Winding down
I am not sure if we can say that we have entered “the final countdown”, but things are certainly “winding down”. I am talking, of course, about the London Olympics, with just two days to go, (Saturday and Sunday), with 31 events taking place Saturday and another 15 to to be completed Sunday before the grand closing ceremony.
Britain seems to have a good games – currently coming in third in the medals table, surpassing the impressive performance of Team GB in Beijing four years ago, and their second best performance ever, with 57 of over 900 awarded at 302 ceremonies across 30 different venues – just under 6% of the total but more or less in line with the fact that 5% of all the competitors were British athletes. (Interestingly, because of the way the table is constructed, Russia with 63 medals rank fourth in the table).
Unfortunately, this time round Kyrgyzstan hasn’t managed to find itself among the fifty odd countries that get onto the final Medals table, even with the financial rewards on offer to anyone who did manage to win a medal, but that shouldn’t detract from the tremendous achievement of those athletes that qualified to participate and represent their country. Despite that, the recriminations seem to have started already … with an article appearing which analyses “the collapse of Kyrgyz Sport”.
The great hope had been in the Greco-Roman wrestling competition, but both the men lost in the bronze medal bouts. Technically speaking, there is still hope for a medal for Magomed Musaev in the 96kg class of the Free Style Wrestling which is due to take place tomorrow, on the last day – before the Closing Ceremony. Yes the football competition may well have kicked off before the official opening ceremony, but nothing should happen after “the Fat Lady sings” and the curtain falls on the closing ceremony.
For the record: the “fat lady” is a reference to Brunhilde in Wagner’s Götterdämmerung, the last of the immensely long, four-opera Ring Cycle, who has ten minute solo which brings the opera to it’s final conclusion. Thank you Inspector Morse for teaching me that little piece of trivia.
I wonder if any of the athletes who actually managed to win one of the Gold medals might be tempted to take the IOC, (the International Olympics Committee), or the London organisers of the games to court for “misrepresentation”. Apparently the Gold Medals, produced by the Royal Mint for the occasion, are not “golden” at all, well practically … something like 6 grams of gold are used to plate the disc which is about 7cm wide and 3 mm thick), and which weighs about 250 grams – the rest is made up of copper, (just over 6%) and silver, (over 90%). The medal itself is apparently worth about five hundred dollars, but if it was made of pure gold it would be worth about nine thousand.
There has been quite a few “golden” stories this week. A Kyrgyz geologist working for an Australian gold mining company here in Kyrgyzstan has identified a new “polymetallic” ore which contains gold and bismuth – which, as I understand it, is a new combination. So new in fact that it has been named after the geologist.
Despite this piece of “positive” news, most of the Golden stories have reverberated around the situation at Kumtor. For example, the tenders for those interested in conducting the various reviews of the Kumtor Gold Mining operation, the operations, environmental impact and legal issues have closed with bids carrying some fairly high price tags. What was interesting was how much they seemed to vary – even those apparently looking at the specific constrained issues.
There is a “competition” for people who want to occupy the government’s places and sit on the Board of Centerra Gold, the company which runs the mine. There is still a week to go before nominations close and there are already 39 potential candidates interested in the position.
As it happens the mine has suspended work on exploratory work to extend the mine … pending some review of the potential deposits, (if I understood the press release correctly), and staffing has been reduced to minimum levels required for maintenance and safety levels.
It seems that a new approach is being proposed by some people – to encourage more local participation in gold mining projects – to help retain specialists and provide employment for local people. This was one of the themes in an interesting article in Vecherniye Bishkek, (Evening Bishkek – the capital’s most popular newspaper), trying to address if ot correct some of the myths that circulate about the company: that the gold flows like the Klondike – it’s actually quite difficult to extract; the company violates the law – although the legal status of the company seems to have changed significantly over the years; that claims against the company have nothing to do with the budget – but the contribution of the company to the economy as a whole and to the budget is far from insignificant … and according to at least one commentator may have “saved the country from bankruptcy”; that they destroy the environment – it may be that there has been some well known and documented detrimental effects but the company have undergone numerous inspections and assessments and adhere to internationally accepted standards; Kyrgyzstan would be able to manage the mine without foreign investors – but, so the author maintains, this is not borne out by experience elsewhere in the country. According to the author, the registered comments on the article brought forth another “myth”, that anyone who “supports” the company is corrupt.
Well, the eventual fate of Kumtor may have far reaching implications for Kyrgyzstan, especially in terms of attracting further investment.
