#12 - RW 7-23-04 - RW Home
Jamestown Foundation
EURASIA DAILY MONITOR
Volume 1, Issue 57
www.jamestown.org
22 July 2004
Tashkent looks to Moscow to replace lost U.S. aid
WASHINGTON PUSHES KARIMOV CLOSER TO MOSCOW
By Yuriy Yegorov

On July 15 Elizabeth Jones, the U.S. Assistant Secretary of State for European and Eurasian affairs, officially concluded her two-day visit to Uzbekistan, where she had met with the country's leadership and local representatives of several human rights organizations. On July 13, on the eve of her visit to Tashkent, the U.S. administration announced its decision to cut $18 million in financial assistance to Uzbekistan. According to the official statement issued by the U.S. Department of State, this measure was adopted in reaction to "the insufficient progress in implementing democratic reforms" in Uzbekistan. The statement specifically mentioned the deaths of suspects held in prisons and the unwillingness of the authorities to register opposition parties. There is increasing speculation that Great Britain and other European Union members may follow suit (Nezavisimaya gazeta, July 15, 2004)

Many observers in Uzbekistan and Russia believe that Assistant Secretary Jones had intended to hold private discussions about human rights issues with the Uzbekistani leadership, to whom Washington repeatedly expressed sincere gratitude for assistance in the conduct of the anti-terrorist operation in Afghanistan. Uzbekistan was the first of the post-Soviet Central Asian states to offer the United States permission to open an air force base on its territory, specifically in Khanabad, which is located close to the border with Afghanistan. This air base became the largest U.S. military bridgehead in the region, and it marked the beginning of a serious shift in the balance of strategic forces between the United States and Russia. In the course of her visit, Jones was supposed to convince Tashkent that the aforementioned decision to cut financial assistance did not imply a change in the American interests in the region or the unwillingness to continue cooperation with Uzbekistan.

According to sources close to government circles in Uzbekistan, Tashkent did not take the news of the $18 million cut well, as the government had relied on the funds. The U.S. Department of State's decision is viewed as a public rebuke of the Karimov regime, and Uzbekistan's leaders realize that this move signals a new and very unfavorable turnaround by Washington. However, President Islam Karimov will not respond by revoking the agreement on the American air base in Khanabad, because its operation brings a relatively small but stable income to the Uzbekistani authorities. Besides, the continuous operation of the air base is considered an asset for the stability of the regime. It must be also noted that Washington continues to offer substantial military-technical assistance to Uzbekistan. In May 2004 the United States gave Tashkent equipment and special hardware for border defense, which was worth total of $516,600. Since April 2000 the total of American military-technical assistance to Uzbekistan amounts to approximately $7 million.

Some political elites in Tashkent believe that Karimov had anticipated the shift in U.S. attitudes long before it occurred. For example, when he visited the United States in 2002, Karimov was furious that his arrival at Andrews Air Force Base was greeted only by Assistant Secretary Jones. For the president of a country with 25 million people, this was a demeaning diplomatic gesture. Karimov had flown to Washington with hopes of securing U.S. political support and to resolve many internal problems with the American financial assistance. Nonetheless, by late 2002 U.S. financial aid to Uzbekistan amounted to only $160 million and another $55 million in loans to purchase goods in the United States for developing small and medium business in Uzbekistan. As one well-connected source commented, "This meant that Tashkent was put in the common waiting line in front of the main entrance to the White House."

In September 2003 Karimov told Russian President Vladimir Putin, who had made a brief stopover in Samarkand on his way to India, that he had finally overcome the initial "euphoria" of hopes related to developing economic relations with the West. This meeting prompted the later reassessment of relations between Uzbekistan and Russia, which eventually culminated in the two presidents signing the Uzbekistan-Russia Treaty on Strategic Cooperation in June 2004. Moreover, Uzbekistan and Russia also reviewed their bilateral military cooperation and resolved to strengthen this relationship. Tashkent firmly believes that, unlike Washington, Moscow will never make its assistance contingent on demands for democratic changes.

At the same time Uzbekistan does not want to jeopardize its relations with the United States and wants to preserve the bilateral partnership. This is why on the eve of the Jones visit to Tashkent, the Ministry of Foreign Affairs issued a communique that stressed that the American-Uzbek relations are characterized as "strategic partnership" and that they are "effectively evolving."

The United States continues to be one of Uzbekistan's ten largest trade partners. In 2003 the trade volume between the two countries amounted to $335.2 million, including $106.7 million in weapons. The results of the first quarter of 2004 show that the trade volume between the two countries amounted to $153.1 million (an increase of 124% compared to the same period in 2003), of which exports comprised $28.5 million (up 31%), while imports amounted to $124.6 million (167.3% higher). The negative balance of bilateral trade amounted to $96.1 million. There are currently 24 priority investment projects in Uzbekistan involving American companies and financial institutions. The total monetary value of these investment projects amounts to $2.383 billion, including American loans and credits totaling $1.406 billion. There are 316 enterprises created with U.S. investors, including 227 are joint ventures and 89 wholly established with of American capital. The enterprises range from mining to chemicals, consumer goods, foodstuffs, and machine manufacturing.