We're always looking for ways to make Geoba.se better. Have an idea? See something that needs fixing? Let us know!
|Country Study > Introduction|
IN 1991 THE FIVE SOVIET REPUBLICS of Central Asia -- Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan -- were faced for the first time with the prospect of existence as independent states. In critical respects, they were unprepared for this event: their economies all had performed specific tasks in the Soviet system, mainly the supply of raw materials; only outdated Soviet-era political structures remained behind in the five republics, with no tradition of national political institutions; and the end of the union fragmented the armed forces units of the former Soviet Union that remained on the republics' territory. In the 1990s, the progress of the five republics toward resolving these problems has been quite uneven. The republics with the richest natural resources -- Kazakhstan, Turkmenistan, and Uzbekistan -- have developed the strongest economies -- albeit with serious defects in each case -- and have attracted substantial Western investment. In all cases, movement away from the Soviet model of strong, one-party central government has been extremely slow. Some degree of military autonomy has appeared in all republics save Tajikistan, which still is bedeviled by rebel forces and a porous southern border. At the same time, the strategic doctrine of all Central Asian countries remains based on protection from Russia's military.
The total area of the five republics is approximately 3.9 million square kilometers, slightly more than 40 percent of the area of the United States and less than one-quarter of the area of Russia.
The region contains enormous natural and agricultural resources. All five republics have favorable agricultural regions and some combination of attractive minerals and fuels. Their industrial bases include trained workers, and their populations have relatively high educational levels and literacy rates. Unfortunately, the moribund, highly inefficient system through which the Soviet Union exploited those resources has proved very difficult to disassemble. The Central Asians have suffered all the typical transitional ills of former communist states moving toward a market economy: erratic supply of critical industrial inputs, increased unemployment, sharply increased inflation, declining capacity utilization and output by industry, and acute shortages of goods. In response, all five governments have pledged meaningful reform, but obstacles such as unworkable government structure, ethnic rivalries, and a variety of social tensions have made all five move cautiously.
Central Asia has a rich history to which numerous tribes and nationalities have contributed over at least 2,500 years. A vital factor in the history of the southern part of the region was its location astride the most direct trade route between China and Europe, the so-called Silk Route, which began to develop in the heyday of the Roman Empire. The Arabs and the Turks brought Islam to much of Central Asia. Meanwhile, the northern part of the region was inhabited by nomadic herding peoples, including the Turkic predecessors of the Kazaks and Kyrgyz, who also fell under the control of the Mongols.
In the sixteenth century, the Uzbeks established powerful khanates along the Silk Route. Those entities flourished until the nineteenth century, when they were overtaken gradually by the traders and settlers of the expanding Russian Empire. The Russians moved southward from the steppes of Kazakhstan in search of trade and later of the cotton that could be grown in present-day Tajikistan, Turkmenistan, and Uzbekistan. In the ensuing decades, cotton became the vital economic magnet for increased Russian occupation, and large tracts of the region were devoted to that crop to supply Russia's domestic needs.
In 1917 the region passed from the Russian Empire to the Soviet Union, with little participation by its inhabitants. Full Soviet control did not occur until the mid-1920s, as guerrilla bands continued to resist Soviet authority. In the 1920s, four of the five republics came into existence for the first time as Soviet authorities drew borders in anticipation of reordering all of Central Asian society. (Kyrgyzstan gained full republic status in 1936.) In the 1930s, the primarily agricultural region was traumatized by the forced collectivization campaign of Joseph V. Stalin's regime; episodes of widespread famine were common. (By 1900 the Kazak, Kyrgyz, and Turkmen nomads already had suffered massive disruption of their traditional lifestyles as a result of Russian settlers taking their grazing land for farms.)
Throughout the Soviet period, the Central Asian republics participated in the life of the union in a rather peripheral sense, and many phases of cultural life were unaffected by Soviet rule. Local communist parties suffered the same purges as those in other republics, but they exercised little political influence in Moscow. Regional economies were stunted by increased demands for production of cotton and other specifically assigned items. As was discovered in the 1980s, decades of Soviet intensive cultivation caused massive pollution, from which the region still suffers. Interrepublican animosities over access to scarce resources went largely ignored by Soviet authorities. The more liberal Soviet regime of Mikhail S. Gorbachev (in office 1985-91) saw increased airing of grievances that long had been withheld by the peoples of the Central Asian republics, but before 1991 no organized movement for independence had evolved from that discontent.
The five post-Soviet states of Central Asia still are defined by the arbitrary borders created in the early years of the Soviet era, and the demarcation among them still fails to correspond to the ethnic and linguistic situation of the region. Thus, Kyrgyzstan and Turkmenistan have substantial Uzbek minorities, and Tajikistan and Uzbekistan have large numbers of their respective neighbor's people. Kazakhstan has few Central Asian people of other nationalities; its largest minorities are Russian, Ukrainian, and German.
Until the 1990s, the Soviet Central Asian states were viewed from the outside world largely as parts of a single, homogeneous region. Since 1991, however, the Western world has begun to discover substantial differences in almost all aspects of those new nations. The West also has discovered the possibility of commercial gain from oil, natural gas, gold, and other natural resources abundant in the region. The presence of these materials was known in the Soviet era, but they were accessible only by way of Moscow.
In responding to their neighbors in the new independence period, the policy makers of the five states have moved in two contrary directions: toward establishing common goals and greater unity in a regional grouping, and toward individual economic and political development and identification with countries outside the region. The philosophical ideal of Pan-Turkism, an ethnically based unity concept that originated among Central Asian intellectuals in the nineteenth century, still receives support, but relatively few concrete steps have been taken to realize the ideal. Furthermore, the people of Tajikistan are of predominantly Persian rather than Turkic origin. Meanwhile, Central Asians have placed special emphasis on ethnic self-differentiation as a belated reaction against the stereotyping of non-Slavs that was common practice in the Soviet Union. That ethnic generalization continues in the Russian Federation, which still exerts enormous influence in the Central Asian republics.
The most important single cultural commonality among the republics is the practice of Sunni Islam, which is the professed religion of a very large majority of the peoples of the five republics and which has experienced a significant revival throughout the region in the 1990s. Propaganda from Russia and from the ruling regimes in the republics identifies Islamic political activity as a vague, monolithic threat to political stability everywhere in the region. However, the role of Islam in the five cultures is far from uniform, and its role in politics has been minimal everywhere except in Tajikistan. For Kazaks, Kyrgyz, and Turkmen, whose society was based on a nomadic lifestyle that carried on many traditional tribal beliefs after their nominal conversion, Islam has had a less profound influence on culture than for the sedentary Tajik and Uzbek Muslims, who have a conventional religious hierarchy.