There is still a lot of attention being paid to the question of trying to attract potential investors. An interdepartmental commission has been established to see what can be done to improve Kyrgyzstan’s standings in various international ratings systems. A similar approach was taken a few years back to the World Bank’s Doing Business Survey. They government decided to make a real effort to improve the country’s standings and it paid dividends in that the measures that were introduced led to a significant leap-frogging over other countries to get us into a very promising position in the league table. I understand that it certainly helped to improve the profile of the country amongst potential investors – but the positive impact was somewhat dented by a revolution together with a variety of other scandals.
Another problematical issue is the number of cases where the country is being sued or taken to international arbitration over alleged breach of agreements and where investors are looking for considerable sums in compensation. It’s been estimated that claims under the law on the protection of investments, involving a bank, a hotel, a petrol company, an engineering plant company and not forgetting a gold mine (not Kumtor!) could cost Kyrgyzstan USD140 for every man, woman and child.
Kumto is also having an impact n other economic indications. The Balance of Payments, for example, looks particularly bad. Compared to last year, exports have fallen by almost 19% whilst imports, (which were already almost three times the value of exports), have risen by almost a third … widening the gap even further. To make matters worse Gold, (our most valuable export), fell by about 60% whilst the import of vehicles doubled. The reduced production at Kumtor is having a considerable impact on economic statistics … if Kumtor’s results are included in the analysis, then industrial output fell by about 30%, but if it is excluded from the figures, then the output of rest of the economy seems to have grown by over 10%.
Indeed, the economic situation does not look too promising, even though we were told that Kyrgyzstan has the lowest inflation rate in the CIS. Djoormat Otorbaev, Vice Prime Minister, made a point of commenting how we import inflation from other countries such as Russia but pay pensions and salaries based on a much lower rate – down by something like 20-30% on last year. To make matters worse, according to the Economist Intelligence Unit, the rate of remittances from Kyrgyz migrant workers in Russia and Kazakhstan is beginning to slow. As if that wasn’t bad enough, the Russians are looking at tightening the controls of foreign workers and hiking the penalties for infringements of the migration laws.
Pensions have provided some interesting snide retorts during the week … especially in the light of proposals from the Ministry of Finance to reduce the amount of pensions paid to senior citizens who continue to work … one comparing the proposals with the generous payouts on offer to athletes in the Olympic Games … USD200,000 for a Gold medal, for example. I know it is a case of comparing apples and pears, chalk with cheese, but the contrasting images this has conjured up have not been particularly appealing. ”Pensioners are forced to work after retirement because of the lack of a pension” … although it’s more to do with the size of the pension rather than the absence of any actual payments received.
It’s been distinctly “warm”, with the temperature climbing into the 30′s, (Centigrade, that is). Back in the UK, we would have said that was distinctly hot, although the hottest recorded temperature in Scotland was 32.9 degrees 38.5 degrees – at Feversham in Kent on 10th August, 2003 – oh, nine years ago yesterday. Anyway, that particular adjective, “hot”, is probably better left to describe next week when the temperatures are expected to approach, if not actually breach, the 40 degree mark.
The weather has been so good, in fact, with “high” temperatures and low rainfall, that it is being blamed for an expected fall in the grain harvest, which is expected to be about 20% less than last years crop - and only about half of what we really need for the winter. Normally, we import sizeable quantities from neighbouring countries, but they seem to be suffering similar circumstances and may also face shortages, not to mention the fact that the world’s largest producer of corn and soya is experiencing drought conditions approaching “historic” dimensions whilst Europe has been drowning in “too much” rain, all of which suggests rising prices on the world’s markets and that we, (not to mention most of the world), could be in for a difficult time. Mind you, I notice that the Prime Minister is saying that the fault for the poor harvest lies with “poor organization of the Spring field works”.
As it happens this is one of the issues discussed during a visit by an official Kazakh delegation which is here to discuss a number of questions; an upcoming visit by President Nazarbaev; arrangements for the accession of Kyrgyzstan into the Customs Union; construction of an oil pipeline and refinery.
Another aspect of life that could prove difficult this winter concerns the electricity supply. Severelectric, … no, in theory there’s nothing sinister in that, it simply means “Northern Electricity” … although it does looks as if something is going to be cut off because in their announcement that they have begun their preparatory work for the coming winter season, they have taken great pains to point out that a lot of the equipment is “outdated”. Some 76km of cable across 60 different sites is planned to be replaced, some of it has been in use for over 40 years, (even though the “service life” of such cable is only 25 years), and much of the equipment has been in operation since the original installation in 1946. At the end of July the Energy Minister told us that water levels in the reservoirs was low, coal stocks were low, there was little cash left in the coffers and repairs were being delayed.
