The Central Asian Republics The following materials were written by Olga Ananina and Yevgeny Schukin, BISNIS Representatives in Moscow, and are available via the United States Department of Commerce Business Information Service for the Newly Independent States(BISNIS) Web Site at http://www.bisnis.doc.gov/bisnis/COUNTRY/9906regov.htm and http://www.bisnis.doc.gov/bisnis/country/9910moscow.htm. Republic of Tajikistan Capital: Dushanbe Population: 6,440,732 (July 2000 est.) Population Growth Rate: 2.12 percent (2000 est.) Area: 143,100 square kilometers National GDP: $6.2 billion (1999 est.) GDP per Capita: $1,020 (1999 est.) Republic of Turkmenistan Capital: Ashgabat Population: 4,518,268 (July 2000 est.) Population Growth Rate: 1.87 percent (2000 est.) Area: 488,100 square kilometers National GDP: $7.7 billion (1999 est.) GDP per Capita: $1,800 (1999 est.) The Republic of Uzbekistan Capital: Tashkent Population: 24,755,519 (July 2000 est.) Population Growth Rate: 1.6 percent (2000 est.) Area: 447,400 square kilometers National GDP: $59.3 billion (1999 est.) GDP per Capita: $2,500 (1999 est.) Republic of Tajikistan Background The Tajik Soviet Socialist Republic was admitted as a constituent republic of the Soviet Union on December 5, 1929 from regions of Bokhara and Turkestan where the Tajiks formed a majority of the population. The Tajik Supreme Soviet declared republican sovereignty in August 1990 and in December 1991, the republic became a member of the Commonwealth of Independent States. Independence led to demonstrations and fighting against the Communist government, which was replaced by a Revolutionary Coalition Council on May 7, 1992. Continued demonstrations led to the ouster of President Nabiev on September 7th, which resulted in a civil war. The government resigned on November 10th and the CIS announced that it would send a peacekeeping force to the country on November 30, 1992. The Tajik government imposed a state of emergency in January 1993 in an effort to quell the violence. Rival factions continued to battle until a cease fire was signed on December 23, 1996 between President Rakhmonov and insurgent leader Sayed Abdullo Nuri. A second agreement, signed on March 8, 1997, resulted in the disarmament of the insurgents and their gradual integration into the national armed forces. Iran and Russia brokered a peace treaty which was signed in Moscow on June 27, 1997 by the political factions. The treaty created a Commission of National Reconciliation and stipulated that 30 percent of ministerial posts should go to the opposition. Territory and Population Tajikistan is slightly smaller than Wisconsin in area. It is a land-locked republic which borders Uzbekistan, the Kyrgyz Republic, China, Pakistan, and Afghanistan (the latter a source of international tensions—see below). The country is mountainous with the Pamir and Alay Mountains dominating the landscape. The largest ethnic group is the Tajiks (64.9 percent of the population), followed by Uzbeks (25 percent) and Russians (3.5 percent and declining due to emigration). Most Tajiks are Sunni Muslim (80 percent) and there is a Shi’a Muslim minority (5 percent). The republic’s official language is Tajik although Russia is widely used in government and business. Over 98 percent of Tajiks over the age of 15 can read and write. Government The Republic of Tajikistan is divided administratively into two provinces (oblasts/ viloyatho), 43 rural districts, 18 towns, and one autonomous oblast, the Gorno-Badakhshan Autonomous Region. On November 6, 1994, the Tajiks approved a new constitution by 90 percent. This constitution enhances the power of the President, who serves as head of state and is elected by universal suffrage for a seven-year term (the current president is Emomali Rakhmonov, re-elected in November 1999 with 96 percent of the vote). The president appoints a Council of Ministers which serves as a cabinet and its members are approved by the Supreme Assembly. The legislature consists of a bicameral Majlisi Oli (Supreme Assembly), which consists of 181 seats. Members are elected by popular vote for five-year terms and Ogil Oqilov serves as the Prime Minister (since January 1999). Under the constitution, the president appoints the prime minister. Legislative elections were held in February and March 2000. Tajikistan has a Supreme Court and judges are appointed by the president. A number of political parties hold seats in the Supreme Assembly including the Tajik Communist Party/CPT and its affiliates (the largest political party holding 100 seats of the legislature); People’s Party; Party of People’s Unity; and Tajikistan Party of Economic and Political Revival/TPEPR. As part