Wednesday, September 5, 2018

September's Book: Dictators without Borders

Dictators without Borders by Alexander Cooley and John Heathershaw
Politics (2017 - 231 pp.)

Dictators without Borders explores the connections between internal security measures and global financing efforts conducted by the ex-Soviet dictators of Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan. Internally, these dictators use foreign direct investment to prop up their regimes; externally, they set up shell corporations to hide funds offshore, and then hunt down enemies through "extraterritorial security measures".* The global aspect is very much in step with these countries' histories: Cooley and Heathershaw use the Russian Empire's overseas agents and the assassination of Leon Trotsky in Mexico City in 1940 as historical inspirations, and time the book so that it was released a year after the Panama Papers.** 

Under the heading aptly titled "Our argument", Cooley and Heathershaw state: "In this book we argue that Central Asia is best understood by focusing on the sprawling, informal transnational links between elites from Astana to London and Bishkek to Beijing." (23) These links include Western and other banks, law firms and real estate brokers. Cooley and Heathershaw conclude by arguing that Western governments can quell the exodus of investment funds through proper due diligence checks and through greater enforcement of anti-corruption laws.

Central Asia's role as historical Silk Road is prevalent in Western media, such as major parts of Kim Stanley Robinson's The Years of Rice and Salt. (See, for example, "The Alchemist", set in Samarkand, in present-day Uzbekistan.) Here's a map of the Silk Road and a map of current Central Asia.) In Dictators without Borders, the Silk Road becomes a metaphor for the connection between Central Asian governments and foreign^ investors, and transformation of countries like Kyrgyzstan into de facto inland offshores.^^

The American "New Silk Road Initiative" and the Chinese "One Belt, One Road" (OBOR) project figure prominently. Each, however, has run into the virtually ubiquitous roadblock of Central Asian restriction of private enterprise, which effectively funnels foreign investment into state coffers. Regarding the American airfield in Kyrgyzstan during former president Kurmanbek Bakiyev's regime, "US Defence Secretary Robert Gates refers in his memoir to Bakiyev's 'amazingly corrupt' government, which 'saw our continued need for the airfield as a rich source of revenue or, as I called it, extortion.'" (176) Bakiyev's son Maxim now lives in a 3.5-million-pound mansion in Surrey, UK. Regarding OBOR, Cooley and Heathershaw note the difficulty of making highways profitable when they do not lead to businesses: "...merely building infrastructure (the hardware) within a environment as prone to rent-seeking and poor governance as Central Asia is unlikely to reform entrenched crony capitalism - quite the opposite in fact, as these upgraded networks may provide additional opportunities for cronyism and the distribution of informal payments." (179) This mirrors the assertion in The Dictator's Handbook that any dictator under threat immediately invests in a high-quality road toward an international airport.

In addition to the book's Silk Road story, there are four spotlight chapters, one on each country, that concern one country's regime and often a wanted person. Many of the wanted people are ex-regime insiders, such as Kazakhstan's Mukhtar Ablyazov or Uzbekistan's Gulnara Karimova. Others are political opponents, such as Obidkhon qori Nazarov (Uzbekistan) or Umarali Kuvvatov (Tajikistan). Details of the state-led persecutions vary from the expected, such as Nursultan Nazarbayev ordering Ablyazov's assets frozen, to the terrifying, such as the 2012 attempted assassination of Nazarov in Stockholm by way of "three or four" bullets to the head or the 2015 poisoning-shooting of Kuvvatov by a Tajik government agent in Istanbul.+ For reference, Cooley and Heathershaw provide a map of disappearances, renditions and assassinations from Uzbekistan, (210) and the same from Tajikistan. (217) The level of detail here, from who owns which shell corporations to who is imprisoned where, is at its peak.

