TASHKENT TIDBITS APRIL 22, 2009

UNCLAS SECTION 01 OF 02 TASHKENT 000559 SIPDIS E.O. 12958: N/A TAGS: PREL PGOV ECON KIRF SOCI PHUM KISL KPAO UZ SUBJECT: TASHKENT TIDBITS APRIL 22, 2009 SENSITIVE BUT UNCLASSIFIED - PROTECT ACCORDINGLY MFA Water Man -------------- ¶1. (SBU) We attended a roundtable on transboundary water issues at the Oliy Majlis on March 4. The two hour session was chaired by Sadyk Safaev, Chairman of the Senate Foreign Affairs Committee and former Ambassador to the U.S. The roundtable produced nothing new in terms of policy; all speakers supported President Karimov's earlier statements on regional water issues. The only new item was the news that the MFA has created a new office to cover water-energy issues in Central Asia. The new office is headed by Mr. Khakimov, former Uzbek Ambassador to Israel and one time head of the MFA's CIS Affairs department. License and Registration, Again Please -------------- ¶2. (U) We previously reported that poloff's private driver was stopped and ticketed by the Tashkent traffic police (reftel). On April 9 our non-diplomatic vehicle was pulled over again, ostensibly for running a red light. Two emboffs in the car agreed that the light - which blinks here prior to turning red - had not yet turned. Unlike the previous spot fine of about USD 2 for a seatbelt infraction, on this occasion the driver had to shell out the equivalent of USD 20 in local currency from his glove box stash for such fines. This is a crushing blow for an average Uzbek - higher than the official monthly minimum wage - and the driver was left visibly shaken. A receipt was written out for the payment, but there is little confidence that the full amount will find its way into official coffers. It was made clear that if the fine was not paid on the spot it would be higher in the court. There is also a troubling double standard that the law does not apply to all, as another car was stopped while we were waiting, whereupon that driver smiled, shook hands, apparently explained his connections, and drove off. World Vision Frustrated by Operating Environment -------------- --- ¶3. (U) Poloff ran into a Tashkent-based official from World Vision, which is implementing programs focusing on HIV and help for disabled children. The organization is frustrated by the slow pace of cooperation from the government, even after it adopted the UN Convention on the Rights of the Disabled. World Vision has continued problems with visas and accreditations for its staff and is unable to implement projects outside of Tashkent. The official was also disappointed that Uzbekistan refuses to allow NGOs such as Handicapped International to operate here. Russia Threatens Protective Measures Against Uzbek Cars -------------- -------------- ¶4. (SBU) In an indication of the limits of Uzbekistan's import substitution and conversion policies that seek to promote the country's exports while keeping imports out, Russia's AvtoVAZ has apparently appealed to the Russian Minister of Economy to enact protective excise taxes against UzDaewoo (GM) imports. Uzbekistan exported over 90,000 vehicles to Russia last year, while importing only 9,000 AvtoVAZ Lada vehicles. The local Lada representative says he is unable to import additional vehicles for sale in Uzbekistan because he cannot buy the US dollars necessary for their purchase. Exports from Uzbekistan's auto industry generate roughly 15% of GDP and Russia is the largest market. Uzbekistan may just be TASHKENT 00000559 002 OF 002 finding out that replicating an East Asian export-driven growth model isn't so easy when the economy of its major trading partner is in recession. GOU Continues to Talk Up the Economy -------------- ¶5. (SBU) Thanks to the wise policies of President Islam Karimov, whose recent book on avoiding the ill effects of the economic crisis gripping the rest of the world is receiving world-wide acclaim, the Uzbek economy continues to hum along nicely - at least according to Uzbekistan's government controlled media. Along with praise for Karimov's book from various Western academics (few or none of whom are actually economists),the GOU is boasting of 7.9 percent GDP growth in the first quarter of 2009. We believe this figure is reasonably accurate, although it reflects constant prices in Uzbek soums. The soum, however, has depreciated lately against the dollar, with the spread between the official and unofficial exchange rates widening to nearly 30 percent. Taxi Drivers Weigh In on Economy -------------- ¶6. (SBU) Tashkent has few official taxis and many drivers will pick up fares. Among the older taxi drivers, many were professional truck drivers during the Soviet period for firms that went bankrupt. These men have been driving their old Zhigulis and Moskviches as taxis since independence. When asked about the effects of the economic crisis on Uzbekistan, the typical response is, "Crisis? We've been living with a crisis for 18 years!" However, there are others, often with slightly newer cars, who tell a different story and are only picking up fares to make ends meet after becoming unemployed. Anecdotally, their numbers seem to have increased in recent months. One driver recently said that he had a construction materials business that was thriving for the past 5 years, but that he is now driving a taxi because his company hasn't sold anything for 2 months. This seems to square with reports that real estate prices have dropped by as much as 50 percent in Tashkent and would indicate that the Uzbek economy could be headed for more trouble than the GOU wishes to admit or believe. IDEC Invitation Declined -------------- ¶7. (SBU) On April 14 we received a diplomatic note turning down an invitation from the DEA for National Security Service (NSS) counternarcotics officials to travel to Cancun, Mexico for the International Drug Enforcement Conference (IDEC) in June. This was disappointing since an NSS officer did just return from a regional conference in St. Petersburg, Russia with DEA sponsorship. It may simply be that Mexico is too far afield for the ever-suspicious security services, and we hope the decision is not an indication of the Government of Uzbekistan's stance on our proposed Embassy Counternarcotics Section, which will be staffed with openly accredited DEA Agents. A response is, as is typical in our dealings with the host government, overdue. BUTCHER