Uranium—a key commodity for the energy sector—may be emerging from a long price dormancy. It’s...
Uzbekistan’s name combines Turkic and Persian words to celebrate the self-mastery of the nation: “Land of the Free.” Bordered by five landlocked countries, it is one of only two doubly landlocked countries in the world (the other is Liechtenstein). It shares a border with Kazakhstan to the north, Kyrgyzstan to the northeast, Tajikistan to the southeast, Afghanistan to the south, and Turkmenistan to the southwest. Uzbekistan enjoys over 260 miles (420 km) of shore on the swifty shrinking Aral Sea, something it has harnessed to irrigate its arable land to cultivate “white gold”—the massive cotton industry, the backbone of the Uzbek market.
Known officially as the Republic of Uzbekistan it is the most populated country in Central Asia, with most of its people living in the fertile Ferghana valley. As the most populous country in the region, it is also the most culturally diverse, home to Uzbeks, Russians, Tajiks, Kazakhs, and to Muslims and Orthodox believers alike. Uzbek, a Turkic language, is the most common, but Russian is used regularly as well. Its rich cultural fabric is based in its heritage: Uzbekistan was formerly a part of the the Muslim Persian Empire, but changed hands first to the Turks, following the Mongol invasion, before being incorporated into the Russian Empire in the 19th century, and then into the Soviet Union.
After the breakup of the Soviet Union, the government in Tashkent declared independence, and established itself as a secular unitary constitutional republic. Despite this nomer, political power in Uzbekistan is strongly centralized in the president, who has the final word on policy. Islam Karimov was president from 1989, until he died, in 2016. Karimov prioritized stability of his rule and the Uzbek government, using profits from Uzbekistan’s natural gas, cotton, and gold to shore up power.
But stability came at the price of isolation Karimov cut Uzbekistan off from regional and global actors. Karimov’s regime was considered one of the most repressive regimes in the world -his political opponents were imprisoned, tortured, or killed. The opposition was often labelled as extremist Islamists by the regime, becoming a self-fulfilling prophecy that resulted in a rise of extremist Islamic fueled by the repression. Following his death, Karimov’s appointed successor, Prime Minister Shavkat Mirziyoyev, secured his transition to power through political brokers. He ran on a platform to abolish cotton slavery and the use of child labor, open Uzbekistan the its neighbors and other partners, like China, and reform politically and economically to bring business and tourism to the country.
Mirziyoyev found himself at the helm of an outdated system and at odds with Karimov-era technocrats and security services about how Uzbekistan’s future should be shaped—pivoting to the east or the west, isolated and secure, or engaged and potentially vulnerable? Moderate, gradual liberalization has evolved under Mirziyoyev. Some political prisoners have been freed, outside media again accredited, and limited media freedoms allowed. The country has been more open to foreigners, including introduction of a simple e-visa for tourists in July 2018—before, visas were tedious and expensive, and foreign visitors were required to register with local police each day of their visit. Nevertheless, these gains have been slow, and sweeping reforms in human rights and political transparency are yet to come. The business sector is beginning to positively evolve, and the outlook is still optimistic.
Uzbekistan does not border any of the regions powers, like Russia, China, or Turkey, and it lacks direct access to the West. Still, it is at the nexus of both Central Asia and the crossroads of Chinese, Russian, and Western policy. It cooperated with the United States and hosted a U.S. military base, K2, for access to Afghanistan, until Uzbekistan’s violent repression of a 2005 revolt in Andijan, while Karimov was in power. The U.S. government stated that human rights unequivocally trumps security, and Washington withdrew military cooperation with Uzbekistan, overriding protests from the Pentagon—a move that later resulted in a power play between the U.S. and Kyrgyzstan. This move led to a shift in trajectory for Uzbekistan, who immediately pivoted to Russia to join its Collective Security Treaty Organization.
Uzbekistan’s economy has been transition from Soviet top-down economy to a market economy. Its strategy had been import substitution—working to replace imported goods with domestically produced goods, which has resulted in astronomically high tariffs and protectionist policies. But under the partial liberalization heralded in by Mirziyoyev, the government has advanced more free market tactics with fewer restrictions and barriers to entry. Tashkent has floated the idea of free economic zones and preferential trade agreements, but so far the government is wary of incursions on its much-protected sovereignty. In September 2017, the country's currency became fully convertible in the market rates.
The domestic market is built on its major producer of cotton, which is a sticking point for human rights organizations because of its use of slavery and child labor. Most Uzbek cotton exports go to China, as many big western textile manufacturers, such as Tesco and H&M are boycotting Uzbek production. Agricultural practices have also harmed the environment.Chemicals have stripped the land, and excessive water use has drained dwindling Aral Sea. The country operates the world’s largest open-pit gold mine, and exports of gold—all of which are sent to Switzerland—representing 40% of the country’s exports. The last leg of the tripod is energy. Uzbekistan is the largest electricity producer in Central Asia, with renewable energy constituting more than 23% of Uzbekistan’s energy, hydro with 21.4% and solar with 2%. It exports petroleum gas to China and Kazakhstan, and has visions of becoming an electricity hub. The country’s low labor cost and high population of youth have brought Uzbekistan to imagine itself as a potential tech hub, as other countries, like Georgia and Ukraine, have done.
