Kyrgyz Anger Over Business Scandals

Tuesday, 22 February, 2005

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IWPR Central Asia

Turkey's new ambassador to Bishkek faces an uphill struggle to ease growing tension over the business practices of some of his countrymen, who have become adept at winning permits and contracts from less than scrupulous Kyrgyz officials.

Ambassador Muzaffer Eroktem, Turkey's fourth to Bishkek in nine years, advises his countrymen to work within the law and notes that "the Turkish private sector has big potential".

But Kyrgyz politicians are increasingly concerned at their inability to stem the tide of business scandals involving some Turkish companies.

"Why should they ignore our laws?" raged parliamentary deputy Ishenbai Kadirbekov. " They try to work round them."

Although he does admit that Kyrgyz must share the blame, " That's our fault, not theirs, because we allow it. For the right price, we are ready to sell anything,"

The problems currently being encountered are in stark contrast to the good relations the countries enjoyed a decade ago.

After the break-up of the Soviet Union, Turkey rapidly granted diplomatic recognition to the new Central Asian states, opening new markets for its products. Turkey's proximity to the region, as well as linguistic and ethnic links, promised it special advantages.

The media began trumpeting a "Great Turkish Union" amongst all Turkic peoples. Kyrgyz intellectuals, in favour of this romantic ideal, also saw Turkey as a potential window into Europe.

"Turkey would have replaced our lost elder brother," said Kyrgyz deputy Kubatbek Baibolov, referring to the Soviet Union.

But Turkey's pretensions to regional leadership were never backed up with

large-scale financial support, and Kyrgyzstan's sights turned once again to

Moscow, where financial assistance was more forthcoming.

Money wasn't the only problem. The business practices of some Turkish companies became a growing concern to many Kyrgyz, despite official rhetoric emphasising friendship agreements and deep historical links.

"Our relationship with Turkey is supposedly an equal partnership," said

Kadirbekov, "not of senior and junior partners. But when certain Turkish companies do business here, it's a totally different matter."

For instance, getting permits through informal contacts is standard practice for unscrupulous Turkish traders.

"European investors are shocked by certain ways of doing business in

Kyrgyzstan," said Baibolov.

"They get fed up and leave. But certain Turkish businessmen have learned the rules of the informal market very well, and know how to work with them."

For most foreign investors, the Kyrgyz market offers little potential - the population is small and poor. But there are still profits to be made, which attract some businesses that, says Baibolov, have few ethical scruples, and are often in trouble in their home country.

There have been accusations of financial irregularities and violation of construction laws. Vice-Premier Boris Silaev was forced to resign over a contract he signed, even though the administration pushed for the deal.

Kadirbekov, who chairs a parliamentary commission into Turkish business activities in Kyrgyzstan, has compiled a long list of dubious deals.

It includes one operator who sold cheap drinks under false pretences and another who won a major civil engineering tender despite being under investigation for tax evasion.

Newspaper headlines frequently announce the latest Turkish business scandal, though parliamentary deputies attribute this to sour grapes from officials who haven't received their cut.

"When they don't get their share, they start to make a noise, " said one deputy. " When they stop, one assumes that the two sides have reached an agreement."

A number of Turkish companies here have Kyrgyz officials on their directorial boards, which, critics say, reflects the unhealthy relationship between business and high-ranking government officials.

The problem is not likely to go away. Some Turkish entrepreneurs say that given the choice between adopting law-abiding business practices and having friends in high places, the latter win every time.

Igor Grebenshchikov is a regular IWPR contributor