of the peace process, the government has legalized a number of political parties who are taking an active role in politics. These political parties include the Democratic Party/TDP; Islamic Rebirth Party’ Lali Badakhshan Movement; National Unity Party; Party of Justice and Development; People’s Democratic Party of Tajikistan/DPT; Rastokhez (Rebirth) Movement; and United Tajik Opposition/UTO. Economy Tajikistan is the poorest of the former Soviet republics. The national economy was severely undermined by six years of civil war, slow market reforms, the collapse of Russian subsidies, and the lack of access to Russian markets. The most important crop in Tajikistan is cotton and other agriculture produce includes grain, fruits, grapes, vegetables, cattle, sheep, and goats. A severe regional drought in 2001 reduced the country’s grain production by 50 percent. The republic has a wide range of mineral resources, in limited amounts, including petroleum, uranium, mercury, brown coal, lead, zinc, antimony, silver, gold, and tungsten. Industry is limited to one large aluminum plant, hydropower facilities (the source of 98.5 percent of the nation’s electricity), chemicals and fertilizers, cement, and small obsolete factories mostly in light industry (metal-cutting machine tools, refrigerators, and freezers) and food processing (vegetable oil). Tajikistan’s real growth rate was 2 percent (1999 est.) but the annual inflation surged at 22 percent (1999 est.). GDP by sector focused on services (42 percent), agriculture (34 percent), and industry (24 percent). The nation’s exports totaled $634 million (1999 est.) and included aluminum, electricity, cotton, fruits, vegetable oil, and textiles. Most of Tajikistan’s exports went to Uzbekistan (37 percent), followed by Liechtenstein (26 percent), Russia (16 percent), and Kazakhstan (6 percent) (1997). Tajikistan runs a negative balance of trade, importing $770 million worth of imports (1999 est.). The country imports electricity, petroleum products, aluminum oxide, machinery and equipment, and foodstuffs. The Netherlands was the source of most of Tajikistan’s imports (32 percent), while other imports came from Uzbekistan (29 percent), Switzerland (20 percent), and Russia (9 percent) (1997). Tajikistan’s external debt stood at $1.3 billion in 1999; the country is dependent on aid from Russia and Uzbekistan and on international humanitarian assistance for much of its basic needs. The country received $64.7 million in foreign aid in 1995. The nation’s labor force, 1.9 million (1996), is involved primarily in agriculture and forestry (50 percent), services (30 percent), and industry (20 percent) (1997 est.). Officially, 5.7 percent of workers are unemployed although large numbers are underemployed or are not registered. Approximately 80 percent of the population lives in poverty. While illicit drug production is limited (the government has taken action to eradicate opium poppy cultivation), Tajikistan is emerging as a major transshipment point for drugs from Southwest Asia en route to Russia and Western Europe. Even if the peace agreement of 1997 is honored, the country’s economic future remains bleak. The government must integrate former combatants into the economy and deal with a growing refugee problem. Tajikistan’s economic future and ability to attract badly-needed foreign capital relies on political stability and further progress in the peace process. Summary Despite several years of peace after an intense civil war, Tajikistan faces numerous economic and political problems which will challenge this fledgling democracy. Portions of the nation’s border with China remain undefined and a source for potential future problems. Tajikistan also is embroiled in a territorial dispute with the Kyrgyz Republic; three small Tajik enclaves in the Isfara Valley are surrounded by Kyrgyz territory. The biggest threat to the republic is from the thousand-mile border with Afghanistan. The civil war between the ruling Taliban Islamic militia and opposition forces has encouraged hundreds of thousands of Afghans to flee north towards Tajikistan. The Tajik government has refused to allow Afghan refugees to cross the border because the country cannot support a large influx of destitute people. Approximately 25,000 Russian troops are in Tajikistan and many are based on the border with Afghanistan to prevent a mass onslaught. The greatest threat to the country is simply the poverty that most Tajiks face daily. The transition from socialism to capitalism has been catastrophic due to the collapse of the social welfare system and denied access to traditional markets, forcing the country to rely heavily on international