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American-Uzbekistan Chamber of Commerce

Address to the 10th Annual Conference of the American-Uzbekistan Chamber of Commerce


Evan A. Feigenbaum, Deputy Assistant Secretary for South and Central Asian Affairs
Remarks to the American-Uzbekistan Chamber of Commerce
Washington, DC
October 3, 2006


Released by U.S. Embassy Uzbekistan

Thank you very much, Bob, and thank you all for the important work this Chamber does to enhance trade and investment between the United States and Central Asia.

Mr. Minister, Mr. Ambassador:

Over the years, one thing we certainly have learned about trade is that it facilitates positive-and mutually beneficial-changes in society. By promoting growth and cutting poverty, creating equality of opportunity, reducing corruption, and strengthening the role of civil society, trade invests people (and countries) in a positive vision of their future. And when people have a larger economic stake in their society, they also assume a greater say in how that society is run.

We Americans increasingly are connected to what happens in Central Asia. And so we welcome the work of this Chamber of Commerce to facilitate trading links between Uzbekistan and the United States.

It's been more than nine years since your first annual conference. And we all know those nine years have seen considerable ups and downs in our relations.

To be candid, I think all of us start by recognizing that the past eighteen months have involved serious disappointment in the U.S.-Uzbek relationship, as well as frustrations and even some confusion, perhaps on both sides.

But two things are clear, and it's important to state them at the very outset:

First, the United States is deeply committed to this region, and we are committed for the long-haul.

Second, we put Central Asians themselves at the center of our approach to this part of the world. Let me be clear about that: We view strong, sovereign, independent nations as our primary partners in this region. We reject the notion, once again so fashionable, that Central Asia is merely an arena for outside powers to compete for influence.

Central Asians are not the object of our struggles with others. They are the very focus of our policy. And thus the core of American policy in Central Asia is simple:

We aim to support the development of fully sovereign, stable, democratic nations, integrated into the world economy and cooperating with one another, the United States, and our partners to advance regional security and stability.

Trade is a big part of that. Indeed, we are working in multiple areas simultaneously: fostering security; facilitating economic change, including the advancement of regional integration and cooperation; and of course promoting democratic reform.

We seek to assure multiple options and new opportunities in every direction on the compass: east, west, north, and south.

Our policy is not "anti-" anyone. Nor is it focused in any single direction to the exclusion of any other.

Rather, as Secretary Rice has said, it is to give impetus to a "corridor of reform" extending southward to Afghanistan and the Indian Ocean, even as the region's ties expand eastward to China, Japan, Korea, and the Pacific Rim.

And while looking for these new opportunities to the south and east, the United States firmly supports maintaining and expanding Central Asia's robust ties to the Euro-Atlantic community, not least through institutions such as NATO and the Organization for Security and Cooperation in Europe.

More options in more directions mean more opportunities and more independence. Countries should never be left with only one option-one market, one trading partner, one vital infrastructure link. Central Asia is a landlocked region, far from major maritime trading routes. But it once was a crossroads of global trade, and it can be once again.

And so Mr. Minister, Mr. Ambassador: we congratulate the Uzbek people on the fifteenth anniversary of their independence.

Today, I'd like to make just three brief points against the backdrop of what I hope, in all candor, we can agree is a difficult relationship:

First, I want to note (as has every Administration since 1991) that close relations between the American and Uzbek peoples ought to have great promise. In other words, I want to say something about what this relationship can-and should-be.

Second, I'd like to reflect for just a moment on why our relations have deteriorated. And since this is a Chamber of Commerce, I'm going to focus on the economic and commercial area to make a broader point.

Finally, I want to offer a realistic, but positive, vision of the future - and to invite our Uzbek colleagues to join us in that vision.

First, to our relations:

In a nutshell, what we can and should be is united in a common enterprise: an historic effort to broaden opportunities and choices for all in Central Asia.

Uzbekistan and the United States have come a long way in fifteen years - and for all the difficulties in our relationship, we recognize that.

You have created a sovereign nation.

We were the first country to recognize your independence and to open an embassy in Tashkent.

We've worked jointly to combat the transnational scourges that haunt our age: trafficking in drugs and dangerous weapons and, of course, transnational terrorism, which led to an uptick in our relations in the aftermath of September 11th, when Uzbekistan provided support to coalition forces operating in Afghanistan.

In 2002, our governments signed a Framework Declaration on strategic partnership and cooperation, affirming a joint commitment to establish stability and security in Central Asia. It focused on five areas: political and democratic reform; security cooperation; economic relations; humanitarian cooperation; and legal cooperation.

That document outlined a vision of what our relations can be: an effort to cooperate not only in matters of military security but also in the true-and enduring-security that comes from an open market-based economy and from an open democratic system of government.

I wish I could say our bilateral relationship had fulfilled that promise.

But what I certainly can say is that the United States remains committed to building a stronger and mutually beneficial relationship with the Uzbek people.

We have stated-and restated-our commitment to work with Uzbekistan to fulfill the promise of those commitments by our two Presidents. And we believe there remains a sound basis for us to find common interest and that we should continue to try to find it.

What are those common interests?