Uzbekistan’s recent history can be divided into two eras. The era of Karimov was markedly authoritarian, repressive, an isolated, but seemingly stable. The era of Mirziyoyev is too early to tell, he inherited a political system where his position is at the head of economic and strategic relations. So far, it is promising, though time is stretching out. But Uzbekistan seems ready to take on a more prominent role in the region, hoping to capitalize as its more open neighbors have done. Recently, Tashkent has undertaken an upbeat PR campaign, sending emissaries abroad to speak of Uzbek culture, heritage and potential; articles naming Uzbekistan as the next “in” tourist destination have run in Western publications—the country wants to be in that spot, but the question remains: can it overcome its past to get there?
|Country Population||31.9 million|
|Largest City (Population)||Tashkent (2.4 million)|
|2nd Largest City (Population)||Namangan (600,000)|
|3rd Largest City (Population)||Samarkand (530,000)|
|4th Largest City (Population)||Andijan (420,000)|
|5th Largest City (Population)||Nukus (310,000)|
|President (Dates)||Shavkat Mirziyoyev (2016-Present)|
|Prime Minister (Dates)||Abdulla Aripov (2016-Present)|
|Prime Minister||Abdulla Aripov|
|Freedom House Score (1=Free, 7=Not Free)||7|
|Ruling Party||Liberal Democratic Party|
|Past Presidents (Dates)||Islam Karimov (1991-2016)|
|Past Prime Ministers (Dates)||Shavkat Mirziyoyev (2003-2016)
O'tkir Sultonov (1995-2003)
Abdulhashim Mutalov (1992-1995)
|How Central Banker is Appointed||Appointed by Parliament|
|Average Voter Turnout in Last 5 Elections
(% of Total Population)
|10 Major Import Partners
(% of Total Imports)
|Top Exports||Sanctioned by
(and Start Date)
(and Start Date)
|1. China (22%)
2. Russia (22%)
3. South Korea (10%)
4. Kazakhstan (10%)
6. UAE (3.3%)
7. Italy (2.1%)
8. Japan (1.7%)
9. Lithuania (1.4%)
10. Kygyzstan (1.4%)
|1. Swtizerland (40%)
2. China (21%)
3. Russia (11%)
4. Turkey (9.8%)
5. Kazakhstan (8.0%)
6. Afghanistan (3.7%)
7. Kyrgyzstan (0.96%)
8. France (0.93%)
9. India (0.62%)
10. Poland (0.45%)
|Largest Ethnic Groups
(% of Total Population)
(% of Total of Population)
|Sunni Islam (90%)
Russian Orthodox (5%)
Uzbekistan’s domestic politics are driven by its centralized, president-led system and clan-like infighting. Emerging after several decades under communist rule, the country favored a strong leader figure, which they found in the first Uzbek president, Islam Karimov. Karimov used his unilateral strongman status to consolidate power, ruling with two interrelated goals: survival of the regime and survival of his leadership. He prioritized Uzbek sovereignty, focusing on policy that kept the country stable but isolated.
When Karimov died in 2016, his prime minister, Shavkat Mirziyoyev, seemed the handpicked successor, but Mirziyoyev had to fight to keep his place, as rival politicians rushed to realize their own interests. Mirziyoyev won out, and was able to successfully build a regime in line with the legacy of Karimov. His challenge has been to step out from the shadow of his predecessor.
To a degree, the government needs elections to prop up their legitimacy: they participate and engage with external actors and monitors, but invariably fall short of the standards and bury the reports under state-controlled media. But their dance with domestic control and international approval—or lack thereof—has consequences. The system was isolated and repressive under Karimov, who had a notorious reputation even among the region’s autocrats. Infamously, some terrorist suspects were allegedly boiled alive by the Uzbek security services. The current leader, Mirziyoyev, has worked to rectify Uzbekistan’s isolation, but his domestic reforms have focused on economic modernization and moderate liberalization rather than any democratization. Political power remains as centralized under Mirziyoyev, despite his charm offensives, as it did during Karimov. Both leaders have sought to preserve their own survival and the continuation of the regime system that keeps them in power and wealth: stability is essential.
The future vision for Uzbekistan is muddled: there is divide between technocrats, security bosses, and oligarchs on how power should be exercised, held, and distributed to ensure the best results. Some think of maintaining the status quo of their own power and refuse to open to reform that would challenge that; others see relaxed borders and more transparency as an opportunity to grow the pie bigger. Some members of the elite are seeking stronger ties beyond Uzbekistan’s borders—including with the West, while others look to Russia, instead, and still others eschew both options, seeking only to protect themselves. Despite divisions, Mirziyoyev has asserted himself as the undisputed leader. In 2018, he dismissed Rustam Inoyatov, a longtime chief of the notorious National Security Service of Uzbekistan, who had maintained order in the country with ruthlessness and whom some considered to be a threat to Mirziyoyev’s reform agenda.
A vital key in the power maneuvers by the Uzbek government has been the use of the Islamic threat as a pretext to suppress opposition to the regime. In particular, the government has often invoked the Islamic Movement of Uzbekistan, an Al-Qaeda affiliate, as a bogeyman to justify harsh measures. Though most of Uzbekistan’s Muslims are moderate, with mainstream practices, the government uses any instances of extremism as a political tool; Karimov’s government in particular was known to excuse government violence as necessary against extremism, even if it was not verifiably true. In the most drastic example, in the 2006 Andijan massacre, the security forces killed hundreds of protesters who had protested the arrest of a group of businessmen, who the regime accused of a membership in an extremist organisation, but critics contend were connected to a local governor who fell out favor with the Karimov regime. Critics say that the government has unrightly over-emphasized the role of Islam in protest. Though extremist groups might exist, they are neither numerous nor united enough to present a force that could stage a coup or replace the current government style. But the government’s use of extremist Islam has become a self-fulfilling prophecy: outlawing and repressing certain religious groups has radicalized members and inspired recruitment. The bottom line is the government fears a color revolution in Uzbekistan. But the population in Uzbekistan is obsequious enough that such an uprising seems far-fetched in the near future. Uzbekistan’s power and laws are squarely in the hands of the ruling regime not in the people’s.
