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Uzbekistan

Situation and cooperation

Shohizinda necropolis in Samarkand, Uzbekistan

Even now, more than 25 years after gaining independence, Uzbekistan is still going through a transition from the former Soviet-style planned economy to a market system. The Uzbek government is only allowing cautious political and economic reforms. The aim behind the state's economic and investment plans is to remain largely independent of foreign intervention. As a result, economic liberalisation, privatisation and structural reforms are progressing only slowly.

According to official figures, Uzbekistan's economy has grown steadily by a minimum of eight per cent per annum in recent years. In 2016, economic growth was 7.8 per cent. The International Monetary Fund (IMF) is expecting economic growth of six per cent for 2017 and 2018. The reasons for the slowdown are the slump in world market prices for Uzbekistan's main export commodities: natural gas, metals and cotton; the economic crisis in Russia, Uzbekistan's most important trading partner; and the marked downturn in private remittances from Uzbek migrants working abroad.

The government has recently introduced numerous measures to improve the investment climate in the country. However, the general conditions for private-sector activity remain difficult. Potential investors are deterred by the strict state controls of the banking system, limited access to credit, lengthy approval procedures, lack of legal certainty and an inadequate infrastructure.

Widespread corruption, too, is another major problem. In the 2016 corruption index drawn up by the non-governmental organisation Transparency International, Uzbekistan ranked 155th out of the 176 countries assessed.

Governance and human rights

According to its constitution, Uzbekistan is a presidential democracy with a bicameral parliament. In fact, however, the country's political course is determined in autocratic fashion by the State President. Political opposition is not permitted. Freedom of expression, freedom of the press and freedom of assembly are all severely restricted. In the 2017 Freedom of the Press Index produced by the non-governmental organisation Freedom House, Uzbekistan came third from the bottom.

Among the shortcomings in terms of the rule of law is the lack of an independent judiciary. Courts frequently hand down rulings dictated by the political elite, and existing legal provisions are often not enforced.

Social life is rigorously controlled by the State. And an active civil society, as we in Western Europe know it, does not exist. For one thing, there is no tradition or culture of civil society activity; for another, independent political activities are prohibited by the government, since they are regarded as a threat to the stability of the country.

Uzbekistan has ratified important United Nations human rights conventions, including the International Covenant on Civil and Political Rights and the Anti-Torture Convention. While a few reforms on the legislative front and within the justice system have been implemented, and the death penalty has been abolished, there are still instances of arbitrary arrest, torture of detainees and unjust court proceedings, according to the human rights organisation Amnesty International. Furthermore, during the cotton harvest, forced or compulsory labour is widespread.

In addition, an increasing number of migrant workers returning from abroad are being arrested and charged with extremist tendencies.


Social development

An indoor market in Taschkent, the capital of Uzbekistan

So far, the government of Uzbekistan has not succeeded in allowing all sections of the population to share in the country's positive economic development. Only a small segment of the population belongs to the upper and middle classes. The majority of people, in particular in the rural regions, live near or below the poverty line.

Rapid population growth (2016: 1.74 per cent) poses a major challenge. Economic growth is unable to keep pace with population growth, bringing with it problems in terms of education and employment and, consequently, poverty. The high level of youth unemployment and the inadequate medical and social security safety net are leading to tensions within the population.

Reforms with the aim of modernising the Soviet-era education system have been launched, but there are too few qualified teachers and a lack of modern teaching materials. The change from Russian to Uzbek as the national language is slowing down the reform process, since there is very little specialist literature in the Uzbek language.

The Human Development Index (HDI) for 2015 ranks Uzbekistan 105th out of the 188 countries listed.


Environment

Lake Aral in Uzbekistan. A large part of the lake has either dried up or become too salty to sustain life.

Uzbekistan is facing a whole raft of environmental problems. However, as yet there is little awareness for environmental concerns among the public.

For example, agriculture, one of the country’s most important industries, is limited mainly to the growing of cotton, which is cultivated in monocultures. Cotton plantations use up huge amounts of water – a resource that is very limited in this Central Asian country. The water needed for these plantations is diverted from the country’s main rivers, most notably the Amu Darya and the Syr Darya. Both rivers flow into the Aral Sea. The sea – formerly the fourth largest in the world – has now been almost completely salinised and dried out.

The intensive use of chemical pesticides and fertilisers is also contaminating the soil and drinking water in many regions. The high level of population pressure is also leading to overgrazing, soil degradation and uncontrolled deforestation. Lax control of pollutant emissions caused by industry and traffic, and inadequate treatment of sewage and refuse, are all contributing to the high levels of environmental degradation in Uzbekistan's cities.

Nevertheless, the issue of environmental sustainability is beginning to receive more attention in the country's politics. The government is planning, among other things, to invest more in the use of renewable energies and, in particular, to make better use of the potential for generating solar power.


Development potential

Thanks to its central geographical position and its mineral deposits, Uzbekistan has good development prospects. Already companies from Russia, China, Korea and Malaysia are investing in the development of the natural gas and oil deposits that can be found beneath Uzbekistan.

The fuel industry, mechanical engineering, metal processing, transport manufacturing and electrical engineering are key pillars of the Uzbek economy. The textile industry, electricity sector, and the mobile telecommunications industry also have good development potential.

The country’s young population can be regarded as another asset. Almost 60 per cent of the population is under the age of 30. Provided educational opportunities are improved, Uzbekistan would be in a position to draw on a plentiful supply of relatively well-trained labour.


Priority areas of German development cooperation

At government negotiations in July 2017, the German government pledged a total of 12.3 million euros for the period 2017 and 2018 for Financial cooperation.

Germany’s efforts will focus on the priority area of health care. The aim will be to support primarily projects that will directly benefit the population. Good governance and respect for human rights are a fundamental prerequisite if Germany is to engage in development cooperation with a country; these criteria will also determine the content and scale of German development cooperation. That is one reason – the other being the economic progress having already been achieved – why in 2015 it was agreed with the Uzbek government to end the programme fostering "sustainable economic development", which, until then, had been the second most important priority area.

Uzbekistan also benefits from some of the transnational projects being implemented in the region as part of Germany's development cooperation programme. These include projects dealing with legal and judicial reforms and with the sustainable utilisation of natural resources. These regional programmes are intended to provide a forum for the exchange of experience and to encourage closer cooperation between the countries of Central Asia.


Health

Mother and child in Samarkand, Uzbekistan

The quality of health care in Uzbekistan dropped dramatically after the country gained independence. The medical care infrastructure dates back largely to Soviet times, and is dominated by out-dated techniques and inefficient structures. People on low income and living in rural areas are especially badly affected.

Germany is helping Uzbekistan's government in its efforts to transform the old hospitals in the provincial capitals into centres of modern medical care. Efforts are underway to improve the technical equipment available in the hospitals and to train and upgrade the staff. Further important goals of Germany's and Uzbekistan's development cooperation include reducing the incidence of tuberculosis and improving maternal and child health.


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