WELCOME TO IWPR'S REPORTING CENTRAL ASIA, No. 573 Part 2, April 22, 2009

NEW INVESTMENT DRIVE, SAME OLD CHALLENGES IN UZBEKISTAN  Despite government 
campaign to attract funds, the business environment remains less than 
attractive.   IWPR staff in Central Asia

FINANCIAL CRISIS TALK HITS KAZAK MOSQUES  Some mosque-goers dismayed at 
political messages preached from pulpit.  By Daulet Kanagat-Uly and Marik 
Koshabaev in Almaty

SPECIAL REPORT:

VILLAGERS ABDUCTED IN TAJIK-AFGHAN DRUG TRADE  When Tajik drug traffickers 
default on payment, their Afghan business partners wreak vengeance by 
kidnapping locals in cross-border raids.  By Turko Dikaev in Shuroabad and 
Mukammal Odinaeva in Dushanbe

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NEW INVESTMENT DRIVE, SAME OLD CHALLENGES IN UZBEKISTAN

Despite government campaign to attract funds, the business environment remains 
less than attractive.

IWPR staff in Central Asia

Lack of interest has forced the Uzbek government to extend the deadline for 
bids to acquire state-owned assets. 

Analysts interviewed by IWPR say it is unsurprising that few potential buyers 
have come forward. Uzbekistan’s economy is subject to a high degree of state 
control, businesses are vulnerable to interference from government, and the 
current privatisation process is far from transparent.

In March, a round of tenders for 26 state-owned enterprises – originally 
planned for last year – was delayed again. The assets on offer include the 
Kokand alcohol plant, a large fertiliser factory in Samarkand, the UzbekUgol 
coal company and the Markazi hotel complex.

These state-owned firms fall within a major privatisation programme which is 
due to be completed next year. 

This includes most of the government-run enterprises involved in extracting and 
processing Uzbekistan’s rich mineral resources, and in chemicals, food, 
construction and tourism. 

The authorities are also looking for new owners for the Tashkent aircraft 
plant, the communications agency Uzbektelecom and two luxury hotels in the 
capital, the Grand Mir and the Dedeman Silk Road.

Analysts believe the privatisation drive has been spurred by the global 
economic crisis, one of whose consequences is a fall in export prices for 
commodities like cotton.

In this harsher environment, the Uzbek state is finding it increasingly 
untenable to underwrite businesses that are, at least in the case of industry, 
crumbling and obsolete.

An anti-crisis programme for 2009 approved late last year focuses on attracting 
investment funds to upgrade industrial plants to modern technologies.

What has not changed, however, is the intrusive role of government in the 
private sector, and analysts say that unless this changes, privatisation 
efforts will have limited success. 

Among the main obstacles they cite is the banking system, where businesses 
report that their accounts are open to scrutiny by the authorities. In practice 
the central bank, which is subservient to government, may freeze cashflows or 
prevent them converting earnings into foreign currencies, despite legislation 
allowing foreign investors for move funds freely in and out of the country. 

“The central bank decides arbitrarily which investors are going to be allowed 
to convert their currency and which ones aren’t,” said a local economist.

When the wind changes, even investors who have secured high-level political 
backing and pledges of unhindered currency conversion can suddenly run into 
difficulties. As a result, a succession of major foreign investors have come 
and gone over the years. 

In some cases, the foreign partner sets up a joint venture, only to be nudged 
out when the business starts doing well. In 2006, for example, the American 
gold-mining firm Newmont, for example, had to retreat when the joint venture it 
was involved in, Zaravshan-Newmont, was taken over by the state-run Navoi 
concern. In what many saw as an example of judicial compliance with the 
government’s agenda, courts in Uzbekistan ruled against Newmont.

According to Dosym Satpaev, director of the Risk Assessment Group in Kazakstan, 
business and politics are closely linked in Uzbekistan. 

“The elite has an interest in maintaining total state control over key sectors 
of the economy,” he said. 

Taken together with a flawed banking system and restrictions on access to 
currency conversion, he said, this suggests that “investors will be afraid to 
take risks, and the privatisation of key state enterprises will drag on for 
many years”.

Uzbekistan’s problematic international reputation is also a constraint on 
foreign-owned businesses. Many of those working in the country closed after 
sanctions were imposed on Uzbekistan following the events of May 13, 2005, when 
government troops shot hundreds of demonstrators in Andijan. In response to 
political pressure to allow an independent investigation into the violence, the 
authorities hit out at foreign companies, squeezing them out of the country and 
nationalising their assets.

