Central Asian Law

By Berdymyrat Ovezmyradov

During my secondments within Central Asian Law project, I had chance to conduct interdisciplinary studies in the field of foreign investments. Being a researcher in supply chain management, I already had a prior knowledge about global value chains related to foreign investments. Still, the conditions and networking provided by the project allowed greatly expanding the knowledge of the investments with regional focus. This article summarizes my analysis of foreign direct investments, hereinafter FDI, which were reflected in Ovezmyradov and Kepbanov (2021).

Do foreign investments really benefit the local population in the end? To what extent did they make ordinary people richer? How to make sure the investments actually have a better impact on wellbeing in the future? Can foreign investors contribute to improving the dire situation with human rights and freedom? Governments and businesses often like to paint a rather rosy picture of FDI benefits. Therefore, I became interested in answers to the above questions in the context of Central Asian countries. There is no big shortage of literature on foreign investment in the region but few papers focused on the problem of long-term benefits of FDI as of 2020s.

As I reviewed the scientific literature and empirical evidence, my views on the investments became increasingly pessimistic, which could seem unwarranted when considering historical data. Countries in Central Asia have long declared welcoming foreign businesses and technology. Capital inflows as a share of GDP in Central Asia was higher than average worldwide for developing countries (Bayulgen 2005). Cheap and abundant electricity, workforce, and resources in the region attract interest from foreign businesses (OECD 2019). Most recently, Kazakhstan and Uzbekistan, the biggest economies in the region, provided favorable conditions for the setup of a business even compared within the Eastern Europe (Santander 2021, US Department of States 2020). Foreign investments as a share of GDP overall declined after 2010, though the same trend was observed in other post-Soviet countries (Figure 1).

FIGURE 1 FDI inflows in post-Soviet countries as the average of GDP percentage for two periods: 2009-2013 and 2014-2018 (The World Bank 2020).

The reason behind pessimism about future investments is not only about the relative decrease – the heavy dependence on extractive industries is even more worrying. Theory says that resource-seeking FDI often harms the local environment in a recipient country and might damage the development prospects in the long run (Moid 2018). With few exceptions among the largest foreign investors (notably, higher interest among businesses from Turkey towards the sectors outside extractive industries, such as textiles, food, and retail), majority of them, unfortunately, were only interested in natural resources. Figure 2 shows how fossil fuel sectors attracted nearly half of the greenfield investments in Kazakhstan, Turkmenistan, and Uzbekistan. Meanwhile, Kyrgyzstan was heavily dependent on metal sector attracting about 80 percent of the foreign investment, while in Tajikistan metals attracted 30 percent. Extractive industries had an outsized role in investments for all of the Central Asian countries. With volatile prices and global demand for commodities, the exports of natural resources might suddenly decrease, especially for oil producers suffering from price wars and relentless expansion of renewable energy (UNCTAD 2020). The extant literature (on the resource curse in particular) suggests natural resource abundance in most countries is associated with reduced economic growth, low democracy levels, and risk of conflicts (Rosser 2006).

FIGURE 2 Cumulated greenfield FDI capital share in extractive sectors 2003 and 2017 (estimated values based on UNCTAD 2021 and OECD 2019 data).

Aside from FDI structure and decrease, another big challenge for Central Asia is to attract more beneficial foreign investments that align with national development, moving to higher-value-added levels with transfer of technology and know-how in agriculture, manufacturing, and services. A final product can be manufactured and assembled in multiple countries, with each step in the process adding value to the end product (World Bank Group 2023). The international transfer of knowledge in global value chains (GVC) determines growth in productivity, employment, and technology. Globalization since the early 1980s led to wider outsourcing and offshoring by companies from the Western countries. China is a prominent example of a developing country that benefitted from the GVC. Current GVC trends might appear as an opportunity to shift a higher share of global production from China to Central Asia, as it happened in neighbouring countries such as Vietnam, India, Bangladesh, Indonesia, Thailand, and Malaysia. A neighbouring region did much better: Southeast Asia achieved much higher combined integration to GVC and regional value chains by 2015 despite being similar to Central Asia in 2000. Income growth in Caucasus and Central Asia rates would be 0.7 percent higher if they could enhance their GVC participation – this is higher than from diversifying economies and improving product quality (Kunzel et al 2018). Unfortunately, integration of Central Asia to the global and regional value chains was limited due to inadequate policies, infrastructure, and logistics (Sharafeyeva 2022). The GVC participation of Central Asia globally was the second lowest (Urata and Baek 2020). Corresponding indices for Kyrgyzstan (0.05), Uzbekistan (0.01), Tajikistan (0.03), and Kazakhstan (0.02) were below the worldwide average index of 0.05.

Given the most recent “de-globalization” trend, Central Asia will face even greater difficulties benefitting from the global production specialization and the labor division than many other developing countries competing for foreign investment. The reasons are high logistics cost in the landlocked countries, insufficient human capital, slow liberalization, relatively small population and their income, meaning lower market size and economies of scale relative to alternative locations in Asia. Cheap energy and workforce alone, without other comparative advantages, are not enough to compensate for the above disadvantages. Highly desirable technology transfer from foreign investors in automotive, machinery, and electronics has not been particularly: visible in the region. The prevailing GVC conditions in 2020s for Central Asia appear likely to cause further lowering the level of participation in the near future, not upgrade: reshoring and diversification limit possibilities to benefit from FDI in the medium-low technology intensity (textiles), regional processing (food and chemicals), extractive, and agro-based (James et al 2020). Foreign investments are not very beneficial when domestic organizations with backward technologies and low-skilled labor prevent effective transfer of technology and knowledge. Central Asian countries still lagged behind peers of comparable size in the post-Soviet area in many essential indicators of research and education (Ovezmyradov and Kepbanov 2021, Sanghera and Satybaldieva 2018).              As for the not so distant future after 2030, Central Asia is among the regions expected to experience a substantial reduction in GVC participation relative to the period before CoVID-19 pandemic. Climate mitigation policies in the developed countries and other major trading partners, such as the EU Green Deal, will have mostly negative implications for the key sectors of hydrocarbon and mineral extraction in Central Asia (Paul et al 2022.).                     

While foreign investments might benefit income levels of ordinary people under certain conditions, they seldom promote freedom in any way. In theory, foreign capital might be interested in helping to reduce the costs of doing business by promoting pluralism, the rule of law, and limits of authoritarian tendencies (Bayulgen 2005). In particular, foreign portfolio investment (FPI) can be more effective in promoting institutional reforms in recipient countries than official development assistance (ODA) and FDI. In practice, foreign businesses are naturally interested in the interpretation of rule of law effectively turning to the rule of dispute courts that make it difficult for the public to hold foreign investors accountable for the ecological and social issues, and there are relevant cases in Central Asia (Sanghera and Satybaldieva 2018). FDI and foreign aid often fail to promote political freedoms, when investors prefer dealing with strongmen for “one-stop shopping” in to get an approval rather than negotiating with strong institutions requiring high standards of social responsibility (Bayulgen 2005). Natural-resource rents from extraction of natural resources might accrue to governments and foreign firms in ‘rentier states’ with unfair income distribution, high corruption, and threats to democracy (Sanghera and Satybaldieva 2018). Authoritarian rulers simply ignored international promotion of liberalization since any loans or foreign aid that could be linked to providing more political freedoms were not significant compared to investment inflows in extractive industries (Bayulgen 2005). Even if FDI ensures technology transfer and growth, it does not necessarily bring good governance.

