The Post-Soviet Uzbek Economy: Is there a Specific Model of Development?

Transcription

1 The Post-Soviet Uzbek Economy: Is there a Specific Model of Development? The Post-Soviet Uzbek Economy: Is there a Specific Model of Development? by Halil Kürşat ASLAN After the collapse of the Soviet Union in 1990 all the Central Asian countries have experienced traumatic political and economic transitions. Geographically surrounded by great powers such as China, India and Russia, all Central Asian countries are landlocked with Uzbekistan being one of only two double landlocked countries in the world. Among the five Central Asian nations Kazakhstan, Uzbekistan, and Turkmenistan have enjoyed an abundance of natural resources whilst Kyrgyzstan and Tajikistan have mostly relied upon foreign assistance and labor migration. Amongst them, Uzbekistan and Kazakhstan are the key countries in Central Asia. Uzbekistan is the most populous one in the region and is classified by the World Bank as a lower-middle income country. Kazakhstan has the largest territory and gross national income in the region. As can be seen in the table below Kazakhstan s national income in terms of purchasing power parity is larger than all the other remaining Central Asian countries combined. What makes all the Central Asian countries similar is their common historical and cultural background. The Soviet South including the five Central Asian nations also share the reality of having been the poorest and least industrialized parts of the Soviet Union.1 According to a scholar in the 1980 s; The economy of Central Asia has in large measure remained colonial to this day. It has by far the least manufacturing per capita, with the relative level actually declining in every republic because of the burgeoning population growth rates. 2 Although all post-soviet countries, including the Central Asians, have 1 Halil Kursad Aslan, 2011, International Labor Migration from Rural Central Asia: The Potential for Development in Kyrgyzstan and Uzbekistan, Doctoral Dissertation, Kent State University. 2 Leslie Dienes, 1987, Soviet Asia: Economic Development and National Policy Choices, (Boulder: Westview Press). followed their idiosyncratic paths with regards to political and economic transitions, the most decisive common factor in all transitions was the heritage of a Soviet era political establishment. In this essay, I attempt to analyze the political transition and economy of Uzbekistan whilst keeping in mind the impact of whatever was inherited from the Soviet era. I particularly would like to emphasize that major historical events, policies, processes, formal and informal institutions have a prolonged impact both on micro level behaviors and on the developmental outcomes in the post-independence era of CentralAsia Wise Men Center for Strategic Studies (BILGESAM) Mecidiyeköy Yolu Caddesi, No:10, Şişli -İSTANBUL bilgesam@bilgesam.org Phone: Fax: All rights reserved. No portion of this publication may be reproduced, copied, transmitted without the written permission of BILGESAM.

2 including that of Uzbekistan. 3 For this reason, I start with a brief historical overview concerning the structure of Uzbekistan s politics and economy. Table-1: Gross Domestic Product of Some Selected Countries Rank Countries GDP (PPP) Billion USD Rank The Soviet Heritage in Central Asian Development The first thing to mention is that Soviet nationality policy still affects contemporary Central Asia including Uzbekistan. At the beginning of the Soviet era, Central Asia s political organization was under the rule of Bukhara, Khiva and the Kokand khanates, commonly known as Turkestan (Land of Turks). 4 By 1936 the Moscow administration reorganized these units under the rubric of national-territorial delimitation as related to the Marxist notion of state-sponsored evolutionism. 5 In pre-soviet Central Asia, society was organized under its patriarchal kinship traditions. Communist rule did not attempt to change this social fabric. In other words, Soviet policies implicitly supported a traditional social structure along with its own patron-client relationship. Experts on Central Asia argue that sub-national identities, such as ethnicity, clan and regionalism, are still influential in the understanding of political behaviors in the post-soviet era. 6 For instance, Uzbekistan s President Islam Karimov has taken into consideration the Tashkent, Samarkand and Fergana regional clan structures in every major de- Countries EU Total: 16,092 1 USA 15, Ukraine China 12, Kazakhstan India 4, Belarus Japan 4, Uzbekistan Germany 3, Azerbaijan 98 6 Russia 2, Turkmenistan Turkey 1, Afghanistan 31,8 17 Iran Georgia 26,6 22 Saudi Arabia Armenia Egypt Tajikistan 17,6 27 Pakistan Kyrgyzstan 13,5 29 Malaysia 492 Source: International Monetary Fund, 2012 cision he makes. 