Political Risk Remains Elevated Amid Succession Uncertainty


BMI View: We do not see the recent limited transfer of powers to the Prime Minister in Uzbekistan as a sign that President Islam Karimov has outlined a clear succession strategy or is willing to de-centralise power from his office. While we expect Karimov to remain in power following 2015 presidential elections, uncertainty regarding succession will continue to damage the country's investment profile.

The succession strategy of Uzbek President Islam Karimov has become somewhat less uncertain give the apparent fall from grace of his daughter Gulnara Karimova, long speculated to be among the candidates to take over for the aging president. However, there remains a significant lack of transparency over the process that will continue to damage the country's investment profile.

In April the parliament of Uzbekistan passed a law broadening the powers of the prime minister, a post currently held by Shavkat Mirziyoyev. In addition, parliament was granted additional oversight over the activities of the cabinet, specifically in terms of economic and financial affairs. While this might be interpreted as a succession strategy becoming clear, or the beginning of a gradual de-centralisation of power, we view the changes as cosmetic in nature and see no concrete clarification on the issue of succession. There is little doubt that these directives came directly from Karimov, who has shown no sign of loosening his absolute control over all aspects of Uzbek governance.

Weak Growth Outlook For Main Trading Partners
Uzbekistan - Main Export Markets, % of Total

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Related sectors of this article: Political Risk
Geography: Uzbekistan