Uzbekistan

uZBEKISTAN

By

Aditya Ramachandran Ananda Neogi

INTERNATIONAL BUSINESS ENVIRONMENT

Geography

With an area of 447,000 square kilometers (approximately the size of France), Uzbekistan stretches 1,425 kilometers from west to east and 930 kilometers from north to south. Bordering Turkmenistan to the southwest, Kazakstan to the north, and Tajikistan and Kyrgyzstan to the south and east, Uzbekistan is not only one of the larger Central Asian states but also the only Central Asian state to border all of the other four. Uzbekistan also shares a short border with Afghanistan to the south.

The physical environment of Uzbekistan is diverse, ranging from the flat, desert topography that comprises almost 80 percent of the country's territory to mountain peaks in the east reaching about 4,500 meters above sea level. The southeastern portion of Uzbekistan is characterized by the foothills of the Tian Shan Mountains, which rise higher in neighboring Kyrgyzstan and Tajikistan and form a natural border between Central Asia and China. The vast Qizilqum (Turkic for "red sand"--Russian spelling Kyzyl Kum) Desert, shared with southern Kazakstan, dominates the northern lowland portion of Uzbekistan. The most fertile part of Uzbekistan, the Fergana Valley, is an area of about 21,440 square kilometers directly east of the Qizilqum and surrounded by mountain ranges to the north, south, and east. The western end of the valley is defined by the course of the Syrdariya, which runs across the northeastern sector of Uzbekistan from southern Kazakstan into the Qizilqum. Although the Fergana Valley receives just 100 to 300

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millimeters of rainfall per year, only small patches of desert remain in the center and along ridges on the periphery of the valley.

Water resources, which are unevenly distributed, are in short supply in most of Uzbekistan. The vast plains that occupy two-thirds of Uzbekistan's territory have little water, and there are few lakes. The two largest rivers feeding Uzbekistan are the Amu Darya and the Syrdariya, which originate in the mountains of Tajikistan and Kyrgyzstan, respectively. These rivers form the two main river basins of Central Asia; they are used primarily for irrigation, and several artificial canals have been built to expand the supply of arable land in the Fergana Valley and elsewhere.

Another important feature of Uzbekistan's physical environment is the significant seismic activity that dominates much of the country. Indeed, much of Uzbekistan's capital city, Tashkent, was destroyed in a major earthquake in 1966, and other earthquakes have caused significant damage before and since the Tashkent disaster. The mountain areas are especially prone to earthquakes.

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DEMOGRAPHY

Full Name Republic of Uzbekistan 

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Capital City Tashkent (Toshkent)

Largest City Tashkent

Most Populous Cities Tashkent

Namangan

Samarkand

Andijon

Nukus

Termiz

Navoi

Angren

Bekobod

Denau

Population 28,929,716 (July 2014 est.)

Age structure 0-14 years: 24.9% (male 3,693,838/female 3,514,734) 15-24 years: 20.5% (male 3,008,779/female 2,934,534) 25-54 years: 43% (male 6,178,921/female 6,255,715) 55-64 years: 6.8% (male 926,129/female 1,036,576) 65 years and over: 4.8% (male 588,881/female 791,609) (2014 est.)

Dependency ratios total dependency ratio: 48.3 % youth dependency ratio: 42 % elderly dependency ratio: 6.3 % potential support ratio: 15.8 (2014 est.)

Median age total: 27.1 years male: 26.6 years female: 27.7 years (2014 est.)

Population growth rate 0.93% (2014 est.)

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Birth rate 17.02 births/1,000 population (2014 est.)

Death rate 5.29 deaths/1,000 population (2014 est.)

Net migration rate -2.46 migrant(s)/1,000 population (2014 est.)

Urbanization urban population: 36.2% of total population (2011) rate of urbanization: 1.27% annual rate of change (2010-15 est.)

Major cities - population TASHKENT (capital) 2.227 million (2011)

Sex ratio at birth: 1.06 male(s)/female 0-14 years: 1.05 male(s)/female 15-24 years: 1.03 male(s)/female 25-54 years: 0.99 male(s)/female 55-64 years: 0.99 male(s)/female 65 years and over: 0.75 male(s)/female total population: 0.99 male(s)/female (2014 est.)

