�Kazakhstan Energy �, is a magazine-appendix to THE GLOBE presents the announcement of the article �The way of the development of Uzbekistan: differences, difficulties and perspectives� by Michael Paterson. You may read the full version of the article in the third number of �Kazakhstan Energy� which is sold in the Supermarkets �Ramstore�, at �Texaco� filling stations, in �Yubileiny�, near CUM, as well as in hotels The Regent Ankara and Hyatt Regency/Rachat Palace.
Internal vs External Development:
But the attraction of FDI has not been as important a component of economic development as it has in neighbouring countries. As stated by President Karimov, �One should not measure economic success with the amount of investments� What is important is not the investments, but the terms of World Bank credits.�1 To a certain extent this is reflective of Uzbekistan�s relative economic strength and independence. Kazakhstan and Kyrgyzstan were both forced to turn to FDI and loans following the breakup of the FSU largely because of financial desperation and their inability to raise capital domestically.
Possessing few natural resources to export for hard currency, tiny Kyrgyzstan soon found it very difficult to pay for required imports. Because of the small size of the country�s market, the possibility of obtaining enough domestic revenue to maintain the existing infrastructure, let alone develop new sectors of the economy was extremely doubtful. Dependent upon World Bank and IMF loans to avoid economic collapse, Kyrgyzstan has been forced to obediantly follow the lending institutions decisive prescriptions for rapid reform.
Rich in ferrous and non-ferrous minerals, as well as fuel and energy resources, Kazakhstan on the other hand, had the potential of becoming a major supplier to world markets. Unfortunately, the tremendous investments of capital and technology required to development of many of Kazakhstan�s resources were beyond the country�s means. For instance, because of the great depth, high sulfur content, and great distance from potential markets, the exploitation of oil deposits of the Caspian Sea Basin was very difficult. Only in the west was there the capital and technology adequate for drilling, processing, and the building of pipelines.
At the same time, Kazakhstan�s industrial sectors were hit particularly hard by the severing of ties with Russia. Because of geographical ties, many of the country�s manufacturing processes were solely dependent upon the inputs and markets of its northern neighbour. Cut off from complementary modes of production across the border by protectionist measures by Russia, it was no longer feasible to continue to operate many factories.
Opening up to foreign investors therefore held a number of attractions for Kazakh authorities.
i) Only foreigners had the capital and technology necessary to quickly develop the country�s significant natural resources.
ii) Privatization revenues would be useful for plugging widening budget holes.
iii) The government could delegate the expenses of maintaining and transforming Kazakhstan�s industrial giants to their new private owners.
iv) Billion dollar deals offered plenty of opportunities for officials� personal enrichment.
Without the same pressures on industry, and lacking the possibility of similar returns for opening up their natural resources to foreign investors, Uzbekistan has rather chosen to develop from within. The State remains the main contributor of capital investment. The State also plays an active role in the investment process. Uzbek authorities have instead constructed an industrial policy that channels the largest percentage of funds into specific higher priority areas. These strategic areas include the fuel and energy sector, chemical industry, aircraft, agricultural machinery, mining and telecom.
Construction of Nation-State:
Foreign critics of Uzbekistan�s transitional program tend to focus upon the speed in which the country�s officials have introduced reform. Uzbek authorities point to the chaos that has erupted in Russia and its Central Asian neighbours, and quite correctly argue that the proper sequencing of reforms is just as important. As is indicated by the title of President Karimov�s book, �Don�t knock down the old house before you have built a new one�, Uzbek officials consistently stress the importance of first building supporting institutional foundations before reforms are unleashed.
As was mentioned previously, the State is the principal reformer in Uzbekistan�s transitional program. Uzbek authorities spent the first years of independence ensuring that they had established national control over their share of the formerly Soviet economy and resources.