The government revolves around the strong arm of the president. There have only been two since Uzbekistan transitioned from the communist system: Karimov and his appointed successor, Mirziyoyev. By Uzbek law, the president is directly elected by an absolute popular majority vote, going to a second round, if necessary—though it never has been. In theory, the president serves one 5-year term and is eligible for a second 5-year term. In reality, the length of the term has varied, and the first president, Karimov, was in power for over 25 years, from 1989 until his death in 2016.
In 1996, Karimov’s first presidential term was extended by a nationwide referendum, in which 99.4% of the population voted to extend his term until 2000, a vote that Karimov treated as a constitutional reelection; this would have required that Karimov leave power in 2000, after serving a second term. But in a farce of politics, the legislature opposed Karimov's statement that he has run in a constitutional reelection, which in turn allowed him to then run in 2000—then again in 2007 and 2015. A testament to his power and the system: Karimov won each election, each time with over 90% of the vote.
When he died, his prime minister, Mirziyoyev, ascended to executive power in a deal brokered by the inner circles of Karimov’s regime. As head of state, Mirziyoyev faced a difficult task: keeping the system that brought him to power while differentiating himself from his predecessor. Mirziyoyev consolidated power by creating three groups in his circle: family members, former exiles, new technocrats. More assured in his position, Mirziyoyev has become increasingly critical of Karimov. In a decisive move, Mirziyoyev forced out the influential Inoyatov—the former chief of security for SNB. Previously, Inoyatov and his services had controlled the borders, appointment of personnel, and the public and political sphere; the success or failure of businessmen and foreign investors depended on the benevolence of the Uzbek security services.
This was a remnant of the Karimov era, when formal bureaucratic positions meant little, and personal relationships to the president and his inner circle trumped all else. Indeed, Karimov feared the rich because they were independent of the state, and Karimov believed income inequality would provoke social tension or reform—oligarchs were made an example of, their assets seized, or they were forced to flee the country. Rather than concentrating power in the hands of business, under Karimov’s regime, Uzbek capital was held by government officials.
The president shares power with the cabinet of ministers, who are appointed by the president and require approval by the Senate chamber of the Supreme Assembly, the Oliy Majlis. Since 2011, the prime minister has been nominated by the majority party in the legislature—always the party of the president—but the president must then appoint the prime minister to power, along with the ministers and deputy ministers. Notwithstanding the power of the president, politics at the executive level are clanish. Ministers scuffle and posture among themselves: the picture of an ironfisted executive is not incorrect, but there is no illusion that the infighting leads to divisions and wrestling of power behind the scenes.
Uzbekistan has a bicameral legislature, the Supreme Assembly, known as the Oliy Majlis. The body was unicameral until 2004. The two houses are the upper Senate and lower Qonunchilik Palatasi. All parties in the legislature support President Mirziyoyev. The Senate has 100 seats in total: 84 of these seats are filled by semi-elections by the councils of regional governments and the other 16 seats are filled by presidential appointment. Each member serves a 5-year term. The lower legislative body, the Qonunchilik Palatasi, has 150 members. Out of these, 135 members are directly elected by absolute majority vote in single-seat constituencies and the other 15 seats are indirectly chosen by the Ecological Movement of Uzbekistan. This oddity was established in 2008 by revising electoral law, and is a half-hearted attempt to guarantee a voice for Uzbekistan’s environmental issues, of which there are many.
There are five parties sanctioned to take part in Uzbek politics: the Uzbekistan Liberal Democratic Party, the Uzbekistan National Revival Democratic Party, the People’s Democratic Party of Uzbekistan, the Justice Social Democratic Party, and the Ecological Movement. The Uzbekistan Liberal Democratic Party is the party of Karimov and Mirziyoyev; it currently has 52 out of 150 in the lower house and and 41 out of 100 seats in the Senate. The second party, the People’s Democratic Party of Uzbekistan, evolved from the original party of Karimov—the successor to the Uzbek Communist Party. It was founded in 1991, following the Uzbekistan’s independence from the Soviet Union, and tends toward leftist values, focusing its platform on a strong legal state and humane and equitable society.
Karimov led the party from 1996 until he created the Uzbekistan Liberal Democratic Party in 2003. Currently, it has 27 out of 150 seats in the Qonunchilik Palatasi and 28 out of 100 seats in the upper house. The Uzbekistan National Revival Democratic Party boasts the largest number of female members. The Party emphasizes Uzbek culture and prefers closer rapprochement with Central Asia over Russia; opposing Uzbekistan’s possible joining of the Eurasian Economic Union. It has 36 out of 150 seats in the lower house and no seats in the Senate.
The last two parties are small. The Justice Social Democratic Party has 20 out of 150 seats in the Qonunchilik Palatasi and no seats in the Senate. The Ecological Movement, as noted above, has 15 places in the lower parliament reserved, a nod to the country’s need to tidy up its ecological policy, but no seats in the Senate.
Media, NGOs, and Civil Society
There is virtually no free press, no active NGOs, and no functioning civil society in Uzbekistan, due to government censorship and repression. The system under Karimov was extraordinarily repressive. The rise of social media, matched by the change of power to the moderabled reformist Mirziyoyev, has worked to counter this, but security services still track internet use and try to block certain sites, but clever Uzbek youth have found ways around this. Human rights organizations exist and the OSCE still monitors elections in Uzbekistan, but any unfavorable reports are countered or drowned out by domestic institutions.
The country has an abysmal human rights track record, with reports of human slavery in the cotton fields and cases of forced sterilization of women in the countryside. Mirziyoyev has attempted to reform both the country’s human rights record and its transparency. Limited presence of foreign media and independent NGOs has also been slowly introduced. He proposed a plan for an online forum where citizens can anonymously complain about the system or mistreatment by bureaucracy, but there are concerns about reprisals. Alternatively, critics have pointed out that the site could turn into a place for denunciations for political capital or revenge. Despite Mirziyoyev platform for change, his government has yet to set forth a clear strategy to develop country; so far, the executive in Tashkent has not shown itself to be prepared for deep reforms.
