Uzbekistan’s Development Experiment: An Assessment of Karimov’s Economic Legacy

Abstract

Uzbekistan's unique post-independence experiment with development was led by Islam Karimov until his sudden death in September 2016. Despite defying international advice on structural reforms, under Karimov's rule, Uzbekistan achieved an average annual growth rate of 5% in the period 1996-2016, which was particularly impressive (over 8%) in [2004][2005][2006][2007][2008][2009][2010][2011][2012][2013][2014][2015][2016]. Karimov also left behind strong macroeconomic fundamentals for his successor. Since taking over the presidency in December 2016, Shavkat Mirziyoyev has introduced wide-ranging reforms, creating an impression of a de facto start to transition in Uzbekistan. This study analyses Karimov's economic legacy and assesses whether it has enabled or hindered the developmental targets set by his successor. UZBEKISTAN'S DEVELOPMENT EXPERIENCE IS UNIQUE. IN the early 1990s, while most transition economies followed reform policy packages promoted by international financial institutions (IFIs), Uzbekistan stubbornly insisted on choosing its own model of gradual development. Since financial aid and technical support from the international community are often conditional on adopting a variation of reform packages recommended by IFIs, Uzbekistan lost access to these resources at a crucial moment in its development path. Nevertheless, the country experienced the shallowest output fall amongst its peers in the 1990s and managed to maintain an impressive average annual growth rate of over 8% in the 2004-2016 period, which puzzled many neoliberal economists. Over time, however, perhaps also emboldened by the success of its economic policies, the government became increasingly isolationist in its international relations and authoritarian in its domestic affairs (Akimov 2015). This eventually led to the excessive centralisation of power under the rule of Islam Karimov and the government essentially became a personalist dictatorship.Karimov came to power in 1989, with the blessing of Mikhail Gorbachev, as the first secretary of the Communist Party in Uzbekistan. He became the first president of

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