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UZBEKISTAN


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 9,949 9,713 11,300 91
         
GNI per capita
 US $ 420 450 550 173
Ranking is given out of 208 nations - (date from the World Bank)

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REPUBLICAN REFERENCE

Area (sq.km) 
447,400 

Population 
26,410,416

Principal 
ethnic groups 
Uzbeks 71.4%
Russians 8.3%
Tajiks 4.7%
Kazaks 4.1%

Capital 
Tashkent 

Currency 
Uzbek Sum

President 
Islam Karimov

  

Update No: 289- (27/01/05)

Uzbekistan, like Tajikistan and Kyrgyzstan, has experienced varieties of the post-Soviet doldrums, with pervasive corruption, lingering socialist-era inefficiencies, and lagging foreign investment hampering growth and allowing poverty to keep a vice-grip on swathes of the population.
Uzbek President Islam Karimov found himself in a familiar standoff with critics of his iron-fisted approach to ensuring stability, as terrorist attacks and outbursts of civil unrest suggested that the seemingly still waters of Uzbekistan may run dangerously deep. 

Rapprochement with Moscow
Some Central Asian leaders, clearly concerned that the popular forces unleashed by the revolutions in Georgia and Ukraine could potentially spread to their own nations, have become increasingly receptive to Russia's overtures. The Islamic radical threat is another major influence prompting Central Asian leaders, most notably Uzbekistan's Islam Karimov, to explore regional multilateral options.
Russian and Uzbek officials held talks January 2nd on ways to improve the capabilities of the CIS. According to a report posted on the Uzland.uz web site, the talks "demonstrated the closeness and similarity of the two countries' stances on most issues." Officials agreed that the CIS needed to become "more efficient and effective" in order to respond to "new threats and challenges in the world," the report added. 
Russian-Uzbek bilateral relations have strengthened significantly since March 2004, when Islamic insurgent attacks resulted in at least 47 deaths. Last June, Putin and Karimov signed a partnership agreement and a US$1 billion, 35-year production-sharing agreement (PSA) to develop Uzbek natural gas deposits. In November, Russia's oil major LUKoil announced plans to strike new strategic deals with Gazprom on joint projects in Kazakhstan and Uzbekistan. 
Russian policy toward Uzbekistan, Kazakhstan and Turkmenistan, focusing mainly on the energy issue, has achieved mixed results. Moscow has pushed for the creation of a "Eurasian Alliance of Natural Gas Producers," including Uzbekistan, Russia, Kazakhstan and Turkmenistan. 
The ability to develop the energy grouping has been hampered by the mercurial behaviour of the Turkmen leader Saparmurat Niyazov. On December 31, Turkmenistan cut off natural gas supplies to Russia and Ukraine, with Niyazov describing the move as in "Turkmenistan's national interests." Gas deliveries to Russia were suspended for a week for "maintenance operations." At the same time, Turkmen authorities expressed a desire to renegotiate an agreement in January covering gas sales to Russia.

A Central Asian iron curtain is descending
In early December, two Uzbek women from Tashkent arrived in Pakistan to take part in an international workshop on legal rights organized by a non-governmental organization in Lahore. Two days later each woman received a distressing telephone call from their respective daughters, both of whom said they had been sacked from their government jobs without explanation. Both daughters were the apparent victims of official retaliation, punished because a close relative had travelled abroad to engage in non-government-sanctioned activity. 
The travails of these two Uzbek NGO activists underscore the fact that an iron curtain is falling on Uzbekistan. Contact with the outside world for Uzbek citizens is becoming as difficult as it is for those in Turkmenistan. Not only does Uzbekistan want to control who can travel abroad, the country is trying to keep out all those who would criticize the government, or otherwise undermine incumbent authority. Outsiders are not welcome in Tashkent, whether journalists, investors or aid workers. Yet, despite the sharp deterioration of human rights conditions, Uzbekistan remains a close ally of the Bush administration in its war on terrorism. 
The closing down of Uzbekistan is more than a threat to the country's own population. It also represents a growing danger to all Central Asian nations. The arbitrary behaviour of Karimov's administration is increasingly seen as a destabilizing factor for the entire region. 
The impact of Uzbekistan's isolationist policies hits Afghanistan, a country struggling to overcome a quarter-century of upheaval, especially hard. Afghanistan's reconstruction hopes count heavily on the country's ability to serve as a regional trade hub. Uzbekistan has dented Afghanistan's trade aims by keeping the key border crossing at Termez closed. Even US military supplies, which are being trucked in to Afghanistan from the US air base in Karshi face innumerable problems and delays getting across the Uzbek-Afghan border. 
Tashkent's reluctance to stimulate Afghan-Uzbek trade does not deter it from providing funds, bodyguards and logistical support to the Afghan warlord Gen. Rashid Dostum, an ethnic Uzbek. Warlordism has been identified as one of the major threats to Afghan stabilization efforts, and Afghan President Hamid Karzai is in the midst of a campaign to curtail the influence of Afghan warlords. Nevertheless, Uzbekistan is among several countries in the region that continues to strengthen its own favourite warlord. 
Uzbek action to seal the country's border has only helped extremist Islamic militants in Central Asia find allies among the Taliban, al Qaeda and militant groups in Pakistan. According to Pakistani officials, there is a constant flow of militants belonging to the Islamic Movement of Uzbekistan (IMU) travelling to the Pakistani region of Waziristan, located along the Afghan-Pakistani border. In Waziristan, IMU militants receive weapons and training before being sent home with the aim of destabilizing Central Asia. 
Six months after Pakistani troops conducted an anti-terrorist offensive in Waziristan, the traffic in Islamic militants between Central Asia and Pakistan and Afghanistan continues unabated. By closing its official borders, Uzbekistan has encouraged Islamic radicals to develop a clandestine highway - traversing Turkmenistan, Iran and the Pakistani province of Balochistan - along which militants travel back and forth. Meanwhile, Uzbekistan's decision to sow minefields along its border with Turkmenistan and Tajikistan have led to civilian deaths and rising discontent among farmers and traders living in frontier areas. 
The Uzbek government's failure to open up the political system is only breeding a new kind of paranoia, fear and instability within the regime, and among the broader population. The opening up of borders, accompanied by the promotion of trade and contacts, is essential if militant Islam is to be defeated in Central Asia. Unfortunately, Uzbekistan is doing just the opposite. In turning inward - cutting off travel opportunities for Uzbeks and contacts with outsiders - Karimov's regime is contributing to its own eventual demise. 