Regional economic cooperation, another type of unity that has received substantial lip service in the 1990s, has failed to materialize on a large scale. All five republics joined the Economic Cooperation Organization (ECO -- see Glossary) shortly after independence, and Kazakhstan, Kyrgyzstan, and Uzbekistan established a limited common market in 1994. But Uzbekistan vetoed the membership of unstable Tajikistan, and Turkmenistan refused to join. Existing arrangements within the free-trade zone have not significantly promoted large-scale commerce within the group of three. For all five republics, Russia remains the top trading partner because much of the emphasis in their agricultural and industrial infrastructures remains the same as when the republics had assigned roles in supplying Moscow. Those roles and dependence on Russian trade are changing slowly in the mid-1990s, however, as diversification occurs.
Several factors encourage economic rivalry rather than cooperation. Water, a crucial resource for agriculture and power generation, has been the object of bitter bilateral and multilateral disputes both before and after independence. In the 1990s, the republics at the headwaters of major rivers, Kyrgyzstan and Tajikistan, have chafed at apportionment of water consumption favoring downstream consumers Turkmenistan and Uzbekistan, and Turkmenistan has complained about excessive water consumption by the Uzbekistanis upstream. Kyrgyzstan and Uzbekistan have come close to conflict over water in the Fergana Valley, where vital agricultural reform and land privatization programs are endangered by unresolved water disputes.
The republics still offer a similar range of commodities for trade. Their common emphasis on cotton, natural gas, and oil limits the potential for advantageous commerce within the group and fosters rivalry in trade with outside customers. Some of the commercial relationships that have developed -- such as the sale of fuels to Kyrgyzstan and Tajikistan by the other three fuel-rich republics -- have been one-sided and subject to shutdown in response to nonpayment or in attempts to gain economic and political leverage.
The five republics have several major problems in common. All remain in the economic, military, and political shadow of their giant neighbor to the north. In the mid-1990s, Russian policy makers, encouraged by a very vocal nationalist faction in the federation, speak openly of recapturing influence in the "near abroad"; Central Asia usually is the first region cited as an example. In the first two years of independence, the five republics remained in the ruble zone introduced in 1995 remained closely connected with its Russian counterpart. In 1996 Kazakhstan and Kyrgyzstan established a new customs union and other economic ties with Russia and Belarus, hoping to gain selected advantages while avoiding large-scale concessions that would increase Russian influence.
The Soviet legacy includes an economic infrastructure in which all republics depend heavily on other republics for vital inputs. A complex Soviet-designed system of pipelines and electric cables connects the five republics. Pending completion of Turkmenistan's new line to Iran, only one railroad line leading out of Central Asia connects the region with a destination other than Russia (the one line goes only to the Xinjiang Uygur Autonomous Region in China). Heavy industry in all five republics also has depended heavily on local Russian skilled labor.
The Central Asian republics also suffer common geographic disadvantages. All are landlocked and located far from potential markets outside the Commonwealth of Independent States (CIS -- see Glossary) and the Middle East. Nations such as Azerbaijan and Afghanistan, through which goods must travel overland to reach Western markets, still are quite unstable, and others such as China and Russia are powerful neighbors with a history of taking advantage of weaker nations that need commercial favors. Kazakhstan and Turkmenistan, both in need of a route to move oil and gas to Western customers, have been especially frustrated by Russia's failure to support new pipelines. The landlocked position also presents a national security obstacle.
Although the region is blessed with ample arable land, most of that land becomes useful only when irrigated. Large-scale irrigation, in turn, has taken a huge toll on the hydrological systems of the region -- in the most obvious case, the system that feeds the fast-disappearing Aral Sea. Regional cooperation on the Aral Sea problem, recognized as one of the most serious environmental crises in the world, received much lip service and little action in the first half of the 1990s. By 1995 an estimated 36,000 square kilometers of the sea's bed had been exposed, and an estimated 3 million inhabitants of nearby Turkmenistan, Uzbekistan, and Kazakhstan had developed chronic health problems associated with that process. In October 1995, a United Nations (UN)-sponsored regional conference produced the Nukus Declaration, which resulted in the promise of intensified joint efforts to stabilize the sea and a pledge of US$200 million from the UN and the World Bank for regional development and aid.
When independence was declared in 1991, none of the five republics had experienced an independence movement or had a corps of leaders who had considered how such a change might be managed. Five years after independence, in four of the states political leadership remains in the hands of the same individual as in the last years of the Soviet Union: Nursultan Nazarbayev in Kazakhstan, Askar Akayev in Kyrgyzstan, Saparmyrat Niyazov in Turkmenistan, and Islam Karimov in Uzbekistan. President Imomali Rahmonov of Tajikistan was not president in 1991, but, like his cohorts, his roots are in his republic's pre-1992 political world. Political power in all five republics is based on clan and regional groupings that make national coalitions risky and fragile. Clan rivalries have played a particular role in the civil war of Tajikistan and in Akayev's difficulties in unifying Kyrgyzstan behind a reform program.
Although all the republics had adopted new constitutions by 1995, the three government branches prescribed by those documents are severely imbalanced in favor of the executive. In all five cases, the political opposition of the early 1990s has been virtually extinguished in the name of preserving stability and preventing the putative onset of Islamic politicization. Although the new constitutions of the republics specify independent judicial branches, the concept of due process has not been established consistently anywhere.
All five republics have suffered increasing rates of crime in the liberalized atmosphere of the postindependence years. Drug trafficking, official corruption, and white-collar crime have increased most noticeably. All republics lack the resources to equip and train qualified police and specialized forces, and their judicial systems are not sufficiently removed from their Soviet antecedents to deal equitably with new generations of criminals. Evaluation and quantification of crime in post-Soviet Central Asia have been hampered by changes in responsible agencies, by irregularities in reporting procedures, and by lack of control and responsiveness in law enforcement agencies, particularly in Tajikistan. Statistics for the years 1990 and 1994 from Kazakhstan and Kyrgyzstan show dramatic increases in every type of crime, although those from the other three republics, where record keeping is known to be substantially less comprehensive, show considerable drops in many categories. In 1995 and 1996, Kazakhstan and Uzbekistan set up new, specialized police units to deal with economic and organized crime.
By far the largest of the Central Asian republics, Kazakhstan extends almost 2,000 kilometers from the Caspian Sea in the west to the border of China in the east and nearly 1,300 kilometers from central Siberia in the north to eastern Uzbekistan in the south. Despite its size, in population Kazakhstan is a distant second to Uzbekistan among the Central Asian republics. With the lowest birth rate and the highest emigration rate in the region, Kazakhstan's population has remained virtually stable for the past ten years. Kazakhstan has by far the largest non-Asian population (45 percent in 1994, equaling the Kazak population) and the smallest population of other Central Asian ethnic groups (for example, only 2 percent are Uzbek).
