Uzbekistan-U. S. Economic Relations: Problems and Perspectives
Uzbekistan-U. S. Economic Relations: Problems and Perspectives
Uzbekistan-U. S. Economic Relations:
Problems and Perspectives
An Independent Study by Mamurjon
Rahimov,
Economics Department, the University
of Illinois at Chicago
Foreword
A lot of foreign and international companies and
organizations have long been reluctant to rely on Uzbek statistical data. In
fact, right before the brake-up of the Soviet Union, there was a large
investigation by authorities from Moscow about notorious statistics
manipulation by Uzbeks in cotton production and delivery to Russian textile
factories. Millions of rubles (Soviet currency) changed hands, echelons of
EMPTY trains traveled all the way to Moscow, large amounts of bribes were paid
to special interest groups, mafia was involved - and at the end the cotton in
the statistics was never produced. Therefore it was labeled "Pahta
Ishi" (i.e. Cotton Conspiracy). The main investigator, Mr. Gdlian died in
an airplane crush - reportedly set up after the roots of the case led him back
to Moscow.
Therefore, I did insert some key data, and
proceeded on to "paint" a big picture of the situation. Besides
simple statistics such as population size, inflation, unemployment, and many other
key statistics have been extensively manipulated. I myself started working for
the largest new economic sector of Uzbekistan - automotive industry in 1999. As
an insider I learnt grave violations in simple economic statistics such as:
Cars produced in Uzbekistan were shipped out of the country, and their dollar
amount was immediately written down as AUTOMOTIVE EXPORTS - regardless they
were never sold. I was told by a witness who traveled to Russia, main market
for Uzbek cars, that thousands (!) of cars shipped there in 1997 were rotting
in storage places - under snow and rain! Is that exports? Main website for info
on Uzbekistan, www.gov.uz has economic data up to 2001. Most other sources make
their own estimates. Therefore I did not concentrate on statistics and went on
to highlight major issues.
Summary
Uzbekistan is a key US ally in the Central Asian region in
the international war against terrorism efforts to counter illegal narcotic
traffic and also is an important U. S. economic partner in this region.
Uzbekistan continues to rebuild its economy after gaining its independence from
the former Soviet Union in 1991. Improving international trade ties and
attracting more foreign direct investment into the country remain on the top
list for policy makers of Uzbekistan, and policymakers there are attempting to
design strategies to boost Uzbekistan’s international competitiveness.
Introduction
The United States and Uzbekistan have maintained close
relations since Uzbekistan gained its independence in 1991, cooperating in a
large array of areas, such as defense and security, designing measures against
illegal narcotics trafficking, liberalization of trade, promotion of democracy
in the region, and, more recently, combating international terrorism. Uzbekistan-
U. S. economic relations can not be viewed separately from all of the above,
since Uzbekistan is a new country and requires strong international support in
facilitation of development in almost every field.
Uzbekistan at the time of gaining independence
At the time of gaining its independence from the former USSR,
Uzbekistan’s economy was in shambles and ill-prepared for an independent
functioning. The fact that this independence was gained by default and/or
inertia partially contributed on the lack of preparedness of the economy. For
decades until this break-up, Uzbekistan’s economy was, just like that of any
other “little-brother” republics’ (i.e. except Russia, the “big brother“),
geared towards working like a small wheel in the Soviet mega-economy. Mainly,
Uzbekistan was a producer of cotton for the textile industry of the former
USSR. Besides that, Uzbekistan supplied other raw materials such as silk,
wool, produce; and natural gas. Instead of building on its existing strengths,
which was the recommendation of various think tanks and foreign advisors,
Uzbekistan chose to remain a raw-material supplier as before, and ventured into
new fields such as automotive manufacturing.
Shortly after independence, Uzbekistan imposed a
strict control over hard currency convertibility (mainly dollar), and since
then economists and lay-people alike accused hard currency inconvertibility as
the main cause of Uzbekistan’s economic problems. However, time showed that
this was not so true: Uzbekistan eventually removed its restrictions on hard
currency exchange, but most problems did not go away.
