American-Uzbekistan Chamber of Commerce
Week in Review:
November 30, 2012 - December 7, 2012

Header for the Newsletter

Quick Links:
Our Members:
Indsur Stelcor, Inc.
Lockheed Martin small
Rio Tinto
Solar turbines
White & Case
Join Our Mailing List
Scan Code
In This Issue:
Arab Foundations to grant Uzbekistan $480 Mln
China to expand Central Asian presence with $10 billion in loans
Trade across Central Asia boosted by railway land bridge to Europe
Uzbekistan provides British RAF with Afghanistan pullout route
Uzbek President attends summit of CIS leaders
Uzbekistan takes 20th place in Growth Markets Index
Draft law "On gas supply" developed in Uzbekistan
Uzbekenergo to construct energy supply objects for Ustyurt GCC

Established in 1993, the American-Uzbekistan Chamber of Commerce (AUCC) is a private, non-profit trade association representing interests of U.S. businesses ranging in size from small private enterprises to large, multinational corporations conducting business in Uzbekistan.

Our Mission: To advocate the views of the business community to ensure that private sector positions are considered during the development of key policies that impact American businesses and the future of U.S.-Uzbekistan relations.

Our Objective: To serve the needs of its members by strengthening commercial relations between the United States and Uzbekistan.   


Arab financial institutions are to grant the Uzbekistan government $480.9 million in loans between 2013 and 2017, the country's economic development and trade ministry said on Friday.

The Uzbekistan government has approved a list of 15 investment projects worth a total of $582.5 million to be funded via the Arab Coordination Group (ACG).

These include public healthcare and university development programs, the use of alternative sources of energy in secondary schools, reconstruction of sewage systems and improvement of water supply, and road-building programs.

The credit agreement was reached in early November at an ACG meeting in Tashkent.

The ACG includes the Islamic Bank for Development and a number of Arab financial institutions including the Saudi Development Fund, the Abu-Dhabi Development Fund, the OPEC International Development Fund, and the Kuwait Fund for Arab Economic Development.   


China has invited Central Asian states to invest in road, rail and energy projects, using a $10 billion loan package that will extend Beijing's reach in the resource-rich former Soviet region.

Chinese Premier Wen Jiabao said the country's state-run banks were prepared to fund projects including a rail link from Uzbekistan through Kyrgyzstan. China, along with Russia, also planned to launch a new satellite in the region, he said.

Wen was speaking on Dec. 5 at a meeting of the Shanghai Cooperation Organization (SCO), a regional security and economic bloc linking China, Russia and four Central Asian states.

China pledged the $10 billion loan package at an SCO meeting in June.

"We intend to invest this money in infrastructure, energy and production projects, in order to facilitate development of the real economy," Wen said in the Kyrgyz capital Bishkek.

He said China would welcome approaches by SCO member states to the state-owned Eximbank and Development Bank of China. Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan all belong to the SCO.

China is extending its economic influence across its 2,800-km border with Central Asia as a counterbalance to U.S. and Russian presence in a region with vast mineral reserves on the northern borders of Afghanistan and Iran.

But China and Russia also share a common interest in reinforcing the region's porous borders and preventing any spillover of Taliban-inspired violence when NATO troops leave Afghanistan in 2014.

Wen said China and Russia had carried out a feasibility study into the launch of a satellite that he said could become an "anti-terror" platform for SCO member states and improve communications in the event of natural disasters.

"China and Russia, having already completed a feasibility study, are ready to work on the creation and the launch of this satellite," the Chinese premier said.

In addition to the six member countries, the SCO, formed in 2001, invites Iran, India, Pakistan and others to attend its summits.

Russian Prime Minister Dmitry Medvedev, attending the same event, said Moscow would also support the satellite launch and participate in projects to improve regional infrastructure.

Wen said he wanted to accelerate construction of a railway line from Uzbekistan to China and that Beijing was willing to finance interested parties.

China has already supplied billions of dollars in loans to Uzbekistan. Rustam Azimov, Uzbekistan's first deputy prime minister, said two state-owned Chinese banks had supplied more than $5 billion in favorable loans for industrial projects.

Uzbekistan started supplying natural gas to China in August, feeding into a 2,000-km pipeline network that originates in Turkmenistan.   


