Current Political & Economic Situation Essay Example

Electoral Commission made arrangements for the forthcoming general elections.

Despite implementing democratic measures such as granting legal status to opposition parties and appointing an ombudsman, the democratic process in Uzbekistan has worsened in the past five years. President Karimov's initial enthusiasm for Western institutional systems, especially those from Europe, seems to have diminished. This decline may have been influenced by the bombing incident in Tashkent on February 6th, 1999. Currently, freedom of expression is severely limited with no independent press available. The government owns most newspapers and all news articles must be approved by the Committee for the Control of State Secrets before publication. Additionally, there are significant restrictions on organizing political demonstrations.

Despite some improvements in NGO registration and the prosecution of policemen involved in prisoner killings, there is still a lack of basic human rights in Uzbekistan. Reports have exposed disturbing incidents occurring within prisons, such as torture and the deaths of detainees. Additionally, there has been an increase in detaining devout Muslims and their families who practice their religion independently from state control. These problems have raised significant concerns about the deteriorating human rights situation in Uzbekistan.

During the second meeting of the EU-Uzbekistan Co-operation Council in January 2001, the EU expressed these concerns to which Uzbekistan agreed to allow inspections by the International Committee of the Red Cross (ICRC) at detention facilities and permit foreign representatives to observe trials for individuals accused of acts against the state. The ICRC has been regularly visiting prisons since then and has reported satisfactory conditions; however, implementing this agreement continues to be challenging. The EU once again addressed this issue during the 4th Cooperation Council held in January

2003.

Uzbekistan is facing significant dangers in the Ferghana valley, primarily due to the emergence of radical Islam and drug trafficking. The Islamic Movement of Uzbekistan (IMU) poses a particular threat in this densely populated region of Central Asia. Additionally, Uzbekistan is currently dealing with border disputes with neighboring countries including Tajikistan, Turkmenistan, Kazakhstan, and Kyrgyzstan, leading to regional isolation.

To address these concerns, authorities have taken measures such as closing borders and mining specific areas within the Ferghana valley. The country has also experienced organized terrorism through a series of bombings in Tashkent on February 6th, 1999. These attacks resulted in 16 deaths and 184 injuries. As a result, there have been increased repressive actions against opposition groups and stricter security controls implemented to further isolate Uzbekistan following subsequent violent incidents during the summer of 2000.

However, it seems that the ability of the IMU to carry out terrorist activities has declined over time. This can be attributed to losing support from Afghanistan after the fall of the Taliban regime and also because their leader Namangani died during clashes with American troops early in 2002.

The Uzbek leadership is concerned about the transformation of IMU into a broader movement known as IMT (Islamic Movement of Turkestan), which now includes Chinese Uighurs, and the absence of a peace settlement in Afghanistan.

Foreign Policy

Recent events in Tajikistan and Afghanistan, both undergoing civil wars, have influenced Uzbekistan's foreign policy. Its relationship with Russia is also a factor in shaping its foreign policy. During the Yeltsin era, Uzbekistan developed an independent policy and considers itself to be the most significant country in Central Asia. President Karimov aims to strengthen ties with Western and

European countries. However, concerns about Islamic fundamentalism led to less emphasis on this policy during Putin's early presidency. Nevertheless, Uzbekistan sees a "strong" Russia advocated by Putin as a potential ally against Islamic fundamentalism and separatism.

President Karimov of Uzbekistan took advantage of the opportunity presented by the events on September 11, 2001 to strengthen relations with the United States. Uzbekistan has officially adopted a policy of supporting the coalition led by the US in response to these events. Currently, American troops are stationed in Uzbekistan for humanitarian missions and search and rescue operations. Additionally, Uzbekistan aims to enhance its cooperation with Europe and strongly supports anti-terrorist activities.

In January 2002, the 3rd European-Uzbek-Cooperation Council agreed to expand their dialogue to include Justice and Home Affairs matters, resulting in the establishment of a new Sub-committee.

