In a signal not all is well, Uzbekistan has posted a slightly below-average economic growth forecast for 2016.
And on the black market — typically a more reliable barometer of economic well-being than the generously massaged government statistics — the national currency, the sum, sank to new lows of 6,000 against the dollar on November 12.
Government figures on predicted gross domestic product (GDP) growth for next year, as reported by the UzA state news agency, suggest the authorities are gradually acknowledging Uzbekistan is not immune from the economic shocks roiling Central Asia.
According to a national budget for 2016 passed by Uzbekistan’s parliament on November 11, GDP will grow by 7.8 percent.
The number ostensibly looks healthy for a region suffering the consequences of low commodity prices and from the repercussions of slowdowns in Russia and China, both major trading partners and investors. To make matters worse, remittances from migrant laborers abroad have been falling steadily, by 14 percent in 2014 and 45 percent in the first quarter of 2015, compared to the same period the previous years, according to the International Monetary Fund (IMF).
But Tashkent has for years stubbornly predicted 8 percent growth and then proceeded to meet its targets precisely. Admission of anything even a whisker below is striking and shows the government is facing up to some of the economic challenges that will translate into slower growth.
Uzbekistan is also forecasting a budget deficit — of 1 percent — for the first time in years. It generally posts a surplus.
The government is sticking to its guns for this year at least and has reported 8 percent growth in the economy over the first three quarters.
Uzbekistan is on a mission to woo foreign investors, touting a massive privatization drive that will see the state relinquish some control over an economy in which it retains a heavy hand.
However, investors may be leery of channeling their cash into a country with a reputation for seizing foreign assets without recompense.
Uzbekistan is putting up stakes for sale in a whopping 1,247 enterprises, First Deputy Prime Minister Rustam Azimov said at an investment forum in Tashkent on November 6, as reported by the UzA state news agency.
Foreign investors are being offered the opportunity to snap up state-owned stakes in 68 companies and bid at auctions against local investors for another 667 enterprises, Azimov said.
They will also have the chance to take on 512 (evidently loss-making) businesses for free, if they take on investment obligations.
A top Norwegian business executive has been arrested in Oslo on corruption charges relating to a multimillion-dollar bribery case involving the ruling Karimov family of Uzbekistan.
The detention ramps up the pressure from international investigations into alleged bribery by multinationals of Gulnara Karimova, the disgraced daughter of Uzbekistan’s President Islam Karimov, to gain a foothold in the country’s lucrative telecoms market.
Jo Lunder, former chief executive of embattled Russian-owned telecoms company VimpelCom, was arrested as he flew into Oslo airport late November 4, a public prosecutor told Norwegian media the following day.
“He has been charged in connection to the VimpelCom case. It is a corruption charge,” Marianne Djupesland said in remarks quoted by Stockholm-based newspaper The Local, declining to reveal further details.
Lunder’s lawyer Cato Schiotz says the accused believes he is innocent, the newspaper reported.
The arrest comes three months after the U.S. Department of Justice won a ruling in a New York court to have $300 million dollars frozen as part of an investigation into what it described as an “international conspiracy to launder corrupt payments.”
The lawsuit alleges that illicit payments were made by two telecoms companies, Russia’s MTS and Amsterdam-based VimpelCom, which is majority owned by Russian billionaire Mikhail Fridman, to curry influence and secure favorable decisions to operate in Uzbekistan’s telecommunications sector.
U.S. Secretary of State John Kerry is interviewed by Kazakhstan's Mir TV in Astana. (photo: State Department)
As United States Secretary of State John Kerry heads home after an unpecedented five-country tour of Central Asia, the U.S. role in the region remains more uncertain than it's been since the 1990s.
The mere fact that the trip happened was the biggest news to come out of it. It was the first time a high-ranking U.S. official had done this five-country tour that has of late become the standard for world leaders (though Japan, India, and China have all sent their presidents, rather than their top diplomat as the U.S. did).
The tour came at a time when U.S. interest in the region seems to be waning as a result of the (albeit now delayed) drawdown from Afghanistan, and so appeared to be an attempt to demonstrate that no, the U.S. isn't gone just quite yet. Also noteworthy -- throughout the entire trip Kerry barely mentioned the much-derided New Silk Road Initiative, which had been the supposed centerpiece of the State Department's post-Afghanistan Central Asia policy.
