UZBEKISTAN 1992 - 1996

(According to materials in the Republican press of Uzbekistan)
by Alisher Ilkhamov and Yelena Kiseleva




Economic basis of business

First, a few words about the economic basis of the formation of business in Uzbekistan. As per the data of mid-1994, 50,000 enterprises were privatized in Uzbekistan. The number of small enterprises comprised 22,000, the private firms - 11,000. A third of the manufactured national income belonged to the private sector. ("People's Word," 06.05.94).

According to data from the end of 1995 ("People's Word," 06.05.94), more than 32,000 small enterprises were counted in the republic, functioning in 22 branches of industry. The non-state sector has manufactured 44% of the industrial and 97% of the agricultural products. Approximately 64% of all working persons in industry were employed in the non-state sector. Also, more then 4,000 joint-stock companies were currently registered in the republic. In the first quarter of the year, the total amount of sold shares reached the sum of about 200 million soummes, in the second quarter - 100 million soummes, and in the third quarter - 500 million soummes. At the same time, the volume of sold shares in 1995 comprised only 23.3% of the total number intended for free sale.

The process of privatization has started in the republic. One of its manifestations has been the trade of immovable property. As per the data at the beginning of 1996, the Republican Immovable Property Exchange (RPE) has opened branches in all the republic's regions, in Karakalpakistan and in the city of Tashkent. 1100 objects have been set out for bidding and 542 were sold. For part of 1995 more then 7,000 objects were sold in auctions and tenders. The total offering price of all the objects equalled 524.5 million soummes in mid-December, the selling price amounted to 781.4 million. The most popular items were as follows: housing, gas refueling stations, inherited plots of land ("People's Word", 03.01.96).

Ideology, motivation and ethic tenets

Changes of social identity have touched mainly those strata of the population which have had to move to another stratum. As a rule, this process has occurred among scientific and technical intellectuals who were forced to leave their jobs and enter business. Let us call representatives of the newly established business class the "new Uzbeks". Who forms this social category?

Economic reform in the republic has lasted only 2 years. As recently as 1993, those who dealt with resale were called "speculators" and were prosecuted. It would be naive to think that all of these new businessmen started from the bottom and worked their way up. Rather, each started from whatever position he or she occupied at the moment when the changes of economic policy came. Many of them had never thought about business before. Some of them possessed solid backgrounds (organization-management experience), others had useful ties and co-operators, and "owners of underground shops" already had solid initial capital. Each of them injected his own social experience, and sub-cultures formed before the market time to the business. The fusion of new motivation and these sub-cultures today forms that which can be called the "new Uzbeks."

What follows is a survey of the press concerning the problems of the entrepreneurial class in Uzbekistan. First, let us look at the ideologists of economic reform.

An interview with Mr. Shukhrat Khakimov was published in the "People's Word" newspaper dated 30.09.92. He is a candidate of science and Secretary of the Coordination Council, "Patterns of the State development, rights and management." At the present, he works in securing economic ties, and in business problems and the legal regulation of foreign economic relations. Small, medium, private and national businesses form the bases of any developed society, according to Mr. Shukhrat Khakimov. However, the situation in our society is somewhat special. The "socialist monster" usurped regional initiative on behalf of the former USSR and imposed its ideology onto economic relations in society. In his opinion, the denial of capitalism is completely unwarranted, because economic democracy is required for the existence of capitalism. Free business is economic democracy.

Business in Uzbekistan today, Khakimov continues, is at the initial stage of its development. We have to revive it as an element of the economy, and we shall establish corresponding legislation which will promote both domestic and foreign economic relations. The new laws will remove the threat of punishment for business activity accepted in the civilized world.

Several article headlines are devoted to business problems in the weekly newspaper "Business-Herald of the East" (hereafter BHE) such as: "Third estate," "Portrait of a firm," and "My business".

An article by Mr. Bakhtiyer Ibragimov, Chairman of businessmen of Khorezm Region, was entitled "Third estate," and appeared in the 51st issue of BHE, 1992. He considers it necessary for state structures to cooperate with business. The key to the formation of the market is the creation of competitive surroundings, he says. The administration shall not only avoid hindering business, but it will even sponsor new enterprises if it is required for competitive development. In conclusion, he points out that "with the creation of a fundamentally new situation, the small business shall find its place in the regional economy. The third estate of Khorezm is granted a fair chance to spread out, but on a competitive basis."

The article "Portrait of a firm," by Khusan Yuldashev, the Chairman of the Board of Directors of Khorezm Inter-Region Commodity Exchange, was published in #48, 1992. Talking about activity at the Exchange, he points out that he puts great hope in it. "Since a long time ago, Khorezm had been a juncture point on the Great Silk Road between Russia and the Central Asia." Khusan Yuldashev expressed his confidence that "the Exchange will revive the traditions" because "commerce and business are in the blood of the Khorezm population." Note that the traditions of business have a regional character here.

An interview with Mr. Bakhtier Nasretdinov, Candidate of Philosophy, Associate Professor of Bukhara Pedagogical Institute, Head of the "Orzu" Association of the small enterprises of Bukhara, was published in the same newspaper (#11,1993) and under the same heading. The philosopher-businessman asserts that it is "exactly private business that has led Western society to prosperity." But he does not consider himself to be a "supporter of a blind imitation of the Western model. Especially since the spirit of business is ... in the blood of Bukhara population." Note another assertion of the regionalism of provincial businessmen.

Bakhtier Nasretdinov continues, "Unfortunately, many of the new commercial structures pursue one aim -- to accumulate money according to the principal that 'money doesn't smell.'" But, he writes, "the future belongs to the honest businessmen -- those who propagate the principle: 'Honor is above profit.' But how can the real businessman survive in the conditions of the 'savage' market? We live in exactly such period".

It is practically impossible to put up initial capital alone, Nasretdinov notes. And so, the idea has emerged to establish the Association of Small Enterprises. "Incomes, like shoes, must be the right size, otherwise they hamper movement and bring discomfort if they are tight, but if they are too big, it's easy to trip and fall down", an English philosopher once wrote, and this principle is "accepted by the members of the Association.... Now 'the shoes' are of the right size for us..." said Nasretdinov.

In the interview with the General Director of the firm "Ferganavneshtorgservice," Erkin Yusupov ("BHE, #39, 1992), the correspondent, remarked that there was no one working in export-import operations. Mr. Yusupov replied, "There were not the conditions for their growth. However, the Fergana valley had been the main line for the caravans on the Great Silk Road. Commerce is in the genes of the Fergana population" -- yet another assertion of the regionalism of business-sense.

Mr. Yusupov, who is 53, says, "Experience has been gained, both professional and everyday." Nevertheless, he considers that age is not an obstacle for business. He graduated the Tashkent Polytechnic Institute as an engineer. He worked as the Director of the plant and as a specialist for electrical wires and the automation of industrial installations. He considers the regulation of foreign activity in his Region to be the main task for his company. "One of the main tasks is to establish a joint venture with modern technology for cotton, vegetable and fruit processing. Here, my engineering background will suitable."

In the article "Labor week-days of 'Unitech International': Designing the next thousand years" published in BHE (#5, 1993), the Director of the Uzbek-American-Indian Joint Venture "Unitech," Naimjon Latypov, reported on the activity of his company. Its founders are the Indian company "Vipron" and "Uzbek Khavo yullari" (Uzbek Airlines).

The main direction of "Unitech International" is the modernization of computer technology. "Business is the basis of progress," Naimjon Latypov says. "It gives life force to society. It is erroneous to compare business to petty trading and see only personal gain in it. The direct responsibility of a businessman is to care for the nation's health and its physical and moral forces. The influx of talented men in all spheres of life and their successful development depends on it." Further, he states, "It has become modern to laud the Great Silk Road. But it was laid down not only as bait. Camel caravans were continuously moving, and in each caravan were philosophers and poets. ... Business and culture were a single whole. Why is Japan, the final destination of the Silk Road, now a leader in the world market, while Uzbekistan, all of Central Asia, remains behind? Was the lag caused by business decline? The young scientist Naimjon concludes that, "it is with business that one can realize the potential of knowledge."

It is interesting to note the motivations of these "new Uzbeks." The above-mentioned authors try to justify themselves by saying that they are interested not only in money but that business is the means for reaching the higher goals. Few of them confess that they simply would like to make money.

This inner contradiction between conscience and motivation is seen in the example of a broker of the "Jakhon" Brokerage Office, Nikolai Petrov (BHE, #34, 1992). Nikolai is 41 and a candidate of philosophy. He graduated the Ural University. Previously he was a member of the CPSU (Communist Party of the Soviet Union) he remains an ardent communist. During Soviet times, he worked in the Regional Committee of the CPSU. He attempted to establish a cooperative. He taught at the Party School. He would like to establish a self-supporting organization in order to earn money. In particular he would like to render consulting services.

This "red" businessman says that, "the theories of Marx and Hegel are practical. Communist ideas were not exhausted. They simply outlived the varied stages of socialism, namely: slave-owning - under Stalin, feudal - under Khruschev and Brezhnev. Now bourgeois relations are forming. That is why I am moving into another activity without denying the previous. I am not destroying myself. I am keeping a spiritual balance and am content with myself. This helps me reach definite success." He did not establish the cooperative at that time. He started to "sell his intellect ...though in our society, such property is not in demand yet." The small education Exchange attached to Tashkent Center of Innovations and Management has been established. They started to trade, the first transactions appeared, and the initial capital was formed. Here the intellect of Nikolai Petrov has come in handy.