President Mirziyoyev, political insider and prime minister of the Karimov regime for 13 years, is no revolutionary. The old order of clientelism, formal institutions as facades for clan-based politics, rampant corruption still characterises Uzbek politics. But real reforms have brought concrete changes to the Uzbek society. In a case study, the notorious practise of the use of slave labor on the country’s cotton fields forced thousands of schoolchildren, students, public sector workers to spend their summers on the burning hot fields for next to no payment. The practice has not been eradicated, but for the time in Uzbekistan’s history, the top authorities in the country have acknowledged the existence of the problem and allowed independent activists to investigate the problem.
But in a reflection of the clan-based politics, while the ministry of labor has ardently worked on reforms, the ministry of agriculture, according to foreign activists, continues to deny the problem’s existence, and local level managers remain more loyal to production quotas than to labor regulations. From the outside, the consolidated authoritarian states like Uzbekistan can seem like a one man show, but the verdict is still out on will Mirziyoyev change the system or if the system will change him from a semi-reformer into a status quo autocrat.
One of the only two countries surrounded completely by landlocked countries, much of Uzbekistan’s foreign relations are shaped by physical geography. Uzbekistan ties the region together. It is the only country in the region to border all of the other four Central Asian states and by none of the outside Great Powers. The isolated but advantageous geopolitical position coupled with the region’s largest population and standing army make Uzbekistan a key player in the region and one that is sometimes accused of harbouring hegemonic aspirations regarding its smaller neighbours. Much of the vital road and rail infrastructure of Kyrgyzstan and Tajikistan passes through its territory—a leverage Uzbekistan has often used in its disputes with its neighbors by cutting off traffic.
Most of the Uzbekistan’s population lives in the fertile Ferghana valley, which stretches to Southern Kyrgyzstan and Northern Tajikistan. Intermixed populations and lack of natural barriers have resulted in some of the world’s most complicated border disputes between the three countries over flexuous exclaves that were carved during the Soviet period. The fertile soil of the Ferghana valley is the heart of Uzbekistan’s cotton industry, but the arid climate conditions make the country dependent on irrigation from rivers that flow down from the Kyrgyz and Tajik mountains. Kyrgyzstan’s and Tajikistan’s plans to build hydropower dams in the rivers’ upstream have periodically infuriated Tashkent.
After the oil-rich Kazakhstan, Uzbekistan is the region’s second most powerful country. In contrast to its northern neighbor, Uzbekistan shares no land border with either of the region’s global powers, China or Russia. Shielded from the Great Powers by smaller states and thus less vulnerable to their power projection, Tashkent has emphasized its foreign policy independence, engaging with outside partners selectively on transactional, bilateral basis.
Unlike Kazakhstan, Uzbekistan is not a member of the Russian-led CSTO (Collective Security Treaty Organization) or the EEO (Eurasian Economic Organization). The persistent emphasis on bilateralism and sovereignty were hallmarks of Uzbekistan’s longtime strongman ruler, Islam Karimov, who ruled the country from the collapse of communism until his death in 2016. During his rule, Uzbekistan went from being a close Russian ally to strategic partner of the United States, back to a Russian ally after relations with Washington soured only to distance itself from Moscow again after courting the Russian bear had run its course.
His successor, Sakhat Mirziyoyev has started opening up the previously closed country and reached out to outside partners, prompting optimism that Uzbekistan—previously the main obstacle to regional integration and cooperation—would become its driving force. In showcases of goodwill and activism, the previously uncompromisingly stubborn Uzbekistan has now settled majority of the border disputes with Kyrgyzstan, and has hosted an international peace conference to facilitate conflict resolution in Afghanistan. And largely due to Uzbekistan’s new foreign policy course, all of the Central Asian leaders, for the first time in over a decade, gathered for a summit meeting in Kazakhstan in March 2018.
The main outside security threat for Uzbekistan stems from the war torn Afghanistan with which the country shares an 85 mile (137-kilometer) border. To minimize the spillover of drugs, arms and extremism, Uzbekistan has heavily militarized the banks of the Amy Darya river that separates the two countries by building an electrified border fence and supporting military fortifications. But recently, Tashkent has been eyeing on Afghanistan not only with fear but with hopes of addressing Uzbekistan’s geographic isolation from access to sea ports. Plans are underway to upgrade the rail link between the two countries to extend from Western Afghanistan to Iran, which would allow Uzbekistan to access Iran’s ports on the Persian Gulf. Another source of optimism, China’s Belt and Road Initiative is promising to include Uzbekistan in the ambitious plans to tie Central Asian countries together as part of a land corridor from China to Europe.
The relationship between Uzbekistan and Kazakhstan—the two most powerful states in the region—is the key for regional dynamics in Central Asia. Despite the shared cultural and historical heritage, the Central Asian countries have so far pursued only very limited regional integration. Until recently, Uzbekistan’s stubborn insistence on sovereignty and bilateralism has been one of the key policy obstacles.
President Mirziyoyev started his tenure with visits to Kazakhstan, where he and president Nazarbayev praised the good relations between their countries, and emphasized that the two have no unresolved disputes. As concrete steps to increase integration between the two countries, Uzbekistan has opened up new border crossings to Kazakhstan, and are seeking to nearly double the trade turnover between the two countries in the next couple years. In 2019, Kazakhstan and Uzbekistan announced that they would no longer require visas from foreigners who have a visa to one of the two. The recent summits and joint-ventures are a season change from era of Islam Karimov who had strained relations with Kazakhstan’s Nazarbayev. They rarely met and allegedly could not stand each other.
