LITTLE KNOWN, LARGE PROFITS

Alice Wilson looks at the role of corporations, including Ikea, Cargill and Credit Suisse in the ex-communist Central Asian republics

Cotton

Throughout the region, cotton is a 'killer crop'. The more repressive the regime, the worse the cotton indutry's effect on the population. It is a resource intensive crop which puts pressure on water supply. Through intensive pesticide use and aggressive irrigation systems it has caused ecological collapse in the Aral Sea basin and beyond. This 'ecocide' has been widely documented1, but the cotton economy is also an integral feature of the dictatorial and authoritarian regimes that dominate in the region2.

In Central Asia, cotton harvesting is still a highly labour intensive procedure; instead of mechanisation, forced labour ensures the harvest is collected. Uzbekistan and Turkmenistan are cases in point. Two of the world's most repressive regimes, countries whose populations live in fear and poverty. Cotton is one of their most important exports. A 2005 report by the International Crisis Group went as far as to say 'The cotton monoculture is more destructive to Central Asia's future than the tons of herion that regularly transit the region'3. Cotton from Central Asia constitutes over 6% of the total world production and over 15% of all cotton exports worldwide.

Since the massacre of May 2005 (when the government killed around 200 demonstrators in the town of Andijan) international censure has fallen on the Uzbekistan, but little effect has been felt in the cotton trade. The people who grow cotton in Uzbekistan and Turkmenistan neither own the land they work, nor do they have any choice as to the crop they grow, the price they charge for their labour or the product itself. There is only one buyer they can deal with: the state organisation Uzpakhtasanoat which then does the lucrative export deals. Foreign buyers are required to pre pay up to 80%, which they conveniently borrow from foreign banks such as ABN AMRO, Societe Generale and Credit Suisse, with a counter guarantee by the national bank of Uzbekistan. These international cotton traders then sell to textile manufacturers, sometimes through middle men cotton traders such as Paul Reinhart AG (a family owned company based in switzerland), and Liverpool based Cargill Cotton, Dunavant Cotton and ECOM USA.

Recently, thanks to foreign involvement, Turkmenistan has started exporting finished products, such as jeans and bed linen, that are sold internationally through chains including Wall Mart and Ikea. Uzbekistan is Central Asia's largest cotton producer as well as being a leading lint cotton producer -ranking second after the USA. As these countries develop their manufacturing industries, further questions arise as to the conditions for those working in them. In countries where the government considers its population to be an expendable resource and where their market share depends on them keeping their prices low- it is hard to imagine that working conditions are a priority.

Throughout the Soviet period, people were forced to join in the cotton harvest, but now in Turkmenistan, where life expectancy is on a par with some of the poorest, war torn African States, that practice has been extended and intensified. Child labour is common4, and medical professionals are compelled to leave their hospitals and go to work in the fields. Thanks to government decrees sacking nurses and medical auxiliaries the hospitals and medical centres are not staffed, and that means people in need of simple treatment die5.

Natural gas

This region is also incredibly rich in natural resources. Turkmenistan has the world’s fifth largest gas reserves, which Russian fossil fuel giant Gazprom is eager to exploit. It should be noted that during the 'Gas crisis' with Ukraine early in 2006, Gazprom looked to Turkmenistan for increased supplies (to replace the gas alledgedly stolen in Ukrane) to make sure Europe got what it paid for. Through gas field and pipeline development schemes Gazprom makes sure it gets a bargain basement price for its gas. The revenues generated from Turkmenistan's gas sales disappear into the personal pocket and vanity projects of Turkmenbashy, the country’s ruthless and eccentric dictator. While his people are chronically malnourished he orders the construction of a ski resort on the snowless foothills of the border with Iran.

EU pushing ahead with trade agreement

On the 21st of March, the European Parliament’s Foreign Affairs Committee approved a proposal for an interim trade agreement with Turkmenistan. The proposal endorses an Interim Agreement with Turkmenistan, to regulate 'trade and trade-related relations' until a full Partnership and Cooperation Agreement is ratified by the member states and the Turkmen government.6 Letters of protest have been written, but it is clear that while there is cheap cotton and textiles to be had, especially where there’s a possibility of lucrative gas deals, the human rights abuses can be put to one side.