Kyrgyzstan, “Kusturizatsia”, and Corruption

The collapse of the Soviet Union sparked the creation of new informal practices across all of its former republics. Soviet-style corruption, in the form of blat (favors) and reiderstvo (corporate raiding), and newer informal practices, enabled the transition to independence. Like other parts of the former Soviet periphery, in Kyrgyzstan Soviet-era practices and ideas were internalized even as independence bloomed. But in response to weak rule of law, and the forces of capitalism, informal practices took on new forms in Kyrgyzstan in light of its own unique circumstances.

The Soviet imperial legacy can be seen especially in these locally developed informal practices. The recently emerged concept of “kusturizatsia ” in Kyrgyzstan is one such example.

Kusturizatsia, a term derived from the word for “vomiting” in Kyrgyz, is used to refer to those who damage the state through corrupt practices and economic crimes (such as stealing from the state budget or not paying taxes), and are then forced to pay compensation to the state when they are discovered.

When corrupt practices are detected, the perpetrators (mainly influential politicians and prominent businessmen) are given time to voluntarily pay compensation for the damage to the state, otherwise they face possible detention. Thus, kusturizatsia is essentially the legalization of corrupt activities by prominent businessmen and politicians. It occurs outside the rule of law, though has been offered up under the phrase “economic amnesty” by Kyrgyz President Sadyr Japarov.

The main bodies in charge of this process are the State Committee for National Security and the office of the president. They decide whether to legalize an individual’s corruption or not. Kusturizatsia occurs between three parties: the businessman/politician (the thief), the president, and the security services. In simpler terms: A thief admits that he stole money, and those who caught the thief (the head of the SCNS, Kamchybek Tashiev, and President Japarov) demand that he returns (vomit up) some of the stolen money back to the state. 

Kusturizatsia as a term has become popular in Kyrgyz society, especially in the mainstream media, and is frequently used by political analysts. The term comes with negative connotations, as vomiting is associated with dirt, disease, and indigestion. People do not want to see a person vomit because they find it disgusting. However, the term also implies that those who are caught vomiting are associated with the idea of shame, and publicly identified as corrupt. As a result, despite the negative connotations, the term is associated with the idea of justice and therefore popular. 

It is reminiscent of “gaming the system,” namely that of “winning some advantage by acting against the spirit of the formal.” The president plays the role of the “savior ” and righteously forces the thieves to “vomit” in front of the public. People seem content for the corrupt to be shamed and are happy to know that a billion som have been reportedly paid in compensation, far more than in the years before this practice. 

But in general, people are not too interested in the complex details, especially what goes on inside the negotiations between the thieves and the state and what trade-offs are made.

Despite the popularity of the term and practice among average Kyrgyz, kusturizatsia is regarded with suspicion by many prominent lawyers and political scientists. There is a shared questioning by critical observers of where the funds from the kusturizatsia process actually go.

As Nurbek Toktakunov, a Kyrgyz lawyer, remarked on social media in 2021‚ the compensation paid by thieves for their crimes under this scheme is not transferred to the state budget. “The funds remain uncontrolled and, as a rule, plundered,” he wrote. “The ‘kusturizatsia’ is stolen or used for the narrow political purposes of the ruling elite.”

As Emilbek Joroev, a political scientist, wrote in a Facebook post earlier this year that that, “in a country where due process supposedly applies, a country with judicial, procedural, law enforcement as well as other checks and balances, the operation of kusturizatsia is more dirty, more shameful, more corrupt, and an act that goes against the law and the principles of justice.” 

Why do Kyrgyzstan’s leaders prefer to use this method of fining corrupt individuals rather than using available legal means to punish them? Kusturizatsia functions in conjunction with a variety of legal and administrative tools, especially judicial rulings, while circumventing other rule of law structures that ought to apply to the corrupt.

