The Cosmopolitan Challenge in the Central Asian States

Why preparation is the key to successful development in the rapidly developing market in the 'Stans'

The former Soviet republics of Central Asia - namely Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan and Tadjikistan - have come a long way in liberalising their economies since becoming independent countries at the start of the 1990s. While for much of the twentieth century, these countries were largely closedoff to trade and commerce with the outside world during their time under central authority directed from Moscow, in the 1990s they have become increasingly open to foreign businessmen.

The massive task of re-constructing their planned Soviet economies to ones based on market institutions, has called for voluminous capital injection into these states and resulted in their governments actively seeking to co-operate with the international business community. Many vital sectors of their economies, including oil and gas, mining, agriculture, telecommunications, power, steel works and tobacco, have been officially open to foreign businessmen for much of the past decade, resulting in an increasingly cosmopolitan business environment.

However, despite this new-found economic cosmopolitism, doing business in Central Asia's former Soviet republics remains a substantially more challenging experience than one may expect in the mature market economies of Europe, North America and other parts of Asia. In particular, from the perspective of business culture, one should appreciate that these are culturally very different societies to those in which we have developed our business acumen. Much of the population of the Central Asian countries hails from a Muslim civilisation that, while containing many of the personality traits from the Middle Eastern and South Asian Islamic societies, has been absorbed by the social values and the business practices which prevailed under the Soviet Union.

The resulting business culture in Central Asia is therefore an interesting hybrid of Soviet formalities and protocol (very similar to that encountered in Russia or Ukraine for example), and Central-Asian Islamic cultural practices - conservative social values, respect for seniority, strong clans and family networks in business, as well as genuine hospitality and often a highly social attitude towards the conduct of business (ie relentless wining and dining as a means of developing the business relationship). Or, to put it in other words, a strong blend of the post-Soviet secular modernism mixed with the deeply entrenched cultural traditions of the Central Asian states. The business experience awaiting the foreigner in these countries can therefore be just as rewarding socially as it can be challenging from the cross-cultural aspects of doing business itself.

It is rather important for the foreign businessman to develop a good relationship with their potential Central Asian partners during this first meeting, as it will set the standard for much of the subsequent meetings to come and will make the locals feel more comfortable in dealing with the visitors. You will find that the local business population does not like to be talked at and promoting such a course of action will quickly lead to a rather burdensome business experience for the foreigner in Central Asia.

When travelling to countries like Uzbekistan or Turkmenistan for example, one will quickly see that the local workforce and business community has little experience with modern business practices equivalent to those long taken for granted in the advanced market economies. This means that the locals are likely to have far less experience in effectively managing a foreign investor's business than one would generally like. However, given their eagerness to learn, and all round good work ethic, it will be far more effective in the long run to persevere with local employees and show patience, rather than getting frustrated when things don't always go as planned. Such gestures on the part of the foreigner will be taken as a sign of "paying your respect", and are often a vital ingredient in developing a harmonious business relationship in Central Asia.