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Russia conquered Uzbekistan in the late 19th century. Stiff resistance to the Red Army after World War I was eventually suppressed and a socialist republic set up in 1925. During the Soviet era, intensive production of "white gold" (cotton) and grain led to overuse of agrochemicals and the depletion of water supplies, which have left the land poisoned and the Aral Sea and certain rivers half dry. Independent since 1991, the country seeks to gradually lessen its dependence on agriculture while developing its mineral and petroleum reserves. Current concerns include insurgency by Islamic militants based in Tajikistan and Afghanistan, a non-convertible currency, and the curtailment of human rights and democratisation.
Update No: 268 - (25/04/03)
The Uzbek example
The Uzbek republic is one of the remotest places on earth. It is one of only two countries on the planet which is doubly land-blocked (the other is Liechtenstein). Although the country has the largest population, 22 million, among the five Central Asian states and lies astride the fertile Ferghana Valley, outside investment has not been forthcoming and is not likely to be, even with reform, unless it breaks out of its unusual geographical isolation.
In fact reform has been largely absent. The president, Karimov, has deliberately eschewed the path of IMF virtue, that is shock therapy and reform. Consequently, Uzbekistan did not suffer the massive contraction of GDP characteristic of those who embraced it, such as Russia. GDP today is 96% of its 1990 level.
Uzbekistan has achieved that rare feat, a state of stagnation. How Gorbachev would have envied this performance! It is not however, likely to be forever sustainable. Soviet-era equipment is rusting and needing replacement; desuetude is the order of the day. The old Soviet markets are no longer available. Uzbekistan will have to change or belatedly contract.
Anti - terrorism to the forefront
President Karimov has other things on his mind. He is above al concerned about the threat of terrorism, notably from the Islamic Movement of Uzbekistan (IMU), which has already tried to assassinate him. IMU is variously estimated at 2-7,000 strong, all young Islamic militants dedicated to overthrowing the Karimov regime.
Since 9:11 the anti-terrorist orientation of Tashkent has given the government its mission and, it deems its legitimacy. The Americans were invited to town and given air bases and military facilities, undoubtedly useful, if not vital in routing the Taleban and al-Qaeda. Karimov regularly hobnobs with Colin Powell. He feels he has arrived on the world stage.
Fateful consequences of US intervention
Actually, he may be right in more ways than he realises. Once the Americans come to town they tend to change things in a more radical way than their hosts expect. Powell's deputy as secretary of state is none other than a feisty lady called Elizabeth Jones, whose role model is Margaret Thatcher, icon of the US Republican right.
She has lectured, indeed hectored the Uzbek government on its need to improve its human rights record. This is the more embarrassing because it agreed to sign proclamations last year in which it committed itself to democracy, liberalism and much else. Karimov may yet learn that hypocrisy, the homage that vice offers to virtue, carries a high price.
Plans for agricultural reforms on the cards
While Uzbekistan is experiencing a shortage of irrigated areas, President Islam Karimov, signed an order to expand agricultural reform, Interfax News Agency has reported. "While preserving collective farms and small agricultural holdings, priority will be given to developing private farms as the main producer of agricultural products," he said.
A programme for the years 2003-2005, targeted at introducing modern market relations among farmers is being drafted. A draft for the development of private farms has begun as well.
Russia, Uzbekistan join forces to sell military aircraft
Russia and Uzbekistan have agreed on the terms of production and export of planes manufactured at the Chkalov aviation plant based in Tashkent, Interfax News Agency has reported.
"It has been decided that Russian enterprises will take part in the supply of Il-78 MKI aircraft to India, and the Chkalov plant will be the head enterprise in the deal," a source in the Russian defence industry told Interfax on 27th March.
In the future, sales of Il-76 cargo planes and Il-78 tanker aircraft will be conducted through the Rosoboroneksport system, he stressed.
Negotiations are under way "with a major Southeast Asian country on a large shipment of Il-76s. The negotiations are being held with some breaks in proceedings," the source said.
Techint builds 21.2m Euro glass plant in Uzbekistan
The Italy-based group, Techint SpA, has constructed a €21.2m glass plant in Fergana, Uzbekistan. Uzaytoprom, a source from the Uzbek car manufacturers association, ordered the project, Interfax News Agency reported. In one year, the plant has the potential to produce 200,000 auto glass kits. Concerning hardened glass, the plant will produce up to 26 different types.
UzDaewoo and SamKochavato automotive plants will receive the glass produced, Interfax reported. The glass will be used for agricultural machinery and will be sold abroad. Italian banks and Uzavtoprom funds financed the project.
In 2002, companies of Uzavtoprom produced about 35,130 vehicles. Production dropped by about 15.1% compared to 41,400 in 2001. Car production also decreased by 15.3% to 34,716. SamKochavato produced 147 vehicles, down 63.2% from 400. Uzavtoprom and the Koc holding of Turkey control equal stakes in SamKochavato. UzDaewoo is the joint venture of Uzavtoprom and Daewoo Motor Co. Both companies hold equal shares.
Uzbekistan records US$650m in FDI
In the year 2002, Uzbekistan raised US$650m in foreign investment, falling 22% from the US$833m in the year 2001, the Deputy Prime Minister and Foreign Trade Agency Chairman, Elier Ganiev, said, Interfax News Agency reported.
Working with foreign investments from 90 different countries, there are about 3,000 companies operating in Uzbekistan. More than 205 of those companies are completely foreign owned. About 80% of the companies work in the manufacturing sector. Uzbekistan is implementing a state investment programme that will cost US$4.3bn and 30% of that is foreign direct investment.
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