Relationships between rule of law, liberalization and foreign investment look uncertain indeed. For instance, the FDI as share of GDP declined in democratic Estonia and Armenia but increased in authoritarian Azerbaijan and Tajikistan, while the least liberalized Turkmenistan achieved the highest ratios in the comparisons (Figure 1). Kyrgyzstan, a relatively more open economy but less stable politically, had a good FDI/GDP ratio levels but still attracted lower investments than authoritarian neighbours in the region. The differences among Central Asian economies in the capital flows partially explain why some states became illiberal while others remained in hard authoritarianism (Bayulgen 2005). There is little to boast about the growth primarily achieved on account of extractive industries doing little for development directly benefitting the entire society. Liberal post-communist democracies might attract relatively lower foreign investment than authoritarian peers but are more likely to create conditions for their citizens to benefit from such investments in the long run with stronger human capital and the rule of law and political freedom.

Central Asian countries did not have to focus on improving institutions when benefiting from booming revenues due to hydrocarbon and other resources (Billmeier and Massa 2007). Western support of democratic transition in the region emphasized technical measures facilitating economic aspects, while few political and institutional objectives were truly achieved (MacFarlane 2002). Meanwhile, Central Asia depended on external capital empowering authoritarian governments but providing less financial benefits to smaller local businesses (Bayulgen 2005). Compared to success in other post-communist states, the EU demonstrated fewer achievements in promoting the rule of law, human rights, and democratization among Central Asian partners (MacFarlane 2002). In terms of the total FDI stock among the countries of investors’ origin, the EU (42%) and the US (14%) were the main investment partner of Central Asia, far ahead of Russia (6%) and China (4%), even if perception might suggest otherwise (Borrell 2022). Investments originating from Belt and Road Initiative and other sources from China cause higher debt burden, for instance, and do not seem to bring once highly anticipated benefits for Central Asian economies. Political freedoms and human rights never seemed to be prioritized by the Western investors, let alone other players with geopolitical influence in the region. As of 2020s, the final benefit of the foreign investment on sustainable development in Central Asia appears questionable with the slowdown of progress in liberalization and worsening situation with freedom in the region.

Coming back to questions raised at the beginning, I can now summarize doubts about the investment benefits for Central Asia in the long run.

Do foreign investments make the people better off economically? Not very much. The concentration on extraction of natural resources and disadvantaged position in the global value chains do not allow gaining the full benefit. Even though the region attracted relatively high foreign direct investments in the first three decades after gaining independence, the ongoing changes in the global demand for commodities together with the reconfiguration of supply chains mean the contribution of investment in economic growth will be hard to maintain with the current characteristics of extractive sectors and human capital. The investment structure just does not strongly support technology transfer and shift to knowledge economy.

Do foreign investors somehow promote protection of human rights and freedom? The answer is negative. Numerous indicators of development indicate the population has long suffered from the lack of good governance, on average, more than other post-Soviet regions. Unfortunately, the starting conditions of foreign investment appear far from bringing a stronger rule of law and political freedoms in Central Asia. If potential for environmental damage and corruption risks from investments is considered, their benefits in the region could be further questioned.

To summarize, the negative effects of foreign investments on sustainable development of Central Asian countries sadly might exceed their short-term benefits.

Keywords: Central Asia, transition economies, foreign investment, sustainable development.

References

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A. Rosser, The political economy of the resource curse: A literature survey (Vol. 268). Institute of Development Studies, University of Sussex (2006).

B. Sanghera, E. Satybaldieva, Rentier Capitalism and Its Discontents. Springer International Publishing (2021).

B. Ovezmyradov, Y. Kepbanov, Comparative Analysis of Higher Education And Research In Central Asia From The Perspective Of Internationalization. Central Asian Law: Legal Cultures, Governance And Business Environment In Central Asia, 25 (2020).

B. Ovezmyradov, Y. Kepbanov, Human capital and liberalization in Central Asia: comparative perspectives on development (1991 – 2020). Lund University (2021).

A. Sharafeyeva, How much do Central Asian countries participate in regional value chains? Australian and New Zealand Journal of European Studies, 14(2), (2022): 62-80.

J. Borrell, Central Asia’s growing importance globally and for the EU (2022) eeas.europa.eu/eeas/central-asia’s-growing-importance-globally-and-eu_en accessed on July 20, 2023.

O. Bayulgen, Foreign capital in Central Asia and the Caucasus: curse or blessing? Communist and Post-Communist Studies, 38(1) (2005):  49-69.

OECD, Sustainable Infrastructure for Low-Carbon Development in Central Asia and the Caucasus: Hotspot Analysis and Needs Assessment. OECD Library (2019).

M. P. J. Kunzel, De Imus, P., Gemayel, M. E. R., Herrala, R., Kireyev, M. A. P., & Talishli, F. (2018). Opening Up in the Caucasus and Central Asia: Policy Frameworks to Support Regional and Global Integration. International Monetary Fund.

S. Moid, M&A vs. Greenfield: FDI for Economic Growth in Emerging Economies. In Foreign Direct Investments (FDIs) and Opportunities for Developing Economies in the World Market (IGI Global 2018): 169-185.

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UNCTAD, Foreign direct investment: Inward and outward flows and stock, annual. Data Center (2022).

UNCTAD, The World Investment Report 2019. United Nations (2019).

UNCTAD, The World Investment Report 2021. United Nations (2021).

United Nations, Trade and development report 2022 (2022).

US State Department, Investment climate statement: 2020 (2020).

V. Vitalis, Official development assistance and foreign direct investment: improving the synergies (2002).

The World Bank, Statistics (2020).

World Bank Group, Global Value Chains (2023). https://www.worldbank.org/en/topic/global-value-chains accessed on March 20, 2021.

World Factbook, Country comparison: stock of direct foreign investment – at home. Library of the Central Intelligence Agency (2020).

