Uzbekistan - Corruption
Transparency International (TI) ranked Uzbekistan 170 out of 176 countries for corruption. Uzbekistan’s Corruption Perceptions score is 17 on a scale of 0 - 100, where 0 means that a country is perceived as highly corrupt and 100 means it is perceived as very clean. Government officials interpret laws and decrees inconsistently and in conflict with each other. Government interference and corruption are common and should be expected.
Corruption is rampant in the Government. Tenders and government positions can be fairly easily secured by paying the right amount of money to the appropriate individual, leading to a situation in which unqualified individuals have every incentive to engage in further corrupt activity to pay off the large debts they usually incur making down payments on the jobs.
US prosecutors said the daughter of Uzbekistan’s president and several associates failed to comply with a court order to turn over more than $500 million held in Swiss banks as part of a long-running money-laundering investigation. The claim, made in an 21 April 2016 letter to U.S. federal court in Manhattan, names Gulnara Karimova for the first time in publicly available US government documents. She is the eldest daughter of Uzbekistan’s authoritarian president, Islam Karimov. Others named include her business associate Gayane Avakyan and Rustam Madumarov, who has been identified as her boyfriend.
A mafia chieftain and President Karimov's oldest daughter, Gulnara Karimova, help businessmen to secure government tenders and job applicants to "buy" government jobs. Crime boss Salim Abduvaliyev puts bidders for tenders in touch with an Iranian businessman holding British citizenship, who submits the paperwork to First Daughter Gulnora Karimova for approval. Salim works with the Deputy Minister of Internal Affairs responsible for personnel issues to arrange government jobs, agreeing on a price and then adding his own fee before selling the position. Salim has reportedly sold a wide range of Government positions, including regional Hokim, police chief, and Ministry of Internal Affairs jobs.
Uzbekistan legislation, including the Criminal Code, prohibits corruption. Enforcement is arbitrary, however, and there is considerable anecdotal evidence that senior officials regularly use their latitude in interpreting regulations to extract bribes. Several major incidents of bribe solicitations have been reported to U.S. Embassy officers, and foreign investors who refuse to pay bribes have experienced difficulties. Uzbekistan ranks 170th out of 176 rated countries in Transparency International’s 2012 Corruption Perceptions Index.
Uzbekistan joined the UN Anti-corruption Convention in 2008, but is not a signatory to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and does not participate in any notable local or regional anti-corruption initiatives.
Low wages in public service stimulate widespread corruption within government bodies and in almost all sectors of the economy, especially those with government involvement. Lack of transparency in bureaucratic processes, including procurement tenders and auctions, and limited access to currency convertibility stimulate rent-seeking. Bribery is commonly used to obtain lucrative positions, government contracts, preferences, and exemptions, and is also used to escape criminal prosecution. Citizens routinely pay bribes to receive public services.
Bribery is considered a crime in Uzbekistan and local companies cannot deduct any bribes from taxes. A number of officials are prosecuted under anti-corruption laws every year. Depending on the court verdict, punishment can vary from a fine to imprisonment with confiscation of property. Often, prosecutions tend to focus on political dissenters rather than on corrupt but loyal government officials or individuals affiliated with the elite.
Government officials often express support for toughening the fight against corruption, but they have taken few effective measures toward that aim. Reports that senior members of the government and their families abuse state power for rent seeking and financial gain are common.
Three main arms of the government are tasked with fighting corruption: the NSS, the Ministry of Internal Affairs (MVD), and the General Prosecutor's Office. There is no evidence that the government requires or encourages companies to establish internal codes of conduct that prohibit bribery of public officials, and only a few local companies created by or with foreign investors have effective internal ethics programs. Currently, no international or local nongovernmental "watchdog" organizations have official permission to monitor corruption in Uzbekistan.
The government reported that during the first nine months of 2011 the courts convicted 460 government officials of corruption-related charges, 371 of whom were sentenced to prison. On October 4, the official newspaper Pravda Vostoka reported that during the first six months of the year, the Public Prosecutor’s Office initiated more than 60 criminal cases against officials accused of bribery, misappropriation of property, and forgery in public office. These cases resulted, amongst others, in the convictions of R. Gulyamov, mayor of Olmaliq; E. Muhammadiev, mayor of Farish District; and Rashid Nurmatov, former deputy mayor of Kokand, for economic and social issues. In late November civil society activists and the mass media reported that M. Shukurullaev, a judge with the Jizzakh Region Criminal Court, had been arrested for bribery.
Corruption among law enforcement personnel remains a problem. Corruption was a severe problem in the university, law, and traffic enforcement systems. All Uzbek businesses "have to have a roof," that is, paid protection. Rather than extortion from a separate organized crime ring, in Uzbekistan the "roof" involves direct channels within the government or its agents in which an enterprise arranges payments for operating licenses, taxes, and overhead cuts. This is at least a known quantity, and one just must be careful not to get too successful and attract attention. The difficulty is trying to calculate how much corruption one can absorb as a cost of doing business before it exceeds the breaking point.
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