VZCZCXRO5894
RR RUEHAST RUEHBI RUEHCI RUEHDBU RUEHIK RUEHLH RUEHLN RUEHNEH RUEHPOD
RUEHPW RUEHSK RUEHVK RUEHYG
DE RUEHNT #0559/01 1121009
ZNR UUUUU ZZH
R 221010Z APR 09
FM AMEMBASSY TASHKENT
TO RUEHC/SECSTATE WASHDC 0792
INFO ALL SOUTH AND CENTRAL ASIA COLLECTIVE
CIS COLLECTIVE
NATO EU COLLECTIVE
RUEHNT/AMEMBASSY TASHKENT

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