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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: 298- (27/10/05)

The pathology of terror
The events of May have changed everything in Uzbekistan. The country is still living in their aftermath. The Uzbek government is engaged in an extensive effort to convince domestic and international opinion that Islamic militants were responsible for the violence that engulfed Andijan on May 13, when hundreds were killed.
Defendants at a show trial being staged in Tashkent have testified that Islamic militants belonging to the so-called Akromiya group sought to foment an uprising in Andijan with the ultimate goal of toppling President Islam Karimov's administration. Akromiya members received backing from international terrorist groups, according to the official Uzbek version of developments. Citing Uzbekistan's atrocious rights record, human rights activists believe the defendants were likely tortured into making confessions. The defendants have testified that their testimony had not been coerced. But then they would even if they had been.
Rights activists say the Karimov administration is trying to use the trial, along with a wide-ranging mass media campaign, to deflect blame for the Andijan massacre. According to eyewitness testimony gathered by rights groups, including Amnesty International (AI) and Human Rights Watch (HRW), the overwhelming majority of deaths during the May 13th events in Andijan occurred when Uzbek security forces opened fire without warning on peaceful demonstrators gathered in the city's central Babur Square. 
Extensively documented reports prepared by AI and HRW contend that a trial of 23 Andijan businessmen served as the catalyst for the May 13th events. The businessmen were accused of being members of Akromiya, and of engaging in activities aimed at undermining the government. The entrepreneurs, who were arrested during the summer of 2004, adamantly denied any affiliation with a radical Islamic group. They admitted to being devout in their religious practices, while contending that they were being prosecuted because local authorities felt threatened by the entrepreneurs' popularity within the local community. 
As the entrepreneurs' trial drew to a close in early May, hundreds of friends and relatives of the 23 businessmen would gather outside the court building to stage daily protests. The events of May 13th began when relatives and supporters of the 23 reportedly staged an armed raid to free them from a local prison, according to eyewitness accounts. The prison break gave way to a spontaneous protest at Babur Square, attracting thousands of unarmed demonstrators, who voiced complaints about the Karimov administration's social and economic policies. 

