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Diplomacy in Action

Uzbekistan (12/08)


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For the most current version of this Note, see Background Notes A-Z.

PROFILE

OFFICIAL NAME:
Republic of Uzbekistan

Geography
Area: 447,400 sq. km., slightly larger than California.
Major cities: Capital--Tashkent (pop. 2.5 million); Samarkand (600,000); Bukhara (350,000).
Terrain: Flat-to-rolling sandy desert with dunes; broad, flat, intensely irrigated river valleys along Amu Darya, Syr Darya; shrinking Aral Sea; semiarid grasslands surrounded by mountainous Tajikistan and Kyrgyzstan in east.
Climate: Mid-latitude desert; long, hot summers, mild winters.

People
Nationality: Uzbek.
Population (July 2008 est.): 27,345,026.
Ethnic groups (1996 est.): Uzbek 80%, Russian 5.5%, Tajik 5%, Kazakh 3%, Karakalpak 2.5%, Tatar 1.5%, other 2.5%.
Religions: Muslim 90% (mostly Sunni), Eastern Orthodox 5%, other 3%.
Languages: Uzbek 74.3%, Russian 14.2%, Tajik 4.4%, other 7.1%.
Education: Literacy--97% (total population).
Health (2005 est.): Life expectancy--60.82 years men; 67.73 years women.
Work force (11.9 million): Agricultural and forestry--44%, industry--20%; services--36%.

Government
Type: Republic.
Independence: September 1, 1991.
Constitution: December 8, 1992.
Branches: Executive--president, prime minister, cabinet. Legislative--bicameral Supreme Assembly or Oliy Majlis consists of an Upper House or Senate (100 seats; 84 members are elected by regional governing councils to serve five-year terms and 16 are appointed by the president) and a Lower House or Legislative Chamber (120 seats; elected by popular vote to serve five-year terms). Judiciary--Supreme Court, constitutional court, economic court.
Administrative subdivisions (viloyatlar): 12, plus Republic of Karakalpakstan and city of Tashkent.
Political parties and leaders: Adolat (Justice) Social Democratic Party--established February 18, 1995 in Tashkent, number of seats in the Legislative Chamber of the parliament 9, Ismail Saifnazarov, first secretary; Democratic National Rebirth Party (Milly Tiklanish Democratic Partiya) or MTP--established on June 3, 1995 in Tashkent, and merged with the National Democratic Party "Fidokorlar" ("Selfless men") on June 20, 2008, number of seats in the Legislative Chamber of the parliament 28, Ahtam Tursunov, chairman; ; People's Democratic Party or PDPU (Uzbekiston Halq Democratic Partiya, formerly Communist Party)--established November 1, 1991 in Tashkent, number of seats in the Legislative Chamber of the parliament 32, Latif Gulomov, first secretary; Liberal Democratic Party of Uzbekistan--established December 3, 2003, number of seats in the Legislative Chamber of the parliament 41, Muhammadyusuf Mutalibjanovich Teshaboev, chairman. Other political or pressure groups and leaders: Birlik (Unity) Movement--Abdurakhim PULATOV, chairman; Erk (Freedom) Democratic Party--Mohammed SOLIH, chairman (banned Dec. 1992); party of Agrarians and Entrepreneurs of Uzbekistan--Marat ZAHIDOV, chairman; Ozod Dekkon (Free Farmers) Party--Nigara KHIDOYATOVA, general secretary; Human Rights Society of Uzbekistan--Abdumannob PULATOV, chairman; Independent Human Rights Society of Uzbekistan--Mikhail ARDZINOV, chairman; Ezgulik--Vasilya INOYATOVA, chairwoman.
Suffrage: Universal at age 18, unless imprisoned or certified as insane.
Defense: Manpower fit for military service--males age 16-49 fit for military service: 5,684,540 (2008 est.), females age 16-49 fit for military service: 6,432,976 (2008 est.); 18 years of age for compulsory military service; 1-year conscript service obligation.