The U. S. Department of State says the following about the
factors that hinder the growth of Uzbekistan’s economy:
Although it is difficult
to make an accurate estimate of economic growth in Uzbekistan--because of the
unreliable nature of government statistics, which often serve political rather
than economic ends--economic growth is far below potential due to:
·
the country's poor investment
climate;
·
failure to attract foreign
investment;
·
an extremely restrictive trade
regime, implemented in order to meet a strategy of limiting imports of consumer
goods;
·
failure to reform the
agricultural sector of the economy, potentially the engine of economic growth
for this largely rural economy; and
·
the price system in Uzbekistan,
which is not functioning properly due to government intervention in markets.
Population Statistics and GDP per Capita
Uzbekistan has not conducted a population census since 1989.
Although there was a very intensive migration during post-Soviet years, for
instance many Russians and other ethnicities left the country, Uzbekistan’s
population size is still only estimated, and in most cases it is believed to be
underestimated. According to the opinion of some economists of Uzbekistan,
consistent underestimation of Uzbekistan’s population mainly serves one
purpose: to exaggerate GDP per capita. It is well known that GDP per capita is
an important economic indicator for any country’s economy. Since population
comes in the denominator of this indicator, the smaller population - the higher
the GDP per capita.
Uzbek Government might have used this tactic to exaggerate
its economic growth achievements, and to attract more foreign investors.
What are the factors that make Uzbekistan an attractive
partner in Central Asia?
After the break-up of the Soviet Union, five independent
republics appeared on the map of Central Asia: Kazakhstan, Kyrgyzstan,
Turkmenistan, Tajikistan, and Uzbekistan. Various countries have been actively
trying to establish themselves in this region, and this competition in regional
hegemony was called the Great Game. The United States has joined the race quite
early. So what attracts the USA in Uzbekistan? These factors probably are:
abundance of natural resources, large consumer base and labor resources, and
strategic location. Uzbekistan is the most populous country in Central Asia.
It has over 25 million people, concentrated in the south and east of the country,
who are nearly half the Central Asia’s total population. Uzbekistan is rich in
oil, gas, uranium, and gold. Since 1991 Uzbekistan has reached
self-sufficiency in oil and oil products. The republic was the third largest
producer of natural gas in the former Soviet Union behind Russia and
Turkmenistan, producing more than 10 percent of the union's natural gas in the
1980s (Library of Congress, 1998). Uzbekistan is the fifth largest producer of
cotton in the world (and second largest exporter of it), and also the eighth
largest producer of gold (ECO, 2004).
Table 1. Selected Economic Indicators for Uzbekistan’s
Economy:
1995-2001
|
1995
|
1996
|
1997
|
1998
|
1999
|
2000
|
2001
|
Nominal GDP (bln soum)
|
303
|
559
|
977
|
1359
|
2129
|
3256
|
4868
|
GDP per capita (1000 soum)
()((1
capita
|
-
|
24.3
|
41.5
|
58.9
|
86.8
|
128.0
|
150.1
|
Sector Shares in GDP (%)
|
|
|
|
|
|
|
|
Agriculture
|
32
|
26
|
32
|
31
|
34
|
34
|
35
|
Manufacturing
|
20
|
21
|
18
|
17
|
17
|
16
|
16
|
Services
|
48
|
53
|
50
|
52
|
49
|
50
|
49
|
Source: Ministry of Macroeconomics and Statistics
Table 2. TOTAL FOREIGN DIRECT INVESTMENT
(mln US $)
(as compared to other countries in the
region)
Countries
|
1996
|
1997
|
1998
|
1999
|
2000
|
2001
|
2002
|
Kazakhstan
|
1,674
|
2,107
|
1,233
|
1,852
|
2,781
|
4,557
|
4,106
|
Kyrgyzstan
|
153
|
86
|
136
|
109
|
90
|
90
|
116
|
Tajikistan
|
18
|
94
|
164
|
275
|
323
|
354
|
434
|
Turkmenistan
|
108
|
108
|
62
|
89
|
131
|
150
|
100
|
Uzbekistan
|
90
|
167
|
25
|
20
|
25
|
64
|
81
|
Source: ECO, 2004.
Neighboring Kazakhstan, mainly due to huge oil reserves plus
more liberal approach to transition to market economy - got almost 10 times
more FDI.
