Uzbekistan-U. S. Economic Relations Problems and Perspectives — страница 2

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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 the Central Asia’s total population. Uzbekistan is rich in oil, gas, uranium, and gold. Since 1991 Uzbekistan has reached self-sufficiency in oil and oil products. The republic was the third largest producer of natural gas in the former Soviet Union behind Russia and Turkmenistan, producing more than 10 percent of the union's natural gas in the 1980s (Library of Congress, 1998). Uzbekistan is the fifth largest producer of cotton in the world (and second largest exporter of it), and also the eighth largest producer of gold (ECO, 2004). Table 1.

Selected Economic Indicators for Uzbekistan’s Economy: 1995-2001 1995 1996 1997 1998 1999 2000 2001 Nominal GDP (bln soum) 303 559 977 1359 2129 3256 4868 GDP per capita (1000 soum) ()((1 capita - 24.3 41.5 58.9 86.8 128.0 150.1 Sector Shares in GDP (%) Agriculture 32 26 32 31 34 34 35 Manufacturing 20 21 18 17 17 16 16 Services 48 53 50 52 49 50 49 Source: Ministry of Macroeconomics and Statistics Table 2. TOTAL FOREIGN DIRECT INVESTMENT (mln US $) (as compared to other countries in the region) Countries 1996 1997 1998 1999 2000 2001 2002 Kazakhstan 1,674 2,107 1,233 1,852 2,781 4,557 4,106 Kyrgyzstan 153 86 136 109 90 90 116 Tajikistan 18 94 164 275 323 354 434 Turkmenistan 108 108 62 89 131 150 100 Uzbekistan 90 167 25 20 25 64 81 Source: ECO, 2004. Neighboring Kazakhstan,