In early May 2017, President of Uzbekistan Shavkat Mirziyoyev is going to visit China. It will be his fourth state visit so far. Last week, after his regional visits to Turkmenistan and Kazakhstan, he visited Russia. Experts say it was a very effective visit: the sides have signed investment agreements worth $12bn and trade contracts worth $3.8bn. They wonder if the visit to China will be as successful – if yes, then what should be done for Uzbekistan to achieve its goal: to restore Russia’s leadership in its trade.
Today, Russia is the second foreign-trade partner of Uzbekistan after China. During their meeting, Mirziyoyev and Russia’s President Vladimir Putin came up with the opinion that this year Russia and Uzbekistan may enlarge their trade from $4bn to $5bn. Well-known Uzbek economist Bahtiyar Ergashev says that this is quite possible.
The sides have signed a total of 50 agreements and memoranda. This package involves Gazprom, Rostec, Vnesheconombank and Lukoil. Gazprom has agreed with the Uzbeks to supply them with 5bbn c m of gas a year in 2018-2023. Vnesheconombank and the National Bank for Foreign Economic Activity of Uzbekistan have agreed to consider spending a total of $500mn on investment projects. Krasnotsvet of Russia and Uzkimyosanoat of Uzbekistan have agreed to jointly produce catalyzers and precious metals. Gazprom and Asaka will finance the construction of a metallurgical plant in Tashkent. The energy ministries have agreed on the delivery of 500,000 tons of Russian oil to Uzbekistan.
“Uzbekistan is upgrading most of the sectors of its industry. So, Russian companies have good chances to compete for the Uzbek market with the Chinese,” Ergashev told EADaily.
Uzbekistan is reluctant to join the Eurasian Economic Union but it is ready to consider other cooperation formats. “One possibility is to create a free trade zone in the framework of the Eurasian Economic Union,” Ergashev said.
One of the key topics during the Moscow talks was security. Mirziyoyev has promised to support Russia’s efforts to ensure peace and security in Afghanistan. “We like what Russia is doing on Afghanistan and are ready to help,” the Uzbek president said. He added that Uzbekistan would attend the Apr 14 Moscow meeting on Afghanistan.
In its turn, Russia is interested in strong army in Uzbekistan. This is why, in the coming years, it will supply the Uzbeks with modern arms. The Uzbeks also need centers for repair of tanks, helicopters and planes. On Apr 5, Russia’s State Duma ratified a Russian-Uzbek agreement stipulating mutual supplies of military products and joint projects to repair military hardware. The only joint venture existing in Uzbekistan for the time being is Uzrosavia, a company repairing helicopters and planes. The Russians are also interested in the Tashkent Aviation Production Association, a company that once produced Il-76 planes.
In short, Mirziyoyev’s visit to Moscow was very successful. And what China can offer him? “In Moscow, the sides discussed a very wide range of issues – from migration to culture. China has money and is ready to invest. But this is mostly politically motivated loans,” Stanislav Pritchin, expert at the Center for Central Asia and the Caucasus, the Institute of Oriental Studies of the Russian Academy of Sciences, told EADaily.
According to Pritchin, the Chinese are always ready to finance transport infrastructure and energy and everything that has anything to do with their Silk Road Economic Belt project. But they have no so far offered the Uzbeks any joint venture projects. For the Uzbeks, the priority is to create jobs for own workers rather than to see more and more Chinese companies emerging in their country. The problem here is that the Chinese do not seem keen to lend money for joint ventures.
“So, I think that with all their efforts to diversify their foreign and economic policies, the Uzbeks will be careful as far as Chinese money is concerned. Consequently, the Russians have a good chance to become their key partner,” Pritchin said.