The prospects of post-Karimov Uzbekistan: Same era, more openness

by Dmitry Belyanin

Will Karimov's demise lead to democracy?  Don't hold your breath

Introduction

On August 29, Islam Karimov, President of Uzbekistan, who had been in power for 26 years, was hospitalized with a stroke. On September 2, Uzbek authorities confirmed his death, after days of rumors. The constitution called for the Chair of the Senate, Nigmatulla Yuldashev, to become acting President, but on September 8 he refused the nomination, reported Lenta.ru. Shavkat Mirziyoyev, Prime Minister of Uzbekistan, was appointed as the temporary acting President. We shall explore Karimov’s legacy as well as problems confronting the new President and the likelihood of solving them, focusing on international trade and finance. Karimov’s death is unlikely to end the repressive yet secular regime, which neighbors portray as the least of possible evils.

The Economy

A thumbnail sketch of the economy will adumbrate the dilemmas that the new President will face. With 29 million residents, Uzbekistan is the most populous country in Central Asia. Over 60 percent of Uzbekistanis live in rural areas. It is the fifth largest cotton exporter and the sixth largest cotton producer in the world, and it exports gold and natural gas. 

The government dominates the economy. Since becoming independent in 1991, the country has been making a very slow transition to a market economy. Government spending is a third of the economy, if we measure the size of the economy as gross domestic product, the value of domestic production. This spending is sustained by tax rates that are high by Central Asian standards -- a top personal income tax rate of 22% and a top corporate income tax rate of 9%, according to the Heritage Foundation.

The government controls prices of petroleum products and many staples, trying (and failing) to avoid shortages through subsidies. It also controls interest rates.Though the government says it will sell hundreds of state enterprises by 2017, the privatization will probably be opaque. Foreigners may not purchase land.

Uzbekistan has one of the lowest standards of living in the Commonwealth of Independent States. In 2013, a seventh of Uzbekistanis were below the poverty line; three fourths of the poor were in rural areas, estimated the United Nations Development Programme. In 2014, 4% of the population were officially unemployed, but the International Labor Organization estimates unemployment at 12%, with another 10% being underemployed. 

Joblessness induces millions of Uzbek citizens to migrate, mainly to Russia and Kazakhstan. According to CA-Portal, 60,000 to 100,000 of these migrants work in Kazakhstan. Having a larger economy, Russia is a much more popular destination. The Russian Federal Migration Service estimates that over 2.3 million Uzbek citizens work in Russia. The average monthly salary in Uzbekistan in 2014 was $300. In comparison, Uzbekistani migrants in Russia may earn $1,000-$2,000 a month, working as tilers or taxi drivers. According to the Central Bank of Russia, Uzbek labor migrants send home around $6 billion each year. Only a tenth of Uzbek migrants work in Russia legally, according to Silk Road Reporters, a web newsite.

Subject Descriptor	2012	2013	2014	2015E	2016E
Real GDP growth, annual, %	8.200	8.000	8.100	8.000	5.030
Total investment, % of GDP	30.852	30.802	30.848	30.834	30.828
Gross national savings, % of GDP	32.651	33.655	31.567	30.823	31.066
Inflation, end of period consumer prices, %	10.813	10.804	9.327	8.427	7.967
General government gross debt, % of GDP	8.554	8.276	7.648	10.694	16.258
Current account balance, % of GDP	1.800	2.853	0.720	-0.011	0.238

Source: The International Monetary Fund, April 2016 World Economic Outlook Database

Table 1: Selected macroeconomic parameters of Uzbekistan (2012-2016)

The International Monetary Fund (IMF) projects that real GDP growth will decline this year (Table 1), possibly due to the perception of political risks. This discourages private investment, compelling the government to borrow in order to make up the difference in spending.

