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UPDATE January 2002

The Uzbek regime made a fateful decision to help the US after 9:11. Actually it was a foregone conclusion that it would do so since it had been quietly co-operating with the Americans for years against terrorism. To allow full troop deployment was but the next logical step.
We now know that on September 12th-14th Putin was making frantic efforts to get Uzbekistan (and the other four Central Asian states) to forbid US troop deployment on the ground. Only when all five refused, did Putin make the best of a bad job and reverse his policy. In each case he was given a determined negation. 
President Islam Karimov of Uzbekistan could see that he had a golden opportunity to bring his country in from the cold, while dealing a fatal blow to his enemies, the 3,000 strong Islamic Movement of Uzbekistan, which the Taleban were harbouring. No longer. The movement has been smashed, its leader dead.
Karimov is now in a much stronger position. The US is an ally and his enemies are dispersed. No material rewards were discussed, his spokesmen say, but they will be forthcoming all the same. With nation-building required in Afghanistan, the US are likely to be around for a long time. Karimov must be delighted. Uzbekistan is on the map for good.
Uzbekistan is not renowned for its oil and gas wealth, unlike Kazakstan and Turkmenistan, although it has minerals aplenty. But in fact its proven oil reserves of one billion barrels are not negligible, with possibly another billion not yet proven. Its natural gas reserves are one trillion cubic metres, with another unproven one trillion cubic metres to spare. This is enough for energy self-sufficiency at least.
The republic has the best and biggest part of the rich Fergana Valley. It also has splendid tourist attractions in Samarkand, Bokhara and other Silk Road cities. With a great past behind it, the former home of Tamurlaine, it now has a great future beckoning it. The Uzbeks now have plenty to look forward to. 

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FOREIGN INVESTMENT

Kripp fordettechnik inks share agreement for mining sector

German company Kripp fordettechnik GmbH has concluded an agreement with State Committee on Property and Support of Entrepreneurship of Uzbekistan on the purchase of 30 per cent of state owned shares worth US$1.5m in an open type Joint Stock Company which specialises in repairing of mining-transport equipment in the city of Angren, and now incorporated into JSC Ugol, Uzreport reported recently.
This is an important enterprise in the coal industry of Uzbekistan where the mining equipment particularly, equipment working on Angren open coal mine is repaired. In the structure of the charter capital of JSC, 25 per cent of shares belong to the state, 6.5 per cent to working collective and small shareholders whilst the remaining 38.5 per cent is not placed yet and is subject to sale through stock exchange. In the long-term perspective JSC is planning to launch repair of the equipment for line technology of a coal mine, which will be introduced at Angren open coal mine. It is also planned to install production of metal frameworks for rotor lines and other equipment used by this technology. 
In the year 2000 the German company won the tender on the realisation of the reconstruction of Angren coal mine, which is the main raw coal base of Uzbekistan. Last year Kripp and the JSC Ugol concluded the contract on the implementation of the first stage of works costing DEM 42m.

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FOREIGN LOANS & AID

Japan equips Uzbekistan with US$73m grant

The government of Japan recently provided equipment and materials for US$73m in the form of a grant to Uzbekistan. In particular, the regional representative of the Japanese International Co-operation Agency (JICA) is implementing in Uzbekistan a project on equipping healthcare institutions, with top priority the ones situated in the ecologically disastrous region of Karakalpakistan. 
It is understood that the installation of this equipment considerably decreases the mortality rate among new-born babies and sickness rate among the women of the reproductive age. Within the framework of another project, JICA is supplying agriculture machinery. Farmers of the Khorezm received gratuitous grain harvesters, tractors, and rice scourers.
The aim of the project was the creation of technical conditions for ensuring self-sufficiency of Uzbekistan in food grains, Uzreport reported recently.
Projects of JICA are being implemented not only in Karakalpakistan or Khorezm but also in Samarkand and Tashkent. Japanese volunteers are providing direct assistance to Uzbek specialists in the fields of healthcare, education and development of sport. Due to the fact that every citizen of Japan "contributes" more than US$80 to the economies of developing countries, the Japanese Agency conducts monitoring of the utilisation of the grants.

