But China is also in the mix
The death of Islam Karimov, a dictator who ran Uzbekistan since its creation a quarter-century ago, has kicked off a new round of geopolitical competition in Central Asia. Despite the rise of China in the region, Russia has the strongest hand. But whoever takes the reins in Uzbekistan, they are likely to continue the country’s obstinate status quo – a semi-isolationalist stance that combines political repression with economic decline.
Karimov pursued a policy of “self-reliance” which isolated his country both from the West and from Russia. He expelled the US military in 2005, pulled Uzbekistan out of the Russian-led Collective Security Treaty Organization in 2012, and refused to join the Eurasian Economic Union (EEU), a customs union launched in 2015 that includes Russia, Kazakhstan and Kyrgyzstan.
Now Karimov’s reign is over, Russia sees a chance to reassert its influence. Moscow still defines Uzbekistan as part of its broader regional sphere of influence and a strategic hub in what it calls “Greater Eurasia”. It is also concerned that any power vacuum could provide an opportunity for Islamist radicals to prosper. Russia is betting that the prime minister Shavkat Mirziyoyev, is the most likely guarantor of stability and Russian influence. On September 5, two days after Karimov’s funeral, Russian President Vladimir Putin arrived to pay his respects and meet Mirziyoyev – and on September 8, Mirziyoyev was appointed interim president.
Mirziyoyev has little international experience, since he spent most of his career as a regional official, and little is known about his worldview. He tends to be labelled as pro-Russian, primarily because he appears to have Moscow’s approval, and partly because of tenuous family links to the Moscow business elite: his niece Diora Usmanova is the widow of Babur Usmanov, who in turn was the nephew of Kremlin-friendly Russian-Uzbek oligarch Alisher Usmanov (one of the owners of Arsenal football club).
Moscow is very adept at leveraging these sorts of personal links, but its ability to exert influence through more conventional economic means is limited. Still beset by sanctions and drained by more than a year of recession, it has no spare funds to invest in Uzbekistan. And more to the point, it would take serious heft to turn around the Uzbek economy, which is in deep trouble.
Karimov’s “Uzbek model” of economic development – a disastrous state-led import substitution policy – has utterly failed. Escaping poverty at home, millions of Uzbeks work in Russia. In 2013, their remittances surpassed US$6 billion, but collapsed to US$3 billon in 2015 as an economically pressed Russia toughened its rules on migrants.
If Uzbekistan joined the Russian-led Eurasian Economic Union (EEU), it would get a better deal for these migrants. Uzbeks themselves seem amenable: in a 2014 poll, 68% favoured joining the EEU. But accession would demand that Uzbekistan liberalise its onerous customs regime. That might be a step too far for a new leader, since some of the country’s influential business groups benefit directly from monopolies on imports and exports.
Russia’s final trump card is security. Uzbek officials are nervously following reports of activity by militant groups in northern Afghanistan. But Tashkent is suspicious of Russian offers of military assistance. Uzbek security forces are ubiquitous and relatively competent; they should have little need for Russian backup except in extreme circumstances.
Contest on the Silk Road
Unlike Russia, China has plenty of funds to invest. Its new Silk Road Economic Belt (SREB), part of the ambitious Belt and Road Initiative to formalise its economic relationships in the region, is backed by a US$40 billion Silk Road Fund and the resources of the Asian Infrastructure Investment Bank.
Some big state-run projects have been successful: in June 2016, Chinese premier Xi Jinping joined Karimov to inaugurate a new US$1.45 billion rail link between the Ferghana valley and Tashkent.
But for Uzbekistan to be a key player in the SREB, it needs to make some major changes to its economic policy – and while China is already Uzbekistan’s largest trading partner, Chinese businesses have found its closed economy and arcane bureaucracy difficult to navigate. The Uzbek state has opposed Chinese proposals for an SCO-wide Free Trade Agreement, fearing an influx of Chinese goods that could undermine domestic producers.
Western states, meanwhile, probably won’t pull ahead in this geopolitical competition. US diplomats have little scope to offer financial aid, and have few if any political channels into the elite. Washington wants to maintain a partnership on Afghanistan through diplomatic engagement and some limited security assistance, but whoever takes control in Tashkent will be wary of appearing too close to them.
In the end, whoever the next Uzbek president is, the country’s conservative policies and fear of Russian domination will continue to slow down Moscow’s drive for influence. The most likely outcome is an updated version of the status quo. Uzbekistan will be symbolically more aligned with Moscow but will remain outside the EEU; there’ll be moves to attract more investments from China and other players, but trade policy won’t radically change.
Nevertheless, Uzbekistan will sooner or later have to reform its sclerotic economy and open up to the outside world. If it leaves it too late, its economic decline will stir up social discontent – and begin an inexorable descent into political instability.