Books on Uzbekistan
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: 279- (23/03/04)
The Uzbeks are in nothing like such a fortunate situation as the Kazaks, who have the other large country in Central Asia, Afghanistan and Pakistan excepted as not FSU states. It is with Kazakstan that they always compare themselves.
The Kazaks have the resources. They have oil and minerals in abundance, in the latter case 60% of those of the former FSU. Uzbekistan has to be satisfied with having the better agricultural land in the fertile Ferghana Valley.
New efforts to reform the economy
The economy is growing, but at 4.4%, compared with Kazakstan's over 10%. Inflation is assessed at 3.8%, whereas it was over 20% in 2,000. A strict monetary policy has been the reason.
Uzbekistan never followed the path of 'shock therapy,' pursued in Russia and elsewhere. It eschewed liberalisation of its exchange controls. Consequently it did not experience the downside of Russian developments in the 1990s, deflation leading to currency collapse, while Kazakstan did to a considerable degree. But both these countries saw their economies boom in the 2000s on the back of higher energy and primary commodities prices, which are rather a problem than a boon for Uzbekistan.
The Uzbek president, Islam Karimov, is a ruthless tyrant, but an able operator for all that. He realises that his country's disadvantage here might in the longer term prove a blessing by forcing the Uzbeks to widen and diversify their economy more than the Russians or Kazaks have done.
Karimov has launched the programme "The Year of Kindness and Mercy" to ameliorate the lot of small and medium business and to reduce red tape in the administration.
Not so merciful political policies
The regime may be kind and merciful to businessmen, but not to its political and ideological opponents. It goes in for a quite gratuitous scale of repression.
There is nothing like the groundswell behind Islamic fundamentalism in Central Asia that obtained and still does in Afghanistan. Fundamentalist groups do operate, but their chance of making any sort of political dent are negligible. Communism generally undermined extreme forms of Islamic piety that ban alcohol and the young consorting on easy terms between the sexes.
If anything is promoting extremism it is the grim successor regime to communism, which is even more venal and arbitrary in its rule. The most prolific group is that of Hizbut Tahrir. A particularly horrific practice that has surfaced recently is that of boiling prisoners alive. The secret police conduct it in the notorious Jazlik high security prison.
A most revealing case that has occurred recently concerns the 63-year old mother of a religious prisoner, Muzafar Avazov, clearly done to death in this way in Jazlik in 2002, namely Fatima Mukhadirova. She was sentenced to six years of hard labour, likely to kill her, incredibly, for making public her son's vile torture and death. She was convicted of trying "to overthrow the constitutional order." On February 12th a judge said that she had "set up an underground cell of women propagating the ideas of Hizbut Tahrir," the police having "found" incriminating pamphlets in her flat, a common occurrence in case of group arrests.
The great Western champion of human rights in Uzbekistan, the British ambassador, Craig Murray, has testified: "This is appalling. She took photographs of her son's corpse which she gave to the British embassy. The Foreign Office sent them to the University of Glasgow's Pathology Department. Their forensic report said the body had clearly been immersed (in boiling water) because of the tide marks around the upper torso."
The Uzbek authorities maintain that he died after inmates spilt hot tea on him!
In a most welcome development his mother's sentence has been cancelled ahead of the arrival of a Western delegation of businessmen. The government must have got the wind-up about the possibility of a cancellation of aid programmes. Hardly worth it for the gratification of torturing an old woman to death.
Military base to stay
The Americans hitherto were prepared to overlook human rights abuses in the republic to obtain its support against terrorism and the Taleban. The Uzbek regime has provided a most useful base in the south at Khanabad for US and UK forces, which they will want to hang onto for a long time to come. It is the key to peacekeeping efforts in Afghanistan.
But the regime continues to appal the Western governments and institutions with which it has relations. Until recently this might seemed to have excluded the Americans. But this was never really so. There was a feeling that the regime might be amenable to pressure expressed privately. The results have been poor, however, and the option of cutting off all US aid, amounting to more than $100m per year has been considered. The timely release of Fatima Mukhadirova has saved their bacon for a time.
The suspension of aid, if it takes place, is likely to be graduated and to exclude military aid. The relationship between Uzbekistan and the West is likely to remain fractious for years, but not necessarily forever, because the regime will not be forever.
Uzbekistan banks report assets boom for 2003
The overall assets of Uzbek banks increased in 2003 by 12.8% to 4,419bn sum, an official in the press service of the country's central bank said recently, Interfax news Agency reported.
Equities of domestic banks increased 10.6% to 791bn sum. A total of 33 banks are currently active in Uzbekistan. Foreign capital is invested in five of them, while three of them, the National Foreign Trade Bank, the People's Bank and Asaka Bank, are state run. The five largest banks (the National Foreign Trade Bank, Asaka Uzpromstroibank, Pakhtabank and Uzzhilsberbank, account for 81% of the total assets.
FOREIGN LOANS & AID
ADB offers key financing to Uzbekistan
The Asian Development Bank (ADB) is helping Uzbekistan to remove the obstacles to increased foreign investment, through a technical assistance (TA) grant approved for US$300,000, New Europe reported.
The TA will help establish a policy and legal framework that gives greater protection to foreign investors and strengthen government agencies.
"Uzbekistan has yet to successfully attract much foreign direct investment (FDI) compared to other former Soviet republics, in spite of the country's abundant natural resources, which include oil and gas, gold and cotton and agricultural products," the statement read.
FDI flows to Uzbekistan have been declining, with estimated disbursements reaching only US$65m in 2002, down by about 10% year-on-year, according to the International Monetary Fund (IMF). This figure is one of the lowest ratios of FDI to gross domestic republics and FDI per head is only US$6.
"FDI is not only crucial to create jobs and economic growth, but will help promote the privatisation of state-owned enterprises," Cheong-Hwan Oh, an ADB governance specialist commented. "Promoting greater capital flows will accelerate the country's integration into world finance and trade and eventually reduce its dependence on foreign assistance."
The TA will base its recommendations on an assessment of the current policy, legal, and institutional framework that will identify the major impediments to FDI in Uzbekistan and possible solutions.
MINERALS & METALS
Uzmetkombinat reports steel production surge
Uzmetkombinat, Uzbekistan's only steel mill, smelted 471,983 tonnes of steel in 2003, 4.9% more than in 2002. The company said it increased roll production 6.4% to 446,500 tonnes, including value-added products 6.4% to 323,300 tonnes. Roll exports rose 27.3% to 180,730 tonnes and export revenue 70.7% to US$42m. Uzmetkombinat installed a new-generation DSP-100 UMZ electric furnace, capacity 500,000 tonnes per year, in 2003, to replace some obsolete smelting capacity. Uzmetkombinat smelts scrap metal. It is expected that the government, which owns 40% of the shares, will call a tender for the sale of 33% in Uzmetkombinat to a foreign investor this year, Interfax News Agency reported.
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