Uzbekistan holds elections - without an opposition
A parliamentary election that does not feature a single opposition candidate is making a travesty of President Islam Karimov's commitment to democratisation in Uzbekistan. Election officials have excluded all opposition parties from the December 26 poll, prompting opposition members to call on voters and international observers to boycott the soviet style election. 
In the run-up to elections, officials refused outright to register opposition candidates or invoked strict registration deadlines that prevented opposition movements from legalizing their status as political parties in time to appear on the ballot. Uzbek electoral law stipulates that a party must be registered as an official political party nine months before a poll in order to field candidates. As a result, Erk (Freedom), Birlik (Unity) and Ozod Dehkontar (Free Farmers), the country's main opposition groups, have all been denied representation. 
Though more than 500 candidates from five pro-government political parties - Adolat (Justice), Fidokorlar (Selfless), Liberal-Democratic Party, Milly Tiklanish (National Revival), and the People's Democratic Party - took part in the election, differences between official party platforms are slight. Candidates for the 120 seats available, many of them businessmen with close ties to the government, have directed only modest criticism at Karimov administration policies. 
With no opposition member on the roster of candidates, Erk and Birlik urged both Uzbek voters and international observers from the Organization for Security and Cooperation in Europe (OSCE) and the Commonwealth of Independent States Executive Committee to stay away from polling stations on election day. On November 26, Ozod Dehkonlar members picketed the OSCE's offices in Tashkent, arguing that the organization's election observers would not be able to prevent voting fraud. A protest was also held on December 1 outside the US embassy in Tashkent with a petition to President George W. Bush to "raise his voice in defense of democracy in Uzbekistan," the UN news service IRIN reported. 
So far, reactions to the opposition's demands have been cautious. The OSCE sent only a "limited mission" of 20 observers - a fraction of the number sent to observe neighbouring Kazakhstan's September parliamentary elections. The observer mission's web site states that monitors will not perform any "systematic observation" of the poll, but "assess the entire election process." The New York-based Human Rights Watch has taken up the opposition's call for the OSCE to not observe the election, arguing in an October 18 letter to the organization that sending representatives to monitor the vote would "send the mistaken message that its electoral system and the government's respect for civic freedoms meet OSCE standards." 
Meanwhile, the US, which maintains a military base in Uzbekistan for its operations in Afghanistan, did at least issue a statement casting doubt on the likelihood of a free and fair election. In a December 16 speech to the OSCE Permanent Council in Vienna, US representative Paul Jones stated that the absence of opposition candidates "[called] into question whether the elections will truly be competitive." 
The Commonwealth of Independent States (CIS), which sent a delegation of 70 election monitors, has adopted a more distant approach. "We have no preferences with regard to the outcome. Neither do we meddle in the affairs of the parties running for seats on the parliament," CIS Executive Committee Chairman Vladimir Rushailo told a news conference in Samarkand on November 30. 