WTO, Trade in value-added and global value chains: statistical profiles (2023).

by Nilufar Khudayarova, Researcher – Kurultai Research and Consulting

In August 2023, I started a six-month-long mobility trip to the Faculty of Political Science of Marmara University in Istanbul as part of a research and training project, “Central Asian Law: Legal Cultures and Business Environments in Central Asia.” This project is funded by the European Commission’s H2020 MSCA-RISE programme. Representing the “Kurultai” research and consulting company based in Tashkent, Uzbekistan, my primary focus during this secondment was to explore the dynamic relationship between business, legal governance, and higher education, with a particular emphasis on Central Asia, and Uzbekistan in particular.

During my secondment stay at Marmara University, I have the privilege of being hosted by Professor Erhan Dogan. The fact that my secondment started simultaneously with two researchers from Zhetysu University, Dr. Daniyar Kaldiyarov and Dr. Daniya Nurmukhankyzy, facilitated my smooth adaptation to a new environment. In this short blogpost, I would like to briefly share my experience as a researcher at the Turkish university.

Higher Education in Uzbekistan

One of the focal points of this mobility trip is to explore internationalization and privatization of higher education in Central Asia. This topic is highly pertinent in Uzbekistan, whose higher education system has been undergoing significant transformations in recent years, making it a noteworthy subject of study and research. As Uzbekistan strives to align its educational institutions with contemporary global standards and to foster an environment conducive to economic development, new private universities are being established, and public universities are striving towards internationalization and autonomy. As a result, the number of universities has increased from 77 to 212, and the university attainment coverage has increased from 9 percent to 42 percent, according to recent official records.

As government officials assert, these reforms aim to equip students with practical skills and knowledge that align with the needs of the modern job market, fostering entrepreneurship and economic growth. At the same time, along with new possibilities and potential for further development, these radical changes have also brought challenges to the country’s higher education. Some of these challenges include the need to ensure the quality of education remains high as the system expands rapidly. There is also the concern of potential overproduction of graduates, which could saturate the job market and lead to underemployment. Additionally, the job market itself must adapt to accommodate graduates with diverse skill sets arising from these reforms. Ensuring education remains accessible and affordable is essential, and efforts to prevent brain drain as individuals seek opportunities abroad should also be considered.

In this regard, studying Turkey’s experience is particularly relevant. Turkey went through a transformational period a few decades ago that saw a significant surge in the establishment of both public and private universities. This proliferation of higher education institutions had far-reaching consequences, not least of which was its effect on the overall quality of tertiary education.

Turkey’s experience provides valuable insights into the challenges and opportunities that arise when higher education undergoes rapid expansion. Analyzing Turkey’s experience can offer valuable lessons for Uzbekistan as it strives to strike a similar balance in its own educational reforms. By examining the Turkish example, Uzbekistan can gain insights into strategies for maintaining and enhancing the quality of education while simultaneously accommodating a growing number of institutions and students. This comparative analysis can serve as a guiding framework to help Uzbekistan effectively harness the benefits of its educational reforms while mitigating potential pitfalls. My policy-oriented research particularly has focused on these issues.

Visits to Universities and Interactions with Faculty Members and Students

During my secondment, on a daily basis, I visit Marmara University and engage with faculty members and students. These interactions focus on topics such as curriculum development, research collaboration, and knowledge exchange. Through these visits, I am gaining insights into the role of higher education in driving transformative change and fostering innovation.

Marmara University’s extensive library has quickly become my preferred workspace during my time here, primarily due to its vast collection of books and resources that directly relate to my research interests. This resource-rich environment has proven invaluable in facilitating my exploration of the topics central to my work. At the same time, colleagues at the host university often serve as my research participants in providing me with invaluable firsthand insights into how the Turkish higher education system has evolved in recent years. I also tried to understand the perspectives of Turkish scholars and educators regarding the role of higher education in driving the country’s political, societal, and economic advancement.

Informal conversations during meals, breaks, and social activities also facilitated the sharing of knowledge and expertise among participants. These casual interactions allow me to exchange ideas, insights, and personal experiences in a relaxed setting.

Overall, my secondment mobility is proving to be very useful. Through my studies and interviews with scholars and professors, I have not only refined my current research focus but have also unearthed fresh topics for potential future investigations. I hope I will be able to further develop my research and policy papers in the coming months. The collaborative and interactive nature of this mobility enables me to learn from other experts, broaden my perspectives, share my experience and expertise, and collectively contribute to the understanding of the transformative dynamics of higher education in Central Asia.

 by Nazgul Baigabatova and Aliya Kashaganova, Zhetysu University

For over a decade, Zhetysu University, named after I. Zhansugurov in Kazakhstan, has maintained a collaborative relationship with the world-leading University of Zurich in Switzerland. Throughout this period, they have engaged in joint research, conferences, and seminars, culminating in the conduct of a summer school in Taldykorgan in 2022. During these sessions, Swiss students received instruction in the Kazakh language and conducted field research in social and cultural anthropology. This collaboration also led to the creation of a shared research hub, the Eurasian Studies Center, hosted at Zhetysu University.

The partnership between these universities was invigorated by their participation in the international and multi-disciplinary project Central Asian Law: Legal Cultures and Business Environments in Central Asia. Funded by the European Commission within the Horizon framework, this endeavor injected fresh momentum into the growth of their bilateral collaboration, opening up novel avenues for cooperation. Within the scope of the CAL Project, our research secondment took place in March and April of 2023 at the Department of Social Anthropology and Cultural Studies at the University of Zurich.

Throughout this project, we have improved our professional expertise in legal culture, governance, and the business environment in Central Asia. Our stay at the University of Zurich involved research-focused activities such as utilizing library resources and conducting writing work and the invaluable opportunity to interact with department members and visiting scholars who were present during sabbaticals or other projects. The extensive library holdings encompassing regional and diverse subject matters greatly enriched our research. Collaborative consultations with our counterparts in the department, namely Professor Dr. Peter Finke, Dr. Werner Hertzog, and Dr. Meltem Sancak played a pivotal role in refining our paper’s structure, outline, and composition. These interactions bolstered the theoretical and methodological underpinnings of our work.

Over two months, we were privileged to partake in seminars and a series of weekly colloquiums hosted by the department. One such event was the workshop titled “Ethnography, Economy, and Ecology of Pastoralism in Kazakhstan,” co-organized by Dr. Russell Zanca, a professor of anthropology at Northeastern Illinois University, who also holds a visiting professorship at the Center for Eurasian, Russian, and East European Studies at the University of Chicago. Additionally, we participated in Ph.D. public defenses and lectures within the department and at the University.

Being integral members of this venture, representing Zhetysu University named after I. Zhansugurov in Kazakhstan, has proven immensely advantageous for our professional advancement. Our two-month stay at the University of Zurich yielded valuable experiences, fortified our partnerships, and introduced novel perspectives and concepts within evolving paradigms. Additionally, we took advantage of weekends to delve into the history and culture of Switzerland, a country renowned for its beauty and prosperity.

https://www.isek.uzh.ch/de/ethnologie/Mitteilungen/Mitteilungen/Guests-at-ISEK—Social-Anthropology-Spring-2023-2.html

by Meral Balci, Marmara University

Hello, I am Associate Professor Meral Balcı, a researcher and lecturer at Marmara University, Turkey. I have been working in the Department of International Relations.

