WELCOME TO IWPR'S REPORTING CENTRAL ASIA, No. 450, 2 June, 2006 KYRGYZ OPPOSITION DEFERS ULTIMATUM The opposition sets the government yet another deadline to reform or resign. By Leila Saralaeva in Bishkek
FREE TRADE CONCERNS IN TAJIKISTAN Economists argue that signing up to the WTO too hastily would destroy local business in an already weak economy. By Artyom Fradchuk in Dushanbe ****************** VISIT IWPR ON-LINE: www.iwpr.net *************** PLEASE NOTE IWPR'S NEW ADDRESS & PHONE NUMBERS: 48 Gray's Inn Road, London WC1X 8LT, UK Tel: +44 (0)20 7831 1030 Fax: +44 (0)20 7831 1050 RSS: http://www.iwpr.net/en/rca/rss.xml FREE SUBSCRIPTION. Readers are urged to subscribe to IWPR's full range of electronic publications at: http://www.iwpr.net/index.php?apc_state=henh&s=s&m=p ****************** VISIT IWPR ON-LINE: www.iwpr.net *************** KYRGYZ OPPOSITION DEFERS ULTIMATUM The opposition sets the government yet another deadline to reform or resign. By Leila Saralaeva in Bishkek The opposition in Kyrgyzstan has failed to achieve the definitive results it hoped its mass protest meeting in Bishkek last weekend would bring, and the stand-off with the government looks set to drag on over the summer months. At a similar rally held on April 29, organisers from the Movement for Reforms promised that the May 27 demonstration would give the authorities an ultimatum to ensure that long-promised reforms were finally addressed, including the removal of government members blamed for some of Kyrgyzstan's social and economic ills. But on May 10, President Kurmanbek Bakiev took some of the wind out of his opponents' sails by sacking key government officials including National Security Service chief Tashtemir Aitbaev, Secretary of State Dastan Sarygulov and the head of the presidential administration, Usen Sydykov. The same day, the impact of another opposition demand - for the authorities to curb a wave of crime - was also softened, though not in the way the government or its critics would have chosen. Ryspek Akmatbaev, a prominent figure whose alleged links with organised crime embodied the opposition's concerns, was shot dead in the street by unknown assailants. The May 27 rally, which brought 10,000-strong crowd onto Bishkek's central Alatoo Square, therefore focused instead on other matters including the outstanding issue of constitutional reform. After months of debate by a large "constitutional conference" convened by the president, attempts to devise a new governing structure for Kyrgyzstan to replace the system left by ousted president Askar Akaev foundered on the issue of whether president or legislature should have the upper hand. The rally concluded with threats to seek President Bakiev's resignation if he fails to submit a new draft of the constitution to parliament by September. Other demands made at the end of the meeting included calls for economic reforms, greater freedom of speech and stronger independent media. Two of the demands listed by Kubatbek Baibolov, a member of parliament and head of the Union of Democratic Forces, were especially close to home for the Bakiev administration. He said Akaev-era officials must be held accountable for the Aksy shootings of 2002. At the time of the incident, in which six people died after police opened fire on a crowd of demonstrators in southern Kyrgyzstan, Bakiev was prime minister. He later resigned and joined the anti-Akaev opposition. Secondly, Baibolov demanded an end to government officials using their positions to acquire businesses for themselves or family members. This echoed slogans chanted by the crowd - in pithier language - accusing Bakiev of facilitating business acquisitions by his son Maxim. Almazbek Atambaev, co-chairman of the Movement for Reform, told rally participants that all of the companies that formerly belonged to members of the Akaev family were now in the hands of the new regime. "Why can't we prove this? Because they've registered them in other people's names," he said. Another serious accusation levelled at the authorities was that their policies tended to set the north and south of Kyrgyzstan against one another. The regional divide has long been viewed as a potentially explosive issue, and the current division of posts between southerner Bakiev and Prime Minister Felix Bakiev, who comes from the wealthier north, was forged last year in an attempt to create a balance. "People of good will have gathered here today to tell the current regime that we are opposed to those who would divide us," parliamentary deputy Dooronbek Sadyrbaev told the crowd. "The regime says the interests of the northern Kyrgyz run contrary to those of the southerners. They are tearing our people into pieces and dividing us like sheep. We want to tell this regime to go." The only senior administration figure present at the rally was Tursunbek Akunov, chairman of the presidential committee for human rights, who stressed that the administration had already moved some way towards addressing the opposition's concerns. Prior to the rally, it was apparent that the Bakiev administration was worried about the mass protest, which was organised not by pro-Akaev elements but by many of the individuals and political groups who were instrumental in bringing Bakiev to power in last year's March revolution. One of the measures taken to avert this show of public anger degenerated into farce and humiliating defeat. Five days before the rally was scheduled to take place, Defence Minister Ismail Isakov announced that Alatoo Square would - by pure coincidence - be taken up by an army extravaganza to celebrate two military dates falling on May 28 and 29. Isakov said that the protesters should find a different venue and not