The first two sessions of the exchange of views occurred in July 2002 and July 2003, which were deemed fruitful by both parties. Uzbekistan heavily relies on Turkey's involvement in shaping its foreign policy, particularly seeking support from Istanbul to establish closer ties with Europe and combat terrorism, drug trafficking, and organized crime. The relationships with other countries in the region involve reciprocal pressures. In the future, the dispute over limited water resources may pose a significant issue and obstacle in bilateral relations between up-stream countries such as Kyrgyzstan and Tajikistan, and down-stream countries like Kazakhstan and Uzbekistan.

Uzbekistan's response to Robin Cook's water initiative in Central Asia, supported by the OSCE, was not significant. The rivalry with Kazakhstan, who also sought regional leadership, hindered cooperation since 2000. Furthermore, Uzbekistan has frequently disrupted gas supplies to Kyrgyzstan and southern Kazakhstan. In retaliation, Kyrgyzstan

and Kazakhstan blocked water for irrigation and barred Uzbekistan goods from passing through their territory. Despite a September 2001 agreement with Kyrgyzstan, it failed like previous agreements.

Uzbekistan has implemented the placement of mines on its borders with Kyrgyzstan and Tajikistan in the Ferghana Valley, causing multiple casualties including deaths. This action has further isolated Uzbekistan from other countries.

In terms of the economy, Uzbekistan is rich in natural resources such as coal, copper, gold, natural gas, oil, silver, and uranium. It also benefits from a well-educated population and skilled workforce that enhance its significant economic capabilities.

Uzbekistan faced economic difficulties after gaining independence in 1991, similar to other CIS nations. These challenges included the loss of markets and subsidies from the Soviet Union, disruptions in inter-republican trade and payments, hyperinflation, and a decrease in output. To address these issues, the government implemented gradual macroeconomic and market-oriented structural reforms with the goal of achieving self-sufficiency in energy and food production while diversifying key exports like cotton and gold for international markets. This strategy helped Uzbekistan avoid the severe decline experienced by many other CIS countries during the early 1990s. However, it also resulted in delays in significant macroeconomic and structural reforms. Additionally, factors such as the Asian and Russian financial crises, a poor cotton harvest in 1998, and declining world commodity prices further worsened Uzbekistan's economic performance in 1999.

In response to negative external conditions, Uzbekistan has implemented stricter controls on exports and currency in its predominantly closed economy. As a result, foreign direct investment in the country has significantly declined, hindered further by bureaucratic obstacles and the absence of a modern banking system. The limited progress made by

the Uzbek government in areas such as privatization and the financial sector has been criticized by international financial institutions. Additionally, the government's repeated avoidance of the IMF has left them unable to access international financing. The IMF permanent representative departed from Tashkent in April 2001, expressing deep concerns regarding the lack of economic reform in Uzbekistan.

Following IMF missions, Uzbekistan entered into an agreement on 15 October 2003 to sign Article VIII of the IMF statute. This agreement granted full external convertibility of the sum and was positively acknowledged by the international community, including the EU.

Economic structure: Uzbekistan's favorable economic structure played a crucial role in its relative economic prosperity. The nation maintained its position as a significant exporter of primary commodities like cotton, gas, oil, and gold while having a limited manufacturing sector with low value-added.

Despite the fact that a majority of Uzbekistan's land is comprised of desert, steppe, or semi-arid areas and only a small portion is dedicated to agriculture, the agricultural sector still holds significant importance in the country. It contributes approximately 25% to the GDP and employs around 40% of the labor force. However, due to Uzbekistan's heavy reliance on exporting primary goods, it remains highly susceptible to fluctuations in global commodity prices.

In terms of trade, approximately 75% of Uzbekistan's merchandise exports consist of primary commodities, such as cotton fiber. Cotton alone accounts for 40% of the country's exports. During the timeframe from 1999 to 2000, Uzbekistan ranked as the second largest global exporter of cotton and represented 6% of total global cotton production. However, in recent years, strong competition from China and the United States has posed challenges for Uzbekistan in

international cotton markets.

The economic crisis in Uzbekistan from 1998-1999 was exacerbated by a severe drought in 2000, which greatly affected cotton and rice production. Consequently, the government of the country sought international assistance.