On security, we both hope to ensure a stable Afghanistan.

We seek to manage the transnational threats that challenge every nation in this global age.

We have an interest in economic and business cooperation, as today's meeting of Minister Ganiev with American firms demonstrates.

And we have an interest in the economic and political development of a healthy society in Uzbekistan.

So what's happened? Why have our relations deteriorated so sharply over the past eighteen months?

Much of the answer lies in our very strong differences about the events in Andijon and the human rights situation in Uzbekistan.

But one needn't look solely to our political differences to see that the challenges to this relationship are vast. We also face difficulties in other areas of direct concern to this Chamber.

Indeed, we take a multi-dimensional approach throughout Central Asia, promoting security, economics, and democracy simultaneously, but working, too, across the seams of these issues.

Promoting the rule of law is not, as some might have it, a solely "American" agenda to ensure better governance and democratic development. It is, too, a fundamental part of building the more attractive economic and investment climate that so many of our Uzbek colleagues hope to create. No company will invest where the rule of law is lacking, where contracts are not sacred, and where a firm has uncertain means of legal redress in the event of a contractual dispute. I should add, too, that the rule of law is also a prerequisite for a confident and vibrant domestic economy, which would benefit Uzbekistan very directly.

The members of this Chamber know well our longstanding interest in advancing economic cooperation. And the Framework Agreement spoke loftily of those shared goals:

We committed to "give priority to the economic aspect of bilateral cooperation."

To jointly create "a legal and regulatory environment conducive to the development of a market-based economy."

To "attract to Uzbekistan U.S. companies and banks."

And to strive to create an "attractive investment climate" for foreign capital.

But today, despite some progress, such as the October 2003 introduction of currency convertibility, American businesses face high barriers in Uzbekistan, including high import duties, restrictive licensing requirements, and the selective application of laws.

Trade between our countries-always a good measure of the state of a bilateral relationship-is decreasing, not increasing.

And ironically, this comes at a time when overall U.S. investment in Central Asia is expanding.

In 2005, for example, 29.2 percent of total foreign direct investment in Kazakhstan came from American companies and we are the number one foreign investor there. General Electric is shifting the production of its locomotives for the Asian market to Kazakhstan, and FedEx is opening a new hub in the commercial capital of Almaty.

In Tajikistan and Kyrgyzstan, too, trade with the United States is increasing at a steady pace.

Tajik exports to the United States were a paltry $1.2 million in 2002. In 2005, this figure had jumped some 200 times to over $241 million.

But in 2005, U.S. goods exports to Uzbekistan were down 68 percent from 2004.

And no wonder. As significant as these statistics are, long-operating joint ventures have found themselves forced out of Uzbekistan. Here, I highlight the case of Newmont Mining - a flagship American investment from a company that operates successfully on five continents. Newmont's was one of the first and the largest single American company investment in Uzbekistan. And it was, too, an investment by Americans in the economic well-being of Uzbekistan and its people. It helped to create jobs for Uzbek citizens. And now it is jeopardized by a decision by the tax authorities to reverse prior commitments.

The way this case is handled will be watched carefully by businesses interested in investing in Uzbekistan.

Why does the United States Government care about these developments?

We care precisely because we view trade as a vehicle to sustain growth, expand wealth, and broaden opportunity and partnership.

These steps not only deter American and other foreign investors but contrast starkly with what we are seeing elsewhere in Central Asia. And as the most populous nation in Central Asia, situated at the crossroads of historic trade links, and with significant human and natural resources, Uzbekistan should be a leader in its region.

For our part, we are working to offer a positive vision to this region. And we would like Uzbekistan to be part of it.

The United States supports membership in the World Trade Organization for all states of Central Asia, although only the Kyrgyz Republic is now a member.

We share an interest-or should share one-in the free movement of energy, people, goods, and information from the northern steppes to the seaports of the Indian Ocean, from the industrial economies of Europe to the dynamic economies of China, Japan, Korea, and the Pacific Rim.

Central Asia was once a crossroads. And it can be again.

Put differently, the United States continues to hope that the Government of Uzbekistan will turn from its current course and make a strategic choice in favor of reform and partnership.

But we cannot wait idly by for that day to come. We will move forward with our partners in Central Asia who seek stability and reform: building bridges, literally and figuratively. From the U.S.-funded $36 million bridge linking Afghanistan to Tajikistan (and, thus, South Asia to Central Asia) to the equally enduring bridges between students, scholars, teachers, and ordinary citizens.

These projects should benefit the entire region, including Uzbekistan.

And so let me quote again from our 2002 Framework Agreement: Relations between our countries were to be based on "common goals," not least the desire to "establish qualitatively new and mutually beneficial relations." We endeavored "to find new fields of joint activity" and to "expand and intensify" our relations.

The United States still believes these words can and should be the basis for future cooperation with a fully sovereign Uzbekistan.

We will continue to support American business in its efforts to seek opportunity and enhance prosperity in Uzbekistan. And we look forward with optimism to working with the Uzbek people to fulfill this promise, to provide greater choices and options for their country, and to enhance the stability and security of Central Asia itself.

Thank you.

Released on October 3, 2006

ENDS

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