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Economic Impact

Any conflict is bound to impact an economy in one way or another. In conflicts between nations one country suffer large losses, while another may gain from the economic opportunities presented by the conflict. In the conflict in Uzbekistan the economy has indeed changed. After gaining their independence in 1991 from the Soviet Union, Uzbekistan began what continues to be a very strong market in growing cotton. Cotton, as it is sometimes called, “white gold,” which is able to guarantee a steady income in exports. The country is mostly self-sufficient for its energy needs, and is able to supply its own grain and produce needs.

Exchange Rate of Uzbekistan sums (UKS) to U.S. Dollar
The economics of Uzbekistan affects its citizens to a large degree. Because Uzbekistan for the most part can control the economy of their country, the decisions that are made by the leaders are directly proportional for the most part to how the citizens are able to fair economically. While the Uzbekistani government is not completely responsible for every economic incident, they are responsible for governing their people.

Recently Uzbekistan allowed for U.S. troops to be stationed in their country in war on terror in Afghanistan. This has allowed Uzbekistan to get triple their normal aid from the U.S., totaling some $160 million per year. This stationing of troops has also allowed local merchants, including carpenters who wanted to build a bathhouse on the U.S. complex, as well as prostitutes hoping to relieve the troops of some of their money. This money mostly goes to training and equipping Uzbek law enforcement and border security forces trying to stop the flow illegal drugs, nuclear material and other smuggled goods across Uzbekistan territory, but Uzbekistan still has a mostly poor economic showing.

This poor showing can be attributed to the heavy security around the region, where in other places security is often a rare thing. As shown by the chart near the top, the exchange rate of Uzbekistan Sums to U.S. dollar shows that while Uzbekistan has not been doing as well as it could. This exchange rate though is controlled by the government though, in order to make imports less attractive to consumers, and help keep their local economy going. This sets Uzbekistan in an odd position though. President Islam Karimov uses the threat of instability from neighboring states to justify rigid internal policy that tolerates no opposition. In having no opposition, this leads to high costs of running the government, along with the increased security.

President Islam Karimov has put his people in a position of high security, but the low economy goes against that. In a poll taken by a public center in Tashkent in 2002 it is said that 80% of Uzbeks have trouble making ends meet. The current conflict concerns a lot of how the Uzbek government is run, with a good portion devoted solely to security of the government.