WELCOME TO IWPR'S REPORTING CENTRAL ASIA, No. 567 Part 2, March 06, 2009
EARLY POLLS LOOKING LIKELY IN KAZAKSTAN The authorities are saying nothing,
but there are mounting reasons why they might opt for a parliamentary election
sooner rather than later. By Anton Dosybiev and Marik Koshabaev in Almaty
TAJIK COTTON FARMS IN CRISIS AFTER PRICE TUMBLE New loan scheme should have
revitalised farms, but timing was unfortunate. By Rukhshona Alieva in Dushanbe
INTERVIEW: AIRBASE EVICTION MAY WEAKEN KYRGYZSTAN Former American envoy says
US can locate military base elsewhere, but Kyrgyzstan needs to weigh up the
consequences for its own security. By Elina Karakulova in Washington, DC
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EARLY POLLS LOOKING LIKELY IN KAZAKSTAN
The authorities are saying nothing, but there are mounting reasons why they
might opt for a parliamentary election sooner rather than later.
By Anton Dosybiev and Marik Koshabaev in Almaty
There is renewed speculation that an early election may be called in Kazakstan
after the law was changed to create more scope for a multi-party parliament.
However, none of the political analysts questioned by IWPR believed that Nur
Otan, the presidential party which is currently the only one represented in
parliament, would be joined by a combative opposition group as a result of the
President Nursultan Nazarbaev signed off on amendments to the electoral
legislation on February 9, meaning that at least two parties will always be
present in parliament. Even if only one gathers the required seven per cent of
the vote, the runner-up will also be awarded seats under a complicated formula
based on proportional representation.
The last election held in August 2007 created a one-party parliament, since
only the president's Nur Otan surpassed the barrier. The other six parties
which fielded candidates were left out in the cold.
The election cast a shadow over Kazakstan's democratic credentials at a time
when the Organisation for Security and Cooperation in Europe, OSCE, was
considering its application to chair the organisation. The bid was finally
approved later that year, and the Kazaks will take over the helm of the OSCE in
The next parliamentary ballot is not due until 2012, but analysts say there are
good reasons why the authorities might opt for an early election. For one
thing, they might want to get it over and done with before their big OSCE year,
and for another, this would preempt any deterioration in the already difficult
economic situation and prevent the opposition from capitalising on it.
Finally, they might want to avoid holding the election at the same time as the
presidential ballot, also due in 2012.
The authorities are maintaining a stony silence on the early election issue,
although speculation has been rife since last year.
However, the president's adviser on political affairs Yermukhamet Yertysbaev,
recently let slip that the issue was at least on the agenda.
"The most convenient moment for an election is now," he said at an event
organised by the AITpark debating club on February 17, noting that it would be
better if Kazakstan had a multi-party system by the time it took over the OSCE
Yertysbaev made it clear he was speaking only in a personal capacity, and said
that in any case, no decision had been taken. "It isn't me who decides these
matters," he added.
An anonymous source in government told IWPR that the current thinking is that
an early election would help assuage concerns in the international community
about Kazakstan's record on democracy.
"Everyone understands that the election has to be conducted soon, because
Kazakstan cannot be chair of the OSCE with a one-party parliament, and that
time is approaching fast," he said.
He indicated that the authorities were already meeting their political PR
advisers to identify the best date for an election.
Most of the analysts interviewed agreed that a 2009 date was likely.
Eduard Poletaev, chief editor of Mir Yevrazii, a monthly political magazine,
said that while the authorities and Nur Otan might appear to be in an
unassailable position, they felt uncomfortable about moving towards to the OSCE
chairmanship with the political set-up as it was now.
Petr Svoik, a leading member of the opposition party Azat, said the political
situation was extremely fluid so "anything is possible", but that the tenser
things became, the more likely it was that the authorities would go for an
The Kazak economy has suffered a reverse after the oil-fuelled boom of recent
years. The international financial crisis has left its banks over-extended and
reluctant to issue new domestic loans, which in turn has curbed investment and
led to job losses.
Andrei Chebotarev of the Alternativa Centre for Political Research, believes
there are "plenty of reasons" to hold a ballot ahead of time.
