Back to the USSR: Why the past does matter in explaining differences in the economic reform processes of Kazakhstan and Uzbekistan

Central Asian Survey

Volumn 24, Issue 4, 2005, Pages 391-404

  Blackmon, Pamela ^a  

^a OKLAHOMA STATE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ECONOMIC DEVELOPMENT; REFORM PROCESS;

ASIA; EURASIA; KAZAKHSTAN; UZBEKISTAN; WEST ASIA;

EID: 30944437430     PISSN: 02634937     EISSN: 14653354     Source Type: Trade Journal    
DOI: 10.1080/02634930500453285     Document Type: Article

References (72)

1. Anders Åslund, Peter Boone and Simon Johnson, 'How to stabilize: lessons from post-communist countries', Brookings Papers on Economic Activity, No. 1, 1996, pp 217-313
2. Steven Fish, 'The determinants of economic growth in the post-communist world', Eastern European Politics and Societies, Vol 12, No 1, 1998, pp 31-78.
3. Kyrgyzstan's political status first declined from 'Partly Free' to 'Not Free' as a result of irregularities in the 2000 parliamentary and presidential elections, and the increasing authoritarian policies of Akayev. For details on the 2000 elections, see, Rafis Abazov, Nations in Transit 2002, Kyrgyz Republic (Washington, DC: Freedom House, 2002), pp 224-238.
4. As a result of mass demonstrations owing to voting irregularities in the recent March 2005 parliamentary elections, Akayev fled the country and then later formally resigned as President of Kyrgyzstan on 4 April 2005. New presidential elections were held on 10 July 2005. For further information on Akayev's role in these events, see, 'Akayev signs his resignation', The Moscow Times, 5 April 2005, p 3.
5. Demonstrators and political opponents believed that Akayev had manipulated these elections in order to ensure a parliament of his supporters, so that he could then seek a referendum that would give him a third term in office. For examples of voting violations observed by the OSCE and complaints from the opposition, see, 'Election results disappoints Kyrgyz opposition', RFE/RL Newsline, 15 March 2005.
6. H. C. Wolf, Transition strategies: Choices and outcomes, in Princeton Studies in International Finance, No 85 (Princeton, NJ: Princeton University, 1999);
7. Martha de Melo, Cevdet Denizer, Alan Gelb and Stoyan Tenev, 'Circumstance and choice: The role of initial conditions and policies in transition economies', The World Bank Economic Review, Vol 15, No 1, 2001, pp 1-31.
8. Jeromin Zettlemeyer, 'The Uzbek growth puzzle', IMF Working Paper, 98/ 133, Washington, D.C.: International Monetary Fund, September 1998, pp 1-36.
9. For background information see, Gregory Gleason, The Central Asian States (Boulder, CO: Westview Press, 1997);
10. World Bank, Kazakhstan: The Transition to a Market Economy (Washington, D.C.: World Bank, 1993).
11. See, e.g. Anders Åslund, Building Capitalism: The Transformation of the Former Soviet Bloc (Cambridge: Cambridge University Press, 2002);
12. Andrei Tsygankov, Pathways After Empire: National Identity and Foreign Policy in the Post-Soviet World (Boulder, CO: Rowman & Littlefield, 2001);
13. Rawi Abdelal, National Purpose in the World Economy (Ithaca, NY: Cornell University Press, 2001).
14. For a discussion of economic issues of integration and independence as they apply to the fSU republics, see, L. Palei and Jerry Petr, 'Integration versus independence for the successor states of the USSR: when might economics' 'right answers' be wrong', Comparative Economic Studies, Vol 34, No 1, Spring 1992, pp 1-12.
15. There are significant differences between Nazarbayev's and Karimov's views on economic reform, which would affect decisions about reform implementation in their respective countries. For additional information on the importance of the leaders in the CAS, see, Gregory Gleason, 'Foreign policy and domestic reform in Central Asia', Central Asian Survey, Vol 20, No 2, 2001, pp 183-194
16. Anders Åslund, 'Sizing up the Central Asian economies', Journal of International Affairs, Vol 56, No 2, Spring 2003, pp 75-87.
