The Silk Road: Uzbekistan's modern resurgence and emergence as a strategic partner for the EU"

KÜLTÜR SANAT

 

Central Asia's historical significance stems from its strategic location at the crossroads of East and West, nestled between empires and bordering areas of conflict and insecurity (such as Afghanistan, China's Xinjiang province, and Iran). While the region was largely ignored throughout the Cold War, its vitality and importance were quickly rediscovered (NATO.int) (Makarenko, 2010). Spechler & Spechler (2009) write that “Uzbekistan has achieved independence and stability by exploiting its natural resources through a strategy of ‘‘staple globalism’’ and by balancing the great powers against each other” (Arabnews.com)[1].

 

Uzbekistan, a former republic of the Soviet Union, gained independence on August 31, 1991. The first president was Islam Karimov but in 2016 Shavkat Mirzoyev came to power. Shavkat Mirziyoyev, the former Prime Minister, assumed office and decisively won the presidential elections in December. President Mirziyoyev has proactively initiated major economic reforms to modernize Uzbekistan's economy and enhance its global engagement. Furthermore, as noted by the official Uzbek online newspaper uza.uz, Uzbekistan seeks to multiply its partners from around the world, including Azerbaijan, Saudi Arabia, South Korea, the European Union, Turkiye, etc.

 

The arrival of the new president to power brings Uzbekistan into a brand new era of economic prosperity, development, openness to the world, etc.

Uzbekistan is an agro-industrial country. 38% of the working population is employed in agriculture, which is mainly irrigated (cotton, fruit, early crops, rice, alfalfa, vines, etc.). The country also has significant mineral wealth (natural gas, uranium, copper, oil). Since independence, President Karimov has chosen a strategy of gradual reform aimed at achieving energy and food self-sufficiency.

Uzbekistan seeks to develop its energy potential, particularly in the field of energy transition. Moreover, the official Uzbek newspaper states that “President of the Republic of Uzbekistan Shavkat Mirziyoyev took part in the launch ceremony of projects for connecting a modern combined cycle power plant with a capacity of 1,500 megawatts to the power supply network in Syrdarya region and the start of construction of a pilot production of green hydrogen in Tashkent region” (Uza.uz, 2023).

Uzbekistan is also becoming an area that attracts foreign investors. For example, Uzbekistan's power sector is expected to get a major boost after UAE-based utility company Abu Dhabi National Energy Co. announced plans to invest more than $3 billion in new and existing power plants.

 

 

Solidjonov (2021) writes that “the Head of the state defined further goals and set the most important tasks aimed at ensuring a consistent increase in the level of welfare and wellbeing of the country's population”.

In the heart of Central Asia, Uzbekistan has the strongest economic growth in the region.Thirty years after the end of the Soviet Union, Uzbekistan has undertaken important reforms to open its economy to the global market, while protecting the most vulnerable households and strengthening the rule of law.

Indeed, in recent years the country has carried out various reforms to break with the economic legacy of that bygone era by liberalizing and attracting foreign investors.

 

Uzbekistan's economy has weathered the Covid-19 crisis rather well, with Uzbekistan being one of the few countries not to have experienced a recession in 2020. The recovery is strong in 2021 and the growth rate of activity could be the strongest since 2016. Solidjonov adds that “While in just 9 months of 2020, despite the pandemic, the country's foreign trade reached $27.5 billion. Uzbekistan's plans to strengthen its role in the establishment of international transport corridors and joint implementation of other infrastructure projects with foreign partners also received a new impetus”.

 

Tsereteli (2018) adds that Uzbekistan adopted a National Development Strategy identifying five priority areas: (1) Public administration reform; (2) Judiciary reform, strengthening the rule of law, and parliamentary reform; (3) Reforms in economic development and liberalization, with a focus on modernizing Uzbek agriculture and industry and aiming for greater competitiveness of products and services; (4) Social reforms based on higher incomes and better jobs, focusing on higher quality healthcare, education, housing, etc.; (5) Security reforms, focusing on improvements to ensure domestic stability and a balanced and constructive foreign policy, with the ultimate goal of strengthening the independence and sovereignty of the state.

 

“Thanks to the reforms, the investment climate has improved significantly," says Ilhom Umrzakov, director of the Graduate School of Business and Entrepreneurship of Uzbekistan. "One of the main focuses of national policy is to ensure the rule of law, including the protection of investors' rights," he said. [euronews].

The establishment of incubators for start-ups and mentoring programs has contributed to the growth of the new technology sector.

A park dedicated to this field opened in 2019 in Tashkent. More and more companies are setting up there, attracted by tax exemption and premises suitable for innovation. [euronews].

