Shavkat Mirziyoyev has become the new President of Uzbekistan. He will soon be inaugurated and will no longer be “president-elect” or “acting president” (as he was before the election). Instead, he will become the leader of one of the biggest Central Asian nations. Our key question is what will change in Uzbekistan now that Islam Karimov’s 25-year rule is over. Expert at Uzbekistan’s Center for Economic Research Bakhtiyor Ergashev has answered this and other questions in an interview to EADaily.
Should we expect changes in Uzbekistan’s foreign policy?
Uzbekistan’s foreign political priorities are known and will hardly be changed: the Uzbeks seek to be equally distant from the world’s centers of force. So, we can hardly expect them to get too close to the Chinese, the Russians or the Americans. The military and technical cooperation agreement signed with Russia a few days ago has shown that in security the Uzbeks will look to the Russians. The Silk Road project has become a serious message that in economy, they will actively contact the Chinese. With the Americans, they have a new C5+1 format but it is not working yet.
The United States has promised to $15mn for some regional projects. Is this promise still in force?
Yes, it is, but as compared to what China is going to invest or what Russia is going to purchase, this is next to nothing. Despite their high activity in Central Asia, the Americans have not achieved any significant results there.
Perhaps, they are not very much interested in the region?
But they are. Central Asia is rich in energy resources, it borders on China and Russia. Simply, after the Andijan events, Uzbekistan reduced its contacts with the West. Now that the country has a new president, the Americans will try to intensify the contacts but for Donald Trump domestic problems are prior to foreign activities. So, we can hardly expect any breakthroughs in the U.S.-Uzbek relations and may see the Uzbeks continue keeping the world’s force centers at equal distance to themselves.
What relations will Uzbekistan have with its neighbors?
The Central Asian countries are very different. They have lots of differences in economy. They have very different foreign policies. Kyrgyzstan and Tajikistan are very problematic neighbors. With Kazakhstan, we have no serious problems. Four years ago, we witnessed a breakthrough in our relations with Turkmenistan. The Turkmens are now building a bridge over Amu Darya. This will boost the export of Uzbek goods and will enhance Uzbekistan’s transit role.
Where will those goods go? To Afghanistan?
To Afghanistan too, but mostly via the Caspian Sea. Georgia, Azerbaijan and Turkey are finishing a railroad. This is a good route for Uzbekistan to the West. Turkmenistan is a transit country for us to the west to the Caspian and Black seas and also to the south to Iran and Oman.
As regards Kyrgyzstan and Tajikistan, they continue to be problematic. The Kyrgyzs are facing a permanent political crisis. So, we cannot solve our border-related problems. Regarding the Tajiks, they have quite interesting energy projects.
Some sources report that Tashkent and Dushanbe agreed on construction of the Rogun HPP, which means that Tajikistan has renewed construction, and Uzbekistan, contrary to what it was doing in recent years, keeps silent and allegedly may even join the construction consortium.
Any attentive individual would notice that over the last 20 years, Uzbekistan has never rushed to make anything public. We are just negotiating. We need to solve this problem. The Tajiks regard it as if this is a dispute. They think that if they resumed the project the first, they are the winners and if the Uzbeks are silent, they are the losers. But this is not true. The Uzbeks will never want to lose. What they want is to come to terms. For example, they may give the green light to this project but may ask the Tajiks to set up a joint stock company, where they will have a blocking shareholding. Are the Tajiks ready for this? This is exactly what the sides are negotiating. So, it is not right to say what if the Uzbeks are silent, they have given in.
As far as I remember, last summer the Uzbek and Tajik prime ministers exchanged tough letters concerning Rogun.
Yes, and that very man (Shavkat Miziyoyev – edit.) is now president. Some three months ago, he sent to Dushanbe a very tough letter on Rogun. Do they in Dushanbe really hope that he has changed his mind?
Perhaps, because Tajik President Emomali Rahmon attended the funeral of the first Uzbek President and has started a dialogue?
So what? The Azerbaijani president was not there. Does it mean that we will no longer be able to carry our cargoes via Azerbaijan? No, it doesn’t. In contrast, the Afghani leaders are ready to attend any event in our country but this does not mean anything either.
What changes do you expect in Uzbekistan’s domestic policy? The country has a high birth rate, lots of young people, who need jobs.
In his electoral program, Mirziyoyev called this problem a big challenge for Uzbekistan. As a solution, he envisions a program that will create over one million jobs a year but only 300,000 of them will be permanent. But still this is a priority task for the new president. Each year, almost 500,000 youths leave schools and need jobs. Here we need foreign capital. We have already created free economic zones in Angren, Navoiy and Jizzakh and are planning to create regional zones in Kokand.
Mirziyoyev mentioned five economic locomotives: textile, construction materials, fruit and vegetable growing, pharmaceutics and tourism. Formerly, we focused on big productions – mostly in petrochemistry. Now our priority is SMEs and production chains.
We need investments. Now we are receiving investments mostly from China and sporadically from South Korea and Russia. One of Mirziyoyev’s key priorities is to reduce labor migration. According to Russian sources, the number of Uzbek gastarbeiters in Russia has already decreased by 200,000-300,000. Our birth rate is very high, so, even the most successful industrial projects will not be able to give jobs to all. So, labor migration will be present till 2025-2030 at earliest.
Mirziyoyev’s plan to liberalize the currency market was a surprise for many. How is he going to reform this sector? Is he going to unify the currency rate?
The reforms will focus on business. The gap between the market and official rates comes from SMEs’ demand for currency. Unlike SMEs, large companies have access to state-level conversion. If the market is liberalized, SMEs will also be able to convert legally and the gap will shrink. We can’t unify the rate in one day. We should do it step by step, especially as the state is short of currency. Karimov and his team reoriented their country from imports towards own production. Yes, not all of our goods are of high quality but we produce almost all we need. Restricted conversion forced local businesses to work. This is not a civilized approach for an ultra-liberal one, but this is right for our specific economy. We preferred to act as producers and over the last 15 years we have taught our produces to produce. In textile and furniture we are already facing a glut and are considering export opportunities.
Uzbekistan-Eurasian Economic Union, Uzbekistan-Russia. Perhaps, Uzbekistan needs a closer look at the Eurasian Economic Union – a 200 million-strong market? And also at Russia.
Uzbekistan has always been the hub of Central Asia both geographically and economically. According to the Asian Development Bank, in 2040, Uzbekistan will the biggest economy of the region. But the Uzbeks have always been skeptical about empty integration ideas. What, for example, has WTO given to us? We are not going to join a union just to please somebody. We are pragmatics. Today, it is comfortable for us to be in the CIS free trade zone. There we face no customs policies, technical rules or unified requirements. We will integrate only if this helps us to develop. Most of our programs are envisaged till 2021. In textile we are supposed to create over 200 projects and to raise cotton fiber processing from 40% to 75-85%. We have lots of programs in leather and shoes production. In integration projects, we prefer being strong competitors rather than poor cousins. So, in order to avoid unnecessary problems and social protests, we should not hurry and should get ready for an equal dialogue.