TASHKENT TIDBITS OCTOBER 14, 2008

C O N F I D E N T I A L TASHKENT 001167

SIPDIS

E.O. 12958: DECL: 10/14/2018
TAGS: PREL PGOV ECON UZ
SUBJECT: TASHKENT TIDBITS OCTOBER 14, 2008

Classified By: P-E Chief Nicholas Berliner for reasons 1.4 b and d.


1. (U) This is the first edition a new weekly product from
Embassy Tashkent intended to provide a space for a broader
range of noteworthy developments from Uzbekistan that may not
ordinarily be the subject of front channel reporting.

Uzbek FM Extols Virtues of Economic Model
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2. (C) At an October 8 meeting with Ambassador on another
subject, Foreign Minister Vladimir Norov raised the current
global financial crisis in the context of efforts to attract
foreign investment to Uzbekistan. Hardly concealing his
smugness, Norov said that Uzbekistan had long pursued its own
path in terms of economic development. Even though
Uzbekistan had been criticized by some for its high degree of
governmental involvement in the economy, including strict
control of currency convertibility, Norov said, the current
global economic crisis showed the need for governmental
control to prevent abuses in the financial system.

Can,t Keep Reality at Bay Forever
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3. (U) Separately, an Uzbek newspaper (Novosti Uzbekistana,
October 3) concedes that the global credit crunch could
affect Uzbek business, if not directly then indirectly in the
form of reduced exports to trade partners experiencing
decreased economic growth as a result of the crisis. "We
must not forget that growth of exports has become the most
important 'engine' of Uzbekistan's economic development," the
paper notes. For the time being, however, Uzbekistan's
economy "turns out not to be so bad in conditions of a
financial crisis" given its relative isolation from world
financial markets.

Anti-Karimov Play at Ilkhom
--------------

4. (C) Even the most obtuse member of the audience could not
have missed the unflattering references to an autocratic
president found in the premiere of a new play at the
avant-garde Ilkhom Theater on Saturday evening. "Clay
Letters, Floating Apples," by a young Tashkent writer, Anton
Pakhomov, tells a nebulously Soviet-era tale of a cruel,
powerful village chief who rules by rationing out scarce
water in a remote corner of Uzbekistan. A new teacher from
the big city, wise beyond his years, challenges the status
quo successfully with some help from ethereal sources.
Ambassador, DCM and PAO happened to attend the premiere (we
did not know until afterwards that the play had a political
sub-text). A member of the Sunshine Coalition asked
Ambassador pointedly on the way out of the theater - "well,
did you get the references?" and a member of the theater
staff made a point of thanking us for attending, saying he
hoped there would be no negative repercussions for the
theater in airing this play. This is the kind of performance
the Ilkhom is known for, but we have not seen anything so
clearly critical of the regime in quite some time. Whether
the play is allowed to continue will be telling. We will
watch this space.

CIS Bishkek Summit
--------------

5. (C) MFA Americas Department Director Mamajanov told the
Ambassador Oct. 13 that "nothing unusual" had transpired at
the CIS Summit in Bishkek - and in particular that Manas had
not featured on the agenda. He did not seem unduly alarmed
about any Russian pressure. He also said the Central Asian
presidents reached a "gentleman's agreement" on water issues
that might ease tensions this winter, although he intimated
that difficulties between the Uzbek and Kyrgyz sides remained.

Karakalpakstan Chairman a Short-timer?
--------------

6. (C) The Government of Uzbekistan refused our request for a
meeting in Nukus this week between the Ambassador and the
Chairman of the Council of Ministers of Karakalpakstan on the
grounds that the Chairman will be busy with issues related to
the ongoing cotton harvest (the GOU has set up a meeting for
the Ambassador with one of the Deputy Chairmen, however).
One of our FSNs heard that President Karimov will be in the
region at approximately the same time and intends to sack the
Chairman, however*if true, this might account for the GOU,s
refusal to set up the meeting.

Prices Rise Sharply
--------------

7. (SBU) We have completed our in-house analysis of the cost
of living in Uzbekistan through the first nine months of

2008. Compared with the cost of living at the end of 2007,
prices have risen 29 percent overall. The cost of food has
risen sharply, with a 43 percent increase in the cost of
bread, a 64 percent increase in the price of flour, and a
staggering 90 percent rise in the cost of rice. Municipal
services and untilities also increased sharply by 45 percent.
(Our full analysis in spreadsheet format is available upon
request.)
NORLAND