Of all of its neighbors, Uzbekistan has the warmest relations with Kazakhstan. The main issue of Kazakh-Uzbek relations is its thinness. Political and economic integration remains low, and Uzbekistan is not a member of the Russian-led economic or security integration projects. Despite recent declarations, deepening the regional integration to supplement or even replace organizations centered around outside great powers remains a distant goal.
Uzbekistan and Kyrgyzstan are closely connected, but until recently, their relations have been marked by tensions and disputes. The Ferghana valley, where most of Uzbekistan’s population reside, connects the Uzbek heartland to Southern Kyrgyzstan and its largest city, Osh, which is just on the shared border. Osh—geographically more closely connected to Uzbekistan than northern part of Kyrgyzstan, where the Kyrgyz capital Bishkek is located, is a home to a large Uzbek minority that constitutes 15% of Kyrgyzstan’s total population. The territory is fragmented by multiple Uzbek exclaves—a Soviet-era legacy. The largest, Sokh, is home to around 50,000 Uzbeks and has witnessed periodical blockades and riots. Ethnic tensions between Kyrgyz and Uzbeks have occasionally descended into sectarian violence. In 2010, riots broke out in Osh. Closer to a thousand were killed, and hundreds of thousands of Uzbeks fled to Uzbekistan, bringing the relations between the two countries to a near-breaking point, prompting fears of a military conflict.
On top of ethnic tensions, disputes over the usage of the region’s rivers have strained the relations. Arid Uzbekistan relies on water from rivers that flow from the mountain ranges of Kyrgyzstan and Tajikistan. Kyrgyz plans for Kambarata-1 Dam, which would be one of the world’s largest, have raised concerns in Uzbekistan over its access to the vital water resources.
A new chapter in Kyrgyz-Uzbek relations started with the change of power in Uzbekistan. Sakhat Mirziyoyev has started his tenure with a more conciliatory approach to Uzbekistan’s neighbors than his predecessor Islam Karimov, who often used bullying tactics to pressure Uzbekistan’s smaller neighbors with border closures or cutting off gas supplies. Uzbekistan and Kyrgyzstan signed a comprehensive partnership agreement in 2017 which urged closer economic and political ties.
The two countries are aiming to increase their bilateral trade from current around $300 million to $500 million; a rail link between Tashkent and northern Kyrgyzstan was opened in 2018; and most of the border disputes were settled in a historical deal in 2017, where Kyrgyzstan and Uzbekistan agreed on the demarcation of over 85% of the flexious border. The most controversial issues, the Sokh exclave and the Kamabarata dam remain unresolved and as a test of the two countries’ willingness to compromise, but both Tashkent and Bishkek have guaranteed to address remaining disputes through joint-processes and dialogue.
Similar to Kyrgyzstan, the relations between Uzbekistan and Central Asia’s poorest country, Tajikistan have been marked by ethnic violence and hydropower disputes. The personal animosity between Tajikistan’s longtime ruler Emomali Rahmon and Uzbekistan Islam Karimov aggravated the relations to a point of a regional “cold war,” making the bilateral relationship between Uzbekistan and Tajikistan the most antagonistic amongst Central Asian states. In the 1990s, Tajikistan descended into a bloody civil war between the secular central government, led by Rahmon, and islamist groups. Fearing spillover, Uzbekistan intervened on the side of the central government, but disputes over the conduct of the war led to a deep personal rift between the countries’ leadership.
Uzbekistan’s Karimov and the Tajik leadership did not conduct any bilateral meetings after 2000, and Uzbekistan fortified the border with fences and minefields. The antagonism was further fuelled by Tajik plans to re-start the construction of the Soviet-era Rogun Dam project, which Uzbekistan fears will hamper its access to the downstream water resources. To pressure its poor neighbor to abandon the project, Karimov’s Uzbekistan periodically shut off gas supplies. But Karimov’s successor Mirziyoyev has completely recast the relationship. Visiting the Tajik capital Dushanbe, the leadership of both countries declared the end of animosity and Tashkent showed the green light to Dushanbe to build the disputed dam, provided that Tajikistan follows international UN treaties on the rights of downstream nations. Further, ten previously closed border crossing were reopened, and flights between the countries’ capitals resumed for the first time in 25 years.
Uzbekistan is not a member of the Russian-led Eurasian Economic Union (EEU) or the Collective Security Treaty Organization (CSTO), reflecting Tashkent’s long-standing emphasis on foreign policy independence, but Uzbekistan’s relations with Russia are nevertheless close and without major disputes. During Islam Karimov’s long rule Uzbekistan fluctuated between a near adversary, aligning itself other post-soviet countries that resented Russia’s influence in the region, to an ally with a membership even in the CSTO from which it withdrew in 2012.
Time and again Uzbekistan has resorted to Moscow as its most reliant backer, who unlike the western powers, does not condition its support on political reforms or the humans rights situation. This was particularly important in the aftermath of the 2005 Andijan massacre when the EU imposed an arms embargo on Uzbekistan and the US Congress called for cutting. Turning a blind eye to human rights violations, Moscow provided Uzbekistan with military support and trade deals in exchange for Uzbekistan rejoining the CSTO and closing down an American military base. Disillusioned with Russian attempts to dominate other alliance members and expand military infrastructure in Central Asia, Uzbekistan withdrew again in 2012.
The current president Sakhat Mirziyoyev, after assuming office in 2016, paid a visit to Moscow as the first foreign great power. He emerged as the successor to Karimov after defeating the deputy prime minister Rustam Azimov in a power struggle. Azimov was considered to be more pro-western than Mirziyoyev, who has emphasized the need for close cooperation with Moscow. Tashkent’s emphasis on foreign policy independence makes it unlikely that Uzbekistan would join either the CSTO or the EEU, but Tashkent and Moscow have recently agreed on Uzbekistan buying military hardware from Russia on the same discount rate as CSTO, and Uzbekistan and Russia, in 2017, concluded economic agreements worth $16 billion.
