Uzbekistan

Phone Code: 00998

Root-level Domain Code: .uz

CIA Info

Background: Russia conquered Uzbekistan in the late 19th century. Stiff resistance to the Red Army after World War I was eventually suppressed and a socialist republic set up in 1924. During the Soviet era, intensive production of "white gold" (cotton) and grain led to overuse of agrochemicals and the depletion of water supplies, which have left the land poisoned and the Aral Sea and certain rivers half dry. Independent since 1991, the country seeks to gradually lessen its dependence on agriculture while developing its mineral and petroleum reserves. Current concerns include terrorism by Islamic militants, economic stagnation, and the curtailment of human rights and democratization.

Economy Overview: Uzbekistan is a dry, landlocked country of which 11% consists of intensely cultivated, irrigated river valleys. More than 60% of its population lives in densely populated rural communities. Uzbekistan is now the world's second-largest cotton exporter and fifth largest producer; it relies heavily on cotton production as the major source of export earnings. Other major export earners include gold, natural gas, and oil. Following independence in September 1991, the government sought to prop up its Soviet-style command economy with subsidies and tight controls on production and prices. While aware of the need to improve the investment climate, the government still sponsors measures that often increase, not decrease, its control over business decisions. A sharp increase in the inequality of income distribution has hurt the lower ranks of society since independence. In 2003, the government accepted the obligations of Article VIII under the International Monetary Fund (IMF), providing for full currency convertibility. However, strict currency controls and tightening of borders have lessened the effects of convertibility and have also led to some shortages that have further stifled economic activity. The Central Bank often delays or restricts convertibility, especially for consumer goods. Potential investment by Russia and China in Uzbekistan's gas and oil industry may boost growth prospects. In November 2005, Russian President Vladimir PUTIN and Uzbekistan President KARIMOV signed an "alliance," which included provisions for economic and business cooperation. Russian businesses have shown increased interest in Uzbekistan, especially in mining, telecom, and oil and gas. In December 2005, the Russians opened a "Trade House" to support and develop Russian-Uzbek business and economic ties. In 2006 Uzbekistan took steps to rejoin the Collective Security Treaty Organization (CSTO) and the Eurasian Economic Community (EurASEC), both organizations dominated by Russia. Uzbek authorities have accused US and other foreign companies operating in Uzbekistan of violating Uzbek tax laws and have frozen their assets. US firms have not made major investments in Uzbekistan in the last 5 years.

Geography Note: along with Liechtenstein, one of the only two doubly landlocked countries in the world

Location: Central Asia, north of Afghanistan

Natural Resources: natural gas, petroleum, coal, gold, uranium, silver, copper, lead and zinc, tungsten, molybdenum

Geographic Coordinates: 41 00 N, 64 00 E

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