Economy
(Note: Government of Uzbekistan statistics are not consistently reliable. This report relies on unofficial estimates and states clearly when a figure is an estimate. Estimates by international financial institutions also use Government of Uzbekistan statistics.)
GDP: 2007 real GDP growth, according to the IMF based on Government of Uzbekistan statistics, was 9.5%. Actual GDP growth was likely lower.
Inflation: International institutions estimate inflation reached 12.3% in 2007, though actual inflation was likely higher, between 24%-28%.
Per capita GDP: Estimated per capita GDP in 2007, on a purchasing power parity measure, was $2,400.
Natural resources: Natural gas, petroleum, gold, coal, uranium, silver, copper, lead, zinc, tungsten, molybdenum. Natural gas production in 2006 was 62.5 billion cubic meters (bcm). In 2006, the U.S. Government estimates 48.4 bcm of natural gas was consumed in Uzbekistan and 12.5 bcm was exported. Oil production in 2007 was 109,400 bbl/day.
Agriculture: Products--cotton, fourth-largest producer worldwide; vegetables, fruits, grain, livestock.
Industry: Types--textiles, food processing, machine building, metallurgy, natural gas, automobiles, chemical. The industrial production growth rate was estimated at 12.1% in 2007; electricity production was 49 billion kilowatt hours (2006 estimate).
Budget (2007 estimates): Revenues--$6.9 (IMF 2008 staff report, Table 5, 1290 soums/dollar) billion; expenditures--$6.6 billion.
Trade: Total exports--(2007 est., $8.05 billion f.o.b.): largest contribution from cotton, gold, natural gas, mineral fertilizers, ferrous metals, textiles, food products, automobiles. Major export markets (2007 est.)--Russia 25.8%, Poland 10.4%, Turkey 9.2%, China 5.4%, Ukraine 4.7%, Bangladesh 4.4%. Total imports--(2007 est., $4.48 billion f.o.b.): machinery and equipment, chemicals, metals, foodstuffs. Primary import partners (2007 est.)--Russia 25.8%, China 14.3%, South Korea 13.7%, Germany 6.7%, Kazakhstan 6.6%, Ukraine 4.3%, Turkey 4.2%.
External debt (December 31, 2007 est.): $3.927 billion.

PEOPLE
Uzbekistan is Central Asia's most populous country. Its 27.3 million people, concentrated in the south and east of the country, are nearly half the region's total population. Uzbekistan had been one of the poorest republics of the Soviet Union; much of its population was engaged in cotton farming in small rural communities. The population continues to be heavily rural and dependent on farming for its livelihood. Uzbek is the predominant ethnic group. Other ethnic groups include Russian 5.5%, Tajik 5%, Kazakh 3%, Karakalpak 2.5%, and Tatar 1.5%. The nation is approximately 90% Sunni Muslim, 1% Shiite Muslim, and 5% Eastern Orthodox. Uzbek is the official state language; however, Russian is the de facto language for interethnic communication, including much day-to-day government and business use.

The educational system has achieved 97% literacy, and the mean amount of schooling for both men and women is 9 years. However, due to budget constraints and other transitional problems following the collapse of the Soviet Union, texts and other school supplies, teaching methods, curricula, and educational institutions are outdated, inappropriate, and poorly kept. Additionally, the proportion of school-aged persons enrolled has been dropping. Although the government is concerned about this, budgets remain tight. Similarly, in health care, life expectancy is long, but after the breakup of the Soviet Union, health care resources have declined, reducing health care quality, accessibility, and efficiency. Uzbekistan continues to enjoy a highly educated and skilled labor force.

HISTORY
Located in the heart of Central Asia between the Amu Darya and Syr Darya Rivers, Uzbekistan has a long and interesting heritage. The leading cities of the famous Silk Road--Samarkand, Bukhara, and Khiva--are located in Uzbekistan, and many well-known conquerors passed through the land. Alexander the Great stopped near Samarkand on his way to India in 327 B.C. and married Roxanna, daughter of a local chieftain. Conquered by Muslim Arabs in the eighth century A.D., the indigenous Samanid dynasty established an empire in the 9th century. Genghis Khan and his Mongols overran its territory in 1220. In the 1300s, Timur, known in the west as Tamerlane, built an empire with its capital at Samarkand. Uzbekistan's most noted tourist sites date from the Timurid dynasty. Later, separate Muslim city-states emerged with strong ties to Persia. In 1865, Russia occupied Tashkent and by the end of the 19th century, Russia had conquered all of Central Asia. In 1876, the Russians dissolved the Khanate of Kokand, while allowing the Khanates of Khiva and Bukhara to remain as direct protectorates. Russia placed the rest of Central Asia under colonial administration, and invested in the development of Central Asia's infrastructure, promoting cotton growing and encouraging settlement by Russian colonists.