"The task of any man is to feed his family, provide it with everything," says Petrov. "Perhaps, I'm pragmatic, maybe too rational. But the ideas themselves have not inspired me. Fulfill them, extract income - yes. I don't want to hide that there was a period of accumulation up to a certain limit. After that, it was no longer interesting... Money for me is not the means to obtain additional material goods. I'm an entrepreneur of the first generation. I can't use money for my own pleasures. A wonderful life is for people who are used to having a good income. It's too late for me to change my life style. If I change, it will most probably be the vulgar merchants. Of course I appreciate money. It is a measure of success."

Of course, most first-wave businessmen are not as loyal to the ideas of the past as Nikolai Petrov. Here is another profile. The article on the entrepreneur Valeriy Yun was published in "People's Word," dated 08.09.92. He started business activity with the opening of the "Meeting" cafe, but it was closed after a few months. He then established the scientific-industrial association (SIA) also called "Meeting," and he started to deal with the manufacture and selling of compost -- fertilizer made from waste, which produced good results on experimental cotton fields. Widening the sphere of activity, the specialist of SIA started the construction of garbage processing plants. However, the work ceased after the ban on the designing of works for private firms. The businessmen did not surrender, and since November 1991, the SIA "Meeting" has been functioning as a small enterprise once again in a different sphere of activity. The small enterprise has started to manufacture radio equipment, soft furniture, window frames, doors, tables, parquet, and even planned to establish a joint venture for clothes production with Chinese specialists.

V. Yun considers that, "recently in the state enterprises, we pretended to work, and the State in turn pretended to pay the wages. Today the situation is changing, and in order to live normally, it's necessary not simply to receive a salary but to earn enough .... Of course, money may be earned in different ways, but the most important thing is that your activity will be useful to people."

The theme of motivation is developed by the General Director of the agricultural-industrial trade firm "Bukhoro," Yagdash Turaev, who agreed that income is the main motive in entrepreneurial activity ("HBE", #6, 1993). He says that, "the time has come when everybody can exercise their talents fully. Market relations are frightening to those who simply are not able to anticipate several steps ahead. And that is normal. Only in our society are people ashamed to confront reality. But the possibility to receive income and use it the as you please gives the stimulus for accepting business decisions that multiply profit. At the same time, the demands of consumers are satisfied, which is good for society. Why don't people like to perceive the businessmen from this angle? More stereotypes are in use, such as - 'shrewd businessman,' 'grabber,' 'spendthrift.' I'm sorry to hear that nobody sees that businessmen serve the progress and prosperity of the Motherland." We add that this material was published in 1993 when the pulse of the economic reforms was barely heard, and anti-market moods were strong in society.

A few words about Yagdash Tyraev. Our hero graduated from the Bukhara Pedagogical Institute and worked as a boxing coach. He was invited to the Regional Committee of Komsomol and then transferred to the Regional Consumer Union. That is how he fell into trade. He then graduated from the Samarkand Cooperative Institute. He was the director of ORS. During the Moscow inquiry of Mr. Gdlyan and Mr. Ivanov, he was arrested on suspicion of bribery. He spent two years in detention by the inquiry but was completely acquitted. He took a bank loan with three companions and opened a small cooperative in 1990. After a year, it was transformed into an agricultural-industrial trade firm.

An interview with Kayum Nabiev, the owner of the industrial-commercial firm "Khamkor," was published in BHE #10, 1995. Mr.Nabieb is also the President of the Association of Business Cooperation with Foreign Countries "Baktria" (the city of Termez) and the Vice-president of the Association of Surkhandarya Businessmen. He came to business from the arts. He explained his choice as follows: "Enterprise in the arts or in the economy was not encouraged at that time. When the barriers started to be removed, I was interested in the economy. ... Our region has everything -- resources, industry and people. Enterprise is in the blood of our people. We had done business for a thousand years and enjoyed the reputation of skillful merchants. And if an "economic miracle" was carried by those without such rich entrepreneurial traditions, why is it too much for us?"

Mr. Kayum Nabiev agrees that enterprise has not reached a considerable level of success in Uzbekistan yet, pointing out that there is no such "freedom" of business anywhere else in the world. He says that people "blow air" here and there without bringing anything into the economy, referring to the machinations of money transferred for supposedly sold goods. "Seventy years of communism broke the habit of work for us, in particular in the sphere of buying and selling. The work of the civilized merchant is assumed to be hellish work, but it is publicly useful work. Trade capital can be formed either at the expense of speculation or by the growth of turnover. ... So it is necessary to have the culture of trade. What lies in store for those who intend to establish a civilized market -- the stock exchange and trading house? The same as what many of them do -- natural speculation, ... our lumpen psychology of 'grab and run.' So I ask the whole business community: gentlemen, if we sell everything that we have, and what will come after?"

In the same newspaper (BHE, #51, 1992), an interview was published with the chairman of the board of directors of the "Toshkent" branch Exchange in Surkhandarya Region. Valeryi Grabilin asserts that "the spirit of enterprise, the merchant character of the forefathers who sold on the Great Silk Road remain in the Surkhandaryan population." Indeed, some of his employees are distinguished by "the skill to sell and buy profitably in modern conditions." Mr. Grabilin pointed especially to the activity of the broker Margin Ismailova, who "manages ties with the collective farms, state farms and farms of the Kizirik district.... She has become the supplier of the whole district." At the same time, Mr. Grabilin talks about what impedes enterpreneurial development. It is mainly the customs borders, bank settlements, and imperfect legislation. But he is optimistic and considers that, "we have already lived through the most difficult time of formation."

But not everybody shares this optimism. In 1992, the newspaper BHE declared a competition called "Economic variations on the theme of future." Broker, Georgiy Rubanov, in the article "Prosperity will come from the East" (#47,1992), named the present time as the "period for surviving." The cooperative movement, which had been the basis of the enterprise movement in the Soviet period, is not playing "its original role as the leading engine of the market," according to Mr. Rubanov, "and it will not play this role in the nearest future." The author also predicts the disintegration and liquidation of small private enterprises, commercial firms and companies in the next year and half. "All of them are existing at the expense of intermediate activity and mainly by using credits that are currently forbidden. Their situation amounts to inaction or bankruptcy from the general registration of the enterprises and organizations." Mr. Rubanov says that many of the exchange structures will fall down, and "the others will be transformed into the trade houses, LTD's and Commercial companies. ... The two or three most powerful will survive. ... [because] none of the existing trade houses completely fulfill their original mission."

Rubanov gives the future leading role in the market economy of Uzbekistan to "mainly Eastern foreign companies and enterprises." Republican commercial structures will occupy second place and "the businessmen of CIS countries will be far behind." "But it does not matter who will be the first in business of state, whether our own people or foreigners." Mr. Rubanov thinks that, "the most important thing is that the state flourishes, people will be fed, clothed and live successfully and peacefully. It will be exactly so."

Murodil Kakhkharov, the chairman of the Kuvasai cooperative "Umelets," assesses the cooperative movement differently. His article "Cooperatives have not become obsolete" was published under the heading of the "Third estate." Mr. Kakhkharov considers it unfair when the manufacturer receives less than those who sell the products. "The paladins of the purse, the pioneers of initial capital accumulation are now in favor. Our example now is the [American] wild West, the gold seekers. But it is known that the lucky ones who rapidly got rich subsequently disappeared in the business formed afterward, where 'honesty is the best policy' (B. Franklin)."

The material on Kakhkharov may be called "The thorny path to success." This businessman talks about the problems which he faced. In 1987, the leather dressing enterprise which he established closed due to the absence of cesspools. He had to transform his enterprise to the manufacture baked goods. But when a sugar deficit appeared, it affected the activity of the cooperative. And so, the cooperative was closed but "sugar was as absent before as it is now. But fortunately the times have changed" - Mr. Kakhkharov said. He told how cooperation with the khokimiyat (government) of the region is carried out, pointing out that "the authority of businessmen has increased considerably. The population of the city felt that we really wish good for Kuvasai."

Mr. Kakhkharov is 60 years old. Before he opened his business, he had work 19 years in a consumer cooperative, and 25 years in a brick factory. The cooperative "Umelets" was registered in 1987. He had never dealt in intermediary trade activity. Initially, he aimed for the manufacturing of leather dressing, pastry goods, and the construction of objects. Mr. Kakhkharov has not remained unnoticed. He unofficially leads the Union of businessmen of Kuvasai.

The Tashkent Center of Innovation and Management has organized the Center for the preparation of businessmen under the brokerage office "Jakhon." This was discussed in an article titled,"Different faces are so alike" published in BHE #4, 1992 talked about this. What leads people to this center? A 32-year old leading designer, who did not see any possibilities to earn money, came to the center in order to be "taught how to make money." At this center it is possible to meet not only the young people but also pensioners. What about brokerage activity interests old men? "We pensioners were delegated by the collective farm to deal with an agent who cheated us by promising gold mountains. He ruined our products, the fruits and vegetables.... We decided to sell in the exchanges by ourselves." When the correspondent of BHE asked the novices, "What work do you prefer - stable but low paying or take a risk in order to make a killing," everybody replied that they are ready to take a risk.

