BACKGROUND: Diplomatic relations between Pakistan and Uzbekistan were established on May 10, 1992, and as a result Pakistan established its embassy in Tashkent in June 1992. Pakistan had an early interest, sending a 23-member delegation to Uzbekistan in December 1991. Relations have not been unproblematic, though. In the mid-1990s, the issue of Afghanistan was a rough edge in the formation of mutually beneficial relations, and Islam Karimov often accused Pakistan of designs on Central Asia given its support for the Taliban movement. Now, in the context of establishing durable peace and promoting regional trade, both countries have common objectives of peace and stability in Afghanistan. In addition, the Uzbek President has expressed admiration for President Musharraf’s vision of enlightened moderation as a way out of international turmoil. On reciprocal basis, Uzbekistan supports the Kashmiri’ right of self-determination as set out in the relevant UN Security Council resolutions, while Pakistan has made a point of keeping the Human Rights issue out of its dialogue with Uzbek officials. Uzbekistan and Pakistan view each other as valuable neighbors and are trying to forge improved bilateral trade, commercial and cultural relations. Uzbekistan views Pakistan as a large South Asian state, which possesses huge economic, political and military potential. Some analysts also see the latest visit as an effort to extend bilateral defense cooperation. Pakistan, for its part, is not interested in merely becoming a pipeline or trade route for Central Asian States, but it is interested in developing trade, economic and political partnership, including in the defense field. Therefore Pakistan is pursuing a two-fold policy towards Uzbekistan. Firstly, it is forging economic cooperation by improving bilateral relations, and secondly through the common platforms of various organizations such as the ECO, SCO etc. President Musharraf expressed the mutual desire to develop road and rail links and the use of its seaports to develop commerce with other regions of the world. President Karimov signed four agreements and six Memoranda of Understanding with Pakistan, including an agreement on cooperation in small and private entrepreneurship, a MoU on trade, economic and investment cooperation, an agreement on mutual legal assistance in criminal matters, an MoU on cooperation in customs and foreign trade, a protocol on cooperation in combating terrorism, an agreement on cooperation between the Chambers of Commerce and Industry of the two countries, an agreement on cooperation in the field of plant quarantine, an MoU on cooperation in food, agriculture and livestock, and finally, an MoU on cooperation between the Tashkent Islamic University and the International Islamic University of Islamabad.

IMPLICATIONS: There is a great potential of expansion of trade, economic, and cultural interaction between the two countries, yet Uzbekistan remains heavily dependent on Russia, which is its biggest trading partner. Russia provides almost 58 per cent of Uzbekistan’s imports and is the recipient of almost 61 per cent of Uzbek exports. Since Uzbekistan is pursuing a policy of diversification, due to its strategy of ‘transition to a mixed economy’, there are vast areas in which the two states can cooperate and lay the foundation of mutually beneficial economic and political relations. For instance, Uzbekistan is the fourth largest cotton producer in the world, and the second largest exporter after the U.S. Therefore Pakistan can help Uzbekistan export cotton, which it already does. In 1998, Pakistan imported cotton for US$53 million from Uzbekistan, when total imports equaled $72 million. This figure fell to $8.7 million in 2000, and lately rose by over 50 per cent during 2005. Uzbekistan is the only country in Central Asia to produce many metals, aircraft, cars, motors, cotton-picking machines and other agricultural technology, cable products, excavators, cranes and lifts, and equipment for the textile and cotton-cleaning industries and weaving machines. Uzbekistan has sixty times more natural gas than does Pakistan. Another sphere of mutual relations is the potential construction of a gas pipeline. Pakistan and Uzbekistan are also looking for Defense cooperation, hence Uzbekistan has offered the sell or lease aircraft IL-76 and IL-114 aircraft for civil aviation to Pakistan. Now both states are looking for cooperation in the field of defence and security. They have already signed an extradition treaty during January 2001. Therefore Pakistani forces have apprehended Uzbek terrorists during military operations in Wana, Waziristan and handed them over to Uzbek officials. Pakistan even agreed upon intelligence sharing with Uzbekistan to deal with the financial linkages of terrorists. Pakistan has several times expressed its willingness to curb terrorism and cooperate with Central Asian states through the SCO platform. President Karimov has assured Mr. Musharraf that his country will support the Pakistan’s pledge for the full membership in the SCO.

CONCLUSIONS: Improved bilateral relations with Uzbekistan are on the priority list of Pakistani decision makers. As an export route, Pakistan’s importance for the international energy market could imply deeper international interest in its stability and security. Uzbekistanis looking at Pakistan as reliable security partner after the bitter denouement of its ties with U.S. The economies of Pakistan and Uzbekistan are complementary. For instance, Uzbekistan can supply gas, electricity, cotton and such minerals as copper, gold, iron, chromium and lead to Pakistan, while in return Pakistan can supply textiles, cement, medicines, shoes, machinery, garments, military and telecommunication equipments. Uzbekistan has the fifth largest gold deposits in the world and ranks seventh in gold production. Barter trade among them is being discussed to save their foreign exchange. ‘Human capital’ is another area of cooperation as Uzbekistan can provide Pakistan with educated human capital. In comparison with Pakistan’s literacy rate, Uzbekistan has a more than 95 percent literate population, including more than 900 PhDs. Pakistan can also provide Uzbekistan with technological help and skilled labour. It can also offer education and training facilities to Uzbek students, technocrats and military personnel. However, to boost bilateral trade, they both need to conclude trade agreements, including provisions for tax exemptions, on a reciprocal basis. That could include establishing business and trade houses, banks, insurance groups, professional services and helping each other towards the development of communication links. Central Asia has been termed a potential annual market of US$80 billion. If Pakistan secures only five per cent of that market, it could earn up to US$4 billion per year. A project of more immediate interest and practicality was the opening of a Pakistani Commercial Bank in Tashkent. The NBP (National Bank of Pakistan) representative office was set up in 1995 in Tashkent but it could not facilitate the opening of a branch till 2005, though the government of Uzbekistan had granted a license for the purpose in 1992. If both states really want to move forward, then such bureaucratic delays need to be avoided. Despite the political will to improve relations they both need infrastructure and economic support to implement their agenda of cooperation.

AUTHOR’S BIO: Asma Shakir Khawaja is an Analyst with the Islamabad Policy Research Institute, Islamabad. She is a Ph.D Candidate at the Martin Luther University, Halle-Wittenberg, Germany, on Energy Politics.