The largest minority in Kazakhstan is its Russian population (36 percent in 1994), which until the 1990s was the plurality group. The status of the Russians, whose number includes many irreplaceable technical experts, has been one of Kazakhstan's burning post-Soviet issues. The government has resisted making Russian an official second language, although Russian is understood by most Kazaks and used in most official communications. In May 1996, a treaty established the status of Kazak and Russian citizens in Russia and Kazakhstan, respectively, ending a long disputed aspect of the nationality issue.
Of the five Central Asian republics, Kazakhstan played the most important industrial role in the Soviet system because of the abundant coal and oil deposits in the northern sector of the republic, closest to Russia. Although the Soviet Union developed specific sectors of industry such as chemicals, metals, and military equipment, the republic also inherited an antiquated industrial infrastructure geared to feed materials into the Soviet economy. Energy industries, which also played a large part in the economy, have suffered from substantial reductions in Russia's post-Soviet demand, as have other industries that remain dependent on Russian markets.
In 1996 most of Kazakhstan's economy was still state-owned and lacked fundamental restructuring, despite large-scale privatization of smaller enterprises in the preceding years. Some large firms have been sold to solid international companies (such as the Republic of Korea's (South Korea's) Samsung, which now manages the Zhezqazghan Nonferrous Metallurgy complex and refinery), but many were awarded to unknown companies whose contracts later were cancelled. In June 1996, the government sold the country's largest oil refinery at Shymkent, Yuzhneftegaz, one of its largest oil enterprises, and the Vasilevskoye gold mine, one of the largest in the world, by public tender to foreign companies. Those sales, together worth an estimated US$1 billion, were a major departure from previous policy and were aimed at improving the confidence of international investors.
In 1996 the healthiest parts of the economy were the oil, gas, and mineral extraction industries. However, infrastructural decay and slow structural reform have delayed the recovery of those sectors from post-Soviet lethargy. Many of the state enterprises concentrated in northern Kazakhstan are far in debt and unable to pay wages to their workers. The transfer of the national capital from Almaty along the border of Uzbekistan to Aqmola in the industrial north, planned for 1998, is an attempt to revive that zone, as well as to retain the cadre of Russian technical experts who continue to leave the country.
Foreign investment in Kazakhstan has been frustrated by complex bureaucratic rules, and the domestic consumer market is restricted by the very low average wage of US$96 per month. The Western oil companies Chevron and Mobil have invested heavily in the Tengiz oil fields offshore in the Caspian Sea, but they have been frustrated by a long dispute with the consortium of Kazakhstan, Oman, and Russia over the structure of a new delivery pipeline. The common customs regime established with Russia in 1995 has accelerated trade, but conditions favored Russia in the first year.
The Central Bank of Kazakhstan, President Nazarbayev, and the Council of Ministers play a strong role in economic policy making. The bank has advocated market reform and inflation control the most strongly of the three. Experts rate Nazarbayev's economic initiatives as erratic. Government goals for 1996 included reducing inflation to 28 percent (the 1995 rate was 60 percent), reducing the budget deficit to about 3.3 percent of the gross domestic product (GDP -- see Glossary); and limiting devaluation of the tenge (for value of the tenge -- see Glossary) to a 10 percent decline against the dollar.
The exchange rate of the tenge against the United States dollar has improved steadily, allowing upper-class Kazaks to expand foreign goods purchases. For 1997 the Economist Intelligence Unit forecasts significant stabilization and recovery, with overall GDP growth of 1 percent and consumer price inflation of 45 percent. Substantial aid was expected from the International Monetary Fund (IMF -- see Glossary) in 1996. Full membership in the Islamic Development Bank, achieved in mid-1996, brought Kazakhstan additional aid for trade operations, personnel training, and infrastructure improvements.
Despite the abundance of fuel in Kazakhstan, in 1996 the republic continued to be plagued by its Soviet-era transportation system, which failed to connect population centers with distant hydrocarbon deposits within the country. As a result, in the winter of 1996-97 Almaty and others cities suffered severe shortages of electric power and heat.
In December 1996, Russia finally stopped blocking a multinational agreement to build an export pipeline that would allow Kazakhstan to sell its abundant oil directly to Western customers. Because the pipeline will not be available until 1999 or later, in 1997 Kazakhstan began shipping oil across the Caspian Sea for resale in Iran -- a procedure that risked Western condemnation because of the ongoing economic embargo of Iran.
As the Soviet Union faced dissolution late in 1991, Nazarbayev was one of the last advocates of the union's preservation in some form. Since that time, he has pursued a careful foreign policy aimed at preserving both close relations with Russia and as much as possible of his nation's economic and political independence. In domestic politics, he nominally expanded some of the republic's democratic institutions, pushing through a new constitution and a popularly elected parliament. However, Nazarbayev also consolidated his executive power steadily in the mid-1990s. Parliaments were dissolved in 1993 and 1995, and Nazarbayev made numerous changes in the personnel and structure of his cabinets, all in an effort to obtain cooperation in his reform programs. In April 1995, a referendum overwhelmingly extended the president's term to 2000, canceling the 1995 presidential election. Decrees by Nazarbayev in December 1995 and April 1996 further extended the president's powers. Nazarbayev also dissolved the Constitutional Court in 1995 and replaced members of the Supreme Court in 1996.
Party politics in Kazakhstan have not worked well, although a substantial opposition movement exists. Despite efforts by the ruling People's Unity Party (SNEK) to minimize opposition activity, the top three opposition parties gained twenty-two of sixty-seven seats in the lower house (Majilis) of parliament in the December 1995 elections, and another fourteen seats went to independent candidates. Indicating the inferior role of parliament in the Kazakhstani government, however, was the lack of competition in those elections; only forty-nine candidates vied for the forty Senate (upper-house) seats being contested. In both houses, Kazaks outnumbered Russians, by forty-two to nineteen in the Majilis and by twenty-nine to fifteen in the Senate (the president appoints seven senators).
In the Soviet era, Semipalatinsk (now Semey) in northeastern Kazakhstan was the world's largest and most frequently used test site for nuclear weapons. During the long Cold-War period of nuclear weapons testing, an estimated 1.5 to 2 million people were affected by radioactive pollution in northern Kazakhstan. Demonstrations against nuclear testing began in 1989, and a major environmental movement sprang from that opposition.
When the Soviet Union dissolved, Kazakhstan was one of four republics possessing nuclear weapons and materials. In November 1994, the United States completed Project Sapphire, which involved the purchase and removal of more than 600 kilograms of weapons-grade plutonium from Kazakhstan, whose insecure storage facilities and possible nuclear sales to Libya and Iran had aroused international concern. In May 1995, the last of Kazakhstan's nuclear weapons was destroyed, removing a major shadow from the Soviet past. The United States has promised aid in permanently sealing the Semey test site.
