Uzbekistan is facing a second corruption investigation in Europe, as Swedish police open a graft probe into claims that Swedish-Finnish telecoms giant TeliaSonera paid hundreds of millions of dollars in bribes for the rights to operate in Uzbekistan. The case is allegedly linked to a money-laundering investigation in Switzerland.
TeliaSonera (whose largest shareholders are the Swedish and Finnish states) said that Swedish police are investigating allegations of “bribes and money laundering” involving Uzbekistan. The allegations surfaced in a September 19 documentary on Swedish broadcaster SVT.
“We can confirm that the Swedish police has collected information from TeliaSonera regarding Uzbekistan,” TeliaSonera – which owns the Ucell mobile phone company in Uzbekistan – said in a statement on September 26. It said that the company had already announced an external review “regarding the allegations of bribes and money laundering” and that now the Swedish Prosecuting Authorities’ anti-corruption unit had launched its own probe, “which we welcome.”
TeliaSonera has denied any wrongdoing but pledged to “cooperate fully” with the Swedish investigation, which follows SVT’s allegations that the firm paid hundreds of millions of dollars to “a small, one-woman company in a tax haven” for the rights to operate in Uzbekistan. The company, Takilant Limited, is run out of Gibraltar by Uzbekistan national Gayane Avakyan.
Over the past few years, military aid has taken up an increasingly large portion of total U.S. aid to Central Asia, from around 5 percent throughout the 1990s to more than 30 percent since 2007. But that aid hasn't been closely examined, a situation I attempt to rectify in a new report (pdf), "U.S. Military Aid to Central Asia: Who Benefits?" The report focuses on aid to Kyrgyzstan, Tajikistan, and Uzbekistan. Among the findings:
-- U.S. training and equipping aid focuses on special forces, including OMON and Alfas, and on occasions when those forces may have acted in ways contrary to stated U.S. interests, U.S. officials have tended to not take an active role in investigating those incidents and continue to support those units.
-- The pattern of aid shows a clear pattern in which the aid increases when Afghanistan is a high priority in Washington, right after the September 11, 2001 attacks and in 2007-8, when U.S. focus again began to turn from Iraq to Afghanistan. That (among other evidence) suggests the aid is intended less as assistance for Central Asian security forces, than as a form of payment for those countries' cooperation in the war in Afghanistan.
-- U.S. claims that the aid is intended to foster the promotion of human rights by Central Asian security forces has been undercut by the decision to resume military aid to Uzbekistan. “It makes the people mad that we do anything with them. They say, ‘Really? Here [in Kyrgyzstan] you talk about human rights, they’re [in Uzbekistan] not so good at it,’” said a U.S. military official currently working on security cooperation with Central Asia. “The desire
to work with people outweighs the desire to do the right thing sometimes.”
President Islam Karimov has signed a law that promises to do something new in Uzbekistan: “On the defense of private property and guarantee of the rights of owners.”
“Every entrepreneur should know that he can without fear invest in his own business, expand production activities, increase production and generate income [...] keeping in mind that the government is guarding the legal rights of the property owner,” Karimov said two years ago when proposing the law.
The new law, signed on September 24, even has a special section on the rights of foreign businesses in Uzbekistan.
Try telling that to Russian mobile giant MTS.
In June, Uzbek authorities began investigating senior officials at MTS for tax evasion and money laundering. Within two months, the company’s entire Uzbekistan operation was seized, 9.5 million users were left without service, and the company was forced to write off $1 billion. MTS denies wrongdoing and observers believe the company was simply plundered by well-connected Tashkent elites.
She’s tantalized us all summer. First, there was the new album with the soon-to-be hit single, “Round Run.” Then there was the trailer for the music video.
Now -- undeterred by a few scandals about Billboard not actually declaring Googoosha a hit -- we have the real thing: Move over VH1, the daughter of Uzbekistan’s strongman, Islam Karimov, is on YouTube.