Kerry's trip also inagurated the "C5+1" format of talks, with the foreign ministers of all five Central Asian states plus the U.S. In an area with remarkably little interregional cooperation, that is actually a genuinely novel and potentially important new platform. But what might it be used for?
Washington’s top diplomat traveled to Central Asia to kick-start a historic initiative to reinvigorate U.S. engagement with the region, but it was the unceremonious treatment of a reporter that is going to stick in the memory.
Activists had hoped in advance of John Kerry’s whistle-stop tour that human rights issues might feature prominently on the agenda. But talk of those was relegated to the sidelines — in public at least.
Instead, Kerry focused on prospects of security, energy and economic cooperation, which have long constituted core priorities for Washington.
The closest Kerry came to mentioning Central Asia’s poor human rights record in public was in remarks about “quality of governance and the strength of democratic institutions.”
“In Central Asia, as elsewhere, people have a deep hunger for governments that are accountable and effective,” he said at the meeting on November 1 in Samarkand, Uzbekistan, with foreign ministers from the region’s five former Soviet republics.
The U.S. State Department said in advance of the tour that this meeting would form the basis of a new diplomatic format, which it has dubbed C5+1.
“We should have no doubt that progress in democratic governance does lead to gains in every other field about which we are concerned and about which we are talking,” Kerry said.
The muted tone of those remarks will have come as a disappointment to many.
Ever since the president of Uzbekistan’s prodigal eldest daughter, Gulnara Karimova, fell from grace into house arrest on various corruption-related charges, the would-be power player has disappeared from social media.
Her place has been taken, albeit in less demonstrative fashion, but her more subdued sibling, who goes by the married double-barreled name Lola Karimova-Tillayeva.
Karimova-Tillayeva’s latest outing on Instagram, which is also the favored channel of communication of Chechen tough guy leader Ramzan Kadyrov, has set tongues wagging with denials that she could one day pursue a bid for power. Gulnara was often linked with possible succession to her father, Islam Karimov, so when she fell out of the running, some of that speculation was transferred to Lola.
But Lola poured scorn on that line of thinking in a caustically formulated Instagram posting.
“I formulated my attitude to power when I was still a child. I will try to explain this in a way that is short and clear. There are certain primitive people that are certain that power can make anybody happy or that power is the source of absolute pleasure,” Lola wrote on her Instagram account on October 30. “People with such a mindset cannot even cope with a small amount of power, and use it inappropriately, causing great harm to people and the work they are meant to be performing.”
Such inadequate people are commonplace, Lola wrote, omitting for some reason to give any specific examples.
The post continues for some while in a vein that may or may not be intended as a pop at Gulnara, with whom Lola is known to have frosty relations.
In one important passage, however, she reveals that she has no plans to “change her life and work in state management bodies or become a civil servant.”
A leading campaigner in the effort to document Uzbekistan’s cotton harvest, which has been blighted by claims of rights abuses, has found his office destroyed by an unexplained fire.
Activists monitoring the harvest have faced an unprecedented wave of intimidation from authorities this year, despite mounting international scrutiny of the sector.
Dmitriy Tikhonov, who has reported cases of forced labor in cotton fields to international organizations, found his office in his home town, Angren, in charred ruins when he returned there on October 29, following an absence.
Files detailing the abuses he had documented were missing. Tikhonov did find a metal box container still intact in the ruins, but the hard drive that was stored inside had disappeared.
“The fire is a horrific escalation of the intimidation campaign against Dmitry and all Uzbek human rights defenders throughout 2015, aimed at preventing them from reporting on forced labor in the cotton sector,” Umida Niyazova, director of the Berlin-based Uzbek-German Forum for Human Rights, said in remarks quoted by the Cotton Campaign, an international advocacy group.
The fire appears to have taken place on October 20, which was the same day that Tikhonov was presented with criminal charges of disorderly conduct. The charges were brought after three members of a local neighborhood committee accused him of using foul language while asking them questions about cotton harvest mobilization.