Uzbekistan Trade and Investment Patterns
Table 3. Uzbekistan’s Major Trading Partners: 2000 and 2001
Country Ranking
(2001)
|
Trade Turnover
(million U$)
2000
|
2001
|
% of
2000
|
Total trade turnover
|
Russia
|
1010.4
|
1129.8
|
16.3
|
17.6
|
Korea
|
393.8
|
485.3
|
6.3
|
7.6
|
Ukraine
|
331.9
|
372.7
|
5.3
|
5.8
|
Kazakhstan
|
316.4
|
312.9
|
5.1
|
4.9
|
USA
|
307.7
|
293
|
5.0
|
4.6
|
Great Britain
|
295
|
285.3
|
4.7
|
4.5
|
Germany
|
292
|
283.4
|
4.7
|
4.4
|
Uzbekistan has been able to retain some of the most important
trading partners from the former bloc: Russia, Kazakhstan, and Ukraine have
been traditionally major trading partners for Uzbekistan. At the same time, it
was successful in establishing trading relations with the some of the most
developed countries of the world. South Korea, the largest investor in Uzbek
economy, has been able to accomplish this mainly through now-bankrupt Korean
giant “DAEWOO” - the joint venture with Uzbek government, represented by Uzavtosanoat,
“Uz-DAEWOO Auto Co.” has been producing passenger cars since 1996. South Korea
has invested in Uzbek economy over 1 billion dollars (Minmacroeconomstat, 2004)
- the lion‘s share of which is attributed to DAEWOO. In 2001, American auto
corporation GM purchased DAEWOO, and this indirectly has placed the US one step
closer to Uzbekistan (Lee, 2001). Even though GM did not purchase the
manufacturing plant of DAEWOO in Asaka, Uzbekistan, it has been partnering with
Uzbekistan through sales of parts.
Key Macroeconomic Indicators
(Percent)
Table 4.
|
1995
|
1996
|
1997
|
1998
|
1999
|
2000
|
2001
|
Gross Domestic
Investment/GDP
|
|
15.1
|
18.9
|
10.2
|
11.8
|
15.9
|
20.2
|
Gross Domestic Saving/GDP
|
|
7.9
|
14.9
|
9.9
|
10.5
|
16.5
|
-
|
Inflation Rate
|
|
64.3
|
27.6
|
26.1
|
26.0
|
28.0
|
26.6
|
Growth in Money Supply (M2)
|
|
113.7
|
36.0
|
28.0
|
31.5
|
17.1
|
16.4
|
Unemployment Ratea
|
|
0.4
|
0.4
|
0.5
|
0.5
|
0.5
|
-
|
Fiscal Balance/GDP
|
|
-7.4
|
-2.2
|
-3.4
|
-2.2
|
-1.0
|
-1.0
|
Source: Asian Development Bank: Asian Development Outlook
2002.
a: Pricewaterhouse Coopers: Uzbekistan: A Business and
Investment Guide 2002
Economic Growth
(percent)
Table 5.
|
Average 92-96a
|
1996
|
1997
|
1998
|
1999
|
2000
|
2001
|
GDP
|
-3.4
|
1.6
|
5.2
|
4.4
|
4.4
|
4.0
|
4.5
|
Value Added in Agriculture
|
-1.8b
|
-7.3
|
5.8
|
4.1
|
5.9
|
-
|
4.5
|
Value Added in Industry
|
-2.6b
|
6.0
|
6.5
|
5.8
|
6.1
|
5.8
|
8.1
|
Value Added in Services
|
-
|
9.9
|
21.3
|
9.5
|
12.6
|
13.0
|
14.2
|
Source: Asian Development Bank: Asian Development Outlook
2002.
a: Growth figures prior to 1996 are taken from IMF:
Uzbekistan: Recent Economic Developments 1998
b: Average pertains to 1993-96
The External Sector
Table 6.
