MAY 20 2017 (The Conway Bulletin) — In yet another sign of improving Turkmenistan-Uzbekistan relations, the countries’ state-run energy companies pledged to jointly develop Caspian Sea oil and gas fields. It’s unclear if this deal has a practical bent to it or if it is designed simply to be an eye- catching bilateral deal.
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(News report from Issue No. 330, published on May 28 2017)
MAY 23 2017 (The Conway Bulletin) — In a deal described as groundbreaking, Uzbek officials agreed to allow the country’s electricity infrastructure to be used to export power produced in Turkmenistan to Kazakhstan and Kyrgyzstan. Analysts said that the deal, unveiled around yet another trip to Turkmenistan by Uzbek president Shavkat Mirziyoyev, showed that cooperation across the region had improved with the death last year of Uzbekistan’s Islam Karimov. Under the terms of the deal, Turkmenistan will send power to the Uzbek grid in exchange for the cancellation of its debt to Uzbekenergo.
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(News report from Issue No. 330, published on May 28 2017)
MAY 28 2017 (The Conway Bulletin) — Uzbekistan’s Central Bank chief, Fayzulla Mullajanov, died on May 24. He was 67-years-old and was perhaps the world’s longest serving Central Bank chief, officially holding the position since independence from the Soviet Union in 1991.
According to media reports, Mullajanov had been suffering from a kidney disease for sometime. In 2013 Ferghana News even reported that Mullajanov had fallen into a coma. This was denied but it is doubtful that Mullajanov has exerted much influence over Uzbekistan’s monetary policy in the last few years — either because he hasn’t been well enough or he simply hasn’t been empowered.
Appointed by Islam Karimov to head the Central Bank, Mullajanov was your archetypal Soviet-style official, prepared to put on a brave face and carry through decisions made by others.
He didn’t make monetary policy but he was expected to sell it.
This was clear from a US embassy report from May 2009 published, later, by Wikileaks.
In the cable, the US ambassador to Uzbekistan at the time, Richard Norland, recounted a series of meetings he had with senior Uzbek officials during a trip to Tashkent by deputy assistant US trade representative Claudio Lilienfeld. Mullajanov featured in the dispatch but only towards the bottom.
“After listening to a half hour recitation of Uzbekistan’s economic success and successes in the banking sector, Lilienfeld remarked that a major disincentive for US businesses to invest in Uzbekistan is the difficulty with capital convertibility,” Norland wrote.
“Expressing surprise that convertibility could be an issue, Mullajanov responded that conversion is done by the commercial banks. He assured us that he would personally look into any convertibility problems if they are brought to his attention in writing.”
Nothing more was said of Mullajanov in the memo, but Norland’s exasperation towards the Uzbek Central Banker was tangible. Mullajanov had been rolled out to sell Uzbekistan as a serious economy to the visiting US delegation. The reality was, as everybody knew, Karimov called the shots.
Uzbekistan’s monetary policy is dominated by its currency and this is set by central government. Mullajanov, who had only ever worked at the Uzbek Central Bank, was the face of this policy but not the architect.
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(News report from Issue No. 330, published on May 28 2017)
MAY 27 2017 (The Conway Bulletin) — Uzbekistan’s Shavkat Mirziyoyev ordered his government to set up a consortium of banks designed to support home-based businesses, media reported. The finance could be important in Uzbekistan where many businesses are based at home.
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(News report from Issue No. 330, published on May 28 2017)
TASHKENT, MAY 26 2017 (The Conway Bulletin) — Highlighting an increase in coffee consumption across Central Asia and the South Caucasus, Russian coffee shop brand Shokoladnitsa said that it was working on a deal to open its first cafes in Uzbekistan and Georgia.
For Uzbekistan in particular, the opening of Shokoladnitsa branded coffee shops would herald a new era and open up opportunities for other companies looking to invest in Central Asia’s most populous country. There are currently no high street coffee shop chains in Uzbekistan. Uzbeks are also renowned for their love of sipping light green tea out of piala, a small handleless bowl, rather than drinking mugs of black coffee.
In an interview with the Russian-language Rambler website, Maxim Trubnikov, director of regional development and franchising at Shokoladnitsa, said he expected to open five shops in Uzbekistan and eight new shops in Kazakhstan.
“Currently, we are working with Georgia, Uzbekistan, negotiations are underway for the opening of the brand in Kazakhstan,” he said.