Japan’s Prime Minister Shinzo Abe embarked on his historic days-long tour of the five countries of Central Asia with a small army of businessmen, banking officials and academics in tow.
This is the first time a Japanese leader has taken all the region’s countries, as well as Mongolia, in a single visit — a clear signal of intent to expand Tokyo’s presence in an area increasingly dominated by the rival economy of China.
Energy was at the top of Abe’s agenda, as suggested by the sealing of $18 billion in deals in Turkmenistan on October 23.
“We have signed documents on a range of projects in the chemical industry and for the construction of electrical generation plants for a total value of $18 billion,” Abe told reporters in Ashgabat.
Those projects include development on the huge Galkynysh natural gas field, building of power stations in the east of the country and polyethylene and propylene production plants, according to Turkmen officials.
The agreements will see Japanese companies like JGC Corporation, Mitsubishi, Chiyoda Corporation and Sojitz Corporation collective investing around $10 billion in Galkynysh, which is estimated to possibly hold 21.2 trillion cubic meters of gas.
Meanwhile, Sumimoto Corporation has received a $300 million order to complete gas-fired power plants with a 400 Megawatt capacity.
Large dollars figures were also flung about with abandon on October 25 in Uzbekistan, where the two countries signed off on $8.5 billion worth of deal.
According to Uzbekistan’s presidential website, Japanese investment will be primarily targeted at modernization of energy and transportation infrastructure, developing mineral resources, automobile construction, the oil, gas and chemical industries, and telecommunications.
Afghanistan's Uzbek leader and vice president Abdul Rashid Dostum has kicked off an offensive in the northern part of the country, just two weeks after traveling to Russia to arrange an increase in military aid.
On Wednesday, Afghanistan's security forces started an operation in the province of Jawzjan, which borders Turkmenistan, led personally by Dostum. The offensive is meant to beat back recent Taliban gains in the north, both in Jawzjan and in neighboring Faryab, which also borders Turkmenistan. Dostum led another offensive in Faryab in August, but his advances were quickly reversed.
Dostum's increasing involvement in the fighting in northern Afghanistan comes as he has also apparently sought to strengthen his ties to the former Soviet states to the north. He visited Grozny and Moscow earlier this month, meeting with officials including Defense Minister Sergey Shoigu, to arrange increased Russian military aid.
After arriving in the north, Dostum appeared on Afghan television and publicly thanked his northern neighbors. "The countries of the Commonwealth of Independent States, from Russia to Tajikistan and Turkmenistan, all of these states are ready to stand with us against [the Islamic State], against extremism, against the bloody Taliban," he said.
Shifty U.S. envoys have been spotted lurking in the cotton fields of Uzbekistan digging for dirt on a competitor whose cheap crop could squeeze out America’s own exports.
At least that’s the yarn some media in Uzbekistan are spinning.
The U.S. Embassy has rubbished the claim.
In a report on October 16, website 12news.uz alleged that three suspicious elements were recently seen in the fields in Qashqadaryo Region, posing as journalists and officials from Uzbekistan’s Foreign Ministry.
“The ‘Uzbekistan Foreign Ministry staff and journalists’ turned out to be diplomats from the US Embassy in Tashkent, who had specially gone to the remote region to find some kind of problems which it would be possible to trumpet to the entire word as ‘the grossest cases of violations of human rights and restrictions on freedoms,’” the website wrote.
12news.uz speculated that the fact-finding team was motivated by a desire to thwart the rising sales of “comparatively cheap cotton from Uzbekistan” on world markets, which it said “in no way suits American farmers.”
The embassy was categorical in its denial.
“The allegations in this story are inaccurate, and we strongly disagree with the characterizations contained in the article,” spokeswoman Natella Svistunova told EurasiaNet.org by e-mail.
Pointing out that diplomats are free to travel under the Vienna Convention, Svistunova said embassy staff had traveled to various parts of Uzbekistan, carrying identification.
Svistunova said embassy staff “always correctly represent themselves, when asked.”
One of the embassy’s goals “is to better understand changing practices in Uzbekistan’s cotton harvest,” Svistunova said.