Corruption is everywhere and Central Asia is no exception. In fact, looking at reports from international rights organizations you would have to conclude Central Asia might even be one of the worst regions in the world when it comes to corruption.
Open Society Foundations just released Tackling Corruption In Uzbekistan, an extremely thorough report that deals not only with examples of corruption in Uzbekistan but also delves into the place and importance corruption occupies among elites and the government.
Corruption is a perennial topic for Central Asia but the current economic crisis has brought the issue to the fore in all five countries in Central Asia.
To explore corruption in Central Asia, RFE/RL’s Turkmen Service, known locally as Azatlyk, brought together a Majlis, a panel, to discuss the role and cost of corruption.
Azatlyk Director Muhammad Tahir moderated the panel. From London, David Lewis, the author of Tackling Corruption In Uzbekistan, joined the talk. Participating from Brussels, Washington-based attorney Brian Campbell, who works with international rights organizations, including the Cotton Campaign, a group that monitors the use of forced labor in Uzbekistan’s cotton fields. And from Almaty, Natalie Malyarchuk, chair of the Board of Trustees of Transparency Kazakhstan, took part. Oh yeah, and I was there and… you know.
Lewis started the conversation with some background about his report. “We’ve tried to go around the generalities and break it down into what corruption actually does, what impact it has, and some of the mechanisms that are used to assert control both over business and over politics.”
The problem has deep roots. Malyarchuk explained, “From the point of view of petty corruption, citizens really face many cases,” and she added, “citizens accept it” and some now see bribes and pay-offs as a way to simplify bureaucratic procedures.
Lewis mentioned corruption has “become part of the system.”
Speaking about Uzbekistan, Campbell noted the cotton industry, long a source of controversy due to forced labor practices, is also specially designed to be opaque. “The entire cotton sector is structured as a corrupt mechanism, the way that the prices are set, the way that the money disappears into a mysterious fund that’s off the budget.” Uzbekistan’s annual cotton sales regularly amount to more than $600 million and some years the figure has been significantly higher.
Central Asian governments often declare a war on corruption but as Lewis said, there usually appears to be an ulterior motive. “Anticorruption campaigns… inevitably are very selective, what they really do is target people who have fallen out of favor, or particular people who have not been loyal enough, shall we say, to the leadership.”
It is extremely difficult to obtain a clear picture of the extent of corruption. Malyarchuk said, “Many reports that you read about our countries are connected directly with political opponents and it’s very subjective.” It is a valid point particularly since some of the leading Central Asian government opponents are fallen former government officials bearing a grudge.
But Campbell stressed that while caution is needed in assessing claims of corruption from local sources, “You can have a political motivation and still have very true, very well-researched facts.”
As mentioned, Central Asia is in an economic crisis at the moment. Several factors have combined that ensured none of the countries could escape from an economic downturn, whether it was dependency on hydrocarbon exports or on remittances sent home, usually from Russia, by Central Asian migrant laborers.
Lewis observed, “When you get an economic decline, when you get an economic recession, the economy really struggles and society really struggles to cope, and that Lewis said “has a big impact on inequality, that’s what we’re finding across most of the region is that it concentrates wealth in a few hands at the top of society and accentuates the difference between the bottom and the top.”
One result of this, as Malyarchuk explained, was that in Kazakhstan “based on our research and our analysis I can say that small and medium business, especially now in the last three years, they are dying.”
The role that foreign businesses play in corruption in Central Asia was also discussed. Malyarchuk said her organization has noticed some foreign companies simply refused to get involved in corrupt practices and withdrew from states in Central Asia. But others stayed, choosing to play by the local rules.
Since the Majlis was prompted by Lewis’s report there was ample discussion of TeliaSonera, VimpelCom, and those companies’ links to Gulnara Karimova, the eldest daughter of Uzbek President Islam Karimov. Information about that scandal has provided a rare view into the extent of corruption in Uzbekistan, “upwards of $850 million in bribery money that was passed and paid between accounts,” Campbell recounted.
Campbell mentioned that money has been seized, but this brings up another problem: What to do with that money? “We would love to see it go back and benefit the people of Uzbekistan and that is our goal,” Campbell said, “but because of this endemic corruption it is very difficult to responsibly repatriate the money."
The Central Asian governments are finding out the hard way how this reputation of corruption hurts. With the current economic decline, all of the Central Asian states could use some outside financial help. But Lewis said, “Organizations like the World Bank, Asian Development Bank, European Bank for Reconstruction and Development, all have faced the same problems in trying to distribute funds in ways that don’t get them enmeshed in corrupt practices.”
Lewis summed up the situation, saying, “You have a drop in foreign investment, a drop in domestic investment, capital flowing out of the region, and also a lack of willingness by international banks to really invest in the region.”
The Majlis explored these matters in greater detail and other issues such as the role presidents’ families play in corruption, a particularly acute problem in Tajikistan and Turkmenistan; the reluctance of Western companies to get involved in projects in Central Asia; the need for leaders and elites to employ corruption as a means of gaining key support; and a range of other topics.
An audio recording of the discussion can be heard at:
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Majlis: The Perfect Storm Of Corruption In Central Asia