Mother's mean age at first birth

23.8 (2006 est.)

Infant mortality rate total: 19.84 deaths/1,000 live births male: 23.54 deaths/1,000 live births female: 15.93 deaths/1,000 live births (2014 est.)

Life expectancy at birth total population: 73.29 years male: 70.25 years female: 76.52 years (2014 est.)

Total fertility rate 1.8 children born/woman (2014 est.)

Contraceptive prevalence rate

64.9% (2006)

HIV/AIDS - adult prevalence rate

0.1% (2012 est.)

HIV/AIDS - people living with HIV/AIDS

29,700 (2012 est.)

HIV/AIDS - deaths 2,400 (2012 est.)

Drinking water source improved: urban: 98.5% of population rural: 80.9% of population 

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total: 87.3% of population unimproved: urban: 1.5% of population rural: 19.1% of population total: 12.7% of population (2012 est.)

Sanitation facility access improved: urban: 100% of population rural: 100% of population total: 100% of population unimproved: urban: 0% of population rural: 0% of population total: 0% of population (2012 est.)

Nationality noun: Uzbekistani adjective: Uzbekistani

Ethnic groups Uzbek 80%, Russian 5.5%, Tajik 5%, Kazakh 3%, Karakalpak 2.5%, Tatar 1.5%, other 2.5% (1996 est.)

Religions Muslim 88% (mostly Sunni), Eastern Orthodox 9%, other 3%

Languages Uzbek (official) 74.3%, Russian 14.2%, Tajik 4.4%, other 7.1%

Literacy definition: age 15 and over can read and write total population: 99.4% male: 99.6% female: 99.2% (2011 est.)

School life expectancy (primary to tertiary education)

total: 12 years male: 12 years female: 11 years (2011)

Education expenditures NA

Maternal mortality rate 28 deaths/100,000 live births (2010)

Children under the age of 5 years underweight

4.4% (2006)

Health expenditures 5.4% of GDP (2011)

Physicians density 2.54 physicians/1,000 population (2010)

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Hospital bed density 4.5 beds/1,000 population (2010)

Obesity - adult prevalence rate

15.1% (2008)

POLITICAL ENVIRONMENT

The Republic of Uzbekistan is a presidential constitutional republic, whereby the President of Uzbekistan is both head of state and head of government. Executive power is exercised by the government. Legislative power is vested in the two chambers of the Supreme Assembly, the Senate and the Legislative Chamber. The judicial branch (or judiciary), is composed of the Supreme Court, Constitutional Court, and Higher Economic Court that exercises judicial power.

The movement toward economic reform in Uzbekistan has not been matched by movement toward political reform. The government of Uzbekistan has instead tightened its grip since independence (September 1, 1991), cracking down increasingly on opposition groups. Although the names have changed, the institutions of government remain similar to those that existed before the breakup of the Soviet Union. The government has justified its restraint of public assembly, opposition parties, and the media by emphasizing the need for stability and a gradual approach to change during the transitional period, citing the conflict and chaos in the other former republics (most convincingly, neighboring Tajikistan). This approach has found credence among a large share of Uzbekistan's population, although such a position may not be sustainable in the long run.

Despite the trappings of institutional change, the first years of independence saw more resistance than acceptance of the institutional changes required for democratic reform to take hold. Whatever initial movement toward democracyexisted in Uzbekistan in the early days of

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independence seems to have been overcome by the inertia of the remaining Soviet-style strong centralized leadership.

Uzbekistan is a member of the following international organizations:

United Nations World Bank Asian Development Bank (ADB) European Bank for Reconstruction and Development (EBRD) International Monetary Fund (IMF) Food and Agriculture Organization of the United Nations (FAO) Euro-Atlantic Partnership Council (EAPC) Partnership for Peace (PfP) Organization for Security and Cooperation in Europe (OSCE) Organisation of Islamic Cooperation (OIC) Economic Cooperation Organization (ECO) Shanghai Cooperation Organisation (SCO) Central Asian Cooperation Organization (CACO) Central Asian Union Eurasian Economic Community (EAEC) – suspended WTO (OBSERVER)

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ECONOMY

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Uzbekistan has one of the world’s most repressive governments. President Islam Karimov, in power since the late 1980s, has hinted that he may seek re-election in 2015. Karimov rose through the ranks of the Soviet-era State Planning Committee (Gosplan) and remains wedded to a command economy, which discourages foreign investment. Uzbekistan is dry and landlocked; 11 percent of the land is cultivated in irrigated river valleys. More than 60 percent of the population lives in densely populated rural communities. Production of cotton and grain has relied on overuse of agrochemicals and has depleted water supplies. Much of the agricultural land is degraded, and the Aral Sea and certain rivers are half dry. Uzbekistan is heavily dependent on natural gas, oil, gold, and uranium exports.