Ironically, Uzbekistan’s economy has grown more sturdy in some ways. Total investment and national savings have been stable, and inflation has declined. The double-digit inflation of old was probably due to demand fueled by remittances from Russia. When they fell, so did inflation. The decrease of exports net of imports may stem from depreciation of the Kazakh tenge after August 2015, which made Uzbek exports less competitive. Another factor may have been decline in the global prices of cotton and natural gas.

Government restrictions keep housing prices low. And difficulties in obtaining construction permits, as well as limits on credit, hold down real estate prices. In 2015, a square meter of housing in Tashkent averaged $680, according to Ria Nedvizhimost’, a Russia-based analytical service, focusing on real estate markets of CIS countries. In comparison, in Bishkek, a square meter was $808, even though Kyrgyzstan’s economy is smaller than Uzbekistan’s.

Uzbekistanis pay a high price for stability of the real estate market. Unlike Kazakhstan, Uzbekistan avoided a real estate boom and hence a construction crisis. But this curtails real estate employment in good times, so young Uzbekistanis go to Russia. When sanctions and falling oil prices led to recession in Russia in 2014, remittances declined 16%. In 2015, remittances were nearly 12% of Uzbekistan’s GDP, reports Eurasianet.org.           

Uzbekistan tightly controls its exchange rate regime. The soum is not freely convertible, and all firms must convert half of their hard-currency revenues into that currency. Payments to foreign suppliers are also restricted, reports Deloitte. Since 2013, the government has banned the direct sale of foreign cash to individuals, who must create accounts in Visa and MasterCard Exchange systems to buy dollars and euros. Foreign currency can be spent only on airplane tickets, when traveling abroad for treatment or education, or on retail purchases abroad smaller than $100. 

These limits complicate the lives of the law-abiding. They cannot easily diversify their holdings to offset inflation and other risks. They must go to bazaars and wait in long lines to buy foreign currency, risking prison. A black market speculator in foreign currency may earn 60,000-100,000 soums ($10-15) a day, which is high for a country with a minimum monthly wage of 130,000 soums ($22).

Moreover, exporters and importers use a third exchange rate. The disparity between the three exchange rates is substantial: the official exchange rate was 2,940 soums on May 18, but the black market purchase rate was 5,500-5,800 soums, while the sale rate was 6,000-6,100 soums. The commodity exchange rate was 8,000 soums per dollar, reports 365.info.kz.  

The depreciations of the Russian ruble in late 2014 and of the Kazakh tenge in August 2015 harmed Uzbekistan’s economy. At the end of 2014, remittances from Russia to Uzbekistan decreased by about 25%. The black market exchange rate of the soum relative to the dollar depreciated 40%; the official exchange rate, 3%. In one day, after the National Bank of Kazakhstan floated the tenge, the soum depreciated by 1.7-2% on the black market relative to the dollar, reports CA-Portal. From August 2015 till December 2015, the official exchange rate of the soum depreciated 7.5%, from 2,583 soums per dollar to 2,777, reports OANDA exchange rates, an Internet service.

But prices, including exchange rates, don’t matter in the long run; output does. Conventional models of economic growth predict that living standards cannot persistently increase without more knowledge; without new skills, each worker can handle only so much machinery. Uzbekistan seems to bear out this forecast. Due to equipment problems, the use of cotton gins in 2010 was well below the 6 million metric tons of installed capacity. For 2007-2011, the government basically modernized 41 gins and closed 30 old ones, reported the US Department of Agriculture. Reliance on the unpaid – and thus unskilled -- labor of children and students dents productivity.

Uzbekistan’s social infrastructure is rickety. It ranks 87^th on the World Bank’s Ease of Doing Business Index, an improvement on 103^rd in 2015; but the ranking is lower than that for all CIS countries except Tajikistan (Table 2). The country ranks high on the ease of starting a business (42^nd), getting credit (42^nd), and enforcing contracts (32^nd), but low in trading across borders (159^th), dealing with construction permits (151^st) and getting electricity (112^th).