As Joroev argued in his Facebook post, these excision operations have been carried out in the shadows. Kusturizatsia is a simple solution to a complex problem. None of the parties involved want to provide complete transparency to the public as would occur in a full-fledged trial.

“Are we to believe the rumors that the leaders ‘vomit twice as much as they eat’ if not the slightest bit of information is given?” he wrote. Further, Joroev offers an interesting bit of analysis: “Due to its secret and shadowy nature, on the one hand, it has become a way for the really serious thieves to bargain inside the system and get ‘clean’ by giving back a little. However, this practice has turned into another bait plate for the ‘vomiting’ parties.” 

The kusturizatsia policy has also reportedly led to a flight of investors from Kyrgyzstan. This not only applies to foreign investors, but domestic investors are also leaving the country. In a December 2021 parliamentary budget hearing, MP Muradyl Mademinov criticized the policy, saying it had prompted even “slightly self-respecting” investors to leave. “Even citizens of Kyrgyzstan are leaving,” he said, claiming that “[t]hey are leaving in droves” for Turkey, Uzbekistan, and Kazakhstan.

As the above-mentioned analysts rightly argue, there are more questions than answers surrounding kusturizatsia. First of all, there is no transparent information about the funds, especially about how much money has come back into the budget or how it has been spent. There’s no reason to believe that the funds returned via kusturizatsia are not themselves also plundered. Second, not everyone is offered this golden opportunity to reimburse the state; the eligibility criteria are a mystery. Third, as noted above, the policy has arguably led to investors fleeing Kyrgyzstan en masse for more predictable markets abroad, but we don’t know the full extent of the damage to Kyrgyzstan’s economy and reputation.

One source responded to my question about the impact of criminal groups on business activities, by laughing, commenting that “we have our own two bandits in our country” – a reference to Tashiev and Japarov – and they are making trouble for the businesspeople. Rumors circulate that a lot of money is flowing out of Kyrgyzstan on a daily basis, and many companies allegedly continue to pay the security services both formally and informally for a green light to do business.

Based on my interviews with three businessmen who have engaged with kusturizatsia, for each the process was different, depending on the willingness of the businessmen to negotiate with the authorities or not.

One entrepreneur from Osh, Arman, is a prominent businessman with many cafes, bars, and catering businesses. He was arrested for a few days over concerns about his previous tax filings. He was required to pay compensation of 3 million som in lieu of taxes. He was released fairly quickly after his arrest following the prompt payment of the fine.

Another businessman explained that he seeks to keep a low profile and tries to avoid conflict with the authorities. He tries to follow the new rules of the tax system, although he complained that “business in Kyrgyzstan has become less profitable. I have to pay almost 1 million som in taxes.” As a consequence he has started to divide his medium-sized business into smaller enterprises.

In the worst case scenario, a businessman can lose his entire business if he is forced to share it with individuals close to government agencies, as was the case for Timur, who had a business distributing cement and bricks from Kyrgyzstan to other Central Asian countries. When he resisted, he lost his entire business. This was done in a creative way: the director of the supply company he had long engaged with suddenly refused to sell Timur goods, saying that he had found a new business partner. The company director asked Timur to understand that he was forced to sell goods to another, unidentified, person in the same industry. If the director refused, the state agencies would pressure him with fines for administrative violations. And so, the director was compelled to cooperate with the new business partner, not necessarily one of his own choosing, in order to guarantee his own company was not seized. 

The concept of kusturizatsia has become popular and widespread in Kyrgyzstan, forcing businessmen to share their profits with the president and the security services in an opaque manner. This has forced other businessmen to seek alternatives, either through negotiation or compromise. Some have chosen to split up or sell their businesses to avoid confrontation with the state and choose to pay taxes legally, despite experiencing huge losses doing so in comparison to others who play the game. The state, on the other hand, manipulates the formal rules and procedures (law enforcement agencies and the courts) to its own advantage, maintaining the existing system and making sure that it works only for state power and not necessarily as rule of law for all.