In an unfavourable global climate, with the business in Uzbekistan particularly 
unfriendly, the investment outlook does not look good.

According to Tashpulat Yuldashev, a political analyst in exile, some 
enterprises have been on the market for three years or more without a buyer in 
sight.

Another deterrent for potential investors is that it is unclear how the 
state-run concerns on offer have been valued. 

Some argue that in purely monetary terms, the firms actually represent a 
bargain. Analysts say UzbekUgol, for example, which would give access to large 
coal reserves, is grossly underpriced at just over 30 million dollars. 

“Practically all the assets put out to tender are undervalued,” said 
Tashkent-based economist Komron Aliev. 

Another commentator, who asked to remain anonymous, said the sell-offs would 
have been easier if the price-tags had been assessed by international 
consultancy firms.

“One of the main problems with the privatisation is that the assets on sale 
haven’t been priced correctly,” he said. “If an investor was interested [in one 
of them] they’d need to visit the site and take a look at what state it was in. 
That would cost time and money.”

(The names of some interviewees have been withheld out of concern for their 
security.)


FINANCIAL CRISIS TALK HITS KAZAK MOSQUES

Some mosque-goers dismayed at political messages preached from pulpit.

By Daulet Kanagat-Uly and Marik Koshabaev in Almaty

Regular visitors to mosques in Kazakstan have been taken aback to hear the 
normal Friday sermons on religious themes prefaced with admonitions to remain 
calm and avoid panic during the current economic crisis.

There is some resentment at the new tone, as many believe the country’s Muslim 
clerical hierarchy is delivering a political message on behalf of the 
government. 

The Muslim leadership has instructed preachers to back the government’s 
anti-crisis efforts and call for national unity at a difficult time, as the 
economy slows and businesses shed workers. 

At a March 27 press conference, Kulmuhamet Mahambet, prayer-leader at the 
central mosque in Almaty, Kazakstan’s biggest city, said that from now on, 
Friday prayers would be preceded by a half-hour talk on the right way to 
approach the current economic slowdown – with patience and forbearance. 

A spokesman for the Spiritual Administration of Muslims in Kazakstan, or 
Muftiate for short, told IWPR on condition of anonymity that the decision came 
from the Mufti himself, Absattar Haji Derbisali. 

Asked whether this amounted to religion interfering in the affairs of the 
secular Kazak state, Mahambet replied, “The Holy Koran says that people should 
obey their ruler. The address by the president calls on people in Kazakstan to 
unite, so it is our duty to support his appeal.” 

He was referring to the state-of-the-nation speech on March 6, in which 
President Nursultan Nazarbaev outlined the steps his government was taking to 
alleviate the crisis, such as encouraging domestic businesses and helping 
vulnerable groups such as people made unemployed by the economic contraction. 

Nazarbaev also called on Kazakstan’s people to display the calm and cohesion 
needed to get them through the economic crisis. 

His party, Nur Otan, has already responded to the call by getting a number of 
political parties and pressure groups to agree not to arrange demonstrations or 
engage in other anti-government activities until the crisis is over. (For a 
report on this, see Kazak Opposition Baulks at “No Protest” Pact, RCA No. 571, 
27-Mar-09.) 

Now the authorities have received backing from the Muftiate, a formal structure 
which leads the country’s Sunni Muslim majority and is seen as close to 
government. 

“We want to help people in difficult times,” the deputy head of the Muftiate, 
Muhammed Hussein Alsabekov, told IWPR. “Now we must pray to Allah, be patient 
and not be afraid. At times like these, we should be united and help each 
other.” 

Alsabekov said clerics at all of the country’s mosques had “understood and 
accepted” the Muftiate’s call. 

Among the mosque-goers interviewed for this report, there was concern that the 
Muftiate was positioning itself too close to government, even among those who 
back Nazarbaev’s plea for unity. 

“Frankly speaking, I am disappointed that my faith is being used to propagate 
someone else’s ideas,” said Rinat, a 33-year-old businessman who said he 
recently “discovered Islam”. Now, he said, “I am even thinking of stopping 
going to the mosque.” 

Like many interviewees, one regular visitor to the central mosque in Almaty was 
against mixing private belief and public politics. 

“Of course it isn’t desirable for such an initiative to come from the religious 
leadership,” he said, speaking on condition of anonymity. 

Both he and other people at this mosque felt it was pointless trying to hammer 
home messages about an economic situation with which they were all too 
familiar. 

“I don’t think we need to be told about the financial crisis,” said 65-year old 
pensioner Abdumalik, “That isn’t what I come here for.” 

