What If Tashkent Developed Different Post-Soviet Economic Strategies?

The Actual History

When the Soviet Union collapsed in December 1991, Uzbekistan emerged as an independent state with Tashkent as its capital. Unlike some post-Soviet republics that embraced rapid economic liberalization, Uzbekistan under President Islam Karimov pursued a distinctive "Uzbek path" characterized by gradual reform, strong state control, and economic protectionism.

Karimov, who had been the First Secretary of the Communist Party of Uzbekistan since 1989, maintained power after independence and established an authoritarian regime that would last until his death in 2016. His government implemented a development strategy that emphasized self-sufficiency, import substitution, and state-led industrialization while resisting the "shock therapy" market reforms advocated by Western institutions.

The Uzbek economic model in the 1990s and early 2000s included several distinctive elements. The government maintained an overvalued official exchange rate alongside a black market rate, effectively creating a multiple exchange rate system that allowed the state to control foreign currency and subsidize imports of certain goods. Agricultural production, particularly cotton, remained heavily controlled by the state, with farmers required to meet production quotas at artificially low prices. The government also restricted foreign trade through high tariffs, exchange controls, and requirements for import licenses.

This approach produced mixed results. On one hand, Uzbekistan avoided the catastrophic economic collapse that affected many post-Soviet states in the 1990s. GDP declined less precipitously than in Russia or neighboring Kazakhstan, and the country maintained relatively low inequality. On the other hand, economic growth remained sluggish, corruption flourished, and foreign investment was minimal compared to more open post-Soviet economies.

By the 2000s, Uzbekistan's economic isolation was becoming increasingly problematic. Despite having Central Asia's largest population (around 30 million today) and a strategic location, the country failed to develop export industries beyond raw materials and cotton. The government's currency and trade restrictions fostered widespread corruption and informal economic activity. Meanwhile, hundreds of thousands of Uzbeks migrated to Russia and Kazakhstan as labor migrants due to limited domestic opportunities.

Following Karimov's death in 2016, his successor Shavkat Mirziyoyev initiated significant reforms. In September 2017, Uzbekistan liberalized its currency regime, allowing the som to float freely. The new government also reduced trade barriers, improved the business climate, and relaxed some restrictions on individual freedoms. These changes aimed to attract foreign investment and integrate Uzbekistan more fully into the global economy.

While these reforms have stimulated economic growth and foreign investment, Uzbekistan continues to face significant challenges related to its decades of relative isolation. Infrastructure remains underdeveloped, governance institutions are weak, and the economy still depends heavily on commodity exports and remittances from migrant workers. Tashkent has grown more open and dynamic, but it has not achieved the level of prosperity or regional influence that its size and location might otherwise have enabled.

The Point of Divergence

What if Tashkent had pursued a fundamentally different economic strategy after the Soviet collapse? In this alternate timeline, we explore a scenario where Uzbekistan embraced more open economic policies from the beginning of its independence, setting its capital city on a different development trajectory.

The point of divergence occurs in late 1991 and early 1992, when the newly independent Republic of Uzbekistan was formulating its economic policies. Several plausible mechanisms could have led to this alternative path:

One possibility is that Islam Karimov, recognizing the potential benefits of economic openness, chose a different development strategy. Despite his authoritarian tendencies, Karimov was pragmatic and concerned with Uzbekistan's stability and development. In our timeline, he rejected rapid liberalization partly because he feared the social and political disruptions that accompanied market reforms in Russia. In this alternate timeline, he might have been persuaded that a more open economic model—tempered by strong state guidance—offered better prospects for stability and prosperity.

Alternatively, different leadership might have emerged during the transition period. Perhaps a more reform-minded faction within Uzbekistan's political elite gained influence, pushing for policies that would integrate the country more fully into the global economy while maintaining political stability. This could have involved either a different president or, more plausibly, influential economic advisers with greater sway over Karimov's decisions.

External factors could also have played a role. More effective engagement from international financial institutions, offering packages better tailored to Uzbekistan's circumstances, might have made liberalization more attractive. Similarly, earlier success stories of economic reform in other post-Soviet states could have provided compelling models.

The geopolitical landscape might have differed slightly as well. With earlier Chinese interest in Central Asian integration (predating the Belt and Road Initiative), or more active Turkish economic diplomacy in the region, Uzbekistan might have seen greater advantages in opening its economy to capture these opportunities.

Regardless of the specific mechanism, in this alternate timeline, Tashkent adopts a more outward-oriented economic strategy beginning in 1992—not an overnight transformation, but a distinctly different path than the one it actually took.

Immediate Aftermath

Economic Reforms and Initial Challenges

In the first years following independence, Alternate Tashkent's economic policy diverges significantly from our timeline. Rather than maintaining the Soviet-era system of state control with minimal modifications, the government implements a gradual but steady liberalization program:

Currency Reform (1993-1994): Instead of establishing a multiple exchange rate system, the government introduces a managed float of the Uzbek som, allowing for more realistic valuation while maintaining some stabilizing controls. This attracts early interest from foreign investors and international financial institutions.
Agricultural Transformation (1993-1995): Cotton production, the backbone of the Uzbek economy, sees reforms that give farmers greater autonomy and better prices while maintaining export revenues through a more efficient tax system rather than direct requisitioning. This creates agricultural prosperity that helps cushion the transition.
Privatization Program (1994-1997): Unlike our timeline's limited and opaque privatization, Alternate Uzbekistan implements a more transparent system, particularly for small and medium enterprises. While strategic industries remain under state control, this creates a more vibrant private sector.