Country	Rank	Bus. starts	Bldg. permits	Get electric.	Register property	Get credit	Protct minort investr	Pay taxes	Trade across border	Enforc contrct	Resolve insolven
Georgia	24	6	11	62	3	7	20	40	78	13	101
Armenia	35	5	62	99	14	42	49	41	29	28	71
Kazakh	41	21	92	71	19	70	25	18	122	9	47
Belarus	44	12	34	89	7	109	57	63	25	29	69
Russia	51	41	119	29	8	42	66	47	170	5	51
Moldova	52	26	170	104	21	28	36	78	33	67	60
Azerbai	63	7	114	110	22	109	36	34	94	40	84
Kyrgyz	67	35	20	160	6	28	36	138	83	137	126
Ukraine	83	30	140	137	61	19	88	107	109	98	141
Uzbek	87	42	151	112	87	42	88	115	159	32	75
Tajik	132	57	152	177	102	109	29	172	132	54	147

Source: The World Bank Group

Table 2: Components of the Ease of Doing Business Index for CIS countries

It’s easier to start a business in Uzbekistan than to run it – but starting one is still harder than for any other CIS country except Tajikistan. The start-up takes 6.5 days on average in Uzbekistan, compared to 10 days for Europe and Central Asia and 8.3 days for countries in the Organization for Economic Co-operation and Development.

Getting credit in Uzbekistan has also become easier, as shown by a change in ranking from 105 in 2015 to 42 in 2016. The depth of credit information index, on a scale of 0 to 8, is estimated at 7, compared to 6.3 for Europe and Central Asia, and 6.5 for OECD countries, indicating well-enforced regulations on credit information disclosure.  But credit bureaus cover 19.4% of adults in Uzbekistan, compared with the average of 37.4% in Europe and Central Asia and 66.7% in the US.   

Uzbekistan enforces contracts relatively well. It has a court devoted to commercial cases, and the government assigns new cases to judges randomly. The courts set deadlines for key events in a civil case, and it enforces them. An initial complaint can be filed electronically. Laws govern commercial arbitration, and voluntary mediation is available. However, there are no fast-track procedures or courts for small cases. The courts don’t publish judgments in commercial cases, and they don’t enforce arbitration or really encourage mediation or conciliation.  

But international entrepreneurs will find that trading across borders in Uzbekistan is snared in red tape. Checking for border compliance for exports takes an average of 112 hours for Uzbekistan, compared to 28 hours for Europe and Central Asia and 15 hours for OECD countries. Verifying documentary compliance takes an average of 174 hours for Uzbekistan, compared to 31 for Europe and Central Asia and 5 for OECD countries.

And that red tape is expensive. Uzbekistan’s average tariff rate is the highest in the CIS (Table 3) and is much higher than for such economies as the US (1.5%), China (3.6%), the EU (1%), and Japan (1.2%). High tariffs and slow importing raise prices in Uzbekistan, since a hike in import prices enable domestic producers to increase their own. And slow exporting decreases revenues.

In general, Uzbekistan is strong in entrepreneurial conditions but weak in the industry that is a bellwether for business cycles in the region – construction. Indeed, getting construction permits in Uzbekistan is difficult. It takes 23 procedures, compared with 15.9 for Europe and Central Asia and 12.4 for OECD. These procedures take as much time as in Europe and Central Asia (176 days on average, compared with 176.3 days for the region), but more time than for OECD countries (152.1 days). Another strike against construction is electricity, which is expensive and hard for a firm to obtain. It takes an average of 89 days, compared with 77.7 days for OECD countries and 118.5 days for countries of Europe and Central Asia. The annual cost, without the value added tax and bribes, is 1,393% of annual income per capita, compared with the regional average of 440% and 65% for OECD countries.