7 According to the description of one scholar on the paradoxical developmental project of the Soviet Union;... however staggering the price, this change meant progress in a society whose growth had been arrested in the Middle Ages. 8 GDP (PPP) Billion USD Secondly, the connection between the Soviet heritage and contemporary Central Asian politics is distorted by the Soviet industrialization policy in particular and modernization endeavors in general. As part of the Soviet ideal to create homogenous Soviet citizens, and partly due to specific characteristics of the Central Asian context and its economic necessities, the migration of European (Slav) settlers in Central Asia was promoted, resulting in significant changes to the demographic and social structure. At the beginning of the Soviet rule in Central Asia there were few, if any, skilled indigenous personnel, no local cadres. Initially this necessitated importing workers and trained personnel from other parts of the USSR. 9 Most of the industrial establishments were brought to the region during the Second World War as a precation against the potentiality of a German invasion in the European parts of the Soviet Union. Limited industrialization in Central Asia was accompanied by labor force segmentation. Amongst the labor force there was a natural segmentation between local people and ethnic Slavs. In the period between 1920 and 1970, Central Asia received millions of ethnic Slavs from Russia, Belorussia, and Ukraine; however, the movement of local people in the reverse direction was insignificant. 10 Due to early conditions within Central Asian societies, the newly settled European ethnicities (Russians, Ukrainians, Germans, and Jews) were employed in 3 Halil Kursad Aslan, ibid. 4 Boris Rumer, 1989, Soviet Central Asia: A Tragic Experiment, (Boston and London: Unwin Hyman). 5 Francine Hirsch, 2000, Toward an Empire of Nations: Border- Making and the Formation of Soviet National Identities, The Russian Review, 59: pp There are several scholarly works on this issue. Clan identity (Kathleen Collins; Edward Schatz), regional identity (Pauline Jones-Luong), and local networks (Scott Radnitz) are cited in Ruget and Usmanalieva 2007, p Martin C. Spechler, 2007, Authoritarian Politics and Economic Reform in Uzbekistan: Past, Present and Prospects, Central Asian Survey 26(2). 8 Teresa Rakowska-Harmstone 1991, Foreword, in William Fierman Ed. Soviet Central Asia: The Failed Transformation, (Boulder: Westview Press), p. ix. 9 Nancy Lubin 1984, Labour and Nationality in Soviet Central Asia: An Uneasy Compromise. (Princeton: Princeton University Press), p Boris Rumer,

3 high-skilled jobs that concentrated mostly in urban centers whereas the locals predominantly took semi-skilled and unskilled jobs. This occupational pattern, which is also associated with social status, did not change much throughout the Soviet era. In the 1970s, the indigenous population was overwhelmingly concentrated in agricultural and service sector jobs with little representation in light and food industries; and where Slavs dominated heavy industry and sectors considered strategically important to the central authorities. 11 The indigenous nationalities concentrated mainly in the least-developed small and medium-size cities. These were labor-surplus areas in rural settings and small towns with little industrial activity and prospects for development. On the other hand, Slavs and other European nationalities were disproportionately located in the large cities or industrial centers. Despite the region s richly endowed natural resources (including oil, gas, cotton, and precious metals), during the Soviet era only a small portion of these were was actually used as raw materials in the Central Asian production establishments. Almost all of the raw materials extracted from this region were sent to European Russia for final production. Similar to British colonial policy in India, Russian policy planners at Moscow s headquarters were not eager to allow the development of a local textile industry by locally grown cotton crops. Instead, both British and Russian rulers sent local raw materials to the industrial centers of the empire, and later final production was sent back to local people at higher prices. In other words, the value added was very tiny in Central Asia relative to other regions of the Soviet Union. Under these circumstances, Central Asian intellectuals demanded a shift of emphasis from large integrated mills towards a greater number of small specialized plants in light industries, where labor intensity per unit value of fixed assets is the highest. 