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Uzbekistan, with the goal of becoming an industrialized, high middle-income country by around 2050, is continuing to transition to a more market-oriented economy to ensure equitable distribution of growth between regions and to maintain infrastructure and social services. The country’s policy goals and priorities are: to increase the efficiency of infrastructure, especially of energy, transport, and irrigation; to enhance the competitiveness of specific industries, such as agro-processing, petrochemicals, and textiles; to diversify the economy and thereby reduce its reliance on commodity exports; and to improve access to and the quality and outcomes of education, health and other social services.

Uzbekistan has the fourth largest gold deposits in the world. Its copper deposits rank tenth in the world. It’s the seventh largest uranium supplier. It ranks 11th in the world in natural gas production with an annual output of 60 to 70 billion cubic meters

Uzbekistan is the world's seventh-largest producer and fifth-largest exporter of cotton. It has shown robust growth, rising by 4% per year between 1998 and 2003 and accelerating thereafter to 7%–8% per year. As on 2010 Foreign exchange reserves amounted to 13 billion US$.

TRADE WITH INDIA

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Commercial   Relations Trade relations between India and Uzbekistan are governed by the Agreement on Trade and Economic Cooperation signed in May 1993. This Agreement provides for such things as mutual MFN treatment, promotion of economic, industrial, scientific and technical cooperation, including in the field of training of personnel, active participation of small and medium sized enterprises in bilateral economic cooperation, and counter-trade, etc. India and Uzbekistan also signed an Agreement on Avoidance of Double Taxation in 1993 and for Bilateral Investment Promotion and Protection in May 1999. The Inter-Governmental Commission (IGC) has met nine times, and the last Session was held in Tashkent on 4 May 2011.  

Bilateral Trade:

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Year

Imports from India(in U.S.$ million)

Exports to India(in U.S.$ million)

Total Trade Turnover(in U.S.$ Million)

Percentage Change over Previous Year

2008 79.9 11.1 91 23.80%

2009 101.6 23.1 124.7 37%

2010 123.8 27.2 151 21.10%

2011 137.6 22.2 159.8 5.83%

2012 163.4 37.82 201.2 16%

up to 10/2013

162.7 27.06 190.03 13.33% (extrapolated)

(Source: Uzbekistan State Committee for Statistics)

India's main exports to Uzbekistan include drugs, other pharmaceutical products, paper, wood

products, machinery, garments & fabrics, tea, plastic items, chemicals, surgical items and

consumer goods. Beans, chemicals and non-ferrous metals constitute the largest item of

Indian imports from Uzbekistan apart from machinery, silver, raw cotton & silk, pulses &

services.

According to the State Statistics Committee of Uzbekistan, India occupied the 15th place

among countries that are trading partners of Uzbekistan, covering 0.7% of the total trade

turnover of the Uzbekistan.

There is considerable interest in Uzbekistan in cooperation with India in the area of

Information Technology. An MoU on the establishment of India-Uzbek IT Centre in

Tashkent (involving Indian assistance of Rs. 30 million) was signed in October 2004 during

the visit of Uzbek Foreign Minister to India. The India-Uzbekistan Centre for Information

Technology, named after Jawaharlal Nehru, was inaugurated by Prime Minister during his

visit to Uzbekistan in April 2006 in the Tashkent University of Information Technology

(TUIT). The MoU for upgradation of the IT Centre was signed during the visit of Vice

President in May 2013.

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Reference

1. World Trade Organisation2. World Bank3. Embassy of India, Uzbekistan.4. Uzbekistan state committee for statistics.5. IMF6. Central Intelligence Agency (US)7. Infoplease.com

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Report Submitted by

Aditya Ramachandran Anand Neogi

15IFIM Business School