The recent travails in Uzbekistan of Russian cellphone giant MTS – hit by employee arrests and a three-month suspension – highlight the perils for foreigners of doing business in Central Asia’s most populous country. Although Tashkent tries to project an investor-friendly image, experts say pervasive corruption makes it difficult, if not impossible for most foreign entities to enjoy a stable operating environment.
Tashkent suspended the operations of Uzdunrobita, MTS’ Uzbekistan arm, on July 17 for 10 working days, accusing it of using equipment illegally. On July 30, the suspension was extended for three months. Tashkent has also accused MTS representatives of engaging in criminal activity, including evading $1.3 million in taxes and violating Uzbekistan’s Byzantine currency regulations.
Five managers – including Russian citizen Radik Dautov, who was appointed Uzdunrobita’s acting head after director Bekzod Akhmedov fled Uzbekistan – are under arrest. On July 25, Russian officials said they had voiced their “concern” to Tashkent about Dautov’s detention. Six days later, Moscow urged a resolution to an “ever more acute” dispute.
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Joanna Lillis is a freelance writer who specializes in Central Asia.