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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: 295- (26/07/05)

The aftermath of May
In Uzbekistan, an uneasy calm has set in since government forces put down a rebellion centred in the Ferghana Valley town of Andijan in May. President Islam Karimov, who has ruled the country of 26 million with a heavy hand since Soviet times, blamed "Islamic militants" for the uprising. The government insists that 176 people died, mostly armed rebels. Human rights groups say more like 750 mostly innocent people were killed.
Mr. Karimov has blocked calls for an independent probe into the tragedy. The US reacted cautiously at first, but has since stepped up criticism of the Uzbek government. In response, Karimov appears to be moving closer to Moscow. Russian President Vladimir Putin has fully supported the Uzbek leader's view of the Andijan events.
"In Uzbekistan, destabilization will continue," says Alexei Malashenko, an expert with the Carnegie Center in Moscow. "At the very least, Karimov will soon be replaced. He is an exhausted leader."

A beleaguered regime
There is no doubt that the events of May, the riots in the eastern town of Andijan and their bloody crackdown, killing hundreds of people, have changed everything for the Uzbek regime. The sinister thing is that survivors who were taken to hospital have been disappearing so that there is little evidence left of exactly what happened.
However, it is clear that after a jailbreak was organised by businessmen in the city and carried out at their behest, releasing at least 23 (but possibly many more. up to 2,000), the regime reacted with the utmost ferocity, with many more than the 176 officially numbered dead in the ensuing massacre.
The trouble has even spread to the capital. A court in Uzbekistan's capital, Tashkent, sentenced 20 people to jail for extremist activities.
A group of 20 protesters were sentenced to terms of between five and 17-and-a-half years. They were accused of belonging to outlawed Islamic extremist groups and of plotting to overthrow the government. The men - all in their 20s - are from the same neighbourhood in Tashkent. 
The verdict sparked anger among relatives, who had gathered outside the courthouse. Police dispersed the crowd. One person was reportedly detained. 
It was the highest-profile trial of accused Islamic extremists in Uzbekistan since the May jailing of 23 men in the eastern city of Andijan, who were then released in the jailbreak. 

Unsavoury methods
The Karimov regime has modelled itself on Saddam's, with an original use of torture chambers. Boiling victims alive and flaying them alive are routine methods (as also the sawing in half of pregnant women, Uday Hussein's speciality after he became impotent). When a suspect is taken to be investigated, so are his whole family and his work colleagues, who are obliged to watch the torture sessions. If it is decided to execute the accused, the family et al are obliged with guns in their backs to do it themselves. 
These nice practices have at least been ended now in Iraq; but Karimov is determined to keep them in operation in Uzbekistan, a tribute to the man now in the dock in Baghdad.
In the dock is exactly where Karimov does not intend ever to be. He is aware that Saddam ended up there by falling out with his previous allies, the Americans. He himself is having second thoughts at palling up with them in the wake of 9:11. They are being asked to discontinue flights from the air base in Khanabad on the Afghan border, which the US took over use of in the autumn of 2001.
The Foreign Ministry said in a written statement that the Khanabad air base, which U.S. forces now use to support operations and supply humanitarian aid to Afghanistan, was only intended for combat operations in Afghanistan after the attacks of 11 September 2001. 
Uzbekistan also claims the United States hasn't paid takeoff and landing fees for all flights to and from the base, and has offered virtually no compensation for additional costs incurred by the Uzbek authorities. 
But it might be more difficult to get the Americans out than it was to let them in.

