President Karimov of Uzbekistan was buried in his native Samarkand at the Shah-i-Zinda complex of mausoleums, where his parents repose. The memorial service was held near Tillya Kori Madrasah on downtown Registan Square. Thousands of men thronged the square. Incidentally, according to Muslim customs, only males can take part in Namaz-e-Janazah (funeral prayer). Now that the mourning rituals have been performed, transfer of power is on everybody’s mind – not only in Uzbekistan, but also the neighboring and distant capitals, for that country is of paramount importance in the region.
There is no shortage of conspiratorial versions of who will replace one of Central Asia’s political patriarchs. Following the example of the neighboring Turkmenistan, some are looking for presidential candidates among the less known figures. But the impression is that things will be different in Tashkent.
Karimov has handed down a difficult legacy to his successors, although official statistics are painting quite a radiant picture: an 8-percent GDP growth, a very small, 5.2-percent, unemployment rate, and a triple rise of individual incomes. But the reality is not so optimistic.
Although transition to a market economy was announced after the gaining of independence, the economic system in fact remained entirely Soviet. Communist ideology gave way to the so-called “Uzbekchilik” (a special path of the Uzbek nation).
Prices were liberalized, but some foodstuffs are subject to rationing. Foreign trade remains under strict control, with more than 70 percent of Uzbekistan’s whole foreign trade turnover passing through the state-run Uznatsbank which is somewhat analogous to Ukraine’s Oshchadbank (Savings Bank).
Although there are a lot of private businesses in agriculture, the state sets quotas for the basic produce – cotton and grain – by way of a governmental order. In the last while, the state order – in fact the Soviet-style plan – has been also applied to vegetables and fruits. The government dictates to private farmers what to sow and whom to sell, and sets prices for their produce in a centralized manner, but these prices do not in fact cover the production costs. Like in the USSR, the producer works at a loss. It is impossible to expect high economic results from this kind of an economic system.
Another problem – typical of all the ex-Soviet countries except for the Baltic States – is corruption. It is only possible to do successful business in Uzbekistan, where all the spheres of life are totally corrupt and tightly controlled by the uniformed services and the president’s inner circle, if one has connections in the government. There are endless bureaucratic obstacles that scare off potential foreign investors. In 2015, the total amount of direct foreign investments in the economy of a country that has very rich deposits of gas, gold, uranium, and other mineral resources was a mere $3.1 billion. In Kazakhstan, this indicator – even though it has touched rock bottom in the past few years – is still five times as high.
One more problem is galloping inflation and acute shortage of both national and foreign cash. Wage delays are a permanent factor of life. Last year the liquidity deficit in the banking sector was an estimated $600 million. According to Fergana.ru, back pay amounted to more than a trillion soms – about $4 billion at the official exchange rate – in the first six months of 2015 alone.
Hard currency is in dire straits, with the black market thriving. The black exchange rate is about three times as high as the official one – $1 = 4,300 soms against $1 = 2,583 soms. Human rights activists say that the black currency market is protected by the government which is quite able, if not to eliminate, then to essentially cut it.
Hence is a huge labor migration. Uzbeks account for a half of labor migrants in Russia, but the total number of them is unknown. The economic crisis and the devaluation of the ruble and the som force many of them to come back to their homeland, where unemployment awaits them because there are simply no jobs to get.
In this situation, clans dominate the country’s political and economic life. The strongest of them are based in Tashkent and Samarkand. Although Karimov was from the latter, he managed to distance himself from both of them. The security and stability of not only Uzbekistan but the entire region depends on how fast Uzbek top figures will manage to make a portfolio-distribution deal.
The current Prime Minister Shavkat Mirziyoyev is the most probable candidate for the presidency. As they decided to follow a constitutional way, it is very likely that some kind of a power sharing agreement was achieved. Word has it in Tashkent that Rustam Azimov will be the prime minister. Meanwhile, under the constitution, Nigmatilla Yuldashev, speaker of Oliy Majlis, the upper house (senate), will be the acting president. Incidentally, in a similar situation in Turkmenistan, constitutional norms got quite a raw deal. It was just said that a former dentist was now the president, and then he was voted into office amid nationwide exultation. The observance of the constitution in Uzbekistan should show to the world that the situation in the country is stable and things are going smoothly.
In all probability, Tashkent will not essentially change its foreign-policy course in the near future. It will not come closer to Moscow, nor will it distance itself from the latter. With due account of a difficult economic situation, the Uzbek top echelons will be busy, firstly, consolidating power and, secondly, seeking a way out of the economic and financial crisis.
From the home-policy viewpoint, there will be no liberal thaw. As a Russian expert said, I only wish things were not worse. For there are some fears. You can’t help it, for, as is known, the East is not the West – it is a very subtle thing.
