UZBEKISTAN

GENERAL DATA

Area: 447,400 sq. km (172,742 sq. miles)
Population: 27,488,000 (2009 estimate)
Ethnic groups: 80.0% Uzbek, 5.5% Russian, 5.0% Tajik, 3.0% Kazakh, 2.5% Karakalpak, 1.5% Tatar, 2.5% others.
Capital: Tashkent
President: Islam Karimov
Religion: 90% Muslim, 6% Christian and 4% others.
GDP (PPP) per capita: $2,629 (2008 estimate).

GOVERNMENT       

Constitutionally, the Government of Uzbekistan provides for democracy. The executive holds a great deal of power, and the legislature and judiciary have little power to shape laws. Under terms of a December 27, 1995 referendum, Islam Karimov's first term was extended. Another national referendum was held 27 January 2002 to extend the Constitutional Presidential term from 5 years to 7 years. The referendum passed, and Karimov's term was extended by act of the parliament to December 2007. Most international observers refused to participate in the process and did not recognize the results, dismissing them as not meeting basic standards. The 2002 referendum also included a plan to create a bicameral parliament, consisting of a lower house (the Oliy Majlis) and an upper house (Senate). Members of the lower house are to be "full time" legislators. Elections for the new bicameral parliament took place on 26 December, but no truly independent opposition candidates or parties were able to take part. The OSCE limited observation mission concluded that the elections fell significantly short of OSCE commitments and other international standards for democratic elections. Several political parties have been formed with government approval. Similarly, although multiple media outlets (radio, TV, newspaper) have been established, these either remain under government control or rarely broach political topics. Independent political parties were allowed to organize, recruit members and hold conventions and press conferences, but they have been denied registration under restrictive registration procedures.

Uzbekistan is a member of the United Nations (UN) (since 2 March 1992), the Euro-Atlantic Partnership Council (EAPC), Partnership for Peace (PfP), and the Organization for Security and Cooperation in Europe (OSCE). It belongs to the Organization of the Islamic Conference (OIC) and the Economic Cooperation Organization (ECO) (comprising 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 pulled out of the organization in 2005. Uzbekistan is also a member of the Shanghai Cooperation Organization (SCO) and hosts the SCO’s Regional Anti-Terrorist Structure (RATS) in Tashkent. Uzbekistan joined the new Central Asian Cooperation Organization (CACO) in 2002. The CACO consists of Uzbekistan, Tajikistan, Kazakhstan and Kyrgyzstan. It is a founding member of, and remains involved in, the Central Asian Union, formed with Kazakhstan and Kyrgyzstan, and joined in March 1998 by Tajikistan.

ECONOMY

Along with many Commonwealth of Independent States economies, Uzbekistan's economy declined during the first years of transition and then recovered after 1995, as the cumulative effect of policy reforms began to be felt. It has shown robust growth, rising by 4% per year between 1998 and 2003 and accelerating thereafter to 7%-8% per year. According to IMF estimates, the GDP in 2008 will be almost double its value in 1995 (in constant prices). Since 2003 annual inflation rates averaged less than 10%.

Uzbekistan has a very low GNI per capita (US$610 in current dollars in 2006, giving a PPP equivalent of US$2,250). By GNI per capita in PPP equivalents Uzbekistan ranks 169 among 209 countries; among the 12 CIS countries, only Kyrgyzstan and Tajikistan had lower GNI per capita in 2006. Economic production is concentrated in commodities: Uzbekistan is now the world's sixth-largest producer and second-largest exporter of cotton, as well as the seventh largest world producer of gold. It is also a regionally significant producer of natural gas, coal, copper, oil, silver and uranium. Agriculture employs 28% of Uzbekistan's labor force and contributes 24% of its GDP (2006 data). While official unemployment is very low, underemployment - especially in rural areas - is estimated to be at least 20%. Still, at cotton-harvest time, all students and teachers are mobilized as unpaid labour to help in the fields. The use of child labor in Uzbekistan has led several companies, including Tesco, C&A, Marks & Spencer, Gap, and H&M, to boycott Uzbek cotton.

Facing a multitude of economic challenges upon acquiring independence, the government adopted an evolutionary reform strategy, with an emphasis on state control, reduction of imports and self-sufficiency in energy. Since 1994, the state-controlled media have repeatedly proclaimed the success of this "Uzbekistan Economic Model" and suggested that it is a unique example of a smooth transition to the market economy while avoiding shock, pauperization and stagnation.

