Uzbekistan-U. S. Economic Relations Problems and Perspectives

    Дисциплина: Экономика
    Тип работы: Реферат
    Тема: Uzbekistan-U. S. Economic Relations Problems and Perspectives

    Uzbekistan-U. S. Economic Relations: Problems and Perspectives

    An Independent Study by Mamurjon Rahimov,

    Economics Department, the University

    of Illinois at Chicago

    Foreword

    A lot of foreign and international companies and organizations have long been reluctant to rely on

    Uzbek statistical data. In fact, right before the brake-up of the Soviet Union, there was a large investigation by authorities from Moscow about notorious statistics manipulation by

    Uzbeks in cotton production and delivery to Russian textile factories. Millions of rubles (Soviet currency) changed hands, echelons of EMPTY trains traveled all the way to Moscow,

    large amounts of bribes were paid to special interest groups, mafia was involved - and at the end the cotton in the statistics was never produced. Therefore it was labeled "Pahta

    Ishi" (i.e. Cotton Conspiracy). The main investigator, Mr. Gdlian died in an airplane crush - reportedly set up after the roots of the case led him back to Moscow.

    Therefore, I did insert some key data, and proceeded on to "paint" a big picture of the situation.

    Besides simple statistics such as population size, inflation, unemployment, and many other key statistics have been extensively manipulated. I myself started working for the largest

    new economic sector of Uzbekistan - automotive industry in 1999. As an insider I learnt grave violations in simple economic statistics such as: Cars produced in Uzbekistan were

    shipped out of the country, and their dollar amount was immediately written down as AUTOMOTIVE EXPORTS - regardless they were never sold. I was told by a witness who traveled to

    Russia, main market for Uzbek cars, that thousands (!) of cars shipped there in 1997 were rotting in storage places - under snow and rain! Is that exports? Main website for info on

    Uzbekistan, www.gov.uz has economic data up to 2001. Most other sources make their own estimates. Therefore I did not concentrate on statistics and went on to highlight major

    issues.

    Summary

    Uzbekistan is a key US ally in the Central Asian region in the international war against terrorism

    efforts to counter illegal narcotic traffic and also is an important U. S. economic partner in this region.

    Uzbekistan continues to rebuild its economy after gaining its independence from the former Soviet Union in 1991.

    Improving international trade ties and attracting more foreign direct investment into the country remain on the top list for policy makers of Uzbekistan, and

    policymakers there are attempting to design strategies to boost Uzbekistan’s international competitiveness.

    Introduction

    The United States and Uzbekistan have maintained close relations since Uzbekistan gained its independence in 1991, cooperating in a large array of areas, such as defense and

    security, designing measures against illegal narcotics trafficking, liberalization of trade, promotion of democracy in the region, and, more recently, combating international

    terrorism.

    Uzbekistan- U. S. economic relations can not be viewed separately from all of the above, since Uzbekistan is a new country and requires strong international

    support in facilitation of development in almost every field.

    Uzbekistan at the time of gaining independence

    At the time of gaining its independence from the former USSR, Uzbekistan’s economy was in shambles and ill-prepared for an independent functioning.

    The fact that this independence was gained by default and/or inertia partially contributed on the lack of preparedness of the economy.

    For decades until this break-up, Uzbekistan’s economy was, just like that of any other “little-brother” republics’ (i.e. except Russia, the “big brother“), geared

    towards working like a small wheel in the Soviet mega-economy.

    Mainly, Uzbekistan was a producer of cotton for the textile industry of the former USSR.

    and natural gas.

    Instead of building on its existing strengths, which was the recommendation of various think tanks and foreign advisors, Uzbekistan chose to remain a raw-material

    supplier as before, and ventured into new fields such as automotive manufacturing.

    Shortly after independence, Uzbekistan imposed a strict control over hard currency convertibility

    (mainly dollar), and since then economists and lay-people alike accused hard currency inconvertibility as the main cause of Uzbekistan’s economic problems.

    However, time showed that this was not so true: Uzbekistan eventually removed its restrictions on hard currency exchange, but most problems did not go away.

    The U. S. Department of State says the following about the factors that hinder the growth of Uzbekistan’s economy:

    Although it is difficult to make an accurate estimate of economic growth in Uzbekistan--because of the unreliable nature of government statistics, which often serve political

    rather than economic ends--economic growth is far below potential due to:

    the country's poor investment climate;

    failure to attract foreign investment;

    an extremely restrictive trade regime, implemented in order to meet a strategy of limiting imports of consumer goods;

    failure to reform the agricultural sector of the economy, potentially the engine of economic growth for this largely rural economy; and

    the price system in Uzbekistan, which is not functioning properly due to government intervention in markets.

    Population Statistics and GDP per Capita

    Uzbekistan has not conducted a population census since 1989.

    Although there was a very intensive migration during post-Soviet years, for instance many Russians and other ethnicities left the country, Uzbekistan’s population

    size is still only estimated, and in most cases it is believed to be underestimated.

    According to the opinion of some economists of Uzbekistan, consistent underestimation of Uzbekistan’s population mainly serves one purpose: to exaggerate GDP per

    capita.

    It is well known that GDP per capita is an important economic indicator for any country’s economy.

    Since population comes in the denominator of this indicator, the smaller population - the higher the GDP per capita.

    Uzbek Government might have used this tactic to exaggerate its economic growth achievements, and to attract more foreign investors.

    What are the factors that make Uzbekistan an attractive partner in Central Asia?

    After the break-up of the Soviet Union, five independent republics appeared on the map of Central Asia: Kazakhstan, Kyrgyzstan, Turkmenistan, Tajikistan, and Uzbekistan.

    Various countries have been actively trying to establish themselves in this region, and this competition in regional hegemony was called the Great Game. The United

    States has joined the race quite early.

    So what attracts the USA in Uzbekistan?

    These factors probably are: abundance of natural resources, large consumer base and labor resources, and strategic location.

    Uzbekistan is the most populous country in Central Asia. It has over 25 million people, concentrated in the south and east of the country,

    who are nearly half ...

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