Country	Average Tariff Rate, %
CIS Region
Armenia	4.6
Azerbaijan	2.2
Belarus	3
Georgia	0.7
Moldova	5.7
Kazakhstan	3.8
Kyrgyzstan	2.5
Russia	6.3
Tajikistan	5.7
Turkmenistan	0*
Ukraine	2.1
Uzbekistan	7.2

*The average tariff rate in Turkmenistan is technically zero, but non-tariff restrictions are substantial.

Source: Heritage Foundation, 2016

Table 3: Average tariff rates in CIS countries

On the positive side, Uzbekistan has a more diversified economy than Kazakhstan does.  Protectionism preserves such infant industries as automobile production. Auto tariffs may equal the value of the car. 

The market for Uzbekistan’s exports is not diversified, and it suffers from shocks. In 2011, 87% of Uzbekistan’s car exports went to Russia and 6% to Kazakhstan. Russia’s accession to the World Trade Organization made Uzbekistan’s exports less competitive, since Russia lowered tariffs on world-renowned car brands, says The Diplomat, a magazine for the Asia-Pacific region.

Quality requirements of trade pacts have hemmed in Uzbekistan’s export markets. Since 2014 the Customs Union, now the Eurasian Economic Union, has required imported cars to have at least one air bag, anti-lock braking, attachment points for child-safety seats, and daytime headlights. Nexia and Matiz, brands produced by GM Uzbekistan, lack these features, reports Eurasianet.org.

But Uzbekistan does have a bit of trade prowess. In two months, it managed to have Kazakhstan’s new trade rules deleted. So 20,000 cars were imported into Kazakhstan in less than one month, compared to 13,300 cars over all of 2013. Automakers in Kazakhstan say it’s unfair for Uzbekistan to set tariffs on vehicles made in Kazakhstan while Kazakhstan allows imports from Uzbekistan to enter easily, reports Tengri News. 

But the theory of the second best argues that a hands-off policy is desirable for one market only if all other markets work correctly. Since Kazakhstan’s southern neighbors in Central Asia, excep Kyrgyzstan, practice hardline protectionism, it may not be wise for Kazakhstan to trade freely with them.

Karimov opposed joining the EAEU, saying his country “will not join an organization similar to the Soviet Union again,” said Tengri News. Thus Uzbekistan had to pay the high tariffs imposed by the EAEU on non-members, as the price for independence from Moscow.

The political scene

Uzbekistan has one of the most repressive regimes in the CIS. According to Human Rights Watch, the country has thousands of political prisoners, and it suppresses religious expression. Globe-trotters need exit visas. 

Uzbekistan undertook the largest crackdown on the opposition in CIS history on May 23, 2005 in Andijan. The night before, inspired by the Tulip Revolution in Kyrgyzstan, protesters gathered on the city square, urging Karimov to resign or at least come for talks about corruption and persecution of Muslims suspected of extremism. That day, Karimov ordered his troops to fire upon thousands of activists. 

The number of victims is disputed. Activists and survivors claimed that over 700 were killed, including children. The government reported that 187 were killed, and it accused Western powers of planning a coup. Hundreds of protesters were sentenced to as many as 22 years in jail.

 

Responding to Western criticism, the government shut down a military base near the Afghan border and increased ties with Moscow. In turn, the US and the EU embargoed arms and banned visas for selected officials. 

Some analysts argue that the threat of Islamic extremists, who may come to power in Uzbekistan and destabilize the region, justifies a harsh regime. The Islamist threat arose with the country’s independence in 1991, when extremists seized a government building in Namangan, a city near Andijan, demanding Islamic law for the country. Karimov held talks. When they failed, he cracked down on Islamists. 

Some attackers fled to Afghanistan, establishing the Islamic Movement of Uzbekistan (IMU). With the Taliban, the IMU organized several attacks in Central Asia.

Karimov’s government blamed the IMU for deadly explosions in Tashkent in 1999, and it responded by clamping down on the opposition and religious people, imprisoning thousands.

