Uzbekistan, the most populated republic in Central Asia with almost 25 million in-habitants, became independent, after the collapse of the Soviet Union, on 31 August 1991. Its constitution, adopted in 1992, is rather liberal in its statement. It introduces a Presidential system with a Parliament (Oly Majlis/Supreme Council) elected by universal suffrage, enabling several parties to present candidates.
Mr Islam Karimov, former head of the Soviet Socialist Republic of Uzbekistan and head of the Peoples Democratic Party (the former communist party), was elected President of the new republic in December 1991 with 86% of the votes. In 1995 a popular referendum approved the extension of President Karimov’s mandate until the year 2000. The presidential election took place on 9 January 2000. President Karimov was re-elected with 91.9% of the votes cast, against only one opposition candidate. The OSCE and European Union expressed a negative opinion on the way in which this election took place. On 27 January 2002 a nationwide referendum agreed with the extension of the president’s constitutional term in office from five to seven years.
The Parliament elected in March 1990 was maintained in function until the general election of 25 December 1994 which was attended by international observers. At the time of the latter the candidates of the presidential majority obtained 80% of the votes. The following general election proceeded on 5 December 1999 and gave results favorable to the ruling regime. The OSCE decided not to send an observation mission as the basic criteria for a democratic election were not met. On 27 January 2002 the same referendum (see above) authorized the election of a bicameral parliament for the second convocation of the parliament in December 2004. The general elections are prepared by an Electoral Commission met by EU Ambassadors in November 2003.
Despite having taken some transitional democratic measures (opposition parties were granted legal status, an ombudsman was appointed, etc.), and even though President Karimov had shown an early interest in Western (and in particular European) institutional systems, it seems that over the past five years (since the bombing on 6 February 1999 in Tashkent) the democratic process in Uzbekistan has taken a step back to practices inherited from Soviet times. Freedom of expression is today severely restricted in Uzbekistan, with essentially no independent press. All but two newspapers are government-owned and require approval from the Committee for the Control of State Secrets for all published news articles. Moreover the right to organize political demonstrations is constrained.
Even if Uzbekistan has moved ahead since 11.09.01 with NGO registration (on 4 March 2002 the first formal NGO registration by the Ministry of Justice took place for the Independent Human Rights Organization) or trial of policemen involved in the killing of prisoners, basic human rights are not applied in Uzbekistan. Reports on alarming incidents in the prisons of the country (torture of detainees, death in custody) and on the increasing number of detentions of pious Muslims and their families who practice their religion outside state control, caused the EU to express deep concerns about the deteriorating situation of human rights in Uzbekistan.
In the Conclusions of the second meeting of the EU-Uzbekistan Co-operation Council which took place on 23 January 2001 in Brussels the Uzbek side agreed to permit representatives of the International Committee of the Red Cross (ICRC) to inspect places of detention and to concede authorization to foreign representatives, to observe trials of individuals accused of acts against the state and the constitutional order. The Red Cross visits prisons on a regular basis since then and has reported that the conditions were correct but the implementation of this agreement is difficult. The EU has raised this point during the 4th Cooperation Council on 27 January 2003.
The rise of radical Islam and drug trafficking, especially in the Ferghana valley, are two of the major dangers facing Uzbekistan today. Fear of the Islamic fundamentalist threat (in particular in the Ferghana Valley, the most densely populated region in Central Asia, with the IMU, the Islamic Movement of Uzbekistan), regional isolation (border delimitation problems with its neighbours Tajikistan, Turkmenistan, Kazakhstan and Kyrgyzstan, borders closed by the Uzbek authorities, borders sometimes mined as in the Ferghana valley) and the emergence of organised terrorism (on 6 February 1999, 6 bombs exploded in Tashkent, killing 16 and injuring 184; other bloody events occurred throughout summer 2000 have all led to strengthened repression measures against opposition and enhanced security controls which further isolated the country. However it seems that IMU capacity to conduct terrorist activities is reduced. Most of its Afghan support has disappeared with the fall of the Taleban and the death of its leader (Namangani) in fights with American troops in early 2002. However the transformation of IMU into a wider movement IMT (Islamic Movement of Turkestan) which includes Chinese Uighurs and the absence of peace settlement in Afghanistan are worrying for the Uzbek leadership.
Uzbekistans foreign policy is shaped by recent developments in the region, in particular in two of its neighbouring countries that have experienced civil war (Tajikistan and Afghanistan), as well as by relations with Russia. Uzbekistan regards itself as the most important country in Central Asia and developed during the Yeltsin era a policy independent of Russia. To this end, President Karimov has tried to bring Uzbekistan closer to Western countries in general, and to European countries in particular. This policy seemed less accentuated during Putins early Presidential period, due largely to the fear of Islamic fundamentalism. For Uzbekistan, a strong Russia as advocated by Putin could mean a solid partner in the fight against Islamic fundamentalism and separatism.
The 11 September events have given an opportunity for President Karimov to strengthen Uzbek ties with USA. Following 11th September 2001 events Uzbekistan has adopted a clear policy of support to the coalition led by the US. American troops are based on its territory officially to participate in humanitarian missions and search and rescue operations. Uzbekistan tries to strengthen also its cooperation with Europe and takes arguments from his strong support to anti-terrorist activities. The 3rd European-Uzbek-Cooperation Council in January 2002 agreed to enlarge dialogue to Justice and Home Affairs issues. A new Sub-committee was created. It held its first two sessions in July 2002 and July 2003 and can be considered on both sides as a fruitful exchange of views.