These reforms are not without costs. Unemployment rises temporarily as inefficient state enterprises restructure, and inflation spikes during the currency transition. However, the government uses its remaining controls to implement social protection measures that prevent the extreme hardship seen in some other post-Soviet states.

Foreign Investment and Regional Positioning

With a more predictable business environment, Tashkent attracts significantly more foreign investment than in our timeline:

Turkish Investment (1993-1996): Turkey, seeking to expand its influence in Turkic Central Asia, becomes an early major investor, focusing on textiles, food processing, and construction. Turkish companies help modernize Tashkent's infrastructure and create export-oriented manufacturing.
South Korean Partnership (1994-1997): Unlike our timeline where South Korean investment was limited, major Korean firms establish operations in Uzbekistan, particularly in electronics assembly, automotive components, and textiles. Daewoo's investments include not just assembly plants but more comprehensive manufacturing facilities.
Early Western Engagement (1995-1998): American and European firms, finding Uzbekistan more accessible than in our timeline, establish a stronger presence. Oil and gas investment expands beyond the limited projects that occurred historically.

Tashkent's strategic position as Central Asia's most populous city allows it to become a regional business hub earlier than in our actual history. By 1997-1998, the city hosts regional offices for international companies operating throughout Central Asia, a role that it only partially achieved decades later in our timeline.

Socio-Cultural and Political Developments

The economic opening creates significant social and political ripple effects:

Educational Reforms (1994-1997): With greater international engagement, Uzbekistan reforms its educational system more rapidly, establishing partnerships with Western and Asian universities. Tashkent sees the founding of several international educational institutions, creating opportunities for the young population.
Controlled Political Opening (1995-1999): While Karimov maintains authoritarian control, the economic opening necessitates some political adjustments. The government allows somewhat greater civil society activity related to business and professional associations, creating limited but meaningful spaces for public participation.
Religious Policy (1993-1998): The government still monitors Islamic activity closely, concerned about extremism. However, economic prosperity and international engagement moderate the approach. Rather than the severe repression seen in our timeline, the state adopts more sophisticated controls while allowing greater religious expression within certain boundaries.
Migration Patterns (1996-2000): With more domestic economic opportunities, fewer Uzbeks migrate to Russia and Kazakhstan for work than in our timeline. Instead, Tashkent becomes a destination for professionals from other Central Asian countries, enhancing its regional importance.

By the end of the 1990s, Alternate Tashkent emerges as not just Uzbekistan's political capital but as Central Asia's economic center, with a visibly different trajectory than the isolated city of our actual timeline.

Long-term Impact

Economic Transformation (2000-2010)

As the new millennium begins, Alternate Tashkent's different development path yields increasingly divergent outcomes from our timeline:

Industrial Development

Manufacturing Ecosystem: Unlike our timeline where manufacturing remained limited, Alternate Uzbekistan develops a substantial light manufacturing sector centered around Tashkent. Textile production expands beyond raw cotton to include finished garments and home textiles, becoming major export industries employing hundreds of thousands.
Automotive Industry: The Daewoo investments of the 1990s evolve into a more robust automotive sector. Rather than the limited assembly operations of our timeline, Uzbekistan develops component manufacturing and eventually local brands targeting Central Asian and Eastern European markets.
Technology Parks: By 2005, Tashkent establishes technology parks housing software development, business process outsourcing, and electronic component manufacturing, taking advantage of the country's strong mathematical education legacy from Soviet times—an opportunity largely missed in our timeline.

Regional Trade Hub

Central Asian Commerce: Tashkent emerges as the primary commercial center for Central Asia, hosting major regional trade fairs and business conventions that in our timeline were scattered between Almaty, Dubai, and Istanbul.
Banking Sector: With liberalized financial regulations, international banks establish regional headquarters in Tashkent, creating a financial sector serving Central Asia. By 2007, Tashkent houses a modest but functional stock exchange trading in regional companies.
Transit Infrastructure: The government invests heavily in positioning Uzbekistan as a transit hub, developing rail connections and logistics facilities far earlier than in our timeline. The Navoi air cargo hub, which struggled in our reality, becomes fully operational by 2006 in this alternate timeline.

Geopolitical Realignment (2000-2015)

Uzbekistan's different economic trajectory reshapes its international relations and regional position:

Multi-vector Foreign Policy

Balanced Relations: With greater economic independence, Uzbekistan successfully implements a balanced foreign policy, maintaining productive relations with Russia while developing substantial ties with the United States, Europe, China, and Turkey. This contrasts with the oscillations between Western alignment and Russian orientation seen in our timeline.
Regional Leadership: Economically stronger and more outward-looking, Uzbekistan asserts leadership in Central Asian cooperation initiatives. By 2008, Tashkent hosts a permanent secretariat for Central Asian economic coordination, an institution that still doesn't exist in our reality.
Chinese Relations: When China launches its Belt and Road Initiative (BRI) in 2013, Alternate Uzbekistan is better positioned to engage selectively and on more favorable terms, having already developed significant international economic ties. Rather than accepting projects on Chinese terms, Tashkent can negotiate more beneficial arrangements.