I was seconded to the Department of Law at Westminster International University in Uzbekistan for two months as a researcher on the EU-funded Project called Central Asian Law. My study focused on women’s representation and participation in political life in Uzbekistan. For this reason, I stayed in Tashkent, the capital city of historic importance, and had an unforgettable experience for four months. As soon as I arrived in Tashkent, the first thing I realized was the sophisticated culture and historical landscape in Uzbekistan. My first impression is of people in Uzbekistan who are so warm and hospitable.

From the first day of my arrival in Tashkent, I tried to discover and experience the city. As Tashkent was reconstructed after the earthquake of magnitude 8 which destroyed the city completely in 1966 turns into a very pleasant city with wide boulevards, large parks, and green areas. Wherever you go, you see huge trees and large parks to walk, run, sit even take a nap on the benches. I spent hours walking in the parks, eating famous Uzbek somsa, like Italian panzerotti, and talking to the birds walking nearby.

While talking about the city, I don’t get a chance to mention the Uzbek underground system. Uzbekistan has an underground system built in 1977 with clean stations decorated elegantly. I took these photos in front of the Metro Kosmonavtov station, where you can see the footsteps of the space traveler. P.S. I cannot pass by without talking about the Uzbek-originated cosmonaut Vladimir Dzhanibekov, whom Uzbeks are proud of.

What impressed me most was that the city changes its peculiarity by 200 meters. While walking through the streets, still reflecting the years of the 11th or 12th centuries, you suddenly go through very modern ones covered by skillful artists’ paintings, and music coming from street musicians as in Mustafa Kemal Atatürk Street, which is well-known as Broadway Street. It is easily understood that giving the name of the founder of the Turkish Republic to a very famous street shows the roots of Turkish-Uzbek relations go back a long way.

Since Uzbekistan is one of the countries that are culturally closest to the Turks, seeing cities such as Tashkent, Bukhara, Samarkand, and Khiva and meeting Uzbek people gave me emotional moments in terms of understanding my roots and cultural values. The people and customs are very familiar. The names of many cities in Turkey are the same here. When Uzbeks realize that I am Turkish, they show their immense hospitability. I have not had difficulty understanding their language since lots of Uzbek words same in Turkish. Most of the Uzbek intellectuals are well-known in Turkey, like Alisher Navoi, a statesman and scientist who valued the Turkish language and is one of the important figures of Uzbekistan and Turkish history. In Tashkent, you can find lots of works reminding him, such as the walls of the metro station named after him and a monument built in the Magic City of Tashkent, the Opera House, parks, and names of the streets.

I have been to the Alisher Navoi Opera House many times since they have been performing very famous operas and ballets; in addition, ticket fees are very cheap here. Once I have been to İlkhom Theatre, a well-known theatre in Tashkent, and watched a play written by a famous Uzbek writer Abdullah Kadiry. Uzbekistan is known for its playwrights and poets, most of whom were executed during the 1938. Their statues can be seen in the famous Milliy Bog.

When I was in Tashkent, Turkish National Day, the 23^rd of April-Children’s Bayram, was celebrated in one of the Turkish schools. I went there and watched the ceremonies prepared by the school with the help of the Turkish Embassy. The Turkish ambassador and his wife, who were very friendly, were there too, they had successfully coordinated all the celebrations, which made me proud of my country.

After working hours at the university, I spent a lot of time outside to discover the city before going to the dormitory. What’s more, after work as the days are long, my friends and I went on a sightseeing on the weekends. I traveled the country and posted photos and videos on my social media accounts. I made several interviews with high-profile women politicians in Uzbekistan, such as some senators from the Senate, deputies from the Parliament, academicians, and businesswomen.

Photo 8. Interview with senators from the Senate, and deputies from the Parliament

When I was in Uzbekistan, I had an opportunity to witness two elections: the April 30 referendum on the new constitution, and 9^th July- the elections of the presidency. In both elections, Uzbek people were very calm and far from the excitement about the campaigns compared to the campaigns and elections held in Turkey a month ago.

During my stay in Uzbekistan, I had the opportunity to visit some cities of historically important namely Samarkand, Bukhara, and Khiva. After completing my research in Tashkent, I discovered these famous Uzbekistan cities. My first stop was Urgench, which opens the doors of Khorezm. And I directly flew to Urgench since it was a very long way to the capital city of Tashkent. After having spent a night in Urgench I set off for Khiva, the first site to be inscribed in the World Heritage List in Uzbekistan in 1991. Khiva consists of two parts; Dichan Kala, the outer part of the city, and Ichan Kala, the inner part of the city. The real symbol of the city is the Minaret of Kalta–Minor, the monument of oriental architecture. Its design, 29 meters height, and color made this minaret unique.

After discovering the main tourist attractions of Khiva, I set off for Bukhara, which was also an attractive city. I saw some famous landmarks in the city. One of them is Kalyan Minaret, 45.6 meters in height. It is also known as the Tower of Death because criminals used to be executed by being thrown from the top. I spent a day in Bukhara and tried the famous Bukhara Pilow, which was delicious. The next day I got on Afrosiyob, the fastest train, to Samarkand, the center of the Timurid Empire. Amir Timur is loved in the region. The observatory, located in the city had been built by Ulug Beg, who is both the ruler and scientist and the grandson of Timur. The observatory is considered the most advanced of its time and important in the history of science and was later established in Istanbul.

The borders of the Timurid Empire also included Turkestan within the borders of today’s Kazakhstan, where he had the mausoleum of Ahmet Yesevi built. I had a two-day trip to Shymkent and Turkistan cities in Kazakhstan and visited the tomb of Ahmet Yesevi. When I was there, I went to Turk-Kazakh University and talked to the rector of the university and told her about our project. She was interested in our project and told me that she wanted to take part in such EU projects.

13. Rector of the Yesevi University, Yesevi Tomb, on the way to Turkistan

by Diyorbek Ibragimov, guest researcher from the Law Enforcement Academy of Uzbekistan

It is worth saying that nowadays it is impossible to imagine social life without information technologies. Information technologies have penetrated into every sphere of social life. In particular, in anti-corruption programs developed by the world community, in scientific and applied research, information technologies are considered one of the important positive advancements in preventing corruption.

However, to effectively use the existing opportunities of information technology in the fight against corruption, it is necessary to thoroughly analyze the causes of corruption in each field, the conditions that create opportunities for it, and the dangers of its possible occurrence in the future. Also, introducing the best practices of foreign countries in this regard in fighting against national corruption may not constantly have a positive effect.  After all, corruption has taken root in different forms and conditions in every country and society.

