Uzbekistan: Halting the Money Train

Uzbekistan is facing a grueling few weeks. Both the U.S. Congress and the European Bank for Reconstruction and Development are poised to make decisions on aid and lending. Both should stop giving money to a government that has failed to act on its promises to change its ways.

In a recent official opinion poll in Uzbekistan, 97 percent of respondents claimed to be happy with the government's policies. And that’s not surprising, if you believe the government's spin and official statistics. The economy grew by 4 percent last year, inflation was down to 3 percent, and real incomes were up 12 percent. The government is supposedly tackling human rights abuses, and the creation of a new Liberal Democratic Party is apparently proof of political liberalization.

The only problem with this rosy picture is that very few Uzbeks seem to believe it. "That poll--it's more likely the other way around," one disaffected young man tells me. "Ninety-seven percent are fed up. Ask anyone."

I do, and he seems to be about right. Police officers, customs officials, and a select group of business people close to the regime seem to be doing fine. Everyone else you talk to is distinctly unhappy.

But the government is keen to keep those negative voices quiet. It is running a strong public relations campaign to head off potential sanctions from the international community. First, it needs to convince the EBRD that it has achieved progress on a series of benchmarks--ranging from human rights issues to economic reform--set out by the bank in March 2003. Second, and more importantly, it wants to guarantee continued aid from the United States, which will stop automatically in the next few weeks if the State Department is unable to certify that Uzbekistan is making "continued and substantial" progress on human rights and political and economic reform.

REALITY

But to convince the internationals that all is well, the government has to battle against a good deal of evidence. Whatever the official statistics say, the economy is clearly in bad shape. The IMF suggests GDP grew by only 0.3 percent last year, and inflation was over 20 percent. Some international experts suggest that the economy has even shrunk over the past two years.

Business people complain that they are going bankrupt under the weight of new regulations and increased corruption; traders say that restrictions on cross-border trade have forced them either out of business or into smuggling; illegal seizures of businesses or property by government officials are regular occurrences. Not surprisingly, capital has fled the country, as anyone with money tries to invest in a safer environment, usually in neighboring Kazakhstan or in Russia.

There's also no sign of political liberalization. The new Liberal Democratic Party turns out to be just another pseudo-party set up by the government, neither liberal, nor democratic. Opposition parties remain unregistered, ensuring that parliamentary elections in December 2004 will be a government-controlled farce. Members of human rights groups and controversial NGOs continue to face harassment and arrest. Ordinary people who speak out against abuses by local officials can expect a visit from the police, advising them to keep quiet. Push further and they can expect to find themselves charged with religious extremism, drug smuggling, or any other trumped-up charge that comes to mind.

On human rights, too, there's no evidence of improvement. Regular horror stories of beatings and torture emerge from trials. When a judge dared to throw out evidence on the basis that it had been obtained under torture, he was immediately placed under house arrest. A much wider range of abuses goes on that is rarely reported: people are often too afraid to complain to international organizations. The police have become a state within a state, and there is no real political will to do much about it.

In most other countries with such a track record, relations with the West would be decidedly frosty. But the United States sees Uzbekistan as a "key ally" in the war on terror and has a military base in the south of the country. So, for the last two years, the State Department has scraped the back of the breadbox and found enough crumbs to claim some progress in reports to Congress. But this year, even the crumbs aren't there.

WHICH WAY TO TURN?

It is not easy to predict how the Uzbek government would react to cuts in aid. The money is not huge--just over $80 million from the United States in 2003, and a good part goes to democracy programs that the government does not even want. But the symbolism will be of acute embarrassment to the Uzbek government, which has put great store on its bilateral relationship with the United States.

Some U.S. officials worry that cutting off aid will force Tashkent to cozy up to Moscow instead. But President Islam Karimov has invested much in the U.S. relationship: a renewed security arrangement with Moscow would be very much a last resort for this government. And anyway, a closer relationship with Russia might not be all bad: it might even force the regime to open up the economy a little.

Others worry that suspending aid will encourage Uzbekistan to turn in on itself, becoming something more akin to Turkmenistan. That is a more-real danger. Already evidence exists of anti-Western sentiment among some in the elite, as well as a new emphasis on "traditional values" in education and the media--apparently at odds with "foreign" notions of democracy and human rights.

Any cuts in aid to the government, therefore, need to be balanced with providing more help for society: supporting NGOs and the media, putting more funds into education, and strengthening socioeconomic development, private-enterprise assistance, and improvements in public health.

But there is no real alternative to suspending government aid, and financial support to the military and security agencies, in particular. Continued support for this regime is making a mockery of claims by Western institutions that they are defending democratic values. Islamic radical groups are finding plenty of young people willing to listen to their conspiracy theories, and they are happy to link the United States with a repressive regime in their propaganda.

In Uzbekistan the policy of quiet diplomacy has simply not yielded results. It is time for a harder line. Start by stopping the money.