Key Features of Uzbekistan, Research Paper Example

Slightly larger than the size of the U.S. state of California, Uzbekistan was part of the former Soviet Union since the late nineteenth century until it gained independence in 1991 after the end of the Cold War. The modern-day Uzbekistan was rich in the production of cotton and grain during Soviet years but inefficient irrigation system has left certain rivers dry and the land degraded. Uzbekistan is now trying to lessen its economic reliance on agriculture by developing mineral and petroleum reserves. Country’s other major natural resources include natural gas, coal, gold, silver, and lead. With a population of slightly over 2.2 million, Tashkent is the capital city of Uzbekistan (CIA).

Uzbekistan’s total population was approximately 29.4 million as of July 2012 of which 88 percent are Muslim and 9 percent Eastern Orthodox. Uzbeks are the largest ethnic group, comprising about 80 percent of the entire population while other major ethnic groups include Russians (5.5 percent), Kazakh (3 percent), and Karakalpak (2.5 percent). Uzbekistan has a relatively young population with an average age of 26.2 years and the population growth rate is also low at about 0.94 percent per year. The country’s nationals are usually called Uzbekistani (CIA).

Uzbekistan’s official name is the Republic of Uzbekistan and the country is ruled by an authoritarian President named Islam Karimov. Islam Karimova is the country’s first and only president to date and has been ruling with an iron hand for nearly 23 years now. The head of government is Prime Minister Shavkat Mirziyoyev who has been in power since December 2003 while the country elected its first ever Deputy Prime Minister in 2008 whose name is Rustam Azimov. The President elects the cabinet with the approval of the Supreme Assembly. The Supreme Court judges are also nominated by the President and confirmed by the Supreme Assembly (CIA).

Uzbekistan is one of the world’s largest exporters of cotton but it also enjoys a negative reputation regarding the labor practices within its cotton industry. The country was the third largest cotton exporter as of 2009 (International Labor Rights Forum). One of the major allegations against the cotton industry in Uzbekistan is that it employs an extensive use of forced labor and shockingly, the government is one of the major perpetrators behind the violation of basic human rights in the cotton industry. Not only young adults but even children as young as 10 years old are forced to work in the field and provincial governments even close the schools so that school teachers and students can help the government meet production quotas by working in the fields (Cotton Campaign).

The growing public awareness has forced the companies to re-evaluate their business practices. As of January 2013, over 100 U.S., European, and Australian apparel brands and companies had pledged to not knowingly use Uzbek cotton (Human Rights Watch). The growing economic pressure due to boycott by some of the world’s largest companies, Uzbek Government signed up with the International Labour Organization convention in 2009, pledging to outlawing forced labor in the country. It was initially difficult to track the source of cotton but Oxford-based Historic Futures developed a technology which made it possible to track source of cotton and was adopted by many retail giants including UK-based Tesco and U.S.-based Gap (Mathiason).

Unfortunately the situation has only worsened as Human Rights Watch reported earlier this year that Uzbek authorities have increased the use of forced labor by adults and older children in order to shift away the burden from young children as a result of international pressure. It is estimated that Uzbek authorities forced over a million of Uzbeks including white collar professionals such as teachers and doctors to harvest cotton during 2012 season. The forced labor is not limited to only few areas but takes place in all 12 provinces including the capital city of Tashkent (Human Rights Watch). It is clear that Uzbek Government had no sincere intention to end forced labor in the industry which generates about $1 billion in annual export revenue for the government (Mathiason). The problem of forced labor continues to persist and the only change has been decline in forced labor among young children but the gap has been more than picked up by adults and older children.

One of the key challenges the country faces in the next five years is genuine economic reforms that enable the country to realize its true economic potential. It is a surprise that despite being primarily government-controlled economy, Uzbekistan has been able to post impressive economic growth rates over the last few years. One key IMF official praised Uzbekistan for maintaining low budget deficits and public debt level. One reason for Uzbekistan’s economic performance might have been its close economic ties with China, especially in the area of energy trade (EurasiaNet). But there are still several areas within the overall economy that require serious reforms. First of all, the country needs to improve its governance structure. Corruption exists at almost all levels of Government hierarchy and the publicly-funded projects rarely include accountability measures. Another opportunity lies in reducing the public sector which accounts for about a third of the overall GDP in terms of expenditures. Due to high government involvement in the economic activities, not surprisingly, Uzbekistan has low per capita labor productivity. Another reason for low productivity is lack of efficient incentive system of which one example is the agricultural sector. The government has also done little to attract foreign investment as evident by protective trade policy and lack of progress on creating incentives for foreign direct investment (Ahmetov).

There are several options available to the government to improve the country’s local and international economic competitiveness. First of all, the country should adopt free trade policies that may help it become a key manufacturing hub in Central Asia due to low labor costs. The government should also reduce the size of public sector and privatize state-owned industries and companies. Privatization will also help the country improve its labor productivity as well as grow the size of middle class which is pivotal to becoming a rising economic power in the region. The government should also lower interest rates to encourage borrowing and investing activities by the private sector. Similarly, tax rates could also be lowered to attract investment from foreign companies (Ahmetov).

Uzbekistan has been primarily reliant on the export of natural commodities such as cotton and oil but the country has great opportunity to diversify its economy by investing in research & development and privatize most of the public sector. The country will also benefit by introducing labor reforms and shed its image as one of the world’s most repressive regime due to use of forced labor in the cotton industry. Uzbekistan continues to do well economically but most of its real potential is still untapped due to high government involvement in the economy and protective trade policies.

References

Ahmetov, Komil Talipovitch. Uzbekistan: Economic Trends and Problems. 25 February 2013 <http://www.centralasia-southcaucasus.com/pdf/UZBEKISTAN%20ECONOMIC%20TRENDS%20AND%20PROBLEMS.pdf>.

CIA. Uzbekistan. 25 February 2013 <https://www.cia.gov/library/publications/the-world-factbook/geos/uz.html>.

Cotton Campaign. End Forced Labor in the Cotton Sector of Uzbekistan. 25 February 2013 <http://www.cottoncampaign.org/>.

EurasiaNet. Uzbekistan: Tashkent Finds Friends in Washington. 26 October 2011. 25 February 2013 <http://www.eurasianet.org/node/64387>.

Human Rights Watch. Uzbekistan: Forced Labor Widespread in Cotton Harvest. 26 January 2013. 25 February 2013 <http://www.hrw.org/news/2013/01/25/uzbekistan-forced-labor-widespread-cotton-harvest>.

International Labor Rights Forum. Uzbekistan. 25 February 2013 <http://www.laborrights.org/stop-child-labor/cotton-campaign/uzbekistan>.

Mathiason, Nick. Uzbekistan forced to stop child labour. 23 May 2009. 25 February 2013 <http://www.guardian.co.uk/business/2009/may/24/retail-ethicalbusiness>.