A story of Central Asia (Uzbekistan)
By Agha Iqrar Haroon
Preamble:
Almost all Central Asian states are going to celebrate their 25th Independence from August 31, 2016 to December 25, 2016.
Uzbekistan was the first Soviet Socialist Republic (SSR) that announced its Independence and came out from the clutches of former Soviet Union on August 31, 1991. Other Central Asian SSRs followed Uzbekistan instantly.
Tajikistan announced independence on 9 September 1991, Turkmenistan announced its independence on 27 October 1991, Kazakhstan announced its independence on 16 December 1991 and Kyrgyzstan announced its independence on 31 August 1991 but it was recognized an Independent state on 25 December 1991.
This phenomenon of disintegration and coming out from the clutches of former Soviet Union is called as “Uzbek way” by Russian anthropologists and historians.
Kazakh SSR had biggest land volume in former Soviet Union while Tajik SSR was the smallest. These Republics were called Constituent Republics of the Soviet Union (USSR).
Almost every SSR had certain production entity except Tajikistan which was known only for water and hydel energy production. Turkmenistan and Kazakhstan were known for their oil and gas productions, Kyrgyzstan was popular for copper, iron and gold mines, and Uzbekistan ruled the former SSRs for its cotton production.
Kazakhstan had an edge of being a wheat producer and hosting Baikonur Cosmodrome which is the first and largest operational space launch facility in the world. But all SSRs had other smaller products also including uranium and iron ore. The future of SSRs was determined by their products when they decided to disintegrate from former Soviet Union and they all performed well in their respective fields except Tajikistan that fell in civil war due to its proximity and social linkages with Afghanistan. A civil war and rule of radical Islamists continued for over five years and ruined this country from top to bottom. Tajikistan has yet to come out of adverse impact of civil war and remains poorest country in Central Asia.
Almost all heads of states of newly independent states had been a part or heads of Soviet system in their respective SSR therefore they decided not to disintegrate from new Russia culturally and socially because they had fears that radicalism would be injected in their countries by United States that had been financing Jihad in Afghanistan. Almost all newly born states did not go far away from Russian orbit though some of them wishes to stay little away from the gravity of New Russia.
New Russia had no interest in Tajikistan because of it proximity and cultural linkages with Afghanistan but new Russia did not wish to disintegrate from biggest country—-Kazakhstan and biggest cotton producer—Uzbekistan. Turkmenistan fell in Western bloc soon and weak Russia let it went away farther.
Almost every new state decided to preserve certain elements and values of the “old system” therefore Turkmenistan, Kazakhstan and Uzbekistan decided to provide socioeconomic basics including free education and health care, special support to elderly people, cheaper oil and subsidies on wheat because these three countries were rich SSRs while Kyrgyzstan and Tajikistan could not do this without the support of new Russia because their productivity was less like of Kyrgyzstan.
One should look into political, social and financial conditions of these former Soviet Republics after they have completed their first quarter of century as independent states.
Uzbekistan
Uzbekistan was first to gain independence and its economy is currently growing but death of its Father of Nation and founding President Islam Karimov on August 30, 2016 (officially on September 2, 2016) can push this country into certain serious political as well as economic crises. Nothing can be said so far about its future but Uzbeks are a resilient nation and I believe Uzbekistan would manage this shock soon.
Uzbekistan performed very well under the leadership of deceased President Karimov. Uzbekistan exploited its cotton industry and provided cheaper labour to new Russia.
Though Uzbekistan got independence on August 31, 1991 but old Supreme Soviet of Uzbekistan remained in place until January 1995—-more than a year after a new constitution had been passed through a referendum, followed by general elections.
I first travelled to Uzbekistan via Tajikistan in 1993. I had seen a fragile administrative system and extreme poverty, empty huge buildings without electricity and gas and I thought this country would not come out of such conditions for next 10 years. However, I was mistaken and I saw a total different Uzbekistan when I travelled second time in year 2004. Its Gross Domestic Product (GDP) continued to increase and its GDP stood at 302.8 billion sum in year 1995—a rise from 0.07 per cent in 1992 to 20 per cent in 1995. There is no doubt its inflation index soared up to 226 per cent in 2006 but country managed its inflation by year 2010.
One of the major reasons to fight out this inflation was that Uzbekistan continued to provide free education, health care and allowances to its population and it worked hard on its tourism sector. Families were given land and built houses by the government while families were allowed to earn some extra income through opening shops in their residences and other petty trade and businesses. Uzbek women played major role in its economy therefore productively of the nation was double. Women played their role in agriculture, trade and businesses. You can find more women doing businesses in markets than men because men are usually working at industries or in travel business.
Government invested on youth and a confident youth equipped with knowledge and skills replaced Soviet-minded non-decisive generation. Private enterprises were encouraged in the fields of construction, real estate, transport, medium size industry, financial and tourism sectors.
However Uzbekistan did not do well in attracting foreign investments due to its tight banking system, old state laws and lack of structural reforms.
There is a great need to work about improving the investment climate for foreign investors, strengthening the banking system, freeing the agricultural sector from state control and building confidence among foreign investors to come.
There is saying “Uzbek investment is one way ticket—you can bring investment into Uzbekistan but you cannot take it back home due to laws those only help State (Uzbekistan) not the investors”. Moreover, state laws are complicated and international banking system is not present with international guarantees therefore smaller groups or individuals are shy to invest in Uzbekistan. Yes Uzbekistan is a pleasant place for investment for strong groups —-having government support from their home countries to ensure transfer of money outside Uzbekistan.
Uzbek economy is strongly linked with Russian economy through remittances therefore it had many serious jolts when Russian currency devalued during 2014-15. Inflation rose overnight and real estate prices went down when Russian ruble lost its value to half.
An energy crisis is another factor to slow down economic growth in last decade. Uzbekistan controls outflow of currency therefore it buys limited gasoline and natural gas while constant growth in its population and industry causes shortage of gasoline, gas and electricity during winter season. Tourism season in Uzbekistan is not growing due to lack of energy resources because heating becomes very expensive during winter therefore 70 percent small hotels shut their business and accommodation rate goes higher in winter. This situation is hampering tourism industry strongly and Uzbekistan can do much better in tourism sector in case it can run its tourism 12 months a year instead of only eight months as it is doing now.
Independence is blessing for Uzbekistan and it is expected that this landlocked country will do well in next decade but structural reforms are needed without delay.
A Series of articles covers 25 years of independence of all Central Asian republics. Preamble of all articles is same to give a background of Soviet Socialist Republics (SSRs) so readers can understand circumstances new states went through after disintegration of former Union of Soviet Socialist Republics (USSR). Independence of Central Asian states caused a snow ball effect and entire USSR was disintegrated on December 26, 1991– just one day after Independence of Kyrgyzstan was recognised.
The Soviet Union was officially dissolved on December 26, 1991, as a result of the declaration no. 142-Н of the Soviet of the Republics of the Supreme Soviet of the Soviet Union. The declaration acknowledged the independence of the former Soviet republics and created the Commonwealth of Independent States (CIS), although five of the signatories ratified it much later or not at all.
