A daily bulletin of news & opinion

29 July 2010

“Who owns the Bacardi Bar in Bishkek?” is not the type of question that generally troubles the sort of UN and World Bank diplomats who gathered in the Kyrgyz Republic’s capital for this week’s donor conference. But as they agreed to plonk $1.1bn (€845m) into the hands of the new government, with little supervision, it is one that matters.

The aid injection is designed to help the country rebuild the towns of Osh and Jalalabad, both ravaged by last month’s ethnic violence in the country’s south. But much of it is likely to be “diverted”.

The new Kyrgyz government has nationalised plush holiday resorts on Lake Issyk Kul, a distillery, a fuel supply company, a cinema, a telecoms provider, the largest private bank, and much else besides: a protection, its supporters argue, against any residual rapaciousness on the part of the old government. A prelude, cynics argue, to lucrative re-privatisations at a later date.

“The interim government has taken a decision on nationalisation in connection with the fact that the previous cabinet of ministers allowed black schemes to work in the country,” said Theodore Ahlers, the World Bank’s strategy and operations director, after announcing the aid package and perhaps just slightly discouraged by the rate of asset seizures. “We are encouraged by the efforts of the new authorities to raise standards in public life, improve accountability, and strengthen oversight over public spending,” he added.

Roza Otunbayeva, the new president, assured donors collected in Bishkek that the $1.1bn aid injection was in safe hands. Anti-corruption laws in the new constitution would “help to destroy the schemes of grand larceny of people’s money that were devised by the previous regimes”, she insisted.

She is no doubt honest and well intentioned, but the same cannot be said for many of her colleagues. Indeed, many were responsible for devising the murky schemes she referred to. 

Perhaps that’s why it’s surprisingly difficult, for example, to find out what happened to many of the businesses, the Bacardi Bar included, that were controlled by Maxim Bakiyev, the former president’s son.

When I visited in June, there were no cars outside the club and at that point gangs were still laying waste to the country’s south, the former president’s stronghold. Inside the club, a group of young men and women lurked by a back room.

“I heard Maxim Bakiyev is the owner here,” I asked.

”Ex-owner”, answered a young man dressed in black trousers and a black T-shirt.

“Who’s the new owner? When did Bakiyev leave?”

”I know. But I can’t say.”

It was then that he pulled up his T-shirt slowly to reveal the leather holster on his belt, a pistol neatly clipped inside.

At the conference in Bishkek’s Hyatt hotel, the new government may talk of its new transparency, but on the streets outside, everything seems as murky as ever, at least according to one nightclub impresario. 

”It’s very unclear as to who owns what proportion of what,” he said.

What is clear is that someone is doing very well. “Bacardi’s going from strength to strength, which is bizarre. It’s the busiest place in the city right now,” he added.


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