Dictators without Borders also includes a series of flowcharts that escalate in their complexity as the book goes on, from the relatively simple chart showing Ablyazov's former ownership of BTA Bank (59) to the labyrinthine network connecting Swedish telecom giant TeliaSonera's investments to the Karimov family's personal wealth, resulting in a $406 million windfall to the Karimovs and their associates. (122) The $406 million included in that one investment appears tiny by that point in the book, as Cooley and Heathershaw show repeatedly that these regimes come out with windfalls as high as 25% of their countries' GDPs. Little of this money goes toward usual Western-style public expenditures.

The only issue I can take with Dictators without Borders is the authors' reliance on the dictators' lack of evidence in criminal prosecutions being directly followed by the condemnations that themselves lack sufficient evidence. Cooley and Heathershaw are fond of saying that a crime was "probably" connected to a dictator, yet "probably" is also the kind of language dictators use when discerning who committed which financial crime. As much as the reader sympathizes with various hunted quasi-criminals over the dictators who chase them, it's hard to look at someone like Ablyazov and see the picture of innocence.

I don't usually give a book a 10 for Educational Content, but the sheer volume and variety of sources that went into Dictators without Borders is astounding. Cooley, Heathershaw and the interviewees they credit went through everything from UK legal proceedings to NGO reports to news stories. The numerous interviewees, most of whom have pseudonyms, drew on many of their own terrifying experiences. People with knowledge of Russian, Kazakh, Uzbek, Tajik and Kyrgyz were required. At the end of the book (Appendices 1-3), Cooley and Heathershaw list authoritative charts of Central Asian expats' real estate holdings, Uzbek Stage 3 (disappearance/rendition phase) exiles and Tajik Stage 3 exiles.

If there's one way Dictators without Borders could have been even more educational (up to 11?), it would have been a chapter on Turkmenistan. Turkmenistan is mentioned briefly in the opening and closing chapters, and figures prominently on the book's cover. It's also one of the world's most fascinating countries, from the statues of Saparmurat "Turkmenbashi" Niyazov in the capital Ashgabat; to Niyazov's memoir-meets-Bible the Ruhnama, of which I've read approximately the first seventy pages; to its strikingly extensive natural gas reserves. That said, Turkmen is not the easiest language to learn, and independent journalists are notoriously difficult to locate in Turkmenistan, so a lack of a full chapter on Turkmenistan is understandable.

Ease of Reading: 3
Educational Content: 10

*This is a diplomatic way of saying "intimidation, unmeritorious Interpol Red Notices, legal proceedings in foreign courts, extradition back to the home country where torture may occur, and, in some cases, assassination".

**For those itching to make drone strike or Guantanamo Bay comparisons, Cooley and Heathershaw address this during the preface: "There is a qualitative distinction between the national security rationales of the US and UK (questionable though they are) and the regime security rationales of Central Asian states. In an autocracy, there is no such thing as an opposition and even opponents in exile are fair game." (xiii)

^Typically, foreign investors are any combination of American, British (including British Virgin Islands shell corporations owned by Central Asian or Russian nationals), Russian and Chinese. There are also numerous other investors, including Sweden's TeliaSonera, that arise within the book.

^^An "inland offshore" is a jurisdiction where money can be hidden or laundered due to lax corporate registry and financial reporting requirements, much like a typical island tax haven (e.g.: British Virgin Islands), but landlocked.

+If you're wondering what a "poisoning-shooting is", Cooley and Heathershaw describe in detail:
On 5 March 2015, Kuvvatov, his wife and two children were invited to dinner at the house of Sulaimon Qayumov, a 30-year-old Tajik citizen who had been in Istanbul for several months and expressed sympathy for [Tajik political opposition] Group 24. Kuvvatov's wife told Radio Ozodi that she, her husband and their sons "felt sick after consuming food offered by Qayumov and rushed out for fresh air. An ambulance eventually arrived at 10:30 p.m. When they were outside, Hafizova said, an unidentified man approached Kuvvatov from behind and fired a single shot to his head before fleeing. Kuvvatov died at the scene." (216)

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