In an interview for a Moscow-based think tank on January 13, he warned of a
groundswell of protest by groups such as workers made unemployed by the closure
of factories, people struggling to repay their mortgages, and residents of
buildings threatened with demolition by property developers.
"So far all of them have been trying to defend their own social and economic
rights, but at any moment, a section of this protest movement could switch to
making political demands, and take more decisive action to further these," said
In that light, he said, it made sense for the authorities to go for a ballot
sooner rather than later.
Supposing an early election does take place and at least one other party joins
Nur Otan in the legislature, will it make for a more democratic system?
According to most of the analysts to whom IWPR spoke, that is unlikely.
Svoik said it was doubtful that any of the existing opposition parties would
make it into parliament, as the electoral bodies that count the vote are
susceptible to government pressure.
Political scientist Amirjan Kosanov predicted that Nur Otan would continue to
"Unfortunately, there's no real consolidation or unity among our [opposition]
democratic forces," he said. "While the opposition is distracted [by
internecine strife] from its main objective, I think the authorities are
working on a project to create a second pro-regime party."
This "pseudo-democratic project", he added, was designed to "persuade both the
public in Kazakstan and the international community that an alternative to Nur
Otan has appeared".
Chebotarev agreed, telling IWPR that "Nur Otan will always be in the majority,
although it might no longer be the sole actor in parliament".
"There won't be major changes," he said of the election. "Maybe [changes] to
the make-up of parliament, but nothing serious. The OSCE issue might have some
liberalising effect, but that's an unknown at the moment."
Anton Dosybiev and Marik Koshabaev are IWPR-trained journalists in Almaty.
TAJIK COTTON FARMS IN CRISIS AFTER PRICE TUMBLE
New loan scheme should have revitalised farms, but timing was unfortunate.
By Rukhshona Alieva in Dushanbe
Falling world prices are pushing Tajikistan's already failing cotton industry
to the verge of bankruptcy.
The government launched a new scheme last year making it easier for farmers to
access loans on affordable terms, but there are fears that many of them will be
unable to repay their debts because their income from last autumn's harvest was
nothing like what they were expecting.
Tajikistan's economy has always been heavily reliant on cotton, which over
recent years has contributed around a fifth of export revenues and provides
nearly half the country's workforce with jobs. Two-thirds of all farms grow
cotton, many of them in the flatlands in the south of the country.
Aziz Rajabov is the top manager at a large farming enterprise in the southern
Kulob region. Last year it took out a bank loan of 280,000 US dollars to fund
expenditure over the growing season - a large amount even for an extensive farm
complex like this.
When the harvest came in at 335 tons - "not at all bad", according to Rajabov -
its gross earnings should have come in at around half a million dollars, based
on a high purchase price of 1,500 dollars a ton in the first quarter of 2008.
However, in the interim, the global financial crisis greatly reduced worldwide
demand for commodities and by autumn, the farmgate price was just 850 dollars a
ton, leaving the farm unable to clear the debt plus interest and other costs,
not to mention make a profit.
Rajabov's farm has held off on selling in the hope that prices will recover, so
the cotton is sitting doing nothing at the local processing plant.
"It wouldn't be profitable to sell it at the moment, as cotton prices have
fallen. If we sold it now, we wouldn't be able to repay the loan," he said.
The crisis facing Rajabov's farm is all the more alarming as it comes in the
wake of an improved financing system introduced last year, which would have
been a resounding success had it not been for the collapse in world prices.
Previously, cotton producers were dependent on advance loans extended by
so-called "futures companies", private firms which provided cash, seed and fuel
at the beginning of each growing cycle. These companies often imposed high
interest rates and took the whole of the resulting harvest at below market
prices, so that Tajik farms ran up hundreds of millions of dollars in debt.
Farmers were unable to obtain normal loans as they had nothing that banks would
accept as collateral.
Under a scheme announced in late 2007 and put into practice last year,
state-run commercial banks were instructed to accept land-tenure certificates
as guarantees, and to issue loans to farmers at a fixed annual interest rate of
12 per cent. That meant the real interest rate was zero or even negative, given
that inflation was roughly the same figure. (See Tajikistan Vows to Revive
Ailing Cotton Industry, RCA No. 526, 11-Jan-08.)