|
1996
|
1997
|
1998
|
1999
|
2000
|
2001
|
Merchandise Exports
(Million US$)
|
3534 (1.7)
|
3695 (4.5)
|
3048 (-17.5)
|
2777 (-8.9)
|
2816 (1.4)
|
2381a (-15.4)
|
Merchandise Imports
(Million US$)
|
4240 (31.0)
|
3768 (-11.2)
|
2937 (-22.0)
|
2586 (-11.9)
|
2440 (-5.7)
|
2370a (-2.9)
|
Balance of Trade (Million
US$) (x)
|
-706
|
-73
|
111
|
191
|
376
|
11
|
Current Account Balance
(Million US$)
|
-979
|
-585
|
-94
|
-164
|
184
|
-58
|
Exports/GDP (%)a
|
24.9
|
23.9
|
28.2
|
18.7
|
23.7
|
20.7
|
Imports/GDP (%)a
|
23.2
|
28.7
|
26.2
|
18.6
|
21.4
|
20.6
|
Current Account Balance/GDP
(%)
|
-7.2
|
-4.0
|
-0.6
|
-1.3
|
0.8
|
-0.5
|
Foreign Direct Investment
(Million US$)
|
55
|
286
|
140
|
121
|
100
|
-
|
External Debt Outstanding
(Million US$)
|
4163
|
4665
|
3467
|
4237
|
4449
|
4600
|
External Debt/GDP (%) (x)
|
16.8b
|
18.7b
|
23.7
|
26.4
|
35.1
|
39.7
|
Official Exchange Rate
(Soum/US$)
|
40.1
|
66.2
|
94.5
|
124.6
|
236.6
|
422.9
|
Source: Asian Development Bank: Asian Development Outlook
2002.
a: Ministry of Macroeconomics and Statistics
b: Economic Cooperation Organization: Annual Economic
Report 2000
Figures in bracket are growth rates.
Trends in Foreign Trade
Table 7
|
1996
|
1997
|
1998
|
1999
|
2000
|
2001
|
Merchandise Exports
(Million US$)
|
3534 (1.7)
|
3695 (4.5)
|
3048 (-17.5)
|
2777 (-8.9)
|
2816 (1.4)
|
2381a (-15.4)
|
Merchandise Imports
(Million US$)
|
4240 (31.0)
|
3768 (-11.2)
|
2937 (-22.0)
|
2586 (-11.9)
|
2440 (-5.7)
|
2370a (-2.9)
|
Exports/GDP (%)a
|
24.9
|
23.9
|
28.2
|
18.7
|
23.7
|
20.7
|
Imports/GDP (%)a
|
23.2
|
28.7
|
26.2
|
18.6
|
21.4
|
|
Source: Asian Development Bank: Asian Development Outlook
2002.
a: Ministry of Macroeconomics and Statistics
Figures in bracket are growth rates.
Major Exports (2001)
Table 8
Commodity
|
Value (Millions US$)
|
Share in Total (Percent)
|
Cotton Fiber
|
793.4
|
24.3
|
Fuels and Energy
|
322.9
|
9.9
|
Non-Ferrous Metals
|
201.3
|
6.2
|
Food Products
|
124.9
|
3.8
|
Services
|
461.3
|
14.1
|
Sub-Total
|
1903.8
|
58.3
|
Total Exports
|
3264.9
|
100
|
Source: Ministry of Macroeconomics and Statistics
Destination of Exports
Table 9
|
2000
|
|
2001
|
|
|
Value (Million US$)
|
Share (Percent)
|
Value (Million US$)
|
Share (Percent)
|
Total Exports
|
3264.7
|
100
|
3264.9
|
100
|
FSU countries
|
1172.2
|
35.9
|
1117.0
|
34.2
|
Russia
|
545.5
|
16.7
|
526.2
|
16.1
|
Kazakhstan
|
100.8
|
3.1
|
118.0
|
3.6
|
Turkmenistan
|
175.4
|
5.4
|
138.3
|
4.2
|
Tajikistan
|
100.9
|
3.1
|
85.8
|
2.6
|
Ukraine
|
153.5
|
4.7
|
149.8
|
4.6
|
Kyrghizstan
|
50.9
|
1.6
|
76.4
|
2.3
|
Other
|
45.2
|
1.3
|
22.5
|
0.8
|
Non-FSU Countries
|
2092.5
|
64.1
|
2147.8
|
65.8
|
Switzerland
|
272.3
|
8.3
|
200.7
|
6.1
|
Korea
|
106.4
|
3.3
|
137.1
|
4.2
|
Turkey
|
99.4
|
3.0
|
81.4
|
2.5
|
China
|
22.4
|
0.7
|
14.9
|
0.5
|
Germany
|
36.5
|
1.1
|
38.6
|
1.2
|
Great Britain
|
236.1
|
7.2
|
205.5
|
6.3
|
Netherlands
|
84.6
|
2.6
|
75.4
|
2.3
|
The USA
|
51.2
|
1.6
|
91.0
|
2.8
|
Italy
|
70.8
|
2.2
|
49.4
|
1.5
|
Other non-FSU countries
|
1112.8
|
34.1
|
1253.8
|
38.4
|
Source: Ministry of Macroeconomics and Statistics
Uzbekistan- U. S. Economic Relations
Main export and import items between Uzbekistan and the USA
(2001)
Table 10
Major Imports (mln U$)
|
Grain (17.7)
|
