“Uzbek” model of economic development and energy resources

From a state-controlled economy toward a developmental state model

There are a variety of studies with regard to the format of economic governance in the postsocialist era (Lane, 2005, 2007; Bolesta, 2019). According to these, many postsocialist states, including Uzbekistan, were presented with the choice of drastic liberalization of the economy called “shock therapy” (Popov, 2007) or some variation of developmental state (see Johnson, 1982; for this model in CA, see Stark and Ahrens, 2012). Uzbekistan opted to preserve the active agency of the state and aspired to shape its investment policy through governmental interventions (Spechler, 2000: 295-303; Fazendeiro, 2015,2017,2018). Immediately after the collapse of the Soviet Union and Uzbekistan’s independence, President Karimov pronounced the preservation of the leading role of the government in reforming the economy of the country. In his energy-related policy, President Karimov did not attempt to actively utilize the RES potential of Uzbekistan, but he rather focused on utilizing traditional mineral and energy resources for both domestic energy generation and exports. In exports, Karimov focused on diversifying markets for vast reserves of natural gas and uranium.

His initial initiative was to reinvigorate the notion of the ancient Silk Road and construct the railroad from Uzbekistan to China (Karimov, 1992). Karimov’s government proposed this aim in its cooperation agenda between the governments of China and Uzbekistan in 1992 during the visit of the then foreign minister of China Qian Qichen to Uzbekistan. Later, in 1994, Karimov unsuccessfully attempted to encourage the construction of a direct railway from Uzbekistan to China through Kyrgyzstan dining Prime Minister Li Pen’s visit to Uzbekistan (Klrodzhaev, 2007: 103). The aims that Karimov had in mind were related less to the notion of connecting Chinese markets with European consumers and more to the developmental agenda of Uzbekistan (Spechler and Spechler, 2010: 159-170). On one hand, Uzbekistan’s energy-transportation infrastructure has been overreliant on Russian networks for the export of Uzbek resources. In this sense, cooperation with China represented a decolonization drive toward China-focused infrastructure to compensate for overdependency on Russia and offer more trade routes for Uzbekistan (Dadabaev, 2018a, 2018b, 2019b). On the other hand, Uzbekistan sees China as a resource for its developmental agenda in which the government plays a significant role in the otherwise liberalized market economy (for relevance and critique, see Alliens and Stark, 2014: 95-110).

To a great extent, Uzbekistan’s proposal to China about the potential for a revival of the Silk Road in the early 1990s reflected the Uzbek government’s attitude toward developing its own economic model (for comparative analysis of East and Central Asian models, see Stark, 2012; Thompson, 2017). While this model has often been criticized for being based on “self- reliance” and isolationism (see Fazendeiro, 2015, 2017), its main principles resonate with the Chinese economic model, also referred to as China’s “Singapore” model (Thompson, 2017) or “postsocialist development state” (Bolesta, 2019). The five main principles of Karimov’s economic reforms referred to the priority of the economy over politics (ideology), the role of the state as the main actor (reformer) in economic activity, the establishment of transparency and rule of law, a social policy orientation, and, finally, a stage-by-stage transition toward a market economy (Karimov, 1992). The idea behind this model, which was implemented in Uzbekistan from 1991 to 2016, was that a strong executive power can ensure the political stability needed for attracting investments and developing the economy. This model was expected to eventually lead to the formation of a middle class and sustainable economic growth (for self-legitimization of the Uzbek model, see Alnens et al., 2016: 47-71). However, over the years of Karimov’s rule, it became obvious that government often, if not consistently, overused its executive powers under the pretext of external threats and terrorist menaces (for the problems legitimization and economic model of the Karimov era, see Alnens et al., 2016: 47-71). Such behavior led to corruption throughout all spheres and levels of public life in the country and major retreat in economic indicators for the public and the state.

President Mirziyoyev’s (2016 onward) rhetoric, articulated on various occasions after his election to the presidency, demonstrates that ideally, he favors the model where the government plays only a regulatory role and does not dictate what industries should do (for the development of various developmental state models, see Johnson, 1999: 32-60). For instance, referring to the total control of 33 state bodies over the licensing of economic activities in hundreds of areas, Mirziyoyev famously exclaimed, “Who needs this? Where is the guarantee that there is no corruption there?” (Daryo.uz, 2017). The economic model he prefers is often referred to as the “rational market” model government behavior, whereby actors can act freely within the boundaries of legal norms (for specificities of state-business relations in CA, see Libman, 2008; President’s Office, 2020).1

However, this model remains the distant goal of the government given the country’s low economic development and slow rate of industrialization. For the present, the Uzbek government adheres to the “developmental state” model, in which the governments shape industrial policy and spearhead infrastructure development (Bolesta, 2019: 3-8; also see Thompson, 2017). The infrastructure development and the usage of connectivity projects in Eurasia in recent years by the Uzbek government can be considered “plan-rational” in nature.

For the Uzbek government, the major goal of developing energy and transportation infrastructure is to enhance national industrial policy and serve export-oriented policy (see TCA, 2017).

In this approach, the general decisions that shape industrial and infrastructure-related policies are made by several major ministries, such as the Ministry of Investment and Foreign Trade, the Ministry of Economy and Industry, the Ministiy of Transport, and the Ministry of Finance.

Implementation of the road maps of cooperation Source

Figure 1.1 Implementation of the road maps of cooperation Source: Compiled by author

Sector-related decisions are also influenced by the Ministry of Agricultural Resources, the Ministry of Water Resources, and the Ministiy of Energy. The Ministiy of Foreign Affairs is called upon to facilitate the work of these ministries with their foreign counterparts and to provide the first point of contact for foreign counterparts (see Figure 1.1).

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