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Central Asia: U.S. Urges Central Asians To Cooperate On Oil

Washington, 17 January 1997 (RFE/RL) - A Senior U.S. Commerce Department official says there is "significant" potential for cooperation among the Central Asian governments in developing oil and gas resources and exporting their output.

Jan Kalicki, the U.S. Ombudsman for Energy and Commercial Cooperation with the newly independent states of the old Soviet Union, says he has already discussed with companies and political leaders in Kazakhstan and Uzbekistan "the possibility of oil swaps among those two countries and western markets."

Kalicki says he has also discussed with the leaders of Uzbekistan the possibilities for western investment in the development of oil and gas fields, such as the Mingbulak Oil field in the Fergana Valley, as well as the development of alternative oil and gas transportation routes.

Uzbekistan, like Tajikistan and Kyrgyzstan, is landlocked and has no direct route to ship oil and gas to western markets. The U.S. has been active in the region encouraging the development of multiple pipelines and other methods to move oil to world markets.

The commerce department official also urged the Central Asian states to develop a free trade zone among themselves to "alleviate cross border trade distortions and benefit both the local population and local business, as well as foreign companies."

Kalicki spoke this week to the inaugural meeting of a new American-Uzbekistan Chamber of Commerce in Washington. The group was organized by U.S. businesses to promote more trade and investment between the two countries.

Kalicki told the business people that they face "significant problems" in trying to conduct commerce in Uzbekistan. The "most pressing concern" is Uzbekistan's hard currency restrictions. The limitations on converting soums to hard currency were imposed last autumn to try to stem what the government sees as a draining of hard currencies.

The Commerce Department official says U.S. ambassador to Tashkent Stanley Escudero and eight other western ambassadors have sent a letter to the government "expressing our concerns" and urging more liberal currency convertibility rules and prompt payment of debts to western companies.

He says that purchasers in Uzbekistan are denied access to foreign exchange and American companies with investments in Uzbekistan "have not been able to easily convert profits earned in their joint ventures."

Kalicki says the Uzbek government's new system is actually making the problem worse. "The current auction system is opaque, constraints trade, stimulates a black market at inflationary rates and breeds corruption."

Kalicki said Uzbekistan also needs to develop an "adequate banking system," eliminate Iburdensome taxation on joint ventures" and clean up the "bureaucratic difficulty of registering joint venture projects."

Most importantly, he says, Uzbekistan should adopt standard international business laws to replace its present practice of negotiating with each company on a case-by-case basis. "In the absence of commonly accepted and enforceable commercial codes, tax regimes and trade and investment norms, foreign firms are reluctant to commit resources to projects in Uzbekistan," Kalicki says.

Despite these problems, Kalicki says, the U.S. government is "actively promoting" business development in Uzbekistan and that the Commerce Department's newly opened American Business Center in Tashkent has already assisted over 50 American companies.

"Opportunities for U.S. business are real and substantial," Kalicki told the business group. The Uzbek government is actively seeking U.S. investment in the oil and gas and mining sectors. He says there is a growing market for the sale of agricultural and construction equipment, and that Uzbekistan is increasing its purchase of consumer goods.

Kalicki said the U.S. strongly supports Uzbekistan's independence, believing that "all countries benefit if Uzbekistan and its neighbors are truly independent, open-market states tied into the world economy."

U.S.-Uzbek trade is small but growing, he said. Tashkent sold $ 143 million worth of goods to the U.S. in the first nine months of 1996, up sharply from the $ 19 million it sold in all of 1995. U.S. exports to Uzbekistan totaled $ 149 million in the first three quarters of 1996, up from the $ 63 million worth the U.S. sold there in 1995.