12 As a demonstration, the western regions of the USSR provided almost 80% of industrial production in the 1980s; from 1971 to 1984, Central Asian nations, with almost 10% of the Soviet population, took 6% of national income and 6% of new fixed capital investment contributing 4% of industrial production and 8.5% of agricultural production. 13 Consequently, the Soviet Union s developmental ef- 11 Nancy Lubin 1984, p Leslie Dienes 1987, p Boris Rumer 1989, pp. xiv, 31, 184. forts in Central Asia particularly in the 1950s and 1960s brought about relatively high levels of economic growth and modernization. These early efforts combined with a high population growth in Central Asia. However, in the following decades this system turned out to be a highly dependent relationship on the Slavic center. By 1989, the Central Asian republics still produced only one-third of their GDP in the industrial sector. 14 By and large the Central Asian republics had remained a supplier of raw materials to the center and they were all dependent on the center as regards to industrial products, technology and coordination. Another result of this partial and distorted Soviet reform program was the increasing spread of the black market along with semi-legal and illegal economic activities across the Soviet Union. On the other hand, one of the most crucial legacies of this period on contemporary Central Asian politics was the growing influence of patronage networks, an informal economy and corruption. Many economic activities in the post-soviet era have been built upon those private activities in the Soviet era. For example, today s shuttle trading (also known as suitcase trade) is a pattern of continuity from the socialist era. In the Soviet era people who were engaged in the informal economy, especially women, gained experience, established enough social capital and networks that later turned into regularities in the post-soviet political economic structure. 15 The circumstances encountered by these newly independent Central Asian countries are seen as key factors for the trigger of primitivization a process well known in the experience of third world countries which includes de-industrialization, re-agrarianization, expansion of informal and traditional sectors, and a contraction of modern social services. 16 Uzbekistan s Endeavors of Reform after the Soviet Union Uzbekistan declared its independence from the former Soviet Union on September 1, In the early days of the newly independent Uzbekistan there were a few developmental models to be emulated. Capitalist, neo- 14 Rafis Abazov, 2007, Culture and Customs of the Central Asian Republics, (Westport, CT: Greenwood Press). 15 Hatice Deniz Yukseker 2007, Economy and Gender in the Urban Borderland: The Public Culture of Laleli, Istanbul, in Alev Cinar and Thomas Bender Eds. Urban Imaginaries: Locating the Modern City, (Minneapolis: University of Minnesota Press). 16 Stanislav Zhukov 1996, Economic Development in the States of Central Asia, in Boris Rumer Ed. Central Asia in Transition: Dilemmas of Political and Economic Development, (Armonk, NY: M.E. Sharpe). p

4 liberal and the Washington consensus variants of developmental models were the most popular and they seemed attractive to the Eastern European countries. On the other hand, Asian style, Japan and South Korean, had been the exemplary cases of successful transitions through a state-led economic development model. Moreover, in the early 2000s, the rise of the Chinese economy made some developing countries consider it as a potential model. Since its independence, the economic policies of Uzbekistan have been significantly cautious. All Central Asian leaders including Islam Karimov of Uzbekistan have widely ignored the mainstream neoliberal Washington- Consensus type recommendations for their economic policies. 