Mannop Ellikbaev, the General Director of the "Zangori olov" firm (in the Andijan Region), said that "business shall be done by clean hands and clear intentions. Only a trusting attitude allows work to be efficient." (HDE #14, 1993). Mannop Ellikbaev was promoted from metal worker up through engineer and dispatcher on oil fields. Then he worked in the Andijan company "Gorgaz," where he continued his career going from gas welder up to chief engineer. In 1988 the chance to make a career appeared and Ellikbaev established a cooperative which provided gas. He strongly believes that a rich man (in the broad sense of the word) puts hope in his industry and that lotteries and games of chance are for the spiritually destitute.

Ulugbek Khashimov, head of the private enterprise "Doston" said the same about a moral code for business. He considers that "any businessman.... first of all shall be an honest and decent man." (BHE, #3,1995).

The director of the Tashkent brokerage office "Rano," Bakhodir Mukhamedov, considers that the broker is "to be energetic, enterprising, and ready and willing" but first of all must be honest. "In the past, the success of the merchant who firmly held to his word didn't disappoint the client. In practice, unfortunately, it's not rare to meet people with a different attitude." (BHE, #1,1993).

Mukhtar Olimov, the first deputy of the Andijan Region, is also worried about the ethical side of business. He wrote that he is "discouraged by the immorality of certain strata of "delovars." In his opinion, it is necessary to develop one's "own code of honor." "Merchants in the East were famous for keeping their word, unfailingly fulfilling their obligations. Moving toward a positive the formation of the third estate" (BHE, #14,1993).

Farkhad Tuichiev is head of the representative office of the Swiss company "Stahel Hardmeyer." He graduated from two institutes - Irrigation and Foreign languages. On the question of what work in a Swiss company offers, he replied that "close interaction with experienced businessmen allows him to learn the laws of market relations in depth, to learn lessons which are not taught in any lectures at the institute. Work at such a company is a good school of business... Interaction with real businessmen shook the notion of them as the sharks of market. Yes, our (Swiss) businessmen care for profit; they know the value of money. But they are not devious fellows who are ready to overstep the laws for bait. Some of our domestic hucksters, who call themselves middlemen, should learn from them." (BHE,#31,1993).

Interestingly, the practices of the majority of CIS and Baltic countries show that enterprise development has taken two somewhat related directions. First, "top-level" business consists mainly of former directors of the state enterprises, employees of ministries and departments. Second, there is the business from the "bottom." The decline of intermediary trade is very typical for this type of business, objectively leading to the acumulation of capital. At the same time, the prejudices against free intermediary trade activity are still strong in the society.

As we mentioned above, the re-selling of goods was still considered illegal in 1992. An interview with the Deputy Prosecutor of the Republic, the State Adviser of Justice, Sirajitdin Mirsafaevich Mirsafaev, was devoted for this problem. ("People's Word", 10.12.92). It said in the interview that more then 30 criminal cases were taken up by the administration from March 1992 concerning law violations concerning foreign economic activity. "One must say that in the process of moving to the market, the new situation favors economic crimes," asserts Mr. Mirsafaev. "The analysis of criminal cases and general supervision checks let us forecast the possible appearance and growth of other kinds of schemes in the economic sphere. Nowadays, despite statutes regulating enterprises, the majority of them don't produce anything but deal in pure speculation. They don't improve the life of the population, but rather promote disorder and accelerate rising inflation. This means that in the minds of both regular people and the authorities in 1992, "real" enterprise was related to manufacturing but not "huckster activity" or intermediary trade activity.

Mr.Mirzoumerbek Alimov, the above-mentioned chairman of the Union of businessmen of the Andijan Region and the president of the small "Malika" company, agrees that among businessmen "there are people who are not doing real enterprise. But, it's impossible to conclude from that one fact, that we are all criminals. We are going through the diseases of growth; we are at an infancy stage." (BHE, #14, 1993). This statement shows that the businessmen in the state in 1993 apparently felt hostility from both society and the bureaucracy, with the result that many of them possess the psychological complex of the "owner of the shop" carrying out the enterprise from the underground.

The psychological complex of being the "owner of the shop" was especially prevalent among the businessmen of the first wave. Akhmadjon Khodjaev is the chairman of the Executive Committee of the Union of the businessmen of Bukhara Region. In the article "Farewell to childhood beaten black-and-blue all over [editor's note: ???]" published in BHE #6, 1993, he wrote: "Who wouldn't engage in business? Everybody rushes into business. It is just the same as in childhood. A whole class of teenagers sign up for boxing class. But some of them quit after basic training, and some after their nose gets smashed. Only a few individuals achieve success in the ring. Likewise in the enterprise movement. Those who are not bright are sifted out. We bid farewell to childhood beaten black-and-blue all over. Remaining are those people who see their prospects in the realization of the program of the Regional khokimiyat (government): the saturation of the domestic market with goods and the solution of social problems."

Businessmen try to appear as decent citizens in order to overcome the negative attitudes of the society. So, the same Khodjaev considers that charity is a priority of the businessman. In retun, he hopes for the support of local authorities who play a key role in the creation of circumstances favorable for business. The most effective state structures are characterized by openness, de-centralization, stability and impartiality. Many of these components are visible already in our region, says Khodjaev. "It's necessary that these tendencies become irreversible." (BHE, #6, 1993).

Journalist, Larisa Levitas, in the article "Is 'Komki' (Commercial shops) the new word in native trade?" published in the "People's Word" dated on 07.10.92, writes about the rapid growth of commercial shops in Tashkent, the low quality of their goods and the behavior of the new businessmen -- the sellers at these komkis. "Before, it seemed to us that the abundance of goods in the shops is directly related to the behavior of the sellers, who are supposedly interested in selling the goods. That's why they behave very politely with the potential buyer." The author mentions the traditions of courteous service at our bazaars. But it turns to be that "the good traditions of the Eastern bazaar ... are badly assimilated on the parquet, marble or linoleum floors of commercial shops."

Because komkis are emerging faster than mushrooms, "they are making the difference in seller-buyer relations and are laying down the traditions ... unfortunately, the bad traditions. ... Boys and girls of various ages who are clothed in modern, 'stylish' clothes, consider themselves to be the rulers of the universe. ... The introduction of market relations is apparently being carried out in a wild, non-civilized, provincial manner".

Mr. Farid, the owner of a commercial shop (BHE #3,1993), does not hide that he is worried about his problems. He considers that "ten or fifteen real buyers per day" is enough for him. For the owner, his "goods are choice quality," and his "prices are corresponding." So, "they should go on sightseeing tours to the different places. They should come to such shops. It is easy to say, I'm tired of these speeches on the rich and poor. People come to the shop and see only their own problems: they couldn't buy this or that ... But they don't care for fig about MY problems." But he solves his own problems relying on no one else. "Each buyer is a worker, engineer, builder, etc. To the extent he works adequately, he shall be ... fed. I have accepted the rules of the game which were given to me by society. If they are changed, I'll see then what can be done. As for now, let's get used to what we have." We thus see in Farid a representative of the new wave of the businessmen.

He doesn't try to cover himself with the slogans of public usefulness. However, his irritation with the remarks of his customers about the prices is evident in his speech. This shows the lack of complete development of public opinion regarding enterprise. Note that this was in 1993. Only in February of that year was the green light given for private business by decree from President Karimov.

As if protecting the honor of the merchant uniform, Ben Benyaminov, the director of "Ben Ami Corporation Limited," proves that "trade is the profession that requires a lot of talent. We have come to the 'ebb' of the hucksters." He himself belongs to the professional class. "This is not the first generation of my forefathers that has dealt with trade. Genes mean something" (BHE, #26,1993).

It should be noted that after the February 1993 decree of the President on the development of enterprise in Uzbekistan, the process of the formation of the third estate sharply accelerated. Various structures were established in order to maintain small and medium business.

The work supporting the development of enterprise in the republic is discussed in the "Pravda Vostoka" newspaper (17.01.95) by the General Director of Business Fund, Dilshod Kamalov. The main aim of the Business Fund, according to Kamalov, is to promote the conditions that allow small and medium businesses to be created. The final aim is reviving the estate of businessmen. The regional brands of the fund were established, where the businessmen themselves, not the officials, are working. Mr. Kamalov believes that the creation of small and medium enterprises will allow the participation of 5-6 million in Uzbekistan in business.

Murodjon Karimovich Juraev, Chairman of the Union of the businessmen of Uzbekistan, in an interview to the "People's Word" (10.01.95), stated that the Union has developed and is ready to adopt the status of the businessman of Uzbekistan, i.e. the code which will be obligatory for any member of the Union. Apparently the status of "businessman" shall include such provision which is possible to define as "guild" or "category".

The article "Small and medium enterprises: traditions and reforms" by V. Abaturov and D. Rustamov, from the information-analytic center "Takhma," is devoted to the role of small business in the economy of the republic ("People's Word" 28.01.95). To substantiate the economic reforms necessary for the republic, the authors considered historical traditions: "From a long time ago, small-scale manufacturing was traditionally developed on a family basis in Uzbekistan, on which trade, craft sector, agriculture were based."