Andijan massacre linked to local power struggle 
A local power struggle dating back to 2004, and not an alleged Islamic radical conspiracy, sparked the chain of events that culminated in the Andijan massacre in Uzbekistan, a source with detailed knowledge of events told EurasiaNet. 
A source said the trial of the 23 businessmen was directly linked to a May 2004 shuffle of the provincial governor, or hokim. At that time, the Andijan's regional legislature impeached Andijan's long-time hokim, Kobiljon Obidov, and replaced him with Saydullo Begaliyev. The reshuffle was widely believed to be engineered by Karimov. 
The 23 entrepreneurs had close personal ties to Obidov, according to the source. "He [Obidov] was the province's master ... businesses favoured by the hokim got the green light for everything," the source said. "All the entrepreneurs who enjoyed his [Obidov's] patronage grew rich." 
Obidov was reportedly a long-time favourite of Karimov's. The Uzbek president used to tout Andijan as a model business environment, in which the entrepreneurial spirit was encouraging economic growth. In recent years, however, a series of scandals and protests removed the lustre from Obidov's star. An investigative television report in 2002 exposed Andijan as having a serious problem with homelessness. During the winter of 2003-04, the region was rocked by protests over a shortage of heating fuel. 
The governor also faced charges of personal impropriety. In one incident, he was accused of neglecting the provincial public transport system so that private business in which he reportedly had a major financial interest - a 100-vehicle fleet of minivans, known locally as marshrutkas - would be ensured a large share of passenger traffic. He was also accused of shielding his son from prosecution for a variety of alleged offences, including racketeering. 
Karimov personally attended the legislative session on May 25, 2004, during which Obidov was sacked. "The whole city was cordoned off by the militia and there were [security officers] in masks in jeeps, along with army soldiers," the source said. "Karimov was obviously worried. ... Obidov had ruled [in the region] for a long time: he was part of the Ferghana clan and he had lots of supporters." 
The new hokim, Begaliyev, had close political ties to the central government. Prior to coming to Andijan, Begaliyev had served as minister of agriculture and water. In late 2004, Karimov appointed Begaliyev's successor as agriculture and water minister, Ikromkhon Nazhmiddinov, as the governor of Ferghana Province. The moves suggest that Karimov was intent during the last half of 2004 on boosting his political influence over the restive Ferghana Valley. 
Once installed in Andijan, Begaliyev wasted little time in launching a purge of all Obidov allies. "Criminal proceedings were started against many of his [Obidov's] administration members," the source said. "The new hokim also decided to re-divide the businesses in the province; he cracked down on the entrepreneurs who had been supported by Obidov. They were told to sell their businesses for a pittance either to him [Begaliyev] or his people, or face legal proceedings." When the 23 businessmen tried to resist, the hokim ordered their arrest, the source said. They were officially charged with being members of Akromiya, and engaging in extremist activities. 
The 23 entrepreneurs had a reputation for being fair employers, offering comparatively high wages to those working in their businesses. They were also active in a variety of charitable endeavours, providing assistance to the poor. This gained them a large body of supporters, including employees and their families. 
As the entrepreneurs sat in pre-trial detention, friends and relatives worked behind the scenes to secure their release. After their trial began on February 11, supporters of the 23 sent a written appeal to Karimov, asking that the president intervene in the case. "Karimov never replied," the source said. 
As the trial proceeded, it became clear that a guilty verdict was preordained. Some or all of the 23 attempted to stage a hunger strike, but authorities force-fed them, the source said. In May, with the trial nearing its end, relatives sought to generate publicity about the case, hoping that unwanted attention would force authorities to make a deal that would keep the entrepreneurs out of prison. For several days relatives, friends and employees staged peaceful protests outside the courtroom. The source said the daily protests comprised between 500-1,000 people. The mood during these demonstrations was non-confrontational, the source said. The protesters were not especially vocal and did not act aggressively. In turn, riot police made no move to disperse the crowds, according to the source. 
At the same time they were organizing the peaceful protests outside the court, relatives of the 23 entrepreneurs may have been conspiring to carry out the prison raid, the source indicated. The source said that shortly before May 13, relatives contacted other supporters of the 23, telling them to "be ready" for sudden developments. "They were making some other arrangements," the source said. 

EU sets sanctions on Uzbekistan
The European Union recently imposed sanctions on Uzbekistan, seeking to punish the Central Asian nation for its refusal to allow an international investigation into the bloody crackdown on the May uprising in Andijan.
The sanctions impose an embargo on exports to Uzbekistan of arms and equipment that might be used for internal repression and suspend meetings between the union and Uzbekistan designed to accelerate the former Soviet state's rapprochement with the West. They will also forbid the travel of Uzbek officials directly involved in the crackdown to the 25 European Union states.
The decision followed months of diplomatic tension between much of the West and Uzbekistan after the May events. Uzbekistan has stubbornly resisted calls for a transparent investigation of the events.
As criticism over the violence mounted in the spring and summer, Uzbekistan sharply shifted its foreign policy, aligning more closely with Russia and China and trimming its relations with the West. In July it ordered the United States to leave an air base that it has been using since 2001, an eviction now scheduled for early next year. Last month Uzbekistan played host to a small joint military exercise with Russian troops, signalling its new allegiances.
Meeting in Luzembourg, the foreign ministers of European Union states approved the sanctions for an initial period of one year, allowing for a review in 2006 of Uzbekistan's willingness to "adhere to the principles of respect for human rights, rule of law and fundamental freedoms." The trade ban covers weapons and ammunition, as well as dozens of items that could be used in crackdowns and police work, including helmets and certain types of body armour, vehicles equipped with armour, leg irons, shackles, tear gas, water cannons, riot shields, fingerprint equipment, search lights and night-vision goggles.
The sanctions also suspend scheduled meetings under the so-called Partnership and Cooperation Agreement, the blueprint that since 1999 has helped develop the European Union's political relations with Uzbekistan and guide economic relations in trade, transport, customs, postal services, telecommunications and other areas. Human Rights Watch hailed that move, saying it was the first of its kind in the Union's history.
But although the sanctions mark a clear rebuke of the Central Asian state, they have a limited ability to undermine Uzbekistan's military or police capabilities. While Uzbekistan has often accepted Western security aid, its military, intelligence and police forces are overwhelmingly equipped with Soviet era military hardware, which continues to be manufactured and sold by Russia, China and other non-EU states.