17 The Uzbek government has always been suspicious of Western advisers and their ideas about democratization and the free market system. Thus, Uzbekistan preferred to design a gradual transformation policy with mixed elements of both socialist and free market economic models. The gradual transition strategy in Uzbekistan was characterized by one ultimate objective, namely stability at any cost. 18 The Uzbek government has mostly relied on government control and management central control over the production, pricing, and export of key commodities such as cotton, grain, gold, and energy. Uzbekistan s import substitution policies are coupled with foreign exchange controls and public investment in favored industrial projects, specifically in chemical and petrochemical enterprises as well as in cotton mills. Because the Uzbek government has implemented an import substitution model to control foreign trade and currency transactions in its domestic economy, several formal and informal regulatory mechanisms were also established to prevent the Uzbek currency from being withdrawn from the banks, along with other import and export restrictions. As it is the case for all import-substitution experiences, the Uzbek economy also faces periodic shortages of cash and the rise of an informal economy. A scholar defines key aspects of Uzbekistan s reforms, also known as the Uzbek Road, as the Karimov regime s assurance of stability by subsidizing employment and controlling prices on essential goods and services along with exchange rates. All outside ideologies, including communism, political Islam, or neoliberalismare rejected. According to the scholar; Insofar as any Uzbekistan Kyrgyzstan Kazakhstan Russia Population in 2013 (in million) Median Age in % Population Growth Rate in Urban population in World HDI Rank in th/ th/186 69th/186 55th/186 % Labor Force in Agriculture 26% 48% 26% 8% Agriculture s share in GDP 18.9% 21.3% 5.2% 4.2% Per capita GDP in 2013 (in USD & PPP value) Table 2: Basic Demographic, Economic, and Social Indicators 3,500 2,400 13,500 17,500 Population Below Poverty Line 17% 33% 5% 13% Source: CIA World Fact Book at in the major sectors of the economic system. The large, state-owned enterprises have mostly remained under governmental control. In general, the Uzbek government controls most of the economic activities with its annual macroeconomic plans. The Uzbek government has mostly relied on the importsubstitution model of economic development which uses 17 Martin Spechler, 2008, The Political Economy of Reform in Central Asia: Uzbekistan Under Authoritarianism, (New York: Routledge). 18 Martin Spechler, outside country is to be emulated, the model would be South Korea, Malaysia, Japan, or Turkey not the USA. 19 While evaluating the Uzbek road Spechler highlights that Uzbekistan s economic policies are different from the Chinese model and more like the East Asian devepmental model. 20 Spechler maintains that the Uzbek economic performance is a success story taking 19 Manuel Stark and Joachim Ahrens, 2012, Economic Reform and Institutional Change in Central Asia: Towards a New Model of the Developmental State?, Private University Research Papers. 20 Martin C. Spechler, Uzbekistan: The Silk Road to Nowhere? Comparative Economic Studies, 18(3),

5 into consideration the global contextual circumstances. Another scholar, who believes that Karimov is doing well in his national economic policies contends that Uzbekistan s economic growth suggests that Karimov s regime has been successful in its gradualist strategy, explicitly rejecting a big bang approach to reform in the early 1990s out of a concern for the impact of liberalization on the poorest members of society. 21 According to her, the Uzbek model of development is a well-planned economic policy, and that Islam Karimov highlighted the crucial stance of the social and political stability as the guarantor of both democracy and development. While analyzing Table 2, the difference between Russia and Central Asian countries is clear regarding demographic, economic, and social variables. Besides, there is a growing a variation within Central Asian countries as well. Demographically, Central Asian countries have a population with relatively higher proportion of young age cohorts: median age is around 26 and 29 for Uzbekistan, Kyrgyzstan and Kazakhstan while this figure is 38 for Russia. Additionally, As opposed to Russia, Central Asian societies have relatively high population growth rates and a large proportion of their population live in the rural areas. Two thirds of the population in Uzbekistan and Kyrgyzstan live in rural locations. Figures for Uzbekistan and Kyrgyzstan indicate that more than 60% of the population lives in densely populated rural communities in these two countries. If we direct our attention to Uzbekistan, in the last decade, the country seems to have improved its human development record. According to the most recent data, Uzbekistan ranks 114 th country out of 186 countries in 2012 with a score of In 2010, Uzbekistan ranked 102nd out of 169 countries on the list with a score of This shows an improvement from