Shunning widespread international concern over mounting political unrest in Uzbekistan, key foreign investors in the country say they are confident about business prospects in the troubled former Soviet state.
"Nothing has changed [for us] and everything is going very well," says Richard Wilkins, director of Oxus Gold, a UK mining company operating in the west of the country.
His comments come a week after civil unrest led to a bloody crackdown in eastern Uzbekistan, in which human rights groups allege up to 1,000 lives have been lost. "We don't think that the instability will affect our business," adds Wilkins.
Another UK mining company, Marakand Minerals, which has a project located close to where last week's violence occurred, assures investors that the venture "is not affected by the civil unrest in Andijan". However, the shares of both Oxus Gold and Marakand Minerals have plummeted in recent days because of fears over heightened business risk in the central Asian republic. Oxus's shares dropped 14% last Monday.
The private sector's optimism stands in stark contrast to concern from political leaders. German Foreign Secretary Joschka Fischer on Wednesday called for "a transparent enquiry into the circumstances of the violence." The US, which regards Uzbekistan as an ally in its "war on terror", has expressed "deep concern" and has scaled back military operations in the country, according to General John Abizaid, head of US central command.
Uzbek President Islam Karimov, however, has remained defiant against international pressure. On Thursday he rejected UN demands for an international inquiry into the violence. Diplomats and journalists have been denied access to locals in the afflicted region and have been restricted to a state-organized tour of the site.
Other international bodies remain vigilant. "We have always expressed concerns about the situation in Uzbekistan," Jean Lemierre, EBRD president, told Emerging Markets. The EBRD reduced its investments in the country two years ago and now largely supports the private sector. Public projects can only receive funding if they have a social impact.
At least one EBRD-backed company remains unaffected by the troubles. Bursel Tashkent Textile, a private company that the bank supported through a $13 million loan, is upbeat. "I spoke with them on the phone and they weren't worried at all," says Gulsema Cerezci, senior banker at the EBRD, who supervises the project. "Things were calm in Tashkent."
But Alisher Djumanov, managing director of Ansher Capital, a leading investment bank in central Asia, says that businesses could become more cautious in investing in the country. "The level of FDI in recent years has not fulfilled its potential," he says. "Now, foreign investors will perceive Uzbekistan as a riskier place."
Last year saw a major inflow of Russian capital into the country, as several companies bought into the Uzbek telecom, food and energy sector. Wimm-Bill-Dann, Russia's biggest food company bought Uzbekistan's largest dairy plant in March. Then in July, MTS, bought Uzdunrobita, the largest Uzbek mobile operator. Gazprom and Lukoil have also established multi-billion dollar projects in the oil and gas industry.
The investments follow a co-operation agreement between Russian President Vladimir Putin and Karimov, which paved the way for business links between the two countries. "Russian companies are used to working in a challenging environment," says Djumanov.