Uzbekistan's fledgling economy relies heavily on Japanese trade and investment for growth. And while most observers have concentrated on Uzbekistan's new military alliance with the United States - Uzbek press reported on December 6 that Washington would soon announce a $100 million aid package - its partnership with Japan seems to be solidifying. On November 12, Uzbekistan's President Islam Karimov received Nariaki Nakayama, a deputy from Japan's House of Representatives, to discuss prospects for further cooperation. Nakayama said he was there "to reinforce this cooperation" that has emerged between the two countries. As Uzbekistan revels in its new alliance with the United States and Japan thrashes in a recession, the two countries are cementing ties for the long term.
Japan, which considers Uzbekistan a hub of the historic "Silk Road" region, has beefed up the country with several unilateral investments since 1997. Indeed, despite its own economic woes, Japan has been Uzbekistan's most generous foreign funder. It made two loans worth 15.6 million yen in December 1999 to upgrade three Uzbek airports, months after insurgents carried out a coordinated and narrowly botched attempt on Karimov's life. The state, via its Japan Bank for International Cooperation, has even supported refinery and cotton mill projects in the densely populated and under-employed Ferghana valley.
In 2001, Tokyo's concern for Uzbekistan's social sector led it to grant equipment for the Republican Center of Emergency Medical Aid. Japan had already supplied child vaccines, modern technologies and equipment for pediatric clinics and maternity hospitals. It also supports annual projects in Uzbek food production. But now that Uzbekistan is serving as a conduit for international aid into Afghanistan, the relationship between the two countries may reflect the Afghan war's antiterrorist priorities.
In October, the countries agreed to swap intelligence on extremists and other matters relevant to the American-led campaign. This may be the only area in which Uzbekistan has greater resources than Japan. Uzbekistan is also intensely focused on suppressing Islamic extremism in its own borders, and may conceivably paint Japanese investment in Ferghana and elsewhere as a tool toward that end. Japan, for its part, may join more international aid projects that seek to retard Uzbek corruption and fight poverty.
In a November 23 piece in the International Herald Tribune, European Bank for Reconstruction and Development chief Jean Lemierre cited Japan's participation in a lending consortium designed to promote Uzbek railway competition. The EBRD, along with the International Monetary Fund and other global financial institutions, are looking closely at new projects in Uzbekistan, Lemierre wrote. For Japan to maintain its special relationship with the country, it will have to join these consortia and may also need to make more patient, and somewhat riskier, investments.
Japan can also boost Uzbek stability by more actively trading with the country, but this hardly seems likely. Japanese-Uzbek exchanges have grown sharply this year, and it's doubtful that Japan's shrinking economy can expand trade much further. In the first nine months of 2001, trade turnover between the two countries was $133.1 million, double the amount registered last year. Uzbekistan, typical of a developing economy, exports mostly cotton and minerals. Japan's imports to Uzbekistan are higher-value goods, including telecommunications equipment, trucks and steel.
Japan also imports business networks and marketing skills, which Uzbekistan's corruption-scarred industries should find valuable. Japan opened a representative office of Japan External Trade Organization (JETRO) in Tashkent in October 2000. The organization set up a trade show in December 2000 in Tokyo, which showcased the potential for further extension of volumes of double-side trade and economic cooperation. However, the Japanese economy would have to rebound for Uzbekistan's trade balance to improve much. On November 29, Goldman Sachs strategist John O'Neill described that economy as "hopeless" and predicted two consecutive years of negative growth.
So Japan seems likely to keep making long-term infrastructure and human capital investments in Uzbekistan - perhaps with more zeal now that those investments have gained an antiterrorist gloss. The Uzbek-Japan Center, which performs assistance in developing cultural ties and provides business training, opened in Tashkent in August 2001. Japan's generosity with this type of support indicates that it views stability in Central Asia as important to its internal security and political development. In early November, Japanese Prime Minister Junichiro Koizumi wrote a letter of support for Uzbekistan's antiterrorism efforts. That sort of endorsement, rather than rapidly expanding trade, figures to boost Japanese-Uzbek relations - and each country's relative place in the world - in the months ahead.
Antoine Blua is a freelance writer who specializes on Central Asian affairs.