17. Stanley Fischer and Ratna Sahay, 'The transition economies after ten years', IMF Working Paper No. 00/30, Washington, D.C.: International Monetary Fund, February 2000, pp 1-44.
18. See, International Monetary Fund, 'History of Lending Arrangements: Republic of Uzbekistan', (http://www.imf.org/external/np/tre/tad/ extarr2.cfm?memberKey1=1042&date1key=2004%2D05% D31&finposition_flag=YES).
19. Stanley Fischer, 'Applied economics in action: IMF Programs', American Economic Review, Vol 87, No 2, May 1997, pp 23-27.
20. The measurement scale for the indicators ranges from 1 to 4, and includes the use of plus and minus signs, where a 1 represents little or no change from a rigidly planned economy and 4+, represents the standards of an industrialized market economy. Data from, European Bank for Reconstruction and Development, Transition Report (London: European Bank for Reconstruction and Development, 1995-2002).
21. Ibid.
22. IMF Press Release: Kazakhstan Accepts Article VIII Obligations, PRN 96/ 41 (July 23, 1996). This statement was made during the author's interview with an IMF economist, 8 July 2002.
23. IMF Press Release: 'The Republic of Uzbekistan accepts Article VIII obligations', PRN 03/1888, 11 November 2003.
24. Author Interview, IMF economists, 22 October 2003.
25. A country notifies the IMF when it is ready to accept Article VIII obligations, and the Executive Board then votes to make the information available on the IMF website (Author Interview, IMF economists, 22 October 2003). Article VIII, Sections 2, 3 and 4 designate that that member will avoid restrictions on current payments, avoid discriminatory currency practices and agree to the convertibility of foreign-held balances (IMF Articles of Agreement, Article VIII).
26. For further information as to how this would affect Kazakhstan's development, see Boris Rumer, 'Disintegration and Reintegration in Central Asia: Dynamics and Prospects', in Boris Rumer, ed, Central Asia in Transition: Dilemmas of Political and Economic Development (New York: M.E. Sharpe, 1996), pp 1-66.
27. For a recent analysis of the issue of Kazakhstan and Russia's interconnected electric systems, see Gregory Gleason, 'Russia and the Politics of the Central Asian Electricity Grid', Problems of Post-Communism, Vol 50, No 3, May/June 2003, pp 42-52.
28. Interstate Statistical Committee of the Commonwealth of Independent States, Commonwealth of Independent States in 2001 Statistical Yearbook (Moscow, 2002), p 50.
29. In 1960, the Kuznetsk and Karaganda coal basins were stated as being able to produce enough coking coal to supply the metallurgy needs of the Urals for 'many years' (Planovoye khozyaistvo, No. 2, February, pp 11-22; in Current Digest of the Post-Soviet Press, Vol 12, No 15, p 5.
30. Interstate Statistical Committee of the Commonwealth of Independent States, Commonwealth of Independent States in 2001 Statistical Yearbook (Moscow, 2002), p 51
31. International Monetary Fund, 'Republic of Kazakhstan: Selected issues and statistical appendix', IMF Country Report No. 02/64, (Washington, D.C.: International Monetary Fund, 7 January 2002), p 95.
32. Katherian Dittmann, Hella Engerer and Christian von Hirschausen, 'Much ado about . . . little? Disenchantment in the Kazak and Caspian oil and gas sectors', in Lutz Hoffman, Peter Bofinger, Heiner Flassbeck and Alfred Steinherr, eds, Kazakhstan 1993-2000 Independent Advisors and the IMF (New York: Physica-Verlag, 2001), pp 127-148.
33. Steve Levine, 'Central Asian republics look west for investment', Financial Times, 8 February 1994, p 4.
34. For additional information on Kazakhstan's privatization of its power and natural gas sectors see, 'Privatization of the power and natural gas industries in Hungary and Kazakhstan', World Bank Technical Paper No 451, Washington, D.C.: World Bank, December 1999, pp 1-135.
35. Kurt Abraham, 'Kazakhstan more energetic than most of FSU', World Oil, Vol 220, No 11, 1999, p 29.