"The leading role of the small-scale manufacturing and enterprise in the republic at the present moment ... is conditional on the following extreme factors," continued the authors of the article. "First of all, there is the traditional predisposition. What remains important is the joint participation of the relatives in the industrial process, especially in the small forms of manufacture... Second, it's the demographic signs... Because of the strong sense of local community and the limited inclination to migrate, the rural areas must be developed with small and medium enterprises close to the raw materials and labor resources, instead of concentrating huge manufacturing in the cities." According to the author, "it is exactly small business that accelerates the formation of the stratum of businessmen, being the moving power of the market economy."

to the beginning

The Social Origins of the New Businessmen

As mentioned above, the new businessmen started from various kinds of initial positions. Here are some examples of the social strata from which the business class is formed.

Many of them already had managerial experience, which served as their "initial capital." Take the example of the Samarkand businessman Kh. Raupov, a manager of the cooperative "Leader" (BHE #26, 1993), which deals in the restoration of car tires, and the restoration and manufacture of batteries. Before this, Raupov worked as the director of a tire repaire plant and manager of the enterprise for inter-city transportation. The cooperative was reorganized into a private industrial enterprise in 1991.

Take another analogous case. The director of private the brokerage office "Fer-brok," Vladislav Chen, graduated from the Tashkent Textile Institute. He worked as a laboratory worker, designer, and the head of a garage. His last post was manager of the purchasing office. He started his business with the purchasing of a brokerage place at the exchange of the city of Osh in Kyrgyzstan. The brokerage movement was well developed in 1991, and has produced income already. This kind of success gave him the initial capital which he reinvested. In August 1991, he received the right to sign the transactions earlier than the exchanges registered in Fergana. He did not have the chance to reveal his talent at this old job. "The purchasing office was so bureaucratic that it was impossible to even think about enterpreneurial initiative." (BHE, #42, 1992).

The first private enterprise in Andijan was opened by a sports coach. Yuriy Khvan, a worker at the Regional Sports Committee, registered his club of Eastern martial arts in August 1991. The Charter of the Club includes trade-purchasing and commercial-industrial activity besides the sport itself. A sewing shop has been opened, attached to the Club. Mr. Fedorov's eye surgery clinic is planned to be opened in Andijan (BHE, #14, 1993).

These cases show how businessmen are emerging from their former work places. Likewise, the General Manager of the "Asia-air" company (producing furniture, oil, charter flights, publishing, and financing the masters of Folk Art), Vyacheslav Saibnazarov, remains the acting pilot. (BHE, #26, 1993).

One of the brightest businessmen of the first wave is Rustam Usmanov. He has a very interesting story, which is reported in the journal "Central Asian Survey": Rustam Usmanov heads the first private bank in Uzbekistan named after him, "Rustambank."

Mr. Usmanov was born in 1948 in the city of Djalalabad (in Kyrgyzstan) to a family of railroad workers. He graduated from the Geology Institute of Tashkent Polytechnic Institute in 1978, and from the correspondence department of the Tashkent Institute of Domestic Economy in 1981. He worked as a designer in the Ministry of Geology of Uzbekistan in 1971-1976. In 1976, he was sent to the construction of the Andijan water reservoir on a komsomol pass. He worked as a concrete worker, as foreman at the site, and as an economist at the automobile base "Andijanstroy." After the completion of the construction, he started to work as the chief economist of the "Tashakhur" poultry farm in 1984.

With the first legislation on enterprise in 1987, Mr. Usmanov opened the cooperative "Dream," which deals with the manufacture and maintenance of beekeeping and other agricultural products, and with intermediary trade activity. The cooperative was transformed in 1990 into the beekeeping collective farm "Dustlik," where the breeding of California worms and bio-humus, new for Uzbekistan, has been established. This activity has been conducted by Mr. Usmanov's "Diamond" company since 1992.

The collective farm "Dustlik" and the "Diamond" company had branches and subsidiaries in various regions of Uzbekistan and outside -- in Kyrgyzstan, Tajikistan, and Russia. Rustam Usmanov established "Rustambank" on May 8, 1992, with the Authorized Fund equal to 181.6 million rubles. It was the first private universal bank in Uzbekistan and one of the first in the Commonwealth of Independent States.

The fate of Rustam Usmanov is unique because he went through both a meteoric rise and fall -- arrest and liquidation of his bank. During his peak, Mr. Usmanov entered the inner circle of President Islam Karimov, where he exerted some influence on the adoption of some decisions on the development of enterprise. Simultaneously, Usmanov openly conflicted with different bureaucratic structures, especially with the Tashkent khokimiyat (government). In 1995, Usmanov decided to engage policy and put forth his candidacy for parliamentary deputy with the "Vatan tarakkieti" party. He started to disseminate leaflets attacking corruption and bribery. His misfortunes started from that point. "Vatan tarakkieti" recalled his candidacy, his bank was closed, and he was arrested, though later released.

From his confessions in 1993 and subsequent events, one can conclude that he fell victim to clan struggles. Having been the favorite of one powerful regional clan, he openly conflicted with the other one, the Tashkent clan. He himself said, "Last year, just after the establishment, we were faced with the counter-actions of some in law-enforcement bodies." This case was made public by publication in the "Pravda Vostoka" newspaper (March 24,1992), in the article "Fire with invitation." "The First Deputy Chairman of the Cabinet of Ministers, Ismail Khakimovich Jurabekov, finally had to intervene in this case. He personally oversaw the registration of our bank, and that's why we managed to do it in only 40 days."

On the question how the bank attracts clients, Usmanov replied: "Generally we grant credits without interest, because that is contrary to Islamic law, which considers it a sin to lend money with interest. We have the other system: we participate in profit." In other words, Usmanov consciously related himself with the norms of Shariat (Islamic law) in the field of business relations.

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The Problems and Difficulties of Formation

The businessmen of Uzbekistan were faced with great difficulties as long as their's remained a semi-legal status. That lasted up to 1993. Only in February 1993 was enterpreneurial activity legalized by special decree of the President. For example, the khokim (ruler, Mayor [?]) of Tashkent signed the instruction for the District Tax Inspections to be given the right to issue patents to the citizens for individual-labor and business activity. These types of enterpreneurial activity which were legalized were considered as the criminal actions before. This included buying and selling and other types of trade activity; the manufacture and sale of products of public consumption; the gathering and sale of mummies; the manufacture and sale of Eastern sweets; and medical services. ("Vecherniy Tashkent", 17.03.1992)

But even after the publication of the decree, businessmen remained the objects of a hostile attitude from bureaucrats. The General Director of trade-industrial association "Namuna," Zakirjon Ibragimov, has pointed out that, "businessman resemble the hare who runs 100 m in the open, being shot at by officials. The pressure of clerks may ruin enterprise and the business activity of small businesses" (BHE, #14, 1993).

Businessman Khamza Khikmatov has faced the big difficulties, as recounted in an editorial of the BHE newspaper (#40, 1992). His enterprise became bankrupt. He dealt "not with buying/selling and intermediate actions, but in the production of... tare plaques". He visited other Central Asian countries and studied the market before he decided to open his own business. Nevertheless, failure awaited him. Difficulties with contractual agreements have arisen: delay in the supply of raw materials and breach of contract. The bank started to demand the payment of interest for the granted credits, etc. "We even forgot to think about income. All our energies were directed to settle the debts." The businessman made the following conclusions from this experience:

Tashkent State Economic University conducted social research in 1992 which clarifies the main factors inhibiting enterprise in Uzbekistan. A professor of the university, candidate of economic science Alisher Taksanov reported (HBE #8, 1993) that of the 398 enterprises around the republic that were polled, 258 of them were small enterprises, 50 joint ventures, 20 limited companies, 17 joint-stock companies, 13 associations of the enterprises, and 39 other status. Taksanov has underlined the following main factors:

  1. Legal or criminal.
  2. Scientific and educational.
  3. Psychological.
  4. Economical.
Concerning the educational factor, Taksanov pointed out that many businessmen were faced with the problem of retraining themselves to qualify for changing professions. Thus, many businessmen have appealed to scientific consulting and information centers. Businessmen, as a rule, possess higher education: 267 persons from total 398 have higher education, 24 did not complete higher education, 76 had special secondary and only 1 did not complete secondary education.

With respect to the psychological factor, there is a stereotype that it is mostly men who can do business, because business requires combattive ability, logic, and accuracy of thinking. These characteristics are considered by public opinion to be lacking in women.

From the interviewed managers of enterprises, 16.6% were women and 83.4%, men. According to this narrow-minded attitude, the participation of women in business would disturb the woman's family obligations and oppose the will of her parents and husband. This attitude is especially expressed in the Central Asian region, where habits and traditions are strong. Conservatism in mentality inhibits enterprise in rural areas.

Despite the great attention devoted today in Uzbekistan to the development of enterprise, businessmen face up to the present day various problems and misunderstanding. Many matters discussed in 1992 still concern businessmen in 1996. A correspondent of "People's Word," Larisa Levitas, reported that representatives of small and medium-sized private businesses complained about their second rate status. "State enterprises pay considerably less for raw materials then these businessmen. But the state enterprises have the manufacturing, ties, contacts, and guaranteed funds." Also private businessmen have problems obtaining credits and with taxes ("People's Word", 07.01.1995).