Karimov tilts towards Moscow
Naturally, Uzbekistan is now tilting back towards Moscow, which is not fussy at all about human rights abuses. Karimov travelled there on June 28th-29th, apparently seeking reassurance amid growing international pressure for an independent investigation into May's bloody Andijan crackdown. Russia taking advantage of Uzbek frustration over Western pressure resulting from the crackdown. Moscow is now able to rely on security as well as economic incentives in order to make Uzbekistan move closer to Russia.
Karimov has an original idea of how the preceding riots happened. He restated his firm conviction that the events had been planned from abroad. He told Russian leaders that his country had been targeted by an "information attack," implying a wider conspiracy. Moscow has declined to condemn Tashkent's heavy-handed approach and shares Karimov's claims that his regime had been targeted by an international conspiracy.
The identity of the true miscreants is not in doubt - they are Islamic fundamentalists funded by Westerners, notably the Americans, using Afghan stooges to do their dirty work for them. The regime is utterly blameless.
Karimov accused the Western media of having advance knowledge of the Andijan riots and even preparing the news coverage ahead of time. "The information attack on Uzbekistan started before the Andijan events," he claimed. The masterminds behind the Andijan events envisaged civilian casualties and wanted to hold the Uzbek government responsible, Karimov alleged at the meeting with President Vladimir Putin at the Novo-Ogarevo presidential residence outside Moscow. "They knew about the upcoming bloodshed and civilian casualties," Karimov alleged. 
Karimov also likened the Andijan riots to the recent "colour revolutions: in other former Soviet republics. "In essence, these events, which should be called operations, are boldly provoked in the CIS and they remain unpunished," he said (RIA-Novosti, June 28). 
Putin revealed that Russian security agencies had information about militants infiltrating Central Asia from Afghanistan and had warned governments in the region before the uprising in Andijan. "We are glad that the situation is stabilizing," the Russian president told Karimov. Putin said he had discussed the issue with leaders of the countries bordering Uzbekistan at the recent Moscow summit of the Collective Security Treaty Organization. The issue was also discussed at the summit of the Shanghai Cooperation Organization in late June (Itar-Tass, June 28)
Russian Defence Minister Sergei Ivanov also reiterated claims that the violence in Andijan was orchestrated from Afghanistan. Partly to counter such interference, preparations are being completed for the first Russian-Uzbek military exercises in post-Soviet history, Ivanov said at a meeting with Karimov. "We are getting ready for the summer joint exercises at a site in central Uzbekistan," Karimov said, adding that the war games would be of special importance for Uzbekistan in the wake of Andijan. "Our bilateral military ties are gearing up," Ivanov commented (RIA-Novosti, June 29). 
Moscow has also been keen to build stronger economic relations with Karimov's regime. Russia and Uzbekistan moved to boost bilateral economic cooperation at a summit meeting in Samarkand in August 2003, especially the export of Uzbek cotton and natural gas, and the participation of Russian companies in exploring oil and gas deposits in Uzbekistan. Notably, Russia has been interested in enlisting Uzbekistan into its hydrocarbon game in Central Asia. Russia's natural gas monopoly, Gazprom, would invest US$1bn in Uzbekistan, Putin announced in June 2004. Gazprom's investment would eventually raise Russian involvement in Uzbekistan to US$2.5bn.
Gazprom has indicated an interest in acquiring a 44% stake in the Uzbek pipeline monopoly Uzbektransgas. The deal was supposed to facilitate supplies of Turkmen gas to Russia via Uzbek pipelines. However, Gazprom's acquisition of the Uzbektransgas stake is yet to materialize.
In June 2004, Putin and Karimov met in Tashkent and signed a partnership agreement as well as a US$1bn 35-year production-sharing agreement to develop Uzbek natural gas deposits. Under the agreement, top Russian oil producer Lukoil is to develop the Kandym, Khauzak, and Shady gas fields in the south of the country, which have 280 billion cubic meters of proven reserves. Lukoil will have a 90% share in the project, with Uzbekistan's Uzbekneftegaz holding the remaining 10%.
In July 2004, Moscow-based Mobile TeleSystems agreed to pay US$121m for 74% of Uzbek provider Uzdunrobita and signed an option to buy the remaining 26% for US$38m in the next three years. It was understood that MTS agreed to pay a hefty premium for the Uzbek firm, which is controlled by Karimov's daughter Gulnara Karimova, known as the "Uzbek Princess." MTS was reportedly paying roughly 33 times what the company's stated value just three years ago. In November 2003, the Russian Foreign Ministry accredited Karimova as a counsellor at the Uzbek embassy in Moscow, a move seen as an early sign of Uzbekistan's drift towards Moscow.
Russian media outlets highlighted the security element of the renewed partnership between Russia and Uzbekistan. Karimov decided to become Moscow's ally again due to security concerns, Izvestiya commented (June 29). Wary of the growing Western clout in the post-Soviet states, Moscow aims at neutralizing outside influence by creating a troika of Russia-China-Uzbekistan, Kommersant commented. Russia may offer Uzbekistan significant military aid and press Tashkent to return to the Collective Security Treaty grouping, the daily speculated (Kommersant, June 29). The Collective Security Treaty was signed in 1992 in Tashkent but Uzbekistan quit the CST back in 1999.