The gradualist reform strategy has involved postponing significant macroeconomic and structural reforms. The state in the hands of the bureaucracy has remained a dominant influence in the economy. Corruption permeates the society and grows more rampant over time: Uzbekistan's 2005 Corruption Perception Index was 137 out of 159 countries, whereas in 2007 Uzbekistan is at the very bottom of the ranking, 175 out of 179. A February 2006 report on the country by the International Crisis Group suggests that revenues earned from key exports, especially cotton, gold, corn and increasingly gas, are distributed among a very small circle of the ruling elite, with little or no benefit for the populace at large.

According to the Economist Intelligence Unit, "the government is hostile to allowing the development of an independent private sector, over which it would have no control". Thus, the national bourgeoisie in general, and the middle class in particular, are marginalized economically and, consequently, politically.

The economic policies have repelled foreign investment, which is the lowest per capita in the CIS. For years, the largest barrier to foreign companies entering the Uzbekistani market has been the difficulty of converting currency. In 2003, the government accepted the obligations of Article VIII under the International Monetary Fund providing for full currency convertibility. However, strict currency controls and the tightening of borders have lessened the effect of this measure.

Uzbekistan experienced galloping inflation of around 1000% per year immediately after independence (1992-1994). Stabilization efforts implemented with guidance from the IMF paid off. The inflation rates were brought down to 50% in 1997 and then to 22% in 2002. Since 2003 annual inflation rates averaged less than 10%. Tight economic policies in 2004 resulted in a drastic reduction of inflation to 3.8% (although alternative estimates based on the price of a true market basket, put it at 15%). The inflation rates moved up to 6.9% in 2006 and 7.6% in 2007 but have remained in the single-digit range.

The government of Uzbekistan restricts foreign imports in many ways, including high import duties. Excise taxes are applied in a highly discriminatory manner to protect locally produced goods. Official tariffs are combined with unofficial, discriminatory charges resulting in total charges amounting to as much as 100 to 150% of the actual value of the product, making imported products virtually unaffordable. Import substitution is an officially declared policy and the government proudly reports a reduction by a factor of two in the volume of consumer goods imported. A number of CIS countries are officially exempt from Uzbekistan import duties.

The Republican Stock Exchange (RSE) 'Tashkent' opened in 1994. It houses a securities exchange, real estate traders, the national investment fund and the national securities depositary. It does not trade all joint-stock companies each month, and therefore market capitalisation varies widely.

Uzbekistan's external position has been strong since 2003. Thanks in part to the recovery of world market prices of gold and cotton (the country's key export commodities), expanded natural gas and some manufacturing exports, and increasing labour migrant transfers, the current account turned into a large surplus (between 9% and 11% of GDP from 2003 to 2005) and foreign exchange reserves, including gold, more than doubled to around US$3 billion.

GEOGRAPHY

Uzbekistan is approximately the size of Morocco and has an area of 447,400 square kilometers (172,700 sq mi). It is the 56th largest country in the world by area and the 42nd by population. Among the CIS countries, it is the 5th largest by area and the 3rd largest by population.

Uzbekistan stretches 1,425 kilometers (885 mi) from west to east and 930 kilometers (578 mi) from north to south. Bordering Kazakhstan and the Aral Sea to the north and northwest, Turkmenistan to the southwest, Tajikistan to the southeast, and Kyrgyzstan to the northeast, Uzbekistan is not only one of the larger Central Asian states but also the only Central Asian state to border all the other four. Uzbekistan also shares a short border (less than 150 km) with Afghanistan to the south.

Uzbekistan is a dry, landlocked country; it is one of two doubly landlocked countries in the world, i.e., a country completely surrounded by landlocked countries – the other being Liechtenstein. Less than 10% of its territory is intensively cultivated irrigated land in river valleys and oases. The rest is vast desert (Kyzyl Kum) and mountains. The highest point in Uzbekistan is the Khazret Sultan, located at 4,643 meters (15,233 ft) above sea level, located in the southern part of the Gissar Range in Surkhandarya Province, on the border with Tajikistan, just north-west of Dushanbe (formerly called Peak of the 22nd Congress of the Communist Party).

The climate in the Republic of Uzbekistan is continental, with little precipitation expected annually (100–200 millimeters, or 3.9–7.9 inches). The average summer high temperature tends to be 40 °C (104 °F), while the average winter low temperature is around −23 °C (−9 °F).

Major cities include Bukhara, Samarqand, Namangan and the capital Tashkent.