The banking system of Uzbekistan experienced
significant changes recently when Acting Chairman of the National Bank of Uzbekistan
(NBU), Zaynutdin Mirkhodjaev, and his first deputy Georgi An were removed from office at
their "own request" according to President Karimov’s decree. But soon
Georgi An was charged with "financial machinations" and according to rumors is
currently a fugitive from justice. The NBU is the country’s largest bank with USD
$400 million and four billion Uzbekistan soms in capital. It is ranked 429 among the top
1000 of the world’s banks in capital holdings and holds 80% of the financial sector
of Uzbekistan. NBU’s chairman is of great political importance and therefore the new
nomination was impatiently awaited. President Karimov appointed Mamarizo Normuradov, the
first deputy chairman of Central Bank.
The changes at the National Bank of Uzbekistan seem to have been the result of illegal
or semi-legal financial operations with foreign banks that resulted in both big profits
and losses. Bribes where also taken from clients in order to secure loans. It appears that
such violations were discovered during recent inspections of the NBU. They were also a
result of inter-bank rivalries. Such rivalries were not typical competition among banks
that is inherent in a free-market economy, but among the Central Bank and commercial
banks, mainly between the Central Bank and the NBU. The fact that the Central Bank
discovered, or perhaps arranged, machinations in the NBU means that the rivalry was
settled in the Central Bank’s favor. The changes allow Fayzulla Mullajanov, chairman
of the Central Bank, to strengthen his political position and influence.
The changes in the banking system appear to be related to inter-clan rivalry for
political power. Some of clans aim to weaken the position of finance minister Rustam
Azimov who is President Karimov’s favorite. The National Bank of Uzbekistan is Rustam
Azimov’s "child". Established by presidential decree in September 1991, the
NBU was given all necessary funds, support and privileges. But it was Rustam Azimov who
determined the strategy of its development and made the NBU known throughout the world.
Despite the fact that Rustam Azimov was appointed as the minister of finance in fall 1998,
he remained the NBU’s "godfather" and actively participated in the
decision-making process. Azimov was only 33 years old when President Karimov chose him to
head the NBU.
At present, 42 year old Azimov is Uzbekistan’s vice-prime minister and has great
ambitions to become Karimov’s successor. This is exactly what irritates other clans
and causes them to brush him aside. It will soon be clear whether these clans have
succeeded in their attempt to weaken his position. Should Azimov be able to appoint the
NBU’s first deputy chairman, it would mean that he is still "on the horse".
Should a different clan’s representative be appointed first deputy chairman, it will
mean that Azimov’s political strength has declined. Whatever the reasons and
consequences for these changes in Uzbekistan’s banking system, they must not be
harmful to other interested parties, most importantly the NBU itself. It is necessary for
the Uzbekistan government to create a "reasonable legend" to explain the changes
to the NBU’s foreign partners. As the NBU prepares to sell its 40% stake to foreign
investors, its image must not be blemished. The NBU must also remember its important
clientele, the Uzbekistan people. While playing political games, Uzbekistan’s
politicians and bankers must not forget about the people’s interests.
Farangis Said, Tashkent, Uzbekistan.