Scientific and practical studies show that there are two different views on the important aspects of the introduction of information technologies in the fight against corruption in the world. First, through ICT opportunities, the entire population has access to open information about the activities of state agencies, as well as active public control over their activities. The impact of ICT against corruption is influenced by the reduction of information asymmetries, the automation of processes, the limitation of public officials’ discretion, and the reduction of intermediaries and red tape (Grönlund et al., 2010). The second is to prevent corruption factors by digitizing the activities of state bodies. In this case, the most important thing is to prevent corruption by reducing the human factor in the implementation of some areas of activity of state bodies.

In today’s world, the introduction of modern information technologies in the fight against corruption plays a significant role in promoting transparency, and accountability, and preventing various forms of misconduct in the activities of all government institutions. When specialists describe it, they refer to “creating accountability by exposing misconduct about situations that occur within the government” (Roberts, 2002). In fact, creating accountability is considered one of the most important methods to reduce corruption. Therefore, one of the most important and effective methods in combating corruption within government institutions is the establishment of transparent accountability platforms. Through such platforms, citizens have direct access to familiarize themselves with the activities of the government, particularly the utilization of the main budgetary funds, obtaining and analyzing real financial information about financial operations, and having the opportunity to assess them. However, despite the advantages of modern information technologies in ensuring the transparency of government leadership and the activities of government institutions, there are challenges in fully utilizing their capabilities. Online platforms that have been emphasized as effective tools are not sufficiently developed, and the availability of up-to-date information is often restricted, limiting access to essential data. Additionally, the unreliability of internet resources and other factors undermine their direct impact.

Therefore, the principle of transparency in the functioning of government institutions plays a crucial role in combating corruption and determining its effectiveness. In particular, a study conducted by the research group Oxford Insights in 2019 analyzed the transparency of information and the level of corruption risks within government institutions (Petheram, Pasquarell & Stirling, 2019). The study results suggest that there is no direct and strict relationship between the level of transparency and the level of corruption. Exactly, in countries like Switzerland where the level of information transparency in government institutions is low, the level of corruption is also low. Conversely, in countries like Brazil where information transparency is high, the level of corruption is also high.

Therefore, in Uzbekistan, it is necessary to ensure the transparency of the activities of the state agencies, so that they do not become symbolic in the prevention of corruption. For this, it is necessary to implement the transparency of the state management system and the activities of state agencies through artificial intelligence that excludes the human factor. Otherwise, there is a high possibility that this system will be used as an informational tool rather than a fight against corruption.

Additionally, crowdsourcing platforms are playing an important role in the fight against corruption nowadays. According to the opinions of field experts, modern technologies like these are effectively contributing to tackling corruption. Particularly, citizens are actively providing positive outcomes by sharing information about corruption through mobile communications and the Internet, which helps in proactively addressing corruption issues. Moreover, according to the Telecommunication Development Sector (ITU-D) 2022, a staggering 8 billion people worldwide, which accounts for 66% of the global population, currently use the Internet. This indicates the significant potential to shape and enhance citizens’ ability to engage in the fight against corruption, including reporting and combating it. The widespread utilization of the internet not only facilitates awareness but also promotes advancement and acceleration in the efforts to combat corruption.

“Undoubtedly, combating corruption in such a system is considered an important step in shaping the ability to work against it in society as a whole. However, it should also be noted that, in our opinion, such a system is primarily designed to share, that is, to report, cases of petty corruption in the public sector.

Furthermore, worldwide, including in Uzbekistan, digitizing government services has been one of the important steps in tackling corruption. Digitizing government services reduces direct interactions between citizens and officials, streamlining the process of service delivery. This automation of service provision also allows for the identification of any monetary transactions that may be required for the completion of a specific service between citizens and officials. Therefore, it is crucial to prioritize the implementation of any necessary financial mechanisms that enable citizens to carry out government services electronically, including electronic payments for citizenship and other services, in order to create a range of possibilities in this area. This indicates that in the fight against government corruption, the extent to which modern information technologies are introduced is crucial. If these technologies are not actively and effectively implemented within the government administration system and if citizens are not provided with the opportunity to utilize them actively and efficiently, it hinders the anticipated benefits and outcomes.

Indeed, for example, according to the highest ratings in terms of internet penetration and usage among countries, Uzbekistan is not among them (Statista, 2023). In the highest indicators of this rating, we can see countries such as Denmark, Sweden, and Norway, which are recognized as countries with a low corruption factor in the rating of Transparency International, where service sectors and the public administration system are digitized.

                      Additionally, the advancement of the usage of digital payment systems by citizens also reduces the need for cash transactions, which in itself serves as an important indicator for combating corruption within society. Furthermore, if we consider the experience of countries that consistently rank highest in the corruption index, we can observe that these countries often have highly digitized payment systems in place. For example, although it was the first country to issue banknotes, Sweden is the most cashless society in the world today, with just 32 ATMs in operation per 100,000 people, and with more than 98% of its citizens owning a debit/credit card and some studies suggest that physical cash could be eradicated from its economy by 2024. According to the World Bank, with 98% of its citizens having embraced the debit/credit card system, Norway could be the first country in Europe to declare itself cashless. Furthermore, data shows that in 2021, only between 2 and 3% of transactions at the point of sale in Norway were carried out using cash (FinTech, 2022). It is necessary to emphasize that a high prevalence of cash transactions within society can facilitate corrupt practices by making them easier to carry out. Therefore, reducing the reliance on cash transactions can be considered as one of the factors that make it more difficult for individuals to engage in corrupt activities.

In addition to that, one of the main reasons for the occurrence of corrupt acts in society is the abuse of authority by responsible individuals, who exploit their powers in violation of the law by making arbitrary administrative decisions. Consequently, there is a growing trend globally towards automating the decision-making process. The automation of decision-making involves gathering legally relevant information and making legal decisions based on it. Within the framework of the proposed model, the official is excluded from traditional corruption schemes as a voluntary decision-making subject, so there is no need to pay bribes (Rakhimov & Turdiboev, 2021).

Indeed, combating corruption is crucial in ensuring the protection of human rights, and one of the key objectives is the effective implementation of fair and impartial justice (UNODC, 2017). In reality, courts serve as the sole institution responsible for safeguarding and guaranteeing human rights through the implementation of fair justice. Therefore, ensuring the legality of decisions made by courts and enhancing the integrity of their activities are among the most important tasks in combating corruption in the judicial system. In this regard, numerous international investigations, projects, and extensive studies have been conducted. Particularly, the automation of the court decision-making process contributes to transparency, accountability, independence, equal treatment before the law, and the delivery of fair justice (Matacic, 2018; Zalnieriute and Bell, 2019; Morison and Harkens, 2019; Wang, 2020; English et al., 2021). These efforts aim to eliminate the possibility of corrupt practices in the court decision-making process and ensure integrity.

