Postcard from Bishkek

For those who happen to live in the United States, today is one of the most unusual “unofficial” holidays on the calendar: Ask a stupid question Day.

Just that name invites a whole host of questions, stupid or not, but there is actually a serious idea idea behind it.

It seems that the day was started by teachers back sometime in the 1980’s, (nobody’s quite exactly sure who, when or where), in order to encourage students to take a more active role in their education, ask more questions in the classroom.  It was felt that children often refrain from asking a question because they are scared that their peers will laugh at them and call them stupid, and, let’s face it, no-0ne likes to be called stupid.  What better way to help remove those inhibitions by making a “game” out  of it and encouraging those “stupid questions.

Of course, today being a Saturday, “school’s out”, so those that do take up the challenge will ask their questions on Monday – the last school day of the month.

In fact, there’s a lot more to it … as much our current state of knowledge and technology, (if not all), is based on somebody, somewhere, having the courage to ask questions, stupid or not.  The Church seemed to think that the ideas proposed by Copernicus and Galileo were stupid and nonsensical … and who would have thought that the way to beat a disease was to inject someone with a serum containing it, (… OK, it’s more complicated than that … but that’s basically what inoculations are).

Asking questions is the basic concept behind the technique of brainstorming – a beloved activity of training courses …  (There are several excellent descriptions of the technique but here is one).  The idea is: don’t simply accept the supposedly obvious solution to a problem but ask for suggestions … a flood of suggestions … welcome creativity and unusual ideas, reaching for quantity rather than quality – that’s addressed in the next step – so criticisms should be withheld and judgments deferred until the discussion stage … because one thing may lead to another – a chance comment might open new horizons, it may be possible to combine, adapt or improve ideas.

As I said, trainers and workshop moderators seem to love the technique … so much so that I sometimes feel that it is overused in trying to generate new ideas … but that is a personal view and probably reflects the fact that over the years I have attended so many such sessions.  The Deputy Prime Minister for Economic Affairs has decided to try a different approach – a direct appeal to businessmen to send him ideas on how to improve the regulatory system.  I wish him luck …

 

One question that really should be very far from being a “stupid” question is: “How many vehicles are there in Kyrgyzstan?” … however, it is very difficult to get an answer.  Once, a foreign consultant working on a traffic project told me when he asked that question, an official in the Ministry of Transport told him that he couldn’t answer the question … not because he didn’t know the answer, (although he probably didn’t), but because it was a state secret.

I tried to assure the dumbfounded consultant that, in a way, the official may have had a point.  It is true that every vehicle in the country has to be registered … “There you are,” he interrupted me, “so look the answer up in the register!” … but, in fact is registered several times … with the traffic police, (who issue the vehicle with registration number plates and have responsibility for coordinating the Techosmotre – the road worthiness test); the tax authorities (so that they can collect the tax on vehicles) and the Ministry of Defense, (so that, or so I was told the first time I had to register a vehicle, in an emergency they can commandeer vehicles).

What is more, there are inconsistencies between the different registers.  For example, according to official figures published this week, in the Chui region there are some 116990 vehicles registered, but tax is paid on only 97000 of them.  (I hasten to add that these are official figures, published in the press and therefore “in the public domain” and so I don’t think I am revealing any state secrets by quoting them here … I hope not, anyway.)

This discrepancy used to be quoted often as an example to support arguments about the inefficiency of the tax system and the size of the “shadow economy”.  Whilst it could simply be the result of the fact most people don’t like paying taxes, (after all, it’s estimated that in Britain there are over two million untaxed vehicles on the road), but it also reflects that a lot of vehicles are taken off the road – for example, abandoned, broken down, written off in an accident – but the owners never remove them from the central register.

As it happens, how many vehicles there are on the road is a somewhat pressing question – with an ever increasing flow of traffic, especially here in the capital.  It has an impact on the road construction and maintenance programme – which is a fairly important item of government expenditure.  Also, it’s not just when we have visiting dignitaries that we have traffic chaos here in Bishkek … and one of the questions tourists often ask is where all the vehicles come from.

One of the big differences between Kyrgyzstan when I first came here, over eighteen years ago, and today is the amount of traffic.  A friend commented that back then you could safely cross the road without looking … because you could hear the oncoming traffic.  Now, if you don’t follow some sort of kerb drill, then you take your life in your hands.