Similar problems exist in the Navoi Region. Correspondent K. Belugina talks about them in the article "With weights on the legs" published in the "People's Word" on 23.02.1996. "Our businessman has been born already and the state encouragess his initiative. But individual officials either deliberately or undeliberately ... chain many weights onto the legs of the athlete".

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Women and Business

Women play an active role along with men in the process of the formation of the business stratum. We observed that many former workers of sewing or confectionary state enterprises now form the domicile or cooperative shops for the manufacture of the same products as before. Their professional skills are very useful in establishing their own businesses. In Khorezm, it was revealed that 70% of the trade "shuttle" business belonged to women. That is, the representation of women is very considerable in the sphere of small (more precisely, the smallest) businesses.

Women are represented on the level of the medium business as well. In particular, according to the article "Samarkand entrepreneurs' own business" (BHE #26, 1993), Venera Gubaidullina opened the first private brokerage office "Badra" in Samarkand. Beforehand, she had worked for over 15 years in the Regional Agricultural Complex providing the branch with construction materials. "At last I managed to realize my own possibilities. I believed in my powers. The 'free flight' in the market economy" - it's just for me, Venera confesses. She considers that the "best product is the product I manufacture myself," and she now plans to open a sewing manufacturing place.

The Association of Business Women supports women's participation in business on all levels from the republican down to the district. So, in the newspaper "People's Word" dated on 08.03.1995, an interview with Dilora Alimbekova, Chairman of Association of Business Women "Tadbirkor ayel," was published.

"Pravda Vostoka" published an article on women entrepreneurs in the city of Namangan on 05.12.1995. Gulshan Abibullaeva is a manager of the private firm "Emil" established in April, 1995. Before that, Abibullaeva worked for many years as an economist in one of the construction organizations of Namangan. The firm "Emil" unifies a private restaurant and bar, sewing shop and beauty saloon. Everything started from the beauty saloon. Mrs. Abibullaeva says that profit is not an end in itself, because "it's possible to make much more money buying through middlemen than we earn today."

Women are also represented in large (with respect to the pay scale in Uzbekistan) businesses. BHE #10, 1993 published an interview with Mukhabbat Khudaikulieva, the Chairman of the Board of Directors of a joint-stock company of the regional commodity and stock exchange "Turkiston." Women have a more serious attitude toward business than the men, according to Khudaikulieva. "Women are accurate, will never promise the impossible, will not postpone uncompleted work, and will never risk anything without first examining the offer." Mrs. Khudaikulieva considers women to be very reliable and responsible partners. "I always take offense," she continues, "when someone agrees to solve my matters as an exception. Why is this? After all, I only demand that one be in accordance with the law. Why it should be done in a form of an exception?" Further, she points out that it is much easier to work with literate people who are released from the stereotypes of the past. It is difficult to work with bureaucrats regardless of their sex.


One can conclude that the self-identification of businessmen is comes about mainly from the following reasons:

  1. As a reaction to oppression from bureaucrats and suspicion from society. Businessmen realized that their own difficulties are connected to the problems of the enterprise as a whole.

  2. In the attempt to develop the so-called code of honor for enteprise. This attempt to introduce moral regulations in their activity is caused not by internal relations but as a reaction to outward pressure from bureaucrats and society. This moralizing is the attempt to justify themselves before society and present their activity as publicly meaningful.

    Even in the entrepreneurial sphere there is a place for the moral tearing appart of intermediate trade activity just as society does with full-fledged business. The paradox is that many businessmen in the transitional period have to deal with this type of activity, which is seen as a required means of capital accumulation, but not an aspiration itself.

    The present forced seperation is typical for non-Uzbek businessmen. This is apparently related to the fact that the Russian-speaking population is considerably more involved in industrial manufacturing, and that its share of skilled workers and engineers considerably exceeds that of the Uzbeks. On the other hand, Uzbeks comprise the majority of those involved in trade. Uzbeks like to refer to their centuries-old experience with trade activity with the East. This historical tie with ancient merchant traditions strongly felt by the Uzbeks.

  3. self-identification as a businessman also concerns differences between manufacturers and sellers, as well as women. Women enterpreuneurs consider themselves as belonging to the minority in the enterpreuneurial environment.

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The press in Uzbekistan gives very little information on the organization of agricultural firms. We present the few materials which we managed to find.

Saidmurad Otamuradov breeds livestock, like his parents did. He worked as the Chief Zoologist in the Samarkand Region. He purchased the farm at the first auction held in that region ("Pravda Vostoka", 27.06.1995).

Omon Khamidov of the Syrdarya Region is 60 years old. He became a farmer two years ago. He sold his car "GAS -24", took out a loan, and purchased land and cattle ("Pravda Vostoka", 11.03.1995).

There were three medium-sized horticultural farms in the Surkhandarya region -- "Dashnabad," "Sariasiya" and "Sagardak." One cannot call them rich. They decided to be unified and form an agricultural firm. Abdygaffor Akhmedov became the manager. He was the former Chairman of the "Dashnabad" collective farm. He was an agronomist for many years and dealt with horticulture and vinoculture. ("Pravda Vostoka", 23.12.1995).

At the collective farm "Yangi khaet" in the Khorezm region, a new mechanism of farming has been developed and put into operation. It is based on the distribution of sowing lands, equipment and other collective property among the peasants. The main principle is long-term renting with the right of inheritance. For the time being, the rent is arranged up to the year 2000. Farmers settle their accounts with the collective farm either by products or money, as they wish. They have full independence. Teams were increased from 9 to 16. The former foremen and timekeepers are now dealing with livestock breeding, field crop farming, and vegetable farming ("Pravda Vostoka", 05.04.1995).

Yu. Gentshke talks about activity of the "Umid" firm in his article "Are entrepreneurs born?" ("Pravda Vostoka" 31.01.1995). The president of the firm, Mr. T. Pazylov, is a lawyer who purchased the deserted field camp three years ago. Now the farm "Umid" has 46.5 hectares of sowing land, 270 heads of cattle, and capital assets amounting to a half million soummes. The firm has built a dining hall, chaikhona (tearoom) and a private bank building. In addition, the firm renders assistance to many families, school children, invalids, and poor inhabitants of the Furkat District of the Fergana region.

The article on Eshmamat Ruzikulov was published in the "Pravda Vostoka" on 27.06.1995. Mr. Ruzikulov worked in the department of Spanish language at the University of the World Languages. He worked for 8 years as an interpreter in Angola and Cuba. This past year, he returned to his homeland, the kishlak (village) Nishovaddin of the Narpai District, and started to work as a school teacher. Besides that, he has taken a plot of land, formed a dekhkan farm and attracted 10 experienced peasants. The field was sown with cotton. Now, according to Ruzikulov, he expects to receive a (gross) profit of 1.5 million soummes. Most of the profit will be spent on purchasing equipment and local mineral fertilizers.

Mr. Khudainazar Ergashev (Syrkhandarya region) worked as a zoologist in the collective farm "Dustlik." Two years ago, he appealed to the board of directors of the collective farm with an offer to buy the farm. Later the collective farm itself was modified into the Association of dekhkan farms. The property of the collective farm was divided among the dekhkan farms. The entire land was given for long-term utilization. Having become the owners, people started to work considerably better and more efficiently. All released workers work in the small enterprise. New working places are now being created at already-available enterprises: sewing, carpet manufacturing, silk cocoon processing. A brick field will be opened as well as confectioner shop and other servicing shops ("Pravda Vostoka", 12.12.1995).

V. Karimov, a correspondent of "Pravda Vostoka," talks about the farmer Ismail Yuldashev in the article "The worries of Ismail Yuldashev, or why the farms disappeared in Kattakurgan" ("Pravda Vostoka", 27.02.1996). Yuldashev worked as a driver, retired on a pension and became a farmer. The farm "Utkir" has been established on the basis of the unification family plots. The collective farm allocated 9 hectares of land to the farmers. But Yuldashev remembers the sad experience of his father, who was arrested as a "rich peasant" in the thirties. The echos of those days remain to this day. That is why, Yuldashev is worried about the fact that they are "called rich men, hinting that ... the day will come when everything again is to be returned to the collective farm."

Further, the correspondent reports on the difficulties of the farmers. Milk is not profitable for the milk factory because it pays little and the settlements are getting longer. That is why they sell milk first to the inhabitants of their own village and the surplus milk to the bazaar. But the farmer does not have "full confidence in the stability of the situation." He cannot overcome the psychological barrier. When there are fewer than 30 animals in the herd, the farm will be liquidated, and the farmer is deprived of land and privileges. The correspondent notes that the district would not explain its policy; there is no moral or practical support for the interests of the farmers. As a result, the number of farms in the district is decreasing.

Akhmad Rejapov, a businessman and manager of a service complex (Andijan region), earned initial capital "on the potato and melon fields." Farm labor is no longer his concern. The firm he established him is trade-industrial. There is a small shop and confectionery shop ("Pravda Vostoka", 19.12.1995).

