Russia has long courted Uzbekistan for membership in the Eurasian Economic Union (EAEU), a customs union comprising five post-Soviet states – Russia, Belarus, Kazakhstan, Kyrgyzstan, and Armenia.
Moscow sees the Central Asian state’s 35 million population and growing economy as making it an ideal addition to the bloc. Uzbekistan gained observer status to the EAEU in 2020, and many assumed that it would be the next state to join. However, Tashkent has since dragged its feet.
Russia resorted to sending Prime Minister Mikhail Mishustin on a two-day visit in September to try to speed up the process, but Uzbekistan appears unimpressed.
On October 17, First Deputy Speaker of the Oliy Majlis (Uzbekistan’s parliament) Akmal Saidov stated that the country would not be joining any time soon. “After carefully studying more than a thousand different documents,” he said, “it is in the interests of Uzbekistan to maintain observer status in the EAEU.” He went on to cite the experience of Kazakhstan, which, he claimed, “has received very few benefits from joining.”
Tashkent’s reticence partly reflects the fact that it has options. According to data from the state statistics agency for the first quarter of 2024, Russia only accounted for 13 percent of foreign direct investment into Uzbekistan. China leads the way with 23 percent, while South Korea, Turkiye, and the UAE also account for substantial portions. Uzbekistan’s appeal to foreign investors was highlighted recently by the interest of UAE firm MBS Investments in funding the Tashkent to Andijan toll road. Meanwhile, with construction finally set to get underway on the China-Kyrgyzstan-Uzbekistan railway, Tashkent is hoping to see a trade bonanza over the coming years.
The Crocus Effect
Russia has also contributed to Uzbekistan’s skittishness.
In recent decades, the Kremlin’s key piece of leverage over Uzbekistan has been the millions of migrant workers who travel north to work in Russian cities. Remittances from Uzbek migrant workers were worth $16.1 billion to the Uzbek economy in 2022, equivalent to some 21 percent of GDP. The vast majority of these remittances – 68 percent of the total – came from Russia, and Moscow has long dangled the promise of simplified access to the Russian labor market as a prize for EAEU accession.
As a market for migrant labor, Russia holds some key advantages: the visa requirements are minimal, and Uzbeks generally have a better knowledge of basic Russian compared to English.
However, Tashkent has been making efforts to diversify, actively exploring how European Union nations could provide opportunities for Uzbek migrant labor. German Chancellor Olaf Scholz, on his recent visit to Samarkand, signed a deal with Uzbek President Shavkat Mirziyoyev designed to simplify the entry of skilled Uzbek workers into Germany, particularly in the health sector.
Moreover, wages in Uzbekistan itself are rising. Department Chief at the Agency for External Labor Migration of Uzbekistan Alisher Ruziev noted in June that “Uzbekistan is experiencing a construction boom and, naturally, our wages are on par with some sites in the Russian Federation.” Indeed, the devaluation of the ruble, and the threat of recruitment into the Russian armed forces, saw remittances from migrant workers fall by nearly 50 percent from 2022-23.
Russia’s appeal has further diminished after the extreme backlash that followed a terrorist attack at Moscow’s Crocus City Hall, a music venue, on March 22. The attack, which led to the deaths of 145 people, was blamed on four migrants from Tajikistan. That led to widespread targeting within Russia of anyone with an “oriental appearance,” including threats to burn down Central Asian businesses, boycotting non-Slavic taxi drivers, and slitting car tires.
“People have gradually begun to understand that our ‘older brother’ doesn’t consider us one of the family,” said Nozim Safari, a Tashkent-based journalist, referring to Russia’s prime role among the fraternal peoples of the Soviet Union.
On an official level, the Russian authorities deported 93,000 people in the first six months of this year, 53 percent more than the same period in 2023. This is in addition to denying entry to over 143,000. The majority of these deportees and those turned away were of Central Asian origin. And new laws are set to come in next year that will further restrict the freedoms of migrants in Russia.
“If Russia’s attitude towards our migrants does not change, then in ten years we may see fewer and fewer migrants heading north,” said Safari, before stressing the importance of better relations with the West. “We would like Western politicians to pay attention to the potential of Uzbek labor migrants and understand their benefit to society and the countries of the European Union. Uzbeks are very hardworking and decent people.”
Cards Left to Play
Is this yet another a tale of a post-Soviet state drifting out of Moscow’s embrace? Perhaps. But the Kremlin can still use its vast natural resources as levers in diplomatic negotiations.
Since late-2023, Russia has been selling gas to Uzbekistan at an immense discount. Uzbek newspaper Gazeta reported in September that the country was paying Gazprom $160 per thousand cubic meters (tcm) for gas, just 55 percent of the rate China paid in 2023 ($286/tcm). For reference, Western Europe generally pays between $400-500/tcm.
Gazprom’s prices are so low that Uzbekistan, despite having large gas reserves of its own, has more than doubled its imports from Russia, and is now a net importer of gas. Such has been the supply glut that Tashkent has allocated $500 million to modernize old pipelines in an attempt to increase the supply of Russian gas from 9 to 32 million cubic meters per day.
Central Asia’s role as a sponge for excess Russian supply is only likely to increase as Europe kicks its addiction, with Ukraine set to close the final westbound gas pipeline in January 2025.
This has raised fears in some quarters of the political consequences of purchasing gas from Russia.
“Every year in winter, the most discussed issue in society and on social media is gas and heating,” said Safari. “Our evolution from a gas exporter to an importer worries many. Russia has always tried to influence and control energy policy and stability in the region.
“Right now, when Russia has nowhere to put its gas and really needs money for the war in Ukraine, they want to do business. But politics is a fickle thing. If Russia’s doctrine changes, the situation may change 180 degrees.”
Down But Not Out
It’s not only natural resources that have been redirected toward Central Asia since the full-scale invasion of Ukraine. Huge amounts of Russian finance and human capital have also been channeled into these former Soviet states.
Last year, partly for want of other destinations after Western flight and visa restrictions, over 700,000 Russian tourists visited the republic. The number of direct flights between Russia and Uzbekistan has now reached 300 per week, while the Tashkent-Moscow rail route, suspended in 2020 due to the COVID-19 pandemic, reopened in September this year.
Meanwhile Russian businesses, from Yandex to Beeline, dominate key sectors of the Uzbek economy. Tashkent has begun deepening collaboration with the EAEU’s Eurasian Development Bank, and Uzbekistan, like other Central Asian states, has benefitted from acting as a backdoor trade route into Russia to avoid sanctions.
Like every other state in the region, Uzbekistan is hedging its bets on the outcome of the Ukraine war while maximizing opportunities elsewhere. Key to this could be Uzbekistan’s accession to the World Trade Organization (WTO).
Tashkent began the application process three decades ago, but has only recently started undertaking the reforms that are necessary for membership. Mirziyoyev signed a decree on June 3 detailing the measures that Uzbekistan was planning to take in order to ensure WTO accession by 2026. These ranged from bringing customs duties in line with WTO standards to significantly liberalizing Uzbekistan’s media environment.
In October he went further, stressing the need to accelerate these reforms.
Whether WTO membership alone presents a long-term strategy for keeping the Russian wolf from the door is another issue entirely, but it is certainly viewed as the priority in Tashkent. For now, EAEU membership is off the table, and that in itself is viewed as an achievement by some.
As Safari put it, “We must understand how difficult it is to achieve this refusal in the conditions of such a tough and intrusive partner.”