 

Talking of taxes … the number 10% has proved to be interesting figure, in this respect.  Not only are the basic rates of tax, (for both Income Tax, paid by individuals and Profit Tax – that is Corporation Tax – paid by companies), set at 10%, it seems that only 10% of companies working in the Services sector pay tax even though they account for 70% of the economy.

The other 90%, however, are not necessarily breaking the law.  It all depends on how the statistic is formulated.  They may, for example, be meeting their tax obligations by working under the patent system.  A patent is a document issued in return for a set fee – the size of which depends on the sort of activity being “patented” – and, (provided their income doesn’t exceed a certain limit),  releases them from all their tax liabilities for that activity … including, the need to keep accounts.  Although this is also known as a “presumptive tax”, (because the fees are set based on certain presumptions about how much they will earn), it is usually featured separately in the statistics.

Indeed, according to the Minister for the economy, it is not just in the service sector that the tax base is unevenly “distributed”.  According to him, the main burden of tax revenue falls on just 550 companies, out of some 300,000 registered business enterprises.   Once again, this is all in the press … so I don’t think I am disclosing any state secrets.

Surprisingly, perhaps, there are suggestions of actually extending the “patent system” to cover even more activities.  The advantage of this is that it will legalize more people, encouraging them to come in out of the shadow – but it will do little to increase the number of “taxpayers”.

On the other hand, there are calls for the system to be changed and the need to introduce a requirement for cash registers at the point of sale, especially in the markets.   It’ll be interesting to see what suggestions the Deputy Prime Minister receives from the business community about this issue in answer to his appeal.

Another form of “tax” and source of income for the government are customs duties.  These are raised on good passing through the border and, of course, have an effect on international trade.  The Customs Union, (comprising Belarus, Kazakhstan and Russia), is an attempt to unify and simplify customs rates and procedures across the three countries whilst removing the barriers between them.  It’s long been mooted by the President and other that Kyrgyzstan should join the Union and discussions are underway on a “roadmap” to facilitate this.  Last week I highlighted some suggestions that, despite this, Kyrgyzstan might be having second thoughts and “dragging its feet”.  There is certainly a vocal opposition to the proposal.  So, the results of a poll conducted for the Eurasian Development Bank, (a regional development bank established by the Russian Federation and the Republic of Kazakhstan in January 2006 to promote economic development and facilitate integration in Eurasia which currently has six member states: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan), came as a but of a surprise when they revealed that 72% of the population favoured the idea.  Some 14,000 people across 12 of the former Soviet Republics were polled and there was a surprising high level of support for the Union in quite a few of the Republics: Uzbekistan (with 77%), Tajikistan (75%), Kyrgyzstan (72%), Armenia (67%), Georgia (59%), Moldova (54%) and Turkmenistan and the Ukraine both on 50%.  The only country in the report which I saw where there was less than a majority in favour was Azerbaijan (with 37%) … but there were also three countries missing from the listing … I wonder if, by any chance, they were Belarus, Kazakhstan and Russia … and if so, what percentages did they get?

Talking of customs … it seems there has been an interesting development at the main Kordai border post, just outside Bishkek – the nearest post to the massive Dordoi market which used to be heavily patronized by Kazakh traders seeking cheap Chinese border to take back and sell at home.  When the Customs Union came into effect the trade stumbled somewhat … with increased duties and long delays for people crossing the border.  To overcome these problems, trucks would arrive at the border and unladen their cargo for “porters” to carry through customs and across the border … “moving commercial goods under the guise of goods for personal use”.  Everyone knew what was going on … but it was creating long queues as they each had to go through the formalities – both as they left Kyrgyzstan and when they entered Kazakhstan.  Well, in a surprising move that demonstrates “thinking out of the box”, (I wonder if it was the result of a brainstrrming session).  The customs services of the two countries have apparently implemented a couple of measures to help resolve the problems that this arrangement has created … establishing a “green corridor” for those with “nothing to declare” and a joint control system, with Kazakh customs officials operating out of the Kyrgyz Customs post leading to a significant decrease in the time taken for individuals to pass through customs control.

 

Things have not been quite so good on the border elsewhere, however, with a couple of incidents occurring “down south”.

