WELCOME TO IWPR'S REPORTING CENTRAL ASIA, No. 652, July 10, 2011 COMMENT
KYRGYZSTAN'S CRUCIAL PRESIDENTIAL BALLOT Democratic principles undermined as fragmented electorate prefers regional allegiances to ideology. By Medet Tiulegenov KAZAKSTAN'S UNHAPPY OIL WORKERS Crushing or ignoring self-confident labour movement could prove serious miscalculation. By Almaz Rysaliev GOLD DISPUTE WON’T HELP UZBEKISTAN'S IMAGE Government faces international court showdown with foreign mining firm. By Bakhtiyor Rasulov **** NEW ************************************************************************************ LATEST PROJECT REVIEWS: http://iwpr.net/make-an-impact/project-reviews VACANCIES: http://iwpr.net/what-we-do/vacancies **** IWPR RESOURCES ****************************************************************** CENTRAL ASIA PROGRAMME HOME: http://www.iwpr.net/programme/central-asia CENTRAL ASIA RADIO: http://iwpr.net/programme/central-asia/central-asia-radio NEWS BRIEFING CENTRAL ASIA: http://iwpr.net/programme/news-briefing-central-asia CENTRAL ASIA HUMAN RIGHTS: http://iwpr.net/programme/central-asia-human-rights-reporting-project STORY BEHIND THE STORY: http://iwpr.net/report-news/the-story-behind-the-story BECOME A FAN OF IWPR ON FACEBOOK http://facebook.com/InstituteforWarandPeaceReporting FOLLOW US ON TWITTER http://twitter.com/iwpr **** http://iwpr.net/ ********************************************************** DONATE TO IWPR: http://iwpr.net/donate **** http://iwpr.net/ ********************************************************** COMMENT KYRGYZSTAN'S CRUCIAL PRESIDENTIAL BALLOT Democratic principles undermined as fragmented electorate prefers regional allegiances to ideology. By Medet Tiulegenov On the face of it, everything should be in place for this year’s presidential election in Kyrgyzstan to reap the benefits of recent political reforms, and embed democratic principles. In reality, though, voter preferences in the October 30 ballot are likely to be strongly influenced by regional, even tribal allegiances, which remain a central feature of politics in Kyrgyzstan, and elections in particular. The way parliament operates is a good example of this. In formal terms, the elected parties hammer out policy through legislative debates. In reality, though, the old ways persist, where popularity with voters and policy-making all come down to strong personalities and regional connections, not actual policies or ideas. Nominations have yet to get under way, but is clear that the front-runners will include many leaders of political parties who are currently in government or parliament. Among the likely contenders are Prime Minister Almazbek Atambaev, who leads the Social Democrats, Deputy Prime Minister and Respublika party chief Omurbek Babanov, and Omurbek Tekebaev of Ata Meken. The Ata-Jurt party will probably nominate its leader Kamchibek Tashiev, while Marat Sultanov of the same party puts himself forward separately. Then there are Adakhan Madumarov of the Butun Kyrgyzstan party, which narrowly missed getting into parliament in last year’s election, Communist Party head Iskhak Masaliev and Omurbek Suvanaliev of the Ar-Namys party. The list of likely candidates, each with his own constituency, suggest that whoever wins, the traditional divide between northern and southern Kyrgyzstan will widen. Last year’s ethnic violence in southern Kyrgyzstan has added a whole different dimension to the electoral landscape. Several days of fighting involving ethnic Kyrgyz and Uzbeks in June 2010 in and around Osh and Jalalabad left over 400 people dead and almost 2,000 injured. Various political parties are now engaged in a blame game, accusing their opponents of bearing some responsibility for the conflict. On the one side, those associated with the interim administration, which emerged following the popular unrest that forced the then president Kurmanbek Bakiev from power in April 2010, are accused of allowing the violence to happen. They in turn accuse their opponents of being reactionaries who would like to turn the clock back to before the April revolt. Support for political parties is already divided along regional and tribal lines; their popularity will now be additionally determined by this new gulf between “revolutionaries” and “reactionaries”. Whoever becomes president, it is almost certain that he or – less likely – she is going to be a lot different from the current head of state, Roza Otunbaeva – the first female president in Central Asia, a politician able to work across political divides, and a former diplomat who can deal with the West while maintaining cordial relations with former Soviet states. The backgrounds of the emerging candidates – all men – suggest they will be inclined to seek most of their external support from post-Soviet states. Significantly, almost all the party leaders paid their respects in Moscow ahead of last year’s ballot. Of Kyrgyzstan’s current political leaders, only Otunbaeva appears comfortable