A DANGEROUS COUNTRY FOR INVESTORS Nationalization - the best recruiting tool of political points
Author: Abay Alykulov
Jany Agim
February 13, 2015Print version
Nationalization. This word turns into a slogan and a tool to collect signatures for some political parties. There is no doubt that every citizen seeking to defend national interests. But everything has to be appropriate. Therefore, before making such decisions, it is necessary to weigh, who will receive some benefit.
Who will benefit from the litigation?
Some politicians have put an edge on the question of nationalization "Kumtor". There was even prepared the corresponding bill and make up for public discussion. Judging by the bill, Kyrgyzstan will sue "Centerra" take control of the company, will work through 2026 to 3 billion dollars. Of course, these words sound pleasant to the ear. Because for the economically weak countries $ 3 billion - a lot of money. But will all the way lawmakers say? That is the question.
MATERIALS ON THE THEME
- Do you want to nationalize - lose
- "In the event of nationalization" Kumtor "will continue to work as before"
- Ongoing conflict mineral wealth
- The opposition decided to scare investors
TAGS
Кумтор , Национализация , политики , выборы , экономика , Инвесторы , суд
Litigation with investors will be considered on an objective site - in international courts. Many experts do not get tired of repeating that there will tilt the scales in favor of the company, which has been working within the law. In an interview with media expert on mining Orozbek Duisheev noted that Kyrgyzstan threatens even the payment of expenses of investors in litigation. Total compensation, according to experts, will be 3-3.5 billion dollars.
It is obvious that each shareholder will try to beat this amount from the Kyrgyz government. Because no one wants to lose their bread. Speaking of shareholders, in addition to the Kyrgyz side, in the list of shareholders "Centerra" are numerous private persons and legal entities, including the Kyrgyz. The largest shareholder - owned company Kyrgyzstan "Kyrgyzaltyn" with a 33% stake.
In addition, the production process will stop with the beginning of the trial. This will create additional problems. According to experts of the mining industry, if the company will cease to work for 2-3 months, then re-start production require 400-500 million dollars.
Sami knocks down its economy as
While members of the government offered to give up the idea of nationalization and create a joint venture, the deputies accused them that they have received millions of dollars in "Kumtor" and act as their advocates. The Government is concerned about the ulterior motive. Because in previous trials had to be pretty to spend money on hiring non-lawyers. Take the example of a case that everyone knows. The state has allocated $ 1 million for the services of the law firm "Winston & Strawn LLP", which introduces us to the case of "Asia Universal Bank".
At this time, the government is suing the eight companies that have expressed claims against Kyrgyzstan. Recently retired Almambet Shykmamatov in an interview with local radio reported that in 2014 the total amount of claims amounted to $ 1.5 billion. If we add to this "Kumtor", then we should at least 4.5-5 billion. Obviously, this is not a toy, given that the amount of external debt of the country is 3.5 billion dollars. For example, the decision was rendered in the case of the hotel "Ak-Keme", according to which our country was forced to pay investors $ 11 million. In addition, the mining company "Stans Energy Corp" won the Kyrgyz government in court, proving that the cancellation of the license to develop the field of rare earth metals "Kuttesay II" was illegal. The company claims 118 200 000 dollars in compensation and made the seizure of shares in Kyrgyzstan "Centerra". Pace in the international arena, Kyrgyzstan will be perceived as a dangerous country for investors. Then no one will come to us to contribute to our economy. What future awaits us if a deficit budget, we take a step back in economic and social terms? Knowing all this, our policy is knocked down our economy.
Who will feed the employees if they remain out of work?
Enterprise "Kumtor" provides 7.7% of the GDP of the country. If billions of soms cease to fall into the treasury, what will be the fate of our fellow citizens who rely on wages, pensions and benefits? Who benefits from the fact that 2,800 employees of the mine and the staff of 600 contractors will not work? About 10 thousand citizens of Kyrgyzstan are directly or indirectly related to the work of "Kumtor". Unless someone is willing to go hungry, satisfied with the beautiful words of the national interest? Will initiate the question of nationalization policy support families left without work of employees? Of course not. Therefore, life proves that production issues should be considered from the point of view of economics, not politics. Singapore Prime Minister Lee Kuan Yew managed to pull the country from the list of countries of the third world, turning it into a prosperous state. We should give meaning to his words: "We met with open arms every investor and created the conditions for it to work."
Everyone understands that the nationalization of "Kumtor" destroy not only the mine, but also the entire industry. But some politicians put on a mask before the election, to fill up political points. Because for some people, political games are more important than national interests, the country's economy and population satiety.