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Series: Central Asia and Japan: Part 2 Uzbekistan Uzbekistan’s Geopolitical Importance and Self-Chosen Transition Strategy | Manabu Shimizu Executive Director, Eurasian Consultant Ltd. Visiting Professor, Teikyo University [Date of Issue: 31/May/2013 No.0219-0892]

Date of Issue: 31/May/2013

Series: Central Asia and Japan: Part 2
Uzbekistan's Geopolitical Importance and Self-Chosen Transition Strategy

Manabu Shimizu
Executive Director
Eurasian Consultant Ltd.
Visiting Professor, Teikyo University

Uzbek nation : the largest ethnic group in Central Asia

Uzbekistan is an influential state which became independent on 31 August 1991. Its population was estimated at around 29 million as at 2012, representing almost half the total population of the former Soviet republics of Central Asia. A land area of 447,400 square kilometer makes Uzbekistan around 1.5 times larger than Japan, but only nine percent of that is arable, with much comprising vast desert lands. Its dry continental climate results in a huge annual temperature range. Around 40 percent of the land area also falls within the Karakalpakistan Autonomous Republic in the west of Uzbekistan. All five Central Asian countries are landlocked, but being surrounded by landlocked neighbors makes Uzbekistan doubly landlocked and forces the country to factor in geopolitical constraints in pursuing external trade. Uzbekistan shares borders with all the former Soviet republics of Central Asia, and with the Amu Darya River lying between it and Afghanistan to the south, from a security perspective Uzbekistan has to be particularly sensitive to political developments in the Afghan situation.

The capital Tashkent boasts the fourth largest population among the former Soviet republics, and is a modern city which was foregrounded as the face of the Soviet Union for developing countries. Production facilities transferred there from the Soviet territory in Europe during WWII promoted the country's industrialization, with Uzbekistan even engaging in aircraft assembly. The country also has excellent tourism resources such as Samarkand and Bukhara. While Uzbekistan embraces more than 100 ethnic groups including Korean population for example, the Uzbeks after whom the country is named comprise around 80 percent of the total. As significant ethnic minorities in neighboring Central Asian countries and a powerful presence in the north of Afghanistan, the Uzbeks are the biggest ethnic group in former Soviet Central Asia. They enjoy a unique cultural tradition as a Turkish people, and are also developing an Uzbek national literature. The empire of Timur (Tamerlane) which existed from the late 14th through to the early 16th century, taking Samark as its capital, ruled a vast territory including Iran and Xinjiang, and leaves behind a glorious history in astronomy, medicine, architecture and Islam theology as the most advanced area of the Islamic world back in that time. Dynastic founder Tamerlane was taken up as a symbol of independent Uzbekistan.

Departure from cotton monoculture and a unique path

Uzbekistan is blessed with one of the best conditions in terms of resources of all Central Asia. Alongside its energy resources (particularly natural gas), it also boasts strong agricultural production and has the potential to build a certain degree of self-sufficiency, with these factors underpinning an independent economic development strategy and an autonomous foreign policy. Cotton is primarily grown in the Fergana Basin, with production standing at seventh in the world and exports at fifth. Uzbekistan has enough natural gas to be able to export to neighboring countries, and is the world's fifth largest gold producer, as well as being able to export uranium, copper and other mineral resources. At the same time, however, the monoculture structure with its reliance on cotton exports which was intensified during the Soviet era means that international cotton prices impact heavily on the entire economy even today. Since independence, Uzbekistan has nevertheless been working to become self-sufficient in its food grain production and to progress industrialization.

Around the time it became independent, making the transition to a market economy became unavoidable for Uzbekistan as for other Central Asian countries, but under the strong leadership of President Islam Karimov, Uzbekistan in particular pursued a path of its own making, comprising an import substitution development strategy grounded in a cautious gradualism. Gradualism entails taking the next step only after ascertaining the results of individual market transition policies, and as such differs from the road taken by Kyrgyzstan and Kazakhstan, who abolished various types of regulations and moved forward with privatization comparatively quickly.

Recent economic situation

Uzbekistan too began moving toward economic recovery in the mid-1990s, but was impacted by the Asian economic crisis and the Russian financial crisis in 1998. Since 1998, government statistics show steady growth, with the average annual growth rate of four percent from 1998 through 2003 subsequently rising to between seven and eight percent and evincing virtually no fallout from the Lehman shock. GDP in 2008 was apparently double that of 1995. This is partly due to tight controls over capital mobility, preventing confusion in national currency and financial markets from having a major direct impact from outside. Exchange regulations have basically been abolished, but black markets sometimes emerge temporarily in response to supply shortfalls in the Uzbek . One notable economic phenomenon recently has been the increase in Uzbek guestworkers in Russia, Kazakshtan and elsewhere, with repatriated funds reaching a scale demanding inclusion in Uzbekistan's balance of payments.

Uzbekistan emphasizes manufacturing of cars, gas chemicals, electrical machinery, oil gas, pharmaceuticals, textiles and furniture as key planks in its industrialization. A Free Industrial Economic Zone (FIEZ) has been set up in Navoi in the heart of Uzbekistan as a vehicle for driving forward industrialization by offering corporate tax and tariff incentives and other preferential treatment for foreign companies establishing operations there, and the fruits of this initiative are being watched with interest. The government has also created a Reconstruction and Development Fund. Many foreign companies moving into Uzbekistan are targeting oil gas and other resources, and cumulative direct investment from Japan amounts to around US$2.3 billion. Japan is also interested in rare metals and rare earths. President Karimov has visited Japan three times. Since independence, Uzbekistan has also been fostering outstanding young human resources through means such as study abroad, and the industrialization and modernization process is gradually moving forward. The country actively encourages foreign universities to set up local branches, of which there are now more than 60.

Challenges ahead

The incumbent President Islam Karimov was born in 1938. He became First Secretary of Uzbekistan's Communist Party in 1989 and has been the country's President since independence. He has played a crucial role through the major historical upheaval of regime shift and independence. He has maintained a consistently gradualist approach throughout Uzbekistan's political democratization, regime shift and market economy transition. The state has become increasingly wary of anti-government forces such as the Islamic Movement of Uzbekistan, and in May 2005 when a clash between Uzbek Interior Ministry and National Security Service (SNB) troops and a crowd of protesters in Andijan resulted in a number of deaths, the US and other countries lambasted Uzbekistan for its authoritarian government and inadequate progress toward democratization. Friction also arose at one point with the IMF over the government's exchange policy. At the same time, the West cannot ignore the geopolitical significance of Uzbekistan in terms of the Afghan situation.

Given the importance of cotton production, securing enough water for agriculture is a critical issue for Uzbekistan, and some friction exists with Tajikistan and Kyrgyzstan upstream over the management of water in the Amu Darya River and elsewhere, positioning the regulation of international relations within Central Asia as one priority issue. Dealing with conflicts of interest with Tajikistan in particular remains a complex challenge.

In terms of wider international relations, one issue will be that of national security following the withdrawal of NATO troops from Afghanistan at the end of 2014, while the US and Russia remain at loggerheads over Central Asia. Uzbekistan will need to chart its own course in a manner congruent with its own interests through these potentially difficult waters.

(original article : Japanese)
(For the Japanese version of this article)

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