a score of in In terms of the human development index both Uzbekistan and Kyrgyzstan rank relatively lower. Kazakhstan is better and Russia is the best performing country according to the table above. When we look at income distribution it seems that Uzbekistan is relatively egalitarian its economic hardships vis-à-vis Russia and Kazakhstan. One scholar argues that the Uzbek regime, has not just relied on tools of repression, but has employed a well thought out policy of economic redistribution, state subsidies and social policies that has enabled 21 Jennifer Murtazashvili, 2012, Coloured By Revolution: The Political Economy of Autocratic Stability in Uzbekistan, Democratization 19(1). it to stay in power. In other words, Islam Karimov has been watchful about the even distribution of economic growth and is why the proportion of the population living in extreme poverty has decreased in the last decade. Looking at the economic indicators we see a similar picture. The contribution of agricultural products to the national income is still significant for both Uzbekistan and Kyrgyzstan; however, it is minor for Russia and Kazakhstan. As of 2008, the annual inflow of employable youth is 350,000 for Uzbekistan. This means that the Uzbek economy will have to satisfy this relatively young population s demand for consumption. Amongst the major issues on the political agenda in Uzbekistan has been the brain drain. A massive ethnic migration of Russians, who were employed in the modern sectors of economy with high skill jobs, put a heavy strain on the new republic. In Central Asia particularly, it was very difficult for the indigenous population to compensate for the exodus of the qualified labor force. European ethnicities were heavily employed in the education and health sectors during the Soviet era. 22 Uzbekistan lost more than a quarter of its 1989 ethnic Russian population by Another important issue for Uzbekistan is its labor outflow and remittance inflows. According to the Central Bank of Uzbekistan, from period, the annual inflow of official remittances to the country increased fivefold, reaching almost USD 1.4 billion or 8.2% of GDP in In 2007, the majority of remittance inflows to Uzbekistan came mainly from Russia (78%) and Kazakhstan (%5), and to a lesser extent from the U.S.A. and South Korea (total of 3.3%). 25 Russian official sources report that in 2007 remittance outflow from Russian institutions towards Uzbekistan reached USD 1.7 billion, or 8.5% of GDP. The worldwide recession affected Uzbekistan through the decline of migrant employment abroad and the remittances it produces. 22 Bakhtior Islamov 2000, Migration of Population in Independent States of Central Asia, in Hisao et al Eds., Population Movement in the Modern World III, Japan Center for Area Studies (JCAS) Symposium Series 9 (Osaka: JCAS), p Andrei Korobkov 2007, Migration Trends in Central Eurasia: Politics versus Economics. Communist and Post-Communist Studies (40), p Umida Hashimova 2009 Financial Crisis Hits Uzbekistan, The Analyst, January 28 (Washington DC: Central Asia-Caucasus Institute), available at 25 Umida Hashimova

6 At its peak in it is estimated that 2-3 million Uzbeks worked abroad in seasonal or long term jobs. Many extended Uzbek families particularly in the Fergana region have relied on these transfers to supplement their low level incomes. These money flows led to a boom in apartment prices in Tashkent and other big cities. The global economic conditions have altered this situation. Two major host countries for Uzbek migrants Russia and Kazakhstan have been deeply affected by the global financial crisis. The Kazakh banks and their loans for construction projects slowed down. Of even greater consequence for Uzbek migrants has been the economic recession in Russia, where approximately 80% of Uzbekistan s migrants have been employed. 26 Uzbekistan is the world s sixth largest cotton producer and fourth largest raw cotton exporter. 