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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)

Books on Uzbekistan

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: 304 - (28/04/06)

Succession problem
President Islam Karimov has been around for decades. He was head of the Uzbek communist party in the 1980s and just remade himself as a nationalist in typical post-Soviet style. The Karimovs of this world have no shame and brazenly exemplify Dr Johnson's dictum that "patriotism is the last refuge of a scoundrel."
In the middle of March one of the web sites of the opposition reported on curious attempts to make Karimov lifetime president, curious because they seem so far to have failed. Reports from other sources imply that his dreaded elder daughter, Gulnara Karimova, put into motion a PR campaign encompassing Russia as well as Uzbekistan, with the idea of her succeeding her father, who, according to certain earlier reports, is unwell and has a fatal disease.
Personnel shuffles in the corridors of power are under way in the republic itself, indeed have been under way for some months. They are believed to be in connection with the presidential election in Uzbekistan scheduled for 2007. Once at the periphery of public attention, the subject of state power succession is moving back into the spotlight again.

A sycophant goes too far
A lawmaker sitting in the upper house of the parliament allegedly put on the floor an amendment to the Constitution stipulating lifetime presidency for the national leader, but the Senate torpedoed the idea. The oppositionist web site that posted this report reckons that the idea belongs to some senior state officials. The web site assumes furthermore that whole labour collectives will begin suggesting lifetime presidency for Karimov one after another, soon.
The attempt to check the report getting out resulted in some unexpected discoveries. According to a source in the upper house of the parliament, it was not lifetime presidency that the Senate discussed. The idea on the floor concerned the status of the first president of Uzbekistan, the title that may be granted Karimov should he step down and that will remain his for life.

The grooming of a dauphin
If this is true, then it certainly puts in a different light the latest events concerning the president's elder daughter. Bella Terra, a glossy magazine Karimova publishes, ran an extensive interview with her in January. Some excerpts from the interview appeared in other publications even before the magazine itself could be found at newspaper stalls. Prominent Russian publications Profil and Evrazia published the interview afterwards. Evrazia for example did its best to present Karimova in the most favourable possible light - with numerous photos of her and a portrait on the cover. All of that was quite revealing to an attentive reader. It is an indication, for example, of the importance attached to the interview (such journals do not usually print someone else's stories, they prefer exclusive materials from their own correspondents).
An interview with one of the Karimovs is not exactly a commonplace occurrence. They usually give interviews for a specific reason. What kind of reason is it? Answers to that question can be found in the text of the interview itself.
For the president's daughter who is a politician herself, the interview is certainly unusual. Not a single word was said on politics. Karimova speaks of her children, her friends and colleagues she throws parties for every now and then, her schedule, her hobbies (design). Karimova even mentions in passing, a certain episode that directly concerned her: the episode involving a plane-full of Uzbek gold allegedly detained by Russian customs. All webs site of the opposition had a field day with the story once, but neither Russian nor Uzbek officials ever offered a word of comment on it.
What takes shape in the course of the interview is the image of a business-lady with numerous commitments also a doting mother, who nevertheless finds the time to write poetry (some poems by Karimova are included). The text is thoroughly edited. Not a word is said on Karimov the president or on the relations among the Karimovs in general. The authors of the interview know better than to go against the taboo concerning publication of any data on relations within the president's family.
Hence the conclusion: publication of the interview was supposed to create the maximum "human" image of a young, poetic, and simultaneously practical woman. And consequently dispel the widespread opinion of Karimova as a successful businesswoman ruthlessly absorbing business ventures of the weak.
Karimova herself deployed the tactic of "closeness to the people" soon afterwards, when she became the head of the Centre of Youth Initiatives. The ceremony of its establishment was certainly informal which is unusual for Uzbekistan. Wearing a T-shirt and jeans like all the others, Karimova climbed the podium, asked for a couple of minutes of everyone's attention, and gave the gist of what the Centre was about. Her speech done away with, Karimova sang in chorus with some popular performers and the audience. This I'm-one-of-you style has never been tried in Uzbekistan before. It follows that Karimova intends to rely on an appeal to youth. Smart of her because it is this stratum of society that supplies revolutions with combustibles. According to official statistics in the meantime, people under 30 years account for 60% of the population of Uzbekistan.
The care with which the PR campaign is carried out should be commented on. Only one interview was given - with carefully selected questions and answers - and it was printed by other publications afterwards. The friendly Profil may count on an exclusive interview with Karimov whenever it feels like it because 50% of the Rodionov's Publishers (Profil is its publication) belongs to Iskander Makhmudov, Karimova's business partner. It certainly looks like PR, pure and simple. Some Moscow magazines decided to reprint an interview that initially appeared in an Uzbek publication. Why not be helpful to the possible next boss of this country?

