Continuing the theme of Eurobloggers moving East this semester, we are returning to Central Asia for one student’s write up of the basics of Uzbekistan’s economy.
Uzbekistan is not a common topic of conversation. At best it is known for its underdeveloped economy, and it has recently gained attention for its human rights abuses. Incidents of forced labor of both children and adults are increasingly coming to the West’s attention. Forced labor is occurring because of Uzbekistan’s economic dependence on the cotton industry. Uzbekistan’s technology is backwards and outdated, so they use manual labor to harvest crops, rather than machinery. Uzbekistan needs laborers to pick cotton, or their economy will fail, and so the government has resorted to forced labor to ensure some level of economic stability.
Uzbekistan is a product of Communism and the Soviet Union. Soviet agricultural policies and a centrally planned economy left Uzbekistan with very little to spur economic growth upon independence. Through the policies of collectivized agriculture and the Virgin Lands Campaign, Uzbekistan developed an economy entirely based on cotton production. The Virgin Lands Campaign targeted Kazakhstan and Uzbekistan in order to increase the amount of land used in agriculture production. The Soviet experience was similar between these two countries, but since the collapse of the Soviet Union, their economic paths have diverged. The Soviet Union left Uzbekistan with outdated infrastructure, economic dependence on cotton, a mercantilist economic system, and emerging ecological problems, all of which have directly led to the precarious economic situation that exists today.
Uzbekistan’s GDP has been growing at an average of 8% per year, but 26% of the population still falls below the poverty line, and Uzbekistan is the second poorest former Soviet republic. Only Tajikistan, which has gone through a civil war, is poorer. Twenty percent of GDP comes from agriculture and yet 44% of labor is in the agricultural industry; whereas in Kazakhstan agriculture is now only five percent of their GDP and only 25% of labor is employed by agriculture.
Why has Kazakhstan’s transition resulted in a more successful economy than Uzbekistan? One of the major differences between the two has been a diversified economy. Kazakhstan has the benefit of oil, which produces revenue that the state has reinvested in diversifying the economy. Uzbekistan has no such revenue coming in and as a result, infrastructure has not been updated or added, technology has not caught up to modern standards, and they have been forced to continue relying on manual labor and their staple industry of cotton. There isn’t any wealth to start up a new industry. The state has maintained a mercantilist economy by continuing to control all cotton production, limiting foreign trade and investment. Uzbekistan also faces environmental and ecological concerns due to the draining of the Aral Sea for irrigation.
Uzbekistan’s economy could very easily collapse. They are taking children out of school to pick cotton, doctors and nurses aren’t able to treat patients because they are being forced to pick cotton as well. These actions have serious long-term consequences. If Uzbekistan continues to cut into the education of their youth, what does that mean for their future? They need an educated population that can innovate and push for change and growth. They need doctors to be available for healthcare. To compound these issues, Uzbekistan’s environment is drastically deteriorating. The Aral Sea is drained to irrigate cotton, and this increases water scarcity. Long-term, they are destroying themselves, but in the short-term, they have no other choice for economic survival. In order to keep their economy afloat, Uzbekistan is literally destroying their future. If the West wants to see real changes in the region, the economy must be completely reformed, starting with cotton. Something has to give in order to move forward.
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