27 Despite ongoing efforts to diversify crops, Uzbekistani agriculture remains largely centered around cotton, although production has dropped by 35% since However, there has been criticism that the agricultural sector of Uzbekistan has been heavily dependent on the cotton monoculture with several financial, economic, and environmental risks involved since nearly all agriculture involves heavy irrigation. Cotton as the dominant crop of Uzbekistan accounted for roughly 12% of the country s GDP in In the post-soviet era, an overreliance on cotton and grain production in Uzbekistan has led to the overuse of agrochemicals and the depletion of water supplies, leaving the land degraded and the Aral Sea Basin partly dried. Thus, the Karimov government seeks to gradually lessen its dependence on the cotton monoculture by diversifying national production. Uzbekistan is also a major exporter of natural gas, gold, copper, uranium, and some strategic minerals. Production of natural gas has recently played an increasing role as a significant source of foreign currency earning for Uzbekistan. It is estimated that natural gas provided around 40% of the foreign currency in 2009, 18.5% in 2011 and 35.1% in the first nine months of Gold is another important source of foreign earnings (about 7%-10% of total exports). Uzbekistan is the world s seventh-largest producer of gold, mining about 80 tons per year, and holds the fourthlargest reserves in the world. Uzbekistan also produces significant amounts of silk, wheat, fruit, and vegetables Dina Rome Spechler and Martin C. Spechler, 2010, The foreign policy of Uzbekistan: sources, objectives and outcomes: , Central Asian Survey 29(2). 27 World Bank, 2011, Report No: UZ. 28 U.S. Department of State, Background Note: Uzbekistan, In recent years Uzbekistan s economy has done well: between 2008 and 2014 real GDP growth averaged approximately 8 percent annually. This performance makes Uzbekistan one of the fastest growing economies amongst the lower middle and upper-middle income countries. 29 Rather than improvements in productivity and industrial capacity this growth momentum is powered by domestic demand and complementary government policies which have fueled the increase in domestic consumption. Part of the stimulation behind the rising domestic demand is the remittances from Uzbek immigrants working abroad. The government was successful in the administration of macro policies to an extent that taxes have been lowered since 2008 which has been advantageous to small and medium-sized enterprises. According to a World Bank report the Uzbek economy s growth and performance has relied on three main factors including favorable terms of trade, in particular the continued high world market prices of the country s key export commodities copper, gold, natural gas and, since 2010, cotton the government s macro-economic management, including its end stimulus and its limited exposure to international financial markets, which has shielded it from the effects of contagion. 30 In other words, Uzbekistan has not been affected by the global economic downturn due to its isolation from the world financial system. In order to challenge existing structural obstacles the Government of Uzbekistan in cooperation with the World Bank has been developing a long term development strategy known as Uzbekistan Vision 2030, which will define the main targets for the achievement of developmental goals. The Uzbek government in its Uzbekistan Vision 2030 program declared that Tashkent wants to become an industrialized, high middle-income country by the mid-century. Officials specified that this transformation would include: (a) increasing the economy s efficiency and competitiveness and reducing its dependency on a few commodity exports; (b) Strengthening the financial sector to support private entrepreneurial activity; (c) Diversifying production towards higher value-added activities where comparative advantage can be demonavailable at 29 World Bank Group, October 2013, Uzbekistan Partnership: Country Program Snapshot. 30 World Bank, 2011, Report No: UZ. 6

7 strated; (d) Creating jobs for the rapidly growing population of young educated people; (e) Improving governance, including access to information on government policies and their outcomes. In line with the Uzbekistan Vision 2030 program Uzbek government also announced its medium-term growth and development strategy in the five-year Industrial Modernization and Infrastructure Development Program which will be effective between the years 2011 and In this medium term program Uzbekistan aims at (a) increasing the efficiency of infrastructure, especially of energy, transport, and irrigation; (b) enhancing the competitiveness of specific industries, such as agro-processing, petrochemicals, and textiles; (c) diversifying the economy and thereby reducing its reliance on commodity exports; (d) Improving access to and the quality and outcomes of education, health and other social services. The Uzbek government established the Fund for Reconstruction and Development in The Government of Uzbekistan targeted a total of 10 billion US Dollars capital. As a result of several years of good export results, Tashkent accumulated $3 billion US in order to