Islam Karimov has also rigorously tried to enforce the political control of the centre over the entire country. In this endeavour, the President has had several advantages: i) Because of the compact size of the nation, the fiefdoms of regional officials are less isolated from the centre than in larger countries as Kazakhstan and Russia and are therefore easier to manage. ii) As 75% of the population of Uzbekistan is ethnically Uzbek, the authorities have not been vulnerable to the threat of ethnic regional separation as ie by the Russians in Kazakhstan. iii) Uzbekistan inheritted a very efficient internal security force and has maintained its significant network of informers and secret police. iv) The Uzbek people have historically been more compliant to the will of a central authority.2
President Karimov often evokes Uzbek history, particularly the mythology of Timur to justify the concentration of his powers, as head of State. This leads to one of the greatest differences between the approach of President Karimov compared to other leaders, particularly President Nazarbayev.
President Karimov has tried to build his nation upon the foundations of the past. Many physical symbols of Uzbekistan�s long and glorious history remain. Bukhara, Samarkand, and Tashkent - all important stops along the Golden Silk Road and once world-renown centres of commerce, science, and culture still stand. More importantly, 70 years of communism have not erased the roots to the past within the Uzbek people themselves.
Even before collectivization, the Uzbek people lived sedentary lives based around agriculture. The traditional lifestyles of the Uzbeks were therefore much more compatible with vision of the communist planners than their nomadic neighbours. Whereas the herding lifestyles Kazakh and Kyrgyz were brutally wiped out, 3 the Uzbeks were able to incorporate many customary ways of governing either into the new system or alongside it.
For instance, clan politics were often important factors in political decisionmaking and appointments. Life largely continued to be centred around the extended family and the makhallah. The traditional role of elders is decisionmaking was maintained. Often the elders were given formal positions by the communists.
Although the Uzbeks were largely excluded from the centre of power in Moscow, they were generally allowed to run their own affairs, as long as the party leaders could promise to maintain political order and fulfil their economic quotas.
This isolation from Moscow and the maitenance of ties to the past, has in some respects protected the Uzbeks from some of the worst traits of the communist system and left them in a better position to compete. Whereas the Kazakhs are widely acknowledged to have adopted the Soviet attitude towards work,4 many Uzbeks are disciplined from a young age to perform long and repetitive agricultural duties. Historically reknowned traders, Uzbeks continued to run small businesses even during the communist era. This industriousness may eventually bode well for capitalist reforms, allowing the country to avoid violent upheavals during the gradual implementation of reforms.
1 CIS Weekly, March 2-8, 1996, vol.III, no.9, from Nezavisimaya Gazeta, March 1, 1996
2 There are a number of explanations for this traditional compliancy as compared to neighbouring Kazakhs and Kyrgyz. Most boil down to the fact that historically the Uzbeks were a sedentary people (therefore subject to central control), while Kazakhs and Kyrgyz were nomads. Because of the problems associated with living in close quarters, the collective organization required by large scale irrigation, as well as the distributional regulations required by agriculture, the people�s livelihood depended upon investing in a strong central authority. As pointed out by Karl Witfoggel, all civilizations in which there was historically central control of irrigation system tend to be authoritarian. C. Karl Wittfogel. Oriental Despotism. (1957).
3 By the time the civil war and collectivation drives ended, 1/2 of the entire Kazakh population had been killed.
4 With no alternative to cling to after their historical lifestyles were wiped out, the communist ideology and lifestyle became firmly entrenched in Kazakhstan. It is the depth of the roots of communism in the mindset of the people of Kazakhstan (as in Russia) which may partly explain the President�s prescription for a capitalist �revolution� rather than evolution.
Local Think Tanks Develop Plan to Bring Lasting Stability to South-East Europe Representatives from 25 leading policy institutes from countries across the region propose concrete steps and timetable for bringing peace and prosperity to Europe�s most volatile region.
