Uzbek City Baulks at Government Controls

Monday, 21 February, 2005

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Timur Salimov

The recent riots in Kokand – a city with a long tradition of resisting central control – are a sign that many Uzbeks are no longer prepared to put up with government restrictions on business, analysts say.

The authorities, who normally have no compunction about putting down dissent, appear to be temporarily at a loss how to deal with the unprecedented level of hostility towards their actions.

The unrest broke out on November 1, as police and tax inspectors were sent in to impose new regulations at the main market in Kokand, historically the "capital city" of the Fergana valley, a densely populated and periodically restive region.

Traders at the Yangi Bazaar and other markets across Uzbekistan feared that the new rules, set out in the now infamous Regulation No. 387, would put them out of business at a stroke, because they stipulate that anyone dealing in imported goods has to have imported them personally.

Thousands of people at the market sell foreign-manufactured – often Chinese – clothes, electrical goods and other items, but their supplies come from a much smaller number of wholesale dealers who travel to Kyrgyzstan to buy consignments and bring them across the border.

As officials arrived to check compliance with the rules, between 5,000 and 10,000 angry traders and sympathisers took to the streets. Tax inspectors and police were beaten, and two police cars were set on fire.

Such acts of mass protest are unheard of in Uzbekistan, where the authorities maintain a tight grip on law and order. Recent demonstrations against the government have been small-scale affairs by interest groups and civil rights activists, which even the normally heavy-handed police force had grown to tolerate.

Although the protests began in Kokand, they were quickly replicated in other Fergana valley cities as well as more distant parts of Uzbekistan such as Karshi, Bukhara and Khorezm.

The scale of the unrest, the rapidity with which it spread, and the fact that participants were prepared to take on the security forces using violence if need be, are all new to this tightly-controlled society and must be worrying the authorities.

“The recent beatings of tax inspectors and police were an entirely new phenomenon as a manifestation of protest," said a political scientist from the Institute for Strategic Research and Regional Security, who wished to remain anonymous. "The Uzbek authorities were scared by this, and temporarily delayed implementing the order.”

That creates a stand-off which Jahongir Shosalimov, an economist and a member of the opposition party Erk, characterises as "revolutionary".

"Those at the top are incapacitated, while those at the bottom won't stand for any more," he said.

With relations between rulers and subjects at an impasse, the government has held off on doing anything more to impose its trade regulations.

For the moment, taxmen and police are simply dodging the issue by staying away from the markets, apparently sensing that any new action would be counter-productive.

“Police at the Chorsu market in [the capital] Tashkent have started wearing civilian clothes because they’re scared to turn up there in uniform – can that be normal?” asked Shosalimov.

The authorities are expected to hold off on any new attempt to impose trade restrictions until after the parliamentary election scheduled for December 26. Doing so beforehand would risk more unrest and deter people from turning out to vote for the five pro-government parties which are standing.

Political and economic analysts interviewed by IWPR suggested that the restrictions look like the latest move in a campaign to squeeze traders out of business, which goes to the very heart of the way Uzbekistan is governed.

As well as a monopoly over political life – meaning that all forms of opposition are throttled nearly out of existence – the administration of President Islam Karimov has maintained rigid controls over an economic system that retains many features of its Soviet past.

Large businesses are in the hands of the same elite that rules the country, managed by officials whose knowledge of market economics is limited to the Soviet system and who are driven by a desire to maximise income from the companies they won in the privatisation of the early nineties.

“The current situation with the Uzbek economy is similar to the Sukarno era in Indonesia in the sixties, when the generals held power in one hand and business in the other,” said Uzbek historian Sodik Abdullaev, who now lectures at a university in Paris.

Despite the power exerted by big business groups with government links, small-scale entrepreneurs such as market traders were nevertheless able to find a niche on the margins of the economy through the nineties.

But even that space may now be closing. A series of regulations and government decrees issued over the last two years, ranging from tougher border controls and swingeing import duties to the requirement that every market stall operates a cash register and files its accounts with a state-run bank, have made the lives of traders and small shopkeepers a misery.

Some analysts to whom IWPR spoke suspect that as well as retaining a very Soviet aversion to the free market, senior officials want to corner the import business for themselves and are crowding out the competition. Sugar and vegetable oil imports have long been a monopoly, for example.

An alternative explanation offered by a western diplomat, who asked not to be named, is that the government is in fact trying to pursue the economic reforms required by lenders such as the International Monetary Fund, IMF. As a precondition to a resumption in lending, the IMF has insisted that the Uzbek currency be made fully convertible – and the goal of financial stability could explain why the authorities are trying to clamp down on unrestricted flows of goods and cash.

Most of the analysts interviewed disagreed with this view that the government is fumbling its way towards the free market. Instead, they backed the argument that it is all about competition – or rather the lack of it.

To illustrate the point, they noted that Karimov's administration has already dealt with the anything that looks like political competition.

Opposition parties are boycotting the December parliament election, but they have been prevented from operating effectively for more than a decade ago. Islamic groups have been crushed and their members jailed, although in this case the effect has often been to spur the appearance of more radical movements. Apolitical non-government groups have come under renewed pressure in recent months, with the Open Society Institute and others closed down.

For some, it is instructive the recent wave of popular anger against the government's gradual encroachment on economic as well as political rights took place in Kokand. There is more than a hint of a historical pattern here: throughout its history, the city has been the focus for protests against outside interference.

One of the Russian Empire's first actions when it expanded into Central Asia was to destroy the Kokand Khanate, the statelet that controlled the Fergana valley and beyond. After the Russian Revolution of 1917, Kokand was the seat of a brief-lived government which held out against Bolshevik expansion into Central Asia.

The city remained quiet through the Soviet period, no doubt due to the bloody suppression of the Kokand government.

But in 1989, Kokand hit the headlines when it was the scene of interethnic violence between Uzbeks and Meskhetian Turks exiled here by Stalin.

The shock caused by the violence stimulated the development of opposition to Soviet rule, with the Birlik movement calling for independence for Uzbekistan.

According to one western expert on Central Asia, the city is back in action as a hotbed of dissent – only this time, he says, "the people of Kokand have stood up for the right to feed themselves".

Timur Salimov is the pseudonym of an independent analyst in Tashkent.