Six months after the death of Uzbek President Islam Karimov, gloomy predictions of inevitable internal squabbles in the country’s new leadership seem to be coming true in the form of a conflict between President Shavkat Mirziyoyev and the powerful head of the National Security Service (SNB), Rustam Inoyatov. The strongman Inoyatov is playing the role of a reactionary force and protector of traditional Karimov-era values, while the president is presented as a liberal and a reformer.

Outside Mirziyoyev’s standoff with Inoyatov, not even the most audacious dreamer among the Uzbek émigré opposition in the West would think of describing the new president as a reformer, let alone a liberal. But after twenty-five years of the Karimov dictatorship that deprived Uzbekistan of civil society and a full-fledged market economy, ordinary people are excited about any changes in the country that are not directed at a further crackdown on freedoms. The old ruling class, for its part, is fearful of anything new.

Few people know what’s really happening inside the closed doors of Uzbekistan’s corridors of power, and we can’t say conclusively that there is an all-out conflict, but it seems that some of Mirziyoyev’s changes triggered the conflict between two of Uzbekistan’s most powerful political figures.

Inoyatov opposes Mirziyoyev’s intention to restore Uzbekistan’s full cooperation with the European Bank for Reconstruction and Development (EBRD), according to Reuters. The EBRD signaled earlier that it is ready to resume its operations in Uzbekistan in connection with the country’s planned reforms, and a bank delegation visited Tashkent in February.

The EBRD operated in Uzbekistan from 1991 to 2007, investing about 900 million euros in local projects, but left the country following the 2005 Andijan massacre, in which police and SNB officers opened fire on a large crowd of protesters. The EBRD was also unhappy with Uzbekistan’s business climate, pervasive government interference in the economy, and the lack of an independent judiciary.

After Mirziyoyev came to power, Uzbek Foreign Ministry officials started saying that it was possible to take a fresh look at the prospects of cooperation, while, in turn, the EBRD’s Central Asia director said the bank would concentrate on supporting small and midsize businesses and improving the country’s business climate.

The reform that made it possible to revive contacts with the EBRD was first presented last November in the form of a draft presidential decree that laid out plans for significant liberalization of the currency market. Reuters sources report that Inoyatov vehemently opposed these changes, fearing that the reform could adversely affect numerous influential public officials—including Inoyatov and his subordinates—who are currently enriching themselves thanks to complicated currency regulations.

Currency rules make life more difficult for the business community, but prop up the black market that is controlled by the security services, just like contraband trade. While the private sale of currency is strictly prohibited in Uzbekistan, dollars and euros can easily be exchanged at any local market right under the nose of uniformed police officers. Private currency dealers offer twice the official exchange rate and pay commission to their protectors in higher places.

Uzbekistan’s black currency market is quite impressive: according to some reports, virtually all remittances from Uzbeks working abroad—which made up 12 percent of the country’s GDP in 2012—are exchanged on the black market.

The SNB head and his affiliates also receive their share of revenues from Uzbekistan’s main exports: cotton, gold, and oil and gas. By taking advantage of the present currency regulations, security service officials implement their corruption schemes and transfer the profits to foreign banks. The proposed reform is supposed to allow more freedom and competition on the market, which would clearly spell financial disaster for many powerful government figures.

The EBRD controversy, however, might be just the tip of the iceberg in the conflict between Uzbekistan’s two most influential politicians. Inoyatov was likely also alarmed by personnel choices made by the new president, such as bringing the sixty-seven-year-old Zokir Almatov out of retirement. The former minister of internal affairs had to quit after Andijan, having been made a scapegoat for the authorities’ abuses of power. The president appointed the former minister to head the State Anti-Corruption Commission and later signed a new anti-corruption law. It’s hard to say whether this document will really help Uzbekistan to rid itself of its status as one of the most corrupt countries in the world, but it could certainly serve as a way to get rid of political opponents, including those in the SNB.

Almatov and Inoyatov have a troubled history, having vied for influence with the president in the mid-2000s. It’s possible that Almatov has retained his former ambitions and is thirsting for revenge against his old rival with the new president by his side. For his part, the president has in Almatov someone who has first-hand experience of Inoyatov’s methods, and who is therefore capable of undermining his influence.
It’s also telling that instead of appointing Inoyatov’s protégé Adkham Akhmedbayev to the position of minister of internal affairs, Mirziyoyev chose Abdusalom Azizov: a man once considered the creature of Almatov.

The recent firing of Inoyatov’s first deputy, Shukhrat Gulyamov, further eroded the security chief’s position. General Gulyamov had gained so much clout by the end of Karimov’s rule that he was delegating his own candidates to the positions of mayors and governors. Inoyatov saw Gulyamov as his successor as the head of SNB, but Mirziyoyev decided to do away with the omnipotent general, removing him from all his positions and stripping him of his rank after the general reportedly ignored a transfer order to the Surxondaryo region.

So far, none of these personnel changes have had an impact on Inoyatov himself: he’s still firmly in his place and is apparently responsible for the rollback of reforms in the past few months. When the president postponed the implementation of visa-free travel for nationals of 15 countries from April 2017 to 2021, one of the official reasons given for the change was the need to ensure the security of both foreign tourists and Uzbek nationals.

The plan to restart flights between Uzbekistan and Tajikistan never got off the ground either. Somon Air canceled its first flight from Dushanbe to Tashkent just a few hours before takeoff, citing technical issues. In reality, according to sources in Tashkent, Inoyatov opposed the route for security reasons: under Karimov, Tajikistan was viewed as the main exporter of drugs and religious extremism to Uzbekistan. Likewise, Inoyatov’s resistance to visa-free travel can be explained by the security services’ tradition of keeping track of all foreigners.

For a long time, Uzbekistan shared the title of the most totalitarian state in the region with Turkmenistan. Mirziyoyev apparently prefers the Kazakhstan model, where a veneer of democracy does not stop Nursultan Nazarbayev from retaining all power for himself, having created a personality cult. In this case, Inoyatov will have to either support the president’s agenda completely, or attempt to return Uzbekistan to the way it was under Karimov. But the resources he has to achieve the latter are getting smaller and smaller every day.