Growth: According to official records, the country witnessed a real GDP growth rate of 5.2% in 1997, 4.4% in 1998, 4.4% in 1999, and 4% in 2000. However, these figures are unreliable as they inflate growth by underestimating inflation rates and conducting biased surveys. Alternative estimates propose significantly lower actual GDP growth rates. Nevertheless, even with these more cautious estimations, Uzbekistan has achieved positive per capita GDP growth for five consecutive years. The estimated GNP per capita for the nation is $720 in 1999, classifying it as a lower-middle-income economy.

There has been a recent increase in risks to macroeconomic stability, both internally and externally. These risks include a decline in exports since mid-1998, lower global market prices for cotton and gold, the implementation of import-substituting industrialization through administrative measures, a rapid rise in external debt (primarily short-term), and a decrease in international reserves. As a result of these factors, an economic crisis occurred in 2000, leading the government to devalue the Som by more than 50% during the latter half of that year. The ministry of finance reported that Uzbekistan's foreign debt was $4.15 billion at the end of 2000, which is equivalent to 48% of GDP based on the official exchange rate or 128% based on the black market rate.

Inflation: In 2000, official figures indicate an inflation rate around 25%. However, it is probable that the actual inflation rate was twice as high.

Environmental problems: Uzbekistan is currently facing several severe environmental issues,

with the crisis in the Aral Sea basin being the most urgent. Located in the country's northwest, inadequate water management and extensive irrigation from the Amu Darya and Syr Darya rivers have caused partial desiccation and contamination of the sea by agricultural chemicals. This situation has had significant negative impacts on both the economy and population's overall health.

EU - Uzbekistan Relations General framework: The European Union acknowledges Uzbekistan's strategic position between Russia, China, and the Islamic world as an economic and cultural center for this region. As a crucial partner for EU, it holds considerable value as a dialogue partner.

Despite expressing concerns about the deteriorating human rights situation in Uzbekistan since February 1999, the EU still considers the country's political developments to be of great importance. Initially, bilateral relations between Uzbekistan and the EU were established through a Trade and Co-operation Agreement with the former Soviet Union in 1989. This agreement was later replaced by a temporary one in 1996.

However, on July 1, 1999, a new era began with the implementation of the Partnership and Co-operation Agreement (PCA) between Uzbekistan and the EU. The first Co-operation Council meeting took place on September 13, 1999.

The PCA serves as a comprehensive framework for enhancing political relations between both parties. Its main goals include supporting Uzbekistan's efforts to strengthen democracy, advance its economy, promote trade and investment, as well as facilitate cooperation in various areas such as legislation, economics, social issues finance civil affairs science technology ,and culture.

In December 2003 ,a protocol was sent to Uzbek authorities aiming to extend the PCA to acceding countries as part of accommodating the enlargement process.

The textile agreement, initially signed in 1993

and valid until 31 December 1999, has been extended through an exchange of letters and is now valid until 31 December 2004. Except for certain products in category 2 (primarily cotton products), there are no quantitative restrictions. Since 1 January 1993, Uzbekistan has been benefiting from the Generalised System of Preferences.

Trade

Uzbekistan is the EU's second largest trading partner in the region, following Kazakhstan.

Despite this, exchanges between the Member States and Uzbekistan have been on the decline since 1997. This reduction can be attributed to Uzbekistan's economic situation as well as the consequences of the Russian crisis. In 2000, there was an increase in the trade turnover between Uzbekistan and the EU. Uzbekistan mainly exports agricultural products, textiles, and clothing to the EC, while their main imports from the EU consist of machinery, transportation material, and chemicals. Since 1996, the trade balance has been in favor of the EU, reaching approximately E 104 million in 1999. However, in the year 2000, the value of Uzbek imports from the EU was almost equal to that of its exports.

In 2002, bilateral trade between the European Community (EC) and Uzbekistan amounted to E 801 million, resulting in a trade deficit of E 115 million for the EC. European companies had been investing significantly until the late 1990s, but investment flow has since declined. The treatment of certain European companies operating in the local market by the Uzbek judiciary indicates that the country does not meet the criteria of World Trade Organization member states. The European Union (EU) provides assistance through its Community's strategy outlined in the Commission's Strategy Paper for Central Asia 2002-2006.