Soros foundation network backs Initiative
Ljubljana, July 20
�Europa South-East�, an unprecedented meeting of regional think tanks and policy experts from the region, concluded this morning in the Slovenian capital with the release of a detailed Declaration. The Declaration contains proposals for integrating the whole of South-East Europe into the European Union. Integrating the region into larger European structures, the proposal argues, will dramatically reduce prospects for renewed conflict. The Balkan policy experts timed the release of their proposal to influence the members of the Stability Pact-the diplomatic initiative of the European Union and the United States and countries of the region to work out a lasting basis for peace. The political leaders of the Stability Pact will hold their first meeting in Sarajevo next week at the head-of-state level. The end of the war in Kosovo �will not now automatically give way to a positive new era,� the Declaration states. �Without a comprehensive and fresh policy approach the best outcome will be stalemate and stagnation and the worst outcome a continuous decent into renewed conflict, chaos and impoverishment. �The proposal put forth by �Europa South-East� relies heavily on and refines the ideas originally contained in a plan elaborated by the Centre for European Policy Studies (CEPS), an independent Brussels-based think tank that is a leading analyst of European strategies. The �Europa South-East� proposal deals with a broad range of issues including free trade, the use of the euro in the region, civil society and democratization, education, reconstruction and investment, police and military security, and EU integration. Among the most important elements of the plan are its call for a customs union involving the EU and the countries of the region and an end to sanctions against Serbia coupled with the offer of including Serbia in the process of European integration subject to democratization and political renewal in Belgrade. Commenting on the plan, international philanthropist and financier George Soros said �The proposal developed by this meeting of independent policy actors from the region is the best chance we have to bring security and stability to the Balkan region. I hope the leaders of the Stability Pact will review it carefully and adopt it as the blueprint for their actions going forward.� Soros has been deeply Committed to promoting civil society and ethnic tolerance in the region. Representatives from independent policy institutes in Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Moldova, Romania, Turkey, Serbia, Montenegro, and Kosovo participated in the conference and endorsed the Declaration.
From the editorial staff: The GLOBE expresses its gratitude to �Soros-Kazakhstan� Fund for support of the project �Students` recruitment agency�
By Ben Partridge
A new report says Russia is trying to reassert its influence over its regional neighbors � such as Ukraine, Azerbaijan, and Georgia � partly in response to concern over the eastward expansion of NATO. The report by British security experts also says Russia�s effort to dominate surrounding countries � and its own multiethnic regions � could worsen international tensions and compromise its own security. Our correspondent in London speaks with one of the authors of the report, as well as a spokesman at London�s Russian embassy.
London, 20 July
(RFE/RL)
The report by British security experts appears in the latest edition of Jane�s Sentinel, issued by the respected Jane�s publishing group. The report says members of the Commonwealth of Independent States (CIS), created in 1991, have shown a determination to come to terms with the Soviet legacy and reshape their national destinies.
But it says Russia has tried to assume the mantle of the former Soviet Union in terms of economic, political, and military power and seems set to try to reassert its influence again over the entire CIS region.
The report finds that Russia has sought to retain �regional hegemony,� or at least to exclude other powers � such as the U.S. and Turkey � and has also sought to elevate its own national interests over those of the CIS.
It concludes that Russia has often bypassed CIS structures � as when it deployed troops in Tajikistan � and has had some success in re-establishing a military presence in all CIS republics except Azerbaijan.
The report notes that a symbolic sign of what it calls a �possible return to the old order� was a plan three years ago to move CIS headquarters from Minsk to Moscow. When the CIS was set up, the Belarus capital was � according to the report � �deliberately chosen to avoid any echoes of Soviet central control from Moscow.�
Russian analyst Paul Beaver, who contributed to the new report, says Moscow is reasserting the doctrine of the �near abroad� � the idea that Russia has a natural right to dominate the territory of the former Soviet Union. He says Moscow appears to be seeking to apply this in the Caspian nations and is also clamping down on independence movements within Russia itself.
�The crux of it is around the Caspian Sea. We�ve already seen the reaction Kazakhstan has had to the fact the Russians are still trying to use the Baikonur (space facility), as if it belonged to them, refusing to pay rent for it. We are seeing it in the way they are trying to exert influence over Azerbaijan, particularly by backing Armenia. We are seeing it in the way they are dealing with Ossetia, Ingushetia and also Dagestan. They are clamping down on anything that sniffs at all of being any independence movement whatsoever.�
But will Moscow succeed in its attempt to � as the report puts it � �dominate and control surrounding regions, as well as its own multiethnic constituents?� No, according to the report, which says that the retention of an exclusively Russian sphere of influence is �doubtful.�
The report says that as CIS nations build up their own bilateral political, economic and military ties with outside powers, Russian influence will become �increasingly diluted.�
The report says it is only in Belarus and Tajikistan that Russia will retain anything approaching exclusive military control, and in both cases, Moscow is starting to question the value of the commitments.
