Central Asia’s Globalized Despots

Alexander Cooley and John Heathershaw’s new book marks a milestone in the study of Central Asia and of the post-Soviet space more broadly. Beyond area studies, Dictators Without Borders offers thought-provoking reflections on the mechanisms of political and financial globalization, and on the erasure of what distinguishes “the West” from “the rest.”

Grounded in a pathbreaking examination of materials from U.S. and European judicial investigations into the offshoring mechanisms and extraterritorial activities of Central Asian presidential families, the book combines scholarly analysis, investigative journalism, and policy recommendations. It begins by arguing that, contrary to the conventional wisdom of Western pundits and international organizations, Central Asia is not a remote place that is detached from the rest of the world and in need of greater “connectivity.” On the contrary, it contends that Central Asian states—and in particular their elites—are in fact highly globalized and well integrated in the world economy. They have learned quickly and well how to use international mechanisms that serve their political, security, and financial interests.

Cooley and Heathershaw’s case studies of Central Asia’s globalized elites include the fallen Kazakhstani oligarch Mukhtar Ablyazov, whose turn toward opposition helped to make him an “obsession” of long-ruling President Nursultan Nazarbayev; Maksim Bakiyev, son of Kyrgyzstan’s former president Kurmanbek Bakiyev; Gulnara Karimova, daughter of Uzbekistan’s late president Islam Karimov; and the presidential Rahmon family of Tajikistan.

Probably the most fascinating case is that of Ablyazov, whom Cooley and Heathershaw call “Kazakhstan’s most wanted.” Chair of Kazakhstan’s first bank (called BTA) from 2005 to 2009, Ablyazov was once one of Kazakhstan’s top oligarchs, but has also been a foe of President Nazarbayev since the early 2000s. After Kazakhstan’s sovereign wealth fund, allegedly overseen by the president’s family, took control of BTA in 2009, the bank launched legal proceedings against Ablyazov. The toppled oligarch fled first to London and then to France, where he was arrested and nearly extradited. His supporters present him as Kazakhstan’s version of the formerly imprisoned Russian oligarch Mikhail Khodorkovsky, punished by an autocrat for funding his liberal opponents. Kazakhstan’s authorities call him an international criminal and fugitive, guilty of massive money-laundering.

The presidential families in other Central Asian republics have themselves been the perpetrators of offshoring strategies, of which Cooley and Heathershaw offer detailed portraits. Tajikistan’s President Emomali Rahmon, who built his power during his country’s civil war (1992–97), appears to have enabled the offshoring of profits from the state-owned Talco aluminum-smelting plant to the British Virgin Islands. The state that Rahmon heads is estimated to have lost US$1.1 billion in revenue to this trading scheme from 2005 to 2007, a stunning sum, as Cooley and Heathershaw point out, for a country whose GDP in that latter year was only $3.7 billion. These arrangements came to light in a London High Court dispute between Talco’s new controllers and a firm that Tajikistani authorities together with presidential associates had ousted from the smelting plant’s business in 2004. The case dragged on from 2005 until 2008, as each side charged the other with financial malfeasance. Total legal expenses may have run as high as $200 million, making it one of the costliest court battles ever waged. Tajikistan’s government paid most of the bill.

In Uzbekistan, it is the eldest daughter of the former president Islam Karimov, Gulnara Karimova, who built a vast commercial empire with her homeland’s wealth before seeing that empire dismantled amid transnational legal troubles, public scandal, and elite infighting in late 2013 and early 2014, when Uzbekistani authorities reportedly put her under house arrest. Despite Uzbekistan’s political closure and isolationist economic policies, the country’s elites became actors in a global drama that involved luxury villas in France, Belgium, and California; a New York court hearing; Swiss bank accounts; and Swedish media investigations.

Cooley and Heathershaw also profile Maksim Bakiyev, the son of Kyrgyzstan...