Uzbekistan-U. S. Economic Relations Problems and Perspectives

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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. Besides that, Uzbekistan supplied other raw materials such as silk, wool, produce; and natural