Maksat, a 19-year old student in Almaty, said it was wrong to issue 
instructions to congregations, since the basis for attending a mosque was 
voluntary. 

At the same time, he was less than surprised that clerics were following the 
lead of Kazakstan’s political masters. 

“In our country, it’s customary to look to the top and do what they say,” he 
explained. 

By contrast, Nazar, a teacher in Almaty, argued that the Muftiate was doing the 
right thing. “It is proper that we should support our government and not 
express discontent,” he said. 

The director of the Kazakstan Bureau for Human Rights and Rule of Law, Yevgeny 
Zhovtis, said religious leaders could and should work towards tolerance and 
peace, but argued that “it arouses suspicion if it’s done sporadically”. 

Zhovtis sees the Muftiate’s plan as a one-off gesture, similar to the campaign 
to rally political parties and other groups behind the government. 

“There’s a sense that this plan has been coordinated from a single centre…. In 
other words it is like Soviet times, where workers, peasants, religious 
figures, NGOs and the rest all have to sign up to appeals for peace and 
accord.” 

“There is a political element which shouldn’t be there, because religion is 
about moral values,” said Zhovtis. 

Amirjan Kosanov, deputy chairman of the opposition National Social Democratic 
Party, argues that the Muftiate is used by government to ensure the Muslim 
community remains quiescent. 

“I think that what the constitution states about the separation of state and 
religion is not working,” he said. 

Political analyst Oleg Sidorov said the Muftiate’s support for Nazarbaev placed 
other faith groups such as the Russian Orthodox Church and the Jewish community 
in a somewhat awkward position. 

“Those who haven’t made an official statement look as though they haven’t 
demonstrated their loyalty,” he said. 

Daulet Kanagat-Uly is a freelance reporter and Marik Koshabaev an IWPR-trained 
journalist in Almaty. 


SPECIAL REPORT:

VILLAGERS ABDUCTED IN TAJIK-AFGHAN DRUG TRADE

When Tajik drug traffickers default on payment, their Afghan business partners 
wreak vengeance by kidnapping locals in cross-border raids.

By Turko Dikaev in Shuroabad and Mukammal Odinaeva in Dushanbe

While out grazing his livestock near the ruins of the Bardara fortress, 
Sherzamon Manonov was abducted by two armed men. Eyewitnesses were sure the 
raiders who spirited Manonov away across the border were members of an Afghan 
drug gang. 

Manonov’s parents were close to desperation when they heard the news, and his 
wife was out of her mind with worry. 

The herder, who comes from the village of Odinaboi in the Shuroabad district of 
south-western Tajikistan, was only the latest in a series of Tajik nationals 
abducted by raiders from over the border. 

These are not random attacks, but deliberate tactics employed when a business 
debt remains unpaid. The business involved is the high-return and high-risk 
trade in heroin produced from opium poppies in Afghanistan and shipped north 
through Central Asia on its way to destinations in Europe. 

That does not mean Manonov or his relatives were enmeshed in trafficking, as 
there are frequent reports that the Afghan suppliers will target anyone in 
order to pressure a whole community into repaying a debt left by a defaulting 
client.

Manonov was fortunate – Tajik security forces secured his release after just 
one week. The head of Shuroabad’s district government, Ibrahim Azizov, told 
IWPR that all security agencies in the areas, border guards as well as police, 
sprang into action and negotiated with the kidnappers. He did not say whether a 
deal had been struck with them. 

His mother still bursts into tears every time she remembers the day he was 
taken. “I am happy everything turned out well. But if he hadn’t been released, 
who would have raised his five children?” she said. 

ROUGH JUSTICE ON LAWLESS FRONTIER 

The border strip in Shiroabad district lies in a particularly remote 
mountainous part of the country, where Tajikistan’s frontier guards have 
limited ability to patrol the tortuous landscape. The porous nature of this 
section of the frontier have made it a magnet for drug smugglers shifting 
consignments of heroin over the river Panj, which is easily crossed here, to 
sell to Tajik gangs who will move it on and out of the country. 

After the Soviet Union collapsed in 1991, economic decline and a five-year 
civil war, coupled with chaos as rival mujahedin warlords battled each other in 
Afghanistan, created all the preconditions for a thriving drug trade. 

Afghan traffickers were soon on the lookout for locals poor enough to consider 
doing the legwork of getting drugs from the border to the interior of the 
country. 

