Uzbekistan courts China on its own terms

By Raffaello Pantucci and Alexandros Petersen

First published in the South China Morning Post May 25, 2012

The Uzbek-Korean air and truck port outside Navoiy.

Among the many items festooning souvenir shops in the Silk Road city of Bukhara are a set of stamps commemorating Uzbekistan’s 15th anniversary of independence. Pride of place alongside President Islam Karimov on these stamps is not a prominent Uzbek, but, rather, the then president of South Korea, Roh Moo-hyun. For Uzbekistan, a close embrace with Korea is a good balancer against a dominant China.

Uzbekistan is in search of a post-Soviet model for development. Initially an eager partner of the West in the wake of the September 11 attacks, it fell out of favour following a hardline government response to violence in the city of Andijan in 2005. This led the nation to look to the Asia-Pacific as a model or partner. But this has not simply meant closer ties with China.

Uzbekistan chose to court Beijing on its own terms. Cognisant of the utility of China as a balancer against Russia, Karimov has been more active in the Chinese-instigated Shanghai Co-operation Organisation than the Russian-led alternatives in the region. But, at the same time, the Uzbek government tries to limit the import of Chinese consumer goods. High tariffs generally keep foreign products out, but Chinese ones are informally targeted, according to those active in trade with China.Analysts say the government has learned a lesson from Kyrgyzstan, where the economy is now almost entirely dependent on Chinese trade; Tajikistan, which is increasingly reliant on Chinese development; and Kazakhstan and Turkmenistan, which are increasingly dependent on China as an energy consumer. Unlike these poor or natural-resource-heavy economies, Uzbekistan prides itself on being an industrial hub.

In contrast, Uzbekistan has embraced a close relationship with South Korea. With strong ethnic links on the ground through a residual Soviet Korean population, Karimov has welcomed Korean investment. It has been far more comforting for Uzbekistan to welcome medium-sized South Korea, a manufacturing nation that has made the shift from authoritarian government to controlled free-market economy.

To what degree has this policy worked? Can Uzbekistan successfully keep the Chinese behemoth at bay? China clearly has a footprint in the country, but has so far bided its time. As Uzbekistan gradually edges its economy forwards, it may find that increasingly the scope of China’s presence will be determined in Beijing and Guangzhou.


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One comment

  1. Fred Yuldashev

    Very nice article. If FDI will increase in Uzbekistan, it will attract a lot of other companies to invest and trust Uzbekistan. Infrastructure of developing nation such as Uzbekistan, is established pretty well comparing to neighboring countries.That along should attract more companies to acquire business, or simply invest. I think for countries such as Korea, tariffs should be lowers.

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