In 1924, following the establishment of Soviet power, the Soviet Socialist Republic of Uzbekistan was founded from the territories including the Khanates of Bukhara and Khiva and portions of the Ferghana Valley that had constituted the Khanate of Kokand. During the Soviet era, Moscow used Uzbekistan for its tremendous cotton growing and natural resource potential. The extensive and inefficient irrigation used to support the former has been the main cause of shrinkage of the Aral Sea to less than a third of its original volume, making this one of the world's worst environmental disasters. Uzbekistan declared independence on September 1, 1991.

GOVERNMENT AND POLITICAL CONDITIONS
The constitution of Uzbekistan provides for separation of powers, freedom of speech, and representative government. In reality, the executive holds almost all power. The judiciary lacks independence, and the legislature--which holds a few sessions each year--has little power to shape laws. The president selects and replaces provincial governors. Islam Karimov, former First Secretary of the Central Committee of the Uzbek SSR Communist Party, was elected to a five-year presidential term in December 1991 with 88% of the vote. In a December 1995 referendum, his term was extended to 2000. President Karimov was re-elected in January 2000 with 91.9% of the vote. In a January 2002 referendum, the term of the presidency was extended from five years to seven. President Karimov was re-elected in December 2007 with 88.1% of the vote. None of these elections or referenda were deemed free or fair.

The 2002 referendum also included a plan to create a bicameral parliament. Parliamentary elections in December 2004 likewise were neither free nor fair, and the Organization for Security and Cooperation in Europe's (OSCE) limited observation mission concluded that the elections fell significantly short of OSCE commitments and other international standards for democratic elections.

Uzbekistan has battled a low-intensity insurgency since the late 1990s. Early this decade, the Islamic Movement of Uzbekistan (IMU) launched a number of small, cross-border raids. The IMU in summer 2001 allied itself with the Taliban government in Afghanistan, where most of its troops were then based, and subsequently engaged U.S. forces in Afghanistan. Since the defeat of the Taliban in 2001, the IMU appears to have become less active in Uzbekistan.

Terrorist bombings, blamed on the IMU and splinter groups, have occurred sporadically, including multiple, simultaneous attacks in Tashkent in 1998 that destroyed a portion of the Ministry of Interior headquarters and narrowly missed President Karimov. Death estimates in those attacks and in subsequent shootouts in Tashkent with alleged bombers range as high as 200. The official government death tally was sixteen. In March and April 2004, suicide bombers struck the U.S. and Israeli Embassies in Tashkent and also detonated devices in the city of Bukhara. In May 2005, armed gunman in the city of Andijon attacked a police station, seized weapons and then stormed a prison, freeing members of a local Islamic organization accused by the government of extremism. In events whose details remain unclear, the attackers then gathered in Andijon's main square. Thousands of local residents also gathered in the square. Shooting erupted between government forces and the insurgents, and a large but undetermined number of individuals were killed. The Government of Uzbekistan, which put the death toll at 187, refused to heed European and U.S. calls for an independent international investigation. Unofficial death toll estimates range as high as 700 to 800. While an international investigation did not take place, the government claimed to have conducted internal investigations into the May 2005 events. It discussed investigation techniques and results with diplomats and other international representatives in 2006, 2007, and 2008.

Human Rights
Uzbekistan has no meaningful political opposition. Four compliant political parties hold all seats in the parliament, and independent political parties have been effectively suppressed since the early 1990s. Multiple independent and governmental media outlets (radio, TV, newspaper) exist. Self-censorship is the norm. Editors and journalists who have broached politically sensitive topics have routinely experienced repercussions, including loss of employment.

