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Key Economic Data 
  2003 2002 2001 Ranking(2003)
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

Update No: 318 - (28/06/07)

The waxing Moscow-Tashkent axis 
Uzbekistan is a pariah state, as regards the West. But that is a positive recommendation to the Kremlin. After all what the US now objects to about the Uzbek regime is that it routinely tortures and boils alive radical Islamicists, while perpetrating the odd massacre or two, such as at Andijan in the eastern Ferghana Valley in May 2005. Putin has been massacring them from his inception of office in Chechnya - and many more than Islam Karimov. This is a common bond.

President Karimov arrived in St Petersburg in early June to participate in an informal summit of CIS countries. But beforehand, he met with Russian President Vladimir Putin on 9th June at a private bilateral meeting at the Konstantin Palace in Strelna outside St. Petersburg. 

The leaders must have had strictly confidential discussions. But they allowed a bland communiqué to appear afterwards, in which they noted the expanding relations between two countries. "Cooperation between our countries consistently develops and there is a strong legal basis for them," which is the Agreement of Allied Relations signed by presidents Karimov and Putin in November 2005. 

The volume of trade turnover between the two countries in the past year has increased and reached more than US$3 billion that testifies to a successful continuation of cooperation. Over 450 joint ventures with the participation of Russian investors have been established in Uzbekistan. Uzbek investors are involved in 284 joint ventures functioning in the territories of Russia. Over 80 representations of Russian companies and firms have opened up in Uzbekistan. 

Last year the Russian market received more than one million tons of various agricultural products from Uzbekistan. Beyond that: "Our countries have great opportunities to expand relations in the fuel and energy sector, metallurgy, communications, tourism and other spheres, " the two leaders averred. 

During the meeting Karimov and Putin discussed the issues of further developing the relations between two countries. "In several days the fundamental document in our relations - the strategic partnership treaty will turn three years," Putin said. "Probably something may develop more effectively, but in general we are satisfied with how the document operates and how our relations with Uzbekistan develop," he said. "I hope that in short-term or mid-term we will be close partners, close friends and will step up our relations in the future," Putin said.

He is fond of deeming dictators he consorts with as 'our scoundrel.' How much better when his interlocutor can reciprocate the compliment, as Karimov can with him. 

But there are antagonistic undercurrents all the same; China beckons
No one could miss the fact that Russian companies were a major presence at the Oil and Gas Uzbekistan Exhibition, held recently in Tashkent. But the high profile of Russian firms at the trade fair does not mean that Moscow's dominating role in Uzbekistan's energy sphere is especially welcomed by President Karimov's administration.

On the surface, the energy partnership between Russia and Uzbekistan seems stronger than ever, underscored by Tashkent's participation in Russian efforts to expand and upgrade a pipeline supply network, known as Central Asia-Centre. If the overhaul goes according to plan, Russia should be able to maintain its stranglehold on Central Asian natural gas, and possibly be in position to realize its long-held dream of creating an international gas cartel, akin to OPEC.

Observers in Tashkent report that Uzbek officials are increasingly concerned about Moscow's growing influence over Uzbekistan's energy sector. "The Russians [the Russian companies] are not more welcome than the Western companies, or the Chinese," said a Tashkent-based foreign businessman, speaking on condition of anonymity.

Uzbek authorities are eager to diversify their energy options. The problem is that politics is severely limiting their choices. Relations with the United States and European Union plunged following the Andijan events of 2005, when government security forces opened fire on unarmed protesters. Lingering tension precludes any deals with US and EU firms at this time.

Tashkent has vigorously pursued closer energy ties with its only other viable option - China. In late April, the state energy company, UzbekNefteGaz reached a deal with the China National Petroleum Corp. to construct a 530-kilometer pipeline with a projected capacity of 30 billion cubic meters (bcm) of gas per year. Uzbek company officials said the project is intended to facilitate a 2006 deal between China and gas-rich Turkmenistan, under which Ashgabat pledged to supply Beijing with 30 bcm of gas annually starting in 2009.

Uzbekistan itself produced 62.5 bcm in 2006, roughly 80 per cent of which was used for domestic consumption. The remainder was exported to Russia and neighbouring Central Asian states. Some experts believe Uzbekistan may possess far larger reserves of gas than are presently known. 

Privately, UzbekNefteGaz representatives hint that they want to use the Chinese export route as leverage to get the Russian energy giant Gazprom to pay a higher price for the gas it buys from Tashkent. The Russian company currently pays US$100 per thousand cubic meters, piping it to Russia before re-exporting it to Europe, where Uzbek gas fetches the going market rate of US$220/tcm or more. Russian officials do not seem overly concerned about the Uzbek-Chinese pipeline deal, believing that it will be years, if ever, before the planned export route becomes operational.

Gazprom and LukOil, another Russian energy giant, have agreements in place to explore Uzbek sites that possibly contain energy deposits, many of them located on or near the rapidly shrinking Aral Sea. Theses projects have proceeded at a snail's pace, however. For much of 2007, Uzbek and Russian officials have haggled over the initiatives. 

Earlier this year, Tashkent accused Gazprom of not living up to its investment commitments, coming up with only about one-tenth of the US$300 million that it had pledged to pump into exploration and development projects. Russian officials, meanwhile, complained about Uzbek government obstructionism. An early March visit to Tashkent by Russian Prime Minister Mikhail Fradkov failed to make much headway in resolving lingering differences. 

