The European Bank for Reconstruction and Development (EBRD) will soon announce its plans to return to Uzbekistan after a decade-long absence, Reuters reported on March 6, citing unnamed sources.
While the return will likely support President Shavkat Mirziyoyev’s reformist goals, some members of the ruling circle stand opposed to many of his promises to open up the tightly controlled post-Soviet country following 25 years of iron-fisted rule by the late Islam Karimov. With the death of Karimov last September, power has been divided among a triumvirate made up of Mirziyoyev, state security chief Rustam Inoyatov and Finance Minister Rustam Azimov.
Inoyatov has reportedly been opposed to some of Mirziyoyev’s proposed changes such as the plan to move the country’s embattled national currency to a floating exchange rate regime. Such opposition to change has been one reason many of Mirziyoyev’s immediate promises are yet to see the light of day.
While he is the successor to autocrat Karimov, Miziyoyev’s role is not so unlimited in power due to his dependence on other members of the unofficial ruling circle. The situation is bound to lead to political infighting, which might potentially end with some of the elites losing power - it is akin to the power struggle that ensued following Stalin’s death in the USSR.
The return of the EBRD comes after a decade-long absence due to Karimov’s poor human rights record, which pushed the development bank to leave the Central Asian country. Specifically, EBRD’s departure resulted from a public stand-off between Karimov and human rights groups in 2003 at an event organised by Azimov and the EBRD to attract foreign investment into Uzbekistan. The event also led to Azimov temporarily falling from grace with Karimov - the new president’s willingness to restore the bank’s presence is possibly supported by Azimov.
If EBRD signals its approval as expected, EBRD President Suma Chakrabarti is set to visit Central Asia’s most populous country later this month in what will be another symbolic step.
Apart from aiming to modernise the country’s $70bn economy, Mirziyoyev has shown commitment to freeing political dissidents imprisoned by Karimov, has issued laws to protect the interests of small and medium-sized businesses, eased the process of renouncing Uzbek citizenship and promised to install a visa-free regime with 15 countries, among other goals.
Mirziyoyev’s government has promised Uzbek exporters that they will be mostly freed of the requirement to sell all their foreign currency revenues at the official central bank-set rates. A government source told bne IntelliNews last year that “any new company will be freed from currency conversion” and that freedom “could be prolonged if the company decides to reinvest”.
EBRD's cumulative investments in Uzbekistan to date amount to €906mn, according to the bank's website.
The Moscow-based International Investment Bank (IIB) announced on August 9 that it has signed off on its debut credit facility in Hungary. The Russian-led IIB decided around five years ... more
This year's growth in the profits of Turkish banks is expected to be between 15% and 20%, Huseyin Aydin, head of The Banks Association of Turkey (TBB), told media on August 8. Turkish lenders’ ... more