Uzbek president pledges currency convertibility in new year
Agence France-Presse
December 12Uzbek President Islam Karimov said Thursday the former Soviet republic would achieve the long-awaited convertibility of its currency in 2003.
"In the new year convertibility will be achieved," Karimov told journalists at a briefing.
The latest deadline comes after an earlier promise by the Uzbek leader to introduce currency convertibility by the end of this year, made during the July visit of then US Treasury Secretary Paul O'Neill to Tashkent. Karimov, who has ruled the country for more than a decade, admitted Thursday that "the process of convertibility of the national currency is occurring with difficulty."
Uzbekistan has come under intense pressure to introduce the convertibility of its national currency, the som, since it emerged as a strategic partner of the United States in the US-led war on terrorism. But the leadership of the Central Asian state appears to be shying away from implementing foreign exchange reform, some analysts say.
Frustration over Uzbekistan's failure to introduce a unified exchange rate system prompted the International Monetary Fund to effectively quit the Central Asian state last year.
Earlier this year, however, Uzbekistan sent the IMF a letter of intent and memorandum of economic policies, pledging to move towards the convertibility of its national currency amid closer ties to Washington after the September 11 attacks of last year.
But an IMF delegation to monitor Uzbekistan's progress on reform chided the former Soviet republic in September for failing to achieve the liberalisation of the foreign exchange regime in full.
Uzbekistan could have a potentially booming economy due to its large domestic market and natural resources, but foreign investors have effectively shunned the Central Asian state due to the restrictions on convertibility and lack of reform.
Karimov, for his part, has pledged on several occassions to introduce currency convertibility, but the effort is thought to have been thwarted by powerful interests groups that benefit under the present system.