Vital Uzbekistan aid link re-opens at last

Railway wagons rumbled across Uzbekistan's "Friendship Bridge" recently for the first time since 1997, carrying food aid bound for hundreds of thousands of displaced Afghans now facing the affects of war, drought and the onslaught of their country's brutal winter, the Financial Times reported on 10th December.
More than four years after Uzbekistan cemented shut the gates to the 1km long bridge, as Afghanistan's Taleban troops advanced northwards towards the former Soviet Republic, 15 wagons laden with grain and flour crossed the murky Amu-Darya river, which marks the Afghan-Uzbek border.
This first shipment capped weeks of intense pressure by western officials. It also carried heavy symbolism for the Uzbeks themselves, who have remained adamant that the bridge would remain closed until northern Afghanistan stabilised.
But US officials were growing frustrated with their Uzbek counterparts' slow pace at creating a major corridor for humanitarian aid from the southern Uzbek city of Termez to the Afghan town of Mazar-e-Sharif, 40 minutes drive south of the border.
The Uzbeks' intransigence was said to be undercutting the humanitarian side of Washington's Afghan campaign.
Colin Powell, the US secretary of state touring the Middle East and Central Asia, announced recently that Islam Karimov, Uzbek president, had agreed to re-open the border.
Food aid had previously moved less efficiently by barge across the Amu-Darya, or by a long route through neighbouring Turkmenistan and Tajikistan.
That Mr Karimov has finally consented to opening the Friendship Bridge - named so by the Soviet forces who built it to transport the military supplies which sustained their Afghan war effort until their defeat in 1989 - perhaps indicates a sea change in attitudes in a country where a "no" always seems an easier answer than "yes."
Moreover, the opening of the bridge also demonstrates that the security-obsessed Uzbeks are now comfortable enough with the situation on their southern border - and reassured by US security guarantees - to loosen up a little. Foremost in the minds of Uzbek officials has been the threat posed by their own Muslim insurgents, the Islamic Movement of Uzbekistan (IMU).
The group was allied to the Taleban and was said to have received some financial support from Osama bin Laden's al-Qaida network.
The presence of the IMU first became apparent in February 1999, when a series of bombs exploded in Tashkent, the Uzbek capital, killing 16 people and laying waste to a number of government buildings.
Although the movement never claimed responsibility for the explosions, President Karimov's government placed the blame on Muslim extremists and introduced a security crackdown.
Despite its silence on the bombings, the IMU said that it wished to overthrow President Karimov and establish an Islamic state in the Ferghana Valley, a strongly Muslim region where the borders of Uzbekistan, Tajikistan and Kyrgyzstan meet.
IMU guerrillas in 1999 infiltrated the mountains which straddle the three countries, clashing with Kyrgyz troops. In 2000 they launched a major campaign against Uzbek forces.
The IMU's numbers were estimated at anywhere from a few hundred to 3,000 by governments in the region. The movement was also said to be maintaining training bases in northern Afghanistan and launching operations from Tajikistan.
Today, observers say that the demise of the Taleban has dealt the IMU a heavy blow, if not wiped it out altogether. Unconfirmed reports also say that Juma Namangani, the movement's military leader, has died of wounds received while fighting alongside Taleban forces in the northern Afghan town of Konduz.
Despite these signs of greater confidence by the Karimov government, observers point out that Afghanistan still lacks a government that can enforce stability throughout the land and ensure that IMU groups will lose their safe haven.
Neighbouring Tajikistan, where a seven-year civil war raged for much of the 1990s, also remains chaotic enough to allow the movement freedom to operate. But for the foreseeable future the IMU is a demoralised force, analysts say.
"The IMU does not have much longer to live. They are weak and limited in terms of their financial resources," says Dr Abdujabor Abduvakhitov, a leading Uzbek terrorism expert.
But the larger question for many is if the Uzbek government's slightly more relaxed attitude will translate to the areas of democracy and human rights.
Mr Karimov's regime has been widely criticised for human rights abuses and the suppression of political dissent which is regarded as having encouraged support for the IMU. Without broader political change, the demise of the IMU may not necessarily mean the end of Islamic movements in Uzbekistan.
"I think that armed Islamic movements will decrease in Uzbekistan. In the short term this will mean more stability. But in the long term, who knows?" says Olivier Roy, a leading French expert on Islamist movements and Central Asia.

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