Not only have common people fallen prey to Karimov’s dictatorship. Gulnara Karimova, Islam Karimov’s eldest daughter, once owned a business empire and had a reputation of using her family to defeat business opponents. In the late 2000s, she was believed to be her father’s possible successor. 

However, in 2014, Karimova quarreled with her father and was placed under house arrest after tweeting attacks on top Uzbek officials. The government seized her businesses and imprisoned dozens of her employees. The Panama Papers, released this year, showed that Rustam Madumarov, Karimova’s boyfriend -- sentenced to 10 years in prison in 2014, along with two of her companions -- stole tens of millions of dollars and evaded taxes, reports Al Jazeera.

Despite violations of human rights, Uzbekistan attracts some Western support because of its strategic location. Following the September 11, 2001 attacks in the US, Uzbekistan was the first CIS country to offer territory and airspace to the North Atlantic Treaty Organization for operations in Afghanistan. The US set up an airbase near the Afghan border. NATO troops left in 2005, but in 2012 NATO agreed to evacuate equipment from Afghanistan through Uzbekistan, reports Al Jazeera.

Uzbekistan’s government spends a lot on repression. About 800,000 to one million law enforcement officers (including soldiers) work in Uzbekistan, and the government spends a fourth of its budget on law and order, reports Prvada.ru. But there is no personality cult of the leader. Unlike Turkmenistan under Saparmurad Niyazov, Uzbekistan has no golden statues of Karimov.

Turkmenistan shows that successors can be slightly more lenient than their predecessors. In 2007, President Berdymukhamedov legalized Internet cafes, though they remain technologically obsolete and closely supervised, says OpenNet Initiative. Uzbekistan has a less harsh regime in this manner -- which leads to both hopes that the new government will allow its citizen more personal freedom, and fears of destabilization.  The next section analyzes the latter possibility.

The possibility of instability

According to Shavkat Mirzyoyev, temporary acting President of Uzbekistan, the country will remain neutral in military affairs and will not re-join the Collective Security Treaty Organization, which it quit in 2012. Furthermore, he promised not to allow foreign military bases in the country, and he opposed placing troops outside the country. 

But Mirzyoyev supports membership in the Shanghai Cooperation Organization. Unlike the CSTO, the Shanghai group attempts non-military goals, such as extending economic and cultural cooperation and fighting drug use.

Russia propagandizes that the West has a vested interest in destabilizing Central Asia through color revolutions, since this weakens the regional influence of Moscow and Beijing. However, a color revolution in Uzbekistan probably would not lead to the West’s favorite scenario -- a free-market economy and parliamentary republic, with a multi-party system and close ties to the West. Also, in spite of the lobbying of the military complex and other business groups, unlike with Syria, it would be harder to convince the American electorate that military intervention or other aid to the new government is justified, since the Uzbekistanis, unlike the Arabs, are ignored by the media.   

Mikhail Saakashvili, former President of Georgia, was among the most successful color revolutionaries in economic reform, but he was blamed for authoritarian measures. Russia and possibly Iran would intervene if a Saakashvili-type leader came to power in Uzbekistan, and civil war could break out. It would be difficult for pro-western forces to win this war, since they would be opposed by pro-Russian forces and Islamists.

On the other hand, if the new leader worried more about political freedom than economic freedom, the best outcome for Uzbekistan would be a parliamentary republic. In that case, a pro-Russian government would probably come to power, as in Kyrgyzstan, because Uzbekistan needs an export market. Russia would prefer an autocratic regime, since this would decrease the popularity of revolutions in Central Asia, so this type of republic could be short-lived.

If Uzbekistan becomes the next Syria, other Central Asian countries may become more loyal to the Kremlin, which protects their alleged right to repressive rulers and which opposes western intervention. They may avoid NATO like the bubonic plague.

Uzbekistan has the largest population in the region, so reducing trade barriers would benefit multinational corporations there. Gains for specific organizations would depend on political stability. At the moment, businesses perceive even more political risks than they had under Karimov. Demand for goods perceived as luxuries in an instable regime may plummet overnight, reducing revenues and increasing seizure of assets. Importers of arms and food would benefit. 