Trade between China and Shanghai Cooperation Organization members will be greatly boosted, thanks to Eurasian countries' efforts to improve the transportation channel of a new Eurasian land bridge linking China and Europe, experts have said.

Occupying three-fifths of Eurasia, six SCO members China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, and five observer countries - Mongolia, Pakistan, Iran, India and Afghanistan, have been working toward strengthening economic and trade cooperation within the group.

"More and more imported and exported goods between China and other Eurasian countries are delivered via railway on the new Eurasian land bridge. This method saves time, offers protection of goods and rapid turnover of cash flow for importers and exporters," said Guo Minjie, chairman of the logistics and technical equipment special committee at the China Transportation Association.

Stretching over 11,870 kilometers, the new Eurasian land bridge extends from China's Lianyungang city to Rotterdam, a major port city in the Netherlands, creating an uninterrupted rail link that passes through Russia and central Asian countries.

"Major trading goods, including mechanical and electronic goods with high-added value are suitable to be transported via railway on the new Eurasian land bridge," Guo said.

Compared with sea transportation, which is widely used in international trade, railway transportation is more time efficient.

According to the China Transportation Association, the delivery time of goods from China to Europe via rail is one-fifth that of the ocean transportation.

"Mechanical and electric products are easily damaged by the sea air, so more importers and exporters of these kinds of products prefer railway transport," Guo said.

"Furthermore, although the delivery cost of railway transport is higher than sea transportation, the greater time-efficiency of land transport can result in quick cash return and this is more attractive," Guo said.

China's mechanical and electronic product exports have been the major driving force of trade growth between China and other SCO members.

The export of mechanical and electronic goods account for 30 percent of China's total exports to central Asia and Russia.

Since the community was established in 2001, trade between China and other SCO countries increased from $12.1 billion to $111 billion in 2011.   


The Uzbek Senate has approved a deal allowing Britain's Royal Air Force to to use the country's airpsace to move its equipment out of Afghanistan north through Central Asia and Russia.

The agreement stops short of allowing RAF aircraft to land on Uzbek territory. If they need to make an emergency landing, the British authorities must notify the Uzbek side about the need to land on the republic's territory.

This deal cements Central Asia's strategic importance to NATO which can avoid Pakistan, previously its transit route of choice.

NATO's agreement with Uzbekistan, accused of using child labor to pick cotton harvest, has been heavily criticized in the West, the Russian news agency RIA Novosti points out in a report.

NATO Secretary General Anders Fogh Rasmussen earlier said the agreements with the Central Asian republics "will give us a range of new options and the robust and flexible transport network we need."

The reverse transit agreement between NATO and three Central Asian countries - Uzbekistan, Kyrgyzstan and Kazakhstan - is for "non-lethal goods" only.

NATO countries have amassed equipment worth tens of billions of dollars in Afghanistan over more than a decade.

Britain has an estimated GBP 3 B worth of equipment to bring home from Afghanistan. Some of the armored vehicles will have a long-term role in the Army.   


President of Uzbekistan Islam Karimov paid a visit to Ashgabat, Turkmenistan, on 5 December 2012 to participate in the session of the Council of the heads of states of the Commonwealth of Independent States (CIS).

Before the summit, President of Uzbekistan Islam Karimov held a meeting with President of Turkmenistan Gurbanguly Berdimuhamedov. The meeting was held in friendly environment and in spirit of mutual trust and openness. The sides discussed current state and perspectives of Uzbek-Turkmen relations, issues of cooperation of two states within the CIS, UzA reported.

At the session of the Council of the CIS leaders, the participants considered several draft projects directed at deepening regional cooperation in economy and humanitarian, as well as safety spheres.

It is worth to mention that creation of the CIS was created with necessity to keep traditional humanitarian, economic and other relations. The CIS proved its necessity and served as platform for solving issues related to political, economic, and humanitarian cooperation.

The CIS member states have been developing mutual beneficial and multilateral cooperation, as strengthening potential of the organization for last 20 years.

At the summit, Ashgabat summit acknowledged necessity to raise efficiency of existing mechanism of multilateral cooperation within the CIS, as well as improve organizational-legal and institution bases of the Commonwealth to achieve further economic progress and prosperity of population of the CIS.