Meat and by-products (5.3)
|
Machinery and equipment (82.3)
|
Transport equipment (6.5)
|
Major Exports (mln U$)
|
Cotton fiber
(36.8)
|
Services (17)
|
Non-ferrous metals (0.1)
|
Food products (0.3)
|
The United States recognized Uzbekistan’s
independence in December 1991. In 1992, various of United States aid programs
were launched. Operation Provide Hope delivered an estimated US$6 million of
food and medical supplies for emergency relief of civilians affected by the
Tajik civil war; the Peace Corps sent its first group of about fifty volunteers
to Uzbekistan; an agreement with the Overseas Private Investment Corporation
(OPIC) began encouraging United States private investment in Uzbekistan by
providing direct loans and loan guarantees and helping to match projects with
potential investors; and humanitarian and technical assistance began to move to
a wide range of recipients. In 1993 the United States granted Uzbekistan
most-favored-nation trade status, which went into force in January 1994. In
March 1994, a bilateral assistance agreement and an open lands agreement were
signed. In 1995 a variety of investment and other treaties were under
discussion, and several United States non-governmental organizations were
initiating joint projects throughout Uzbekistan.
In the first two years of Uzbekistan's
independence, the United States provided roughly US$17 million in humanitarian
assistance andUS$13 million in technical assistance. For a time, continued
human rights violations in Uzbekistan led to significant restrictions in the
bilateral relationship, and Uzbekistan received significantly less United
States assistance than many of the other former Soviet republics. Because
Uzbekistan was slow to adopt fundamental economic reforms, nonhumanitarian
United States assistance was largely restricted to programs that support the
building of democratic institutions and market reform. By the end of 1995,
however, United States-Uzbekistan relations were improving, and significantly
more bilateral economic activity was expected in 1996 (U.S. Department of
State, 2004).
Major Issues in Uzbekistan- U. S. Economic Relations
Aral Sea Crisis
The former Soviet Union, in an effort to become
self-sufficient in cotton, diverted tributaries of the Aral Sea, Amu Daria and
Sir Daria, for massive irrigation of cotton fields throughout then-Uzbek SSR.
The result has been environmental devastation: since 1960, the sea level has
dropped 50%. Residents of Uzbekistan and Turkmenistan are paying the price, as
winds whip tons of contaminated dust from the dry seabed into the air, leading
to respiratory infections, diarrheal diseases, and some of the highest rates of
tuberculosis in the former Soviet Union. Besides health problems, Aral Sea
disaster has made hundreds of acres of agricultural land unfit for use. If the
issue shall not be resolved in the nearest future, the Aral Sea disaster’s
impact on Uzbek economy will be devastating.
The USA could have extended long-term,
substantial credit lines for Uzbekistan to implement major projects to solve
the Aral Sea problem, but that did not take place to the date. American
involvement with the Aral Sea problem remains at superficial level - mainly
through some international organizations.