working with western democracies. The election outcome will therefore present challenges both to the West and to the new head of state, given Kyrgyzstan’s heavy reliance on international aid and loans. The new leader will also struggle to maintain cross-party relationships across the various parliamentary factions and the partners in the current or future coalition government. That will require the skill to know when decisive leadership is needed, and when a more cautious intervention is called for. Otunbaeva will not be standing herself; she is automatically excluded by her position as interim head of state for a fixed period. The fact that as the incumbent, Otunbaeva is leaving office at all is a landmark event in itself. Independent Kyrgyzstan’s two earlier presidents, Askar Akaev and Bakiev, were ejected from office following mass protests, Turkmenistan got a new president only when the first one died in office, and Kazakstan, Tajikistan and Uzbekistan have had the same heads of state since before they became separate countries. The presidency itself, like other political institutions, has been radically overhauled by the constitution passed in a nationwide referendum at the end of June 2010. Kyrgyzstan became the first Central Asia state to shift from a political system dominated by a strong president into a parliamentary democracy. A parliamentary election conducted under the new rules last October created a multiparty legislature in which no one group dominates through an absolute majority. The election will be held under new legislation designed to correct shortcomings noted in the 2010 parliamentary ballot, and more serious problems of earlier years. This suggests that since the parliamentary election was relatively fair, the presidential one will be a genuine contest. One improvement, for example, is the decline in the traditional practice where incumbent politicians help themselves to government resources to ensure they win. The October ballot will also be a fairly open-ended affair given that Otunbaeva is not standing and none of the likely contenders is in a position to rally overwhelming voter support at the moment. In last year’s election, the five parties that made it into parliament received less than 40 per cent of the vote among them, a clear indication of a fragmented electorate. Parties considering nominating a presidential candidate will have to bear this in mind. Since the new constitution reduces the powers of a future president, one might reasonably ask – why bother standing? There are at least three points that still make the position attractive – it provides opportunities to exert control over appointments to key government institutions, to win popular favour, and – down the line – to use one’s position to claw back more powers for the presidency. This latter could entail attempts to rewrite the constitution towards something more like the old one – in other words, reversing the process that has given Kyrgyzstan a parliament-based democracy and greater political pluralism. As human rights activist Dinara Oshurakhunova warned at a recent meeting of the Institute for Public Policy on June 29, “It is doubtful that the next president will agree to the same degree of authority that Otunbaeva has now – it’s more likely that he will seek to expand them.” Medet Tiulegenov is a lecturer in political science at the American University of Central Asia in Bishkek, Kyrgyzstan. KAZAKSTAN'S UNHAPPY OIL WORKERS Crushing or ignoring self-confident labour movement could prove serious miscalculation. By Almaz Rysaliev The uncompromising and heavy-handed response to a rising wave of strikes across Kazakstan’s oil sector is doing nothing to promote a settlement, and instead threatens to turn an industry-specific protest into a broader grassroots movement. Over recent weeks, hundreds of oil workers as well as drivers and ancillary staff at companies in the west of Kazakstan, where the economy is based largely around oil and gas extraction, have joined what began as small-scale strike actions in May. There are varying estimates of the total numbers involved. Aynur Kurmanov, who heads a socialist movement called Kazakstan-2012, puts the overall figure at 12,000. The protests began on May 9 at Karazhanbasmunai, a Kazak-Chinese joint venture, and escalated into a full-scale strike there in less than a week. Workers demanded recognition of their independent trade union and the same pay as staff at another firm, Ozenmunaigaz, where wages were increased last year following protests in the town of Janaozen. One Karazhanbasmunai protester was quoted by local media as saying he was being paid half the amount his counterpart at Ozenmunaigaz would get. Management at Karazhanbasmunai filed a legal action and on May 24, a court ruled that the protest was illegal. Union lawyer Natalya Sokolova was detained the following day and charged with holding an unauthorised demonstration, and later – on the day when she was supposed