Turkey also plays a considerable role in the formulation of Uzbek foreign policy. In particular, Tashkent counts on Istanbul to draw it closer to Europe, as well as to provide assistance in the fight against terrorism, drug trafficking and organised crime.
Relations with other countries of the region are marked by reciprocal pressures. The dispute over scarce water resources may become in the future one of the important issues and obstacles in bi-lateral relations between Central Asian “up-stream-countries” like Kyrgyzstan and Tajikistan and “down-stream-countries” like Kazakhstan and Uzbekistan. Uzbekistan did not react with much enthusiasm to the initiative (in spring 2000) of the former Foreign Minister of the United Kingdom, Robin Cook, seeking to outline a strategic approach to the problem of water in Central Asia, under the auspices of the OSCE.
Rivalry with Kazakhstan (the other candidate for leadership of the region) has been an obstacle to regional cooperation, particularly since 2000. Moreover, Uzbekistan has cut many times gas supplies to Kyrgyzstan and the south of Kazakhstan, which in return refused respectively to provide water for irrigation or to ensure the transit of Uzbekistan goods through their territory. An agreement has been reached in September 2001 with Kyrgyzstan but this agreement as the previous ones failed rapidly. Taken as an internal security measure, Uzbekistan has mined its border with Kyrgyzstan and Tajikistan in the Ferghana Valley. Many casualties including death of people have occurred. This mining has further isolated Uzbekistan from the other countries.
Economic situation
Uzbekistan is rich in natural resources such as coal, copper, gold, natural gas, oil, silver, and uranium, and with a well-educated population and qualified labour force it enjoys significant economic potential.
Immediately following independence in 1991, Uzbekistan experienced economic difficulties similar to those that affected most CIS, including loss of markets and subsidies from the Soviet Union; major disruptions in inter-republican trade and payments; hyperinflation; and declining output. Against this background, the government decided deliberately to follow a gradual, so-called step-by-step approach to macroeconomic and market-oriented structural reforms.
This gradual transition strategy, the policy of attaining early self-sufficiency in energy and food grains, and the largely successful efforts to diversify key exports (cotton and gold) to international markets helped Uzbekistan avoid the dramatic output collapse and drastic fall in living standards recorded in many other CIS countries during the early 1990s. Notwithstanding these achievements, Uzbekistan’s gradualist reform strategy has involved postponing significant macroeconomic and structural reforms. The Asian and Russian financial crises, a bad cotton harvest in 1998, and falling world commodity prices contributed to the substantial deterioration of the economic performance of Uzbekistan in 1999. Uzbekistan has responded to the negative external conditions by tightening export and currency controls within its already largely closed economy.
Because of this situation, and due to bureaucratic difficulties and the absence of a modern banking system, foreign direct investment in Uzbekistan has fallen sharply. International financial institutions criticised the Uzbek government for having made limited progress in some areas, including privatization and the financial sector. Having repeatedly shunned the IMF, the government has no access to international financing. The IMF permanent representative left Tashkent in April 2001, expressing deep concerns of the IFI towards absence of economic reform in Uzbekistan. Following IMF missions, Uzbekistan signed on 15 October 2003 Article VIII of the IMF statute (i.e. allowing full external convertibility of the Sum). This long awaited step forward was welcome by the international community, including the EU.
Structure of the economy: Uzbekistans relative economic success was mainly due to its favourable economic structure. The country remained a primary commodity exporter (cotton, gas, oil, gold) with a low value-added manufacturing sector. Despite the difficult terrain (60 % is desert, steppe, or semi-arid land and only 10 % is cultivated), agriculture accounts for about 25% of GDP and employs about 40 % of the labour force. However the dependency on exports of primary goods makes the country extremely vulnerable to shifts in world commodity prices.
Trade: Primary commodities, together with cotton fiber, account for about 75 % of Uzbekistans merchandise exports, with cotton alone accounting for 40 %. Uzbekistan is the worlds second largest cotton exporter having supplied in 1999/2000 6% of the worlds cotton production. In recent years, Uzbekistan was increasingly faced with strong competition on the world cotton markets from the US and China. The countrys economic crisis in 1998-1999 was exacerbated by the impact of a severe drought on the cotton and rice crops output in 2000, prompting the Uzbek authorities to call for international aid.
Growth: According to official data, real GDP grew by 5.2 % in 1997, 4.4 % in 1998, 4.4 % in 1999 and 4 % in 2000. However, official statistics are unreliable since they inflate growth figures by understating the true rate of inflation and through biased surveying. Accordingly alternative estimates of GDP growth are much lower. However, even the lower estimates confirm that Uzbekistan has now recorded five straight years of positive per capita GDP growth. Uzbekistan’s 1999 GNP per capita is estimated at US $ 720, placing it among lower-middle-income economies.
On the other hand, recent internal and external trends imply that macroeconomic stability is at risk. The sharp decline in exports since mid-1998, the drop of world market prices of cotton and gold, the administratively-imposed import-substituting industrialisation, the rapid accumulation of (mainly short-term) external debt, and declining international reserves together with other factors led to an economic crisis in 2000 in which the government has been forced to depreciate the Som by over half of its value in the second half of 2000. According to the ministry of finance, Uzbekistan ended 2000 with a foreign debt of US $ 4.15 billion. This represents 48 % of GDP (using the official exchange rate) and 128 % of GDP (at the black market rate).