How does the current situation in Afghanistan affect
Uzbekistan’s economy
Fight Against Terrorism: Soft Ways
Militant Islamic groups, such as Islamic Movement
of Uzbekistan (IMU), have been causing problems in Uzbekistan long before the
USA faced Taliban of Afghanistan. In fact, removal of Taliban regime had been
a blowing impact towards IMU as well, since they lost many fighters and
training centers in Afghanistan. Besides the current military presence in the
South of Uzbekistan, namely in Khanabad Military Base of Karshi region, the United
States has been actively using and teaching “soft” ways of combating terrorism,
such as economic development in the region. Ferghana Valley of Uzbekistan has
been the most volatile region in the entire Central Asia. Below is an excerpt
from Beth Jones, Beth Jones, Assistant Secretary for European and Eurasian
Affairs:
In Central Asia, poor economic and social conditions are
contributing to the appeal of extremist Islam in the volatile Ferghana Valley.
We seek to head off conflict by improving infrastructure, creating employment
opportunities, and helping develop and strengthen civil society. We are
creating jobs through marketing assistance and establishing credit for
agricultural processors. We are maintaining a high level of student and professional
exchanges.
Therefore the US presence in Uzbekistan, both
military and economic can be seen as a positive factor in Uzbekistan’s economic
development. On the other hand, the USA’s presence in the region did not
prevent Afghanistan from becoming number one producer of narcotics (UN Press
Release AFG/269 SOC/NAR/917 ), and notably a major portion of this dreadful
crop passes through Uzbekistan. Uzbekistan take pride for being at the
crossroads of the ancient Great Silk Road that until the discovery of seaways,
connected the East with the West. In reality, the ancient Great Silk Road has
turned into an undercover Great Narcotics Road. Truckloads of narcotics are
passing through Uzbekistan into other former Soviet republics and on to
Europe.
Below is a brief statistics on Afghan Narcotics Production:
Table 11. Fact Sheet -
Afghanistan Opium Survey 2004
|
2004
|
Variation
On 2003
|
2003
|
Net opium poppy cultivation
|
131,000 ha
|
+ 64%
|
80,000 ha
|
% of agricultural land
|
2.9%
|
|
1.6%
|
number of provinces
affected
|
32 (all)
|
|
28
|
Average opium yield
|
32 kg/ha
|
|
45 kg/ha
|
Production of opium
|
4,200 mt
|
+17%
|
3,600 mt
|
% of world opium
production
|
87%
|
|
76%
|
Households cultivating
opium
|
356,000
|
+ 35%
|
264,000
|
People cultivating opium
|
2.3 million
|
|
1.7 million
|
% of total population
(23 million)
|
10%
|
|
7%
|
Average farm price of fresh
opium
|
$92/kg
|
- 67%
|
$283
|
Afghan export value of
opium
|
$2.8 billion
|
+ 22%
|
$2.3 billion
|
% of 2003 GDP ($ 4.6
billion)
|
~60%
|
|
50%
|
- gross profits of Afghan
traffickers
|
$2.2 billion
|
+69%
|
$1.3 billion
|
- farm value of opium
production
|
$0.6 billion
|
- 41%
|
$1.02 billion
|
Yearly income to opium
families
|
$1,700
|
- 56%
|
$3,900
|
Per capita income to opium
families
|
$ 260
|
- 56%
|
$600
|
Afghanistan’s GDP per
capita
|
n.a.
|
n.a.
|
US$207
|
Gross income from opium per
ha.
|
$4,600
|
- 64%
|
$12,700
|
Gross income from wheat per
ha.
|
$390
|
- 17%
|
$470
|
Source: www.un.org/ UN
Press Release AFG/269 SOC/NAR/917
The figures are appalling. If we add to that the
words of Mr. Costa that “… drug developments in Afghanistan contradict trends
in the rest of the world. Drug production is decreasing on every continent,” -
then we can realize how horrible the situation is. Firstly, Uzbekistan is a
major drug-trafficking route for the Afghan narcotics industry. Second, large
portion of Afghan narcotics settles in Uzbekistan and causes numerous social
and economic problems.
It is well-known that corruption is widespread in
Uzbekistan, and that comes handy for drug traffickers. Therefore, the USA has
to commit some serious assistance in strengthening customs control at
Uzbek-Afghan border - but to the date the USA did not get involved in this
matter.
U.S. Assistance to Uzbekistan –
Fiscal Year 2004 (U.S.