The CIS leaders expressed their willingness to further strengthen the role of the CIS in the formation of regional and inter-regional relations, becoming of the organization as a viable and effective cooperation mechanism.

It was said that global economic crisis is strengthening and the CIS leaders underlined importance of implementation of potential of the CIS' economic cooperation to solve social-economic issues. They noted that creation of international transport-communication corridors, development of energy and scientific-cultural partnership, expansion of export opportunities and stimulation of investments are key areas of cooperation development in this area.

The heads of states of the CIS underlined that strengthening of cooperation in cultural-humanitarian sphere is another key area.

The sides underlined expediency to continue joint works on further improving operations of the CIS and legal framework based on international experience. The sides also expressed assurance that countries should strengthen friendship and cooperation among member states.

In the result of the summit, the sides inked a declaration of the heads of the states of CIS on further development of multilateral cooperation. They also signed documents on announcing 2013 as the Year of ecologic culture and protection of environment in the CIS, on implementation of previous agreements on cooperation in the field of communication and information, and others.

In line with the decision of the CIS leaders, Belarus will chair the organization. They also decided to hold next summit of the CIS heads in Minsk in October 2013.   


The Republic of Uzbekistan took the 20th place in Growth Markets Index, which was issued by British consulting company Maplecroft.

Maplecroft's new Growth Markets Index (GMI), which evaluates the economic performance, stability and potential of 175 countries, has identified 30 markets that have the best growth prospects for business over the next two decades.

The Growth Markets Index provides an evaluation of economic performance, investment conduciveness, recent structural reforms and projected future demographic trends, including growth of middle class consumers. Maplecroft divides its scoring across the three categories of Growth Performance, Growth Environment Conduciveness and Growth Potential. Each country is assessed according to a selection of key indicators to evaluate whether its economy is likely to outperform in the future. The conduciveness element makes this index unique.

Uzbekistan clinched the 20th place in this index. Uzbekistan is above such countries as Saudi Arabia (23rd place), Mexico (26th place) and Poland (29th place). China, India, Indonesia, Vietnam and Bangladesh were five top countries in the index.

According to Maplecroft, Pakistan and Kazakhstan took the 32nd and 34th places in the index respectively.

Specialists of Maplecroft said that Uzbekistan, as well as some other states, could see its ranking improve if reforms to address political risk and legal and regulatory factors are implemented.   


Uzbekistan is developing a draft law "On gas supply". Currently, one of key tasks of oil and gas industry of Uzbekistan is to ensure uninterrupted gas supply and conduct single technical policy in gas distribution network and gas pipelines.

In order to achieve these goals, it is necessary to create single law, which would regulate gas supply system. The law would ensure adherence of gas supply, modernization of gas transport system, rational use of natural gas, etc.

The draft law, on which work is continuing, aimed at ensuring the safety and security of gas supply, the regulation of the processes of distribution, supply and rational use of gas, relations between gas transport organization and local authorities.

The main purpose of the law is to form careful treatment of gas suppliers and customers, strengthen payment discipline, rational and efficient use of the most important form of fossil fuel.

The State joint stock company "Uzbekenergo" started construction of energy supply objects of Ustyurt Gas Chemical Complex (GCC) with the cost of US$44.6 million.

RIA Novosti reported that it is planned to construct sub-station with the capacity of 220 kilowatt with two high voltage electricity supply lines - 220 kilovolt line with extension of 138 km and 110 kilovolt line with extension of 18 km. The project will be implemented within a year.

The project will be financed by Uzbekenergo and commercial loans.

Currently, Uzbekneftegaz, in cooperation with Korean consortium led by Kogas, is implementing a project on construction of Ustyurt GCC at the base of Surgil field.

The complex will process 4 billion cubic meters of gas a year and produce 400,000 tonnes of polyethylene and 100,000 tonnes of polypropylene. The project cost is US$4.2 billion. The project implementation will be completed in 2016.

The American-Uzbekistan
Chamber of Commerce
1300 I Street, N.W.,
Suite 720W
Washington, DC 20005
phone: 202.509.3744
[email protected]