36. For additional information on Kazakhstan's development of a tax regime to encourage foreign investment in its energy sector, see Erika Weinthal, Pauline Jones Luong, 'Energy wealth and tax reform in Russia and Kazakhstan', Resources Policy, Vol 27, 2001, pp 215-223.
37. The primary cotton manufacturing oblasts were Ivanovo and Kostroma located near Moscow. The decision by the Soviets not to develop the manufacturing of cotton textiles where the cotton was grown was not based on sound economic policies, especially considering that the rail system was already overloaded and the fact that the textiles then had to be shipped back to the Central Asian region. For further details and additional analysis of cotton growing under the Soviet Union, see Boris Rumer, Soviet Central Asia: 'A Tragic Experiment' (Boston: Unwin Hyman, 1989), pp 62-75.
38. Commodity Research Bulletin, The Knight-Ridder CRB Commodity Yearbook (New York: John Wiley & Sons, 2000), pp111.
39. Ibid;
40. Commodity Research Bulletin, The Knight-Ridder CRB Commodity Yearbook (New York: John Wiley & Sons, 2003), pp111.
41. International Monetary Fund, 'Uzbekistan - selected issues and statistical appendix', IMF Staff Country Report No. 96/73 (Washington, D.C.: International Monetary Fund, June 10, 1996), p 91
42. International Monetary Fund, 'Republic of Uzbekistan: Recent Economic Developments', IMF Staff Country Report No. 00/36 (Washington, D.C.: International Monetary Fund, January 12, 2000), p 52. Data were not available for export, import, or consumption amounts of natural gas after 1998.
43. Ibid.
44. Zettlemeyer, op cit, Ref 4.
45. Uzbekistan's balance was +130, and Tajikistan's was +57. By comparison, Kazakhstan's balance was- 1068 (in millions of hard currency roubles) 'Kto i Kak Zhivet', Ekonomika i Zhizn', No 10, March 1990, p 7.
46. European Bank for Reconstruction and Development, Transition Report (London: EBRD, 2002), 217 pp.
47. Rumer, op cit, Ref 26, pp 64-68.
48. Uzbek SSR Tsentral'noe statisticheskoe upravlenie, Uzbekistan za gody vos'moi piatileki (1996-1970gg.): Kratkii statisticheskii sbornik (Tashkent, Uzbek SSR, 1971).
49. The 'cotton affair' refers to the time period during Rashidov's tenure as First Party Secretary around 1978-1983, when Moscow, in effect, paid for cotton that it never received. The actual amounts of raw cotton delivered to Moscow were inflated to meet or exceed the planned target amounts by bribing officials at the procurement centres or by increasing the cultivated area, as explained in Boris Rumer, Soviet Central Asia 'A Tragic Experiment' (Boston: Unwin Hyman, 1989), pp 70-71.
50. The fact that the event would be portrayed as one of corruption in Moscow, but as one of an unfair prosecution of Uzbek officials in Uzbekistan, would continue to strain relations between Uzbekistan and Russia during the Soviet era. For additional information, see James Critchlow, '"Corruption", nationalism, and the native elites in Soviet Central Asia', The Journal of Communist Studies, Vol 4, No 2, 1988, pp 142-161.
51. Donald Carlisle, 'Islam Karimov and Uzbekistan: Back to the future?', in Timothy Colton and Robert Tucker, eds, Patterns in Post-Soviet Leadership (Boulder, CO: Westview Press, 1995), p 196.
52. An official from the Embassy of Uzbekistan stated that Karimov's economic background would allow him to understand the disadvantages of other economic systems, such as a shock therapy approach to economic reform (Interview with the Author, 11 July 2002). For more information on Karimov's reasons as to why the transition from a planned economy to a market based one should happen in phases and take time, see Islam Karimov, Building the Future: Uzbekistan - Its Own Model for Transition to a Market Economy (Tashkent: Uzbekistan Publishers, 1993).
53. Akhad Agzamov, Alisher Anvarov and Kahramon Shakirov, 'Economic reform and investment priorities in the Republic of Uzbekistan', Comparative Economic Studies, Vol 37, No 3, 1995, pp 27-38.