Since 1992, Uzbekistan has received E118.6

million in assistance from the TACIS programme. The 1998-1999 Tacis Action Programme provided E29 million for various sectors such as rural development and institutional building. In 2000, the Commission adopted the Action Programme for 2000-2001, which amounted to E15 million and focused on rural development, social consequences of transition, and institutional reforms. On October 30, 2002, the Commission adopted the new Strategy for Central Asia for 2002-2006, which included the Tacis Indicative Programme (2002-2004) with a regional focus. However, there was no Country Strategy Paper specifically for Uzbekistan. E29 million has been allocated for national activities in Uzbekistan, with an emphasis on regional aspects.

Based on this Indicative Programme, two Tacis Action Programmes were adopted in December 2002 and July 2003. In September 2003, a Relex mission was in Tashkent to start the preparation of the Tacis Indicative Programme for 2005-2006. Furthermore, a mission led by EuropeAid will take place in October to prepare the Tacis 2004 Action Programme, which is planned to be adopted by the Commission before the summer break in 2004. The Uzbek have requested EIB to finance an education project and have expressed the wish to have additional funding from the Food Security Programme. However, at present, no other EU assistance activities are planned for Uzbekistan in the future.

Future relations

Future relations are closely connected to the implementation of the Partnership and Co-operation Agreement and the continuation of domestic reforms in Uzbekistan.

Despite the Uzbek authorities expressing a desire to align with Europe politically, there is a contradiction in their increasingly isolationist domestic and foreign policies. This is accompanied by limited progress in terms of democratization and economic reform. The Partnership and Co-operation Agreement

includes explicit mention of the 'common values' shared by both parties, and consequently places obligations on Uzbekistan to pursue economic liberalization and protect human rights. The EU's objectives include urging Uzbekistan to implement currency convertibility and improve the business climate. Additionally, the EU aims to promote Uzbekistan's participation in regional cooperation initiatives with the EU and OSCE.

General data Geography: The Republic of Uzbekistan (Uzbekiston Jumhuriyati) covers a surface of 447,400 km. The country is a doubly land-locked. Uzbekistan includes the southern part of the Aral Sea with a 420 km shoreline. The country has common borders with Kazakhstan, Kyrgyzstan, Tajikistan, Afghanistan and Turkmenistan. It also has small enclaves inside Kyrgyzstan and Tajikistan. Uzbekistan is composed of 12 administrative regions as well as one autonomous republic (Karakalpakstan).

There are various territories that are irrigated and yield cotton and other agricultural goods. The climate is continental, characterized by cold winters and hot summers. The capital city of Tashkent, which was fully destroyed in the earthquake of 1966, has been reconstructed and now has a population of 2.4 million, making it the most populous city. Other cities such as Samarcand (population: 392,000), Boukhara, and Khiva are renowned for their architectural wonders. Urban dwellers make up 41% of the overall population.

The Ferghana valley, located in the east, is densely populated and has a well-developed agriculture. This valley is irrigated by the Syr Darja river, which flows through Kazakhstan and ends in the Aral Sea.

Population:

The estimated population as of July 2000 is 24.75 million, resulting in a density of 55 inhabitants per square kilometer. The majority of the population consists of Uzbeks (77%), while the remaining population includes various minority groups

such as Russians (6%), Tajiks (5.1%), Kazakhs (4.2%), Crimea Tartars (2%), Karakalpaks (2%), Koreans (1%), Kyrgyzs (1%), and others (1.7%).

Religions:

The dominant religion is Islam, with 88% of the population practicing Sunni Islam. Russian Orthodox Christianity is followed by 9% of the population, and the remaining 3% practices other religions. The official language is Uzbek, but Russian and Tajik are also spoken.

Political system: Uzbekistan is a parliamentary republic, although power is mostly concentrated in the executive branch and little power is allocated outside of it.

Constitution: The constitution was adopted on 8 December 1992.

Legislature: The Supreme Assembly (Oliy Majlis) is a unicameral body with 250 seats. Members are elected through popular vote for five-year terms. In January 2002, a nationwide referendum authorized the election of a bicameral parliament that was implemented in December 2004.

