R 180451Z DEC 08
FM AMEMBASSY TASHKENT
TO SECSTATE WASHDC 0126
INFO ALL SOUTH AND CENTRAL ASIA COLLECTIVE
DIA WASHINGTON DC
NSC WASHINGTON DC
CIA WASHINGTON DC
AMEMBASSY TASHKENT

UNCLAS TASHKENT 001474 
 
 
E.O. 12958: N/A 
TAGS: PREL UZ
SUBJECT: PRESIDENT KARIMOV'S CONSTITUTION DAY SPEECH - "DON'T DESTROY THE 
OLD HOUSE BEFORE YOU BUILD THE NEW ONE" 
 
¶1. (SBU) SUMMARY: On December 5th 2008, Uzbek President Islom 
Karimov delivered a speech commemorating the 16th anniversary of the 
adoption of Uzbekistan's constitution and ushering in 2009 as the 
"Year of Rural Development and Improvement of the Countryside". Of 
note in a generally unremarkable speech, Karimov emphasized 
Uzbekistan's "transition" to a democratic system of governance, the 
need to stem corruption, curb the role of the state and expand the 
functions and powers of the citizens' self-governing bodies. 
Karimov's only mention of the U.S. was to name it as the source of 
the ongoing global financial crisis; he did not mention Russia at 
all. END SUMMARY. 
 
¶2. (U) During his opening address, Karimov highlighted the building 
of "a democratic state, free market economy and developing civil 
society" which highly valued "humans, their interests, rights and 
freedoms". He further commented that Uzbekistan has "rejected the 
old, obsolete totalitarian idealized administrative-command system, 
(and) has chosen the new strategy of a law-governed democratic 
development of the country that meets the true interests of our 
people". Also of note, a bold-face section of the speech's 
English-language translation read that enhancing the GOU's work to 
implement a program "from a strong state to a strong civil society" 
serves as a "model of evolutionary development of the country". The 
speech contained multiple references to the rising social activeness 
of the population, and the need to enhance civil society 
institutions. 
 
¶3. (U) A significant portion of the speech dealt with the ongoing 
global financial crisis. Karimov blamed the U.S.'s "failure and 
insolvency of mortgage lending" for the crisis, which led to a 
"disastrous fall of indices and market value of the biggest 
companies at the world's top stock exchanges". While he admitted 
that Uzbekistan has been affected by the crisis, he stated that his 
country had been able to mitigate its consequences. The President 
claimed that Uzbekistan has "denied the methods of shock therapy, 
which were persistently imposed upon us, as well as naive and 
deceptive conceptions about the self-regulating nature of market 
economy". Further, he added, the transition from an 
administrative-command economy to a market system of regulation will 
be gradual, as it is wise "not to destroy the old house until you 
build a new one". In short, Uzbekistan has mitigated the internal 
effects of the crisis, by balancing its policies of reforming, 
modernizing and diversifying the economy. Uzbekistan has also 
increased its capital basis and levels of liquidity in its banks, 
which further helps protect the country from the damaging 
consequences of the global crisis, according to Karimov. 
 
¶4. (U) Economic figures of interest: Karimov spoke proudly of 
several economic statistics during the speech. He specifically 
highlighted the fact that the total capital for Uzbekistan's eight 
leading commercial banks increased 42 percent, and was expected to 
double by 2010. He highlighted the Microcredit Bank, which provides 
credits to small businesses, and which now has 78 branches and 270 
"mini-banks" throughout the country. The bank's total capital is 
expected to reach 150 billion soms (approximately $115 million) in 
the unspecified future. Regarding external debt, he stated that the 
total external debt of Uzbekistan made up 13.3 percent of GDP, and 
did not exceed 31 percent of export volume. In 2008, Uzbekistan will 
implement foreign investments worth over $1.5 billion, 70 percent of 
which were direct investments. Inflation thus far in 2008 was 6.6 
percent. (COMMENT: Unofficial estimates put inflation at 20 percent 
and higher. End Comment). Average salaries from 2007 to 2008 
increased more than twofold. 
 
¶5. (U) 2008 - "Year of the Youth": Karimov highlighted his country's 
2008 accomplishments, including improving children's health care and 
schools, and raising employment levels for young graduates by 
660,000. He cited 2009 as the "Year of Development and Improvement 
of the Countryside", which will focus on improving drinking water, 
electricity, roads and transport services in Uzbekistan's rural 
areas. He also mentioned the need to implement agricultural reforms 
to improve soil fertility. 
 
¶6. (U) Thanks to the Outside World: Karimov thanked Uzbekistan's 
foreign partners and international organizations which "render 
significant and indispensable assistance". He specifically named the 
World Fund for Improving Nutrition, the Japanese government, the 
Saudi Development Fund, the Kuwait Arab Fund for Economic 
Development, the Islamic Development Bank, the United Arab Emirates, 
Asian Development Bank, and KFW Bank of Germany for their in-country 
donations and contributions to infrastructure projects. 
 
¶7. (SBU) Comment: Karimov did not specifically mention the United 
States or Russia by name, and instead thanked Uzbekistan's 
"representatives of foreign and international institutions". Such 
speeches send important signals to the bureaucracy, but are 
generally not known to blaze new paths in real policy and this one 
was no exception. Uzbekistan's printers, however, have been given 
ample notice to start the presses for the soon to be ubiquitous 
billboards of happy farmers and their smiling president lauding the 
"Year of Development and Improvement in the Countryside." Under the 
rubric of this upcoming year of rural development, there will be 
opportunities for USG programs, including USAID; rural water and 
agricultural activities, to make inroads in Uzbek acceptance and 
recognition of U.S. contributions. The impact of such programming 
will be felt not just in terms of economic development, but also in 
terms of empowering rural populations and U.S. public diplomacy. End 
Comment. 
 
NORLAND 
 
To view the entire SMART message, go to URL 
http://repository.state.sgov.gov/_layouts/OSS SearchResults.aspx?k=messageid:a78bde8c-0e7c- 4733-8c2d-0363d424c705