“I expect that we conclude the contracts in the coming months.”
Shokoladnitsa also owns the Coffee House and Wabi Sabi brands. It was one of the original coffee shop brands to expand across Russian, serving americanos and cappuccinos since 2000.
It already has franchises in Astana, Almaty, Yerevan and Baku. The coffee scene has become increasingly developed in Kazakhstan with the emergence of several coffee shop chains over the past few years, including Starbucks.
In Uzbekistan, a Bulletin correspondent said a coffee culture was slowly spreading through independent cafes in Tashkent but that tea was predominant.
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(News report from Issue No. 330, published on May 28 2017)
MAY 24 2017 (The Conway Bulletin) — The head of Uzbekistan’s Central Bank, Fayzulla Mullajanov died aged 67 from complications linked to kidney disease, media reported. Mullajanov had been head of the Central Bank for 14 years and retained his position when Shavkat Mirziyoyev took over as president after Islam Karimov died in September 2016. In reality, the Uzbek Central Bank has little independence from central government.
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(News report from Issue No. 330, published on May 28 2017)
MAY 16 2017 (The Conway Bulletin) — French car producer PSA, the maker of Peugeot and Citroen cars, signed a deal with Uzbekistan’s state-owned Uzavtosanoat to set up a factory in the Free Industrial Zone of Jizzakh, media reported. The plan is to produce light commercial vehicles for the Uzbek and wider Central Asia markets. For Uzbekistan, attracting investment from PSA is a major success. It already operates a JV with the US’ GM. The car market, though, has slumped over the last few years as the economies in Central Asia and Russia, a major market, have dipped.
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(News report from Issue No. 329, published on May 20 2017)
MAY 19 2017 (The Conway Bulletin) — Uzbek President Shavkat Mirziyoyev travelled to Turkmenistan for the second time in 10 weeks, an indication of just how important he regards bilateral relations. Mr Mirziyoyev’s interest in Turkmenistan lies in stark contrast to his predecessor, Islam Karimov, who preferred an isolationist stance. Mr Mirziyoyev’s first overseas trip as president was made to Ashgabat in March.
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(News report from Issue No. 329, published on May 20 2017)
MAY 10/11 2017 (The Conway Bulletin) — The UN High Commissioner for Human Rights, Zeid Ra’ad Al Hussein, finished a tour of Uzbekistan by saying that in general he was confident that the country, often derided as one of the worst in the world for human rights, had started to mend its ways.
Mr Zeid’s visit was the first by a UN Human Rights Commissioner to Uzbekistan since independence from the Soviet Union in 1991. It has been viewed as a turning point in Uzbek relations with international institutions and a major PR victory for Uzbek President Shavkat Mirziyoyev who has been looking to woo global institutions.
In a statement at the end of his two night trip to Uzbekistan, Mr Zeid said that he had been impressed by the new Uzbek administration’s endeavor setting up a series of units to improve human rights.
“Uzbekistan is, in my view, at a crossroads. The volume of constructive human rights related proposals, plans and new legislation that has emerged since President Mirziyoyev took up the office is remarkable,” he said.
“It is going to be a long and difficult road to get near that point [improved human rights], with obstructions and setbacks, but I do believe the journey has begun.”
The New York-based Human Rights Watch issued a statement afterwards saying that Uzbekistan’s rhetoric now needed to be turned into action.
Mr Mirziyoyev, inviting Mr Zeid to tour Uzbekistan was a risk. In the end, though, he appears to have impressed Mr Zeid. He wants to improve Uzbekistan’s image to give it access to finance, which is increasingly linked to human rights, and gain more acceptance.
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(News report from Issue No. 329, published on May 20 2017)
MAY 11-14 2017 (The Conway Bulletin) — A slew of Central Asian officials flew to Beijing to meet with Chinese President Xi Jinping for bilateral talks and also regional development. Visitors included Kazakh President Nursultan Nazarbayev, Kyrgyz President Almazbek Atambayev and Uzbek President Shavkat Mirziyoyev, on his first visit to China since becoming Uzbek leader in September last year. China has become an important driver of economic development in the region with its ‘One Belt, One Road’ policy that envisions Central Asia as a stagepost for Asia-Europe trade. The Central Asian leaders returned home with billions of dollars worth of deals.
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(News report from Issue No. 329, published on May 20 2017)