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Intelligentsia and business

The problem of the adaptation of intelectuals to the new conditions was addressed in an article of Andrey Semerkin "Intellectuals on market: between the knowledge and wealth," in BHE #5, 1993.

"Several years ago, intellectuals tried to occupy the forefront in the struggle for societal and economic renewal saying: forward to the market," writes the author of the article. But "initial capital accumulation has been carried out without the intellectuals' participation. The issue is not the subjective unreadiness of the intellecual 'sub-stratum' for business. Rather it is due to the, the legalization of the shadow economy and the fact that the main forms of capital accumulation objectively do not need the knowledge of scientist and specialist."

Further, the author says that it has become commonplace for one to have 2 or 3 jobs. He points out that "the total salary of the post-Soviet engineer, working at 3 jobs is enough to maintain the family standard of living "on the 1991 level." In these conditions, "the extreme reaction to these economic difficulties is emmigration from the country and 'emmigration' from the profession. Both events take place among intellectuals considerably more often than in the other social spheres. This is because knowledge, the main good of the intellectuals, becomes unnecessary during the initial stage of the market." Therefore, while intellectuals "more then anybody else advocated the market ..., they were marginalized in the process."

However, Andrey Semerkin has pointed out visible changes for the better and the appearance of weak signs of market formation of intellectual activity. He observes signs of the formation of the new sphere of the information market, the sphere of consulting services, and the sphere of education. Therefore, the market is involving intellectual professions. So, the hope arises that special knowledge and intellectual creative activity will be demanded by the developing market.

In section 1 of this essay ("Enterprising"). We have already mentioned the article of Alisher Taksanov, which discusses the polling of managers of small enterprises and joint ventures, joint-stock companies and associations. The press materials examined confirm the data of the study about the higher educational requirements of businessmen. The changed economic situation forced people to newly evaluate their knowledge, experience and try to use them with maximum profit. Plus, they are not afraid to change life styles and master new types of activity. Age is not an obstacle for business. Both young and experienced people are busy with enterprise. There are a lot of people who were previously occupied with managment posts -- previous work required at least higher education. Former scientific workers open trade houses, brokerage offices or established commercial manufacturing firms. There are considerably fewer who deal with the development of up-to-date technologies or the rendering consulting services. Only few deal with agriculture.

Shukhrat Tashpulatov is president of the trade house "Bars." He graduated from the Bukhara Technological Institute when he was 28 years old as a mechanical engineer. He is a former graduate student and has established a sewing business in Bukhara. Before that he dealt with intermediary trade activity. It is from here that he derived his initial capital. The trade house "Bars" has 4 shops in Tashkent, branches in Jizak, Termez, Namangan, Bukhara, and representative offices in Belarus, and Baltic countries. The interests of "Bars" are spread from Moscow to Sakhalin Island in Russia. The joint venture "Olevandy-Bars" has been established with the German "Olevandy" Co., which deals in hotels, sewing and processing enterprises.

According to Shukhrat Tashpulatov, the market is first of all competitive. "Bars" became a multi-purpose concern supported by three components. First, "the import policy -- saturation of the domestic market with products." Second, the export of ready, competitive products. Third, the formation of a market structure that can "serve as the business card of Uzbekistan." "Foreign investors," Taspulatov says, "will become convinced that there are the serious businessmen in the republic ready to integrate into the world economy" (BHE, #50, 1992).

Erkin Matkarimov, he General Director of "Khorezmservice," is 34 years old. He graduated from the Tashkent Institute of Communications with honor as a specialist in electronics. He intended to become a scientist, but returned home and started to work as the regular signalman in Urgench. "Perhaps, one day I will regret the missed possibilities," Mr. Matkarimov says, "but, apparently I'm a more practical man. Market relations have widened the perspective for enterprise." He believes that a scientific approach is required for business. That is why he completed a 4-month management course in Moscow. He had registered one of the first cooperatives in the Khorezm region. Nowadays in the association headed by him, there are two cooperatives, two small enterprises, two private and self-supporting enterprises. The field of activity is from TV repair and special assebly works, to shoe making and flower cultivation in hot houses. "If business is good, then there will be enough work for everybody. As well as money" (BHE,#49,1992).

Recall that earlier in this essay, in the section "Farming," T. Pazylov, a lawyer, established a farm in the Fergana region ("Pravda Vostoka", 31.01.1995), and that E. Ruzikulov, 27, worked in the department of Spanish language in Uzbek University of the World languages and 8 years in Angola and Cuba, and now established a farm ("Pravda Vostoka", 12.12.1995). But we have not met any women who are scientists dealing with business, though from our observation they exist.

Former engineers and technicians of the State Enterprises and Organizations prefer to deal with manufacturing, construction, manufacturing of consumer goods or rendering services requiring special knowledge and skills, for example, in the sphere of development and adaptation of certain equipment. They are less involved with intermediary trade activity than those from the sciences.

Here are some examples. Five small enterprises - producing various consumer goods, carrying out design-estimation work, a whole range of construction work, artistic carving, ceramics, service, and the provision of everyday services - make comprise the Construction-Architect Society "Turkiston." "In order to achieve success, the businessman must be an economist, lawyer and diplomat simultaneously," says Makhkam Sobirov, General Director of APSAO "Turkiston." "Turkiston" is the winner of the "Tashabbus-94" competition for the "best business-projecy." Sobirov graduated from the Tashkent Polytechnic Institute Department of Architecture. He had started with designing the Nuristan settlement for the builders of the Talimardjan Hydra Power Station, then he was assigned as the Chief Architect of Nishan District of Kashkadarya Region.

At the beginning of the cooperative movement, he traded the "arm-chair of the state employee for the worried life of cooperative owner." He designed, built, became familiar with and mastered the enterprise ("Pravda Vostoka", 24.06.1995).

The article "Samarkand businessmen's own business" talks about the small enterprise "Argo," which produces transformers, welding units, safety blocks for boilers, cathode protection stations, and charging devices for batteries (BHE #26,1993).

The "Kinap" plant was the founder of this small enterprise, which used to be a part of the military-industrial complex. The manager of "Argo," Vuacheslav Beglaryan, worked in "Kinap" and has been the foreman and head of the shop. He thinks, "Conversion in all the times and in majority of cases was carried out after the winning or losing of war. We are the witnessing a historical phenomena when conversion is caused by the disintegration of a social-economic system that has exhausted its own potential. In that situation to look at the military industrial complex as an evil is irresponsible. The concentrated scientific-technical potential in it and its skilled workers are property not to be pushed away... This is the sort of enterprise that "Argo" should support at "Kinap." Finally, the economy will be based on the efficiency of huge associations, companies, corporations. Small and medium business with their flexible and fast reactions will form the required infrastructure of economy. It's not possible to compare these two parts of the economy."

The General Director of the Uzbek-China trading house "Ipak Yulli," Rustam Mirzarakhimov considers that "within the modern economic situation, the trading house will not survive in a pure form. That's why we established industrial collectives under our roof." Mirzarakhimov graduated from the Fergana Polytechnics Institute as a mechanical-engineer. After the institute, he worked in "Ferganaoblglavsnab." His service career spans from engineer to first deputy chairman. He passed practical training in Moscow, and works as the First Deputy Head of "Mosglavsnab" (BHE,#42,1992).

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Scientific activity under the new conditions

Here are some examples of how specialists found ways to use their knowledge and professional experience without stopping their scientific activity.

The chief scientific secretary of the Academy of Sciences of the Republic of Uzbekistan K. G. Gulyamov, was simultaneously the General Director of the NPO "Sun physics." He defended several patents on the use of the enterprise's innovations concerning new types of ceramic materials. Now they plan to arrange their manufacturing like American plants, which provide benefits to science.

Is it possible to talk about commercial activity in the scientific sphere? Mr. Gulyamov replies, "The word 'commercial' frightens me .... The scientist enriches mankind with new knowledge instead of dealing with the enterprise. However, it's quite admissible that at the present stage of our development, it's necessary to find possibilities for strengthening the financial basis of research institutes." He points out that finally the results of research are intellectual property which can be sold. The republican innovation-commercial exhibition center UzFANT was established and registered under his guidance with the aim of advertising and realizating these innovations in both internal and external markets (BHE, #47,1992).

The market forced academicians to deal with the applications of their work. BHE #27,1993, talks about a new invention at the Institute of Electronics of the Academy of Science, RU. The employees of the Institute invented and manufactured an installation which is capable of converting any raw material into instant powder.

Dias Rumi is a candidate of physics and mathematics, a worker of this institute and one of the authors of the developed installation. At the same time, he is the manager of the small scientific-industrial enterprise "Proton."

The main activity of the joint venture "Tezinko" (General Director - Ilyar Rasulovich Gulamov, doctor of physics-mathematics science) is the manufacture and export of high technology - cyclotron radio isotopes. "Our task is the maximum support of the scientists," Gulamov says, "They are the brain of the nation. They need to be socially protected in order to do their work and think only on it rather than bread for living. If they leave science, we will never recover the loss... This matter is not only a financial but a moral, psychological... social program - one of the grounds of the JV activity. Today everybody who can earn money will not take even a cent from the state.... And if the state today cannot provide for science completely, then science shall provide for itself. Science is the intellect of the nation."