Still, Russia is concerned about the growing influence of NATO on its borders, despite the fact that Moscow itself signed a special charter with the western military alliance two years ago. By early 1995, 11 of the 12 member states of the CIS (all but Tajikistan) had signed NATO�s Partnership for Peace framework document.
According to the report, Russians fear that the further enlargement of NATO � which has already expanded to include Poland, the Czech Republic and Hungary � could �perpetuate the division of the continent, with Russia on the wrong side of any divide.�
Moscow is said to be particularly concerned because Ukraine participated widely in NATO�s Partnership for Peace program and also signed a special charter with the western alliance. The report says Ukraine is �uneasy� about Russian attempts to re-exert its influence over its neighbors, a concern shared by Azerbaijan, Georgia, and others.
Vladimir Andreyev is press counselor at the Russian embassy in London. In an interview today with RFE/RL, Andreyev denied that Moscow is trying to dominate and control neighboring regions:
�No, it�s not true. Russia is basing its relations with our neighbors on the foundation of equality. We understand that we are dealing with independent sovereign states and that is the foundation of our relations with our neighbors and all other countries of the world. So it is not true what this report says. The general principle, the general idea, is very clear. And it has nothing to do with any search to be dominant in the region, or elsewhere.�
The report says resistance to any Russian attempt to re-establish dominance of the CIS remains strong, particularly in the Caucasus region, which could be threatened at any time by a new eruption of ethnic strife and separatist movements.
Azerbaijan has resisted increased military cooperation with Russia and opposes a greater Russian military presence in the region. In Georgia, there has been controversy over the presence of Russian military bases. Tensions are high in the Russian Caucasus in the wake of Chechnya�s successful bid for de facto autonomy. The report also predicts increased unrest in neighboring Dagestan.
The Jane�s report notes that the formal Russian National Security Concept � adopted in December 1997 � puts considerable emphasis on the �preservation and strengthening of Russian national values.�
It says there is a real danger that this could be interpreted as legitimizing or threatening a renewed policy of enforced Russification of the other 100-plus nationalities within the Russian Federation (28 percent of the total population), something that the Jane�s report says �could seriously worsen rather than improve interethnic relations.�
Astana citizens do not like when high-rank persons come to their city. There is only one reason: main streets are blocked. As there are a few streets in the new capital, all traffic is completely stopped. Then it is a problem not only for car drivers, but for foot-passengers as well. Your correspondent had to make sure in this. It is known that some days ago the President of Moldavia visited Astana. Main streets were blocked; cars made rows along the roads. At 9 p.m. I saw the following situation. In every ten steps policemen stood along Abai Street. They permitted neither to cross the road nor to go along the street. For example, I reached the hotel thanks to a corespondent�s certificate. A girl going before me, was pushed away. It occurred so that Mr. Luchinski was to stay at �Inter-Continental� hotel. Of course, as usual, policemen were not marked with politeness.
Citizens were outraged with such a constant terror,�You cannot go there, you cannot go here!� as in the soviet period.�� The population considers it inappropriate to block the streets for such a long period (an hour before the motorcade, and one hour after). In that moment it seemed that the entire town consisted of policemen.
The Minister of Internal Affairs Kairbek Suleimenov told to THE GLOBE that during the last visit of a high-rank person 317 policemen had been used, including 80 men working in Road Police. �During great events, we attract police from all Kazakhstan. We are short of people,� the Minister said. Mr. Suleimenov believes that such measures are necessary. As an example he mentioned the events in Minsk, where citizens broke the cordoning, and in Tashkent when KAMAZ drove into the crowd during the greatest event.
�If it is not allowed, it means you should not go,� the Minister announced.
He said that really Astana is not Almaty, where there are a lot of parallel streets, and blockage does not influence traffic in the central part of the city. In Astana to reach another part of the city it is required to go through the only bridge. �After some time, when another bridge is built, you will suffer less from blocked streets. This problem will be settled in a year or two,� Mr. Suleimenov resumed.
Banu MARAT
ASTANA
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