Business and Economics
Editor’s Note: Originally written by neweurasia’s Adam (RUS).
The newspaper “Kursiv” has recently published an interesting piece about running a hotel business in Almaty. It is known that already in March Hayatt, which used to administer “Rahat Palace”, has left, whereas Kempinski Bayterek and Radisson Blu have frozen their projects down for an unknown period of time. Noticeably, Park Inn and JW Marriott are planning to be opened in 2012-2013.
The upcoming 3-4 years may introduce another group of major hotel projects of “luxury” and “premium” class with over 348 rooms in total. Kempinski Bayterek and Radisson Blu projects have been suspended due to financial difficulties and the proposed time of their resumed work is unknown. The numbers about planned investments into the projects vary.
Park Inn and JW Marriott, however, are doing much better. They are planning to open in 2012 and 2013. One of the main reasons for their optimism is the degree of their readiness for exploitation. According to some experts, ‘accurate data on investments are absent, but approximate numbers are 200 – 250 million USD’.
Apart from the abovementioned businesses, some other major foreign companies such as Four Seasons and Hilton are now evaluating the capacities of the local market. This might create ‘extra-surplus’ in the “five-star” segment because in the last two years the Almaty hotel industry has mostly seen new projects of only ‘premium-class’.
Given that Almaty is becoming increasingly busy, there is also an increasingly unsatisfied demand for 3 and 4-star hotels. Spring and fall are the most active periods for holding exhibitions and international conferences. It is also the time when there is a lack of affordable hotel rooms. This, in turn, has made renting private housing popular.
Until 2007 Almaty’s hotel business was on a rise. In 2007 hotels were 50% full; from 2008 to 2009 the indexes rapidly decreased. The record of 60-70% was put during the Asian games. In 2010 the number of customers decreased for 1% compared to 2009. Hotel businesses in 2011 are expected to be moderately successful.
World Bank Group support to countries in the Europe and Central Asia (ECA) region totaled more than $9.3 billion in fiscal year 2011. This was double pre-crisis levels but, as planned, less than at the height of the crisis. The Bank continued to lend significant support this fiscal year to help countries sustain the nascent recovery in the region, while mitigating the impact of lingering effects of the crisis on the region’s most vulnerable, World Bank’s press-service reports.
“Countries in the region are continuing to face a challenging environment as they look to recover from the crisis. Growth resumed in Europe and Central Asia in 2010 and reached 4.5 percent, following sharp declines during the global crisis. Projections for 2011–13 are for slightly stronger performance, but remain below those for other regions.
For net importers, higher food and energy prices threaten to increase poverty, particularly in Armenia, the Kyrgyz Republic, and Tajikistan, and the continued financial concerns in Western Europe provides added uncertainty. The World Bank remains committed to supporting the countries in the region as they continue to recover from the crisis and take the necessary steps to improve the lives of their citizens.”
Philippe Le Houérou, World Bank Vice President for the Europe and Central Asia Region.
Wal-Mart, Macy’s, Eileen Fisher, Nautica, Gear for Sports, The Jones Group, Liz Claiborne and Nike are among the first companies to sign a pledge boycotting the use of Uzbekistan-sourced cotton until the International Labor Organization determines that forced child labor is no longer an issue in the country, reports Women’s Wear Daily (WWD).
The nonprofit Responsible Sourcing Network expects to have lined up 70 companies representing hundreds of brands by New York Fashion Week in September.
To remind, in August, 2008 a coalition of the four trade associations representing the U.S. apparel and retail industries hand-delivered a letter addressed to Uzbekistan President Islam Karimov to Ambassador of Uzbekistan Abdulaziz Kamilov in Washington, DC. The group urged the government of Uzbekistan to take decisive and immediate actions to end the use of forced child labor in its cotton fields. Read the full story »
The US Department of State is sponsoring the Central Asia and Afghanistan Women’s Economic Symposium, called “Strategies for Success”, on 18-20 July, 2011 in Bishkek. The symposium will bring together female policy makers and leaders from private enterprise, education, and civil society to share strategies in support of women’s entrepreneurship. Kyrgyzstan’s President Roza Otunbayeva, a long-time champion of women’s enterprise, will provide the opening address. US Ambassador-at-Large for Global Women’s Issues Melanne S. Verveer and Assistant Secretary for South and Central Asian Affairs, Robert O. Blake, Jr. will also participate in the symposium.
Editor’s note: An American diplomatic cable released by WikiLeaks reveals that in 2007, Turkish businessman Ahmet Çalık believed that, vis-à-vis, Turkmenistan was “on the surface” the most independent of the post-Soviet Central Asian republics, “but not behind the scenes” — to the point that he insinuates Berdimuhamedov was put in power by Moscow. neweurasia’s Magtymguly reports. “This cable is like scripture for me,” he writes.
There is new WikiLeaks cable from middle of May that has not been reported. It is about views of Ahmet Çalık, owner of Çalik Group and ex-minister of Turkmenistan’s textile industry Niyazov days, on President Berdimuhmmedow in the first days of new regime. My comments are after the quote.