A problem arises concerning the professionalism of the scientists. Generally speaking, the scientist cannot maintain his/her reputation in the scientific world without the financial means. Some of them receive foreign grants, some of them adjust to research on a negotiated basis. One of the typical examples is found in BHE 22, 1993 about Bekhzade Sadykovich Yuldashev, the Director of the Institute of Nuclear Physics, a professor and laureate of the State Beruni prize. Yuldashev worked for many years in the laboratories of the USA and Canada, being a member of the Rotary club, which unifies businessmen of the world.

In February 1991, the limited Compozit company was established, attached to the Ferghana Institute of Polymer Materials. The director of the company, Valeriy Gaibov, 45, graduated from the Tashkent Polytechnics Institute, worked as the head of the shift in the Ferghana plant of chemical fiber, and then as the scientific worker of the Institute of Polymer Materials. He has no current patents but has a streamlining project.

Gaibov regrets that we do not have the concept of intellectual property. "For the time being, it is a luxury. Thank God that nobody disturbs the use of developed ideas and deriving benefit from them. We research, develop and than put into operation and manufacture the products. So, we realize the idea" (BHE #43,1992).

The Vice-president of the Academy of Sciences RU, M. M. Kamilov, in the article "Academic science: the horizons of development" published in "Pravda Vostoka" 12.01.1995, talks about the new Charter of the Academy of Sciences of Uzbekistan. The main features of the new Charter concern principles of democracy and representation. With the aim of comprehensive support of fundamental science and its practical use, the Academic Fund of Fundamental Researches is to be established in the Academy.

And so, small enterprises and joint ventures with foreign partners may be established attached to academic organizations. These organizations may open hard currency accounts in domestic and foreign banks to maintain scientific research and make corresponding investments into science.

An interview with the Chairman of the State Committee RU for Science and Engineering Academics, Tukhtapulat Riskiev, was published in the "People's Word" 16.04.1996. He pointed out that, at the present time, Uzbekistan possesses powerful scientific, technical and intellectual potential which it has retained despite the difficulties of the transition period. The reduction of workers in scientific research organizations is explained by Riskiev as a cardinal change of policy. A transition from a strategy of comprehensive scientific-technical development not acceptable for Uzbekistan with the combination of borrowed high world achievements in those spheres where our science and technologies are beyond from the advanced world level.

That is why there has been a transfer of skilled specialists into the other spheres where their knowledge is demanded. He points out that the transfer of scientific workers is going on, mainly, into small expertise enterprises. This stimulates the intimacy of science and manufacturing.

With Uzbekistan's independence, institutional changes have taken place in the republic. The national Higher Attestation Committee (HAC) has been established in the image of the old Soviet system of science. Previously, HAC had been a more powerful structure, where candidate and doctoral dissertations were processed, and where professorships were awarded. HAC served as the quality control for scientific workers. In spite the strictness of control, as a whole the system was ineffective. However, the breakup of the USSR and the formation of the national HAC's, made the situation worse because: 1) the system has remained without deep reforms, and 2) the criteria for assessing the quality of scientists were lowered.

Bek Tashmukhamedov, a scientist with a world reputation, was assigned as the head of HAC in the republic. However, his scientific weight cannot warrant the hack-work of scientific workers.

Bek Tashmukhamedov claims in his interviews that the quality standards for judging submitted scholarly works have been raised. The practice of awarding professorships to those who do not have a doctorate has ceased. Works are no longer accepted that are from disciplines related to Communist ideology -- Marxist-Leninist aesthetics, Scientific Atheism, the history of the CPSU, or the theory of socialism (People's Word, 05.02.1993). 43 doctors and 145 candidates of science, 104 professors, 217 associated professors and 51 chief scientific workers were produced by HAC in the state of 1993. (People's Word).

However, the prestige of scientific ranks and titles fell sharply. There are two main reasons for this.

First, the awarding of these ranks does not guarantee financial livelihood. Even academics complain about material difficulties. In the past, ordinary people considered the wage of the academic to be too high. Academics also enjoyed other privileges, such as receiving the best apartments, country houses, and special distribution points of hard to find products. Today, all these have disappeared. And as a result, the material state of the academic is not better than that of the ordinary broker and is sometimes considerably worse, since the academic receives his salary from the poor state budget, whereas the scale of broker's income is tied to his success in his transactions.

Second, it has become easier to receive the rank than before when many of the scientists were certified abroad, in the leading scientific centers of the USSR. This gave specific weight to the received rank. Today in order to receive approval from HAC, it is necessary to obtain approval from the local scientific elite, who are far behind ex-Soviet scientific standards in many branches of science. Only several big names are the exception.

As a result of the sharp fall in the prestige of science and the education system, young people have started to leave science for business, where the prize for success is much more impressive compared to the state budget.

Interesting processes in the intellectual sphere have occurred in relation to language in the republic after independence, with the adoption of Uzbek as a state language and the breaking of ties with the scientific centers of Russia. The question of what languages should be used for education and research has become a hot topic. On one hand, the predominance of the Russian language in this sphere has kept the science and the culture of Uzbekistan as a whole dependent on Russia. On the other hand, the main mass of the special literature and special publications of the former USSR were and are being published in Russian. Cutting off access to this literature deprives Uzbek scientists of the possibility of growth. The complexities of this problem led to discussion in the press.

A senior scientific worker of the AS of Uzbekistan, O. Jabbar (People word 27.05.1992), discussed the article of T.Radjabov, a member of the AS of Uzbekistan, "Language and science" (People word 19.05.1992), where the point of view is expressed that the preservation the Russian language in our science will be the guarantee of its high level. Having agreed with this point, the author, however, expresses doubt that the Russian language remains the language of former Soviet Union, since education is conducted in national, Western and Eastern languages. He considers that it should be the language problem for the scientist since he is obliged to know more then one language.

In the article of sociologist Alisher Ilkhamov, "Science and education" published on October 10, 1995 in "Pravda Vostoka," solutions were offered concerning access to foreign literature by the re-distribution of resources. Scientific-educational organizations not producing any benefits or practical goods to the republic should be liquidated, and a powerful Information Center should be created from these funds for purchasing foreign literature on the important directions of science. The creation of even one library satisfying the standards of the developed countries will relieve the severity of many problems of science and education.

The article of Mr. Ilkhamov caused an angry reaction from the Director of Information Center of Scientific-Technical Library of the AS of Uzbekistan, who asserted that the state had adopted a decision on allocation of several thousand US Dollars for purchasing foreign literature (Pravda Vostoka, 1995). But he did not reveal how many volumes of foreign literature were being purchased.

Education. The Young generation.

Pravda Vostoka published the article of the correspondent A.Ivanova, "Do you want to work? Go ahead." The correspondent tells about the activity of the Student Fund for the establishment of an industrial base. The networks of small enterprises are being established where students will be working during their free time. A shop on the campus is planned, where their products will be sold. A sewing shop has been opened already, and a shoe manufacturing shop and barber shop will be opened soon. Providing students with a job will allow them to improve their financial state when the size of their stipend does not cover food and other necessities.

In BHE #51,1992 under the heading of Foreign contacts, was an article by correspondent L. Grigoriev called "The students have their borders." "The doors of leading foreign institutes are now open for the students and teachers of Uzbekistan," writes the author. More than 1800 Uzbeks are now studying in Ankara, Istanbul, Izmir and other cities in Turkey. More than 20 students attended the classes in prestigious universities in the USA. Tashkent institutes dispatch students and teachers abroad for a limited time. 16 professors of the Economic University have studied for two months with experienced specialists in the market economy in Ankara (BHE, #51,1992).

In "People's Word" dated 20.11.1992, the article of R. Samigulina, "Study abroad - already a common affair," writes that two Uzbek girls have gone abroad to study at the Medical College of Red Crescent in Turkey. They will become professional nurses after 4 years of education. The Society of Red Crescent of Uzbekistan adjusts the contacts with the National Committee of the Societies of Red Cross and Red Crescent of foreign countries. The 5 young representatives of the Society had a rest at the camp of Turkish Red Crescent.

The process of education abroad will lead without doubt to a change of identity of the varied social groups, for example, in relation with the new branch of tourism. Samarkand businessmen visited Indonesia, interested in the economy of Indonesia today and in the place of tourism in the economy. The firm which received the guests from Samarkand is ready to render assistance with tourism specialists.

to the beginning


Pan-Turkic Sentiment

It has been repeatedly said that the destruction of the USSR let out the bottled "genie" of nationalism. At the end of the perestroika process, Uzbekistan also experienced a surge of nationalistic feelings. At that time, political opposition to the Uzbek government was in strong, and its main political powers were the "Birlik" and "Erk" parties. Both parties reached the peak of popularity by utilizing nationalistic-democratic slogans, one of which concerned making Uzbek the state language.

Another slogan of the opposition was Pan-Turkism. The newspapers began to feature historical materials about the idea of a united Turkestan. For instance, "The Independent News Bulletin" (an organ of "Birlik"), #6, 1992, featured, "Some matters of Pan-Turkism in Turkestan". This article says that the movement for a united Turkestan was defeated by the Bolsheviks, resulting in the division of West Turkestan into 5 Soviet administrative territories. The basis of that division was ancestral belonging. Only after the territorial-administrative division amongst the Pan-Turkists did the feeling of belonging to a specific nationality (Uzbeks, Turkmens, etc.) emerge.