The United States
The European Union
Uzbekistan could be the regional leader for Central Asia. The doubly-landlocked country was cut off from the outside world under its former president, Karimov, but the new, gregarious Mirziyoyev is poised to put the country back into the regional and international mix. The size and placement of Uzbekistan puts it at an advantage to be a regional broker. The problems it faces is the lack of legacy, attributable to Karimov’s withdrawal, and the regional play between Russia, Kazakhstan, China, and the Middle East. With no heritage to draw on, Uzbekistan will have to improvise into the role of leader, and create the foundation to maintain its power, were that to be the country’s desire. If not, Uzbekistan could play side-kick to regional power Kazakhstan, and walk in Kazakhstan’s and Russia’s shadow, a move with less payoff but less risk. But Mirziyoyev and his policies are still new to Uzbekistan, it will take time for the regional and international community to react, and their acceptance or rejection could be indicative of the direction Uzbekistan will pursue.
The state emblem of Uzbekistan is framed by wheat and cotton. The Soviet central planners diverted the streams flowing into the Aral Sea—once the world’s fourth largest lake, now mostly an arid, salted desert, to build an irrigation system across the Ferghana Valley for a cotton monoculture. The labor and water intensive cotton retains its place as Uzbekistan’s most important agricultural export, and the widespread practice of using forced labor in the harvest has caused international condemnation and boycott by international clothing brands.
Posters that declare “cotton is our gold” still decorate the streets of Tashkent, but in fact, gold is really Uzbekistan’s gold. Every year over 56 tons of gold is dug at the Muruntau gold deposit, the world’s largest open pit gold mine. The gold exports account for 40% of Uzbekistan’s total exports. But especially compared to Kazakhstan, Uzbekistan remains a low-income country with a GDP per capita of only little over $2,100, putting it in the same income bracket as Ukraine.
During the Karimov regime, Uzbekistan remained a closed economy. It was the region’s maverick, rejecting the Washington Consensus and instead sought to emulate the successes of the state-led economic model of the East Asian economies. Import substitution policies and the oversized role of state enterprises formed the backbone of the Uzbek economy. President Karimov viewed independent oligarchs as a political threat, and most of the country’s rich made their fortunes in state-controlled firms. Karimov’s successor, Sakhat Mirziyoyev, has started his tenure with an ambitious reform program. The country has made respectable achievements under its new leadership, including liberalization of trade policy, reduced barriers to entry, appeals to foreign investors, campaigns to end the use of forced labor on the cotton fields. All of these efforts mark a contrast with the past to take the advantage of Uzbekistan’s untapped potential.
Uzbekistan is an energy exporter with over a fifth its energy produced with renewables—mostly with hydropower but also increasingly with solar. Formerly hard to access, the astonishing historical sights of Bukhara and Samarkand—centers of the ancient silk road, are now open to foreign visitors, who can visit the country on an e-visa. It has the largest and youngest population in Central Asia. A quarter of the population are children under 14-years-old, and only 6% are older than 65. Relatively well-educated, the labor force of over 17 million workers can be a huge strength if the reforms are able to create economic opportunities for the many, but a source of instability if the ills of corruption, environmental degradation, and a badly managed economy go unsolved.
The government is still highly involved in tariff law, regulation of business, and investment. There are many places for Uzbekistan to reform and improve if it wishes to grow its economy and attract more foreign speculation. The government in Tashkent ought to perk up the investment climate by fostering rule of law and judicial transparency. Much exchange takes place on the shadow market, which Uzbekistan could work to curb by liberalizing its protectionist tariff law and import restriction.
The government in Tashkent is working with international organizations, such as the IMF and World Bank, to tighten up its system. It needs to develop a better, stronger banking system to stabilize the economy and give potential investors confidence. Despite being a transition economy, much of the key markets are still under the heavy regulation and jurisdiction of the government, with contracts being awarded or maintained under government directive. Uzbekistan could take steps to liberalize key sectors, such as agriculture and manufacturing, that have space to flourish but need more cash flow and innovation to do so.
Finally, though sharing a common geographic area and title, the Central Asian countries are far from cozy with one another; Karimov was known for his cold and closed attitude toward Uzbekistan’s neighbors, and his unwillingness to enter into joint projects. To move forward, Mirziyoyev’s administration is working to settle border disputes and closures with neighbors, while reaching out on bilateral and multilateral relations for joint projects, which could help to raise the economic prosperity and stability of the entire region.
Structure of the economy and key markets
The Uzbek economy is largely based on the production of primary goods of which cotton and gold are its most important exports. It is the world’s fifth largest exporter of cotton and the eighth largest producer. Agriculture continues to account for fifth of Uzbekistan’s GDP and employs over a quarter of the labor force. The share of services has steadily increased and now accounts for a half of the GDP, while industry—mainly mining, accounts for 35% of the GDP and employs 13% of the workforce. The Soviet-era command structure and central planning remained largely in place through the 1990s. Combined with rising commodity prices (especially cotton) the gradual approach to economic reform allowed the state to retain large revenues from the export of cotton.
Uzbekistan was the first post-Soviet country to grow its GDP back to the pre-1991 level, and the revenues propped up comparatively high level of social provisions. But in late 1990s, when commodity prices dropped, Uzbekistan’s economic performance started to lag behind, and the planned currency liberalization was put off, isolating the country from international financial institutions. Nevertheless, Uzbekistan’s economy continued growing and the economic model gradually shifted away from the dominance of large state-controlled enterprises to service-based economy with a large SME sector. The size of the SME sector in proportion of the GDP grew from 30% in 2000 to nearly 60% in 2016, while the share of the labor force employed in the SME sector rose from 50% to nearly 80%.
