Uzbekistan is all a-hubbub these days over the case of a prominent businessman facing charges of fraud for his creation of what amounts to a crude pyramid scheme.
State television station Channel One on July 1 aired a second program in quick succession about the arrest of Ahmad Tursunbayev, who went popularly by the name Ahmadbai Chinazsky.
Tursunbayev’s arrest, in the middle of June, came as a major surprise to many.
According to Uzbek TV, 38-year old Tursunbayev and a group of around 30 collaborators duped people into handing over their savings with promises they would provide a minimum 100 percent return within the year.
The scheme appears to have gulled no small number of gullible investors. According to Uzbek state television, around 40,000 people willingly parted with cars, money and gold, apparently against written assurances that their profits would be paid. Curiously though, no guarantee was given that any money would be returned in the event of Tursunbayev’s death, presumably as some crude form of protection. Rumors on the streets of Tashkent put the number of defrauded investors even higher than that offered by Uzbek television, at around 80,000.
The scheme does not in truth appear to have been especially sophisticated. Tursunbayev’s team compiled accounting information in children’s school copybooks. Television footage showed stacks of hundreds of copybooks and huge bags spilling over with Uzbek sum and US dollars. Police reportedly seized a whopping 13.1 billion sum (around $2.1 million at the unofficial rate) and $12 million in hard cash.
In an interview with Channel One, a woman called Halima said that she sold 20 large sheep and handed Tursunbayev around $2,600 dollars in the hope of doubling it within a year. Halima said she is now penniless.
Kyrgyzstan’s state debt has almost hit the $4 billion mark, sailing upward past a government-imposed debt ceiling.
That figure, which is dated to the start of June, is a big leap from the figure reported at the end of March, when debt stood at $3.7 billion.
The Finance Ministry’s press service said on July 1 that $3.7 billion is owed to foreign creditors, mainly to the state-run Exim Bank of China, which is owed $1.4 billion. Another $642 million is owed to the International Development Association, a branch of the World Bank that is focused on development in poor countries.
The scale of the debt is not in itself necessarily catastrophic, although it does surpass the 60 percent debt-to-gross domestic product ratio ceiling mandated by parliament in 2014. Deputies have proposed legislation to raise that ceiling as a way to authorise raising additional outside funds for major projects.
The size of debt at the end of March put the country’s liabilities at 60.3 percent of its 2015 GDP in dollar terms, although that figure is lower when the calculations are done in the local currency, the som, as local economists like to point out.
Also, almost all the foreign debt is too all intents and purposes interest-free. Most of the debt is repayable decades from now and is accumulating interest between 0.75 percent and 2 percent.
Accruing debt seems to have become an established strategy for development in recent years. The policy is line with the government’s “National Sustainable Development Strategy for the Kyrgyz Republic 2013-2017,” which envisions sweeping reforms and investment in industry, agriculture, communications and transportation.
Apparently unchastened by the wave of protests that accompanied recent failed attempts to force through land reforms, Kazakhstan is now mulling renting large areas of land to Russia to accommodate falling rocket debris.
The plan has already drawn criticism.
Deputy Investment and Development Minister Albert Rau told Nash Kostanai newspaper on July 3 that the government plans to lease 630 square kilometers for $460,000 per year.
When rockets are launched from the Russian-leased Baikonur cosmodrome in southern Kazakhstan, stages of the rocket containing engines and propellant are jettisoned in the first few minutes of flight, typically over empty and barren steppe.
Rau said parliament is working on ratifying an agreement with Russia on the lease agreement.
Under the proposed arrangement, sections of launched rockets will now fall in areas to the northwest of the city of Zhezkazgan, which is situated almost bang in the middle of the country.
Money raised through the rent will go straight into the state budget and be used for “social needs” in the Kostanay and Aktobe regions, where the land is located, Rau said.
"I wrote to the governors of both regions and they confirmed to me that the allocated funds would not just sit idle, but they would go toward the districts where the rocket debris is falling,” Rau said. “I took a look at the map and there aren’t a lot of residential areas there, so people living in those areas will truly be able to receive funds for their social needs.”
This explanation has been met with some indignation, particularly considering that many believe crashing rockets might be provoking illnesses among the human and animal population in the area.
Tajikistan’s banking regulators are forcing retailers and restaurants to accept payment by bank card against the threat of fines of up to $1,000 in the latest wheeze to compensate for the lack of cash in circulation.