The National Bank of Tajikistan reports that farmers received loans totalling
some 60 million dollars last year, two thirds of which came from government
funds channelled to the banks and the rest from commercial banks' own funds.
The central bank has recognised that falling prices mean farmers will find it
hard to service their debts on time, and has shifted the deadline for repaying
the capital from December 1 last year to March 1.
However, Rajabov fears that is not going to be enough, and is hoping for a
further rescheduling "until June, at least".
Industry experts say that falling prices have only added to the longstanding
problems affecting cotton production in Tajikistan, and that taken together,
these issues cannot be resolved even by an improved financing system.
At the heart of the problem, say analysts, is the persistent practice of making
farmers grow cotton because of its strategic value to the state, even when they
would prefer not to.
While President Imomali Rahmon has repeatedly said farmers should be free to
grow whatever they want, local government officials continue to issue
directives and production targets as if the Soviet Union had never come to an
Rajabov confirmed that his farm faced pressures of this kind.
"Cotton production is currently a loss-maker, and if we'd had a chance we'd
have switched to a crop that was more profitable," he said. "But our hukumat
[district-level government] requires us to sow at least 70 per cent [of the
land] with cotton."
According to agriculture expert Kurbonali Partoev, part of the problem is that
while the bigger farming units which dominate cotton production are technically
commercial ventures, they display the same inefficiency and lack of incentive
as their predecessors, the Soviet collective farms.
"Local authorities need to stop pressuring farmers and using outdated
management systems," he said.
Add to this soil depletion due to lack of rotation given the cotton
monoculture, failing farm machinery, and underinvestment in developing better
crop strains, and the result is a relentless decline in yields and consequently
Scientist Vahob Vahidov points out that Israeli farms get five or six tons per
hectare when they use seeds from Tajikistan, yet local yields average under two
Annual production figures have averaged less than half a million tons a year
since 2001, and fell from 419,000 tons in 2007 to around 350,000 tons last
"However much money you throw at agriculture...it will never be enough,"
That is a view with which some Tajik bankers might sympathise, as they argue
that the government has placed them in an impossible position by forcing them
to lend at their own risk to farmers who may now default.
Concerns about the threats posed by these unpaid debts were raised at a January
15 cabinet meeting, at which the heads of Amonatbank and Agroinvestbank warned
that they could face serious liquidity problems in an environment in which it
was already hard for them to borrow on international markets.
Another banker, who asked to remain anonymous, told IWPR that the failure of
farmers to repay loans could lead to the collapse of the banking sector.
At the cabinet meeting, Deputy Finance Minister Jamoliddin Nuraliev said the
commercial banks had not helped themselves when they bumped up their annual
interest rates, in some cases to 24 per cent.
The government has promised to increase state funding for loans to cotton
farmers from 38 to 48 million dollars this year, but during the cabinet
meeting, President Rahmonov also urged the banks to raise money from
Rajabov is all too aware how hard it will be for his indebted farm to raise
funds this year.
"The 2009 sowing season is approaching, and if we are unable to repay our loan,
I doubt anyone will give us money to plant. I don't know to do," he said.
Rukhshona Alieva is the pseudonym of a reporter based in Dushanbe.
INTERVIEW: AIRBASE EVICTION MAY WEAKEN KYRGYZSTAN
Former American envoy says US can locate military base elsewhere, but
Kyrgyzstan needs to weigh up the consequences for its own security.
By Elina Karakulova in Washington, DC
A former United States ambassador to Kyrgyzstan says the country's decision to
close a major American airbase may deprive Kyrgyzstan of a counterbalance in
its dealings with large and powerful neighbours like Russia and China.
In an exclusive interview for IWPR, John O'Keefe predicted that the US would be
able to find an alternative location for an airbase to supply military
operations in Afghanistan.
On February 19, the Kyrgyz parliament voted to end the US military presence at
Manas airport near the capital Bishkek. The decision followed President
Kurmanbek Bakiev's announcement that the base was to close, made during a visit
to Moscow earlier in the month, during which he secured pledges of loans and
investment worth two billion dollars. Some analysts argued that Bakiev traded
the US base for Russian financial and political support.
