Winds of change in Uzbekistan?

The most populous state in Central Asia, Uzbekistan today finds itself in an uncomfortable position. Shaken by the world economic crisis, unable to rely on oil and gas exports to replenish its foreign currency reserves, it is furthermore threatened by instability in neighbouring Kyrgyzstan and numerous internal problems.

« It's the economy, stupid »

One could believe that Uzbekistan is doing quite well; it has indeed secured a 1,150 billion USD loan from the Asian Development Bank, the same amount it has so far lent to Uzbekistan from 1996. However, though all this fresh money will certainly relieve a strained budget, it was not without painful concessions from Uzbekistan, which could further provoke discontent among the population. Besides, indicators show that the economy is not doing well, and so on for Uzbekistan's budget.

In the past months, the Uzbek government seems to have taken several measures aimed at raising more funds: it has cut expenses on invalidity pensions, risen taxes on fuel and cars,  and lowered interest rates for private deposits in state-owned banks. This has occurred in parallel with an accelerated devaluation of the national currency (sum), whose « official » price is more and more overvalued regarding the sum/dollar parity on the black market. This most likely means that Uzbekistan is short on foreign currency reserves and unable to support the sum.

The fact the Uzbek government is obviously short on funds might prompt hasty explanations for some of last months' most unpleasant events. For example, widespread arrests of businessmen and oligarchs in march 2010 resulted in rumours that this was simply a way to refill the State's coffers. The same could be stated about the problems currently experienced by Zeromax, Uzbekistan largest private company and reportedly in the hands of President Karimov's daughter and ambassador to Spain, Gulnara (altough such pursuits are more likely politically, and not economically motivated). Finally, the loss by hundreds of their savings in the National Bank of Uzbekistan could eventually prompt rumours that the State is now robbing its own citizens in order to restore balance in its budget.

Growing discontent

The bad and so far deteriorating economic situation plays a big part in the growing exasperation of the population. Hardly hit by the crisis, heavy taxes, political repression and environmental problems, Uzbeks also had to cope, in the last months, with unpaid wages, looming food shortages, as well as more « usual » hardness for the region (power cuts, and poor healthcare quality sometimes resulting in contamination). Furthermore, rumours recently grew that Uzbek authorities had initiated a forced sterilization campaign in order to curb overcrowding in the region. All this does little to appease griefs against the Uzbek government, which has grown increasingly anxious over the past months that unrest in Kyrgyzstan might spread to Uzbek parts of the Ferghana Valley. Indeed, in 2005, an uprising in Andijan closely followed the Kyrgyz tulip revolution. Although its bloody crushing has so far deterred any new protest in Uzbekistan, Uzbek authorities are afraid that the troubles shaking southern Kyrgyzstan could provide opportunities for troublemakers at home.

Musical chairs in Madrid and Tashkent?

Zeromax's current problems should not be separated from the bigger picture of Uzbek politics. Gulnara Karimova, President Karimov's daughter, has long been considered as a possible heir to her father. However, recent developments suggest it might after all not be the case. Indeed, Gulnara is said to be a controversial figure and would thus not make a consensual leader when the time comes to succeed the father. Most important perhaps, she remains a women, and most likely unable to hold power for long in a rather conservative and patriarchal society.

Whether Gulnara Karimova is being forces out of succession or willingly accepting to stay out of politics has no great interest for today. Rather, it would be interesting to know whether or not President Islam Karimov has supported this evolution. Indeed, the worsening situation of the countries and the subsequent fears it could be destabilized may have emboldened some rival clans in Uzbek politics. The recent troubles experienced by Zeromax would thus be the sign of Karimov's diminishing control over the Uzbek state apparatus.