In the 1990s, Kazakhstan's foreign policy has continued Nazarbayev's early support of a federation among the former Soviet states, now loosely united in the CIS. Because the country's industrial and energy bases are located close to Russia's southern border, experts have identified Kazakhstan as the former Soviet republic most likely to experience Russian pressure toward reunification. Despite the strains caused by the uncertain status of the large Russian minority in his republic, Nazarbayev has maintained close relations with Russia; in early 1996, he brought Kazakhstan into a new commercial confederation with Belarus, Russia, and Kyrgyzstan. In June 1996, Prime Minister Akezhan Kazhegeldin reiterated Kazakhstan's full support for additional CIS integration (while preserving member-state sovereignty) and for the reelection of Boris N. Yeltsin as president of Russia. Meanwhile, Kazakhstan worked with Kyrgyzstan and Uzbekistan to extend the activities of the Central Asian Economic Union, which was established in 1993. At the Bishkek summit of January 1997, a treaty of "eternal friendship" guaranteed mutual security assistance among the three member nations; the summit also discussed mutual convertibility of the three currencies.
Kyrgyzstan, the second-smallest of the Central Asian republics in both area and population, is located between two giants: Kazakhstan to its north and China to its south and east. The rural population, already the largest by percentage in Central Asia, is growing faster than the cities. Like Kazakhstan, Kyrgyzstan has a minority population of Russians (22 percent in 1994) whose accelerated emigration threatens the country's technological base. The country's legal and political systems give clear priority to the Kyrgyz majority, alienating not only Russians but also the large Uzbek minority concentrated in the Osh region of southwestern Kyrgyzstan. Friction persists over control of the scarce land of the Fergana Valley, which overlaps the territory of three republics: Kyrgyzstan, Tajikistan, and Uzbekistan. The regime of President Askar Akayev (first elected in 1990) has attempted to balance sorely needed national reform programs with the demands of ethnic groups and clans that still exercise strong influence on the country's political and social structures.
Kyrgyzstan, ranked as the second-poorest republic in Central Asia, possesses a more limited range of natural resources than its neighbors. In the Soviet era, Kyrgyzstan contributed a specific group of minerals -- antimony, gold, and mercury -- to Moscow's economic plan. Of the three, only gold is a valuable asset in the post-Soviet world; it has attracted several Western investor companies. Kyrgyzstan has only limited amounts of coal and oil. The major energy resource is water power from the republic's fast-moving rivers. However, despite a government program of increased emphasis on hydroelectric power, Kyrgyzstan must import a large proportion of its energy supply. Kyrgyzstan's industry, which had been specialized to serve the Soviet military-industrial complex, suffered heavily when that demand disappeared; conversion has proven very difficult.
After independence, Kyrgyzstan suffered one of the worst economic declines among the CIS states (particularly in industrial output), despite a reform program that was deployed more rapidly than most others. Statistically, privatization was very effective, but because meaningful economic change did not occur after privatization, inefficient state enterprises continued to drag down the economy. Government and commercial corruption also diluted the effects of economic reform.
In the mid-1990s, official measurements of Kyrgyzstan's economic performance were very negative; they were, however, not completely accurate. By 1996 an estimated 30 percent of real GDP came from the "black economy" -- independent, unregistered entrepreneurs selling their wares on the street or in private shops -- while state-owned enterprises continued to go bankrupt or failed to pay their employees. However, even official GDP bottomed out in 1995; it dropped 6.2 percent after slumping by 26 percent in the previous year. The Economist Intelligence Unit forecast GDP rises of 1 percent in 1996 and 2.5 percent in 1997, the latter spurred by the opening of the Canadian joint-venture gold mine at Kumtor. In 1995 the volume of industrial production dropped 12.5 percent, and consumer goods production dropped 25.4 percent, but agriculture improved by 38.8 percent.
Other indicators are more positive, however. By early 1996, the inflation rate, which had reached 1,400 percent in 1993, was about 1 percent per month. The government's goal was to halve the end-of-1995 rate by the end of 1996. The exchange rate of the som (for value of the som -- see Glossary) remained stable in 1996 at eleven to US$1. The budget deficit remained high at about 12 percent of GDP, with foreign loans applied to make up the shortfall.
Foreign investment remained very sparse in 1996. Many joint ventures with Turkey have failed, and the sale of Kyrgyzstani firms to foreign investors has provided embarrassingly little revenue for the government. International loans continue, but Kyrgyzstan already has fallen behind in repayments to Russia and Turkey. Repayment of pending international debts inevitably will raise the national debt. Debt and the failure of foreign investment have forced Kyrgyzstan to rely more heavily on Russia. The customs union that Kyrgystan joined with Belarus, Kazakhstan, and Russia early in 1996 will add to Moscow's power over Kyrgyzstan's trade policy.
At the same time, Kyrgyzstan's parliament has resisted reform legislation that would modernize the tax code and privatization of large state enterprises in energy, telecommunications, mining, and aviation. According to a government estimate, as many as 70 percent of privatized enterprises were bankrupt in 1996 because, under existing economic conditions, they simply lacked customers. A limited capital market includes the Kyrgyzstan Stock Exchange, which opened in early 1995, and some independent brokerage houses, but because there is no legal framework or government regulation for capital exchange, cash transactions were few in 1996.
Although President Akayev began his regime with ideals of multiparty democracy, strong opposition stymied his reform programs and moved him gradually closer to the authoritarian positions of his four Central Asian colleagues. Power struggles between the legislative and executive branches of government promoted Akayev's expansion of executive power. In the mid-1990s, two elections -- the first reelecting Akayev by a huge margin in December 1995 and the second giving 95 percent approval in a referendum on extending his power in February 1996 -- were approved by international observers as free and fair, although the opposition claimed otherwise. The referendum empowers the president to conduct domestic and foreign policy and to name and dismiss cabinet ministers and judges without consulting parliament. The parliament retains approval rights over the presidential appointment of the prime minister, Supreme Court judges, and other officials, but the president may dissolve parliament if it fails three times to approve a nominee. Akayev had argued that centralizing presidential power was necessary to speed economic, political, and legal reform and to reduce the influence of regional political centers. In March 1996, he exercised his new power by securing the resignation of the government, naming four new ministers, and redesignating the positions of five others. He also reorganized local government to reduce the power of provincial leaders and assign them direct responsibility for enactment of national reforms.