Leaving to remain
Only two successful means of a smooth transfer of state power to the necessary pair of hands are known in the post-Soviet zone - and none of a replacement of an authoritarian regime with other than the nomenclatural opposition. Uzbekistan is unlikely to become an exception to this rule, says Sanobar Shermatova of Bolshaya Politika for Ferghana.Ru.
The weakness of the national democratic opposition and its patent inability to consolidate and offer a realistic project of modernization of the country are a common knowledge. Leaders and activists of Birlik [Unity] and Erk [Will] have lived abroad since the early 1990's, their rapport with the electorate all but lost for good. Had an opportunity to come back presented itself, they'd have rallied the so-called protest electorate of course. In the meantime, it is a sheer impossibility, and not only because of Karimov.
Groups of influence entrenched all around the president, with ministries in their possession, would not give ground. Installation of a new elite in the meantime would inevitably result in a rearrangement of spheres of influence. Even should the nomenclature step down for some reason, there are serious doubts in the capacities of opposition leaders to run a country with the population amounting to 26 millions. They lack the experience. They were never trained for it, it is as simple as that.
Once in the corridors of power, the opposition will inevitably encounter another problem. Legitimacy of the new regime will require acknowledgement by nearby countries and Russia. Revolutions in Tajikistan in 1992 and Kyrgyzstan in 2005 are a vivid example. President Rakhmon Nabiyev was forced to resign, the Tajik opposition sought Moscow's friendship. Russia and other neighbours of Tajikistan chose to back the Popular Front and their support eventually elevated Emomali Rahmonov to presidency.
The future of the new authorities of Kyrgyzstan also depended on recognition, and they knew it. They became legitimate only when Russia, Kazakstan, and Uzbekistan seconded them. The principal argument President Vladimir Putin offered was like this: we know these people, they've done a lot to advance cooperation between our countries.
This is not what can be said about the Uzbek opposition. One day power-hungry Erk leader Muhammad Salikh promotes American military presence in the region claiming that the US military base should return to Uzbekistan while Russia and China (imperialists as they are) must vacate Central Asia, and the following day he promotes close relations with Moscow. Even discounting the aforementioned arguments, a policy like that cannot bring about any positive results. Predictability is what is valued in politics above all. Novices in politics are uniformly feared.
As a matter of fact, one of the two means of a smooth transfer of state power will apparently be used in Uzbekistan. The son inherited state power from the father in Azerbaijan. In Russia, it was a charismatic successor to an unpopular president. Both candidates for president in these countries spent some time as prime ministers first. As far as political technologists are concerned, it is the position of prime minister in charge of economic and social matters the population is so sensitive to, that is the best possible jumping board for career-seekers.
Along with everything else, the prime minister is inevitably the focus of attention of TV channels and newspapers, and that's a sure-fire way of boosting one's popularity. In fact, Ilham Aliyev was to have become chairman of the parliament in Azerbaijan at first. This option was reconsidered at some point and Aliyev Jr. became the prime minister.
Should the Uzbek regime decide to follow suit, Karimova will become the prime minister soon. (For starters, she may become a governor to accumulate experience.) The role played by the prime minister in Uzbekistan will be inevitably boosted in this case. Let us now recollect the events of more than three years ago when Karimov met with journalists in the course of a session of the national parliament. Karimov said then that he intended to step down one fine day but first he would reorganize the government and the parliament. Some of the presidential powers would be invested in these structures. By the Constitution, it is the national leader that appoints all ministers of the Cabinet nowadays. In the future, he will only recommend the prime minister to the parliament leaving formation of the government to the premier himself. Security ministers traditionally handpicked, appointed, and supervised by the president will be appointed by the Senate.
According to Karimov, Uzbekistan is to be transformed into a parliamentary-presidential republic with a strong prime minister. The same report of Deutsche Welle dated December 13, 2002, quoted the president as saying that the reforms in the country would begin in 2005 when the parliament of two houses was elected.
This promise was kept. The first election by party lists took place in Uzbekistan last year. The Liberal Democratic Party associated with Karimova's name won a majority of seats on the lower house of the parliament. The Liberal Democratic Party presents itself as a political force backed by the middle class, but it is essentially a ruling party in everything but name (Prime Minister Shavkat Mirziayev sits on its Council).
By the way, Putin and Aliyev Jr. had political parties of their own on the way to the pinnacle. The United Russia was established literally on the eve of the 1999 parliamentary election. Yeni Azerbaijan [New Azerbaijan] was reanimated after six years of dormancy by Heydar Aliyev and turned over to Ilham who became chairman of the Political Council.