54. I. Dzhurabekov who served in many positions in the Uzbek government from 1992-1998, including Minister of Agriculture, was listed in the position of agricultural vice prime minister in the Rashidov government, Nezavisimaya Gazeta, 28 June 1994, p 3
55. in Foreign Broadcast Information Service, 29 June 1994, p 55.
56. International Monetary Fund, 'Republic of Uzbekistan: Recent Economic Developments', IMF Staff Country Report No. 98/116 (Washington, DC: International Monetary Fund, 19 August 1998), p 109.
57. This decision also allowed the state to have enough currency reserves to pay for more important imported goods such as equipment needed for the self-sufficiency of local industry (Author Interview, Official from the Embassy of Uzbekistan, 11 July 2002).
58. The Economist Intelligence Unit Limited, 'Convertibility is promised', Country Monitor, 20 May 2002, p 6.
59. For more information about the resistance of the Uzbek government to comply with currency convertibility because of the tight control over the economic situation see, 'Currency convertibility in Uzbekistan: economic and political implications', RFE/RL Central Asia Report, 17 October 2003.
60. Nazarbayev also stressed the need for a separation between economic strategy and Communist party influence, see, for example his statements in Komsomolskaya Pravda, 13 April 1991, p 2, in Foreign Broadcast Information Service, 18 April 1991, 54 pp.
61. Author Interview, World Bank economist, 12 July 2002.
62. For complete information on the 7 March 1994 parliamentary election in Kazakhstan, see, 'Report on the March 7, 1994 Parliamentary Election in Kazakhstan', Prepared by the Staff of the Commission on Security and Cooperation in Europe (Washington, DC: Commission on Security and Cooperation in Europe, March 1994), pp 1-20.
63. Even though the OSCE did not certify these elections as free and fair, it is noteworthy that for Uzbekistan's parliamentary elections held in 1999, the OSCE 'refused' to send a full observer mission as a result of the failure of the process to meet democratic standards and instead the commission sent a small team of representatives. For more information, see Freedom House, Freedom in the World-1999-2000 (Washington, DC: Freedom House, 2000), pp 516-518.
64. For a detailed analysis of these events, see the chapter by Martha Brill Olcott, 'Democratization and the growth of political participation in Kazakhstan', in Karen Dawisha and Bruce Parrott, eds, Conflict, Cleavage and Change in Central Asia and the Caucasus (Cambridge: Cambridge University Press, 1997), pp 201-241.
65. Elena Suhir and Zlatko Kovach, 'Administrative barriers to entrepreneurship in Central Asia', Center for International Private Enterprise, 30 June 2003, pp 1-8.
66. IMF Press Release: IMF approves three-year extended fund facility for Kazakhstan, PRN 96/39, 17 July 1996.
67. Uzland, Uzbekistan Information Directory, 'Uzbek Government Members and Other Officials as of March 2004' (www.uzland.uz/gova§f.htm).
68. For additional information on Uzbekistan's political process, see Freedom House, Nations in Transit Uzbekistan (Washington, DC: Freedom House, 1998), pp 645-654.
69. Theodore Karasik, ed, Russia and Eurasia Facts and Figures Annual, Vol 21 (Gulf Breeze, FL: Academic International Press, 1996), p 238.
70. This Ministry is important in the Kazakh government due to its visibility with oil projects, and projections about increases in oil production. For examples of Shkolnik's comments and visibility as Minister of Energy, see, Heather Timmons, 'Oil majors agree to develop a big Kazakh field', The New York Times 26 February 2004, pp W1, W7
71. Business in Brief, 'Kazakhs to boost oil', The Moscow Times, 3 August 2004, p 6.
72. See, e.g. Mikhail Alexandrov, Uneasy Alliance: Relations Between Russia and Kazakhstan in the post-Soviet Era (Westford: Greenwood Press, 1999), pp 6-10.