Despite the structural shift, the high custom duties and restrictions on currency exchanges put limits on Uzbekistan’s growth. President Mirziyoyev, after resuming office in 2016, has started implementing sweeping reforms. With no illusions of how the system works, he has put in practice reforms of which many were already drafted but never implemented during his tenure as the prime minister because of lack of political will. The most important of the reforms has been the liberalization of the foreign currency exchange controls. Until the liberalization in 2017, the gap between the official and unofficial exchange rates created vast, illicit black markets and hampered foreign trade. After the reform, Uzbekistan has secured large investments and loans from foreign financial institutions. Since 2017, the loans for economic development from the World Bank, Asian Investment Bank, Deutsche Bank and other institutions total to over $2.5 billion.
In contrast to his predecessor, president Mirziyoyev has acknowledged and prohibited the use of forced labor on the cotton fields and urged cutting down of red tape. In a speech to the parliament, Mirziyoyev blasted: “The same customs procedure that takes one hour for clearance in Belgium takes an entire month in our country.” Mirziyoyev’s reforms are boosted by the Chinese Belt and Road Initiative, which promises to turn the previously closed-off Uzbekistan into a transit hub of Central Asia. Railway projects to connect Uzbekistan through Kyrgyzstan to China, to Kazakhstan and Afghanistan seek to position Uzbekistan as the central path in the Chinese project to connect China with Europe through Central Asia.
Uzbekistan's trade is dominated by the imbalance of its export to imported ratio. It has been running at a negative trade balance since 2006. In 2016, it had a negative trade balance of $1.98 billion. The country’s export market is driven by gold, cotton, and petroleum gas. Gold makes up 40% of all exports, $2.86 billion, all of which is exported to Switzerland. Petroleum gas is the next highest product, making up 10%—$738 million—the bulk of which is sent to China, with 84%, then Kazakhstan, with 13% and Afghanistan and Kyrgyzstan.
A grouping of cotton products, including raw cotton, non-retail cotton yarn, knit t-shirts, and other products make up a large section of the export economy: non-refined pure cotton yarn comprises 6.5% of exports, with a value of $464 million; raw cotton makes up 2.7% and is worth $192 million. Most cotton products are destined to markets in China, Turkey, and Russia. Uzbekistan also exports other ores, such as copper, and chemical products, including radioactive chemicals and ethylene polymers. The big buyers of the radioactive material are China, France, and the U.S. The country’s top export trade partners are Switzerland, accounting for $2.86 billion, all gold; China, with $1.52 billion; Russia, at $751 million; Turkey, with $698 million; and Kazakhstan, accounting for $567 million of Uzbekistan’s exports.
Uzbekistan’s imports are driven by a need for mechanical parts, metals, chemical products, and a hodgepodge of consumer goods. Its key import partners are China, which sends $2.01 billion to Uzbekistan; Russia, sending $1.96 billion; South Korea, with $927 million; Kazakhstan, at a value of $920 million; and Turkey, with $531 million. The products with the biggest bulk of import to Uzbekistan are packaged medicaments, with 5.1%, followed by refined petroleum, which represents 4%, and then vehicle parts, with 3.9%. On aggregate, China is Uzbekistan’s largest trade partner, accounting for a total of $3.53 billion in trade turnover; Russia is Uzbekistan’s second-largest partner, with $2.7 billion in turnover. Further, Russia is the destination for a large number of Uzbek migrant workers—about 2 million—who send close to $3 billion in remittances to their families at home.
Like other countries in the region, Uzbekistan is no doubt feeling the squeeze between Russia and China as trade and project partners: Russia’s Gazprom, following its fall-out with Turkmenistan, opted to deepen its relationship with Uzbekistan, from which is is planning to receive 4 billion cubic meters of gas; Lukoil began construction of a gas terminal in southwest Uzbekistan, with a planned capacity of over 8 billion cubic meters.
Foreign Money Flows
Uzbekistan is in search of foreign direct investment under new leadership from President Mirziyoyev. The country has a poor track record for FDI—one of the lowest levels in CIS, and the lowest FDI per capita. The former president, Karimov, kept the country largely closed from foreign investment of any kind, prefering to think of Uzbekistan as uniquely sovereign, not in need of handouts and money from other countries to prop up the countries economy, for which the economy and development certainly suffered. Under the new administration, the Uzbek bureaucracy is split. Some want new investments and believe large foreign investment will propel the country’s modernization forward. Others—remnants of the Karimov era—fear that engaging with outside investors will undercut the country’s bargaining power.
Cooperation with foreign investment in this region is usually done with a local partner, which creates another layer of concern for the old guard. They see a significant risk that foreign investment will create a class of Uzbek oligarchs, who will divide the most lucrative pieces of the Uzbek economy among themselves and take over the political sphere in the same way the state security services, SNB, did. Karimov was not welcoming to oligarchs and regularly made an example of them; he preferred to allow security services to have a ruling role. Karimov was known for exiling oligarchs, and as a result, they live all over the world: in the UAE, Russia, Turkey, Malaysia, Ukraine, Kazakhstan, and the EU. These business leaders are capable of bringing sizable investment to Uzbekistan if the rules of the game are clear.
The current president, Mirziyoyev, has signaled a change in the winds, partnering with Uzbek billionaire Alisher Usmanov, a man with the power to walk into the president’s office whenever he can to lobby for business interests. Indicative of this power, in 2017, Russia and Uzbekistan signed bilateral project agreements to the amount of $16 billion—of this, Usmanov pledged to invest $7 billion.