aid. Without market reform and economic growth, the future political stability of Tajikistan will remain uncertain. Republic of Turkmenistan Background The people of Turkmenistan are descendants of the Oghurz tribes who migrated to Central Asia in the 10th Century. Most of Turkmenistan was occupied by the Russians between 1865 and 1885. In 1865, tsarist forces seized Tashkent, with Samarkand falling in 1868. The Russians united the occupied territory with Russian Turkestan. In the 1870’s, the Russians advanced further south, In 1873, the Emir of Bokhara signed an agreement, recognizing tsarist suzerainty. At the same time, the Russians made Khiva a vassal state. Until the collapse of the imperial Russian government, the political administration of Russian Central Asia included the Khanate of Khiva, the Emirate of Bokhara, and the Governor-Generalship of Turkestan. With the advent of the Bolshevik Revolution, the Soviet government established its authority in these regions during the summer of 1919. The Bolsheviks deposed the Khan of Khiva in February 1920 and established a People’s Soviet Republic, reviving the medieval name of Khorezm. The Emir of Bokhara suffered the same fate in August 1920 and the Soviets set up a people’s soviet republic. The former Governor-Generalship of Turkestan became an Autonomous Soviet Socialist Republic with the Russian Soviet Federal Socialist Republic (R.S.F.S.R.) in April 1921. The Soviets of the Turkestan, Bokhara, and Korezm Republics met in the Fall of 1924 and agreed to redistribute the territories of these republics on the basis of nationality; at the same time, Bokhara and Korezm became Socialist Republics. The territorial redistribution was completed by May 1925 and the new states of Uzbekistan, Turkmenistan, and Tadzhikistan entered the U.S.S.R. as Union Republics. With the impending collapse of the Soviet Union, the Turkmen Supreme Soviet unanimously voted to declare Turkmenistan’s sovereignty in 1990. In October 1991, the republic held a national referendum in which 99.4 percent of the voters supported national independence. Turkmenistan became a member of the Commonwealth of Independent States (CIS) in December 1991. Territory and Population Bordered by Kazakhstan, Uzbekistan, Afghanistan, and Iran, Turkmenistan is a landlocked nation. It is slightly larger than California in area. The country’s topography consists of flat, sandy desert rising to mountains in the south, low mountains along the border with Iran, and the Caspian Sea to the west. Turkmenistan’s climate is best characterized as subtropical desert. The Turkmen are the largest ethnic group (77 percent of the population), followed by Uzbeks (9 percent), Russians (8 percent), Kazakhis (2 percent), and others (5 percent) (1995). Turkmenistan is predominantly a Muslim nation, with 89 percent of the population adherents to that faith. The other major religion represented in the population is Eastern Orthodoxy (9 percent). Languages spoken in Turkmenistan include Turkmen (72 percent), Russian (12 percent), Uzbek (7 percent), and other languages (2 percent). The national literacy rate for inhabitants 15 and older is 98 percent (1989 est.). Government Turkmenistan is divided administratively into five provinces or welayatlar. On May 18, 1992, the country adopted its current constitution. The President and Chairman of the Cabinet of Ministers is Saparmurat Niyazov. He won the first direct presidential election in October 1990, becoming both the chief of state and head of government. Niyazov was reelected in June 1992 in an unopposed campaign, gaining 99.5 percent of the vote. Under the constitution, the president is elected for a five-year term by popular vote. However, in December 1999, the Majlis (Assembly) unanimously approved Niyazov as president for life. The Council of Ministers serves as the cabinet and is appointed by the president. Under the 1992 constitution, the legislature is composed of two branches. The Halk Maslahaty (People’s Council) is a unicameral body, composed of more than 100 seats, but meets infrequently. Some delegates are elected by popular vote and the remainder are appointed. The Majlis (Assembly) is the second branch of the legislature and consists of 50 members who are elected by popular vote to serve five-year terms. The last Majlis election was held in December 1999 and all 50 candidates were pre-approved by the president. Regarding the judicial branch of government, all of the members of the Supreme Court are appointed by the president. The Democratic Party of Turkmenistan/DPT is the only political party that has legal standing in the republic. Formal opposition parties are outlawed, although small, unofficial