As per Fournis (2022), Uzbekistan aims to move beyond the communist era by opening up its economy. Major reforms are being carried out, especially in the energy sector, in order to become a major country in Central Asia. He writes that "Uzbekistan, which aspires to become an economic tiger in Central Asia, seeks above all to be an attractive country for investors, for international organizations and for tourists, in order to keep its businesses running and to provide them with opportunities".

More than 55,000 commercial buildings have been built and the number of companies that have exceeded the symbolic turnover of one million dollars in one year has increased from 5,000 to 26,000. In addition, more than 200 Uzbek companies have surpassed the $100 million a year threshold. The state has recently introduced a targeted policy to support these different enterprises based on their size and annual revenue (Fournis, H. 2022).

 

Solidjonov (2021) writes that in recent years “the average annual investment growth rate was 22 percent. The total volume of attracted foreign investments reached $26.6 billion, including direct investments of $17.5 billion. For comparison, such a volume of investments was attracted to the country's economy between 2007 and 2017. In general, the total volume of investments over the past 4 years has grown by more than 2.1 times, including foreign investments by 2.7 times. The share of investment in GDP in 2019 exceeded 38 percent for the first time, which creates a solid foundation for ensuring economic growth in the coming years. At the same time, the GDP of Uzbekistan in 2019 grew by 5.6 percent.”

The country also aims to get support from international financial institutions to increase the average entrepreneurial tissue throughout Uzbekistan.

 

Finally, lately the Uzbek government is working on opening up the country and trying to provide economic support to the regions that are in more difficulty than others, including subsidies to businesses, facilitating access to loans, providing guarantees, etc. (Fournis, H. 2022).

In summary, and according to coface.com, Uzbekistan has a more resilient economy than the rest of Central Asia (more diversified, less sensitive to external shocks). Not to mention the country's significant hydroelectric potential, its young population (50% under30), its international financial support, its economic reforms (liberalization, privatization, diversification), its credit development (42% of GDP, 37% to the private sector) and public investments (electricity, transport, health).

 

The country is experiencing a high development of bilateral relations and its negotiations are becoming increasingly dynamic for preferential trade agreements with key partners (Turkey, Singapore, South Korea, etc.), the European Union (EU) and China. In 2022, on 27 and 28 October, the President of the European Council Charles Michel was in Uzbekistan. He first went to Tashkent, where he met with Uzbek President Shavkat Mirziyoyev to discuss bilateral relations and cooperation.

The two leaders issued a joint statement in which they welcomed the steps taken to strengthen interregional ties and cooperation and agreed to further deepen EU-Uzbekistan relations. They also welcomed the recent initialing of the Enhanced Partnership and Cooperation Agreement and expressed hope that it will be signed and ratified soon. The presidents discussed the importance of increasing port capacity, expanding ferry fleets and the rail fleet, harmonizing customs procedures, and introducing digital solutions for cargo handling and border crossing. The implementation of such projects is fully in line with the goals and objectives of the EU Global Gateway strategy.

As of the end of 2023, the European Union and France maintain a strong interest in Uzbekistan. Since the Russo-Ukrainian war, Europe has faced an unprecedented energy crisis, driving the search for new strategic and reliable partners, such as Uzbekistan. Moreover, French President Emmanuel Macron paid a visit to Uzbek President Shavkat Mirziyoyev.

The Uzbek official information agency Dunyo writes that The meeting between Macron and Mirziyoyev led to high-level talks aimed at elevating interstate relations to the level of a strategic partnership (Dunyo information, 2023).

 

 

 

 

 

Uzbekistan wants to become a key player in the connections between Central and South Asia. According to Polonskaya, G. (2021), Uzbekistan is a key player in developing the interconnection between Central and South Asia, regions with more than two billion people. In fact, this issue was at the heart of an international conference recently held in Tashkent and initiated by its host country, Uzbekistan.

Josep Borrell Fontelles, Vice-President of the European Commission wrote on twitter: "Central and South Asia are of growing strategic importance for the EU. For regional connectivity and security issues and especially when it comes to the situation in Afghanistan.”

 

 

Uzbekistan, for its part, is working to develop regional cooperation and is carrying out infrastructure projects. One of them is the construction of a high-voltage power line that will serve Afghanistan.

 

During a meeting at the Uzbek Embassy in Brussels on November 3, 2022, Ismatilla Irgashev, special representative of the Uzbek president regarding Afghanistan, said that "Afghanistan would become a bridge between Central Asia and South Asia."