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AVIATION

Uzbekistan to join strategic alliance to set up UAC

Russia has asked Uzbekistan to step up cooperation in aircraft construction and to join a strategic alliance to set up United Aircraft Company (UAC), which would incorporate the assets of the Tashkent-based Chkalov aircraft plant. The conversion of the Chkalov plant's shares into UAC shares would benefit both countries, Boris Alyoshin, head of the Russian Federal Agency for Industry (Rosprom) and the Russian section of an intergovernmental economic cooperation commission, said during a commission session currently underway in Tashkent, New Europe reported.
He suggested creating a joint working group to work out mechanisms for the Chkalov plant's entry into the aircraft alliance. This should be a businesslike and commercial process, Alyoshin said, adding that any privileges for the project's participants are out of the question. The assessment of the Chkalov plant's assets should be the first step towards realizing the project, he said. The Chkalov plant emerged on the basis of a Russian aircraft plant evacuated to Uzbekistan in 1941 from Khimki in the Moscow region. It produces various types of the IL-76 heavy transport plane, the IL-114 passenger jet and wings for the AN-70.

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ENERGY

Uzbekistan inks energy contract 

Uzbekistan signed a deal on the creation of a consortium of investors from China, Russia, Malaysia and South Korea to explore hydrocarbon fields in the dried seabed of the Aral Sea, the state oil and gas holding company Uzbekneftegaz said on September 9th, New Europe reported.
The agreement by Uzbekneftegaz, Malaysia's Petronas, Russia's Lukoil, South Korea's National Oil Corporation and China's National Petroleum Corp (CNPC) was signed on September 8th in Tashkent, Uzbekneftegaz said in a statement. 
The Aral Sea, hit by one of the worst man-made environmental catastrophes in the world, is shared by Uzbekistan and Kazakstan. "Further negotiations are expected to take place with Uzbekistan on a production sharing agreement for the exploration and development of oil and gas fields in the Uzbek part of the Aral Sea," the statement read. According to Uzbekneftegaz, this production sharing agreement is expected to be signed next year.

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EURASIAN ECONOMIC COMMUNITY

EurAsEc hails Uzbekistan's intention to join 

The Eurasian Economic Community (EurAsEC) welcomes the wish expressed by Uzbekistan to join the organisation and is ready to start accession talks, EurAsEC Secretary General, Grigory Rapota, said at a press conference in Moscow, New Europe reported.
"We have witnessed a landmark event - Uzbekistan expressed the wish to join the EurAsEC. We will work on the technical aspects of the accession, as all legal aspects have already been settled," he said. Rapota said integration of the Central Asian Cooperation Organisation into the EurAsEC is feasible. "We simply have to admit new members," he added. 

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FOREIGN INVESTMENT

Iran to invest 24m Euro in Uzbekistan 

An Iranian company, Condor, will invest 24 million Euro over seven years in detergent manufacturing in Uzbekistan, a source at the Uzbek State Property Committee said, Interfax News Agency reported.
The source said Condor had signed a deal to buy 75 per cent of the shares in the Samarkand Elevator Factory, where it will produce up to 120,000 tonnes of detergents, including washing powder, per year. Condor will provide an additional three million Euro to support core production at the plant, which is elevators. The plant is currently working at just 15 per cent-20 per cent of its capacity for elevators.

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