Since 1991, many prominent opponents of the government have fled, and others have been arrested. The government severely represses those it suspects of Islamic extremism, including those suspected of any affiliation to organizations such as the banned extremist Party of Islamic Liberation (Hizb ut-Tahrir). Thousands of suspected extremists have been incarcerated since 1992. While such arrests continue, the total number appears to have declined in recent years. The exact number remaining in custody is unknown but may be several thousand. A large number of prisoners have died in custody, many from disease and other poor conditions and others from mistreatment and abuse. Political prisoners and suspected extremists are allegedly treated worse than ordinary prisoners.

The police force and the intelligence service have used torture as a routine investigation technique. In May 2003, following the visit of the UN Special Rapporteur on Torture, the Government of Uzbekistan drafted an action plan to implement the Rapporteur's recommendations. The government began enacting a number of the plan's provisions and has since restarted cooperation with international organizations involved in prison monitoring. Prison conditions and the prevalence of torture today are widely believed to remain problematic.

Principal Government Officials
President and Chairman of the Cabinet of Ministers--Islam Karimov
Prime Minister--Shavkat Mirziyaev
Chairman of the Senate of the Parliament--Ilgizar Sabirov
Speaker of the Legislative Chamber--Diloram Tashmukhamedova

Deputy Prime Ministers
Economics and Foreign Economic Complex--Rustam Azimov
Information System and Telecommunications Technology--Abdulla Aripov
Geology, Fuel and Energy, Chemical, Oil-Chemistry and Metallurgical Industry--Ergash Shaismatov
Social Issues, Education, Health Care--Rustam Kosimov
Communal Service, Transportation, Capital Construction and Construction Industry--Nodir Hanov
Automobile Industry, Machinery, Electric-Technology, Aviation, Standardization of Products--Ulugbek Rozukulov
Women's Issues--Farida Akbarova

Key Ministers
Agriculture and Water Management--Saifiddin Ismailov
Defense--Kobil Berdiyev
Foreign Affairs--Vladimir Norov
Internal Affairs--Bahodir Matlyubov
Justice--Ravshan Mukhitdinov
Public Education--Gairat Shoumarov
Higher and Special Secondary Education--Azimjon Parpiev
Emergency Situations--vacant
Finance--Rustam Azimov
Economy--Batir Hodjaev
Culture--Rustam Kurbonov
Health--Feruz Nazirov
Foreign Economic Relations--Elyor Ganiev
Labor and Social Protection--Aktam Haitov (Acting)

Other Key Officials
Chairman, National Bank-Foreign Economics--Saidakhmad Rakhimov
Chairman, Central Bank--Fayzulla Mullajanov
Chairman, State Committee on Statistics--Gofurjon Kudratov
Chairman, State Property--Dilshod Musaev
Chairman, State Committee for Customs--Sodirkhon Nosirov
Chairman, State Committee for Taxation--Botir Parpiev
Chairman, State Committee for Geology and Mineral--Nurmahammad Akhmedov
Chairman, National Security Service--Rustam Inoyatov
Chairman, Committee on Protection of State Border--Ilkhom Ibragimov
Secretary, National Security Council--Murod Ataev
Ambassador to the United States--Abdulaziz Kamilov
Ambassador to the United Nations--Alisher Vohidov

The Republic of Uzbekistan maintains an embassy at 1746 Massachusetts Ave., NW, Washington, DC 20036. Tel.: (202) 887-5300; fax (202) 293-6804. Its consulate and mission to the UN in New York are located at 866 United Nations Plaza, Suite 326/327a, New York, NY 10017. Consulate tel.: (212) 754-7403; fax: (212) 486-7998.

ECONOMY
The economy is based primarily on agriculture and natural resource extraction. Uzbekistan is a major producer and exporter of cotton. It also is a major exporter of gold, uranium, strategic minerals, and gas. Since independence, the government has stated its commitment to a gradual transition to a free market economy but has been cautious in moving to a market-based economy.

