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Uzbekistan after Karimov

What is the legacy left to Uzbekistan by Islam Karimov?

Wednesday 29 August 2018, by Alisher ILKHAMOV

As the mourning period following the death of Islam Karimov comes to a close, we can begin to draw some observations concerning his period of rule. Only in this way can we understand the context in which the new leadership begins its period of rule, and the limited prospects for reform. My aim in providing this analysis is not to cast the whole of Karimov’s legacy a priori in a negative light. It is important to recognize those positive aspects of his period of rule.

That said, even with the greatest concern for objectivity, I can identify only three.

Karimov Dynasty
Islam, Gulnara & Lola
(Click to enlarge)

First, right at the start of his period of rule, Karimov allocated additional domestic land plots to the population, which enabled many families to keep body and soul together at a time of great economic hardship. This also allowed the political situation to stabilize. However, the benefits of this move have long since been exhausted. By the start of the new millennium, the majority of the population had turned to labour migration as their primary strategy for economic survival.

Second, Karimov should be credited with refusing to play the nationalist card and with managing to avoid stoking inter-ethnic discord in the country. The Russian-speaking population has also been insulated from particular pressure, which explains why some among this group express genuine respect and admiration for Karimov. He also acted wisely at times of ethnic conflict in neighbouring Kyrgyzstan: he did not become involved in the conflict, and he allowed shelter to refugees. For this we should be very grateful.

Third, in foreign policy, Karimov has developed a course that has distanced Uzbekistan from the neo-imperial course of the Kremlin. I hope that this is a course from which the new leadership of the country will not depart. Such a move does not necessarily entail a distancing from Russia. Indeed, Uzbekistan should retain friendly relations with Russia, while supporting integration processes within Central Asian region. But it should not seek more than that.

These three features should be read, however, against the more troubling aspects of Karimov’s legacy.

The Economy

The economy is in a lamentable state, especially when considered in the context of the country’s existing potential in terms of both human and natural resources. There are several dimensions to this economic picture that can be distinguished.

First, the economy is overwhelmingly dependent upon remittance transfers. This great dependence on the earnings of migrants is already an indication of the de facto high rates of domestic unemployment.

Second, in terms of GDP per capita, Uzbekistan is ranked 125th in the world, on a par with several states in Africa. As one of Uzbekistan’s leading economists, Yuliy Yusupov, puts it, in 2013 Kazakhstan’s GDP was 4.3 times larger than that one of Uzbekistan ($243.8 bln against $56.8 bln respectively), while in 1992 the difference was only 1.9 times ($24.9 bln against $12.9 bln). Even these figures on Uzbekistan’s GDP are significantly inflated because they have been calculated according to artificially low currency exchange rates. Uzbekistan has at least four exchange rates, with the black market rate exceeding the official exchange rate by at least double. That is not surprising, given that restricted access to the free currency exchange along with systemic corruption at all level of government significantly increases the costs of conducting business in Uzbekistan.

Third, direct foreign investment has been drastically reduced: this is despite being a resource-rich country with population of nearly 32 million, and thus a potentially important market for investors. Contrary to this potential, over last 3-4 years FDI in Uzbekistan has been rapidly declining and in 2014 was only $626 mln, down from $1,635 mln in 2011. Compared to this, resource-poor Georgia with population of only 4 million, attracted significantly more than Uzbekistan ($1,647 mln in 2014), as table below suggests.

Foreign Direct Investments in Uzbekistan, 2009-2014
YearUzbekistan
(population 32 mln)
Georgia
(population 4 mln)
2009 842 647
2010 1,636 866
2011 1,635 861
2012 563 426
2013 629 705
2014 626 1,647
Comparison between two post-Soviet countries.

 

Fourth, Uzbekistan has one of the slowest internet speeds among CIS countries, and comparatively one of the most expensive. As of September 2016, the average fixed internet download speed in Uzbekistan was 3.27 Mbps, ranking 123rd of 142 countries studied, the slowest among post-Soviet states, save Turkmenistan. The mobile internet download speed, occupies 99th place with 1.24 Mbps, on a par with Lesotho, Mozambique and Mali. The average monthly bill for the use of wired broadband internet access in Uzbekistan in 2012 amounted to 9.1% of the per capita Gross National Income (GNI). Among post-Soviet countries only in Kyrgyzstan and Turkmenistan was mobile internet more expensive at that time.

Fifth, Uzbekistan remains overwhelmingly dependent on the export of raw materials. Only a fraction of the cotton that is produced in Uzbekistan is turned into manufactured goods that could add to export value. At the same time, the country’s cotton crop depends overwhelmingly upon the forced labour of hundreds of thousands of citizen. The state effectively takes from its citizens in order to accumulate cotton export revenues in the unaccountable and non-transparent Selkhozfond (Agricultural Fund) at the Ministry of Finance. This scale of enforced cotton harvesting has reached absurd proportions, with even the employees of corporations such as General Motors required to collect cotton.

Karimov as Guarantor of Peace?

It has become commonplace to praise Karimov for the fact that Uzbekistan has avoided civil war. This is fallacious argument that is employed to stymie political critique. Uzbekistan has never been faced with a significant threat of civil war because the country is not divided along ethnic or regional lines in the way that, for instance, Moldova, Georgia, Tajikistan or Azerbaijan are. In every viloyat, with the exception of Karakalpakstan, Uzbeks represent an absolute majority. And in which democratic country do politicians have as their mandate the promise of averting civil war? Politicians should be judged according to their plans for developing the country, and not for their capacity to identify an internal enemy.

Karimov has also been praised for keeping Islamic extremism under control. However, the truth is that his policies have been more a part of the problem than the solution. Karimov presented Uzbekistan with an artificial choice: “either me or extremism”. In fact, the threat from the Islamic Movement of Uzbekistan was contained when, in 2002, NATO virtually destroyed this group. In subsequent years, the Karimov regime has repeatedly drawn upon this earlier threat to silence moderate voices.

Andijan

Karimov will ultimately go down in history as a President who fired at peaceful citizens, including children and women, with over 500 documented as dead in the 2005 Andijan events.

In Andijan the protestors were no Islamic extremists: indeed, the most concrete evidence of this is that those protestors who managed to flee abroad have successfully continued the same peaceful business activities that they sought to conduct in Andijan.

Political and legal development

The path pursued by Karimov manifests contempt for constitutional norms. Laws were systematically undermined, fostering a whole generation of rulers and subordinates who have been raised to view the law as applying unequally to those with power and without. Shavkat Mirziyoyev, the acting President at time of writing, is only one of many members of the elite who has been shaped by this system. The entire legal and judicial system has been subordinated to the executive branch. The balance of powers exists only on paper. As regards human rights, the situation is equally dire: the use of torture in investigative cases and in prisons is routine, as is well documented by Human Rights Watch and other monitoring organisations.

Corruption

Corruption has reached such proportions that it has set the country’s development back by a decade. In only one sphere — that of telecommunications — the scale of corruption represents 7% of the country’s total budget. How many more such schemes exist in other sectors of the economy? It is indicative that when MTS left the country in August 2016, no new investors wanted to replace it. Karimov could not guarantee the conditions that would prevent corruption, leading to wariness among investors in case of arbitrary fines. A vivid case here is the telecommunication giant, Vimpelkom, which was obliged to pay a fine of $800 mln. The only investors who can operate in this environment are those who are provided legal guarantees by the Uzbek government.

In such a situation, only a series of considered reforms can save the country from the deep economic hole in which it finds itself. It remains an open question, however, whether such arguments won’t reach Mirziyoyev and the political elite who are to lead Uzbekistan in the post-Karimov era. ■

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