support investment in infrastructure and basic industries. According to the World Bank, the Uzbek government embarked upon a $47.3 billion, five-year ( ) Industrial Modernization and Infrastructure Development Program; of which almost $26 billion, or about 60 percent is allocated to investments in oil and gas; over $5 billion, or about 11 percent to electricity; $2.6 billion, or roughly 6 percent each to chemicals and metallurgy; and the remaining 16 percent to construction materials, machine-building, textiles, transport, and other industries. External financing has already been secured for these projects in chemicals, hydrocarbons, and textiles from China, India, Korea, Russia and Turkey. At the same time, the Uzbekistani Government has actively courted several major US and international corporations, offering attractive financing and tax advantages, and has landed a significant US investment in the automotive industry, including the opening of a powertrain manufacturing facility in Tashkent in November If we look at the most recent report produced by the Doing Business we see that Uzbekistan s reforms since 2008 started to give fruits. Tashkent authorities made starting a business easier by reducing the minimum capital requirement, eliminating some procedures and reducing the cost of registration, introducing an online facility for name reservation and eliminating the fee to open a bank account for small businesses, abolishing the paid-in minimum capital requirement and by eliminating the requirement to have signature samples notarized before opening a bank account. Despite significant improvements in the Uzbek business environment there is still ample room for further reforms. Uzbek rankings as of 2014 are stated as 21 amongst 189 economies on the ease of starting a business; 159th on the ease of dealing with construction permits; 173rd on the ease of getting electricity; 136th on the ease of registering property; 130th on the ease of getting credit; 138th on the strength of investor protection index; at 168th on the ease of paying taxes; 189th on the ease of trading across borders; 40th on the ease of enforcing contracts and 63rd on the ease of resolving insolvency. Conclusion One scholar portrays the developmental conditions of Soviet Central Asia in the wake of their independence as follows All the economic, demographic, and ecological ills of the region are wrapped up neatly in a single parcel; it can be undone only by a coordinated social-economic conception of development that is securely based on the real resources of the region. 31 In the immediate aftermath of the Soviet collapse there was a grim picture in Central Asia including in Uzbekistan. The Uzbek government performed well in terms of economic policies especially since 2008 where political and social stability have been the ultimate goal of Tashkent. In the overall evaluation of Central Asian economies one must take into consideration what remained from the Soviet era. Thus, we should neither be too optimistic nor too pessimistic when reflecting upon Central Asian politics and economics. 31 Boris Rumer, 1989, p

8 About BILGESAM About Author Established in 2008, the Wise Men Center for Strategic Studies (BILGESAM) is one of the leading think tanks in Turkey. As a non-profit, non-partisan organization BILGESAM operates under the guidance of a group of well-respected academics from different disciplines, retired military generals and diplomats; and aims to contribute regional and global peace and prosperity. Closely following the domestic and international developments, BILGESAM conducts research on Turkey s domestic problems, foreign policy and security strategies, and the developments in the neighbouring regions to provide the Turkish decision-makers with practical policy recommendations and policy options. Halil Kürşad Aslan is assistant professor of international relations. He has a BSc degree of Political Science and Public Administration from the Middle East Technical University, MA degree of Internationbal Relations and Political History from the Marmara University, and PhD degree in political science from Kent State University, Ohio, USA. In his dissertation, titled as International Labor Migration from Rural Central Asia: The Potential for Development in Kyrgyzstan and Uzbekistan H. Kürşad Aslan analyzed Central Asian people and their economic behaviors based on his field research conducted in several villages of Kyrgyzstan and Uzbekistan. His research areas include international political economy, post-soviet politics, economic and political development and foreign policy. 8