“At first, they were polite and didn’t insult anyone, but they were persistent 
in looking for middlemen to dispose of the drugs,” recalled one local resident 
who gave his first name as Alikhon. “Many people agreed to it since there were 
no other jobs to be had in those days.”

Alikhon explained how there was an air of unreality to the trade at that time, 
“Drugs were handed out freely to anyone who wanted to get involved in selling 
them, without any payment up front. The idea was that accounts were settled 
after the sale went through.”

Another local man, Nurkhon, added, “It was as if people went mad when they saw 
how easy it was to make money from drugs. You’d see elderly couples leading a 
donkey or horse loaded with saddlebags full of hashish.” 

In the years since the United States-led Coalition ousted the Taleban 
government in Kabul in late 2001, opium production has boomed, despite various 
eradication campaigns led by the international community. With Iran still the 
main exit for processed heroin, with two-fifths, the Central Asian states and 
Tajikistan in particular are the second most important transit route, 
accounting for perhaps another fifth.

Russia maintained troops along the Afghan border until 2005, when the Tajiks 
took over, but neither force proved capable of intercepting the massive 
quantities of heroin coming into the country, although Tajikistan intercepts 
more than any other Central Asian country. 

A retired Tajik border guard who requested anonymity said adjoining parts of 
the Afghan province of Badakhshan were not under the control of Kabul or of the 
international troops stationed in the country. 

He said the drug trade in this part of Afghanistan was under the control of 
ex-members of the mujahedin faction Jamiat-e Islami, part of the “Northern 
Alliance” that battled the Taleban regime prior to 2001.

“The remnants of these troops make up the majority of the local drug 
traffickers,” he said. 

With more money at stake than ever, the rules of this illicit game are tough, 
especially for those who take the goods and renege on payment. 

“Afghans used to hand out narcotics to almost anyone. The people here were 
neither sophisticated nor familiar with the drugs business, so they didn’t 
imagine that debts would be collected in this way,” said Nurkhon.

Lieutenant-Colonel Abdurahim Buzmakov, former head of Shuroabad’s criminal 
investigation department, knows a thing or two about the crime network that 
spread in the area. He says that although police have broken up 14 trafficking 
gangs in the district, a similar number are still operating there, well-armed 
and consisting of up to 60 members each. 

The more successful Tajik traffickers often relocated permanently to urban 
areas such as the capital Dushanbe, or even abroad, to enjoy their newfound 
wealth. If they left any outstanding debts behind, their relatives or others in 
the village pay the consequences. 

“Many fled their homes, but the Afghan traffickers found a way to squeeze them 
for money,” said Nurkhon. 

“When our villagers grew so poor and did not have anything to pay the debts, 
the Afghans started taking hostages,” says another villager Faizullo Ismoilov. 

According to Asliddin Dostiev, a journalist in Shuroabad district who 
specialises in covering the drugs trade, “the Afghan drug smugglers conduct a 
raid over the border, grab hostages and bring them back to Afghanistan”. 

The attackers are well aware that family ties are strong in Tajikistan, so 
taking relatives is an effective way of pressuring defaulters. The captives 
seem to be used as serfs, performing manual work for their captors until they 
are ransomed. 

The border guards service says five Tajik nationals were kidnapped last year 
and 12 in 2007. These figures are lower than in previous years; in 2004, for 
example, there were 44 Tajiks recorded as being held captive in Afghanistan. 
However, members of the security services accept that the official figures may 
underestimate the scale of the problem. 

Lt-Col Buzmakov recalled how two of the five people abducted last year were 
young men from the village of Sebandi. 

“The Afghans seized these two young men because they allegedly took drugs from 
them and tried to pay them in counterfeit dollars,” said Buzmakov. 

The two men were released, only to be arrested back in Tajikistan on charges of 
drug trafficking and counterfeiting. 

Because the negotiations and sometimes transactions involved in securing a 
release are confidential, former captives are reluctant to talk to the press 
about their experiences.

Zoir Niezov, 63, from the village of Mulev in the Shuroabad district, spent 
several months in captivity in Afghanistan in 2005, held by a gang who claimed 
his nephew owed them money for drugs. They threatened to seize other family 
members if he died in captivity.

Like others, Niezov will not discuss how much money changed hands to free him, 
although he says the Afghans were demanding 170,000 US dollars in payment for 
the drugs. 

Residents of Shuroabad told IWPR that traffickers sometimes engaged in plain 
extortion these days, beating up villagers and robbing them of livestock and 
valuables. 

