TIME TO PLAY ROUGH

Even the earthquake that took place on January 31 and was felt throughout the territory of Uzbekistan did not shake the local population so much as the news about the dismissal of the all-powerful head of the National Security Service (NSS), Rustam Inoyatov.

Undoubtedly, the significance of this event is comparable to the death of the all-time President Islam Karimov in September 2016. After all, the daunting NSS with its own armed forces, guards and special forces subordinated the customs and border services and has controlled all spheres of Uzbek society for many years.

It is assumed that after the death of Karimov, the then Prime Minister Shavkat Mirziyoyev could not have become the acting president and then president of the country without Inoyatov's support. But the events that followed have clearly demonstrated different views of the two politicians on the future of Uzbekistan. The struggle for control of the country between the two has continued from September 8, 2016 to January 31, 2018.

During his term as the acting president, President Mirziyoyev has made it clear that he was determined to break the old traditions. He has invited Western observers to presidential elections, made statements on normalizing relations with neighbors, signed a new edition of the law on labor protection taking into account the recommendations of the International Labor Organization (ILO), canceled unplanned audits for businesses, proposed liberalization of fiscal policy due to lack of free conversion foreign currency.

The new president has gained the public recognition after opening a virtual reception desk on his website, which has received complaints and suggestions from more than 200 thousand people in less than three months.

To demonstrate the new vector of its priorities, the government has declared 2017 as the Year of Dialogue with the People and Human Interests. At the beginning of the same year, the Cabinet of Ministers released the draft of the Five-Year Development Strategy for Uzbekistan to public domain on the government website for nationwide discussion. By February, the authors of the draft have received 1,310 proposals and feedback, which has resulted in the revision of 41 points in the final version of the Strategy.

Judging by the adopted document, Mirziyoyev intends to reform the country radically. The Strategy outlines five main areas: 1) improvement of state and public construction; 2) the rule of law; reforms in judicial and legal systems; 3) development and liberalization of the national economy; 4) social development; 5) security; religious tolerance and interethnic harmony.

Not a Black Tuesday

The president has proclaimed the decentralization of the state administration system with an intention to expand the functions of the parliament (Oliy Majlis) by abolishing some of some of his own powers. The role of traditional local government bodies (mahallas) is growing.

Over the past year, a significant work has been done to develop small and medium-sized businesses such as the introduction of the ombudsman institution for the protection of entrepreneurs' rights, considerable reduction of business taxes, expansion of access to bank loans, reduction of the mandatory share for selling foreign exchange earnings for enterprises, as well as the establishment of 12 free economic and 45 industrial zones and so on.

The presidential decree on the abolition of individual customs, tax and other benefits granted to individual companies for the import of food products was a strong blow to protectionism and the bureaucratic system. But the most serious incentive for the economic development was the transition to free conversion of the national currency (Uzbek Som, UZS), which inter alia eliminated one of the main obstacles for foreign investors who have not had any incentives to work in Uzbekistan, as they could not get their revenues out of the country. In fact, the official exchange rate of som was twice as high as in the black market, but it was impossible to purchase foreign currency on it. Only selected companies had permission to convert the currency at the official rate.

On September 5, 2017, when the government announced the free conversion of the national currency and almost all the banks opened currency exchange offices for the population, a formal devaluation of the national currency took place (from 4210 to 8100 soms per U.S. dollar). Many even called that day the Black Tuesday, similar to the event in the newest history of Russia. However, nothing like this happened in Uzbekistan as the real exchange rate of som was legalized. But there were some victims of devaluation such as the NSS, which has long supervised the black exchange market that was a serious source of income for the heads of the service. For example, enterprises engaged in import and export operations had to constantly visit the NSS bosses for indulgences. It is assumed that the opposition of Inoyatov to the above reform explains why the transition to free conversion has been delayed for a year. After all, the reform had to be implemented starting from the beginning of 2017.

NSS has also opposed Mirziyoyev’s attempts and initiatives to liberalize the visa regime in Uzbekistan. Apparently, after Inoyatov’s dismissal, these activities will accelerate.

Also, it is believed that the former head of the NSS has delayed for three months the opening of a direct flight between Tashkent and Dushanbe, called to be the first step of reconciliation between the two neighbor nations.

One of the primary goals of Mirziyoyev is the restoration of good-neighborly relations with all countries of Central Asia. It is no coincidence that the president’s first foreign visit was to Ashgabat and Astana and only then to Moscow, hence demonstrating Uzbekistan's priorities in foreign policy.

Uzbekistan had conflicts with almost all its neighbors. The new president of the country said that he was ready to make compromises within reasonable limits for the sake of establishing a dialogue. Moreover, he showed himself as a serious reformer of international relations too, suggesting that the heads of Central Asian states meet annually to discuss acute issues of the region.

While it's not about creating an alliance, Mirziyoyev has managed to draw attention to his initiative from the world community. Moreover, there were no objections from neighbors. The Kazakh president Nursultan Nazarbayev has expressed his readiness to organize the first such summit very soon, during the Novruz celebrations.

End of the era of special services

The second president has faced a serious personnel problem. It turned out that there was practically no one capable of implementing his reforms both at the local level and in the higher layers of power. More or less knowledgeable 22-24-year-old university graduates and officials have become popular. Mirziyoyev’s allies in his struggle against the National Security Service and the old bureaucratic staff is the media, which, from the very first days of his presidency, has been calling for bolder criticism of problems that hamper the development of the country, including bureaucracy and corruption. Despite the limits set for criticism, the censorship has weakened, and for the first time the residents of the country have an opportunity to see and hear their ministers and other officials, who have suddenly bravely spoke of shortcomings in the industry instead of the usual eulogy of the head of state.

One of the factors that held back the freedom of speech was the fear of the NSS and its all-powerful boss. Inoyatov, who has been the head of the service since 1995, is fired. The organization will be reformed this year, but all the schools and diplomatic missions have been already cleared of its employees. The influence of the National Security Service on state and business structures has significantly weakened.

From now on, the power of the special services in Uzbekistan is over. It is time "to shrug the shoulders proudly and work for the benefit of the state and its people," said Mirziyoyev just a week before Inoyatov's dismissal. The former chief of the National Security Service has been appointed presidential adviser and has immunity as a deputy of the Oliy Majlis. So, it is not yet known if it is a victory or a result of some agreement.

Still many skeptics

The economy of Uzbekistan is growing. The rate of growth in 2017 was 5.5%. A total of $60b-worth agreements on international trade and investment have been signed already. Forty "road maps" have been developed for different sectors of the national economy.

The new president is setting ambitious tasks. The government has declared 2018 as the Year of support of active entrepreneurship, innovative ideas and technologies. These are all reforms coming ‘from above’. What does the ordinary people think about them?

Earlier this year, the Ferghana news agency conducted a poll among its readers about their expectations of the reforms launched by the new president. There were different opinions. For some, the new Uzbek government is made of "reformers capable of changing people's lives for the better." The others are pessimistic and still doubt that "the Uzbek authorities are capable of implementing radical reforms." In other words, it seems that the new authorities still have much to do to regain the trust of their nationals.