Karimov claims to welcome foreign criticism
But in a December 2 speech to parliament, President Islam Karimov maintained that outsiders' criticism of the election was only welcomed. "It should be nobody's secret that our country - with the aim of holding the elections in compliance with all democratic and international standards - considers the experience accumulated in advanced countries acceptable to us," Uzbek Radio reported Karimov as saying. "It serves our purpose to accept all their views and recommendations that are critical and, at the same time, objective." 
The elections resulted in the formation of the lower house of a new, bicameral Oliy Majlis, or parliament, first proposed four years ago. Elections for regional council deputies also took place. In January, another national ballot was held, this time for the parliament's upper house, a 100-seat Senate. 
Some independent Uzbek journalists, based outside the country, have argued that the election date was deliberately chosen to coincide with the Christmas holidays in hopes of minimizing participation by Western observers. Others have forecast the possibility of post-election protests against falsified results, but the Uzbek public has shown little sign of mass mobilization. With media controlled by the government, forums for debate have been few. Public political meetings have been banned, and registration clampdowns have severely hampered the work of non-governmental organizations. In rural areas, increased police surveillance in response to terrorist attacks in March and July 2004 has further discouraged dissent. 
In this climate, the opposition's protests are expected to have limited effect. With individual leaders rather than policy ideas driving opposition groups, no strong coalition of critics of the Karimov administration exists. Discords exist both within parties - the Erk party split earlier this year into two hostile camps - and between them. While Erk and Ozod Dehkhantor are boycotting the election, for instance, Birlik is fielding election monitors and some candidates from so-called citizen groups. 
But with only a 33 per cent turnout required to validate the vote, government leaders expressed little sign of uneasiness that the opposition's boycott could lead to a Kiev-like scenario in Tashkent, which it has, indeed, not. Addressing the issue head-on in his speech to parliament in December, Karimov was succinct. The Ukrainian uprising, he said, could be attributed in part to "popular discontent" and in part to President Leonid Kuchma's "tactical and strategic mistakes" in ensuring a fair and democratic vote. 

Economy in crisis
In a December speech, Karimov announced that Uzbekistan had achieved "macro-economic stability" and claimed that the population's average income had risen 210 per cent over the past five years. Such statements create the impression that Karimov is out of touch, as they do not correspond to Uzbekistan's economic reality, observers say. Entrepreneurial activity in Uzbekistan has experienced a dramatic drop-off in recent years, as businesses struggle to bear an onerous taxation burden while confronting rampant corruption. A report prepared by the International Finance Corporation, the World Bank's arm for private-sector lending, estimated that domestic investment in businesses has declined roughly 50 per cent over the last three years. 
Indeed, there are signs that Uzbekistan's normally pliant population is reaching a point where it is losing its fear of punishment and is starting to resist government repression. Beyond the Islamic radical-inspired violence that hit Uzbekistan in 2004, the country in recent months has experienced a series of protests staged by regular Uzbeks upset with declining living standards. 
In November, 6,000 protesters took to the streets of the Ferghana Valley city of Kokand to condemn new government taxation and trade policies. The Kokand unrest sparked protests in other cities in the valley, including in Ferghana City and Margilan, as well as in Karshi in southern Kashkadarya Province. 
Anti-government demonstrations also occurred December 3 in the city of Bakht in Syrdarya province, and on December 6 in Shakhrikhan in Andizhan Province. In both cases, people protested against decisions by local authorities to cut off utilities, namely, natural gas, electricity, and water. In addition, a rally occurred December 10 not far from the Chorsu Bazaar in Tashkent, the site of the March suicide bombing attacks against police officers. Local residents protested a government ruling to demolish their homes in order to build a road. 
During each of the December protests, law enforcement authorities showed surprising restraint. In previous instances of popular unrest, officials reacted quickly and forcefully, making mass arrests. But in December, authorities merely cordoned off protest sites and made no effort to forcefully disperse demonstrators. In all cases, local political officials were dispatched to engage the protestors, and issue promises that their complaints would be addressed. In Bakht, the protest stopped only after authorities turned the electricity back on. 

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FOREIGN TRADE

India to boost trade with Kazakstan, Uzbekistan

The fifth Joint Commission Meeting (JCM) between India and Uzbekistan was inaugurated by the Indian Minister of State for Commerce and Industry, Shri Elangovan in Tashkent recently, Interfax News Agency reported.
The JCM was expected to give a boost to the trade and economic cooperation in the areas of apparels, engineering goods, basic chemicals and pharmaceuticals, a statement read.
The Indian minister led a 73-member trade delegation to Uzbekistan and Kazakstan as part of the Focus, Commonwealth of Independent States programme of the ministry of commerce and industry to enhance the areas of economic cooperation between India and the CIS countries. Twelve countries like Armenia, Azerbaijan, Russia, Tajikistan, Kazakstan and Uzbekistan are members of the CIS group.
Under the CIS programme, the government gives assistance to exporter, export promotion councils (EPCs), business chambers to visit these countries, organise trade fairs and to undertake various market promotional activities.
Members from various export promotion councils like basic chemicals and pharmaceuticals EPC, engineering EPC chemicals and allied products EPC were part of the delegation. The thrust areas for cooperation are textiles, engineering goods, chemicals and pharmaceuticals.

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