Accessibility links

Kyrgyz Business Community Struggles to Recover

  • Lisa McAdams

It has been one week since violence and looting spread across Kyrgyzstan's capital, Bishkek, after the political opposition stormed government headquarters, forcing President Askar Akayev to flee. VOA's Lisa McAdams is in Bishkek, where she spoke to local businessmen trying to recover from $100 million in losses.

Turkish carpet retailer, Fikrit Ozden, who has two shops in the Kyrgyz capital, lost one store entirely, first to thieves who looted it of all its contents, and then to the flames in the fire the thieves set.

Mr. Ozden says he has no hope the government will compensate him for his losses. So, he was back at work at his other store on Wednesday, although he says the political uncertainty in Kyrgyzstan is not good for business.

"We are not expecting business today, and also, in near future, we are not expecting business will be good. But we are still here. We are having this business," he said. "We have to continue. Life is going on."

Mr. Ozden's story is repeated tens of times down the main commercial street, which is abuzz with hammers and drills, as workmen try to restore broken store fronts and make order out of the mess.

One business that managed to survive the storm virtually unscathed is Bishkek's largest commercial center, GSUM. Transformed since Soviet days, GSUM contains 500 independent stores under its roof, and employs more than 1,000 local workers.

GSUM's Italian general director, Giorgio Fiacconi, says it was sheer luck that the business he oversees is still standing. He describes watching the events unfold, as protesters and looters surged through the city.

"In evening, while the BETA store was burning, the Silk Way was already looted," he said. "The Plaza had the same fate. We were all in front of GSUM. And we had probably 5,000 to 10,000 people confronting us, advancing and going back in the same time, and this lasted from seven o'clock until 2 o'clock in the morning."

But one advantage Mr. Fiacconi had was citizens brigades made up of his employees and the general public.

The brigades roamed the capital for three nights following the unrest, and are largely credited with restoring law and order to Bishkek.

David Grant is the director of the International Business Council (IBC) in Kyrgyzstan. His group is trying to help business owners get back on their feet as soon as possible.

At the same time, Mr. Grant tells VOA, the IBC is also lobbying the new government of acting President Kurmanbek Bakiyev for two immediate reforms.

"One is public administration reform, so that public servants have good incentives to do a professional job to develop the country," he said. "Right now, they are poorly paid, and their incentives are upside down. So, they are effectively encouraged to undertake corruption, and not to deliver good service for the government. And the second is judicial reform, so the judicial sector is transparent, clean and professional."

Mr. Grant of the IBC says, following those two reforms, others could be attempted, such as stream-lining the tax system and reducing corruption.

He says the short-term business prospects are, perhaps, worse than they were just one week ago, before the looting. But he says the long-term outlook might just yield some surprises for Kyrgyz business.

"It's an immediate shock what happened, but it's opened up an opportunity, so that the future election is no longer controlled by the state," he said. "And there's an opportunity that, if we get someone who is committed to reform, who is committed to develop this country, and is standing up against corruption that they actually improve the business environment, then we will then have much more investment."

But Mr. Grant and most business owners agree that much will be on hold, until June 26, when presidential elections are slated to be held.

In his first public comments six days after fleeing Kyrgyzstan [to Russia] amid the unrest, President Akayev expressed regret for not anticipating the violence.

Mr. Akayev told Russia's Echo Moscow Radio that he never could have imagined things would have gone the way they did.

"I feel enormous guilt," he added, "for not preventing the violence."

In the interview, Mr. Akayev also said that he would like to return to Kyrgyzstan, but that he did not yet have any security guarantees.

Acting President Bakiyev has urged him to stay away, saying the situation in the country is still far too unsettled.

XS
SM
MD
LG