But wait…..
There were other forces these two successors ultimately counted on. It was the Family comprising some oligarchs in Russia, and Aliyev's clan (the Family, in other words) in Azerbaijan.
Nothing even remotely similar exists in Uzbekistan. Relations between the powers-that-be and groups of influence (clans) have a different nature in this country. Certain rules of the game were established in Russia and Azerbaijan in accordance with which the nomenclature and oligarchs (members of the clan in Azerbaijan) serviced each other's interests and saw to mutual security, but Uzbekistan lacks this regulator. Senior state officials are traditionally faithful to presidents (the strongest of them all) but live in the state of permanent fear. That they will second the president's daughter is not a foregone conclusion at all. First and foremost, they will be afraid of losing the administrative resources that ensure security of their wealth and positions and, even more importantly, their own security.
And since the president cannot secure the elite's loyalty and faithfulness to the successor, we cannot afford to rule out the possibility of his return. It may take the form of the status of the first president permitting his participation in political processes. It may even take the form of election the chairman of the Senate (this possibility is whispered about in Tashkent nowadays). Outwardly, democratic procedures will be observed, and someone formally independent of Karimov may be elected the honorific president with enormously restricted powers. The leverage and the state power as such will then remain where they have been for years.

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BANKING

R&D Express- Aussenhandels buys 40% of Savdogar bank 


Germany's R&D Express-Aussenhandels GmbH has acquired 40 per cent of shares in Uzbekistan's Savdogar Bank for two million Euro, the bank said recently, Interfax News Agency reported.
The Central Bank of Uzbekistan gave its permission for the German company to buy the stake in Savdogar, a spokesman for the financial institution said. A shareholders' meeting was expected to discuss the arrival of the German company as a shareholder in the financial institution by the end of April and change the name of the bank. Savdogar Bank was set up in 1994 to service Uzbek trade and commercial enterprises. Legprombank, which services enterprises working in light industry, merged with Savdogar in 1998 and Mevasabzavotbank, which specialises in financing enterprises for the processing of fruit and vegetable products, joined the bank in 2000. The bank has 50 branches and 34 mini-banks. Savdogar Bank had charter capital of six billion som (about five million Euro) on January 1st 2006, divided into 600 common shares with a par value of 10 million som each.

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FOOD & DRINK

Austria's SEID buys only sugar plant in Uzbekistan

Austria's SEID Iandelsgescellschaft mbH has purchased a 99.43 per cent stake in Khorazm shakar (the Khorezmsky Sugar Plant), Uzbekistan's only sugar plant, the Uzbek State Property Committee's press service said, Interfax News Agency reported.
The committee and SEID signed a buy-sell agreement on March 6th, the press service said. In accordance with the agreement, SEID will invest a total of 35.2m Euro and 7.2bn som in the plant. In particular, the new owner paid 17.6m Euro for the share package and took on additional investment liabilities to pay off the plant's 11.6m Euro and 7.2bn som in accounts payable. SEID will also be required to invest six million Euro in developing production of new types of products.
The State Property Committee announced a tender for the sale to foreign investors of a 73.43 per cent stake in Khorazm Shakar for 26.35m Euro in 2004, however the tender was annulled due to a lack of specific bids. In March 2005, the Uzbek government decided to increase the package to 99.43 per cent.
Khorazm shakar has charter capital of 14.6m Euro. The company's employees own a 0.57 per cent stake in the plant. Khorazm Sugar Plant was launched in 1998. The enterprise was initially planned to process sugar beet, from domestically harvested beet however due to a low sugar beet yield, the plant was not able to work at full capacity and the refinery was reconstructed at the cost of two million Euro in 2002 to refine 1,000 metric tonnes of imported raw materials a day.
The US-Uzbek joint venture Shakar Investment provided the amount to upgrade the plant to process raw cane sugar. The plant currently has capacity to produce 1,000 tonnes of sugar per day. Uzbekistan consumes some 630,000 tonnes of sugar per year. Domestic sugar output dropped 24.4 per cent to 146,380 tonnes in 2005.

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