Uzbekistan: Turkish Business Returning, Cautiously

Turkish businessmen in Uzbekistan have repeatedly been stung over the years, but they may gradually returning to this promising market. One high-profile investor, however, still remains deeply embittered at his experiences in the country and is seeking hefty damages in the courts.

On September 16, the head of Demir Holdings, Ahmed Demir, is to hold a seminar in the Uzbek capital entitled “The history of success.”

Demir should be no fan of Uzbekistan.

He was among the first wave of major Turkish investors to arrive in the country. After creating the Mir Store supermarket chain, he converted the crumbling Rossiya hotel in Tashkent into the plush and revamped Grand Mir. His Mir fruit juices were the first foreign-made beverage to be produced in Uzbekistan after independence. All told, around 7,000 Uzbeks were employed by Demir Holdings.

It all began to go wrong in 2010, when the company became object of a relentless series of raids and inspections. Mir Store eventually closed and Demir left Uzbekistan. 

The ascendancy of Uzbekistan’s new president, Shavkat Mirziyoyev, quickly brought about a change.

RFE/RL’s Uzbekistan service, Radio Ozodlik, reported back in June that officials were instructed to make peace with Demir following the visit to Tashkent by Turkish Foreign Minister Mevlüt Çavuşoğlu in late April. Demir was in the delegation accompanying Çavuşoğlu at the time and is reported to have held talks with Mirziyoyev.

Ozodlik cited its sources as saying that Tashkent authorities have given Demir a hotel building that has been lying idle in the city’s historic Chorsu disctrict. Demir is also being granted tax breaks.

There is a less happy story to tell for Vahit Güneş, who was also part of the Turkish foreign minister’s delegation in April.

As he told Ozodlik in an interview last week, when he was forced out of Uzbekistan, he was forced to abandon businesses into which he had invested $70 million. His holdings included the popular Turkuaz shopping complex in Tashkent.

Even more gravely, Güneş has previously asserted that when he was detained for nine months by Uzbekistan’s National Security Services in 2011, he was subjected to relentless physical abuse.

"We were tortured badly using electric shocks," Güneş told IWPR in April 2012. "We saw people tortured to death, some of them had heads, hands and bodies dismembered.”

Güneş and seven others were eventually convicted on charges of tax evasion and other financial crimes, but were released on amnesty in February 2012.
The businessmen has since tried to seek recourse in international tribunals.

“In 2013, I filed suit in an international arbitration court against the Uzbek government to seek compensation for damages worth $250 million. On December 20, I expect a verdict. I think the court will rule in favor of Uzbekistan paying at least $100 million. I think there is no faith in the Uzbek government,” he told Ozodlik.

According to official figures, turnover between Uzbekistan and Turkey reached $1.2 billion in 2016. That amount is set for almost certain growth since the thaw in relations ushered in by Mirziyoyev, who is due to visit Turkey in October.

The souring of ties predates the hounding of Turkish businesses.

Following the dissolution of the Soviet Union, there had been some expectation that Ankara might seek to exploit its Turkic cultural links to become a leading player in Central Asia. But that mission in Uzbekistan was severely undermined in 1993, when Turkey began providing a haven to the late President Islam Karimov’s political rivals. One such person was Muhammad Solih, a poet and leader of the Erk political party, who stood against Karimov in the 1991 presidential election on a nationalistic and pan-Turkic platform.

When Solih fled Uzbekistan, he initially secured political asylum in Norway. But he later moved to Turkey, where he has been based ever since, much to the chagrin of officials in Tashkent.

In a somewhat unexpected turn of events, Solih revealed to the BBC on September 4 that his name had been removed from the Interpol wanted list, where it has long been placed at the request of the Uzbek government.

This appears to be the result of an online video appeal by Solih in which the opposition figure expressed his support for Mirziyoyev.

“The reforms carried out by Mirziyoyev give hope to the representatives of the Uzbek opposition that there are positive things happening in Uzbekistan,” Solih said.

Uzbekistan: Turkish Business Returning, Cautiously

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