It is difficult to accurately estimate economic growth in Uzbekistan due to unreliable government statistics, which often serve political rather than economic ends. Economic growth has been strong in the past few years, but wealth is strictly held by the elite. According to the World Bank, approximately 25% of Uzbeks live at or below the poverty line.

The government implements a strict import substitution policy to control foreign trade and prevent capital outflow. Substantial structural reform is needed, particularly in the area of improving the investment climate for foreign investors and liberalizing the agricultural sector. Although the government has committed itself in theory to the provisions of the International Monetary Fund's (IMF) Article VIII regarding currency convertibility for current account operations, in practice firms can wait from three to eight months for currency conversion. Convertibility restrictions and other government measures to control economic activity, (e.g., import and export restrictions, and intermittent border closings) have constrained economic growth and led international lending organizations to suspend or scale back credits.

GDP and Employment
The International Monetary Fund estimates 2007 GDP growth figure as 9.5%. The IMF projects 2008 GDP growth of 8.0%. Unemployment and underemployment are very high, but reliable figures are difficult to obtain, as no recent credible surveying has been done. Unofficially, unemployment is estimated around 8% and underemployment around 25%. Underemployment in the agricultural sector is particularly high--which is important given the fact that 62% of the population is rural-based. Many observers believe that employment growth and real wage growth have been stagnant, given virtually no growth in output.

Labor
Literacy in Uzbekistan is almost universal, and workers are generally well-educated and well-trained. Worsening corruption in the country's education system in the past few years has begun to erode Uzbekistan's advantage in terms of its human capital, as grades and degrees are routinely purchased. Additionally, elementary and secondary students in the remote provinces have poor access to basic education. Most local technical and managerial training does not meet international business standards, but foreign companies engaged in production report that locally hired workers learn quickly and work effectively. Foreign firms generally find that younger workers, untainted by the Soviet system, work well at all levels. The government has significantly curbed a long-time program emphasizing foreign education, which in past years annually sent about 50 students to the United States, Europe, and Japan for university degrees, after which they have a commitment to work for the government for 5 years. Reportedly, about 60% of the students who studied abroad found employment with foreign companies upon their return, despite their 5-year commitment to work in the government. In addition, Uzbekistan subsidizes studies for students at Westminster University--the only Western-style institution in Uzbekistan. In 2003, Westminster admitted about 360 students, and the government funded about half of the students' education. Education at Westminster costs $4,900 per academic year.

With the closure or downsizing of many foreign firms, it is relatively easy to find qualified, well-trained employees, and salaries are very low by Western standards. The government has implemented salary caps in an attempt to prevent firms from circumventing restrictions on the withdrawal of cash from banks. Some firms had tried in the past to evade these limits on withdrawals by inflating salaries of employees, allowing firms to withdraw more money. These salary caps prevent many foreign firms from paying their workers as much as they would like. Labor market regulations in Uzbekistan are similar to those once used in the Soviet Union, with all rights guaranteed but some rights unobserved. Unemployment is a growing problem, and a significant number of people continue to look for jobs in Russia, Kazakhstan, the Middle East, and Southeast Asia, though the overall number might have declined in the past year due to slowing economies in neighboring countries. Business analysts estimate that a high number of Uzbek citizens are working abroad. Estimates range from lows of 3 million to highs of 5 million Uzbek citizens of working age living outside Uzbekistan, most in neighboring countries or Russia. Uzbekistan signed a labor agreement with Russia in 2007 to facilitate the temporary migration of Uzbek workers and the taxation of their income, though reportedly only 1,000 Uzbeks participated in this program in 2008.

Prices and Monetary and Fiscal Policy
Macroeconomic performance has been strong over the last two years and resulted in a positive trade balance. Real GDP growth was high, and official reserves continued to rise. Inflation is expected to be between 30%-40% in 2008. In order to combat inflation, the government has exercised strict currency controls, causing periodic shortages of cash. Reacting to the weakening of the dollar to the Euro, the government recently switched to the Euro for its accounting and financial management. The hospitality sector is following suit.

