Kazakstan and Uzbekistan Strengthen Economic Ties
Kazakstan and Uzbekistan Strengthen Economic Ties
Kazakstan and Uzbekistan have signed a long-term economic cooperation strategy, but NBCentralAsia experts say the relationship between these states, both with strong presidents in charge, may make it difficult to collaborate to the full.
On July 26, Kazak prime minister Karim Masimov met his Uzbek counterpart Shavkat Mirziyoev in Tashkent where they signed a strategy for economic cooperation until the year 2016.
Both men noted that trade between the two countries has almost doubled in the past year and may exceed one billion US dollars by the end of this year.
NBCentralAsia observers say that even though this agreement demonstrates serious political intent to strengthen trade ties, a real improvement in economic cooperation would require proper integration, including a relaxation of customs and tax rules, as well as a liberalisation of both their political systems.
One NBCentralAsia analyst, Petr Svoik, says that the new strategy is a political rather than economic document.
But is precisely political factors that will hinder greater economic integration. “One would need inter-governmental institutions, joint commissions and best of all parliamentary cooperation,” he said. “But all this is lacking at the moment, and it won’t start happening in the foreseeable future because of the political system in both countries.”
Kazak president Nursultan Nazarbaev and Uzbekistan’s Islam Karimov both governed their countries since the collapse of the Soviet Union in 1991.
According to Uzbekistan’s constitution, Karimov’s final term has officially expired and an election must be held in December but he has not made any official statement about holding such a ballot.
In May, Nazarbaev introduced changes to the constitution that allow him to stand for the presidency as many times as he likes.
According to Svoik, the most promising areas for economic cooperation between Kazakstan and Uzbekistan are the gas industry, rail and road links, water resources, and supplies of Kazak fertiliser for the Uzbek cotton industry.
Gulnur Rakhmatullina, head of economics at the Kazakstan Institute for Strategic Studies, adds that there is also potential for trade in agricultural products, fuel and energy, mechanical engineering and textiles.
Both sides are currently discussing a joint project to build a gas pipeline running between Turkmenistan and China. Construction is due to start next year, and the route will take in both Uzbekistan and Kazakstan.
Rakhmatullina believes the signing of the strategy document creates the legal foundations for improved economic cooperation, but she warns that “market reforms in Uzbekistan are not very advanced yet, businessmen have a tough time of it there, and there are still problems with banking transactions”.
According to a 2007 report by the Heritage Foundation and the Wall Street Journal, Kazakstan has the highest level of economic freedom in Central Asia, ranked 75th out of 161 countries, while Uzbekistan sits near the bottom in 132nd place.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
On July 26, Kazak prime minister Karim Masimov met his Uzbek counterpart Shavkat Mirziyoev in Tashkent where they signed a strategy for economic cooperation until the year 2016.
Both men noted that trade between the two countries has almost doubled in the past year and may exceed one billion US dollars by the end of this year.
NBCentralAsia observers say that even though this agreement demonstrates serious political intent to strengthen trade ties, a real improvement in economic cooperation would require proper integration, including a relaxation of customs and tax rules, as well as a liberalisation of both their political systems.
One NBCentralAsia analyst, Petr Svoik, says that the new strategy is a political rather than economic document.
But is precisely political factors that will hinder greater economic integration. “One would need inter-governmental institutions, joint commissions and best of all parliamentary cooperation,” he said. “But all this is lacking at the moment, and it won’t start happening in the foreseeable future because of the political system in both countries.”
Kazak president Nursultan Nazarbaev and Uzbekistan’s Islam Karimov both governed their countries since the collapse of the Soviet Union in 1991.
According to Uzbekistan’s constitution, Karimov’s final term has officially expired and an election must be held in December but he has not made any official statement about holding such a ballot.
In May, Nazarbaev introduced changes to the constitution that allow him to stand for the presidency as many times as he likes.
According to Svoik, the most promising areas for economic cooperation between Kazakstan and Uzbekistan are the gas industry, rail and road links, water resources, and supplies of Kazak fertiliser for the Uzbek cotton industry.
Gulnur Rakhmatullina, head of economics at the Kazakstan Institute for Strategic Studies, adds that there is also potential for trade in agricultural products, fuel and energy, mechanical engineering and textiles.
Both sides are currently discussing a joint project to build a gas pipeline running between Turkmenistan and China. Construction is due to start next year, and the route will take in both Uzbekistan and Kazakstan.
Rakhmatullina believes the signing of the strategy document creates the legal foundations for improved economic cooperation, but she warns that “market reforms in Uzbekistan are not very advanced yet, businessmen have a tough time of it there, and there are still problems with banking transactions”.
According to a 2007 report by the Heritage Foundation and the Wall Street Journal, Kazakstan has the highest level of economic freedom in Central Asia, ranked 75th out of 161 countries, while Uzbekistan sits near the bottom in 132nd place.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
