Wsj com East of the Oder February 8, 2002

The farmers, however, argue that they have been forbidden to cultivate any crops, not only rice.
"We know water is in short supply so we had plans to sow other things like, for instance. However, the farm told us not to sow anything - not even those crops that require little water," said Ummatov.
Uzbekistan's agricultural ministry has allocated a mere 3,200,000 hectares for crops this year. Of that amount, around half are earmarked for cotton, about a third for grain crops and the rest will be used to grow fodder, vegetables and legumes.
Andijan's farmers contributed upwards of 380,000 tons of raw cotton to government stocks last year. "This year, the authorities set us a target of 400,000 tons, so we had no choice but to expand the acreage," explained Mirzakhakimov.
Although Uzbekistan gained independence and declared its commitment to a market economy ten years ago, its agriculture is still governed by the old communist precepts of a planned financial system.
The government sets regional targets not only for raw cotton, but also for other crops including grain. It is the duty of heads of regional and local authorities to make sure these are fulfilled.
Local authorities set binding targets for local farmers - and those who fall short risk losing their land next year. Regional and local governors in turn risk losing their jobs if they fail to meet government targets for cotton or grain. The system is exactly the same it was in the Soviet era.
It is ironic that after gaining independence, the new leadership condemned the Soviet communist party as an exploiter of the Uzbek people because it forced the nation to only grow cotton.
Just as in the old days, cotton growers cannot set their own prices or sell their harvest to anyone other than the government, which sets very low rates - even though Uzbekistan has recently signed a memorandum on economic and financial policy with the International Monetary Fund which states that farmers should be allowed to sell 50 per cent of their harvest on the open market this year.
Farmers do not believe the memorandum will change anything. One worker at the Toshmatov collective farm, who declined to be named, told IWPR he did not believe the government would ever mend its ways. "They have unlawfully confiscated our land for cotton and they will be back to seize our cotton harvest for a pittance," he said.
"Cotton has never been a profitable crop for farmers. Government officials are the ones who clean up on it. It makes no sense for us to grow cotton if all we are paid for it is 15 sums - around two US cents - per kilo."
Farmers at the Toshmatov collective have not reported for work since the local authority seized their land for cotton. "We cannot work for nothing anymore," said one. "We should be allowed to grow the crops that are good for us, not the bureaucrats."
Khalmukhamed Sabirov is the pseudonym for a journalist in Uzbekistan

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Uzbekistan: Traders Protest Over Tax

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Uzbekistan: Traders Clash With Police

Government moves to regulate Tashkent's markets spark violent protests.
By Bobomurod Abdullaev in Tashkent (RCA 145, 10-Sep-2002)
Stallholders have clashed with police during protests against swingeing new taxes on imported goods and an official drive to regulate the capital's markets.
Critics maintain the moves - which include the imposition of 90 and 50 per cent customs duties on imports of industrial and food products respectively - are part of a government push to reduce demand for foreign currency before a visit by the International Monetary Fund, IMF, later this month.
The so-called shuttle traders - itinerant merchants who bring sorely needed goods into Uzbekistan from neighbouring countries - fear the clampdown will drive them out of business.
Seven traders were charged with disorderly conduct after an incident at the Eski Djua (Old Town) bazaar in Tashkent on September 4. Three of those arrested - including Jjakhongir Shosalimov, an activist from the prohibited opposition party Erk and member of the Independent Organisation for Human Rights in Uzbekistan, IOHRU - are serving 15-day prison sentences while the other four were fined.
The violence erupted when police began to enforce the new tax regime, which stipulates that traders must have a quality certificate and an invoice for imported materials - proof that the increased taxes have been paid - and must also have their own cash register.
Tax police angered traders when they began to confiscate goods from stalls whose owners could not meet the new requirements.
Witnesses told IWPR that the police began to beat trader Nurmat Jonjigitov when he refused to hand over his goods, dragging him into a police van. His pregnant wife Gulbakhor rushed to help him, only to be violently restrained by officers.
"Despite the fact Gulbakhor was pregnant, one of the policemen kicked her in the stomach, and when she fell down they kicked her in the head," claimed trader Sherzod B, who did not want to give his full name. People were outraged and began to hurl rocks and bricks, smashing the windows of three police vans and injuring one officer, according to Zukhriddin Bobokalonov of the Tashkent Main Internal Affairs Department, GUVD.
The department denied reports that several traders were injured by a truncheon-wielding special police division that was later called in to deal with the disturbance.
Speaking to IWPR at the scene of the trouble, only minutes before he was arrested, Shosalimov said that the crackdown was designed to reduce the number of private traders, whom the government thinks are too reliant on foreign currency. "With customs duties like these, shuttle traders will stop importing goods, which means they will not have to buy dollars on the black market, and this will lead the dollar rate to drop," he said.
"Additionally, the cash registers will allow their entire earnings to be accounted for, reducing turnover and thus lowering the consumer demand for dollars," he said.
Shosalimov said the measures had been taken to fulfil the conditions of a memorandum on mutual understanding signed with the IMF in January 2002. The agreement envisages a liberalisation of the country's economy, first of all in the foreign currency market.
The IMF commission is soon to visit the country to check if the memorandum has been implemented correctly. A first instalment of 100 to 300 million US dollars will be handed to the republic before the end of autumn if the reforms meet with approval. "Although the republic needs this money, it is not as important as IMF recognition and cooperation, which will be a powerful signal to all international financial institutions that Uzbekistan is a nation with a market economy," said David Pearce, head of the local World Bank mission. The IMF closed its Uzbekistan office in April 2001, claiming it saw no reason to stay in a country that did not want to carry out economic reforms or listen to advice.
However, when Uzbekistan allowed the US to use its Khanabad airbase during the recent military operation in Afghanistan, Washington agreed to help with economic reforms and persuaded the IMF to give the republic another chance.
Uzbek traders and consumers are already feeling the consequences of the new policies. Traders cannot work, many Tashkent markets are closed or empty, and consumers cannot find the goods they need.
Government officials estimate that more than 12,000 people trade imported goods in the capital. Their source of income is under threat, as are those of hundreds of thousands of market workers - drivers, warehouse security guards, porters, loaders and cooks.
"I fed my family exclusively by driving customers from the regions to the Tashkent markets, and now I don't know what to do," said private taxi driver Gulom from Tashkent. Consumers are also at a loss, as the capital's markets were a source of wholesale goods for the whole country.
"My family cannot afford to buy clothes at expensive shops so we bought everything at the markets - including food products," said Elena Rashchektaeva, a nurse from Tashkent.
However, interior ministry official Bobokalonov has warned that "nothing will change" - no matter how many people are unhappy with the government's decree.
Bobomurod Abdullaev is an IWPR correspondent in Uzbekistan.

