Dialogue  October-December, 2004, Volume 6  No. 2

Perspective of Economic Development in Uzbekistan and Relations between Uzbekistan and India

Dr. Surat Mirkasymov

Before beginning my paper I would like to say that the topic of the seminar fully reflects the ancient and contemporary relations between Central Asia and India, Uzbekistan and India in particular.

We can see the clear contours of four periods: the first, being the period when Central Asia played the role of a bridge for the spreading of ancient Buddhism—a religion which was born in India into China. It was during the Kushan period that Buddhism came to Central Asia, and southern Uzbekistan.

The second period covers the Middle Ages when King Babur’s settled in India, engaged in uniting and developing the country’s economy, military, culture, architecture, agriculture irrigation system, etc.

The third period includes the Soviet period, beginning from the 1920’s up to 1991. In this period relations between our countries grew from official relations to people’s friendship. It was colossal! There was no sphere which was left untapped by bilateral relations. As a part of the Soviet Union, Uzbekistan also developed cultural, educational, scientific, tourist and other relations with India. Hundreds of Indian youths studied in the universities of Tashkent. Many young scientists did their Ph.Ds here and were trained in various plants, farms, institutions. We are sure of the contribution of these people in the fast development of India from the nineties to the present.

The fourth period reflects our relations from 1991 onwards, when

Uzbekistan became a sovereign Republic, having direct relations including diplomatic were established between the two countries.

The first three periods laid down the foundation for our present day relations. But are these relations strong and effective?

Last November during the inaugural address at third India Central Asia Regional Conference in Tashkent, the Minister of Foreign Affairs of the Republic of India H.E. Mr. Yashwant Sinha said: “For us Central Asia is our immediate and strategic neighborhood.”

Uzbekistan also has the same position. Dozens of diplomatic documents on cooperation in different fields have been signed with India which are an evident proof of this. We can say that political, diplomatic, cultural, scientific, educational relations are developing, but economic and trade relations need more attention from both parties. As Mr. Yashwant Sinha mentioned: “As far as India and Central Asia are concerned, greater economic engagement is needed.” All Central Asian Republics are connected by air with Delhi and other cities of India. Uzbek Airways is also functioning effectively. For the land and sea connectivity both parties already have some programs planned. As the Minister confirmed last year, India, Iran and Afghanistan decided to open a new sea and road route through the Iranian port of Chahbahar. The government of Uzbekistan has also signed an agreement with the governments of Afghanistan and Iran to jointly construct a road which will connect the Uzbed city of Termez with the Iranian border via the ancient Afghani city of Herat. Once this road is complete, it will reduce the current distance between Uzbekistan and India by 1500 kilometres. No doubt that this road will serve other Central Asian countries, including the Asian part of the Russian Federation.

The historical meeting of the leaders of Pakistan and India during the SAARC summit meeting in Islamabad in the beginning of January this year and the decision to put their mutual distrust behind them and have a composite dialogue on all bilateral issues, including Jammu and Kashmir was welcomed by all. As the “Hindustan Times” correctly wrote “India Pak Kill Chill.” A majority of countries, according to information received from capitals of different countries, welcomed the decision. We in Uzbekistan were also happy to hear this news. If negotiations will conclude with the signing of an encouraging agreement then the political atmosphere in the SAARC area will undergo a positive change and will help solve long awaited problems. Firstly, the political, diplomatic, economic, trade, cultural, tourism, sport relations will grow between the two neighboring countries. Secondly, it will open the scope for quick development of economic and trade relations between Central Asian countries including Russia and Afghanistan and the SAARC countries.

As specialists calculated, the trucks with cotton silk, fruits, metal, fertilizer and other export goods from Uzbekistan starting from Termez city will reach New Delhi via Kabul-Peshawar-Lahor-Amritsar within 34 days maximum. For landlocked countries like Uzbekistan it makes sense. Inside the country there is a well developed infrastructure : automobile roads, airways, airlines, but there are still not many alternative roads connecting Uzbekistan with sea shores.

What kind of factors make India so attractive for the Uzbek party? The main factor is its great achievements in the process of liberalization of its economy: if in the beginning of the reform process it had only one billion dollars in its reserve now after just 13 years it has became $100 billion. The GNP has grown annually and crossed 7% and in the last quarter of 2003 it crossed 8% and India turned from creditor to debtor, its exports crossing the $50 billion mark. So we can see big positive changes in all fields of life of the Indian people: education, science, information technology, agriculture etc.

Of course, Uzbekistan has also tried to do the same and some good results have been achieved. The economy attained its pre-independence GDP level in 2001, the country achieved self-sufficiency in energy by 1995 and in wheat by 1998. Wheat product increased from 1 million tons in pre-independence times to a record of 5.4 million tons by 2002. A number of new industries were promoted in consumer goods, for example cars, TVs VCRs etc.

The government’s development policy is aimed at building a “socially-oriented market economy”. The strategic objectives announced soon after independence were :

            •   Achieving economic independence by reducing imports

            •   Diversifying the economy from its raw material orientation to a more modern and competitive industrialized structure

            •   Increasing the country’s export potential and foreign exchange reserves to have a strong, stable currency

            •   Expanding employment opportunities and raising living standards

Here it has to be emphasized that the country had to face and overcome two expected difficulties on the way of implementation of it program. First, lack of business experience as a result of about 80 years of the Soviet policy of “no private business”, and the second minimal foreign investment into the economy due to civil disturbances and instability in neighboring Tajikistan and Afghanistan.

Now normal life in these countries has been stabilized, The aggressive policy of the Taliban government and its support of religious extremist groups had meant that the Uzbek government had to give more attention and higher expenses for the security of the country.

Now, after the great victory of the coalition forces against world terrorism, step by step new spheres are opening up for the speedy implementation of the economic reforms program. The annual session of the European Bank for Reconstruction and Development and many other international seminars being held in Tashkent along with the growing GDP rate of over 4% annually, strong government policy towards implementing reform program educated and professional human resources plus rich natural wealth of the country have raised the confidence that the goals of the country will be achieved.