Artificial Intelligence (“AI”) is swiftly becoming a relevant component in judicial decision-making processes around the globe (Reiling, 2020). In summary, in some investigations, opinions exist regarding the necessity of using artificial intelligence algorithms in the 4 stages of information processing: 1) information acquisition; 2) information analysis; 3) decision-making; 4) ensuring the implementation of decisions (D.Barysė; R.Sarel, 2023).

In summary, the fight against corruption and the direct connection between corruption and information technologies are comprised of the following aspects. According to analyses provided by Transparency International (Transparency International, 2022) Corruption can take many forms, and can include behaviors like:

– public servants demanding or taking money or favours in exchange for services,

– politicians misusing public money or granting public jobs or contracts to their sponsors, friends, and families,

– corporations bribing officials to get lucrative deals.

In situations like these, it is possible to observe the effectiveness of modern information technologies in combating them and taking preventive measures based on the aforementioned analyses. In short, modern information technologies empower responsible individuals to monitor the actions of authorities, reduce instances of misappropriation of state funds by them, and create opportunities to oversee every financial operation. Additionally, it enables simplifying cash transactions within society or providing other valuable assets.

In general, information technologies are not the primary means of combating corruption, but they are considered one of the effective methods in the fight against corruption. Its positive capabilities, in conjunction with other methods and institutions, contribute to combating corruption in accordance with the intended purpose. This implies that in utilizing information technologies against corruption, it should be implemented in a comprehensive manner, taking into account political, legal, socioeconomic, and infrastructural factors.

REFERENCES

А.Grоnlund, R.Heacock & D.Sasaki, J.Hellstrоm, W.Al-Saqaf. (2010) Increasing Transparency and Fighting Corruption Through ICT Empowering People and Communities SPIDER ICT4D Series no. 3. [online resource] URL: https://spider1.blogs.dsv.su.se/wpcontent/blogs.dir/362/files/2016/11/SpiderICT4D-series-3-Increasing-transparency-and-fighting-corruption-through-ICT.pdf.

Roberts, 2002. Keeping public officials accountable through dialogue: Resolving the accountability paradox. Public Administration Review, 62(6), 658–669. doi:10.1111/1540-6210.00248

Petheram, Pasquarelli, Stirling, 2019. The Next Generation of Anti-Corruption Tools: Big Data, Open Data & Artificial Intelligence, available at: https://www.oxfordinsights.com/ai-for-anticorruption (accessed 10 June 2021).

The Telecommunication Development Sector (ITU-D) 2022 [online resource] https://www.itu.int/en/ITU-D/Pages/About.aspx).

Statista, 2023. [online resource] https://www.statista.com/statistics/227082/countries-with-the-highest-internet-penetration-rate/

FinTech, 2022. Top SIX Digital Payments Countries About to go Cashless. [online resource] https://fintechmagazine.com/digital payments/top-six-digital-payments-countries-about-to-go-cashless

С.Рахимов, Х.Турдибоев, 2021. Коррупцияга қарши курашишда янги рақамли технологияларни қўллаш. “Iqtisodiyot va innovatsion texnologiyalar” ilmiy elektron jurnali. № 3, may-iyun, 2021 yil, 333-338.

UNODC, 2017. [online resource] https://www.unodc.org/dohadeclaration/en/news/2018/04/corruption–human-rights–and-judicial-independence.htm   

Matacic, (2018) Are algorithms good judges? Science 359:263–263. https://doi.org/10.1126/science.359.6373.263

Morison J, Harkens A (2019) Re-engineering justice? Robot judges, computerized courts, and (semi)automated legal decision-making. Leg Stud 39:618–635. https://doi.org/10.1017/lst.2019.5

Wang N (2020) “Black Box Justice”: robot judges and AI-based Judgment processes in China’s Court system. In: 2020 IEEE international symposium on Technology and Society (ISTAS). IEEE, Tempe, AZ, USA, pp 58–65

English S, Denison S, Friedman O (2021) The computer judge: expectations about algorithmic decisionmaking. In: Proceedings of the annual meeting of the cognitive science society, pp 1991–1996

Reiling AD (2020) Courts and artificial intelligence. Int J Court Adm 11:1

D.Barysė, R.Sarel, 2023. Algorithms in the court: does it matter which part of the judicial decision-making is automated? Artif Intell Law (2023). https://doi.org/10.1007/s10506-022-09343-6

Transparency International, 2022. What is corruption? https://www.transparency.org/en/what-is-corruption

by Jintao Yang, PhD student at the University of Latvia

Hello everyone! Welcome to my blog! My name is Jintao Yang, and I am a PhD student from the Faculty of Business, Economics and Management at the University of Latvia, Riga, Republic of Latvia. In January 2023, I had the opportunity to participate in the “Central Asian Law: Legal Cultures and Business Environments in Central Asia” research and training project funded by the European Commission. My secondment program took place at the Westminster International University in Tashkent (WIUT), Uzbekistan, from January to April 2023, where I aimed to determine the influencing factors of foreign direct investment (FDI) flows from European Union (EU) to Central Asia.

My primary objective during the secondment was to explore the influencing factors of FDI flows from the EU to Central Asia. This included determining the factors that attract EU FDI to the region and the challenges that EU companies face when investing in the Central Asian region. During the secondment, I had the opportunity to meet many nice colleagues within our project, including Professor Erhan Dogan, Professor Deniz GENÇ, Dr. Huajing Yang and Professor Meral Balci. I am very grateful for their support and help. Additionally, I would like to express my thanks to every senior in the office of the Law Department of WIUT for their care and concern.

One of the biggest challenges I faced during the secondment was the unavailability of data on FDI flows and stocks from the European Union to Uzbekistan. However, with the help of Mr. Akhtem Useinov, Senior R&D Officer at WIUT, I found the Uzbek version of the data in the library of the university. Really thank him so much! Through my research, I gained new insights into the influencing factors of FDI flows from the European Union to Central Asia. The research experience in the region will be one of the important keys to start my academic career.

Overall, the secondment experience in Uzbekistan was particularly valuable. Not only have I made many new research connections here, but a deeper understanding of the business environment in Central Asia will benefit my future research.

“☀️👉🇺🇿😍And let’s not forget the best part of my secondment in Uzbekistan🇺🇿 – the sunshine☀️! As a researcher🕵️, I can confirm that the UV rays have had a significant impact on my data analysis skills📊🧑‍💻. So, if you’re looking for a career boost📈and a golden tan🌟, I highly recommend a research secondment in Uzbekistan🇺🇿😉.”

Thanks! Rahmat! Teşekkürler! Paldies! Xiexie!

by Diyorbek Ibragimov, guest researcher from the Law Enforcement Academy of Uzbekistan

About me

Welcome to my blog post about the secondment experience at Lund University in Sweden! My name is Diyorbek Ibragimov and I am a guest researcher at Lund University. My secondment started on the 1st of February. In this blog post, I would like to talk about my experience in Sweden, certain aspects of Swedish culture, also the research environment at Lund University, as well as about my project.