While middle and high school students in Jizzak province of Uzbekistan enjoyed their return from cotton fields to attend graduation ceremonies in their schools after more than a month absence, campaign to end the use of forced child labor in Uzbek cotton fields enlarges more and more by supporters from the civil society representatives from around the world, as well as by retailers.
Group of retailers, international civic activists had been bombarding the Uzbek government to stop what they call “a patriotic act by little Uzbeks.”
In August, 2008 a coalition of the four trade associations representing the U.S. apparel and retail industries hand-delivered a letter addressed to Uzbekistan President Islam Karimov to Ambassador of Uzbekistan Abdulaziz Kamilov in Washington, DC. The group urged the government of Uzbekistan to take decisive and immediate actions to end the use of forced child labor in its cotton fields. Read the full story »
Editor’s note: Ataturk Street in downtown Tashkent is about to be renamed, and in the view of neweurasia’s Avicenna, it’s the latest signal of Turkey and Uzbekistan’s rather bipolar relationship. “It’s obvious that this crisis is probably more serious than anyone thought,” he writes, “but it’s also consistent with the back and forth that’s taken place several times during the first 20 years of independence of Uzbekistan.”
**“Türkiye va Atatürk ketsin!?” (Uzbek for “Turkey and Ataturk must leave!?”)
Despite all the statements of the government of Uzbekistan on never-ending friendship and brotherhood between our country and Turkey today’s news on re-naming of the Ataturk Street in the downtown of Tashkent fueled rumors of a serious crack in the Uzbek-Turkish relations.
The Turkish businesses closures that started in the end of 2010 and which have continued in 2011 likewise indicate an unwelcoming environment for Turkish investors coming to Uzbekistan.
Yet, with seeming no regards for these ups and downs, both countries have always emphasized “deep, centuries-old historical and cultural roots”. But now it’s obvious that this crisis is probably more serious than anyone thought, but it’s also consistent with the back and forth that’s taken place several times during the first 20 years of independence of Uzbekistan.
In the light of the possible solution to the propiska (registration) issue, which became a headache for thousands of Uzbekistanis while attempting to register in the capital city of Tashkent, covered by Uznews, I wanted to remind President Karimov’s speech of January 21 at the Cabinet of Ministers dedicated to the results of the socio-economical evaluation of 2010.
Islom Karimov brought the issue of creating new job opportunities several times in his speech, emphasizing that “not only governors but everyone living in Uzbekistan starting from the president to officials should contribute to this.”
“When someone in need goes to places located far away and lives there as a slave, it hurts my dignity as an Uzbek man. Everyone sitting here should pay attention to this. This is something that seriously hurts our dignity, dignity of Uzbeks. My and your task is to provide them with necessary jobs in Uzbekistan.”
January 21, 2011, Cabinet of Ministers meeting
Mr. President allow me to ask you a few questions: Why do you think Uzbeks leave their country to seek a better life abroad? Isn’t that because of the restrictions (apart from political and human rights ones) to move freely and seek for a job inside of Uzbekistan?
As Uznews reminded on the promise of Uzbek authorities to ease the restrictions on citizens from other regions settling in Tashkent starting from April 1, it appears that attempts to resolve this issue have been failed and postponed for an indefinite period of time.
Editor’s note: Foreign businesses are facing an unusual “investment” crisis in Turkmenistan: three major Turkish companies have lodged a legal inquiry with the ICSID, and according to an anonymous source, 22 more may soon follow, reports neweurasia’s Annasoltan. She interviews Turkish businessmen who know the country well and have nothing nice to say about its policies. “Most Turkish construction companies have already left the country,” says one.
Running a business in a closed country such as Turkmenistan can already be a difficult enterprise, but it can be twice as hard when political elites act irresponsibly by failing to fulfil contractual obligations. One Turkish businessmen who has worked in Turkmenistan for over a decade remarked to me, on the condition of anonymity,
“Unfortunately, the leadership that succeeded Niyazov is not taking international laws seriously and has begun to take actions that violate the agreements.”
His claims come as three major Turkish construction companies have recently filed a legal inquiry against the Turkmen authorities over lost profits ranging between 600,000 and 1 billion USD. The inquiry has been registered with the International Center for Settlement of Investment Disputes (ICSID), an international arbitration body that deals with disputes around contracts and foreign investment. A Turkish source has informed me on the basis of anonymity that another 22 firms, who have also had problems with getting their projects complete, are also expected to submit their complaints soon.
All of this puts into question Turkmenistan’s reliability as a business partner, and with it, may dash the president’s plans of turning the capital into the “Eastern Dubai”.
Recently, Bishkek hosted an “international” exhibition titled “Kyrgyzstan 2011″. As far as I understood, the exhibition was supposed to display goods produced by 75 Kyrgyzstani companies. However, it turned into a temporary market in downtown Bishkek with lots of goods that have almost nothing to do with our country (except that it’s sold here). Anyways, see it for yourself below: