UZBEKISTAN: TASHKENT TIDBITS DECEMBER 18, 2009

C O N F I D E N T I A L SECTION 01 OF 03 TASHKENT 001637

SIPDIS
DEPT FOR SCA/CEN
AMEMBASSY ANKARA PASS TO AMCONSUL ADANA
AMEMBASSY ASTANA PASS TO AMCONSUL ALMATY
AMEMBASSY BERLIN PASS TO AMCONSUL DUSSELDORF
AMEMBASSY BERLIN PASS TO AMCONSUL LEIPZIG
AMEMBASSY BELGRADE PASS TO AMEMBASSY PODGORICA
AMEMBASSY HELSINKI PASS TO AMCONSUL ST PETERSBURG
AMEMBASSY ATHENS PASS TO AMCONSUL THESSALONIKI
AMEMBASSY MOSCOW PASS TO AMCONSUL VLADIVOSTOK
AMEMBASSY MOSCOW PASS TO AMCONSUL YEKATERINBURG

E.O. 12958: DECL: 2019/12/18
TAGS: PREL PGOV ECON PHUM SOCI EINV ETRD UZ
SUBJECT: UZBEKISTAN: TASHKENT TIDBITS DECEMBER 18, 2009

CLASSIFIED BY: Robert McCutcheon, Econ Officer, State, Pol/Econ
Office; REASON: 1.4(B),(D)

Dilmurod Sayyid Moved to Prison Hospital

--------------




1. (SBU) Dilmurod Sayyid, who was sentenced to 12 and a half years
in prison last June, was transferred December 15 from Navoi Prison
to Sangorod, the Tashkent-based prison hospital. Embassy contact
Abdurahmon Tashanov, who attended Sayyid's trial, told the Embassy
that he was turned away from visiting Sayyid, and he speculates
that this was because Sayyid is in very bad health (he has active
tuberculosis). Tashanov also thinks there may be a chance that
Sayid will be moved to a Tashkent-based prison following his stay
in Sangorod. The international community has given great attention
to this case, as Sayyid was a journalist reporting on farmers'
issues, and the charges against him were widely believed to be
baseless. Sayyid's wife and daughter were killed recently in an
auto accident on November 5.



Ordinary Uzbeks Fed Up with Mandatory Debit Cards

-------------- --------------




2. (SBU) More and more employers are paying a percentage of
employee salaries via electronic funds transfer (EFT) directly to
bank accounts. The employees are issued debit cards that in theory
can be used to access these funds, but the infrastructure for using
these cards is only just developing, particularly outside of
Tashkent. Moreover, most banks will only allow 10-20 percent of
the balance in a person's account to be withdrawn, and banks also
frequently charge a hefty service fee for the privilege. Thus,
many people effectively must live without that percentage of their
income that is paid by EFT.




3. (SBU) The Uzbek Central Bank encourages private employers to pay
50 percent of salaries by EFT, but several employers are doing this
to a much greater extent. In Surhandaryo Province, some employers
are reportedly paying 100 percent of salaries by EFT. One hundred
percent of pension and other social payments also will soon be made
in this way. For many people, particularly outside of Tashkent,
one of the only options for obtaining cash is to go to a local gas
station, which generally will accept debit cards and give cash
back, but at a 20-30 percent "fee." The economic hardship faced
from this situation comes up in the internet press and in
conversations with Uzbeks on a daily basis, and people are getting
noticeably angry. In Tashkent, long lines at local banks on payday
have been common in the past, but two to three police officers now
generally monitor those lines, presumably to make sure that anger
does not result in violence.



Centuries-old Trees Felled in Central Tashkent

-------------- -




4. (SBU) To the shock of most Tashkent residents, the city began a
project in mid-November to remove all of the plane trees from Amir
Timur Square in central Tashkent. The trees were planted during the
time of the Russian empire in the mid to late nineteenth century
and dominated the square (then named after General Kaufman),
providing much needed shade and relief from Tashkent's oppressive
summer sun. Tashkent residents griped that cutting a tree in one's
own yard can result in a hefty fine from the city authorities, but
this operation seemed to have been undertaken on orders from
"higher up." Given the construction of the
several-hundred-million-dollar Forum of Palaces this year on the

TASHKENT 00001637 002 OF 003


same square, the assumption was that Karimov himself wanted to open
the view on his new monument and had city officials remove the
trees. A press article seemed to confirm this suspicion, but
indicated that perhaps obsequious city authorities got a little too
zealous or misunderstood the leader's wishes. Karimov, it seems,
upbraided Tashkent's mayor for the devastation, saying that he had
only suggested the trees be "thinned out," but not cut down
completely. The trees took over a century to grow and it's too late
for regrets. Tamerlane dominates the now denuded square, his
horse's tail giving way to the full splendor of the grandiose Forum
of Palaces.



Legal Roundtable

--------------




5. (SBU) The Embassy hosted a legal roundtable on December 14 to
discuss changes to attorney licensing requirements, the Chamber of
Lawyers that replaced the previous bar association, and a new
decree that requires attorneys and notaries to report to
authorities when they suspect a client is involved in money
laundering, tax evasion, or terrorism. The three-member panel
included one licensed attorney who runs a law clinic, one former
attorney who chose not to renew her license according to the new
procedures, and one former attorney who was not relicensed
following the testing procedure. All three told the assembled
diplomats that they felt the testing procedures were a way to
"cleanse" the defense bar of attorneys not under the GOU's control.
All three are also concerned that the October decree requiring
reporting on clients violates the norms of attorney-client
privilege, and suspect that the government will use it as one more
tool with which to go after attorneys who do not always toe the
official line.



An Inside Look at GM Uzbekistan

--------------




6. (C) A manager in GM Uzbekistan's Powertrain operation gave us
insight into the day-to-day reality of what it is like to build
GM's new casting and engine plant in cooperation with Uzavtosanoat.
Although the plant will not be operational until 2011, there is
already a substantial local staff involved both in management and
construction. The GM manager told us that the top salary for local
employees is approximately 1,100,000 soum/month ($550/month).
Although locally-employed staff are paid in soum, there is an
exception for the top six local employees designated by the GOU,
who are paid 100 percent cash in U.S. Dollars. We were told that
in October the Uzbeks forced out most locally-based Korean workers
from the assembly plant in Asaka and replaced them with Uzbek
nationals. The Koreans had been the senior technical workers --
e.g., shop foremen - and there is concern that their departure will
impact the assembly plant's technical capacity.




7. (C) There seems to be a great deal of on-the-ground frustration
of the part of GM's expat employees. Currently, there are six GM
employees not from Uzbekistan living here. Andor Paizer, overall
manager for the GM Powertrain operation, left for good -- in fact
left GM for good -- on November 25th, reputedly because he could
not take Uzbek methods any longer. At this moment, the Powertrain
operation is in "remote control" until a new manager comes out in
February.




8. (C) Adding to the frustration, Uzavtosanoat requested a $2

TASHKENT 00001637 003 OF 003


million USD loan from GM Powertrain for three days to meet a
cash-flow problem. GM refused to transfer the money, which
reportedly "surprised" the Uzbeks. In still another move sure to
please, the GOU informed GM's American employees that it is
requisitioning all GM company cars and drivers for two weeks,
starting December 16, for use in the upcoming elections.




9. (C) A GM metallurgist told us his first impression of Uzbek
engineers is that they have no concept of modern casting methods.



Honeywell Cuts a Deal

--------------




10. (SBU) Following close on the heels of Honeywell CEO Dave Cote's
visit to Uzbekistan in October, Uzbekneftegaz announced on December
11 that it had signed a memorandum of understanding with Honeywell.
According to Davina Patel, Honeywell Manager for Strategy &
Marketing, Honeywell has now met with several of Uzbekistan's
National Holding Companies and has signed a protocol with the
Ministry of Foreign Economic Relations, Investment, and Trade
defining specific actions Honeywell will undertake with the various
NHCs. Taken together, these events mark a major expansion of
Honeywell's activities in Uzbekistan.



Some Easing of Sentences

--------------




11. (SBU) In Ref A, Post reported on the conviction of Baptists
Pavel Peichov, Dmitry Pitirimov and Yelena Kurbatova for their
activities related to a summer camp for youth. In October, a court
imposed heavy fines on all three and imposed a three year ban on
any administrative or commercial activity for the next three years.
On December 4, the Tashkent City Court granted amnesty for the
charges that had resulted in the fines, but left intact the
restriction on administrative and commercial activities. In Ref B,
Post reported on the sentencing of human rights activist Farhad
Mukhtarov to five years in prison. On December 3, the Tashkent
City Criminal Court reduced the sentence to four years. (Note:
Although not unheard of, it is unusual for sentences to be reduced
on appeal. It is not known whether these parties will continue to
appeal their convictions.)
BUTCHER