During the meeting at the Uzbek Embassy, it was said that Uzbek authorities are working to develop transport corridors. They have recently launched a new project: the construction of the Mazar-i-Sharif-Kabul-Peshawar railway line which will run from Termez in Uzbekistan -the link between this city and Mazar-i-Sharif is already operational - through Afghanistan to Pakistan.

 An infrastructure project supported by the World Bank, Russia and the United States, among others, which will stimulate the Afghan economy, provide direct access to Pakistani seaports and reach India.The section of the line between Mazar-i-Sharif and Kabul is estimated to cost $5 billion to build and will be constructed mainly through borrowing. In recent months, Uzbekistan, Afghanistan and Pakistan have made a joint appeal to international financial institutions to support the project. Depending on funding, construction could begin next September.

This rail line will offer new business opportunities as the time and cost of transporting goods will be significantly reduced. It is estimated that the new link will reduce the transport time between Central Asia and Pakistan to 6 days and lower costs by 30-35%. The railroad will provide direct access to Pakistan's seaports (Karachi, Qasim, Gwadar). The main objective of Uzbek diplomacy is to transform itself from a landlocked country into a country linked to the wider Eurasia. Uzbekistan has decided to participate in the construction of the Trans-Afghan Railway. They want to become a logistics hub in Central Asia.

By investing billions in the construction of new railroads and roads, Uzbekistan aims to create efficient traffic corridors across Central Asia and, in the long term, to enable the creation of direct junctions with seaports that will facilitate access to international markets.

Uzbekistan was already historically a key location on the Silk Road. The Trans-Afghan corridor project will provide access to other corridors that will connect East and South Asia to Europe via the Black Sea. The country holds a strategic and central position on the ancient Silk Road, justifying the construction of the following corridors: «NorthSouth», «Trans-Caspian corridor», «ChinaKyrgyzstan-Uzbekistan» (Gulamov, and al., 2022).

 

 

            Finally, Uzbekistan is becoming a tourist paradise and a new attraction for tourists from all around the world. Undoubtedly, its Timurid heritage, the remarkable square of Registan, and its beautiful blue cities such as Samarkand, Khiva, and Bukhara attract all history, Timurid, and architecture enthusiasts. According to Olimovich (2015),  “Throughout the country there are more than 7,000 monuments of architecture and art of different  epochs  and  civilizations,  many  of  which  are  included  in  the  list  of  cultural  World Heritage  Site”. In addition, Gulomkhasanov, and al. (2021) specify that the government also ensures the development of ecotourism. Moreover, the State Committee for Nature Protection has developed a "Concept for the development of ecotourism in the Republic of Uzbekistan and its long-term plans."

 

 

In summary, Uzbekistan holds a strategic position on the new global transport map, connecting Asia to Europe. Additionally, it plays a significant role in the emerging model of global supply chains. Through its principle of multilateralism in foreign policy, Uzbekistan advocates for the development of creative processes in globalization, establishing mutually beneficial and fair international cooperation based on dialogue, mutual trust, and respect for each other's interests. Therefore, the country is highly strategic for the EU, China, Russia, Turkiye in political terms, especially concerning discussions with Afghanistan. In conclusion, Uzbekistan, with its 35 million inhabitants, its ever-increasing resources and its geographical position, is a growing power. That is why the European Union is seeking to develop multidimensional (political, economic, …) cooperation between Uzbekistan and the EU.

 

In the future, Uzbekistan will play a crucial role in the international arena, especially due to its natural resources, political strategy and strategic position between Europe and Asia.

Author: Derya Soysal

 

REFERENCES:

 

Cartwright, G. 2023. “Brussels: Uzbek universities sign MoU with Belgian Education Council - https://eutoday.net”.

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Coface.com/ Ouzbékistan https://m.coface.com/fr/Etudes-economiques-et- risque-pays/Ouzbekistan

 

Dunyo Information, 2023, https://dunyo.info/en/prezident/dvuhdnevnyy-uzbeksko-francuzskiy-sammit-na-vysshem-urovne-v-samarkande

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https://www.revueconflits.com/ouzbekistan-le-developpement-de-lentrepreneuriat-comme-cle-du-dynamisme-de-leconomie/

 

Gulamov, A., Masharipov, M., & Egamberdiyeva, K. (2022, June). Planning of new transit corridors-New opportunities for the development of transit in Uzbekistan. In AIP Conference Proceedings (Vol. 2432, No. 1). AIP Publishing.

 

Gulomkhasanov, E., Uktamova, U., & Akramov, S. (2021). Development of ecoturism in Uzbekistan. Scientific progress, 2(8), 614-617.

 

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Visite du président Michel en Asie centrale

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