“Karimov thought he could control the market by force” — Former Defense Minister speaks out

In an interview with the Alter Ego project, Akhmedov – who served as Uzbekistan’s Minister of Defense from 1991 to 1997 – was asked about the closure of currency conversion during the 1990s.

According to Akhmedov, the country’s first president, Islam Karimov, veered away from the principles of a market economy.

“Karimov had a strategy that the economy should be regulated. But you cannot control the economy by force. If it’s a market economy, then everything should be left to the market. But he didn’t let go – and that’s why we kept conversion closed,” he explained.

The retired general also stated that corruption played a role in keeping currency conversion restricted.

“There was an element of corruption. I remember there was a closed meeting where Karimov summoned us – the security agencies – to intimidate the bankers. Besides the Prosecutor’s Office and the National Security Service (NSS), the Finance Minister, the heads of the Central Bank, and the National Bank were all present,” he said.

Akhmedov went on to describe what happened in practice:

“Every day, banks would allocate foreign currency to exchange offices to sell to the public. You’d show your passport and buy the currency. But what did they do? They distributed the money to their own people – not to the public, but to insiders.

“I remember the President started seriously reprimanding Azimov (who served as Chairman of the National Bank from 1991 to 1998, and then as Finance Minister – ed.), as well as the Central Bank. He said, ‘What are you doing? Do you think I’m blind and don’t see what’s happening? Who are you providing conversion to? Your own people – not the public.’

“That’s why there was public discontent. We had such times. The shortage of foreign currency led to various forms of social unrest,” Akhmedov recalled.

Previously, Murad Muhammad Dust, a writer who worked in the Presidential Administration between 1990 and 1999, described the closure of currency conversion as “the biggest mistake” of Karimov’s presidency. “Around that, a hundred families got rich and billionaires were born,” he remarked.