Executive branch: The President, who is elected through popular vote, serves as the Head of State for a seven-year term. A referendum in the past extended the president's constitutional term from five to seven years. The Prime Minister is appointed by the President and serves as the Head of Government.

Judicial branch:

The judicial branch of Uzbekistan consists of the Supreme Court. The judges in the Supreme Court are appointed by the president and confirmed by the Supreme Assembly. Despite having the Soviet Civil law in force, Uzbekistan still does not have an independent judicial system.

Incumbent Government:

Since gaining independence on 31 August 1991, Uzbekistan has been governed by President Islam Karimov. During the late Soviet period, Karimov was the head of the Communist Party and is currently the chief of the People's Democratic Party. He was

re-elected on 9 January 2000, receiving 91.9% of the votes.

The most recent parliamentary elections took place on December 5, 1999, and had outcomes that were beneficial to the government. Every party in the Supreme Assembly is in support of President Karimov. Utkir Sultanov has been serving as the Prime Minister since December 21, 1995, and is also responsible for coordinating the European Union's TACIS assistance program. Abdulaziz Kamilov holds the position of Foreign Minister.

The Current Political And Economic Situation

Political situation

The political setup in Turkmenistan has not changed much since the country gained independence from the Soviet Union on 27 October 1991. President Saparmurad Niyazov, also known as Turkmenbashi ('leader of the Turkmens'), has been in power for 13 years. He first served as President of Turkmen SSR and then became the leader of independent Turkmenistan. Various local groups have requested Niyazov to be the "president for life," but he has rejected the idea, stating that it would require a constitutional amendment. As political parties are banned, there is no official opposition. However, unofficial and small opposition movements exist, mainly operating underground or in other countries.

President Nyazov controls the entire political situation in Turkmenistan. He has made the decision to develop Ashgabat by constructing massive monuments. This is paid for by the Presidential Fund, which is directly managed by Nyazov himself and amounts to US$1.3 billion. In October 2000, President Niyazov stated once again that his country is not ready for a multiparty democracy. He also denied the presence of political prisoners in Turkmenistan. However, various human rights organizations have gathered evidence of numerous individuals

being sentenced for criticizing Niyazov's policies. Additionally, there is no religious tolerance in Turkmenistan.

During the summer of 2000, there was a period of relative "inactivity" in Turkmenistan. However, it seems that the police and security officers have recently resumed their actions of raiding Protestant churches and arresting baptists. This occurred after President Niyazov, whose term was extended indefinitely in December 1999, made an announcement on 18 February 2001. He stated that he will step down from his position no later than 2010, when he reaches the age of 70. Niyazov also mentioned that open elections should be held at that time with younger candidates competing for the presidency. However, there are certain criteria for eligibility. Only individuals who have held public office for 5-10 years and have been approved by parliament can run for office. Additionally, candidates must have lived in Turkmenistan for 10 years prior to the presidential ballot. Unfortunately, this means that former Foreign Minister Avdy Kuliev, who currently resides abroad, is disqualified from running.

The parliament approved a law on presidential elections in 2010 after President Niyazov informed foreign ambassadors on 16 February that legislation regarding the election of regional administrators and the president would be implemented in 2008. Turkmenistan, recognized by the UN as a neutral country, maintains strong alliances with Iran and Turkey and strives to exert influence on the regional political stage.

In February 1999, negotiations were initiated in Ahgabat between the Talibans and Commander Massoud, as well as other Afghan Factions. Although the President declined joining the CIS Customs Union, Turkmenistan maintains a strong bilateral relationship with Russia. The country officially transitioned from Cyrillic to Roman script in 1995.

Turkmenistan possesses substantial natural gas reserves, ranking among the largest globally, and holds significant proven and recoverable oil reserves. The gas sector contributes 50% to the GDP. Additionally, Turkmenistan is listed as one of the top ten cotton producers.