The impression that some foreigners in Tashkent get is that Karimov's administration is playing for time. Tashkent needs Russia's political support at this time, but does not want to grow economically dependent on Vladimir Putin's Kremlin. Perhaps with the passage of time, circumstances will change, and Uzbek authorities could find new partners for energy ventures, or at least create an appearance of competition that enables them to drive harder bargains with Russian firms, some observers believe. "It seems that the Uzbek administration is purposely working very slowly, and in a very complicated way," the foreign entrepreneur stated.

Other observers say Uzbek officials have a demonstrated ability to undermine their own policy objectives. To back up their contention, they point to the April decision of another Chinese firm, Sinopec, to withdraw from a US$110-million deal that was inked in 2005. The Chinese entity reportedly backed out due to exorbitantly high tax rates set by the Uzbek government. 

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Uzbek-Korean bank boosts assets to IAS 45.5%

Uzbek-Korean UzKDBbank saw assets to international accounting standards surge 45.5 per cent in 2006 to 84.701 billion som, the bank's balance sheet report shows, Interfax News Agency reported. 
The bank's loan portfolio expanded 20.7 per cent to 21.075 billion som. Liabilities increased 47.9 per cent to 66.838 billion som and capital grew 37.3 per cent to 18.29 billion som. The bank obtained audited net profit of 4.967 billion som, up 120 per cent. UzKDBbank (UzDaewooBank until February 2006) was established in 1997 to work with South Korean companies operating in Uzbekistan.

Uzbek fund inks agreement with Czech exports bank

The Reconstruction and Development Fund of Uzbekistan has signed an agreement with the Czech Exports Bank aimed at the support and development the investment and financial cooperation between the two countries, Pravda Vostoka newspaper reported.
The new Czech partner of the Fund is a specialised state financial institution, which renders to Czech and foreign companies the long-term financing with an aim to support the Czech exports, firstly the products of machine engineering, oil, electrical technology industry and transports and implementation of investment projects. The Reconstruction and Development Fund of Uzbekistan was established by the decree of the president of Uzbekistan in 2006.

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Delegation to promote Uzbek-Thai relations

The visit of a Thailand delegation to Uzbekistan headed by the deputy minister of the ministry of international affairs, Sovanita Kongsiri, will promote the future strengthening of collaboration between countries, according to Uzbekistan Today. 
Uzbekistan and Thailand have the same views on many issues of modern international relations. The two countries plan to develop cooperation in many areas. Thailand actively supports strengthening of the international cooperation in questions of a safety of Asia Pacific region (APR), and also fighting against drugs and drug-dealing.

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Uzbek-British JV AGF plans to double gold production 

The Uzbek-British joint venture, Amantaytau Goldfields (AGF), could double gold production in 2010. A highly placed source at the Uzbek State Geology and Mineral Resources Committee told Interfax that AGF, which produced 98,053 oz of gold in 2006, could be producing 250,000 oz or 7.8 tonnes in 2010, Interfax News Agency reported. 
AGF will achieve growth of 180,000 oz annually with the launch of the 87.6-million Euro project to process sulphide ores mined at the Amantaytau field, the source said. It is expected that the Uzbek government will in the third quarter of this year give its consent to launch the project. The project could get under way at the end of 2007 or early 2008.The source said the joint venture produced 161,615 oz of gold in 2005. The drop in production last year was attributable to tax problems encountered by the company. The source said that those problems had been solved since Zeromax GmbH had become a shareholder in Oxus Gold Plc., which owns 50 percent of AGF, and that the joint venture was now working as normal. AGF processed 1,375,500 tonnes of ore graded at 3 g/t Au in 2006. It also processed 1,465,500 tonnes graded at 4.5 g/t. Net profit fell to 8.85 million Euro in 2006, from 13.26 million Euro in 2005.The State Geology Committee owns 40percent and Uzbekistan's Navoi Mining and Metals Plant owns 10 percent of AGF, which is licensed to develop the Amantaytau filed with a recoverable 3.2 million oz and more than three million oz in additional estimates reserves. It is also licensed to four other deposits in the Central Kyzyl Kum. The biggest of them, Uzunbulak and Vysokovoltnoye, hold a recoverable 230,000 oz and 600,000 oz, respectively. The Navoi Regional Economic Court in October 2006 ordered AGF to pay more than 223.8 million Euro in back taxes for the period 2003-2005. Switzerland's Zeromax in November 2006 signed an agreement to acquire 16percent of Oxus Gold Plc. The influential Swiss company, which has a substantial track record of business in Uzbekistan, helped to resolve the joint venture's tax problems. Uzbekistan is the world's ninth biggest gold producer. It mines around 80 tonnes of the metal per year.

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Uzbekturizm inaugurates tourism office in Pakistan

The national company of Uzbekistan in the area of promoting tourism into the country, Uzbekturizm, has established its representation office in Pakistan's capital of Islamabad. The representatives of political, business and public circles of Pakistan, as well as the tourist industry of both countries took part in the inauguration ceremony of the office. "The two countries have profound opportunities to extend the trade and economic relations," Talha Mahmood, the Pakistan senate interior affairs committee chairman, the president of the Pakistan-Uzbekistan Friendship Society, has said, "at the moment, the trade, exchange of technologies in leather, pharmaceutical and textile spheres of industry are turning into the priority directions in the joint trade and economic activity."

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