Mixed messages from Tashkent

By bne IntelliNews March 21, 2011

Clare Nuttall in Almaty -

It looked like a tentative move towards greater openness when legislation giving more powers to the Uzbek parliament was passed in March. Yet Tashkent has recently crushed those hopes by throwing out an international NGO, forcing several international investors to shut down and denouncing western rock as "devil music."

Changes to the constitution approved by the lower house of parliament, the Oliy Majlis, on March 4 will give greater powers to the parliament, including the right to select and dismiss the prime minister. While not widely publicised, the amendments also clarify what will happen if the president is unable to carry out his duties - the head of the upper house of parliament will become acting head of state, Reuters reported. The constitution had previously been vague on this point, raising concerns over how the country would be governed if 73-year-old President Islam Karimov was suddenly incapacitated.

A statement from parliament describes the new legislation - initially proposed by Karimov in his address to parliament in November - as "the start of a new stage of democratic development of the country and development of civil society... and expands the powers of the Oliy Majlis in the system of state authority."

In that November address to parliament, Karimov had also talked extensively about the need to improve the business climate in the country, proposing changes that include new laws on protection of private property and privatisation, and obtaining a sovereign credit rating for Uzbekistan. It seemed that with the global economic crisis coming to an end, Tashkent was looking to revive its stalled privatisation process, which was to a great extend aimed at attracting strategic investors to modernise major state-owned companies.

This was a welcome surprise in a year that saw the arrest of several prominent bankers and the mysterious closure of Uzbekistan's largest conglomerate Zeromax. Despite Uzbekistan's undoubted attractions - significant oil and mineral wealth, and Central Asia's largest population - one investor described the business climate in early 2010 as the worst it had ever been.

However, 2011 looks to be no more of an improvement than 2010.

Business as usual

London-listed Oxus Gold, which had agreed to sell its 50% holding in the Amantaytau Goldfields joint venture to the Uzbek shareholders in the JV, announced on March 3 that it's having to resort to international arbitration. Oxus said in a statement that the commission appointed by the Uzbek Ministry of Finance to audit Amantaytau Goldfields employed practices that, "have led the directors to conclude that there is no evaluation of the assets taking place in good faith and there is a risk of the audit committee using the process to find reasons to justify putting [Amantaytau Goldfields] into liquidation." The company's stock plummeted 35.8% on the announcement.

A Tashkent court has also frozen all the assets and bank accounts of Swedish cosmetics company Oriflame in the country. Oriflame's offices in Tashkent have been closed and its managers ordered not to leave the country while an audit of its business is carried out, Gazeta.ru reported. According to local press reports, several other businesses are also being forced out of business; they include beauty products vendor ParfuMed, furniture retailer Komfort-Elit and Turkish shopping centre Turkuaz. Documentaries shown on state television have accused several Turkish business of links to the banned Islamic group Nurcus, claiming they have been disseminating Nurcu literature and establishing prayer rooms.

The "development of civil society" talked about in the new legislation also looks little more than rhetoric. Just 11 days after the March parliament vote, Human Rights Watch (HRW) announced that it had been forced to close its Tashkent office after operating in the country for 16 years. The NGO's office registration was cancelled after several months during which HRW says the government obstructed its work by denying visas and work accreditation for its staff. "With the expulsion of Human Rights Watch, the Uzbek government sends a clear message that it isn't willing to tolerate critical scrutiny of its human rights record," says HRW's executive director, Kenneth Roth. "But let me be clear, too: we aren't going to be silenced by this, we are as committed as ever to report on abuses in Uzbekistan."

HRW says the human rights crisis in Uzbekistan is deepening, citing the high number of independent journalists and human rights and political activists currently in prison. "Torture and ill-treatment in the criminal justice system are systematic, and serious violations go unpunished," the organisation says in a statement.

At the same time, the government launched a bizarre crackdown on popular culture. Another documentary aired in late February warned Uzbeks to "beware of the satanic effects of this evil music... [which] was created by evil forces to bring youth in western countries to total moral degradation," said the narrator of "Melody and Calamity".

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