As ambassador, O'Keefe played a central role in negotiating the opening of the
Manas facility in 2001, which was used as a transit point for personnel and
freight going to support Coalition operations in Afghanistan and as a base for
aerial refuelling planes.
Q: As an official who negotiated the opening of the military base in Bishkek,
what did you think about first when you heard the news of its closure?
A: At first, because the announcement that the base would close had happened
before at an SCO [Shanghai Cooperation Organisation] conference in Astana, I
was wondering if this was a serious statement. But within the context of the
assistance package and the manner in which it was announced with President
Medvedev, I did feel that this is probably a real possibility. This has been
such a topic of discussion over the past several years, so it was not a big
Q: How do you think officials in Washington perceived the threats to terminate
the contract that came from time to time from Bishkek?
A: I am not with the State Department any longer, so I am a little bit out
reach of what they think. Looking at it from the outside, it did strike me that
- as with lots of things in international arena - this was originally a bit of
a negotiating tactic. Nevertheless, there were some serious issues that really
needed to be resolved between the countries. But also... other issues of
cooperative operations within the Kyrgyz Republic and the [Kyrgyz-US]
relationship... fighting terrorism, regional stability and reducing
cross-border tensions seemed tied up in this process.
Q: During the parliamentary discussions, some Kyrgyz deputies suggested that
there was nothing tragic about the closure of the base, and Kyrgyzstan would be
able to reopen it any time if it needed to. As a person familiar with the
process, do you agree it would be easy?
A: No, I think it would be very difficult to reopen it once the base is closed,
but not impossible. You can look at newspaper reports of the US exploring with
neighbouring countries - Uzbekistan and Tajikistan - the possibility of opening
bases there. The base could be brought back again, but probably not if
alternate support mechanisms are available.
I think though, within the Kyrgyz context, it might be somewhat more difficult,
because in one sense, the public dialogue is a lot more open in some ways in
Kyrgyzstan. So that the question of reopening the base is not simply the
question of President Bakiev saying this is a good idea. He would need to
convince parliament that would have to be done and inform public opinion so the
people of Kyrgyzstan would see that it is in their interest as well.
Q: It looks like Washington is trying to negotiate with all relevant parties.
How far do you think Washington could go in an attempt to keep the base?
A: The real question is whether it is money, or policy, or national interest,
or regional stability. To me, you can break this down and you can say, what's
the compensation package? The US could perhaps have an attractive package, but
I don't think the US is in a position to offer the credits that have been
reported to have been given from the Russian side.
The real question to me, if you are the president of Kyrgyzstan and you are the
parliament of Kyrgyzstan, you must look at the base and its relationship to
Kyrgyz interests in retaining it and the advantages of having it removed. Then
you get a different kind of equation; it's a non-monetary equation.
The advantages of retaining the base are these - Afghanistan as we have seen,
before 2001, was destabilising the region. The people who committed terrorist
acts in Kyrgyzstan before 2001 [the Islamic Movement of Uzbekistan] had support
from Afghanistan and training there. So the first question is, if things really
go bad in Afghanistan because there is a problem with logistical support, how
does that affect Kyrgyz interests and how much does Kyrgyzstan - as an
international actor and a sovereign nation - decide that it wants to be part of
a coalition that is trying to bring stability to Afghanistan
The second question is, what are the advantages in dealing with other countries
within the region by having a US presence? I think that you could reasonably
argue that it helps Kyrgyzstan in its negotiations with its neighbours and
others. Without the base, the negotiating position of Kyrgyzstan may be weaker.
And that's something that the president and the parliament have to decide for
themselves. They are closer to it than I, and must live with that decision.
The third question is that the base, I think, is viewed in the US, by people in
the Congress and in the administration, as sort of giving Kyrgyzstan a somewhat
more special place in public opinion toward Kyrgyzstan. Within the Washington
context, the members of Congress, the Senators and people in the administration
are very aware of the help that Kyrgyz people have provided by hosting the
Q: Do you mean that because of the base, US policies towards Kyrgyzstan have
been somewhat favourable?
A: I would say they have been more favourable; the desire to run assistance
programmes has been a little bit better. And there are also some of the
intangibles. I will just reflect on my experiences arriving in 2000, and then a
year and a month later when operations in Afghanistan began.
