Kyrgyzstan Allows Fugitive Ex-President Akaev To Return In Attempt To Bolster Case For Gold Mine

Kyrgyzstan is in an international ownership dispute over a very lucrative gold mine and the government has shown it's ready to do whatever necessary to stake its claim, including bringing back a fugitive former president.

Askar Akaev, Kyrgyzstan's first president, returned to his homeland on August 2 for the first time since he was chased from power more than 16 years ago.

Akaev was needed by the government to testify about alleged corruption and other violations surrounding the Kumtor gold mine. There are still charges against him connected to Kumtor, and although he was questioned about those charges, it was a carefully managed visit that lasted only six days.

During his return, Akaev publicly repented for agreeing early during his 1990-2005 presidency to disadvantageous terms with a Canadian mining company that have cost his country hundreds of millions of dollars.

Kyrgyzstan's State Committee for National Security (UKMK) arranged Akaev's brief homecoming so he could be questioned about agreements made with the Canadian-based Cameco Company about Kumtor, which is located in the mountains of northeastern Kyrgyzstan.

Akaev made that clear on the day he arrived, saying, "I came to cooperate, to help, and I will tell everything I know about Kumtor."

And although Akaev still faces corruption charges over the Kumtor agreements, it was also clear from the day he arrived that he would not be facing any charges -- but was rather a guest of President Sadyr Japarov who was staying at the presidential residence outside the capital, Bishkek.

"I am grateful to President Sadyr Japarov for giving me the possibility to come to Kyrgyzstan," Akaev said.

Making Bishkek's Case

Akaev's comments to the press indicate that there were indeed bad decisions and corrupt motives for the deals made with the Canadian company.

The UKMK has already detained or arrested several current and former members of parliament, prime ministers, deputy prime ministers, and other officials from previous administrations in an attempt to show that a series of agreements signed with Canadian companies over the years were flawed and should be considered illegitimate.

But Akaev was there from the start of the deal, so his testimony is vital to showing that the original agreements as well as subsequent deals signed over the course of the 15 years he was in power were, at best, not in Kyrgyzstan's interests and, at worst, simply illegal.

Akaev said that from the start, in 1992, Kyrgyzstan had made "numerous concessions, including violations in the interests of the Canadian side to the detriment of national interests."

Akaev mentioned the "illegal" decision in 1992 to free Cameco from paying taxes, "including for the use of natural resources," and the transfer of management of the project to the company as being among the foolish concessions his government made.

But he claimed his greatest mistake "was to give consent to the [Kyrgyz] government to restructure the deal in 2003." He said that at that time "the government convinced me that it was necessary."

The restructuring agreements of 2003-04 lowered Kyrgyzstan's stake in Kumtor by 25.7 percent. Kyrgyzstan currently owns a mere 26 percent of the mining project.

Japarov To Blame?

Japarov's government imposed external management on Kumtor in May amid the latest dispute with Canadian company Centerra, which bought Cameco's share in the project in 2009. That move temporarily put the mine under Kyrgyz control, but Centerra quickly filed a case in an international arbitration court, where it is likely there will be ruling in its favor.

Kyrgyz authorities seem determined to show the deals with Cameco and later Centerra were illegal from the start and the result of corrupt domestic politicians conniving with the Canadian side.

As for Akaev, he also got something from the visit.

He was allowed to visit his native Kemin region for the first time in 16 years -- and he received a very warm welcome there as he met with friends and relatives. Also on tap was a trip to the northwestern Talas region to celebrate the 103rd birthday of his mother-in-law.

Akaev also had the chance to attempt to partially vindicate his past. In a video he made just before he flew back to his home in Moscow on August 8, the ex-president said, "There were great hopes for Kumtor [but] unfortunately it did not turn out as we wanted."

In an August 4 interview, Akaev blamed current Economy and Finance Minister Akylbek Japarov (no relation to the president) for the restructuring agreements. "Akylbek Japarov played the key role then in [the restructuring agreements]," he said. "[He] was the chairman of the parliament committee on taxes and budget."

Akaev said Akylbek Japarov was in the commission that flew to Toronto for talks on the new deal. He said that upon returning he claimed that "[Cameco] was the best company in the world" and that the new agreement took into account the interests of the company and of Kyrgyzstan.

Revising History

Akaev also had a good opportunity during his return to tell the Kyrgyz media his side of the story about the events in 2005 that led to his ouster and subsequent flight from Kyrgyzstan.

"As the first president who was in power for the first 15 years of independence, I have one regret," Akaev said. "That if a [presidential] election had been conducted in 2005, I would have handed over power."

He blamed "political adventurists" that he said "knew they could not win in free elections" for "staging a coup six months before the end of my term and seizing power by force."

Akaev's version omits the rigged parliamentary elections of February and March 2005 that saw two of his children elected and several popular politicians barred from competing by questionable court decisions. Along with the fact that constitutional amendments were implemented that allowed him to run for a third term in office in 2000 and what many suspected would be a fourth term in elections later in 2005.

Japarov's government, meanwhile, seems confident Akaev's visit and his statements about the early Kumtor agreements strengthen Kyrgyzstan's legal case to take control of the gold mine. Just a few days after Akaev left, on August 11, the Kyrgyz government officially annulled the final agreement with Centerra.

An arbitration court is unlikely to approve of the Japarov government's unilateral move to take over Kumtor. In fact, that could work strongly in court against Kyrgyzstan's overall case.

But Akaev's testimony will likely demonstrate that there were serious problems with the Kumtor agreements and that Kyrgyzstan has not received its fair share of the wealth extracted at the gold mine.