It is claimed in this article that those tribes (Uzbeks, Turkmens etc.) are the big rivers of Turkestan. Their ancestors are Turks. Nowadays in Turkestan, no one denies his Turkic origin, and has no doubts of becoming a part of the Turkic stock.

The authors appeal to Uzbek poets who were repressed during the Communist regime for spreading the Pan-Turkism idea - Fitrat, Cholpon, Magdgan Kasim, Tinistan, Elbek. A verse by Fitrat from 1917, "Hey, son of the Turk" is quoted. Elbek, it is said, wrote the poems in defense of the Turk language. One of the symbols of Pan-Turkism is the poet Magdgan Jumabay. He was a supporter of the Osman version of Pan-Turkism. When the lands of Istambul and Onatuli were conquered, the poet had written the verse "Distant relative." The poet appealed for the Osman turks, who had moved so far away, to unite with the Turks in the Altay Mountains. The poet will be long remembered among the people as the true expresser of the Pan-Turkism idea. The poem "Turkestan" says: "Turkestan is the door between two worlds, Turkestan is the cradle of the Turk". The poet liked Amir Temur (Tamerlane) very much.

The government of Uzbekistan responded by adopting the slogans of the opposition, thereby depriving the opposition of its social base. President Karimov established very close relations with Turkey. The law on State language was passed, and the name of Amir Temur became the most respected in the pantheon of national heroes. The decision was taken to move to the Latin script.

In the opposition publications, the dispute concerning alphabet reform was launched. At the same time, opinions were divided between supporters of the arabization and latinization of the Uzbek alphabet.

The "ERK" newspaper, No 12, 1992, published two opinions. In the article "Freedom is not a subject to be victimized," Aslar Makham writes that the adoption of the Latin alphabet, implemented in the 1920s, was only a step toward the adoption of the Cyrillic alpabet, which was done 10 years later. "During those 10 years, the Soviet Empire pursued latinization and repressed families who were found to have just a slip of paper with the Arabic script .. All that had been created for 14 centuries was wiped out". In this connection the policy of latinization is considered to be adverse to the people of Turkestan. Latinization, claims Aslar Makham, will have the same effect as the adoption of the Cyrillic alphabet -- entering Europe. "We are people of the East who crossed the Moscow bridge into Europe, but who did not become either European or Eastern people. ... Those who believe that the Latin script has no serious differences with the Cyrillic and will make us happy are basically the high brows who visited Turkey," continues the author. However, these intellectuals do not know that in Turkey itself supporters of the Arabic script are a majority. The only argument against adopting the Arabic script is that it is too complicated. But this argument was heard not from their ancestors but from Engels. "How long will we follow someone else's will (America's or Turkey's)? Freedom can be sacrificed neither for a happy life nor for advanced development".

The opposite point of view is defended by Sunatulla Mir Asim in the article "What kind of ABC?." The people gladly accepted the adoption of the Latin script initiated by the reformer Jadids, according to the article. However, the Communist regime put the Russian Cyrillic alphabet into effect instead of the Latin, fearing the emergence of a strong, unified Turkestan. The result of this treacherous action was that our people were forced to adopt the Russian script, language, history, cultural events. Since then, we have been prisoners of the Russian script, and youngsters turn their backs on the traditional history and culture, but take on Christian customs.

Sunatulla Mir Asim, like the Jadids at that time, had a pragmatic point of view: Our people ought to study their history, culture, the base of which is the Arabic script. However, there are very few youth who want to study history and work with old manuscripts. Since the Uzbek language is so far from Arabic, it is hard for so the youth to be taught the Arabic script. The Arabic script is simpler to be taught but up-to-date technical knowledge is hard to find. "Since the most people do not know both the Arabic and Persian, the transition to the Latin script, which resembles our present one with respect to form and composition, will secure for the unity of language and knowledge for the Turk people," concludes the author.

The matter of the reform of the Uzbek alphabet seems like the only issue on which the Islamic and National-Democratic opposition could not come to a common point of view. On the remaining issues a symbiosis of these forces may be observed, just as in Turkey the Pan-Turkism and Pan-Islamism are not in opposition. This symbiosis may be found in the attitude of Uzbek-Turkish newspaper "Zaman," published in Uzbekistan for a short period of time.

Here are several characteristic publications of that newspaper. On 16th of September, 1992 Nabigon Bokiy writes that Enver Pasha (the politician who fled from Turkey and then led the Basmachi movement in Turkestan) and Ibragim Bek (one of the leaders of the Basmachi movement) are national heroes of Turkestan.

Above we mentioned joint Uzbek-Turkish programs in education. "Zaman," 30th of September, 1992, reports that according to the agreement between Uzbekistan and Turkey in the different provinces of Uzbekistan, 7 colleges had been opened where Turkish specialists teach.

On the 4th of November 1992, the newspaper announced that on the 29th of September, 1992 in Bishkek, an international scientific conference was held on establishing a common alphabet for the Turkic peoples. After the collapse of the Ottoman Empire, says the article, not only did the Turkic world fall apart, but considerable differences in the Turkic languages appeared too. In our language, many foreign words appeared (French, English, Russian). But we need to work out a common alphabet and language. This was the common opinion of all who attended the conference.

In other materials (18th of December, 1992), the slogans of Islamic solidarity already sounded. In an article by S. SHAFTROSH and S. EGIZ, based on the biography of the present Belgrade Mufti Khafiz Amir Dilovar and the hostile actions of the Slavs towards the Muslims. The real historical facts of the massacre of Muslims in the different periods of the history of Yugoslavia are provided. During World War II, the article says, 15 big Moslem sacred objects were demolished by the Bulgarians, Serbs and Croatians. In one day, 6 thousand Muslims were killed. The motto of the Slavs was, do not leave any Muslim within the territory from the Adriatic to Iran.

Probably, the attitude of the "Zaman" newspaper is expressed in the clearest manner in the publication dated 15th of January, 1993, where the author Ertungul Yaman, a teacher at the Uzbek language and literature Department of Tashkent State University, regretfully states that over the recent years, youth have experienced a certain estrangement from their native culture and history. It is a lot of Europeanism, that may be clearly seen in Turkey. Uzbekistan will also encounter that. In this connection this appeal can be heard:

  1. Form the identity on the basis of 3 significant points -- Islam, Pan-Turkism, and the History of Turan.
  2. Develop close cooperation with neighboring countries.
  3. Beware of foreign relations. Be careful not to become dependent on another culture.
  4. Take strict measures against drunkenness.
  5. Save the youth from such strange and unnecessary holidays as birthdays and New Year's Day.
At present, the diversification of scientific and educational external relations is taking place. More and more youngsters study at the Higher Education Establishments of far-flung foreign countries. The largest number of joint projects in education was initiated by Turkey. Further, Turkish television broadcasting has been arranged. The Uzbek-Turkish newspaper "Zaman" came out for a while. A while back, Pan-Turkism-based intellectuals appeared publicly. The most notable representative was one of the opposition leaders, Mohammed Solikh. After his emigration and the shut-down of "Zaman," as well as the criminal case regarding the recruitment of Uzbek students by the opposition, the activity of the Pan-Turkism-based intellectuals declined.

To be objective, the influence of Turkey is carried out not only and not so much in the stream of the Pan-Turkism ideology. On a far greater scale, the sharing business experience under international standards is taking place, since Turkey itself is an integral part of the Western European economic arena. In BHE #39, 1992, under the caption "Bank news," the article "Turkey: study, study and study again" was published. It stated that the NBU employees group had 5 months of training in the Training Center belonging to one of the Turkish banks. "We availed ourselves of the Turkish experience, and the Turkish colleagues study at the American and European banks."

Russian speaking population

The "People's Word" newspaper dated 27.10.92 printed the article of V. Petrov Tapoich: "It is necessary to adapt to the new realities."

Aircraft Production Corporation Management is worried about the personnel problem in the Corporation, writes the author. From the beginning of this year, more than 400 well-qualified specialists were fired, mainly the Russian-speaking ones. Deputy Director General for Production Mr. V.P. KUCHEROV commented: "Saying that the personnel problem occurred only due to the discharge of the Russian-speaking specialists would be incorrect," the article says. "Because nowadays, the well-qualified native workers are dismissed too." For Mr. KUCHEROV, the cause is their affinity for land. Many of them had left their villages because of unemployment. But now, their parents are granted plots of land for farms by decree of the President, and they return to them. Nowadays, the selection of the necessary personnel is preferably from the urban population, which is more inclined to work at production enterprise.

The cause of the personnel drain was investigated by the State Committee. In a meeting with the Corporation management, the problems related to low-quality teaching of Russians in the Uzbek-language schools was addressed. In several arts colleges, Uzbek language examinations were arranged for the Russian-speaking applicants. Naturally, at the existing level of school knowledge, many of them failed. In addition, in many establishments of higher education, the number of the Russian-speaking groups was reduced.

Basically, press coverage on the matter of the national minorities was very small, because the leadership feared that publication of such issues would provoke inter-ethnic strains. One can say that in reality this matter is not open enough to be discussed.

to the beginning

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