Outstanding external debt in 2007 was estimated at $3.927 billion. Tax collection rates remained high, due to the use of the banking system by the government as a collection agency. The World Bank and the UN Development Program (UNDP) have provided technical assistance to reform the Central Bank and Ministry of Finance into institutions that conduct market-oriented fiscal and monetary policy. Bank reform is very slow and inhibits the ability of citizens or private companies to obtain credit and other banking services.

Agriculture and Natural Resources
Agriculture and the agro-industrial sector contribute about 30% to Uzbekistan's GDP. Cotton is Uzbekistan's dominant crop, accounting for roughly 14% of the country's GDP in 2007. Uzbekistan also produces significant amounts of silk, wheat, fruit, and vegetables. Nearly all agriculture involves heavy irrigation. Farmers and agricultural workers earn low wages, which the state seldom pays on a regular basis. In general, the government controls the agriculture sector, dictates what farms grow, and buys directly from the farmers to sell abroad.

Minerals and mining are integral to Uzbekistan's economy. Gold is Uzbekistan's second most important foreign exchange earner, unofficially estimated at around 20%. Uzbekistan is the world's seventh-largest producer, mining about 80 tons of gold per year, and holds the fourth-largest reserves in the world. Uzbekistan receives a considerable amount of income from natural gas exports. It produces oil for domestic consumption and has significant reserves of copper, lead, zinc, tungsten, and uranium.

Trade and Investment
Uzbekistan's export/import policy is based on import substitution. The highly regulated trade regime has led to both import and export declines since 1996, although imports have declined more than exports, as the government squeezed imports to maintain hard currency reserves. Draconian tariffs and sporadic border closures and crossing "fees" decrease legal imports of both consumer products and capital equipment. Uzbekistan's traditional trade partners are from the Commonwealth of Independent States (CIS), notably Russia, Ukraine, and Kazakhstan. Non-CIS partners have been increasing in importance in recent years, with the European Union, South Korea, Germany, Japan, and Turkey being the most active.

Uzbekistan is a member of the IMF, the World Bank, the Asian Development Bank, the Islamic Development Bank, and the European Bank for Reconstruction and Development. It has observer status at the World Trade Organization (WTO) and has publicly stated its intention to accede to the WTO. It is a member of the World Intellectual Property Organization and is a signatory to the Convention on Settlement of Investment Disputes between States and Nationals of Other States, the Paris Convention on Industrial Property, the Madrid Agreement on Trademarks Protection, and the Patent Cooperation Treaty. In 2008, Uzbekistan was again placed on the special "301" Watch List for lack of intellectual copyright protection.

Since Uzbekistan's independence, U.S. firms have invested roughly U.S. $500 million in Uzbekistan. 2006 and 2007 saw some foreign investors depart Uzbekistan because of declining investor confidence, harassment, and currency convertibility problems. However, in 2007 GM-DAT, a Korean subsidiary of GM entered Uzbekistan when it signed a joint-venture agreement with UzDaewoo to assemble Korean-manufactured cars for export and domestic sale, including Chevrolets. GM is looking to expand its operations in Uzbekistan. Boeing also has a longstanding relationship with the national airline of Uzbekistan, Uzbekistan Airways.

DEFENSE
Uzbekistan possesses the largest and most competent military forces in the Central Asian region, having around 65,000 people in uniform. Its structure is inherited from the Soviet armed forces, although it is moving rapidly toward a fully restructured organization, which will eventually be built around light and Special Forces. The Uzbek Armed Forces' equipment is not modern, and training, while improving, is neither uniform nor adequate yet for its new mission of territorial security. The government has accepted the arms control obligations of the former Soviet Union, acceded to the Nuclear Non-Proliferation Treaty (as a non-nuclear state), and has supported an active program by the U.S. Defense Threat Reduction Agency (DTRA) to demilitarize and clean up former weapons of mass destruction-related facilities in western Uzbekistan (Nukus and Vozrozhdeniye Island), as well as to guard against the proliferation of radiological materials across its borders. The Government of Uzbekistan spends about 2% of GDP on the military (2005 est.).

