, in exchange for fines and penalties to the tune of $600 million.
Energy exports from Uzbekistan jumped in value by 81 percent last year, new figures show, thanks in part to a new pipeline to China. But as Tashkent enjoys the windfall, the vast majority of Uzbeks continue to face gas, electricity and heat shortages.
According to the State Statistics Committee, gas and other energy exports were worth $5.03 billion in 2012. That’s an increase of 81 percent over 2011, when the country exported $2.78 billion worth of energy products, mostly hydrocarbons. Citing government statistics, Uzdaily.uz reports that energy accounted for 35.3 percent of Uzbekistan’s total exports in 2012, up from 18.5 percent in 2011.
Last year, Uzbekistan joined a Turkmenistan-to-China pipeline that had opened in 2010 and, in August, started pumping China-bound gas for the first time. The pipeline was expected to export up to 4 billion cubic meters (bcm) of Uzbek gas to China by the end 2012 and 10 bcm this year.
The exports are sparking some resentment in Uzbekistan, however, as they negatively impact domestic supplies. Net output from Uzbekistan’s aging wells also appears to be falling. Local reports suggest output of oil and gas condensate in 2012 decreased by 11.6 percent year-on-year to 3.2 million metric tons and gas production by 0.2 percent year-on-year to 62.9 bcm.
France’s Foreign Minister should have used a trip to Uzbekistan this weekend to demand an artist be allowed the right to travel abroad, an international group of artists urged last week.
In January, Vyacheslav Akhunov was barred from leaving Uzbekistan. He has been invited to perform at the prestigious Venice Biennale this June.
In an open letter last week to French Foreign Minister Laurent Fabius, who visited Uzbekistan on March 2 to talk trade and development with President Islam Karimov, artists from the United States, Russia and other countries called on France’s top diplomat to "urge the government of Uzbekistan to honor the rights and freedoms of artist Akhunov, who represents the modern independent art of Uzbekistan abroad."
There is no indication Fabius responded to the request or discussed Akhunov’s situation with Karimov during his visit.
Akhunov has taken part in approximately 200 international exhibitions. But in January "authorities banned him from going abroad, explaining that his creative tours are 'inadvisable.' This response points to a political motive in the decision," the artists said in their letter, which was posted on February 27.
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.