Chinese ready for talks in Uzbekistan
The mayhem in May is also bringing Tashkent closer to Beijing. The parallel with Tienmanen Square is evident to all.
A Chinese delegation was scheduled to pay a visit to Uzbekistan in July, a Chinese envoy to Uzbekistan said in a recent interview with Jahon new Agency, Interfax News Agency reported.
Ambassador of China to Uzbekistan, Gao Yushen, said the delegation, to be led by Chinese Deputy Prime Minister, Wu Yi, will visit Uzbekistan to discuss with local authorities the implementation of several agreements, signed during the visit of Uzbek leader to China in late May. Simultaneously, the business circles of two countries will hold a forum, Chinese envoy said.

Human rights activists at risk in Uzbekistan 
Uzbekistan is in the human rights focus as members of a fact-finding team from the International Helsinki Federation for Human Rights (IHF), who spent a week in Tashkent, Andijan, Djisak and Samarkand, reported that human rights defenders were facing levels of repression comparable with what happened to dissenters in the Soviet Union in 1968. 
According to a press statement from IHF, the team, which included members of the Helsinki groups from Uzbekistan (Talib Yakubov), Belarus (Dzmitry Markusheuski), Azerbaijan (Eldar Zeynalov) and from the IHF Secretariat (Eliza Moussaeva), visited numerous human rights defenders in an effort to document human rights developments in Uzbekistan after the mass killings of civilian demonstrators on May 13. 
Highlighting the point, the statement said: "At one point, the IHF team members were themselves detained and forced to leave Andijan region." Human rights defender Momir Azimov, on May 26, when confronted by government supporters asking why he wanted to hold a picket concerning the Andijan events, stated: "If we keep silent about Andijan, Djisak will be next. One can't keep silent." 
In a counter attack to suppress information about the actual happenings of May 13 events and death toll, IHF pinpointed that Uzbek authorities were forcefully propagandising the citizens with an official version of the May 13 events. 
The neighbouring Kyrgyzstan where Uzbeks took shelter was mulling over whether to send back more refugees back which according to IHF, "would likely result in detention and torture back in Uzbekistan" as "Uzbek refugees have been labelled as "criminals" and "terrorists" by the Uzbek authorities. Several have been sent back to Uzbekistan by decision of Kyrgyz authorities, and face persecution there."

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TELECOMMUNICATIONS

Loan to help expand Uzbek mobile network


The European Bank for Reconstruction and Development (EBRD) is offering the Uzbek GSM mobile network operator, Unitel, 30m Euro in order to make mobile communication services affordable and accessible to greater part of the Uzbek population, New Europe reported.
The EBRD already holds 7% stake in the private, Greek-owned company. Unitel, which has 106,000 subscribers and a market share of 25%, would utilise the funds to extend its network and introduce services, such as pre-pay which currently is unavailable in the country. Only 1.5% of Uzbeks so far use mobile phones.
By making mobile services more affordable, Unitel aims to capture the lower income segment of the market.
The loan is consistent with the bank's strategy for Uzbekistan, which on account of slow progress in political and economic reforms stresses private sector project finance, particularly for such critical infrastructure as telecoms. Unitel is owned by Germanos SA, the leading Greek retail network of mobile service and equipment centres; Panos Germanos and the EBRD. Germanos PA, listed on the Athens Stock Exchange, has a network of about 300 outlets in Greece and more than 400 in central and eastern Europe.

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