Department of State, 2004)
Since the independence
was gained in 1991, Uzbekistan’s government has been overwhelmed with myriad of
issues that it has to deal. This is explained by the fact that the government
structure of Uzbekistan had been designed by the Soviet Headquarters in Moscow
mainly as an executive body, with little or none authority for on-site problem
solving. Although Uzbekistan’s government built itself many new offices, and
re-named most of its former governing bodies, much of the government structure
and its main executives remain the same. The fact that the U.S. financial
assistance to Uzbekistan comes to predetermined fields makes it more
effective.
Another positive thing is
that according to Section 568(a) of the FY 04 Foreign Operations Appropriations
Act requires the Secretary of State to determine that Uzbekistan is making “substantial
and continuing” progress in meeting its commitments towards improving respect
to human rights, ensuring free and fair elections (all the elections and
referendums of Uzbekistan since the Independence had been criticized by
international observers as unfair), multi-party system (Uzbek political life is
still “owned” by People’s Democratic Party, former Communist party of
Uzbekistan, headed by the President Karimov), freedom of speech and
independence of media. For instance, in July 13, 2004 U.S. Department of State
threatened to suspend its financial aid to Uzbekistan due to its poor record
(Press Statement # 2004/766 of U.S. Department of State).
Below is the information from the
U.S. Department of State on how this aid is distributed among various programs.
The Uzbekistan assistance program focuses on
micro-credit and agribusiness development, health and education reform,
democracy, human rights, and community development. Security, nonproliferation,
and law enforcement programs address narcotics smuggling, improved treatment of
suspects and detainees, trafficking in persons and weapons, and the
proliferation of nuclear and biological materials and expertise. The Secretary
of State’s decision not to make the determination required for assistance to
the central Government of Uzbekistan by section 568(a) of the Fiscal Year 2004
Foreign Operations Assistance Act affected a range of security assistance
programs, including but not limited to Foreign Military Financing (FMF) and
International Military Education and Training (IMET) programs using FY 2004
funding.
The estimated $50.6 million budgeted by all U.S.
Government agencies for assistance programs in Uzbekistan in Fiscal Year 2004
is allocated roughly as follows based on information available as of the date
of this fact sheet:
Democracy Programs
|
$15.7 million
|
Economic and Social Reform
|
$21.2 million
|
Security & Law Enforcement
|
$10.7 million
|
Humanitarian Assistance
|
$2.0 million
|
Cross Sectoral Initiatives
|
$1.0 million
|
Democracy programs in Uzbekistan focus on strengthening the institutions of
civil society, supporting human rights, and addressing the problem of torture.
Civil society centers provide training, grants, and technical assistance to
indigenous non-governmental organizations (NGOs). The program supports human
rights through training, grants, resource centers throughout the country, and a
growing dialogue between officials of the Government of Uzbekistan and human
rights defenders. Funding also supports a judicial reform program, a human
rights law clinic, several legal assistance centers, training for legal
professionals, and development of law school curricula.
U.S. Government assistance seeks to improve
citizen participation and transparency through community development, housing
associations, and civic advocacy. Community development programs mobilize
stakeholders to improve social conditions through small-scale infrastructure
projects such as rehabilitating schools or irrigation canals. Print and
broadcast media programs seek to strengthen independent media outlets.
Anti-trafficking in persons programs are carried out in close cooperation with
the Government of Uzbekistan and focus on public awareness, law enforcement
education, identification and protection of victims, and prosecution of
perpetrators.
Training and exchange programs reach out to the
next generation of Uzbek leaders and give them first-hand experience with the
day-to-day functioning of a market-based, democratic system. Last year, the
U.S. Government sent over 475 Uzbek citizens to the U.S. on academic and
professional exchange programs. Since 1993, the U.S. Government has funded the
travel of over 2,900 Uzbek citizens to the U.S. on these programs. The U.S.
Government also promotes access to information through programs like the
Internet Access and Training Program.
In an effort to counteract the deterioration of
the basic education system, a new program trains teachers in interactive
teaching methods and in integrating critical thinking and learning techniques
into curricula and teaching materials. Other program goals include increasing
parent and community involvement, strengthening school administration, and
improving school infrastructure.