In May 1996, a new government document described social conditions and listed goals for social programs in the ensuing years. Kyrgyzstan, which has made earnest efforts to maintain social support programs in the lean years of the 1990s, is emphasizing job creation and prevention of unemployment, reorganization of social insurance and pension systems, and reforms in education and health care. The official unemployment figure in mid-1996 was 76,600; about 60 percent of the unemployed received unemployment benefits. The government goal is to keep unemployment below 100,000 while mounting a new, long-term job creation program. In 1996 a proposal was made for a government-controlled social fund to run a uniform state insurance and pension system that would remove the severe inequities of Kyrgyzstan's current system.
Meanwhile, nearly one-third of the population (1.257 million) are estimated to live below the poverty line, and the 14,000 refugees arriving annually from Tajikistan create additional social pressures. Kyrgyzstan became a preferred refugee destination when Kazakhstan and Uzbekistan tightened their migration controls in 1993.
In the 1990s, Kyrgyzstan's foreign policy has been shaped by the small country's reliance on Russia for national security. In 1996 President Akayev reiterated that Kyrgyzstan always would view Russia as a natural ally and partner. At the same time, Kyrgyzstan has appealed to the North Atlantic Treaty Organization (NATO -- see Glossary) and the Organization for Security and Cooperation in Europe (OSCE -- see Glossary) to replace the CIS force in Tajikistan and, in fact, to guarantee the security of the entire region -- a position at odds with Russia's strong opposition to NATO influence anywhere in the former Warsaw Pact regions. However, in early 1997 Akayev backed Russia's opposition to NATO expansion in Europe. In 1996-97 Kyrgyzstan diversified its national security policy somewhat by participating in the Central Asian peacekeeping battalion under the aegis of the Central Asian Economic Union.
Difficult relations with Central Asian neighbors increase the need for an outside source of security. Uzbekistan, which has a 13 percent minority population in western Kyrgyzstan, has flexed its muscles by shutting off fuel supplies. Kyrgyzstan depends heavily on the Kazakhstani capital, Almaty, for air traffic in the absence of a first-class domestic airport. Unresolved border issues and a continuing flow of civil war refugees have inflamed relations with Tajikistan. Greatly expanded trade relations with China also have brought large numbers of Chinese merchants who threaten to stifle domestic commerce in some Kyrgyzstani cities. Kyrgyzstan has expressed the need to balance its policy between China and Russia, and has praised China for its relative restraint in exerting influence over Central Asia.
Located on the western slopes of the Pamir Mountains, Tajikistan occupies one of the most rugged and topographically divided regions in the world. Possessing extremely convoluted frontiers, it borders Uzbekistan to the west, China to the east, Afghanistan to the south, and Kyrgyzstan to the north. Tajikistan is the smallest in area and third-largest in population of the Central Asian republics. Unlike the ethnically dominant groups of the other four republics, the Tajiks have a culture and a language based on Iranian rather than Turkic roots. Despite their differing cultural backgrounds, the Tajiks and the Uzbeks did not consider themselves separate until the Soviet Union's artificial demarcation of the republics in the 1920s. (Until 1929 the Autonomous Republic of Tajikistan was part of the Soviet Socialist Republic of Uzbekistan.)
The Soviet Union brought Tajikistan significant advancement in education, industry, and infrastructure compared with the primitive conditions of 1917. In the mid-1990s, however, the country remained the most backward of the Central Asian republics, partly because of specifically focused Soviet development policies and partly because of topographical factors that enormously complicate exploitation of existing resources.
In the Soviet system, the Tajikistani economy was designed to produce cotton, aluminum, and a few other mineral products, including uranium and gold. Waged across a large portion of the republic, the civil war has caused great and lasting damage to the national economy. In 1994 damage to industry was estimated at about US$12 billion. Production levels in all industries had dropped an estimated 60 percent in 1994 compared with 1990. Many Germans and Russians, a high percentage of the country's key technical personnel, fled the civil war. The rate of inflation was steep in 1992-93.
In 1996 Tajikistan's economy still was in desperate condition. It remains the least attractive of the former Soviet republics for foreign investment. Only the export of cotton and aluminum has brought significant profits. A joint cotton venture with the United Arab Emirates was scheduled to begin in mid-1996. In 1995 the Regar (Tursunzoda) aluminum plant produced 230,000 tons of primary aluminum, about half its capacity but enough to make aluminum the second-largest export product. As it was earlier in the 1990s, aluminum production has been limited by continued reliance on imported raw materials and energy. Tajikistani industry remains handicapped in general by the country's inability to pay foreign energy suppliers.
Some movement toward economic reform was seen in 1996, although the unreliability of performance statistics makes evaluation difficult. Prime minister Yahyo Azimov, who took office in February 1996, has stressed the need for quick privatization and assistance from the IMF and the World Bank. In early 1996, controls were lifted on bread prices, a move that led to riots in some cities but that was considered a sign of commitment to market reform. The Azimov government set a 1996 budget deficit cap of 6 percent of GDP. In mid-1996 the World Bank was considering a loan of US$50 million, but the IMF withheld aid pending improvement of foreign exchange and other conditions. The privatization target for the end of 1996 was 50 percent of total enterprises, after only 8 percent of the country's enterprises were privatized in the first four years of independence. The Economist Intelligence Unit forecast additional GDP reductions of 12.4 percent in 1996 and 10 percent in 1997.
In 1996 and 1997, Tajikistan attempted to join regional organizations that would improve its economic position. The customs union of Belarus, Kazakhstan, Kyrgzstan, and Russia considered Tajikistan for membership, but the Central Asian Economic Union of Kazakhstan, Kyrgyzstan, and Uzbekistan refused Tajikistan's overtures.
Some improvements were made in 1995-96 in Tajikistan's woefully shabby infrastructure. The Daewoo firm of South Korea modernized the telephone system, and United States, German, and Turkish firms were scheduled to add new features. The Dushanbe Airport still needs modernization, although in the mid-1990s regular flights were established to Moscow, India, and some other points.
Especially in comparison with the stable regimes that have dominated the other republics since 1991, the political scene in Tajikistan has been unsettled from the day of independence onward. Throughout the 1990s, an old guard with roots in the Soviet era parried the efforts of various opposition groups to share or monopolize power. In 1992 a short-lived coalition government broke down, sending the country into a civil war that was won nominally when the old guard forces captured Dushanbe and named Imomali Rahmonov chief executive. But conflict persisted, based partly on the geographical and clan divisions of the country and partly on the political question of reform versus reaction. Between 1993 and 1996, fighting flared, mostly in limited engagements, in several regions of Tajikistan and across the border in Afghanistan. In 1993 a multinational CIS force, dominated by Russian units, entered the country with the primary mission of enforcing the southern border, across which opposition forces had received substantial support. In early 1994, the UN arranged a first round of peace talks, and five more rounds followed over the next two years. None of the talks led to an agreement on peace terms, however.
