October 25, 2018
As Uzbekistan Opens Up, the Goal Is Economic Modernization, not Liberalization
On Oct. 18, Russian President Vladimir Putin arrived in Uzbekistan for the first meeting of the newly established Uzbekistan-Russia Interregional Cooperation Forum. Putin attended the symbolic groundbreaking ceremony of a new $11 billion nuclear power plant, signing investment deals totaling $25 billion, mostly in the energy sector. The visit was a clear illustration of how significantly Uzbekistan has changed since the death in August 2016 of Islam Karimov, the country’s first post-Soviet president who ruled for 27 years.
Under Karimov, Uzbekistan pursued a path of outward isolation and inward repression. His successor, President Shavkat Mirziyoyev, has slowly opened Uzbekistan up since coming to power after Karimov’s death. Domestically, Mirziyoyev has liberalized the currency, dismissed the country’s powerful security chief, pardoned 2,700 political prisoners and relaxed censorship. Within the region, Uzbekistan has moved to mend ties with its neighbors, trying to position itself as the hub of Central Asia both politically and economically.
Beyond the region, Uzbekistan is pursuing ambitious policies aimed at globalizing the Uzbek economy, courting Russia, China, the United States, Turkey and Iran. These moves have produced results. Uzbekistan’s trade increased by 11.3 percent in 2017, with the largest gains coming from within Central Asia itself. Foreign direct investment has doubled since 2016.
Many observers have concluded that an “Uzbek spring” has brought a thaw to what was one of the world’s most repressive states. Change certainly is in the air, so much so that it is impossible to keep track of all the many, albeit piecemeal reforms. But what is motivating all this change, and what are its limitations?
Citizens of Uzbekistan certainly benefit from the transformations taking place. They can speak more openly and visit relatives in neighboring Central Asian states, and they will reap some of the benefits of economic development following decades of stagnation. But the priority of Mirziyoyev’s agenda is modernization rather than liberalization, with the elites standing to benefit most both economically and politically from the system the president is building. Taking his cue from China, Singapore and Kazakhstan, Mirzizyoyev is seeking to upgrade the economy and make the country’s government more effective at providing services to the population without opening political space for participation or dissent. His popularity and legitimacy is intertwined with this project of authoritarian modernization.
Mirziyoyev has in particular overhauled the country’s bureaucracy, bringing in younger, energetic professionals, apolitical technocrats with a desire to improve government services rather than cultivate their own power bases. He has removed Soviet-era holdovers, most notably the powerful security chief Rustam Inoyatov. He has moved the country in a direction that can be called a softer authoritarianism. These steps may be about improving governance, but they are also aimed at creating an elite cadre that is loyal to Mirziyoyev. Tellingly, Mirziyoyev has appointed his son-in-laws Otabek Shahanov and Oybek Tursonov as, respectively, deputy head of the president’s security service and head of the presidential administration.
Meanwhile, Uzbekistan’s expat oligarchs, who were not welcome under Karimov, are also benefiting from the changes underway in the country. Alisher Usmonov, an Uzbek-born magnate who has become Russia’s seventh-richest man, has provided “advice, consulting, and charitable projects,” along with investments of over $7 billion in projects including a tourism zone in Bukhara, a metallurgical plant and a football team. Another Uzbek-born tycoon in Europe, Patokh Chodiev, has opened a branch of his charitable foundation, International Chodiev Foundation, in Tashkent and invested $300 million in a metallurgical plant in the city. His nephew, Olim, plans to invest $300 million to develop seven tungsten deposits in Uzbekistan, aiming to account for 6 percent of global output of the metal.
Organized criminals are also seeking to cash in on the bonanza. September saw the first known informal gathering of the post-Soviet vory v zakone, or “thieves in law,” in Uzbekistan in over 20 years. Gafur Rakhimov, a suspected drug kingpin once on Interpol’s wanted list and still on the U.S. Treasury Department’s sanctions list, has been rehabilitated and appointed interim president of the International Boxing Association, the body responsible for overseeing the amateur sport, by its executive board. Similarly, the alleged underworld boss Salim Abdulvaliyev has been president of Uzbekistan’s Wrestling Federation since 1997 and was voted vice president of the Uzbekistan National Olympic Committee in January 2017.
Opening Uzbekistan to foreign trade and investment provides rent-seeking opportunities to members of the government as well, as state-owned enterprises make up almost 20 percent of the country’s highly centralized economy. Under Karimov, Uzbekistan was already one of the most corrupt and kleptocratic countries in the world. Officials used their links to the state to amass vast personal fortunes; Karimov’s daughter, Gulnora Karimova, used her position to solicit over $1 billion in bribes from investors in the telecommunications market.
Mirziyoyev’s government has introduced a new law on combating corruption, initiating cases against 1,566 officials in the first half of 2017 alone. But he has also appointed Abdulla Aripov, the official who colluded with Karimova to shake down the telecommunications companies, as his prime minister. A June 2017 survey found that over 58 percent of respondents believed corruption was still a problem in the country.
Things are not looking particularly liberal on the country’s political scene either—further evidence that the opening in Uzbekistan has its limits. Hundreds of political prisoners have been released, including one of the world’s longest detained journalists, Muhammad Bekjanov, who had been in prison since 1999. Such moves are a welcome departure from the Karimov era. But broader political liberalization remains elusive, and the government continues to have a limited tolerance for criticism. In September, police detained at least four conservative religious bloggers who had criticized the regime for its treatment of believers. Other journalists and civil society activists have reported continued harassment by law enforcement due to their activities.
Uzbekistan remains a de-facto one party state. Although the ruling Uzbekistan Liberal Democratic Party shares seats in the country’s Supreme Assembly with four other parties, all were established with the permission of the president and form a faux opposition that supports Mirziyoyev in all his policies. And while parliamentary elections are scheduled for next year, no opposition movement has emerged. The leading opposition party, Erk, remains unregistered, with its leader Muhammad Salih still in exile. No new opposition party has managed to gain registration since Mirziyoyev came to power in 2016.
Ultimately, as Uzbekistan slowly opens up, many people stand to enjoy greater freedoms. But Mirziyoyev’s project is more one of restructuring economically than liberalizing politically. In the end, it is the elites who will continue to benefit the most from Mirziyoyev’s authoritarian modernization.