The West primarily depends on cotton as its main export. However, cotton cultivation requires extensive irrigation, and due to limited arable land, the country has shifted towards growing more cereals in order to achieve self-sufficiency in basic food crops. This change in agriculture may pose challenges due to the 2000 drought. The country has experienced a decline in output over multiple years, and the State Sector remains dominant in the economy. Additionally, there are significant outstanding payments from NIS (Ukraine, Georgia...) for gas.

In December 1995, the government implemented a comprehensive economic reform program that included unifying the exchange rate, discontinuing credit allocation by decree, freeing interest rates, and introducing measures to liberalize prices. The government's main goal is to stabilize the currency and decrease inflation to manageable levels. Currently, there is no IMF program for the country. Turkmenistan's foreign policy is closely connected to energy matters, with its main objective being access to external markets.

Turkmenistan's relations with neighboring countries have deteriorated, and its refusal to join regional alliances has isolated the country. This isolation continues in 2001. Developing a close relationship with Russia has also faced challenges due to significant economic disparities. Currently, Turkmenistan is facing obstacles in exporting gas to Europe and even selling gas to Ukraine, as Russia's gas firm, Gazprom, is hindering these efforts. Despite an agreement with Russia in December 1998 and an increase in energy prices, Turkmenistan still struggles to export

its energy. Additionally, the country faces difficulties in recovering payments for energy sold to Russia, Ukraine, and other CIS countries, exacerbating its debt issue.

Turkmenistan is striving to develop positive relationships with both Iran and the USA. The aim is to establish a route to the open seas through Iran and to receive assistance from the USA in building the trans-Caspian pipeline, which would connect Turkmenistan to the Mediterranean Sea. However, due to human rights concerns voiced by the US States Department and a lack of real economic activity, President Niyazov decided to terminate the contract with certain American firms for the Trans-Caspian pipeline. In October 2000, Turkish President Sezer visited Ashgabat to discuss trade and economic matters, particularly the execution of an agreement made in 1999. According to this agreement, Turkey would annually purchase 16 billion cubic meters of Turkmen gas starting from 2002. However, this agreement depends on the construction of the Trans-Caspian gas pipeline. Niyazov stated that a new energy agreement with Turkey would be signed during a summit of Turcophone states scheduled for April 2001.

The long-awaited summit discussing the legal status of the Caspian Sea among the Caspian littoral states is set to occur in Turkmenistan in 2001. According to a statement released by the official Turkmen press, Ashgabat asserts that dividing the seabed, surface, and waters into equal national sectors is the only acceptable approach to determining the status of the Caspian Sea. On the other hand, Russia, Azerbaijan, and Kazakhstan advocate for dividing solely the seabed while keeping the surface and waters for common use. In opposition to any alteration of the current median line separating the Azerbaijan and Turkmen

sectors, Azerbaijan stands its ground. Furthermore, the Turkmen statement highlights that regional security matters should be addressed during the summit and proposes declaring the entire Caspian Sea as a demilitarized zone. Speaking of the economy, Turkmenistan relies heavily on the production of raw materials, specifically oil, gas, and cotton.

The country relies on oil and gas for 80% of its revenues, yet it experienced a severe recession in 1998 despite having abundant mineral resources. The government has stated that there was positive growth in 1998, but economic data is highly unreliable. Although the recession of 1997, which caused a 25% contraction in the economy within a year, did not recur, growth was likely minimal.

The economy of Turkmenistan suffered a near-collapse after experiencing almost two consecutive years without revenue from gas exports in 1997 and 1998. During this period, there was a significant decrease in output and an increase in inter-enterprise and wage arrears. Additionally, the national currency, the manat, underwent a steep devaluation. These factors resulted in a lowered standard of living for the population, which had already experienced a significant decline in income. However, there was a recovery in 1999.

According to data released by the Government in January 2001, Turkmenistan's GDP experienced a year-on-year increase of 17.6% in 2000. Further growth of 16% is anticipated for 2001, along with an expected 18% increase in consumer goods production in the same year. Despite these positive developments, chronic structural issues persist, although efforts have been made to consolidate banks in order to improve the fiscal sector.

In October 2000, President Niyazov made the decision to not privatize the oil and gas sectors for the next 10-15 years. He

believed