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Uzbekistan: Traders Protest Over Tax

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By Bobomurod Abdullaev in Tashkent. (RCA No 123, 07-Jun-02)

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Thursday, October 3, 2002

Uzbek Fury Over Unpaid Salaries
Workers are going hungry as confusion grows over who is responsible for the continued non-payment of their wages.
By Ulugbek Khaidarov in Tashkent (RCA No. 146, 13-Sep-2002)
Uzbekistan is facing growing industrial tension as the country's workers and pensioners go for months without pay and benefits.
Public anger at the delay in payments has been made more acute by the government's vast expenditure on Independence Day celebrations.
Workers are going hungry while their employers blame the banks for not providing them enough cash to pay salaries. The latter in turn claim they don't have enough money to go round.
Staff at one of the country's biggest enterprises, the Chkalov Aviation-Industrial Union in Tashkent, have not been paid since June. The company's pensioners last received a cheque in March.
"President Islam Karimov increased state pensions in April - and that's exactly when we stopped receiving them. Now I live like a beggar, selling whatever belongings I have left in order to buy bread," former Chkalov specialist worker Olga Nazarenko told IWPR.
The situation may be difficult in the capital, but some areas of the country are even worse off. Workers at cotton-refining factories, state farms and construction trusts in the Jizak region have not been paid for a number of months.
Bakhtiyor Tokbaev and 12 of his colleagues recently won a court case against their employer - Automotive Enterprise No. 21 in the Jizak town of Gagarin - for not paying salaries for more than a year.
The courts ordered the firm to pay 23,196,000 sums (more than 20,000 US dollars) to its employees in August. However, the local prosecutor found that the enterprise was totally insolvent and owed its suppliers huge amounts of money.
"The management of the enterprise is not hurrying to pay its staff, and new debts are emerging all the time," Assistant Prosecutor Komiljon Isoqov told IWPR.
Workers at the Zarbdar cotton-refining factory in Jizak, who have only received two monthly salary payments this year, are now threatening to go on strike.
"Dissatisfaction grows among the workers and I am already afraid to look in their eyes," said factory director Raim Kasymov.
"My cashier goes to the bank every day hoping to receive at least half of the sum that should be paid to the workers. But the bank says that they do not have the money - and do not expect to have it any time soon."
Yuldash Safarov, a senior official at the central bank's Jizak branch, said the problem was created because the cash it paid out in salaries was not being banked there, as most of the local population spent their wages in the capital and its neighbouring Samarkand region.
Commercial bank managers say the problem is the result of monthly limits on cash payments imposed on them by the central bank. Uzbekistan is in the process of implementing a series of reforms to strengthen its banking system and liberalise foreign trade under the supervision of the International Monetary Fund.
In a July memorandum, the central bank admitted that there was a serious problem with the non-payment of salaries. Its deputy chairman, Muhammadjon Jumagaliev, told IWPR that all debts related to payment of salaries have been paid off throughout the republic as of this month.
"In July we did have problems, but we created an emergency task force which monitored the situation in all of the regions, dealt with the problems and organised payment," he said.
However, reports from Jizak suggest otherwise. "As of September 1, the debt of only one enterprise, the Kaitashskii mine, equals 33,600,000 thousand sums," said Yuldash Safarov, head of the salaries department at the central bank's Jizak branch.
Local human rights activists complain that government statements are only making matter worse. "Right now, resolutions about timely payment of salaries and pensions are so pathetic that they only annoy people," said Bakhtiyar Khamraev, chairman of the Jizak branch of the Human Rights Society of Uzbekistan, HRSU.
Some suspect that the cash shortages stems from the government's vast expenditure on Independence Day celebrations.
Khamraev alleged that the Khokim - head of the regional administration - had ordered around 2,000 dollars to be taken from the accounts of local enterprises to pay for Uzbek pop stars to perform at September 1 event, which cost around 500 million sum - around 440,000 dollars - in total.
Such reports have angered the unpaid workers, who feel they have very little to celebrate. "It would have been better if they paid us our salaries," said Khamraev, one of the out-of-pocket employees at Gagarin's Automotive Enterprise No. 21.
"I can't even afford a kilo of meat for my children for the holiday, not to mention clothes and various school items needed for the coming year."
Ulugbek Khaidarov is an independent journalist from Jizak