Destabilization of Uzbekistan would create an exodus of refugees, mostly to Russia and Kazakhstan. This would drive down wages in these countries. Uzbekistan differs from Syria and Libya, from which refugees fled to Europe. If entrepreneurs have enough lobbying power, they will press the Kremlin to intervene in Uzbekistan, through financial or military assistance. 

Immigration of Uzbekistans into Russia will increase the popularity of nationalist movements there, which may threaten Putin’s regime. Since, in the Kremlin’s eyes, the preservation of Putin’s power takes precedence over the economy, it will not intervene in Uzbekistan in ways that would lead to civil war.

Because Uzbekistan is not in Europe, the West would not impose sanctions on Russia for aggression, as it did over Ukraine. Some analysts view the Russian support of separatists in southeastern Ukraine -- and the controversial referendum in Crimea, leading to its acquisition by Russia -- as a prelude to reclaiming former Soviet, particularly Belarus and the Baltic states, which either belong to the EU or NATO or want to join them. The West views sanctions as a preventive measure against this takeover. It is unlikely that Russia will annex parts of Uzbekistan or recognize their independence, since Uzbekistan has no separatist regions; and other interventions would resemble the Syrian, rather than the Ukrainian, scenario.

Unlike Russia and the US, China clearly wants a stable Uzbekistan. It does not need migrant labor, and it does need regional stability to complete the New Silk Road project for cheap and quick transportation of goods into Europe. Furthermore, the destabilization of Uzbekistan would increase world cotton prices, cutting profits of the Chinese cotton industry.

Though China has been neutral on geopolitical issues in Central Asia, the attack on the Chinese embassy in Bishkek on August 30, during which the attacker was killed and three embassy employees were wounded, may induce Beijing to weigh in. Since Russia needs good relations with China, being under western sanctions, it will probably not destabilize Uzbekistan.      

We thus forecast no foreign intervention that could ignite a color revolution in Uzbekistan.  The government of Uzbekistan will still accuse the West, if such a rebellion occurs, and poverty makes protests likely. The uprising will be suppressed, with Moscow’s backing.

Elite groups in Uzbekistan may struggle for power. For example, Lola Karimova-Tillyayeva, Islam Karimov’s younger daughter, may strive for power. In a patriarchal society that Islamic extremists might well challenge, she would have little hope of popular support. The West would disapprove of her rise, since it would imply movement toward an absolute monarchy; and the Kremlin would doubt that she could control the country.

Ethnic tensions between the Kyrgyz and the Uzbeks in southern Kyrgyzstan may induce Uzbekistan to support its native ethnic group there. However, because Kyrgyzstan is in the CSTO -- and because of strong historical cultural ties between Kyrgyzstan and Kazakhstan, an important market for Uzbek goods -- Uzbekistan is unlikely to invade. At most, Uzbekistan may send (costly) humanitarian aid, resort to diplomatic pressure, or impose embargoes. But if ethnic tensions recur in Kyrgyzstan, the Uzbek government may propagandize against the most decentralized republic in Central Asia, claiming that the Uzbek authoritarian regime is superior to chaotic democracy in Kyrgyzstan.    

Future economic policy under stability

For political stability, Uzbekistan needs reforms. For example, restrictions on exchange rate transactions in Uzbekistan hinder the development of industries that import materials and equipment. Also, the requirement to convert half of revenues into national currency artificially keeps it strong, hurting exporters. A more flexible exchange rate would enable Uzbekistan to sustain its import-competing industries.