The U.S. Government is developing models of
primary health care that emphasize essential care to families at the
community level. Infectious disease programs are fighting the spread of
Tuberculosis, HIV/AIDS, and hepatitis B. A maternal-child health program works
to improve pre- and post-natal health care for mothers and newborns. A drug
prevention program targets vulnerable groups with information and counseling on
the dangers of drug use and abuse.
Market reform assistance focuses on small and medium enterprise
(SMEs) development, microfinance, credit union development, and agribusiness
development. U.S. assistance helps the Government of Uzbekistan reach its goal
of accession to the World Trade Organization (WTO). A new water user’s
association project will focus on increasing community participation in
efficient water use and irrigation management systems. Using FY 2003 funds, the
U.S. Government provided a grant to the Uzbek Agency for Communications and
Information for technical assistance to implement an E-Government plan and
taxation pilot project. The grant will allow the Government of Uzbekistan to
further its goals of greater online communication between government ministries
as well as facilitate communication and transparency for Uzbek citizens.
The U.S. Government also provided a grant to the
National Bank of Uzbekistan that funded a U.S. consultant who helped in the
preparation of projects to be financed under a $50 million U.S. Export-Import
Bank credit line for Uzbek SMEs. Under this credit line, Uzbek SMEs will be
able to access U.S. equipment and technology to assist them in their
development efforts.
Using FY 2004 funding, security and
nonproliferation assistance continues to focus on supporting military
reform, improving Uzbekistan’s counter-proliferation capabilities, promoting
regional cooperation, and improving border security to help stop the flow of
illegal narcotics, weapons of mass destruction (WMD), and other illicit items
through Uzbekistan. Our Export Control and Related Border Security Assistance
(EXBS) program continues to work with Uzbek export control officials, customs,
and border guard to improve their prevention capabilities against weapons
proliferation and other illicit trafficking. The U.S. also
provides nonproliferation assistance for Uzbekistan, including funding to
secure biological pathogens and to conduct joint research and disease
surveillance activities with biological and chemical scientists. The U.S. funds
science centers and bio-chem redirect, and bioindustry initiative programs and
works through the multilateral Science and Technology Center in Ukraine to
engage scientists in transparent, sustainable, cooperative civilian research
projects. The U.S. also provides nonproliferation assistance to the Civilian
Research and Development Foundation (CRDF). The Department of Energy is helping
to secure nuclear materials.
Law enforcement assistance programs seek to strengthen
counter-narcotics capabilities, help reform and restructure the Prosecutor’s
Office and law enforcement agencies, and introduce Western methods and
standards for the conduct of criminal investigations and prosecutions. U.S. Government
funding promotes proper treatment of prisoners through prison service training
and seeks to prevent the use of torture in the course of police investigations.
Initial assistance to the Uzbek border guards and customs services has been
provided to begin interdicting narcotics trafficking across the Uzbek/Afghan
border.
Humanitarian programs are shipping approximately
$10 million in privately donated medicines, pharmaceuticals, medical equipment
and supplies, emergency shelter items, school equipment and supplies, food, and
clothing to the most needy individuals, families, and institutions.
Uzbek - US economic relations could be considered to be on a very basic level.
The relations are far from Win/Win situation, and probably Lose/Win at best. A
lot of issues are still waiting to be seriously addressed.
References:
Uzbek Ministry of Macroeconomics and Statistics
U.S. Department of State. 12
March 2002. “U.S., Uzbekistan Sign Nonproliferation Implementation Agreement”.
www.usinfo.org. Retrieved: 11/30/2004.
Economic
Cooperation Organization (ECO) site at www.ecosecretariat.org
Library of
Congress, Country Studies site at #"main.cfm/include/displayIssueArticles/issue_date/20010927.html">oo Motor in a $400M deal” www.babsonfreepress.com. Retrieved: 11/30/04.
Daene
C. McKinney and Akmal Kh. Karimov, “Amu Darya River Water Allocation Model”
prepared for Central Asia Mission of U.S. Agency for International
Development. Environmental Policy and Technology Project, Contract No.
CCN-0003-Q-08-3165-00. Almaty, Kazakhstan, 1996.
Online References:
www.un.org
www.state.gov
www.findarticles.com
www.babsonfreepress.com
www.usinfo.org
www.ecosecretariat.org
#"#">www.gov.uz
|