Beginning in the late 1990s until 2004, the government received U.S. Foreign Military Financing (FMF), International Military Education and Training (IMET), and other security assistance funds. Beginning in 2004, new FMF and IMET assistance to Uzbekistan was stopped, as the Secretary of State, implementing U.S. Government legislation, was unable to certify that the Government of Uzbekistan was making progress in meeting its commitments, including respect for human rights and economic reform, under the U.S.-Uzbekistan Strategic Framework Agreement. Uzbekistan approved U.S. Central Command's request for access to a vital military air base in southern Uzbekistan following the September 11, 2001 terrorist attacks in the U.S., but asked the U.S. to leave in July 2005. All U.S. forces had departed this facility by November 2005.

FOREIGN RELATIONS
Uzbekistan is a member of the Shanghai Cooperation Organization (SCO), the Collective Security Treaty Organization (CSTO), the Commonwealth of Independent States (CIS), the United Nations, the Euro-Atlantic Partnership Council, NATO Partnership for Peace, the Organization for Security and Cooperation in Europe (OSCE), the Organization of the Islamic Conference (OIC), and the Economic Cooperation Organization--comprised of the five Central Asian countries, Azerbaijan, Turkey, Iran, Afghanistan, and Pakistan. In 1999, Uzbekistan joined the GUAM alliance (Georgia, Ukraine, Azerbaijan, and Moldova), which was formed in 1997 (making it GUUAM), but formally withdrew in 2005. Uzbekistan hosts the Shanghai Cooperation Organization's (SCO) Regional Anti-Terrorist Structure (RATS) in Tashkent. Uzbekistan is a founding member of the Central Asian Union, formed with Kazakhstan and Kyrgyzstan (and which Tajikistan joined in March 1998). In 2002, Uzbekistan joined the Central Asian Cooperation Organization (CACO), which also includes Tajikistan, Kazakhstan, and Kyrgyzstan. In 2006, Uzbekistan joined the Eurasian Economic Community (EurASEC), comprising Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan, but subsequently withdrew in 2008.

Uzbekistan participated in the CIS peacekeeping force in Tajikistan and in UN-organized groups to help resolve the Tajik and Afghan conflicts, both of which it viewed as posing threats to its own stability. Uzbekistan is a supporter of U.S. efforts against worldwide terrorism and joined the coalition combating terrorism in Afghanistan. It continues to support coalition anti-terrorist operations in Afghanistan by granting access to Germany to an air base in southern Uzbekistan.

Uzbekistan has actively participated in regional efforts to combat terrorism and the narcotics trade. It has maintained close ties to Russia, while also seeking to balance this with stronger ties to China and other powers. In November 2005, Uzbekistan signed a mutual defense treaty with Russia.

U.S.-UZBEK RELATIONS
The U.S. recognized the independence of Uzbekistan on December 25, 1991, and opened an Embassy in Tashkent in March 1992. U.S.-Uzbek relations developed slowly and reached a peak following the U.S. decision to invade Afghanistan following the September 11, 2001 terror attacks. Relations cooled significantly following the "color revolutions" in Georgia, Ukraine, and Kyrgyzstan in 2003-2005, and the Government of Uzbekistan sought to limit the influence of U.S. and other foreign non-governmental organizations (NGOs) working on civil society, political reform, and human rights inside the country. Relations deteriorated rapidly following U.S. and European demands for an independent, international investigation into the May 2005 Andijon violence.

Relations have improved since the second half of 2007 as both the United States and Uzbekistan sought re-engagement under the terms of the March 2002 Declaration of Strategic Partnership between the two countries. The declaration covers not only security and economic relations but political reform, economic reform, and human rights. Uzbekistan has Central Asia's largest population and is vital to U.S., regional, and international efforts to promote stability and security.

Bilateral Economic Relations

Trade and investment. Trade relations are regulated by a bilateral trade agreement, which entered into force January 14, 1994. It provides for extension of most-favored-nation trade status between the two countries. The U.S. additionally granted Uzbekistan exemption from many U.S. import tariffs under the Generalized System of Preferences (GSP status) on August 17, 1994. A Bilateral Investment Treaty was signed December 16, 1994; it has been ratified by Uzbekistan and received advice and consent of the U.S. Senate in October 2000. However, the Bilateral Investment Treaty will be unlikely to enter into force until Uzbekistan embarks on economic reform. The government is taking some modest steps to reduce the bureaucratic restraints on the nascent private sector.