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Uzbekistan: Traders Clash With Police

By Bobomurod Abdullaev in Tashkent (RCA 145, 10-Sep-2002)
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By Khalmukhamed Sabirov in Andijan (RCA No. 134, 1-Aug-02)

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Tariff Policy Fueling Social Tension in Uzbekistan

posted on TOL Wire on 26 September 2002

Tariff Policy Fueling Social Tension in Uzbekistan

from EurasiaNet
TASHKENT, 26 September (Eurasianet)--Desperate to reestablish a good working relationship with international monetary institutions, Uzbekistan’s government is pushing ahead with fiscal policies that are causing hardship for possibly millions of its citizens. Already, a punitive tax on imported goods is ravaging the country’s entrepreneurial sector, and foreign sources in Uzbekistan report that popular anger is building.
The government imposed a 90 percent tariff in July on most imported items, including those manufactured in other Commonwealth of Independent States (CIS) countries. Packaged food and industrial equipment carries a hefty 50 percent tariff. The measures have effectively caused activity at bazaars throughout the country to grind to a halt, eliminating the primary source of income for most traders, drivers, teamsters and other workers. Authorities require all vendors at bazaars to either provide a certificate of payment of the tariff, or produce proof that the goods being sold were made in Uzbekistan. Shoppers are hard-pressed to find anything other than fruits and vegetables grown in Uzbekistan at bazaars today.
In addition, the tariffs have imposed a restriction on shuttle trading. The livelihoods of possibly hundreds of thousands of Uzbeks depend on shuttle-trading, in which individuals travel to a neighboring country--including Russia, Kazakhstan and Turkey--buy goods and return to Uzbekistan to re-sell the wares. Overall, some political observers estimate that potentially two million Uzbeks, including traders and their families, have suffered economic repercussions due to these tariffs.
The Uzbek government says that the measures are designed to stimulate local production of consumer goods, including clothing, household products, and electronics. However, some observers say the government’s main objective is to curtail black-market activity and to establish tighter controls over money supply. Officials have a tendency to view the country’s bazaars as black market bastions. Currently, imported goods can now only be found in state-run stores. Yet Uzbeks report that even in many state-run stores shelves are empty. At present, the Uzbek economic infrastructure lacks the ability to make up for the consumer goods shortage … created by the import tariffs.
The tariffs were imposed weeks after an International Monetary Fund (IMF) mission visited Tashkent to evaluate implementation of a Staff Monitored Program (SMP). The main goals contained in the SMP were the unification of the country’s exchange rates and the free convertibility of the Uzbek currency, the som.
The Uzbek government had promised to implement free convertibility by July 2002. Compliance with the SMP was seen as the key to future cooperation between Uzbekistan and the IMF. The IMF closed its office in Tashkent in April 2001, citing the Uzbek government’s reluctance to implement recommended programs. Since early 2002, Uzbek authorities have been seeking to entice the IMF to return to Tashkent. Uzbekistan’s support for the U.S.-led campaign against terrorism prompted Washington to encourage the IMF to resume activity in Uzbekistan.
In the weeks before the June IMF mission, the government acted to cut currency … by administratively causing a shortage of banknotes. The shortage succeeded in temporarily closing the gap between the black market currency exchange rate and the official rate, largely because black market traders lacked cash in Uzbek som. Over time, however, the black market rate crept back up again.
The import tariffs are seen by many local observers as an extension of the earlier efforts to narrow the exchange rate gap. Uzbek media reported in early September that the black market rate for one US dollar was starting to gradually decline again. Biznes-Vestnik Vostoka, for example, … the rate had fallen from 1,200 soms to 1,140 soms to the dollar.
Nevertheless, the tariff policy has so far failed to completely satisfy the IMF. A second IMF mission wrapped up a 10-day visit to Tashkent on 20 September. An IMF statement issued at the conclusion of the visit noted that the government had failed to fulfill its currency liberalization commitments. At the same time, the statement also expressed general satisfaction with tax and budget policies, according to the UzReport web site.
Meanwhile, local political observers have expressed concern that popular anger over the tariffs could prompt mass unrest. Already, relatively small-scale protests have hit many towns and cities, including Tashkent.
So far, government officials have publicly downplayed the economic disruption, refusing to acknowledge that the tariffs are a source of hardship for many. "We are going to saturate our domestic market with quality goods as soon as possible," Deputy Prime Minister Mirabor Usmonov said in an interview broadcast by Uzbek television 13 September.
"There will no longer be commodity hunger as before [during Soviet times]," Usmonov stated. "Goods manufactured in our country will be enough for us."