At the same time, he made a suggestion about raising tariffs but, as this was one of the issues that led to general unrest and the eventual downfall of the Bakiev regime, I’m fairly sure that he’s not going to get that – even though it’s probably necessary – if not essential. The Prime Minister has also weighed into the discussion saying on a TV interview that he thought there was no need for tariffs to rise. He thinks that a problems is that some people create offices, workshops and saunas in what is technically residential accommodation and so consume large amounts of power whilst paying at the lower domestic rates. ”That loophole needs to be closed.” If it is, according to some reports, that should enable to the to maintain the current tariffs for another two years.
The Prime Minister is adamant, the Ministry of Energy “should fight corruption” rather than talk in terms of raising tariffs. There are huge debts owed for energy, and many of them have become “bad debts” and are basically unrecoverable. He has issued instructions that these debts should be reduced and if they are not, then heads should roll – well, metaphorically, that is.
All this also illustrates why a decision by the Kazakhs about they will stay in, or leave, the Central Asian power grid … and the construction of more hydroelectric power stations and the Datka power transmission line are so important.
I suppose that the good weather has been good for the tourist season, which has been progressing well with bumper crowds in Issyk Kul and isn’t expected to wind down for another three weeks. I have even felt a little envious of the journalists who seem to have wangled themselves assignments up there, covering this conference or that event. The only conference I go invited to recently was in one of the city centre hotels here in Bishkek. Andrei, one of the kids, went up to take part in a project renovating a couple of the children’s homes up there. Although it sounds as if it was fun – I think he was experiencing Facebook withdrawal symptoms.
There seems to have been more Western tourists here as well. I don’t think they were enticed to the Heart of Central Asia by the recently introduced Visa Free Regime, but I have to say that they are delighted with the new arrangements … leading us to urge them to, “Please go back and tell everyone of the warm welcome!” One journalist posted a query on Twitter asking if anyone had any evidence as to whether the new regime had resulted in additional tourists – with the proviso, “if it’s not too early”. It drew a response that even if it was too early, there was a general sense of delight about the new arrangements. Well, if just so happens that I can report that I have met my first tourist who actually chose to come to Kyrgyzstan because of the new regime … he had been in Kazakhstan when he heard the news and changed his travel plans, deciding that instead of applying for a Russian visa and heading North and East, that he would rather head South and East crossing the Celestial Mountains.
I suppose it might have something to do with the heat, but I saw a claim during the week that the month in which most murders occur is August. There was no source quoted for this rather vague statistic, but I suspect there may be something in it. In 2009, the New York Times did a survey reports and discovered a definite spike in summer months. I suppose that, in the Northern hemisphere at least, that might have something to do with coping with soaring temperatures, and I must admit that I notice an increase in short tempers during the summer heat. One local news agency ran an interesting story during the week to the effect that there were more than 90 “assassinations” during the five year Bakiev regime, siting several well known cases as examples – including murders of journalists, MPs and representatives of the underworld – along with the observation that most of them remain “unsolved”.
One of the interesting stories during the week concerned the suggestion that the GKNB – the security service which is the successor of the KGB – is setting up to monitor internet activity with a view to clamping down on incitements to racial hatred. There is nothing new in this, in that there have already been some prosecutions relating to content seen on blogs and news websites. Over the years there have been several moves to block individual websites and there’s a tremendous number of registered users on social media – although, apparently, there is some doubt whether all the prominent politicians actually maintain their own registered identities.
Another news item drew attention to the fact that six deputies, (Members of the Parliament), have been arrested on corruption charges. Someone went as far as to suggest that these cases were now being used as pawns, or chips, in discussions about the vote of no confidence in the government that has been tabled for the start of the new session after the long summer recess … promises of cases being dropped in exchange for votes. That struck me as somewhat ironic.
Security also provided the strangest report of the week – citing “foreign sources”, one local news agency carried an item about a terrorist act at the Manas Transit base had been foiled – including references to “casualties” amongst American servicemen … but no-one else, (apart, that is, from the agency, itself), including the security services, seemed to have any knowledge of the incident.
Another favourite news topic has re-emerged in the news this week: Tax.