to be released – accused of “inciting social discord”. The Karazhanbasmunai strike continues, with calls for Sokolova’s released added to earlier demands. At the same time, starting on May 11, workers with the Ersai Caspian Contractor company – part-owned by Italy’s Eni oil company – began striking for better pay and conditions, for the right to be represented by an independent union, and for wages to be on a par with foreign employees doing the same jobs. One of the protesters, Karim Jalynov, told IWPR, “There are 250 of us here. We launched a hunger strike on May 21, and since then 42 people have been hospitalised with health problems.” He went on, “Why are we striking? Because they don’t pay us much, and because of discrimination. I’m a rigger and I am on 60,000 Tenge [410 US dollars] a month, whereas a foreigner doing the same job as me gets twice that amount.” Jalynov said management had not talked to the strikers, but had sacked 92 of them. “We’re going to stay until our demands are met. We’ve got nothing to lose,” he said. Ersai Caspian Contractor says that the protest is illegal and that it will not meet the strikers’ demands. It argues that its staff are paid almost double the average wage in other industries in Kazakstan. By May 26, oil workers and truck drivers at Ozenmunaigaz had begun their own action in support of a pay claim. They said last year’s wage rises had been eaten up by inflation, and their bonus payments had been slashed. In the Ozenmunaigaz case, too, a court ruled that the workers’ demands were not justified and their strike was illegal. As these three strikes continued in the southwestern Mangystau region, industrial action spilled over into the neighbouring Aktobe region, where workers at Aktobemunaigaz – another joint venture with China – started a protest on June 14 against plans to transfer ownership of a further part of the company to the foreign investor. They were concerned that the move would lead to job losses. For a comment on these issues, IWPR spoke to the public relations department at KazMunaiGaz, the state-owned giant that owns Ozenmunaigaz and also has a half-share in Karazhanbasmunai. It said wages at Ozenmunaigaz had doubled in the last few years, and giving the example of an oilshaft repair worker who would now be on 2,200 dollars a month. In a June 16 press release, KazMunaiGaz said protests were continuing at Ozenmunaigaz, but the number of staff involved was falling and now mainly consisted of drivers. It warned that protesters now faced dismissal proceedings, and insisted formal negotiations would only become possible once the industrial action ended. Energy-sector wages are among the highest in Kazakstan, but the work is hazardous and the climatic conditions extreme. The cost of living is also higher as everything has to be trucked in for the oil worker’s settlements. Human rights lawyer Sergei Utkin said industrial action in Kazakstan had so far generally been confined to the oil and gas sector, a major earner for the country. He said it was perfectly normal for employees to seek better remuneration, and for employers to resist such demands. He agreed with strikers who argue they are being discriminated against when foreign nationals brought in to work on the same fields receive “incomparably more” money. What is potentially worrying for the Kazak authorities is that the spirit displayed by the oil industry workforce could spread to other sectors where such open defiance is rare. The Kazakstan-2012 movement led a nationwide action in support of the oil workers on June 16, prompting statements from staff at major firms like copper-mining giant Kazakhmys and metals conglomerate ArcelorMittal Temirtau, as well as another oil and gas firm, Aktobemunaigas. These statements expressed solidarity with the strikers and made similar claims about their own industries – low and unequal pay, poor working conditions, and the persecution of independent trade unionists. Meanwhile, strikers at Ozenmunaihaz also called for better pay for local public-sector teachers and doctors. Andrei Chebotarev, director of the Alternativa Centre for Political Studies, a think-tank, sees a growing politicisation of what began as specific, localised industrial action. “Initially, the demands the protesters were making were purely social and economic, concerning their relations with management at their various companies,” he said. Chebotarev said it was the Kazak authorities who heightened tensions by failing to encourage negotiated settlements rather than confrontation, and by allowing the police to get drawn into pressuring union activists. Meanwhile, Kazakstan’s opposition parties took up the strikers’ cause, adding a further political dimension to the dispute. Utkin agreed that the authorities had show themselves unable to play the role of neutral third party, and had thus exacerbated the situation. “The authorities have backed the employer, using heavy-handed tactics against the workers, and