In one case, Uzbek border guards entered a transmission station which Kyrgyzstan claims is on its territory … but Uzbekistan says is part of Uzbekistan which led to a standoff when border troops from the two countries apparently stood “face to face” … which, in turn has led to protest meetings.  Basically, the transmission station was built in the Soviet period when the border was simply an administrative one rather than an international one … with all that that entails in terms of sovereignty and so forth … and the  border demarcation commission couldn’t come to a conclusion when it considered the issue back in 2006 and hence the confusion.   Apparently there’s going to be another meeting to consider the issue “in the nearest time”.  I doubt that they’ll try a brainstorming session … but I suppose it might help if they did, they might come up with some interesting alternatives.

In another, a group of Uzbeks apparently crossed the border illegally and when they were challenged by the border guards ignored the warnings and commands to stop.  As a result shots were fired and one of the Uzbeks was in the leg … she was taken to hospital and an investigation is under way.

 

There were two other incidents worthy of note during the week – because they both involved grenades.

In one, police stopped a car in the southern city of Osh because the car had tinted windows which were too dark according to the regulations.  It turned out that he didn’t have a driver’s license and the police decided that were going to impound the vehicle.  It was at this point that he took out a grenade from a mobile phone case and attempted to explode it … but the police overpowered him and arrested him.  In the confusion, however, two passengers from the vehicle managed to make good their escape.

In the other, however, there wasn’t such a “happy ending”; the grenade exploded and killed two people.  It happened in a furniture factory and the two people were the accountant of the firm and a man who apparently owed her money.  The details aren’t too clear, but it seems that the man turned up with a plastic bag and asked to talk to her … there was an argument and the grenade exploded.  It’s not clear where the grenade came from in the first place.

 

I suppose that I ought to mention some of the developments in some of the ongoing sagas that have dominated the news – and these postcards – in the last few weeks.

As a former teacher, I am always interested in stories about education and schools, so the news that most of the schools in the capital were built something like 40 or 50 years ago, and have seen little or no renovation or  reconstruction since, and are in a “state of emergency”.  Ever since Independence in 1991, although some new private schools have opened, the capital hasn’t seen one new school built.  I was reminded of the speaker at a Teachers’ Union Conference who astounded the hall with the comment “I don’t know why talk about Victorian education as if it was a bad thing … The Victorians had it good – much better us … they at least had new schools!”

It not just the buildings, however, that seem to be in a state of emergency.  Since the beginning of the year there have been 95 cases of extortion reported to the police in Bishkek – although only three of them have proceeded beyond the initial stages of investigation, mainly because the complaints are registered by the parents … the victims are afraid to talk about their cases.  That sounds bad … but it’s actually an improvement on last year when there were 130 cases reported.

 

The discussions over Kumtor continue … there was a little hiccup, however, when it was suggested that Kyrgyzaltyn, (the state Gold company which is supposed to become the country’s shareholder in the newly formed Joint Venture to operator the mine), was on the brink of bankruptcy.

Although there is a lot of coverage in the press in support of the current proposals – some of the residents of the Djety Oguz region, (where the mine is located), have indicated that they are not happy with them … and, amongst other things, demanding that Kyrgyzstan take 70% – not 50% – of the restructured company.

Whilst the future of Kumtor lies in the balance, the past isn’t escaping scrutiny … it was revelealed that Aidar Akaev, son of the former President has been charged, in absentia, on charges of corruption over the initial deal to bring the Canadian company in to develop the mine.

In the meantime … the residents of the Chatkal district have once again seized vehicles belonging to a mining company, apparently because they are frustrated at the “failure” of the company to deliver on its “promises” of improvements to the  local community.

 

Kyrgyzstan is particularly well endowed with potential for the production of Hydroelectric Energy, and “experts” in the field seem to disagree violently over the viability and effectiveness of developing alternatives sources of sustainable energy … and another salvo has been fired in that particular battle duting the week.  It’s almost as confusing as the whole debate about global warming – or the pause in global warming due to variations in the El Nino ocean currents – vanishing glacies and the disappearing arctic ice cap … and so on.  One thing, however, is clear: there are more calls from the government and industry for tariffs to rise …  Quite how to persuade the public that this not only desirable but inevitable … will probably need a brainstorming session.

 

Last week, I mentioned that the President had said that he saw no reason for a Foreign Agents Law modeled on the law recently adopted in Russia.  Well, he may not, but some people do and it seems to have fired up those organizations and there has been a surprising amount of coverage in the press and social media given over to their protests: claims that it would curtail the operations of many, (if not most … if not all), Non Governmental Organizations in the country; about how the draft law that has been proposed is simply copied “word for word” from the Russian law; … and so on.