It is essential to mention that, Lund University is highly ranked in many international comparisons of higher education institutions. The University has been consistently placed in the global top 100 in different university rankings. Therefore, it gave me great pleasure to conduct research at this university.

Lund University made an impression on me as a wonderful real science institution that provides equal opportunities for students, university staff, and visiting researchers like us. As soon as I started my research work, I attended a seminar discussion of Marie Leth-Espensen’s research on the topic of “Animals and the politics of suffering” and Heraclitos Muhire’s research on the topic of “Revolving doors to the private sector? A socio-legal study on top state and region officials’ transitions to the private sector and their regulation adults”. And, they gave me a wonderful opportunity to enrich my scientific skills and experience.  

About my research work

Currently, corruption is one of the painful problems not only in Central Asian countries but also in the whole world. It should be noted that corruption has negative effects on the economic, social, and political development of the country. So, “corruption, primarily affecting weak states in Eastern Europe, Africa, Asia, and Latin America, is the main cause of poverty and inequality” (Urinboyev, Mustafoev, 2023). This can be justified by several approaches. One of the most important of them is in countries with a lower economic index, the standard of living of the population will be also lower. As a result of this, these reasons create conditions for evolving situations such as attempts to improve living conditions and gain wealth by the population, especially officials, through corruption.

By the way, the construction industry has become one of the biggest businesses. The increasing of population in the world is causing for a growing need for construction. Studies show it has predicted that global construction output will increase by more than 70%, to US $15 trillion per year worldwide, by 2025. Some of those countries where the highest growth is predicted are also perceived as having the highest levels of corruption (K&L Gates, 2014). In turn, it should be noted that corruption risks are also increasing in this field.

On the other hand, it has been proven that сorruption in the construction sector can directly threaten human life, as can be seen in the examples of disasters in Turkey and Syria. On the night of 5 February, a severe earthquake occurred in southern Turkey on the border with Syria. Twelve days after a devastating earthquake hit Turkey and Syria, more than 46,000 people have died and more than 84,000 buildings have either been severely damaged, need urgent demolition, or collapsed, according to officials. What attracted my attention was that the city of Erzin, which is situated 80-100 km away from the major earthquake-damaged cities in Turkey, was not damaged by the earthquake (Aljazeera, 2023).  No major damage, and no deaths, because, reportedly, they have always been strict to enforce construction quality standards.

Who can guarantee that such natural disasters will not happen again in every part of the world? Therefore, the prevention of corruption in the construction industries, and the implementation of construction works based on the established standards is one of the main priority tasks today. One of the most important signs of preventing corruption in the construction industry is the identification and assessment of corruption risks. In particular, Charles Louis Montesquieu said in his philosophical legal work “On the Spirit of Laws” (1748), “… the intelligent legislator is not concerned about the punishment of crime, but about the prevention of crimes”.

In general, in Uzbekistan, several measures are being implemented to prevent corruption, identification, and assessment of corruption risks not only in the construction sector but also in other areas. As presented above, the role of construction in the life of the country has become significant, in particular, as of January 1, 2021, as the number of enterprises and organizations in the construction sector has reached 41,000, which has increased by 1.7 times or 17,100 units compared to 2017 (Stat.uz, 2021). All this imposes an obligation to make this industry an area free from corruption, building facilities that can meet the standards for the future.

It should be noted that in Uzbekistan, as in other CIS member states, existing social relations are regulated by adopting and applying normative legal documents. In particular, the Law “On Combating Corruption” was adopted, which defines the main directions of the state policy in the field of combating corruption, the state bodies that directly carry out anti-corruption activities, and their duties and functions. In addition, the Decision of the President of the Republic of Uzbekistan “On measures to improve mechanisms to remove corruption risks in the field of public administration and expand public participation in this sphere” was adopted in order to identify corruption risks and eliminate them. Most importantly, in order to prevent corruption risks in the construction industry, the “Transparent Construction” information system was launched, which includes the development of an architectural-planning task, the examination of project-estimate documents, construction control, in a word, the processes from beginning to the end of construction. The main purpose is to prevent corruption in this field, as well as to reduce the human factor as much as possible. The most important point is that this system is directly integrated into the prosecutor’s office, and it gives an opportunity to the prosecutor’s office for effective prosecutorial supervision over the execution of legislation in this field.

The institutional and legal framework for anti-corruption reviews has been established in Uzbekistan, but the existing potential is not being used as effectively as it could be (Urinboev, 2020).   

Despite the implementation of a number of measures to prevent corruption, identification, and assessment of corruption risks in Uzbekistan, the country’s place in international rankings and indexes remains behind. This means that there are still drawbacks in implementing the actual content of normative legal documents aimed at preventing corruption. That is, the development of legal documents aimed at identifying and preventing corruption risks in the construction sector does not mean that corruption problems in this sector have been eliminated.

During my guest research stay, I will try to study this topic and provide an analysis of existing problems and shortcomings in the identification, assessment, and prevention of corruption risks in the construction sector, as well as opportunities for their elimination.

Building culture in Lund

In general, in Lund, special attention is paid to urban planning, the construction industry, and the fact that the buildings show the bright beauty of the 18th century and it attracts a person. It is obvious that every building was built with high quality. Therefore, in Sweden, specifically in Lund, I am deeply interested in studying the construction culture, the mechanism of implementation of the processes related to it, and getting acquainted with the work carried out in this regard to identify and evaluate corruption risks. I will share my learnings and impressions on this subject in future analyses, articles, and blogs.

REFERENCES

1. Aljazeera, 2023. Earthquake death toll surpasses 46,000 in Syria, Turkey. https://ww.
aljazeera.com/news/2023/2/18/earthquake-death-toll-surpasses-46000-in-syria-turkey.

3. K&L Gates, 2014. Biggest Risk of Corruption in The Construction Industry. The Global Picture.

2. Stat.uz, 2021. Information on the demographics of the activities of enterprises and organizations in the Republic of Uzbekistan. https://stat.uz/images/uploads/reliz2021/presreliz_101122_uzb_compressed.pdf

4. Urinboyev R, Mustafoev T., 2023. Law, society, and corruption: exploring (Anti-) corruption from interdisciplinary and multilevel perspectives. Research report / Coursebook in Sociology of law 2023:1, 7.