In 1996 Tajikistan's political situation remained as unstable as it had been for the previous three years. The Rahmonov regime was unable to defeat rebel forces or to compromise enough to reach a satisfactory agreement with them. As it had in the previous three years, Russia failed to bring the government and the opposition to the peace table. Meanwhile, continued instability provided Russia the pretext for maintaining substantial "peacekeeping" forces in a key region of the former Soviet Union. The situation has led some outsiders to doubt the sincerity of Russia's efforts to bring peace to the area.
In early June 1996, the civil war in Tajikistan intensified once again, and observers saw similarities between Russia's military activity there and its occupation of Chechnya. Russian air attacks on opposition villages in south-central Tajikistan contravened the latest three-month extension of the UN-sponsored cease-fire (originally signed in 1994), which had been set in May. In a new campaign apparently coordinated with Moscow, Tajikistani troops moved with Russian air support eastward into the country's narrow central corridor toward opposition strongholds. Meanwhile, in May the Rahmonov regime refused to reconvene UN-sponsored talks as scheduled, and the UN Observer Mission in Tajikistan (UNMOT) was refused access to the combat zone. In August 1996, opposition troops moved close to Dushanbe amid intensified fighting that ended yet another cease-fire agreement.
In the fall of 1996, the government's military position was unfavorable as rebel forces drove from Afghanistan into central and eastern Tajikistan. In December Rahmonov signed a peace agreement with Sayed Abdullo Nuri, leader of the opposition Islamic Rebirth Party. The agreement called for a National Reconciliation Council that would be a forum to negotiate the terms of a permanent peace. In the months that followed, the Rahmonov government negotiated with the United Tajikistan Opposition to reintegrate the political and military organizations of the two sides. Scattered fighting continued into the spring of 1997, however.
According to a Russian report in May 1996, the Tajikistani army was lacking 40 percent of its nominal officer cadre, and only 40 percent of those in service, many of them callups from the reserves, had a military education. The Tajikistani force was evaluated as inferior to its opposition in training and armament. Instances of troop mutiny reinforced that opinion, paralleling the situation in Afghanistan during the 1980s. In both Tajikistan and Afghanistan, Russian troops operated in a highly unstable civil war atmosphere, and the opposing sides were deeply divided within themselves.
As the civil war continued, the Rahmonov regime took steps to avoid internal sources of opposition. Although the new constitution approved in November 1994 contained substantial guarantees of human rights (also staples of all the Soviet-era constitutions), prescribed legislative and review functions for the legislature, and mandated an independent judiciary, in fact the country's governance amounted to one-man rule based on declarations of emergency executive powers extended from 1993 and 1994. The result has been imprisonment, exile, and assassination of opposition political figures and some foreign observers. Rahmonov won a decisive victory in the presidential election of 1994, with opposition only from a second hard-line politician of similar background, in what was generally labeled a rigged outcome. The unicameral legislature offers decisive majority support for Rahmonov's programs, and the judiciary is fully under the control of the president, who has the power to dismiss any judge. The Gorno-Badakhshan Autonomous Province, which accounts for nearly 45 percent of the republic's territory, has disputed status and is a main stronghold of separatist opposition forces.
Tajikistan's foreign policy increasingly has sought the economic and military security of close relations with Russia. In Tajikistan, the Russian minority enjoys a more liberal set of privileges than it finds in any other Central Asian republic. For example, Russians are allowed dual citizenship and Russian remains an official language. In April 1996, Rahmonov appointed the Russian mayor of Dushanbe, Yuriy Ponosov, as first deputy prime minister, continuing the policy of granting high government positions to ethnic Russians. Despite favorable treatment of the Russian minority, Russians have fled Tajikistan steadily since 1992. In early 1996, only about 80,000 of the 500,000 Russians identified in the 1989 Soviet census remained. Most have complained that Russian government authorities did not afford them adequate aid or security in Tajikistan, leaving them no choice but to leave.
Turkmenistan was known for most of its history as a loosely defined geographic region of independent tribes. Now it is a landlocked, mostly desert nation of only about 3.8 million people (the smallest population of the Central Asian republics in the second-largest land mass). The country remains quite isolated on the eastern shore of the Caspian Sea, largely occupied by the Qizilqum (Kyzyl Kum) Desert. Traditional tribal relationships still are a fundamental base of society, and telecommunications service from the outside world has only begun to have an impact. Like the Kazaks and the Kyrgyz, the Turkmen peoples were nomadic herders until the second half of the nineteenth century, when the arrival of Russian settlers began to deprive them of the vast expanses needed for livestock.
Agriculture contributes about half of Turkmenistan's GDP, whereas industry accounts for only about one-fifth. However, irrigation is necessary for nearly all the republic's arable land. In the early 1990s, government subsidies protected consumers from the shock of leaving the insulated Soviet system. Nevertheless, the standard of living protected by those subsidies had been among the lowest in the Soviet Union, and it deteriorated further in the 1990s. Although the Niyazov regime launched ambitious privatization programs in 1992 and 1993 -- with energy, transportation, agriculture, and communications to remain under state control -- only minor progress had been made toward the programs' goals by the mid-1990s. Progress also has been quite slow in the reform of commercial and banking legislation.
Turkmenistan played a vital role in the Soviet system as a natural gas supplier. In the post-Soviet period, Russia remained the republic's top trade partner, with Turkey moving into second place in the mid-1990s. A crucial rail link with Iran also was an important commercial improvement.
The single most important mineral resource is natural gas; Turkmenistan's reserves may be among the largest in the world, with estimates as high as 15 trillion cubic meters. Nearly all the republic has been identified as potentially productive, and important offshore reserves exist in the Caspian Sea. The second major resource is petroleum, of which Turkmenistan has an estimated 63 billion tons. However, the range of the republic's mineral resources is small: sulfur, mineral salts, and clays complete the list.
In the mid-1990s, Turkmenistan's economic policy continued to rely heavily on the West's demand for natural gas. But, for a nation isolated along the east coast of the Caspian Sea, gas sales depend strictly on pipeline movement. Existing lines, built to serve the Turkmenistan-Russia north-south axis, cannot fill this need. New lines moving from east to west have been planned, but all plans encounter strong geopolitical opposition from a regional power or from the United States. Until the pipeline problem is solved, Turkmenistan can sell gas only to the same customers it served in the Soviet era, who now are its impoverished fellow members of the CIS. Armenia and Ukraine, major CIS customers, have been chronically late in paying. In February 1996, Turkmenistan made a long-term agreement to sell as much as 15 billion cubic meters of gas per year to Turkey between 1998 and 2020. Turkey also received development rights for a field in Turkmenistan believed to contain 20 million tons of oil.
