When you see deals like this, you have to wonder how serious America is about investing in the New Silk Road -- which is how the State Department describes the concept for "prosperity" in the Central Asian region after the withdrawal of US troops in 2014.
Be sure to follow my curated news clips on Scoop.it called Northern Distribution Network-New Silk Road to see in fact how rocky things are -- NATO troops continue to die in battle; a plane crashed recently killed 7; there are terrible scandals about the CIA's cash spent on Karzai and cronies going to waste; there are Pakistani tribal elders demonstrating against the NATO trucking routes. James Dobbins, Obama's new special representative to the region will have a very tough and unenviable assignment; his predecessors include Richard Holbrooke, who died of heart failure and Marc Grossman, who was said to keep a low profile.
You'd be forgiven for thinking that "the New Silk Road" merely means NATO traffic and business through Afghanistan. It's also the rest of the old Silk Road of the ancient caravan-serai in the countries of Central Asia like Uzbekistan.
That's where South Korea has just signed a $3.9 billion deal to build a gas complex, according to trend.az:
Kogas signs agreement for $3.9 billion gas-chemical complex - Trend.az - The Government of Uzbekistan and South Korean Korea Gas Corporation (Kogas) signed a direct agreement on the construction of the Ustyurt Gas Chemical Complex
Or look at China, which has $15 million just in Jizzak:
Chinese companies implement $15 million worth projects in Jizzak SIZ - Trend.az -
Jizzak SIZ was created in March of this year according to the decree of the President of Uzbekistan.
I'm not suggesting that it's a good idea for American companies to invest in this region, given the corruption and massive human rights violations -- which in fact are not good for business, as the same corrupt institutions that violate people's civil rights to stay in power are the same ones that take bribes or suddenly confiscate your investment; they are intertwined.
The State Department can't really avoid reporting these bad things about the poor investment climate in Uzbekistan where Oxus Gold saw its stake confiscated and were forced to leave at a loss and where Turkish companies have been hounded, suspected of fueling religious extremism, and expelled, and there have been other debacles, for example, the Germans not getting their debts repaid. W
With GM reducing its car sales in Russia -- the market for the Uzbek-manufactured vehicles -- I wonder how this joint venture, originally inherited from South Korea's Daewoo when it was taken over by GM, will be impacted. GM says it has doubled production in Uzbekistan in in 7 years. Even so, reportedly 94% of new cars in Uzbekistan are made by GM.
Paging Mitt Romney to ask whether this helps or hurts American jobs for GM, which declared bankruptcy in the recession, got some government-backed bail-out loans but then claimed to have paid them back in full after restructuring in which numerous workers were fired, and some Congressmen questioned their pay-back as it came from other tax-payer funds:
GM sold 121,584 vehicles in Uzbekistan last year, making the country the eighth-largest market for its Chevrolet brand. The joint venture produced more than 225,000 cars last year and will raise output to 250,000 units this year.
At one level, if it keeps the company in buiness, even if the jobs go to Uzbeks, it's a plus.
But on the other hand, the reality is, China, South Korea, even India are investing more in this region and apparently looking the other way when it comes to corruption and human rights problems that ultimately will haunt them. They are spending large amounts of money. And this is now a foreign policy fact of life which means that as the US "pivots" toward China for reasons I can never really grasp, they will find themselves with the harsh reality that the regions of the world that they think are "pacified" or "taking care of themselves" or merely "withdrawn from" are what are being Asia's powerhouse.
And maybe the job is just to provide a bulwark to Central Asian leaders -- who in the long term may become better as the tyrants age out -- so they have choices besides being taken over by China -- and of course, have a hedge against Russia, which has also had its failures in a region increasingly turning anti-Moscow:
Not every foreign investor has met with success in Uzbekistan. Russia's top mobile phone operator, MTS, which trades on the New York Stock Exchange, has written off $1.1 billion after its Uzbek licence was permanently revoked on Aug. 13.
There's a certain lobbying force in the US which seems to be over-friendly to dictators -- and gets its way despite the objectsions of human rights groups and even others in government. Says the Asia Times:
It was reported that the American business delegation, headed by Carolyn Lamm, chairwoman of the American-Uzbekistan Chamber of Commerce (AUCC), and including representatives of over 30 US companies such as Boeing, Solar Turbines, General Motors, Merk, General Electric Energy, Anadarko, Zeppelin International, Case New Holland, Nukem and others, attended the business forum.
Lamm is former head of the American Bar Association and you wonder why she doesn't get more challenge from her colleagues in the ABA, but then, the ABA is not really a human rights organization but a vehicle to expend USAID money for "training" that usually enriches US contractors.
Senior Uzbek government officials in charge of the economic sector, including ministers of finance, the economy, foreign economic relations, investments and trade and other high level officials, were also in attendance to brief their guests on the state of Uzbek economy and to discuss possible investment and economic cooperation.
The forum has been very successful, according to Uzbekistan's National News Agency, as the two sides reached understanding on 21 economic and investment projects covering areas such as machinery, metal processing, energy, oil and gas mining, petrochemicals, electrotechnical processes, uranium mining, pharmaceuticals, and others, with a total value of US$2.8 billion.
Obviously, if the total value of US projects here is $2.8 billion, that doesn't even equal one project from South Korea noted above.
Fozil Mashrab at the Asia Times last year interestingly said that Uzbekistan's "look East" policy seeking investment from places like South Korea or Malaysia was only a function of Western reticence, given that the West suspended ties with Uzbekistan after the Andijan massacre, when hundreds of people were gunned down by Uzbek troops for protesting injustices in 2005 after an opposition jail-break in which police were killed.
But even though the US restored ties and even some forms of military aid, subject to review, it hasn't stopped the "look East" policy in fact, which I think was never going anywhere.