obstruct the military events, which included a concert and awards ceremony, plus a ballroom dancing competition. The opposition hit back, suggesting that defence chiefs pay more attention to their under-resourced conscripts rather than hosting elaborate events. "Let the defence minister buy the soldiers some underwear and uniforms instead of holding celebrations," said parliamentary deputy Taalay Subanbekov. On May 26, the day before protesters, soldiers and ballroom dancers were due to converge on central Bishkek, the defence ministry sounded the retreat and cancelled the party. With the rally over, the Movement for Reforms has given the government another three months to produce some results before the opposition starts protesting again. Next time, opposition politicians promise, they will be seeking the resignations of both president and prime minister if they deem progress on reforms to be insufficient. "This was the last demonstration of the season, and we have stated officially that we are giving the regime three months, and expect an official answer from it at the beginning of September. If just one of our demands is not met, we will demand the resignation of the tandem," said opposition deputy Melis Eshimkanov, referring to the Bakiev-Kulov alliance. For the opposition, there is a danger that all-or-nothing demands for senior heads to roll will begin to lose their force if ultimatums are deferred from one protest meeting to the next. Elmira Nogoibaeva of the International Strategic Studies Centre, which is associated with President Bakiev's office, said, "One gets the impression that the last demonstration and this latest one did not differ fundamentally in any way. "If nothing changes in the coming three months, then the same kind of demonstration will probably take place in September, only on a smaller scale, with fewer participants, and less impact." Leila Saralaeva is an IWPR contributor in Bishkek. FREE TRADE CONCERNS IN TAJIKISTAN Economists argue that signing up to the WTO too hastily would destroy local business in an already weak economy. By Artyom Fradchuk in Dushanbe As the Tajik government tries to speed up the country's accession to the World Trade Organisation, economists are warning that signing up too soon would damage the country's still fragile economy. In an interview with IWPR, Ghafur Rasulov, the head of public relations at the Ministry of Economy and Trade, said Tajikistan could join the WTO as early as next year. That would make it only the second Central Asian state to accede to the free trade association, after Kyrgyzstan, which joined in 1998. Of the other Soviet states, only Armenia, Georgia and the three Baltic states are members, although Russia and Kazakstan are some way along the negotiating process. The Tajik government submitted an application to enter the WTO in 2001, and talks have been ongoing since then. One of the immediate consequences for a country like Tajikistan is that it has to amend a whole range of economic laws, trade regulations and customs arrangements to harmonise with the WTO's rules. The improvement in the framework governing trade should have the added benefit of encouraging foreign investors, who are currently put off by the perceived lack of regulation. According to Rasulov, an inter-departmental government commission working on the accession process has already done a substantial amount of work to meet WTO standards. "We have reviewed a list of 12,000 goods and amended hundreds of laws in order to comply with WTO norms," he said. In the long run, this should smooth trade relations. "The WTO has 150 members, and once we've had to agree with them this once, we won't have to go through the routine of reaching bilateral agreements with these countries again," said Rasulov. Outside the government, WTO membership is supported by a number of Tajik economists. "Being a WTO member will enable us to apply the preferential rules applied to exports of goods from all WTO member states," said economist Khojimuhammad Umarov. "And importing low-price raw materials and components will enable us to reduce the prime cost of production to competitive levels, therefore boosting the rate at which the real economy develops." Tajikistan is already a member of two regional groupings that envisage free trade arrangements - the Commonwealth of Independent States, the original association of former Soviet states established in 1991, and the Eurasian Economic Community, a more limited grouping dating from 1997 and consisting of Russia, Kazakstan, Kyrgyzstan, Tajikistan plus recent member Uzbekistan. But customs harmonisation and rules on transit trade - important for landlocked Tajikistan - have not been fully implemented. Advocates of WTO membership argue that it might achieve what earlier arrangements have failed to do. "Given that all the Central Asian countries are going to enter the WTO, all the unjustifiably high customs and transit duties that Tajikistan now has to pay will be lifted. Those duties have already cost the country [to date] more than 15 billion US dollars," said Umarov. However, other analysts are wary about the impacts the new trading regime will have on an economy that remains largely uncompetitive aside from the key areas of aluminium, cotton and hydroelectric power. Apart from aluminium and cotton, which are traded internationally, and electricity which goes to neighbouring Central Asian states, Tajikistan's principal export market remains Russia. A World Bank study on Tajikistan's trading system published in December said that while the country would eventually benefit from membership, the study cautioned that "accession will not suddenly improve market access abroad for Tajikistan's