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Tuesday, April 28, 1998

Central Asian tobacco industry awaits face lift 

Christina Ling  
URGUT, UZBEKISTAN, April 27: Rashid has become an expert pothole-dodger in the past two years. Twirling the steering wheel of his 20-year-old Lada with one hand, he twists around in his seat to point out the empty tobacco fields lining the road with the other before turning back in the nick of time to swerve around the next gaping pit.

The road seems an apt reflection of the recent history of this historic tobacco-producing region located a stone's throw from the ancient Silk Road.

Once one of the linchpins of the Soviet tobacco industry, the area has suffered disrupted economic links with Russia since independence, and guaranteed income from the tobacco crop has become a dream from the past.

"Before, I earned more than enough from tobacco -- we were up to our eyeballs," said Rashid, who now works as an impromptu tour guide and driver in nearby Samarkand, the once glittering imperial capital of the mediaeval conqueror Tamerlane.

"I haven't grown any tobacco for two years -- it's just not worthit."Nor is Uzbekistan the only Central Asian state to have fallen upon hard Times when it comes to tobacco.

Growers across the area are fond of telling visitors that British Statesman Sir Winston Churchill, renowned among other things for his taste for Armenian cognac, was also a connoisseur of the pungent local Dyubek tobacco.

Whether the story is true or not, farmers are finding tobacco a hard sell five years after the break-up of the Soviet Union and the accompanying disruption in established trade deals.

Lacking the guaranteed markets and ready cash advances of the Soviet arrangement, cultivators have been thrown rudely into the harsher realities of the market economy.

"God forbid that anything ever happen with the tobacco crop one year," said Mamat, who stood selling the cheap leftovers from his crop at a bazaar in the Kyrgyzstan capital, Bishkek.

Mamat, with four children to feed, said his yearly income varied between 10,000 and 30,000 soms ($500-$1,500).

"It's not as profitable as it wasbefore," he spat, adding that he grew vegetable cash crops to supplement his income.

Nor have the region's cigarette factories proved much more resilient.

Bishkek's Bishkektamekisi cigarette factory, which has made do with essentially the same equipment it started with in 1929, produces only 20-30 percent of its yearly capacity of three billion cigarettes, said Chief executive Vladimir Kuchin."We cannot afford to buy the paper, the tobacco -- we do not have the working capital," he said.

In such circumstances, Western tobacco firms seeking new markets have appeared like knights in shining armour.

Philip Morris has invested $220 million in modernising a tobacco factory in Kazakhstan's main city of Almaty and plans to invest another $150 million, according to corporate affairs director Robert May.

And in Uzbekistan, British American Tobacco is investing about $300 million in a joint venture with Uzbekistan's former state tobacco monopoly.

"Since the Englishmen came here, they pay well and peoplehave started planting again," said Rashid.

BAT figures show Uzbekistan's tobacco harvest rose to about 25,000 tonnes in 1997-8 from about 15,000 in 1996-7.

Real investment has lagged in Kyrgyzstan, but after several years of negotiations with different firms, Bishkektamekisi finally signed a joint venture deal with Germany's Reemstma in February.

The venture will build a new factory with an initial production capacity of eight billion cigarettes a year, Kuchin said.

"In two years' time we will be fully covering the local market as well as exporting cigarettes," he added.

Not every sector of society is uniformly delighted with the tobacco companies' interest in the region.

"Right now you can't prove to anyone here that it is harmful and that there will be a great deal more to pay for it later on," said Ilya Savchenko, director of Kyrgyzstan's Sanitas youth addiction centre. "Right now the main thing is money."

Projected mortality data cited in World Health Organisation (WHO) documents estimatethat about 45 per cent of deaths of men between the ages of 35 and 69 in Kazakhstan are caused by illnesses associated with smoking.The figure is the highest of all the European countries in which WHO is active, beating even that for neighbouring Russia, where attitudes to smoking are equally carefree.

But the vociferous anti-tobacco lobby of the West is unlikely to make many sudden converts in Central Asia, where the the region's smokers are not about to be discouraged by mere mortality statistics.

"If it weren't tobacco, it would be something worse," said one contented smoker, citing the region's growing reputation as a transit corridor for drugs, as well as a Prime growing area. And the Western firms, who point to generous contributions to health, cultural and social projects as well as agronomy programmes and hefty tax payments, say they are working hard to prove themselves good citizens and neighbours.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.



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