Close to being a failed state ..Central This is how kyryg is described in this artcle .....
Experts have recorded increase the risks for investments in Central Asia
Author: Polina Khimshiashvili
Gezitter.org
February 25, 2015Print version
Risks to foreign investors are increasing in all countries of Central Asia, the study captures Minchenko Consulting. Among the reasons: the sanctions war between Russia and the West and the rise of Islamic extremism. The most favorable country for foreign investment in Central Asia is Kazakhstan, followed in descending order of attractiveness settled Turkmenistan, Uzbekistan, Kyrgyzstan and Tajikistan, according to the report "Assessing political risk for foreign investors in Central Asia" for 2014, prepared by the communications holding Minchenko Consulting. In the same order of the country were in last year's ranking of the holding. However, over the past year, the risks to foreign investors has increased, according to the report: the region was indirectly affected by sanctions war between Russia and the West, began falling commodity prices, and the expansion is dangerous terrorist group "Islamic State of Iraq and the Levant" (LIH).
Authoritarian and clan threats
Among the key risks in Central Asia, according to the report - the authoritarian regime and the non-public nature of the policy. These modes are as prone to high corruption and a sudden burst of influence on the "first person" external players and separate internal factions or clans. There is a constant review of the "rules of the game" in the interests of the individual factions within the ruling circles. To a lesser extent, these risks manifest themselves in Kazakhstan, mostly they are characteristic of Uzbekistan and Tajikistan. Instability of the institutional environment often, according to experts, is an even greater obstacle to successful foreign investment than opaque authoritarian regimes.
In Kazakhstan, as compared to other countries in the region to establish a sustainable balance between the various intra-groups, the report said. Country unchallenged headed by President Nursultan Nazarbayev , managed to go further along the path of political modernization and to get away from the traditional tribal structure (as in Turkmenistan) or regional (as in Uzbekistan and Tajikistan) balance, the report said. The change of government under the auspices of improving the investment climate and return to the post of Prime Minister Karim Massimov in the spring of 2014, on the one hand, strengthening the position of the last show and preparing for a possible "transition period" (snap presidential elections in Kazakhstan will be held in the spring), and on the other hand, confirmed that Nazarbayev short bench personnel replacement.
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Central Asia , investment climate , rating , risks , threats , Russia , sanctions , Ukraine
Sufficiently resistant to internal political crisis drafters of the report considered and Turkmenistan, where all power is at a relatively young president Gurbanguly Berdimuhamedov . Contribute to the consolidation of power: the existence of the state of large revenues from hydrocarbons, the lack of a cultural environment that is conducive to the growth of Islamism, the almost complete destruction or expulsion of the old elites, the rejection of the most odious manifestations of extreme authoritarianism and personality cult times Turkmenbashi active "promotion" Berdimuhamedov own tribe (Akhal Tekke of) as a base of support for the political regime.
More unstable is the situation in Uzbekistan, where the March presidential elections. The country continues inside the elite political crisis caused by waiting for the inevitable transfer of power to the permanent president of 77-year-old Islam Karimov , whose health condition is serious concern among observers, the report describes the situation. A year ago, inflamed public conflict between the president's daughter Gulnara Karimova and the head of the security organs of Uzbekistan Rustam Inoyatov . Problems encountered in Uzbekistan Russian company "Eurocement" considered by some experts as part of an ongoing attack on the president's daughter, indicated in the report.
In Tajikistan, the control and management of the country is concentrated in the hands of President Emomali Rahmon and his immediate family and trustees mode stabilizes the threat from Uzbekistan and the fear of a repetition of the population and the elite of the civil war the first half of 1990, the report said.
Kyrgyzstan, the only parliamentary republic in the region, the report describes as a country on the verge of a "failed state", the State is shattered as a result of the two revolutions in 2005 and 2010.
External threats: extremists, Russia and China
Sanctions imposed by the West against Russia, and indirectly hit for Central Asia immediately recognized in the report. The IMF estimates that the loss of the region as a result of side effects of the sanctions amount to 1-1.5% GDP growth, reducing last from 7 to 5.5%. Another negative factor for the region represents the return of migrant workers from Russia, which can reduce the political stability as well as the homeland of these people do not find work and can become recruits for LIH and other extremist organizations. The most heavily exposed to echo postsanktsionnogo economic downturn in Russia Tajikistan, where up to 50% of GDP accounted for remission of labor migrants from Russia (the first in the world in the proportion of remission in GDP).
Most suited to external risks authors call Kazakhstan, Astana and main asset - of effective multi-vector foreign policy. The power is the point of intersection between the interests of the great powers - Russia, the EU, the US, China, and not take advantage of their conflicts, written by experts. In Uzbekistan, the report record high potential for enhancing internal risk external - proximity to Afghanistan. The same threat is facing Tajikistan. Kyrgyzstan over the past year partly softened its external risks, closer to joining the Eurasian Economic Union.
Prior to the Ukrainian crisis, Kazakhstan's economy was in third place after the Russian and Ukrainian, and the absolute leader in Central Asia, with the beginning of the Ukrainian crisis the country has remained a strong position agrees with the findings of Russian experts Director of the Kazakh Risk Assessment Group Dosym Satpayev . The Government, he said, last year made a major change in investment legislation, plans to set up a special investment Court and appoint an ombudsman for investments. In Kazakhstan, the problems persist with guaranteed foreign businessmen property rights, but large companies have the possibility to defend in other countries in the region have almost no such rights, besides Kazakhstan is the last two decades is committed to a policy of attracting foreign investment, first in mining industry, and now in innovation, said Satpayev.
Turkmenistan, he said, like anyone does not want Uzbekistan command-administrative economy, and the economy of Kyrgyzstan and Tajikistan is traditionally less attractive. The investment climate will deteriorate due to external factors, predicts Yevgeny Minchenko , president of communications holding company. In the first place he puts the threat of Islamic extremism, and the impact of the conflict between Russia and the West - the second produced by the Eurasian integration mechanisms can help to minimize the damage indicates Minchenko. LIH threat and other extremist groups exaggerated disagree expert at the Russian Institute of Strategic Studies Azhdar Kurts . On the Afghan side of the border with Tajikistan, Uzbekistan and Kyrgyzstan are up to 20 thousand. Militants, but there is no coordination between them, they are armed with small arms, so it's hard to imagine how they will withstand regular armies, indicates Kurts. In addition, like an expert, a long time the threat came from Afghanistan were based in the movement "Taliban", but the threat is not explicitly influenced the level of foreign investment. The main risks he believes fall in oil prices is not associated with relations between Russia and the West, a slowdown in China.