5. Urinboev R, 2020. Central Asian law: legal cultures, governance, and business environment in Central Asia. A collection of papers from Central Asian guest researchers seconded to Lund university, 79.   

by Krists Ansons, PhD candidate at the University of Latvia

I am Krists Ansons and I am a PhD student at the University of Latvia. In Kyrgyzstan my hosting institution was LLC “SIAR research&consulting” which helped me with my research, information gathering and even gave general advice on living in Kyrgyzstan. I work in international tax law, transfer pricing and in my daily work specialize in conclusion of advance pricing arrangements and solving mutual agreement procedures. So far, I have lived for 6 months in Kyrgyzstan, from middle of April 2022 until now, end of September 2022. Central Asian Law project is relevant to me in three ways – personally, professionally and academically. But for the sake of convenience, I will start with my personal experience in Kyrgyzstan so far.

Central Asian Law project is relevant to me personally, as applying to this project provided me with a wonderful opportunity to widen my point of view and improve my knowledge of inter culture business relations. During this project I realized, that Kyrgyzstan, is a very accessible country for tourists. For example, I, as a citizen of an EU state, could come to Kyrgyzstan without a visa, and I could stay there for up to two months per visit. Furthermore, it was possible to cross the border and come back, to extend the visit. This lack of required formalities was refreshing, as my trip required almost no bureaucracy. As there were no direct flights from Latvia to Kyrgyzstan, I opted a flight from Riga to Bishkek (the capital of Kyrgyzstan) with transfer in Istanbul (Turkish Airlines) the total time spent on the flights was around 9 hours, so upon arrival I was pretty tired. My first impression started with the look from the airplane window to the Manas international airport, which from above resembled more of a military base. Yet from the inside it looked like a typical airport, with check of passport, and scan of baggage, and some available shops. I recommend everyone upon arrival, if you want to use internet and order a taxi in the city, to buy a Kyrgyz sim card in the airport, as it is very easy to do, so as no formalities are required. Furthermore, it is cheap. For around 10 dollars it is possible to buy a local sim card with unlimited internet for a month.

My second impression was exiting the airport, as outside I was greeted by numerous taxi drivers offering a fare, which came as a complete surprise to me, as so far the airport was a quiet, calm and orderly place – yet at the door, there was a crowd waiting. My hotel had already arranged a transfer there, so I went past without taking their services. Speaking about driving, Kyrgyz drivers tend to drive dangerously, but confidently, as few people follow the road rules. Most of the people in Kyrgyzstan are Muslim, but Kyrgyzstan is a secular country, therefore religion is separated from the state. In Kyrgyzstan, there are two official languages the Kyrgyz language and Russian. As I had learned Russian at school, I could use it comfortably to get around, but in day-to-day life English is used rarely, most receptionists in hotels and servers in restaurants knew it, but you should not expect everyone here to know it as English language is not a mandatory subject in their education system. Regarding the food, almost all the dishes in Kyrgyzstan are prepared from meat products.

The country itself is gorgeous, I visited the Kyrgyzstan capital Bishkek and so-called southern capital Osh. In these cities you can quite easily rent an apartment or a room in hotel using booking.com, Airbnb and other sites. I also visited Issyk-Kul lake, which is one of the largest mountain lakes in the world. In between these locations I saw beautiful mountains (80% of the country is covered in mountains), where the locals had set up their summer yurts and set up their flocks of horses, sheep and other animals to graze. I also saw roadside cafes, roadside mosques and other smaller and bigger cities. I also tried my hand at riding a horse for the first time in here. Summer here is hot, the temperature can reach above 35C degrees, yet the mountains are cool. Even in the middle of summer the people living in their summer yurts were dressed warm.

It was easy to live in Bishkek as money exchanges, shops, taxis and ATMs are everywhere. Regardless if you like to bargain or not, I recommend to visit the eastern style bazaars, as there you can buy almost everything while getting to know a little bit of the people’s mentality. I liked living there, and really felt myself at home, as everything a remote worker may need is there, also the cost of products, transport and services is significantly lower than in other countries.

Therefore, I can conclude that having the suffix “stan” and formerly being in the Soviet Union does not necessarily mean that there would be any obstacles for tourism and daily living.

Central Asian Law project is relevant to me professionally, as Central Asian countries, including Kyrgyzstan, are one of the priority cooperation partners of Latvia’s development cooperation policy. Furthermore, Kyrgyzstan has concluded Treaty for the avoidance of double taxation with Latvia which entered in force on 04.03.2008. Therefore, there is a basis for substantial level of economic cooperation between Latvia and Kyrgyzstan, if there is demand and supply. According to the central statistics bureau of Latvia, for the 2021. financial reporting year companies from Republic of Latvia exported goods to Kyrgyzstan in the value of 7 million EUR (mainly food products, canned sardines, canned mackerel, malt beer, medicine), and imported goods from Kyrgyzstan in the value of 600 000 EUR (mainly metals and its products). Imports from Kyrgyzstan to Latvia used to be roughly 3 times higher, but starting from 2020 financial reporting year Kyrgyzstan has decreased export of ore and precious metals, that used to make up the bulk of the imports to Latvia.

Central Asian Law project is relevant to me academically, as my thesis is on “the importance of international mutual agreement procedures in tax cases”. Taxes are the basis of the jurisdiction’s existence as the payment of taxes is part of a public contract (for example, constitution) between citizens or residents, and the jurisdiction. My thesis is linked with international taxation, which is relevant when a person or business is subject to the tax laws of different jurisdictions. With the development of technology, for companies and individuals, the place of performing economic activity and its auxiliary activities is no longer so important, hence person or business might be subject to the tax laws of different jurisdictions. Each jurisdiction has built their tax system based on their own policies and definitions which are not always coordinated with the other jurisdictions. The concluded Treaties for the avoidance of double taxation works to align the taxing rights of jurisdictions when there is an international element, that is in case when double taxation might occur, when it has occurred, or when it will occur. Double taxation is a restriction on property rights where the same profits are taxed twice. Tax law distinguishes between two types of double taxation: legal double taxation (the same income of one taxpayer is taxed in several countries), economic double taxation (the same income of two different taxpayers is taxed in the same country). It goes without saying that in this age of globalization there should be a right not to be taxed twice for the same income, therefore an instrument is necessary to prevent this situation. This instrument is tax conventions which contain mechanisms that prevent double taxation. Mutual agreement procedures are one of the instruments, when the normal application of the treaty norms has not resulted in solving the double taxation case. According to the treaty the tax payer can ask for the states to initiate this mutual agreement procedure to solve the double taxation case.

My task as a researcher within the scope of the Central Asian Law project was to find out how Kyrgyzstan has implemented the 25th paragraph (mutual agreement procedures) of the Model Tax Convention on Income and on Capital in their 30 concluded treaties for the avoidance of double taxation with the purpose of finding out if any changes would be necessary for them to align with the latest OECD recommendations and minimum standards. My other task was to find out how and if the 25th paragraph is applied in practice. These tasks are relevant as functional mutual agreement procedure regulation helps prevent double taxation, therefore making the jurisdiction better target for international businesses and investments.

Regarding these tasks I will publish the results in my paper as I finish my work within the Central Asian Law project.