Comments on the President Islam Karimov’s book by Mr Julian Hammond, Chief Commercial Officer of Tethys Petroleum Limited

2 April, 2009

The book by President Karimov “The global financial-economic crisis, ways and measures to overcome it in the conditions of Uzbekistan” is both interesting and educational on the current state of the financial system and the economy in Uzbekistan.

The issue that stands out to me is they way the prudent running of the government and its economic management has shielded Uzbekistan from the major problems faced by other nations today due to the economic crisis that originated in the United States. The role that the government has played in regulating the financial system and other areas of the economy has ensured financial discipline. An example of this has been bank lending where emphasis was put on long term investment and the benefits of this for everyone, rather than short term gain which is not productive for the economy. It is ironic that the very countries that have run into the most trouble, including my own, advocated the free market and less state involvement for so long, and have now abandoned this and are now pushing for more government intervention in the free market through stricter regulation. Uzbekistan maintained this balance throughout, and the results are obvious, and should be applauded for this.

The whole world now realises that the balance between state and the free market needs to be maintained for the most efficient long term benefits of any economy, much as Uzbekistan has been doing.

The result of this is a growing economy at rates most countries would be envious of. The President emphasises that of course due to the nature and scale of the economic crisis it would be naïve to think Uzbekistan will not be affected, and indeed he expects it to in terms of lower exports. Linked to this is the emphasis on finished products as a growing portion of trade which is indeed happening in Uzbekistan and will continue to grow. Investment in innovation has continued and this accelerates development and allows diversification of the economy. This is, in my opinion, brings stability to the economy.

Also I support the analysis that it is vital to support the banking system going forward. The banking system is the life support system of any country and needs to be regarded as this. Supporting and strengthening it is imperative, as well as other financial institutions such as the Development and Reconstruction Fund which promotes modernisation, and the Microcreditbank which is an important source of lending to small business. This in tandem with reduced taxes for small business is good economic policy to promote growth. The banks themselves in Uzbekistan are very well capitalised by international standards and this is the foundation to stability in the financial system.

Growth in agriculture and the manufacture of industrial products are also important, providing an important source of job growth. The book provides excellent real examples of how the government is supporting these industries, as well as the numerous social programs being development in tandem, such as the rebuilding of schools and other educational institutions.

The Anti-Crisis program adopted by Uzbekistan, and its five directions, addresses all these key areas and I believe is the way to address the current financial crisis.

 The President must be commended for his prudent policies which have actually been highlighted due to the problems elsewhere. We often don’t see how well countries are being run until we see how they are affected by crisis. Because of this Uzbekistan is now in a strong position to move forward and has a bright future.