A National Bank decree that came into effect on July 1 reminds businesses that under a law adopted in December 2014, shops covering an area larger than 40 square meters need to have card processing terminals installed.
Entities liable to be fined have until next January to come into line with the rules.
The truth is though that outside the capital, shoppers are unlikely to get any satisfaction with their cards.
“Unfortunately, the infrastructure for card payment mainly exists in Dushanbe — the situation in other regions requires attention,” the National Bank had to admit ruefully.
While it might be desirable for business out in the regions to transition toward cashless transactions, if not just to help develop the country’s weak banking sector, there is clearly an ulterior motive at play. Developments in recent days, which have seen banks suffer fresh liquidity problems, suggest this is in fact a desperate, last-ditch measure to wean people off reliance on hard cash. Both the countries largest banks — Tojiksodirotbank and Agroinvestbank — are both experiencing trouble getting hold of enough money to hand out to desperate clients.
Russian Foreign Minister Sergey Lavrov meets with his Turkish counterpart Mevlut Cavusoglu in Sochi on July 1, the first high-level meeting in seven months between the two countries. (photo: MFA Russia)
Turkey's foreign minister floated a proposal to let Russia use a key air base for a joint fight against ISIS in Syria. He later qualified the offer, but it nevertheless was a measure of how rapidly Turkey's foreign policy, in particular its relationship to Russia, is changing.
On Monday, Foreign Minister Mevlut Cavusoglu told state broadcaster TRT that Turkey would cooperate with"“everybody who is fighting Islamic State," adding: "Ankara has opened the Incirlik airbase to all those wishing to join the active fight. Why not cooperate with Russia in the same manner?”
Those remarks caused a minor furor in Turkey and Russia, given what until just a few days ago was a dangerous level of tension between the two states caused by Turkey's shooting down last year of a Russian plane on the Turkey-Syria border.
Cavusoglu was forced to clarify: "We said that we could cooperate with Russia in the period ahead in the fight against Daesh ...I did not make any comment referring to Russian planes coming to the Incirlik Air Base."
Not everyone was convinced by that denial. "I think officials in Ankara wanted to see the possible reactions about Incirlik issue," said Mehmet Fatih Öztarsu, an analyst who follows Turkish relations with the post-Soviet world. "Even pro-governmental media published the same speech but a few hours later [Cavusoglu] denied it. It was an attempt to understand domestic and international balance," Öztarsu said in an email interview with The Bug Pit. He added that while Russia's use of Incirlik -- a key hub for NATO allies including the United States -- was unlikely, some form of military cooperation could be expected to develop between Turkey and Russia.
Social media in Kyrgyzstan is abuzz at the sudden appearance online of a soulful singing performance by President Almazbek Atamabayev, who has apparently elected to show off his more sensitive side.
The Russian-language song “In Spite of Fate” appeared on YouTube on July 2 and was accompanied by suitably downbeat snippets from Soviet-era Kyrgyz film “Provincial Romance.”
Atambayev does not himself appear in the clip, which had racked up around 75,000 views by July 4, but his voice is unmistakable. Representatives from the Ordo production studio, which recorded the song, told local outlet Kloop.kg that the president is also playing the acoustic guitar.
“This is one of my first songs,” Atambayev drawls lugubriously in the intro, as if addressing a captive audience at an intimate acoustic set. “It is like a motto for me. This song helped me to beat a path through all the difficulties that befell me in life.”
The two-minute song that follows is a melancholy recollection about a lost lover. Referring to “memories like droplets of rain” and swimming to “the lighthouse of your sad eyes,” the song evokes a protagonist weighed down by tribulations and misfortune, rather than the businessman-turned-opposition politician who came to power on the back of a bloody revolution.
Other presidents in the region have turned out happier fare.
Tajikistan’s National Bank is once again pleading for an international bailout as the country’s lending sector remains mired in an existential crisis.
At a meeting with a visiting European Bank for Reconstruction and Development delegation, National Bank deputy chairman Jamoliddin Nuraliyev appealed for assistance to the country’s systemically important banks.
“It is necessary to carry out remedial work in some of the lending institutions,” Nuraliyev said, according to a National Bank statement. “I urge the executive directors of the EBRD during their coming board meetings to support proposals from the National Bank.”
Nuraliyev did not specify what those proposals were, but given that Tajikistan suffers from chronic liquidity problems, it is not hard to guess: Tajikistan desperately needs for its banks to be recapitalized.