Many recent economic indicators can only be approximated because Turkmenistan has not issued precise statistics. The national currency, the manat (for value of the manat -- see Glossary), was devalued in late 1995 from a ratio of 500 to US$1 to 2,100 to US$1; it has remained non-convertible. It is believed that inflation in 1995 exceeded 1,000 percent; the 1996 annual rate, 140 percent, still was the highest in Central Asia. Exports for 1995 were about US$1.9 billion and imports about US$1.5 billion in official estimates. However, Turkmenistan conducts much barter trade, and payment failures of gas customers further undermine the application of cash trade figures. For 1996 the Economist Intelligence Unit forecast a 5 percent reduction of GDP following a drop of 15 percent in 1995. It also forecast a reduction in inflation in 1996 to 800 percent and a further drop in the value of the manat to a rate of 3,000 to US$1.
The state still strongly dominates the national economy. Little private enterprise occurs without some form of government approval or support, and about 90 percent of the work force is in state enterprises. In 1996 plans called for modernization of tax and business laws, including joint-venture conditions for the oil and gas industries. Pending those developments, foreign investors face a mass of state bureaucracy.
Foreign investment has been small, and experts predict no short-term improvement, partly because of the republic's insufficient legal and bureaucratic infrastructure, and partly because the very small and impoverished population provides little market opportunity. (The official average monthly wage was US$7 in early 1996.) The European Bank for Reconstruction and Development (EBRD) and other international banks are funding a textile complex, and Ashgabat Airport will be modernized with a loan of US$31 million from the British Export Credit Agency. However, for 1996 total direct investment was only US$32 million, with another US$61 million in joint ventures and US$161 million in foreign loans.
Turkmenistan has pursued the most independent and pragmatic foreign policy of the five Central Asian republics. The overall goal has been to form advantageous regional relationships without becoming involved in regional conflicts such as the Tajikistani civil war. In December 1996, Turkmenistan passed legislation declaring permanent neutrality and prohibiting membership in any military or political-military alliance entailing responsibilities for collective action by its members.
President Niyazov has run the country's foreign policy personally; he has faced little pressure at home to orient policy in a particular direction. Thus, he has been able to form ties with diverse foreign nations, maintaining economic advancement as the primary goal. Through the mid-1990s, Iran has been the top regional partner, although national security relations with Russia also have been a high priority during that period. In 1995 Turkmenistan signed a series of bilateral agreements with Russia, expanding economic and political cooperation and proclaiming the two nations "strategic partners" through 2000.
Turkmenistan has explicitly avoided multilateral arrangements, most of them sponsored by Uzbekistan, with the other Central Asian republics. It refused membership in the Central Asian customs union established by Kazakhstan, Kyrgyzstan, and Uzbekistan in 1994, and in the Central Asian Economic Union that sprang from the initial agreement. Turkmenistan also contributed nothing to the CIS peacekeeping force sent to Tajikistan by those three nations and Russia in 1993. Substantial tension has arisen with Uzbekistan over water consumption, competition on the world cotton market, the Uzbek minority population's potential for unrest, and resentment of Uzbekistan's ambitions for regional leadership. By the end of 1995, tensions with Uzbekistan were so high that Turkmenistan boycotted all regional meetings. However, in January 1996 a meeting of the two nations' presidents produced a package of economic cooperation agreements, and new agreements on road and railroad transportation were discussed in the first half of 1996.
Uzbekistan is the third-largest of the Central Asian republics in area and the first in population (estimated at 23 million in 1994 and growing at the fastest rate in Central Asia). Uzbekistan is completely landlocked between Kazakhstan to the north, Turkmenistan to the south, and Kyrgyzstan and Tajikistan to the east. It shares the Aral Sea, and hence the environmental problems of that area, with Kazakhstan. The territory of modern Uzbekistan was at the center of the rich cultural and commercial developments that occurred in Central Asia over a period of two millennia, especially along the axis defined by the Silk Route between Europe and China. Included in Uzbekistan are the three chief Silk Route outposts of Bukhoro (Bukhara), Khiva, and Samarqand (Samarkand).
Besides the agricultural base that yields cotton, vegetables, and grain, Uzbekistan's economy is blessed with gold, several other valuable minerals, and substantial reserves of energy resources, especially natural gas. In the mid-1990s, the economy still is based primarily on agriculture, following substantial increases in irrigation-dependent output in the 1970s and 1980s. Cotton remains the most valuable crop, and Uzbekistan is the fourth-largest cotton producer in the world.
Uzbekistan has suffered from high inflation, mainly because the state has continued Soviet-era social protection programs, bank credits for unprofitable enterprises, budget deficits, and price supports that require expanding the supply of money. As inflation has redistributed wealth, many Uzbekistanis have suffered substantial losses of real income. By 1994 annual inflation reached 1,300 percent, but government restrictions in 1995 lowered the year-end figure to 77 percent.
Throughout the post-Soviet period, a primary goal of Uzbekistan's economic reform policy has been to avoid the disruptions associated with rapid transition. While proclaiming the eventual goal of a market economy, economic planners have moved very slowly in privatization and in the creation of a Western-style financial sector that would offer economic incentives and encourage private entrepreneurial initiative. This strategy has succeeded in reducing the transition shocks experienced by other post-Soviet societies. Since independence, Uzbekistan's GDP has fallen about 20 percent, compared with the Central Asian average of 50 percent. Part of that moderation results from Uzbekistan's initially more favorable situation in 1992. Because the cotton monoculture gave Uzbekistan a commodity with sales value worldwide (in 1995 some 75 percent of cotton exports went outside the CIS) and because Uzbekistan was less dependent on foreign trade and imported energy supplies than the other Central Asian countries, the end of the Soviet Union imposed fewer economic hardships. The 1995 cotton crop, expected to set a record, was significantly below forecast levels, however. Meanwhile, in 1996 the republics of the region continued nominal efforts to improve the Aral Sea environmental disaster, amid significant doubts that Uzbekistan would sacrifice cotton irrigation water from Aral tributaries to achieve that goal.
In late 1995, the IMF lent the regime US$260 million for economic reform, the first money accepted by Karimov from the IMF. In its evaluation at that time, the IMF noted that Uzbekistan's structural reform had been slow, notably in the banking sector, but that its tight monetary policy had slowed the economy's previous runaway inflation and liberalization of foreign exchange had been effective. Inflation for 1995 was 77 percent; the IMF year-end inflation target for 1996 was 21 to 25 percent; the exchange rate of the Uzbekistani som (for value of the som -- see Glossary) fell from thirty to the United States dollar in 1995 to thirty-five to the dollar in 1996. The Economist Intelligence Unit forecast a 1996 drop in GDP of 1 percent, followed by growth of 1 percent in 1997. The projected budget deficit for 1996 was 3.5 percent of GDP, which conforms with IMF loan guidelines. An IMF credit of US$124 million was granted in December 1995.