Sociopolitical Evolution

Political Transition: While still not democratic, the greater middle class and international integration create pressures for political modernization. By 2010, the government implements modest political reforms, establishing some checks and balances and allowing greater media freedom than in our timeline.
Religious Accommodation: The more prosperous economy and moderate government approach reduce extremist appeal. Religious practice finds legitimate expression within a framework that separates religion from politics, avoiding both the repression and underground radicalization seen in our timeline.

Urban and Cultural Development (2010-2025)

By the current decade, Alternate Tashkent's cityscape and cultural position differ dramatically from our reality:

Urban Renaissance

International Architectural Presence: Rather than the limited and often nationalistic projects of our timeline, Tashkent attracts international architects for significant projects. The city skyline features distinctive high-rises housing corporate headquarters, hotels, and residential complexes.
Cultural Infrastructure: Significant investment in museums, theaters, and concert halls establishes Tashkent as a cultural capital. The Great Silk Road International Cultural Center, merely a concept in our timeline, becomes Central Asia's premier venue for international exhibitions and performances by 2015.
Transportation Network: A modern metro system extends throughout the metropolitan area, complemented by efficient public transit. Unlike our timeline's car-centered development, Alternate Tashkent implements transit-oriented development around metro stations.

Knowledge Economy

Education Hub: Tashkent becomes an educational center with satellite campuses of major international universities and strong local institutions. The Tashkent Innovation University, established in 2012 in this timeline, develops into Central Asia's leading technical institution.
Digital Economy: Building on early technology investments, Tashkent develops a significant digital economy. By 2020, the city hosts several successful technology companies serving regional markets, with specializations in financial technology, educational software, and e-commerce platforms.
Research Centers: International research facilities and corporate R&D centers establish presence in Tashkent, tapping into the scientific talent pool that in our timeline largely emigrated to Russia or the West.

2025: The Present Day Comparison

In our alternate 2025, Tashkent stands as a city of 3.5 million (compared to about 2.5 million in our timeline), with a metropolitan area approaching 5 million. Its economy is approximately 2.5 times larger than in our reality, with significantly higher average incomes and a more diverse economic base.

While still not a global city on par with Singapore or Dubai, Alternate Tashkent holds a regional significance comparable to Warsaw or Istanbul—a far cry from its relatively isolated position in our timeline. The city features prominently in international business publications as a "Central Asian tiger" and major frontier market opportunity, rather than the occasional mention as a post-Soviet curiosity it receives in our reality.

Uzbekistan as a whole remains a middle-income country with ongoing challenges, but its development trajectory resembles successful transition economies like Poland or Malaysia more than the state-dominated economies of our timeline's Central Asia. Most importantly, it has established a sustainable growth model based on human capital and regional integration, positioning it for continued development in coming decades.

Expert Opinions

Dr. Shirin Akiner, Former Research Associate at the School of Oriental and African Studies (SOAS) in London and Central Asia specialist, offers this perspective: "The 'Uzbek path' that President Karimov chose in our timeline reflected legitimate concerns about stability during the chaotic post-Soviet transition. However, the extreme caution and isolation ultimately stunted Uzbekistan's development. In an alternate timeline with more balanced policies, Tashkent could have leveraged its advantages—central location, large population, industrial base, and rich cultural heritage—to become a genuine regional hub. The irony is that many of the reforms implemented after 2016 could have been introduced decades earlier without threatening stability, as this alternate scenario suggests."

Professor Johannes Linn, former World Bank Vice President for Europe and Central Asia, contends: "Uzbekistan's actual post-Soviet development represents one of the greatest missed opportunities in the transition economy landscape. In our work with Uzbekistan during the 1990s, we saw tremendous potential that remained largely untapped due to excessive state control and isolation. In an alternate timeline with gradual but consistent liberalization, Uzbekistan could have developed an economic model similar to Vietnam or Malaysia—maintaining state guidance while harnessing market forces and global integration. The country's size and location would have made Tashkent a natural economic center for the entire region, potentially transforming Central Asia's fragmented economies into a more cohesive market."

Dr. Gul Berna Ozcan, Professor of International Business and Entrepreneurship at Royal Holloway, University of London, provides a different analysis: "While greater economic openness would certainly have benefited Uzbekistan's development, we should be careful not to idealize the alternate scenario. Central Asia's landlocked geography, the collapse of Soviet economic networks, and regional tensions would have posed significant challenges regardless of policy choices. What's most intriguing about this counterfactual is how it might have changed Uzbekistan's neighbors. A more dynamic and open Uzbekistan could have incentivized greater economic reforms in Tajikistan and Turkmenistan through competitive pressure, potentially transforming the entire region's development trajectory through demonstration effects and economic integration."