Rolling around Bukhara in a classic Chaika limousine, Gulnara Karimova is waiting for her black-clad ninja man as he runs “round and round,” scaling walls, jumping and skipping across the fabled UNESCO world heritage site to an exclusive rendezvous with the princess of pop (and the country). It’s the Matrix meets James Bond playing capture the flag.
Googoosha sure knows how to build up the suspense. While you may not often see a low-cut dress in an Islamic holy place, Googoosha owns it, baby.
As for the music? Googoosha calls her song a “dance floor pumper” from an “exotic potpourri of sounds and a personal testimony to the power of deeply felt emotions.” While some might feel the 90s-style synthpop better relegated to a sticky Tashkent nightclub, we’ll let viewers decide.
Once again a foreign telecoms firm in Uzbekistan is at the heart of an international scandal, and this time the trail leads back to a close associate of Gulnara Karimova's.
An investigation to be aired September 19 by Swedish public broadcaster Sveriges Television (SVT) charges that Swedish-Finnish mobile giant TeliaSonera has paid hundreds of millions of dollars to a shady offshore firm for the rights to operate in Uzbekistan. Karimova, the daughter of Uzbekistan’s dictator Islam Karimov, is close to the action, says SVT's Uppdrag Granskning (“Mission Scrutiny”) program.
TeliaSonera, which is 37 percent owned by the Swedish government, started operating in Uzbekistan in 2007. In order to work there, the company relied on a partner called Takilant Limited, which is based in Gibraltar and run by an Uzbekistan national named Gayane Avakyan.
Uppdrag Granskning reports that Avakyan has strong links to Karimova. Her name appears frequently in association with Gulnara’s pet fashion projects. And Radio Ozodlik has quoted sources calling Avakyan very close to Karimova, adding that she manages the first daughter’s finances.
Over the course of six years, SVT says, TeliaSonera has paid Takilant 2.2 billion Swedish krona ($336 million) in exchange for 3G licenses, mobile frequencies and phone numbers in Uzbekistan. But, the program notes, the money cannot be accounted for in public financial records.
The question of what motivates Uzbekistan's president, Islam Karimov, is key to U.S. policy in Central Asia, which relies heavily on Uzbekistan as a staging ground for military equipment being shipped to Afghanistan. What does Karimov want in return for his cooperation for this Northern Distribution Network? The most plausible explanation is that he is looking for some sort of geopolitical support against Russia, and the military equipment that the U.S. is in the process of giving Uzbekistan is meant as an explicit symbol of that support.
This is in marked contrast to Uzbekistan's neighbors Tajikistan and Kyrgyzstan, who by all accounts are just out for money, and see military cooperation with foreign countries as a cash cow. Karimov, for all his faults, is generally believed to be relatively uncorrupt (his daughters, of course, are a different story...)
But might Karimov be more motivated by money than we usually think? A reader passes on a very interesting report, which I missed when it was first released (yes, in 2006). The report discusses the fate of the Karshi-Khanabad air base that the U.S. operated in the early years of the war in Afghanistan. And the experience of K2 is probably our best look into what Karimov wants, and doesn't want, out of his military ties with the U.S.
One problem for anyone seeking to foster regional integration in Central Asia (“New Silk Road” or otherwise) is the frequent border disputes between the countries involved. Uzbekistan, which abuts all the other Central Asia states, has been particularly uncooperative, often closing its border posts without notice, hampering trade and hurting economies around the region.
The Asian Development Bank (ADB), a multilateral lender, has announced it will grant $100 million to help people and goods cross one of those tricky borders. Much of the money will be used to repave a 113-kilometer stretch of road in Tajikistan connecting a major highway with an isolated valley leading to the border with Uzbekistan.
“Improvements to this road will increase regional connectivity, reduce transport costs, and strengthen competitiveness,” said Zheng Wu, a transport specialist at ADB’s Central and West Asia Department, in a September 13 press release. Part of the money will also be spent on upgrading infrastructure at the Sarazm border post on the Uzbekistan-Tajikistan frontier.
But that post has been closed for almost two years. Uzbekistan sealed it in late 2010, cutting Panjakent – a Tajik town in the valley, home to some 33,000 people – off from the Uzbek city of Samarkand, only 60 kilometers away.