As part of the initiative to attract investors, Uzbekistan, under Mirziyoyev, has introduced government policy to alleviate the tax burden. Uzbekistan has introduced agreements to avoid double taxation and preferred nation status. The general profit tax stands at 7.5%, with a rate of 15% for banks. Uzbekistan has also established the Kadimiy Bukharo (Ancient Bukhara) tourist zone, full of boutique hotels, health and recreational facilities, shopping malls, and entertainment centers, where all investors are exempt from taxes until 2020. The country has the potential to introduce many more tax incentives in the future, as there are few now; they are a key way to invite business into the country.
Uzbekistan’s economy has acted as though it has been in transition since the fall of the Soviet Union, nearly three decades ago—because it has been. The regime and economy under the first leader after the collapse, Karimov, was closed, defensive, and not hospitable to investors. That has changed since power has shifted to Karimov’s successor, Mirziyoyev, who has made overtures to neighbors and investors alike, opening Uzbekistan’s borders and economy to the outside world.
The effect is a sudden modernization of an economy that has been limping along for countless years. Now, Uzbekistan wants to make its economy attractive; it wants to expand and have a role in the regional economy. It is working on projects with Russia and China along with entering into talks with regional partners, like Kazakhstan. Uzbekistan’s economic future is still a large unknown, but now the desire is there to move forward and keep the country open to opportunity.
Culture & Society
At night, Uzbekistan’s silk road cities glitter with the light adored on mosques and ancient buildings. By daylight, the sparkle remains, sustained by the play of light against gold painting and brilliant blue handiwork within the chapels and high-vaulted ceilings of some of the ancient and most stunning places of religious adoration in Central Asia. Uzbekistan is landlocked, but it is surrounded by a sea of white cotton and tan desert. It has the occasional oasis of lush green, like Samarkand, the ancient city of the Silk Road. A brief bullet-train ride away from Samarkand is Bukhara, the lesser-known but equally lavish Silk Road post near the Turkmenistan border.
The ancient Silk Road cities reveal Uzbekistan’s diverse historical heritage. Bukhara and Samarkand both have their share of UNESCO World Heritage sites. Samarkand’s iconic Registan is one of the grandest examples of Islamic architecture, decorated with breathtakingly beautiful ornaments and geometric designs.
Of Bukhara’s many sites, the Samanid Mausoleum is perhaps the best illustrative of the region’s history. Modest in size, the gravesite is considered as one of the most outstanding examples of Central Asian architecture because of the details of its brickwork. It is also the oldest, standing historical building in Central Asia. This is largely because at the time of Genghis Khan’s Mongol invasions, it escaped devastation as it was already covered in mud.
It was only dug up in 1930s by Soviet archaeologists. But the Soviets did not want the mausoleum or the surrounding graveyard to become a sight of pilgrimage, so they razed the surrounding graveyard and built an amusement park on top of it. Bukhara and Samarkand are rooted in the Persian cultural heritage, and in both cities, the majority of the population still speak Persian as their first language rather than Uzbek, which is a Turkic language.
Uzbekistan’s capital city, Tashkent—the fourth largest city in the post-soviet region, is as old as the famed Bukhara and Samarkand, but looks modern in comparison. The city was devastated in an earthquake in 1966, giving the Soviet urban planners an opportunity to transform the chaotic medieval cityscape into a grid with 8-lane avenues, brutalist architecture and Central Asia’s second metro system.
Its central square reflects Uzbekistan’s search for national identity. In the Soviet times, first, the statue of Stalin took the center stage before being torn down and replaced by a statue of Karl Marx during the de-Stalinization campaigns of the 1960s. In 1993, the communist heritage gave way to a statue of Amir Timur, the last of the ‘great’ nomadic conquerors. In the 14th Century, his armies conquered and pillaged the great cities of the time from Delhi to Damascus and even Moscow. “Strength is in justice” as his motto, Timur sought legitimacy by portraying himself as a successor to Genghis Khan and as the sword of Islam. Now his legacy as the founder of the Timurid Empire is honored in the public squares, museums and history classes of Uzbekistan, while the destruction he left behind is conveniently overlooked.
The blend of Persian, Soviet, and nomadic legacies have left a deep imprint on the national identity of Uzbekistan, which celebrates the Timurid Empire, considers the Persian heritage of Bukhara and Samarkand as its own, and does its best to distance itself from the stamp of the post-soviet. But regardless the nation-building at the top, the everyday life and points of pride for the country’s majority have largely stayed the same.
Busy bazaars, rather than supermarkets, still form the center points of commerce in many Uzbek cities, even in Tashkent. At lunch hour plov fills the tables. The mix of spicy broth absorbed in rice, boiled vegetables and meat has its origins in northern India, from where it has spread across Eurasia. But no country is as adamant about the right to call plov as its own national dish than Uzbekistan.
And perhaps this is the key to the Uzbek culture: different civilizations and cultures have traveled through the ancient Silk Road, some with arms, others with manuscripts, but all leaving their distinct mark on the country that is a diverse mix of peoples and influences. In the post-soviet years of independence, the rough-handed leadership of the president Islam Karimov took the diverse heritage and has boxed it into a national identity for a new, still poor country that has inherited a rich past.
In the Karimov era, Uzbekistan remained a closed country; foreign visitors to the renowned sights of the ancient Silk Road remained few in numbers. His successor Sakhat Mirziyoyev has opened up the country to visitors, and now travelers can easily apply online for an e-visa, which they then print and present at the border.
The remote Karakalpakstan region in northwest Uzbekistan is home to the second largest collection of Russian avant-garde art in the world.Read More
Kazakhstan and Uzbekistan have pursued divergent foreign policy agendas as independent states since gaining their independence in 1991.Read More