Another worrying trend is that the wives and sisters of defaulting drug 
customers are carried off and forced to become concubines of the minor warlords 
who run the drug gangs in the Afghan province of Badakhshan. The kidnappers 
often send the women home when they feel they have become a burden, for example 
when they bear children.

It is not known how many cases of this kind there are, but residents say there 
are many women living alone in border areas with children born from Afghan 
fathers. 

EKING OUT A LIVING 

Apart from the few Tajik drug runners who make a lot of money, the illegal 
trade has not brought wealth to the local population. 

Most people in these border areas are living close to or below the national 
minimum, set at 60 somoni or 16 dollars a month. With few sources of paid 
employment, villagers in Odinaboi survive on what they can grow – peas, beans, 
lentils and wheat. They also keep livestock, but have to sell most of the meat, 
keeping only enough for special occasions. 

Odinaboi has no mains water supply so villagers have to use nearby springs. 
When the Soviet Union collapsed, the local hospital closed for lack of staff 
and funding. There is a midwife in the village, but anyone who falls ill has to 
travel to the town of Shuroabad. 

Many villages in the mountains along the border are all but inaccessible by car 
because Soviet-era roads have fallen into a state of disrepair, and are nearly 
impassible due to thick snow and mud from autumn to spring.

LARGE GAPS IN BORDER PROTECTION

Life under these harsh conditions is made worse by the ever-present threat of 
cross-border incursions. 

The 169-kilometre stretch of border in Shuroabad is the most vulnerable section 
of the 1,300 km frontier with Afghanistan, because it runs around numerous 
gorges and ravines. The Panj river which marks the border is very easy to ford 
at this point, unlike lower downstream, where it grows to become the Amu Darya, 
one of Central Asia’s two great waterways. 

Former border guards say this area was poorly protected even in the Soviet 
period, when the USSR was generally a well-defended fortress. 

Lt-Col Buzmakov says the frontier post nearest the border is actually seven km 
away from it, and the furthest is 25 km from Afghan territory. The intervening 
strips of land are impossible to patrol properly. 

“Since Soviet times, over 32,000 hectares of territory in Shuroabad district 
have never had frontier posts,” he said. “Something needs to be done about it. 
Afghan drug smugglers take advantage of this situation.” 

Tajikistan only began guarding its southern border in 2006, taking over from 
Russian troops who had stayed on after 1991. Although at the time some doubted 
that the Tajik force would cope as well as the Russians, three years on 
observers say the level of border control has not deteriorated, although it has 
not shown much of an improvement either. 

Officials say one thing that has got better is that the number of Tajik 
nationals kidnapped and taken to Afghanistan has declined steadily since 1996. 

“We need to lay 154 km of new roads… to connect villages and the frontier 
posts. We need to have well-equipped posts, and to shift them closer to the 
border,” said Buzmakov. “None of this is currently in place, which is to the 
advantage of the drug smugglers.” 

Officers with the Tajik border guards in the Shuroabad sector readily admit 
that the force is under-funded and under-resourced. 

On patrol, the service’s armed units lack adequate communications to stay in 
touch with base or call for back-up when they need it. Often, a local command 
centre will discover there is a problem only from the sound of shots as a 
patrol unit engages a band of armed smugglers. 

A serving major with the border guards, who spoke on condition of anonymity, 
said most of his men’s kit dated from the Soviet era, and they lacked night 
vision equipment. 

Another problem, he said, was that units were short of local men who knew the 
lay of the land. 

“Afghan drug smugglers know this area better than border guards who were 
drafted in from various regions of the country. We are prohibited [by law] from 
conscripting only locals,” he said. 

Tajikistan has received assistance from the international community, mainly the 
United States and the European Union, to strengthen border protection and 
narcotics interdiction, but this does not seem to have reached units stationed 
in remoter locations. 

The Tajik authorities have recognised that Shuroabad is a special case, and set 
up a commission to make recommendations for improved border protection 
arrangements there. One of the recommendations was that two battalions of the 
regular army should be deployed to offer a rapid response when necessary.

Last year, the government also ordered local authorities to help with the 
running costs of the border forces stationed in their area, both in cash and by 
providing land where they could grow fruit and vegetables. 

The head of Shuroabad district, Ibrahim Azizov, told IWPR that his 
administration was doing everything it could, although since nearly 80 per cent 
of its budget was subsidised by central government, it was hardly in a position 
to make a substantial contribution.

He insisted that life was slowly getting better in the district, adding that 
“Securing the border… is paramount importance if people are to live and work in 
peace. 

Turko Dikaev and Mukammal Odinaeva are journalists based in Tajikistan.

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