opposition movements exist underground or in other countries. Economy Turkmenistan is predominantly a desert country with limited agriculture (nomadic cattle herding and intensive agriculture in irrigated areas) and large petroleum and natural gas deposits. The republic’s GDP by sector is led by industry (62 percent), services (28 percent), and agriculture (10 percent) (1997 est.). Approximately one-half of the country’s irrigated land supports cotton production, making Turkmenistan the world’s tenth largest cotton producer. Other agricultural products include grain and livestock. The country’s economy relies heavily on fossil fuel production. Turkmenistan enjoys the fifth largest natural gas reserves in the world and has substantial petroleum deposits. Industrial production focuses on natural gas, oil, petroleum products, textiles, and food processing. Most electricity production (99.94 percent) is derived from fossil fuels. Oil and gas production has helped spark the republic’s economy, which experienced a real GDP growth rate of nine percent in 1999 (est.). Turkmenistan, simultaneously, suffers from a high rate of inflation, estimated at 30 percent (1999), in its consumer price index. The nation had a negative balance in 1999 of $150 million. Turkmenistan exported a total of $1.1 billion worth of goods in 1998, consisting primarily of oil and gas (55 percent) and cotton (22 percent). The republic’s chief exporting partners included Iran, Turkey, Russia, Kazakhstan, Tajikistan, and Azerbaijan. In 1998, Turkmenistan imported a total of $1.25 billion worth of goods, including machinery and equipment (45 percent), chemicals, and foodstuffs. The republic imported goods from the Ukraine, Turkey, Russia, Germany, the United States, Kazakhstan, and Uzbekistan. The country’s labor force is composed of a total of 2.34 million workers (1996). Many work in agriculture and forestry (44 percent), industry and construction (19 percent), or are employed in other types of work (37 percent). Unemployment statistics for the country are not available. Turkmenistan’s external debt is $2.1 billion (1999 est.) and receives very little foreign aid (only $27.2 million in 1995). Until the end of 1993, Turkmenistan avoided much of the economic disruptions other former Soviet republics experienced because the republic’s economy received a big boost from higher international oil and gas prices as well as a sharp increase in hard currency earnings. In 1994, Russia refused to export Turkmen natural gas to hard currency markets and the mounting debts of CIS states resulted in delayed payments for gas deliveries. This resulted in a sharp decline in Turkmen industrial production and moved the republic’s budget from a surplus to a slight deficit. Due to rich reserves of natural resources and a conservative government, Turkmenistan has adopted a cautious approach to economic reform. Privatization reform has been limited. In June 1994, the government began to sell off firms with less than 100 employees by sales by auction, to the employees, or to foreign ownership. The government planned to convert larger firms into joint stock companies with the state retaining a majority of the shares. Turkmenistan is trying to open new natural gas export channels though Iran and Turkey to Western Europe to circumvent the Russian pipeline system. It will take many years for a new gas transportation system to be constructed. In 1998-99, the government experienced revenue shortfalls due to inadequate gas export routes and obligations on short-term external debt. In 1999, the government agreed to ship 20 billion cubic meters of natural gas though Russia’s Gazprom to alleviate the nation’s 2000 fiscal deficit, but these arrangements will not contribute to the long-term development of the country. Summary The nation’s vast fossil fuel resources provide Turkmenistan an economic opportunity for development that is not available to other Central Asian countries. Increasing world demand for petroleum and natural resources have supported Turkmenistan’s economy and ameliorated the slow transition to a market based economy. The government’s failure to accelerate market reform may lead to future problems. The state has relied on natural gas and cotton sales to bolster an inefficient economy. The lack of a secure pipeline system to export natural gas to the West has forced the Turkmen to rely on Russian pipeline systems and reduced profits. Despite the country’s bountiful natural wealth, many Turkmen live in widespread poverty and the country has accumulated significant short-term foreign debt. IMF intervention may be necessary, although the Turkmenistan government would not welcome