Assistance. The United States' humanitarian and technical assistance to Uzbekistan has decreased markedly since 2004, both as a result of government actions against U.S. implementing partners and U.S. Government restrictions on aid. Since its independence, the U.S. has provided technical support to Uzbekistan's efforts to restructure its economy and to improve its environment, education, and health care system, provided support to nascent NGOs, and provided equipment to improve water availability and quality in the Aral Sea region. Through the U.S. Agency for International Development (USAID) and the Embassy's Public Affairs Section, the U.S. Government continues to support educational and professional exchanges and other programs that offer Uzbeks the opportunity to study in the United States and to establish professional contacts with their American counterparts. The Departments of State and Defense provide technical assistance in the form of equipment and training to enhance Uzbekistan's control over its borders and its capabilities to interdict the illicit movement of narcotics, people, and goods, including potential weapons of mass destruction-related items. In FY 2003, the United States provided roughly $87.4 million in humanitarian aid, technical assistance, military-to-military funding, and micro-credit support in Uzbekistan. U.S. assistance grew to approximately $101.8 million in FY 2004, but fell to $92.6 million in FY 2005. These programs were designed to promote market reform and to establish a foundation for an open, prosperous, democratic society. Starting in 2004, the Secretary of State has been unable to certify that Uzbekistan has met its obligations under the bilateral 2002 Strategic Framework Agreement. As a result, U.S. assistance declined to approximately $10 million in FY 2008.

USAID provides both technical and humanitarian assistance. Technical assistance to Uzbekistan promotes sound fiscal and management policies, a strengthened business enabling environment, enhanced competitiveness of the agribusiness sector, increased citizens' participation in civil society and economic decision making, improved sustainability of social benefits and services, reduced environmental risks to public health, and other multi-sector reform programs. The USAID/Central Asian Republics Uzbekistan health program focuses on four chief needs: primary health care reform, HIV/AIDS and infectious disease control, drug demand reduction, and reproductive and maternal and child health. Programs are designed to develop local capacity and promote mechanisms for citizens to engage with their local government. U.S. Government funds also support the work of non-governmental organizations to prevent trafficking in persons and care for victims.

Peace Corps staff arrived in Uzbekistan in August 1992, and a bilateral agreement to establish the Peace Corps in Uzbekistan was signed November 4, 1992. The first volunteers arrived in December 1992. Peace Corps Volunteers were active in English teaching, small business development, public health, and women's issues. However, Uzbekistan failed to renew visas for Peace Corps volunteers in 2005, ending the Peace Corps presence in the country. Department of State-managed exchange programs, farmer-to-farmer exchanges, and the Department of Commerce's Special American Business Internship Training Program (SABIT) contribute to expansion of technical know-how and support bilateral relations. The U.S. also provides export finance/guarantees and political risk insurance for U.S. exporters and investors through the U.S. Export-Import Bank and the Overseas Private Investment Corporation (OPIC). Proceeds from the U.S. Department of Agriculture's Commodity Monetization Program are scheduled to finance more than 30 farmer assistance and rural development projects which were approved jointly by U.S. and Uzbek officials in 2005. Some of the selected projects are already underway.

[Fact sheet on FY 2008 U.S. Assistance to Uzbekistan.]

Principal U.S. Embassy Officials
Ambassador--Richard B. Norland
Secretary--Patti Hagopian
Deputy Chief of Mission--Duane Butcher
Political/Economic Chief--Nicholas Berliner
Public Affairs Officer--Carol Fajardo
Management Officer--Doug Ellrich
Consul--Rafael Perez
Defense Attache--LTC Jeff Hartmann
USAID--James Bonner

The U.S. Embassy in Tashkent is located at 3 Moyqo'rq'on, 5th Block, Yunusobod District, Tashkent 700093; tel. [998] (71) 120-5450; fax: [998] (71) 120-6335; duty officer (cellular): [998] (71) 180-4060.



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