The new road project, expected to begin later this year, will certainly help connect the isolated Zarafshan Valley with the rest of Tajikistan, and thereby with a new source for the goods and supplies local residents used to buy in Uzbekistan. At present, in winter Zarafshan’s access to the “mainland” is often restricted to irregular flights to Dushanbe.
It’s September and that means it’s cotton-harvesting time in Uzbekistan. As the kids return to school (often via the cotton fields), Tashkent has issued its annual denial that they are forced to pick the “white gold.” But forget trying to independently confirm there is no forced child labor in Uzbekistan.
The government continues to refuse to allow observers from the International Labor Organization, a branch of the United Nations that monitors international labor standards, to monitor the cotton harvest, the Cotton Campaign reports. [Editor’s Note: The Cotton Campaign receives support from the Open Society Foundations; EurasiaNet.org operates under the auspices of OSF.]
Prime Minister Shavkat Mirziyoyev announced in August that it is forbidden to use children to harvest cotton and that schoolchildren shouldn’t even be near the fields during harvest season. However, UzNews and Radio Free Europe’s Uzbek Service note that Mirziyoyev’s decree is a yearly song and dance, and that as early as September 5, students from Jizzakh, a town in Uzbekistan’s northeast, were rounded up into buses and sent off to pick cotton in fields about 70 kilometers away.
President Islam Karimov of Uzbekistan has upped his rhetoric against neighboring Kyrgyzstan and Tajikistan, warning that their efforts to build hydroelectric power stations on rivers upstream could spark war.
Speaking during an official visit to Astana on September 7, Karimov launched a broadside against Bishkek and Dushanbe, which, he said, “forget that the Amu-Darya and Syr-Darya are trans-border rivers.”
“Why do you think such questions [sharing limited international water resources] are discussed by the United Nations?” he asked in remarks quoted by Kazakhstan’s Bnews website.
It was a rhetorical question: “Because today many experts declare that water resources could tomorrow become a problem around which relations deteriorate, and not only in our region. Everything can be so aggravated that this can spark not simply serious confrontation but even wars.”
Karimov has long been a vociferous opponent of plans by Tajikistan and Kyrgyzstan to complete long-stalled hydropower dam projects -- Rogun on the Vakhsh River (the headwaters of the Amu-Darya) in Tajikistan and Kambarata on the Naryn River (which becomes the Syr-Darya) in Kyrgyzstan.
Tashkent says the dams could disrupt water supplies to downstream states, adversely impacting its economy and damaging the environment. Bishkek and Dushanbe counter that they need to harness hydropower to kick-start their ailing economies.
The Swiss Attorney General’s Office has confirmed that a money-laundering investigation has been opened against four Uzbek citizens, two of whom are under arrest in Switzerland.
“The Attorney General’s Office (OAG) confirms the arrest of two Uzbek citizens at Geneva,” a spokeswoman told EurasiaNet.org by e-mail, specifying that the arrests were made “due to a criminal investigation of the OAG.”
“At this stage, the investigation is conducted in respect of money laundering and against four Uzbek citizens,” the Attorney General’s Office said.
None of the individuals were named, but the confirmation of the money-laundering probe came in response to a query filed by EurasiaNet.org following local media reports about the arrest of two well-connected Uzbek citizens in Geneva that had, according to press speculation, sparked a protest last month at the Swiss Embassy in Tashkent.
Regional news site Centrasia.ru reported that the embassy was picketed by a group of 10-11 people carrying placards saying “Shame on Switzerland!” in protest against the detention of two Uzbek staff members of Coca-Cola Uzbekistan, named as Aliyer Irgashev and Shahruh Sabirov (the latter was named in other sources as Farruh Saberov).
Citing “sources,” Centrasia.ru suggested the protest was organized by a foundation run by Gulnara Karimova, eldest daughter of President Islam Karimov -- the Forum of Culture and Art of Uzbekistan (Fund Forum for short). Neither the foundation nor Coca-Cola Uzbekistan have responded to emails requesting comment sent in August.
