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

international court showdown with foreign mining firm.  By Bakhtiyor

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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

Medet Tiulegenov is a lecturer in political science at the American
University of Central Asia in Bishkek, Kyrgyzstan.


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

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

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

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

“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.


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

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

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

“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

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.

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