Kyrgyzstan’s Clumsy Application of an Elegant Solution to a Primitive Problem

Kyrgyzstan has a lot of problems. One in particular is that its economy is an almost pitch-perfect caricature of a post-Soviet kleptocracy, such that the Kumtor Gold Mine officially accounts for 10 percent of GDP, unofficially accounts for 30 percent, is the sine qua non of the shadow economy.

Its second problem is that it would very much like to nationalize the mine, but would like its trickle of foreign investment not to disappear. How to accomplish this incredibly bad idea? An outright nationalization would end or nearly end the tiny lifeline of foreign investment that keeps the country afloat. A purchase of the controlling share from Centerra, the Canadian corporation that set the thing up, would bankrupt the country.

So, in a bow to modern sensibilities, Bishkek is suing Centerra for environmental damage. In Bishkek, also known as the International Home of Due Process.

It probably struck everyone involved as terribly clever, the problem is that someone left it to Kyrgyzstan’s government to execute it. A suit in, say, Canada, could have come across as a public relations coup, a sign that Bishkek wanted more than a bargaining position and was serious about due process. Because Bishkek is not run by the sharpest knives in the drawer, it is instead an utterly transparent attempt to nationalize the mine by fiat with a laughable fig leaf of a judgment as explanation.

This is no way to run a country. Kyrgyzstan is not the sort of autocracy that neighboring Turkmenistan is, and it has more potential for growth and development by far. Instead, the government is throwing it away to take away political pressure from the opposition and those citizens who darkly and in all likelihood correctly suspect that the original deal was riddled with corruption.

Centerra has hardly been blameless in all this, but give credit to Kyrgyzstan: Even if their claims are one hundred percent legitimate, they look like thieves and incompetent thugs.

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