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Thursday, October 3, 2002

Karakalpakstan: Thousands Escape Poverty

Tashkent wants to keep control of Karakalpakstan - yet seems unconcerned that its people are flooding into Kazakstan.
By Olga Borisova in Nukus (RCA No. 150, 30-Sep-02)
Officials in Uzbekistan appear to be turning a blind eye to a mass migration of people from its autonomous republic of Karakalpakstan to neighbouring Kazakstan.
An increasing number of Karakalpaks are doing anything they can - including bribing officials - to cross the border into Kazakstan, where living standards are seen to be higher and work more readily available.
The problem was highlighted by the recent arrest of a provincial passport officer who was discovered to have been accepting money to alter Karakalpak travel documents - effectively turning the bearer into a Kazak citizen.
It's not known how many have changed their identities in this way, but law enforcement officials say it is becoming increasingly common.
The Uzbek government appears to be completely unconcerned by this. While its demography and migration agency claims only around 63,000 people moved from Karakalpakstan to Kazakstan between 1991 and 2001, independent analysts put the figure much higher.
Specialists from the Karakalpak branch of the International Foundation to Save the Aral Sea say that almost a quarter of a million people have emigrated to Kazakstan in the last seven years alone - practically a sixth of the population.
Karakalpakiya, formerly part of Kazakstan, became an autonomous Soviet republic in 1932, and should have become a separate independent state.
But four years later, Tashkent convinced Moscow to turn it over to Uzbekistan, and any talk of Karakalpak-Kazak reunification has been suppressed since that time.
As well as sharing a very similar language, Karakalpaks are ethnically close to Kazaks, and the culture and customs of both people are very similar.
While Tashkent seems unconcerned about the Karakalpak people, it has a very keen interest in the territory itself, which comprises almost a third of Uzbekistan and is of significant strategic importance.
As the railways and motorways of one of the country's two northern trunk routes go through Karakalpakstan, Tashkent is especially keen to keep control of the autonomous republic - and this can be better achieved if the majority of its population are Uzbeks, rather than Karakalpaks and Kazaks.
Karakalpak local authority sources told IWPR that there are plans for an "Uzbekisation" of the region - and that the departure of non-Uzbeks is in Tashkent's interests.
The political machinations of Uzbekistan and Kazakstan are of little interest to the Karakalpak people, however, who care only for the prospect of decent work and a life without poverty.
Ertai Jumanov, a villager in the Takhtakupyr region, is slowly dismantling his house in preparation for a move to Kazakstan. Selling the roof, bricks and doors to building contractors is the only way he can recoup the money invested in his home. Nobody is interested in buying property in Karakalpakstan.
Jumanov says he is leaving because of "the terrible poverty and lack of work prospects, and because I can't support my wife and three children if I stay here".
Almost every family in this small village has a relative now living - and working - in Kazakstan. Dozens of partially dismantled houses and outbuildings, stripped of everything that could be sold on to building companies, are dotted along its dusty streets.