IMF-imposed structural adjustments. Democratic reform is equally unlikely for the foreseeable future. The autocratic government is dominated by ex-Communist leaders and society reflects a tribal-based social structure. In terms of foreign relations, the boundaries of the Caspian Sea remain undemarcated with disputes with Azerbaijan, Iran, Kazakhstan, and Russia still under negotiation. Turkmenistan is increasingly becoming a transshipment point for illicit drugs from Southwest Asia enroute to Russia and Western Europe. The Republic of Uzbekistan Background The Uzbeks trace their ancestry back to nomadic Mongol tribes who settled across Central Asia during the 13th century. During the late 19th century, the Russians advanced into this region meeting stiff resistance from the Uzbeks. In October 1917, the Tashkent Soviet assumed control over the area and the Red Army encountered some opposition. Between 1920 and 1924, the Bolshevik government reorganized the administration of Central Asia, transforming People’s Republics into Soviet Socialist Republics. On October 27, 1924, the Soviets announced the establishment of the Uzbek Soviet Socialist Republic. The republic gained an additional 40,000 square kilometers of territory from Kazakhstan in 1963. During the Soviet period, central planners sought to address national agricultural problems by developing intensive farming in Uzbekistan, primarily in the production of “white gold” (cotton) and wheat. This policy had disastrous environmental consequences for the republic due to overuse of agrochemicals (pesticides and fertilizers) and the depletion of water supplies. The result was polluted soil and severe water loss in the Aral Sea and certain rivers. In response to the collapse of Communism in the Soviet Union, the Supreme Soviet of Uzbekistan adopted a declaration of sovereignty on June 20, 1990. In August 1991, after an unsuccessful coup, government declared its independence as the Republic of Uzbekistan, a decision which was confirmed by a national referendum in December. The nation joined the Commonwealth of Independent States (CIS) in December 1991. Territory and Population Uzbekistan is a landlocked country which is bordered by Kazakhstan, Turkmenistan, Afghanistan, Tajikistan, and the Kyrgyz Republic. The country is slightly larger than California in area. Declining water levels in the Aral Sea have had a serious environmental impact on the country as growing concentrations of chemical pesticides and salt deposits from the dry lake bed become wind borne and contribute to desertification. The largest ethnic group is the Uzbek (80 percent of the population) followed by Russians (6 percent) and Tajiks (5 percent). Due to low Russian immigration during the Soviet period, Uzbekistan does not have the nationality problem which has contributed to political tensions in other Central Asian republics. Most Uzbeks are Muslim (88 percent and mostly Sunni) and there is a Russian Orthodox minority (9 percent). A majority of citizens speak Uzbek (74 percent) and approximately 14 percent use Russian. Literacy for people 15 years and older is 99 percent. Government Uzbekistan is divided administratively into 12 wiloyatlar, one autonomous republic, and one city (the capital of the country, Tashkent). On December 8, 1992, the country adopted a new constitution which declared Uzbekistan a pluralistic democracy. The nation is effectively ruled under an authoritarian president with limited power outside of the executive branch. Executive power is concentrated in the presidency. Uzbek’s Supreme Soviet elected Islom Karimov president in March 1990 as chief of state. A national referendum, held in March 1995, extended his term for another five years (Karimov received an overwhelming 99.6 percent of the referendum vote). In January 2000, Karimov retained the presidency in a national election. The legislature consists of a unicameral parliament, the 250-member Oliy Majlis (Supreme Assembly). Members are elected to five-year terms by popular vote with the next election scheduled in 2004. While Uzbekistan has a Supreme Court with members nominated by the president and confirmed by the Supreme Assembly, the country lacks an independent legal system. Uzbekistan has a multi-party political system and includes the following political parties: Adolat (Justice) Social Democratic Party; Democratic National Rebirth Party/MTP (Milly Tiklanish); Fatherland Progressive Party/VTP (Vatan Tarakiyoti); People’s Democratic Party/NDP (formerly the Communist Party); and Self-Sacrificers Party (Fidokorlar). All of the political parties represented in the Supreme Assembly support the president. In addition, Uzbekistan has a number