- A Minister has suggested that we introduce a wealth tax – an interesting idea, but we already have a property tax and I am not convinced that this works effectively or efficiently, (but then, I am opposed to wealth taxes on principle);
- A businessman has announced that his company was working independently, and without his knowledge and consent issuing fraudulent VAT invoices, which have now been cancelled – resulting in companies that had already claimed rebate of the VAT supposedly paid on the basis of these invoices discovering that they are liable to repay it … and the tax due on the windfall “profit” this has given them. Personally, I hate VAT – not that I think it is a bad tax, on the contrary, in theory it is a very good tax, but it is so difficult to administer and creates all sorts of loopholes and pitfalls that detracts from the admirable principle behind it;
- Tax contracts have been introduced for hotels and resorts on Lake Issyk Kul, resulting in a significant increase on the tax revenues for the budget – I just hope that there won’t be anything to stem the flow of tourists, forcing hotel owners to breech their tax contract;
- A system of discounted advance payments is being proposed, so that paying a sum of money now could mean savings of up to 45% over a ten year period – if investors can be persuaded that the tax system, yet alone the economic environment, will remain sufficiently stable over 10 years;
However my nomination for this week’s “golden story” goes to this one:
Mind you, we may have our own home grown confidence tricksters … but it now seems that we have begun to attract some from further afield. We often see, for example, jibes about different Pyramid schemes, and the ever present “Nigerian scams” – that’s an unfortunate name … I’m sure that not all the perpetrators emanate from that particular country, but at I can be fairly confident that you will understand what I am referring to. There was a new get rich quick scheme reported this week … well new to me at least. A couple of “businessmen”, (the news report made a point of saying where they were from – but it doesn’t really add to the story apart from reinforcing stereotypes), who had arrived in Bishkek had explained to their “marks”, (or should that be “chumps”), that their business was “not quite normal”. I’ll say it wasn’t. They asked their victims to bring a hundred dollar bill, and taking the bill and two pieces of white paper the size of a bill, soaked them in the liquid. After a few minutes, they dipped them in another liquid, then flattened and showed three ready-made 100-dollar bills.
It reminded me of a wonderful sketch on Erelash, a Russian children’s TV program where a youth finds a one rouble note scrumpled up on the pavement, takes it home and irons it smooth. He is amazed to discover that it has been transformed … into a three rouble note … then a five rouble note … and so on. Just as in this case, however, it turned out that the “magic” was not quite what it purported to be … and the boy ended up with nothing more than a one rouble note … well, he would have, if he hadn’t thrown it out of the window in disgust and despair. In this case, however, the victims ended up with less than nothing – having been persuaded to part with 4000 dollars for the secret of the liquids.
Perhaps, however, a more personal story could be a contender:
For his birthday, a couple of months ago, Maxim got a camera and he’s been busy taking photographs. He particularly wanted a Fish-eye lens for the camera, but they are difficult to come by in Bishkek so he asked if I could order one over the internet for him from a firm based in London … we filled in the order form on the Thursday, paid for it (USD400) through the bank on Friday, (for some reason there always seems to be a problem paying by credit card over the internet), and it had already arrived in Bishkek on the Saturday – although it wasn’t actually delivered to us until Monday morning. He couldn’t believe it … and, for that matter, neither could I. I am waiting in trepidation for his next order – I don’t think it will quite as quickly and how will I explain the delay to him in the light of this experience.
When it was Andrei’s birthday last month, he asked if I could order him some T-shirts from Moscow over the internet … we filled in the form, went off to pay (about USD40) through the bank and sat back, waiting for the parcel to arrive … and waited … and waited … and … well … waited. The packet eventually arrived, five weeks later … and, unfortunately, three weeks after the big day. To be honest, although it took longer than I had expected, I wasn’t all that surprised about the length of time it took … but Andrei couldn’t believe it. At least it probably means he won’t be in a hurry to ask me to order anything else for him.
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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:
- Healthprom update - news from the UK based development charity, Healthprom;
- Jamilia - the remarkable love story told by Chinghiz Aitmatov in his first novel was chosen by UK bookseller Waterstones as their Book of the Month for August;
- From the sublime to the … - The Silk Road Lodge, our hotel in downtown Bishkek opened 0n 7th Ausgust, 2000; that is, twelve years ago. Twelve is an “interesting” number … imbued with symbolism in many different cultures … but is being a “sublime number” something akin to being ridiculous?
- Ormon Khan - An 18th century leader of the Kyrgyz who tried to unite the 40 tribes …
- Sary Chelek – Yellow Bucket - “You MUST go …”, a friend said to me when describing her visit to Lake Sary Chelek, having heard that although I have been to a neighbouring valley, I have never actually seen the lake.
- Uniquely Kyrgyzstan - And your starter for 10 … What is the USP for Kyrgyzstan?
It is now possible to follow me on Facebook, (where I have specific pages for Celestial Mountains and ianbek … and also links.kg and Kyrgyz Diary), and on twitter, (@Bishkekpostcard and @celestialMTC ).
Bishkek