Uzbekistan's economy is one of the most stable in the Central Asian region, and foreign investment activity there has been the highest in the region. In December 1995, the United States Overseas Private Investment Corporation agreed to provide US$500 million to convert the Soviet-era military industry, and United States oil companies committed US$1.3 billion of long-term investments in the oil and gas industry. Uzbekistan is the regional distribution center for electronic and domestic appliances from Dubai, based on a favorable tariff system that places no tax on most imports (a 15 percent tariff was levied on electronics in 1996). A large Daewoo (South Korean) television and videocassette plant in Tashkent is the most visible foreign electronics enterprise. The British Massey-Ferguson firm plans an agricultural machinery plant at some future date, and the British Quickstop supermarket chain opened outlets in Tashkent in 1996. Although some improvement has been made in Uzbekistan's tax and legal system, the dominance of the state bureaucracy continues to complicate foreign investment.
In 1996 the Karimov regime became noticeably less cautious in its approach to economic reform. Karimov criticized some bureaucrats for hindering execution of reform decrees, and the president began advocating private enterprise as the surest path to individual and national prosperity.
Overall foreign trade goals still include expanded commercial agreements with East Asia and the West, but by 1996 Uzbekistan had expressed willingness to join a customs union with Belarus, Kazakhstan, and Russia, which already had reached a series of commercial accommodations early in 1996. Self-sufficiency in oil, gained for the first time in 1996, has freed Uzbekistan from dependence on Russia in a key area.
Uzbekistan's position as the only Central Asian state bordering all the other four has combined with other advantages (the largest population in the region and significant natural resources) to advance its claim as the leader and potential unifying force of the Central Asians. That putative role also has gained Uzbekistan considerable distrust among the other four republics, each of which has a significant Uzbek minority population and each of which has felt the impact of Uzbekistan's drive for supremacy in different ways. In 1992 Uzbekistani troops -- the best-equipped in Central Asia -- were instrumental in the triumph of Imomali Rahmonov's communist forces in Tajikistan, and since that time Uzbekistan has participated in the CIS force attempting to keep the peace in that country. In tandem with its drive for Western economic ties and privatization, in 1996 Uzbekistan intensified its promotion of regional economic and security agreements. Partly as a counterweight to Russia's influence in the region, Uzbekistan has encouraged broader activities by the Central Asian Economic Union, which it shares with Kazakhstan and Kyrgyzstan. In 1996 the most notable departure from dependency on Russia was establishment of the Central Asian peacekeeping battalion, which held an initial exercise in the United States under the auspices of the NATO Partnership for Peace program. In January 1997, the economic union's members signed a treaty of "eternal friendship" that included mutual security guarantees.
The armed forces, which had inherited a substantial infrastructure from the Soviet period, were the best-equipped force in the region by 1996, after developing steadily in the interim years. In 1996, Uzbekistan's armed forces numbered 30,000 persons, including 25,000 ground and 4,000 air force troops. At that time, the government announced that ethnic Uzbeks constituted 80 percent of the country's armed forces, compared with 6 percent in the former Soviet force of 1992.
After independence, much of Uzbekistan's political structure remained essentially unchanged. Although some impetus had existed toward more democratic governance prior to independence, Karimov set the tone for political activity by winning a rigged presidential election in 1991. The new constitution approved in December 1992 prescribed a secular, multiparty democracy with full observance of human rights. However, the trial and harassment of opposition political figures and the restriction of the media began immediately; international protests in the next few years achieved scant results. Only two parties, Karimov's and a token opposition group, were permitted to participate in the parliamentary election of 1994. In March 1995, a rigged referendum extended the presidency of Karimov until 2000. Shortly thereafter, Karimov sentenced seven leaders of the political opposition to prison terms. Although the stable atmosphere fostered by Karimov's regime had tended to soften international criticism, Uzbekistan's human rights record still left much to be desired. In 1995 and 1996, however, a general improvement in government observation of human rights was noted; the government apparently has attempted to attract Western investors by responding to criticism of its handling of human rights cases. Two new political parties were formed and registered officially in mid-1995.
Uzbekistan's relations with Russia have been characterized by a combination of resentment and dependence, representing one of the few areas where the Karimov regime does not exercise full control. Although Karimov has strongly encouraged business activities by Western countries, especially Germany, he has been careful not to alienate Russia's commercial interests. In 1994 and 1995, Uzbekistan signed commercial treaties with a variety of CIS countries, but Russia always was the primary partner in such deals.
The issue of dual citizenship for the Russian minority in Uzbekistan, strongly pressed by Russia in the early 1990s, has caused serious irritation, as did Russia's unsuccessful pressure for Uzbekistan to remain in the ruble zone in 1993. Like the other Central Asian republics, Uzbekistan has suffered a rapid loss of its Russian technocrat population. Since independence, an estimated 500,000 Russians (out of the 1.65 million in 1989) have left, and the emigration of Germans, Jews, and Koreans further depleted the republic's base of technical know-how.
Just beyond the borders of Central Asia, Uzbekistan has established new relationships with Iran, Pakistan, and Turkey, based chiefly on economic exchanges. Stimulated by the economic stability of Uzbekistan, international lenders such as the EBRD and the IMF have offered fairly generous loans. The United States, conscious of human rights violations, has offered less generous assistance to Uzbekistan than to other Central Asian countries.
The republics of Central Asia emerged from the Soviet Union with a combination of assets and handicaps. Their geographic isolation has complicated establishment of commercial relationships, and even name recognition, in the West. The complete lack of democratic tradition has kept the republics from complying with Western legal and commercial standards, and the expression of political dissent has been erratic and sometimes costly to dissenters. Serious deterioration of the Soviet-era education systems in all five countries threatens to diminish the capabilities of the next generation to contribute to the national economies at a time when those economies may be ready to flourish. At the same time, ample natural resources hold out the prospect that at least the republics most blessed in this way -- Kazakhstan, Turkmenistan, and Uzbekistan -- may ultimately enrich their economies and hence the standard of living of their people. The prospect of full regional cooperation remains only theoretical, in spite of numerous bilateral and trilateral agreements. And relations with Russia, traditionally the dominant outside force in Central Asia's geopolitical situation, remain close and vital, although fraught with misgivings. In early 1997, the future of the region remained nearly as unclear as it was in 1991, the year of independence.
Data as of March 1996
Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on Factba.se.
Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Kazakhstan was first published in 1996. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.
Kazakhstan Main Page
Country Studies Main Page
Section 5 of 65
Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on Factba.se.
(лв) Kazakhstan Tenge (KZT)
Convert to Any Currency