One country was causing quite a buzz in the EBRD annual meeting's coffee room, but remained almost entirely invisible at the conference.
Uzbekistan is coming out of its shell following the death of Islam Karimov last year, and sent a delegation to the annual emerging market investment jamboree. But there was no country session, no speakers, no panel or stand. The delegation was almost entirely invisible.
I asked one of the EBRD’s press room staff to help me make an interview with one of the delegation and she came back later the same day with a glum look on her face. “I told them there was some press that wanted to meet. And they hummed a moment and then said no,” she reported.
The same thing happened when I corned Uzbekistan’s only investment banker and fund manager, who promised to do an interview but then changed his mind.
This investor cut his teeth with a Western bank in the short boom in the mid-1990s when interest in the most populous country in Central Asia and the only one with borders to all the others was high. He has since set up funds investing into Mongolia, Mozambique and Myanmar, which all have similar profiles. However, he has just moved back to Tashkent as he can smell the change in the wind and wants to be on the ground floor again when it takes off.
Uzbekistan's first mini boom was cut off sharply when Karimov got the bill for his liberalisation of the trade regime: $1bn of the country's $3bn in annual export earnings went on foreign exchange for imports, and so he stamped on the business.
“We are not going to waste our hard earned dollars on importing chewing gum,” Karimov famously said in a 1996 speech, and imposed draconian exchange controls to try to limit the spending to “useful” imports. Within six months Tashkent had emptied of foreign investors, many of them moving to neighbouring Almaty in Kazakhstan, which took off and is now streets ahead of Uzbekistan.
Kairmov told me personally in a rare interview with a foreign journalist that the currency controls were temporary, but nearly two decades later they are still there. My criticism of this policy and the clan-based crony capitalism it engendered earned me persona non grata status shortly afterwards.
Since then the republic has withdrawn into a protective shell and has watched Kazakhstan’s rising prosperity enviously. The country has moved on since the $3bn it used to make from cotton. It has developed its limited oil and gas reserves to become largely energy independent and the soaring prices of gold – which rose from around $250 per oz in the 1990s to around $1,300 now – has made the country’s large gold fields profitable. All-in-all Uzbekistan earns some $10bn a year from exports – plenty of money to run the country, which has changed little in the last two decades.
But that is no longer true. After taking over last year the new President Shavkat Mirziyoyev is slowly loosening the government's grip and has introduced the first tentative reforms. Mirziyoyev has showed willingness to follow up on his promises by issuing decrees protecting the interests of small businesses, getting rid of child labour at Uzbekistan’s cotton fields, and even recognising the existence of the country’s significant migrant population.
The EBRD has responded by reopening its office in Tashkent, which will be operational in a few months time, hence the appearance of an Uzbek delegation at the annual meeting. The bank’s cumulative investments in Uzbekistan to date amount to €906mn, though it currently only has an €8mn portfolio in the country, according to the bank’s website.
More importantly Mirziyoyev is actively courting new foreign investments and was in Beijing this week to drum up some investment from China. He will pushing at an open door as China is ramping up its investment into its New Silk Road project to connect Asia to Europe by land and Uzbekistan lies along the route.
But old habits die hard and delegations and investors are still worried about offending the still thin-skinned new presidential administration.
“Can we do this interview in a couple of months? Just I have a few projects on the go that are in discussion with the authorities and… well, you know how it is,” the investor told me.