exports", simply because these already enjoy the terms applied to WTO states. The inherent saleability of aluminium and cotton on world markets potentially places Tajikistan in a better position as an exporter than other developing countries which have found their textiles, for example, blocked by anti-dumping measures imposed by stronger states within the WTO. The study argued that the main negative effect of WTO accession was the short-term cost of regulatory reform. But local analysts are more concerned that WTO membership will flood the domestic market with cheap imports, driving all but the strongest Tajik firms out of business. "Entering the WTO will affect different parts of the economy in differing ways," said Maksud Odinaev, Tajikistan programme manager for the WTO's International Trade Centre. "For some it will have positive consequences, while for others it will prove destructive. It will depend on how well companies in these areas are prepared for WTO membership." The Tajik economy was the weakest in the USSR, and the subsequent collapse of Soviet trading links and the 1992-97 civil war created huge problems from which the country is only now recovering. "Objectively, Tajik enterprises are not ready to work to the WTO's conditions, and they will all go bankrupt," warned economist Rustam Babajanov. Nuriddin Kaumov, director of the Centre for Economic Research, agreed, saying the warning signs were already apparent. "At the moment, the republic has one of the lowest customs duty rates for imported goods, and the domestic market is filled with foreign products. After [WTO] accession, all the customs barriers will be removed and this will seriously damage companies that even now are economically unstable," he said. Political scientist Said Yuldashev argued that small and medium-sized firms were most at risk, "Since they have been unable to fulfil their promise on the domestic market, they will undoubtedly be crowded out by incoming international firms." Odinaev believes it is the government's responsibility to ensure that local producers do not suffer. "Small and medium businesses have only just begun to emerge, and entering WTO will kill them off at such an early stage of development," he said. "In order to join the WTO, the government as the prime mover must take steps to improve the competitiveness of domestic producers.... "WTO membership needs to be on terms that meet our country's national interests, and do not create a threat to local domestic producers." New WTO members, especially the poorer ones, are able to claim certain privileges and exemptions to mitigate the shock effects of accession. But the experts interviewed by IWPR were sceptical about how much Tajikistan would benefit. As Babajanov explained, "Tajikistan is recognised to be one of the poorest of all the former Soviet republics, so the WTO may accept some [restrictive] import conditions in return for limiting [Tajik] exports. However, one needs to realise that all such preferential terms will be only temporary in nature." Odinaev added that the Tajik state was too weak to exercise the theoretical rights it would have within the world trade grouping. "It is unlikely that the country will be able to negotiate such preferential treatment at the WTO. To do that, Tajikistan would need a permanent team of negotiators based in Geneva. That's impossible, as the cost of doing so would be beyond Tajikistan's means," he said. Opponents of rapid accession point to neighbouring Kyrgyzstan as an example of what can go wrong. The parallels are relevant, as the two countries are the smallest in Central Asia, and lack the oil and gas resources that make their bigger neighbours at least potentially wealthy. "We shouldn't repeat the sad experience of Kyrgyzstan, which entered the WTO hastily," said Umarov. "That country did not complete the process needed to eliminate [trade] barriers and raise foreign investor confidence." Trade barriers or not, Kyrgyzstan failed to address the underlying issues that hindered investment, said Odinaev. "The factors that made Kyrgyzstan less attractive for investors were political instability and widespread corruption. This is a lesson that should be learned by the Tajik government, so as to avoid inaction during WTO accession preparations - [otherwise] the end result will be counterproductive." Artyom Fradchuk is an IWPR contributor in Dushanbe. ****************** VISIT IWPR ON-LINE: www.iwpr.net *************** IWPR's 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. The service forms part of IWPR's Central Asia Project based in Almaty, Bishkek, Tashkent and London, which supports media development and encourages better local and international understanding of the region. IWPR's Reporting Central Asia is supported by the UK Community Fund. The service is published online in English and Russian. All our reporting services are also available via e-mail subscription. For further details on this project and other information services and media programmes, visit IWPR's website: www.iwpr.net Editor-in-Chief: Anthony Borden; Managing Editor: Yigal Chazan; Senior Editor: John MacLeod; Central Asia Programme Manager Saule Mukhametrakhimova; Editor in Bishkek Kumar Bekbolotov. The Institute for War & Peace Reporting is a London-based independent non-profit organisation supporting regional media and democratic change. 48 Gray's Inn Road, London WC1X 8LT, UK Tel: +44 (0)20 7831 1030 Fax: +44 (0)20 7831 1050 The opinions expressed in IWPR's Reporting Central Asia are those of the authors and do not necessarily represent those of the publication or of IWPR. ISSN: 1477-7924 Copyright © 2006 The Institute for War & Peace Reporting REPORTING CENTRAL ASIA No. 450