The National Bank has already obtained assurances that the EBRD is to take a controlling stake in Tojiksodirotbank, the country’s second largest bank. The situation at that bank is grim. People who draw their salaries at the bank have had no joy for the best part of half a year and ATMs only began issuing money in June, after a hiatus lasting several months.
For what it’s worth though, Tojiksodirotbank chairman Tojidin Pirzoda has shrugged off talk of insolvency.
“Rumors about Tojiksodirotbank being on the verge of bankruptcy have been spread by certain people and certain interested parties,” he told state news agency Khovar back in January, without providing names or details.
Turkmenistan is getting more directly involved in affairs in northern Afghanistan, an area inhabited by ethnic Turkmens, as instability festers on the border between the two countries.
The Turkmenistan government recently invited several local northern Afghanistan officials to Turkmenistan in late June, and gave free medical care to a commander in an ethnic Turkmen paramilitary unit fighting the Taliban in northern Afghanistan, the commander told the Turkmen service of Radio Free Europe/Radio Liberty.
Also visiting Turkmenistan were the head of the border police in a district of Afghanistan bordering Turkmenistan, other paramilitary commanders, and the head of the highway police in one northern Afghanistan region. It wasn't clear what the other officials were doing in Turkmenistan, but RFE/RL notes that it is rare for Turkmenistan to give visas to ethnic Turkmens from Afghanistan. The paramilitary commander, Emir Allaberen Karya, told RFE/RL that he hoped Ashgabat would "continue to help the Afghan Turkmens." It's not clear what that help has consisted of, but one assumes it is more than the occasional health care junket to Ashgabat.
Karya said it was his first visit to Turkmenistan and that he had been hoping to meet there other commanders of his group, Arbaky, from neighboring regions but that a Taliban attack on his unit had forced him to return to Afghanistan ahead of schedule.
Also in late June, Turkmenistan's foreign minister Rashid Meredov visited northern Afghanistan unannounced, RFE/RL reported. Meredov visited Jowzjan, Faryab, and Balkh provinces where he visited Turkmenistan-financed development projects and met with local leaders. In one part of the visit his convoy hit a mine, though Meredov was apparently unharmed.
The state commission in charge of the project for Tajikistan’s Rogun mega-dam has picked Italian company Salini Impregilo to carry out the construction, although it remains unclear where the money is to come from.
Khovar state news agency reported on July 1 that the agreement to design, source material and build the hydroelectric power plant will set Tajikistan back $3.9 billion. The project is broken down into four components, with the most expensive one involving the building of a 335-meter-high rockfill dam — the tallest in the world — which will entail costs of around $1.95 billion.
“The three remaining lots are seen being assigned to the Group by Sept. 30, 2016,” Milan-based Salini Impregilo said in a statement.
The Italian company boasts on its website of significant experience in major dam-building projects. One listed on its website is a €2.5 billion ($2.8 billion) hydroelectric plant in Ethiopia with an installed capacity of 2,200 megawatts. That comes substantially short of Rogun, however, which will, if completed under the current design, have six 600 megwatt turbines to make up for a total installed capacity of 3,600 megawatts — equivalent to three nuclear plants, as Salini Impregilo points out.
Germany this week took its turn to appease and assure the South Caucasus about the European Union’s integration intentions by sending its top diplomat to the topsy-turvy region. Given Germany’s standing within the European Union and its structures, Frank-Walter Steinmeier came to the region not just as German foreign minister, but also as a key decision-maker for EU-South Caucasus ties.
As is par for the course with high-profile Western visitors to the region, German Foreign Minister Frank-Walter Steinmeier’s visit was a triple-header. He zigzagged from Yerevan to Baku, and from Baku to Tbilisi on June 29, 30 and July 1, respectively. As also is usually the case with visiting Western diplomats, Steinmeier urged restraint on warring Armenia and Azerbaijan in the Nagorno-Karabakh conflict zone, and patience on Euro-Atlantic-community hopeful Georgia.
On both of these counts, Germany holds a special role. Germany’s imprimatur is seen as decisive for granting Georgians much-desired visa-free access to the EU. Germany now holds the rotating presidency of the Organization for Security and Cooperation in Europe (OSCE), the continent’s top security and democracy-assurance body involved in negotiations and the monitoring of a ceasefire between Armenia and Azerbaijan.
Steinmeier urged a greater role for the OSCE in the conflict-resolution effort, which Russia has pretty much dominated in the wake of April’s Four Day War, the deadliest flare-up of Armenian-Azerbaijani hostilities since the 1994 ceasefire.