I have got a feeling that this is likely to go on … and on … and on.  At least it might lead to a reduction in the number of brainstorming sessions.

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Let me close by reporting how, in some respects, it has been a frustrating week for me.  I came across a couple of situations which, not only exposed some of the weaknesses of modern systems …

The first came when we received a phone call from a citizen of Bishkek … who explained that her telephone was was 6****9 – which used to be our phone number at the hotel.  It seems that she keeps receiving phone calls from people asking for the hotel.  She was understandably upset because the calls seem to come at all hours of the day and night … and as it is a family home, with children, sometimes the calls wake them up.

She asked that we go through our advertising material and correct the contact details so that the phone calls would stop.  A perfectly reasonable request and one with which I have a lot of sympathy, (as we in the office often get calls at all sorts of hours which turn out to be wrong numbers – perhaps the callers have simply mis-dialed, but sometimes I end up having to say that the number they tell me they have dialed is indeed our number … but we are not the person or organization that they are looking for).

As I said, 6****9 was indeed the hotel’s phone number … until, that is some eight years ago when the local exchange was reorganized and the number changed to 324889, but we have updated all our websites and leaflets … I went and checked just to make sure!  So, I can only assume that the callers have got the number from somewhere else, perhaps an old guide book published several years ago, or a hotel booking website that simply took a a list of hotels when they created their database.   I did a quick Google and discovered that there are almost 400 such listings on the internet.

We’ve now started going through them asking the owners to update the information.  Mind you … I am not impressed that they still have information on file which is not only almost a decade old but is also out of date and incorrect … hardly inspiring confidence in their system, yet alone frustrating for us who may be losing customers, or our fellow resident of Bishkek who is tired of receiving our phone calls.

 

The second came when I tried to use the ATM, (automatic teller machine, cash dispenser, bankomat), in the hotel lobby, to withdraw some money from my bank account.

At first, it seemed to be working fine … up until, that is, the moment when I actually asked for some cash.  It accepted my card, my PIN number, told me my balance, and went through the withdrawal procedure right up to the moment of dispensing the money … when it simply displayed the message: “System Malfunction.  Please take your card” … which I did.  I asked the receptionist to call the bank and report the problem and ran off to another Bankomat in a nearby shopping center to withdraw the cash I needed.

The same thing happened the next day.  Once again I asked the receptionist to report the error as I ran off to find another working cash machine.

When it happened the third day in a row, I decided to call the Service Center myself.  I was astounded by the response  … According to the engineer, the machine was working fine and reporting no errors.   Maybe, he said, I had made a mistake entering the PIN number … did I have enough cash in the account? … which bank issued the card? (“yours!”) … I asked – why would it report “System malfunction” if I had keyed in the wrong PIN number?, or didn’t have sufficient funds in my account?, or the card wasn’t supported by the machine? – they would be separate specific messages for those circumstances … why is it that other cash machines seem to be working fine, not rejecting the card or causing any problems … the problem, wasn’t with the card, my account or with me …  there was something wrong with this machine! … specifically with the cash dispensing system.  It’s been reported as a problem for three days – and nothing seems to have been done.  Could them please send an engineer to deal with it.

“But the machine tells me it is working … it’s not reporting any errors.”

“Then send an engineer and we’ll show him the error.”

I was told to put the phone down … not hang up, just lay it down whilst I go back to the machine … and try again … which I did … only to be told “this machine is temporarily out of order” … try again, he said … so I did and this time it was working … but I still ended up with: “System malfunction.”

“We’ll sort it out,” was all I was told.  I am pleased to say that they seem to have done something, because on the fourth day … it worked … albeit slowly and noisily as the chunky machine hidden away in the machine’s innards clunked and clanked before pausing for a few seconds and then bursting into life again … but I did eventually get some cash and not an error message!

To add insult to injury, not only was the machine not working for three days, causing inconvenience to guests, (and to me), it actually costs us money as we only rent it.  Yes, the machine belongs to the bank and we have to pay in order to have it standing in our lobby as a convenience for our guests (which we are happy to do … when it does work), but I can’t say that we are that happy about it when it doesn’t work, our staff have to face dissatisfied customers and the bank doesn’t seem to want to do anything about it.

 

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Postcard from Bishkek: the weekly postcard that I send out as an email also gets posted on the website ianbek.kg each week – and there are other postcards which don’t get sent out.  This week, for example, there has been the following postcards:

Tags: In_the_News, Weekly_Postcards