Uzbekistan is a land almost synonymous with Oriental bazaars. Yet shoppers in Central Asia’s most populous state are hesitantly embracing the shopping mall – at least in the capital, Tashkent. The change in consumer habits seems partially connected to government efforts to pad state coffers.
Uzbekistan has introduced sweeping new banking and import regulations that appear designed to keep hard currency from leaving the country. Observers say residents and entrepreneurs should expect a bumpy ride in the coming months, as the cumbersome new measures are expected to drive up prices for basic goods and encourage an expansion of the shadow economy.
Just a week ago at a cabinet meeting, Uzbek leader Islam Karimov hailed the achievements of the Uzbek economic model, which is basically a retrofitted command system. But Karimov clearly hasn’t gotten out of the capital much lately. For many citizens in Central Asian most populous state, electricity cuts and gas shortages have become a defining feature of this winter.
The recent sentencing of a executive connected with a troubled British gold mining venture in Uzbekistan offers fresh evidence that Tashkent has foreign investors in its cross-hairs. Some observers suspect a behind-the-scenes power struggle is responsible for a string of incidents involving foreign-operated companies in Uzbekistan.
In early 2011, when Uzbekistan’s authorities pledged to implement programs and policies to support small and medium businesses, Naimjan Akhmedov operated a travel agency with two employees in Tashkent. This month, after the initiatives went into effect, Akhmedov, found himself faced with a much higher tax bill and wrestling with numerous bureaucratic hassles. So, he decided to close up shop.