of political “pressure groups” which include the Birlik (Unity) Movement; Erk (Freedom) Democratic Party (banned in December 1992); the Human Rights Society of Uzbekistan; and the Independent Human Rights Society of Uzbekistan. Economy Uzbekistan was one of the poorest republics in the former Soviet Union with more than 60 percent of the population living in densely populated rural communities. Soviet central planners sought to develop agriculture in this republic and intensively cultivated and irrigated Uzbekistan, with serious environmental repercussions. Uzbekistan is currently the world’s third largest cotton producer but the government is striving to reduce the country’s dependence on agriculture. Other agricultural products include vegetables, fruits, grain, and livestock. Uzbekistan is also rich in gold and natural gas and is a regional supplier of chemicals and machinery. The republic’s chief industries include textiles, food processing, machine building, and metallurgy. Uzbekistan’s GDP by sector in 1997 was led by services (47 percent), agriculture (27 percent), and industry (27 percent). The country’s economy remains stagnant, with real GDP falling by one percent in 1999. At the same time, the country’s annual inflation rate in consumer prices reached 29 percent. The country’s exports totaled $2.9 billion (1999) and included cotton, gold, natural gas, mineral fertilizers, metals, food products, and automobiles. Uzbekistan’s primary export partners were Russia (15 percent), Switzerland (10 percent), Britain (10 percent), Belgium (4 percent), Kazakhstan (4 percent), and Tajikistan (4 percent) (1998). Uzbekistan experienced a negative balance of trade, importing $3.1 billion worth of machinery, equipment, chemicals, metals, and foodstuffs in 1999. The republic received imports from Russia (16 percent), South Korea (11 percent), Germany (8 percent), the United States (7 percent), Turkey (6 percent) and Kazakhstan (5 percent). The nation’s external debt stood at $3.2 billion in 1998. Following independence in December 1991, the government sought to maintain a command economy through subsidies and tight controls on production and prices. This resulted in high inflation rates which forced the government to introduce reform policies in 1994. The Uzbek government expanded the privatization process, tightened monetary policies, moved to reduce the role of the state in the economy, and improved opportunities for foreign investment. Despite these policies, the government continues to play a significant role in the economy and reform has not resulted in structural changes to establish a market economy. In 1996, the IMF suspended a $185 million standby agreement because Uzbekistan could not meet IMF conditions. The government attempted to insulate the national economy in response to the Russian and Asian financial crises by further tightening export and currency controls in an already largely closed economy. These economic policies have significantly limited foreign investment which has been a major factor in Uzbekistan’s economic stagnation. Unrelenting inflation, an expanding national debt, and a poor business climate undermine Uzbekistan’s economic and political future. Summary Uzbekistan faces difficult political and economic challenges at the turn of the century. A strong executive branch has hindered the growth of democracy in the republic and Uzbekistan has compiled a poor human rights record. In terms of its economic prospects, Uzbekistan is an important global cotton exporter. However, the country’s agricultural development has come at the cost of the depletion of fresh water supplies, desertification, and soil contamination through overuse of fertilizers and pesticides. While the government seeks to reduce national dependence on agricultural exports by boosting the exportation of natural gas, petroleum, and minerals, economic policies have undermined the transition from socialism to a free market economy. A non-convertible currency, high inflation rate, government economic controls, and the inability to attract foreign investment has resulted in negative economic growth. In addition, Uzbekistan is increasingly challenged by Islamic militant groups from Tajikistan and Afghanistan. The unstable political situation in Afghanistan threatens to spill over Uzbekistan’s border in the form of terrorism and drug trafficking. The Russian-American Chamber of Commerce® is a nonprofit, nonpartisan organization acting to promote American business interests in the Russian marketplace. The Russian-American Chamber of Commerce® Last Updated: January 11, 2002. Copyright the Russian-American Chamber of Commerce® 1995-2003. All rights reserved.