trashing their reputations in the state media,” he said. “That isn’t right – the authorities should take a neutral stance and seek a compromise, lawful outcome.” In this kind of environment, Chebotarev says, if striking groups act in unison and remain steadfast, they have a chance of getting their demands met. “In any case, the strike movement in Kazakstan is clearly on the rise, and it could force the country’s leadership to rapidly take the measures needed to prevent social tensions deteriorating even further,” he said. Almaz Rysaliev is IWPR’s editor in Kazakstan. GOLD DISPUTE WON’T HELP UZBEKISTAN'S IMAGE Government faces international court showdown with foreign mining firm. By Bakhtiyor Rasulov Whatever the outcome of the ongoing legal battle over a gold company’s assets in Uzbekistan, analysts say the dispute will inevitably harm the country’s reputation as a place to do business in. The court case pits Oxus Gold, which has a 50 per cent stake in Amantay Goldfields, AGF – a joint venture with two state-run Uzbek partners – against the government in Tashkent. The Uzbek finance ministry launched an audit of AGF earlier this year, in a move Oxus said was designed to force the joint venture into liquidation so that the state could acquire the foreign-owned half of its assets at well below their market value. Oxus said its subsidiary – the partner in AGF – was no longer in a position to meet its contractual obligations. It said it was seeking an amicable agreement to dispose of its shares in AGF for a fair value. In early May, Uzbek deputy foreign trade minister Shavqat Tulyaganov accused Oxus of failing to pay taxes for some of the time it had operated in the country. The lawyer acting for the company, Robert Amsterdam, said the claim was “false and misleading” and formed part of a “campaign to fabricate a reason to steal the last foreign assets in the mining industry in Uzbekistan". He also denied Tulyaganov’s assertion that Oxus had turned down an offer of an amicable settlement. The dispute is now to go to international arbitration. The Uzbek trade and foreign economic relations ministry refused to comment on the affair, as did the State Committee for Geology and Mineral Resources or Goskomgeo, which has a 40 per cent share in the joint venture. But a senior Goskomgeo official, who did not want to be named, said the Uzbek government wanted to acquire a complete monopoly of the gold industry because the metal’s world price was rising – and that meant getting rid of foreign partners. A local analyst suggested a different reason for dissolving AGF – the one-time involvement of a Swiss-registered company called Zeromax GmbH. In 2006, following a tax dispute with the Uzbek government, Oxus issued a 16 per cent shareholding to Zeromax, which was owned by an Uzbek businessmen and had extensive interests in the country’s energy sector and other industries. Once seen as untouchable because of its proximity to the Uzbek government, Zeromax lost all its assets in the country last year when they were seized at the behest of the secret police. Many analysts saw its demise as the result of one elite group moving in on the interests of another. (See Uzbekistan: Mystery Surrounds Zeromax Collapse.) The analyst said Oxus might have been the unwitting victim of an internal power-struggle in which a company which the regime was once happy to see involved in AFG suffered a spectacular fall from grace. “It’s likely that… a decision was taken to expel all of the company’s partners,” he said. This kind of political volte-face is just one of the unpleasant surprises that can face foreign companies which risk investing in Uzbekistan. “They get invited into the country, and they invest immense sums of money in developing an industry. Later on, they are driven out under formulaic pretexts, and the foreign shareholding [in a joint venture] passes to the Uzbek partner, and is then nationalised,“ the analyst said. The American mining firm Newmont suffered the same fate a few years ago. Its Zarafshan-Newmont subsidiary was accused of tax evasion around the same time as Oxus in 2006, and its assets seized. “The authorities’ actions do nothing to contribute to improving the investment climate, and scare off potential investors … but they do serve to enrich individual officials,” an economist in Tashkent said. (The names of interviewees have been withheld out of concern for their safety.) Bakhtior Rasulov is a pseudonym for a journalist in Uzbekistan. This article was produced as part of IWPR's News Briefing Central Asia output, funded by the National Endowment for Democracy. **** http://iwpr.net/ ********************************************************** REPORTING CENTRAL ASIA provides the international community with a unique insiders' perspective on the region. Using our network of local journalists, the service publishes news and analysis from across Central Asia on a weekly basis. 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