Although the acting President of Uzbekistan promises not to join any military union, the country might strengthen economic ties with Russia and Kazakhstan, in hopes of export revenues. Russia, on its part, may pressure Uzbekistan to cooperate by implicitly threatening to expel migrant workers, which would increase unemployment in Uzbekistan. If Uzbekistan does not join the EAEU, it will probably negotiate with it to sign an association agreement. By combining their markets for automobiles through intra-industry trade (two-way exchange of similar goods), Kazakhstan and Uzbekistan can decrease their average price of cars and increase variety. Competition between the auto industries of Kazakhstan and Uzbekistan will sharpen, and Kazakhstan may need to subsidize loans in order to stimulate domestic demand for locally assembled cars.

Unlike Ukraine, Uzbekistan has no viable economic alliances to join except the EAEU. While the US may encourage former members of the Soviet bloc in Asia to join the Trans-Pacific Partnership (TPP), the countries of Southeast Asia, not Central Asia, will be the first candidates for membership, due to their location and larger economies. Among transition economies, only Vietnam has joined the TPP. But someday it might become a rival to the TPP.

Ruslan Azizov, Deputy Prime Minister of Uzbekistan, intends to expand economic cooperation with Moscow. At a meeting with Alexander Tkachev, Minister of Agriculture of Russia, he proposed a pact for a “green corridor” where farm exports from Uzbekistan would not need customs declarations in Russia and would enjoy simplified clearance and confirmation of compliance with sanitary norms, reports Sputnik. The reduction of these non-tariff barriers would increase Uzbekistani agricultural export revenues and decrease prices in Russia.  

The new government of Uzbekistan may be tempted to subsidize exports of newly privatized enterprises. Uzbekistan has only observer status in the WTO, so its export subsidies would face no bans. While subsidizing exports of cotton and natural gas would enlarge producer surplus, it would reduce consumer surplus by decreasing terms of trade, making the price of the exported good more expensive at home and cheaper abroad. 

To spend on subsidies and welfare benefits, the government might borrow more this year, forecasts the IMF (Table 1). To induce investors to purchase government bonds in an emerging market, which may wobble, interest rates will have to rise, crowding out private investment. If the government re-nationalizes foreign assets, while the market for corporate securities stagnates, the crowding out effect could be large. Risky as it would be to invest in government bonds of Uzbekistan, it would be even riskier to invest in corporate securities, whose interest rates may not reflect all risks, due to a lack of transparency.

   

Conclusion

President Karimov’s death may seem like the end of an era, but it’s not. Though the business elite in Russia and the West have vested interests in destabilizing Uzbekistan, national security issues will overshadow them. Other major powers in the region need a stable Uzbekistan. Committed to stability, though continuing repressions, Uzbekistan will probably move toward Russia and away from economic liberalization.

    

Dmitriy Belyanin has a Master’s degree of Business Administration in Finance and a Bachelor of Arts degree in Economics from KIMEP University. Since 2007, he has been writing on issues in economics and finance ranging from stock markets to environmental economics. He is the associate editor of this blog.

Notes

There are 5 procedures for registering a company in Uzbekistan, compared with an average of 4.7 for Europe, Central Asia and OECD countries. Registering the name of the company takes less than one day and is free. Making a company seal takes 2 days and requires 50,000 Uzbek soums. Registering with a local authority and obtaining a certificate of state registration requires 118,400 soums and 2 days. Opening a permanent account with a local bank takes one day and is free. Simultaneously, the company is registered with the National Bank.

OpenNet Initiative is a collaborative organization formed by: The Citizen Lab at the Munk School of Global Affairs, University of Toronto; the Berkman Center for Internet & Society at Harvard University; and the SecDev Group (Ottawa), which investigates and analyzes Internet filtering and censorship practices worldwide. 

The CSTO includes Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan.  The Shanghai Cooperation Organization includes Uzbekistan, Kazakhstan, China, Tajikistan, Kyrgyzstan and Russia. During its last summit, The Shanghai group approved Pakistan and India as prospective members, reports Sputnik.

Silk Road Reporters, a United States-based news website, focuses on politics, economics and society in Central Asia and adjacent regions.

      

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