Before September 2001, getting Washington policy attention on Kyrgyzstan was
not so easy, because in terms of US attention there were other things more
pressing. But once we had a presence there then it was easier for me as the US
ambassador to argue the case for Kyrgyzstan.
So I think with the removal of the base, when you are a country of five million
next to a country of over a billion [China], and a country that has good and
close relations with Russia, it is always useful to have friendships that
counterbalance some of those other relationships, as positive as they might be.
Q: Do you think the U.S. policy towards Kyrgyzstan and the region will change
significantly after the base is removed?
A: No, I don't think so. The region is one that has strategic interest, there
still will be a desire for economic and democratic progress from the US side.
That interest won't be as great, nor the attention as much. However, I could be
Q: How do you think the airbase closure could affect the current plans of the
US to expand its operations and troop numbers in Afghanistan?
A: I am no expert on military logistics, but I know that [State Department]
Under Secretary [William] Burns was recently in the region to discuss the other
options, and General [David] Petraeus [commander of US Central Command] visited
Uzbekistan to carry out discussions. I think what they will try to do is to
find alternative means for supply. It is always do-able, sometimes it's just
harder. So with the loss of the base in Kyrgyzstan, they will just have to find
another way to supply these troops - which they will.
Q: What are the alternatives? Do you think it is possible to re-open the base
in Uzbekistan? (Ed. the Uzbek government forced the US military to close its
base at Karshi because it was unhappy with American demands for an
international investigation into the Andijan violence of May 2005.)
A: In 2001, when the question of where we have a base came up, the Coalition
group which was led by a general from Turkey looked at the options in
Tajikistan, Kazakstan and Kyrgyzstan, and they were all on the table. And the
decision was to go for Bishkek. I discussed it with President [Askar] Akaev at
that time; the Kyrgyz government was very supportive. 2009 is not 2001, but
those options are there, so I would think that if in fact the Coalition can
work out an arrangement with a country in the region, they would certainly take
that one up.
It's a complicated question and I can't speak authoritatively about the bases
in the other countries, so I can't say how much infrastructure investment would
be necessary. I would observe there were operations out of Uzbekistan until
couple of years ago, so I presume that infrastructure there is just fine.
Q: What about Tajikistan? Some say that airports there are not quite adequate
for military purposes.
A: I think when they made this decision in 2001, it was less that this is one
wasn't adequate and that one was; it was a question of which was the best one.
At the time, Manas had substantial infrastructure in terms of storage, runway
length, air traffic control, and a very welcoming government. That made it the
Q: Do you think Pakistan and India might be good alternatives to Manas?
A: It appears that neither may be an option, from what I've been reading in the
Q: Some argue that military cooperation with Russian and its military presence
at the Kant base [near Bishkek] is enough for Kyrgyzstan to maintain security.
What do you think about that?
Q: It depends on where you view the threat to stability for the region. If you
believe that if Afghanistan falls back into chaos, it will affect Kyrgyz
stability through the export of individuals who want to overthrow the
government or establish a different kind of government, then I don't believe
the Russian base is going to help with Afghanistan. If you look at it in a
different way, I guess the question I would ask is, by having the Russian base
there... what theoretical threat are they addressing? I don't know exactly what
that is. I am not too sure what the purpose of the Russian base is.
Q: Russia has announced it is ready to provide logistical help to NATO forces
in Afghanistan; however, it apparently also offered Kyrgyzstan a pay-off for
evicting the airbase. What do you make of that?
A: I think that perhaps the Russian leadership is looking for ways to work the
new Obama administration. This [Afghan logistical cooperation] offer would in
fact be a good step towards improving these relationships.
Q: Do you allow the possibility that it could be an attempt to eliminate third
parties in the negotiating process with the US?
A: I think the Russians have always negotiated directly with the US. I don't
know whether it is to eliminate third parties, but it is certainly is a way to
work with a new group in Washington in a constructive way.
Q: Would you like to add anything?
A: I would like to add that having spent three years in the Kyrgyz Republic and
going back a few times, I have a very profound wish for the people of the
country and its leadership that they will find a good road for a better life
for all who live in Kyrgyzstan.
Elina Karakulova is IWPR's former chief editor in Bishkek, currently based in
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