The Uzbek puzzle revisited: An analysis of economic performance in Uzbekistan since 1991

Central Asian Survey

Volumn 26, Issue 1, 2007, Pages 7-30

  Ruziev, Kobil ^a   Ghosh, Dipak ^a   Dow, Sheila C ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

ECONOMIC ANALYSIS; ECONOMIC CONDITIONS;

ASIA; EURASIA; UZBEKISTAN; WEST ASIA;

EID: 34547908207     PISSN: 02634937     EISSN: 14653354     Source Type: Trade Journal    
DOI: 10.1080/02634930701423400     Document Type: Conference Paper

References (95)

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2. G. Taube and J. Zettelmeyer, 'Output decline and recovery in Uzbekistan - past performance and future prospects', IMF Working Paper 98/132, International Monetary Fund, Washington, DC, 1998.
3. C. M. Spechler, K. Bektemirov, S. Chepel and F. Survankulor, 'The Uzbek paradox: Progress without neoliberal reform', in G. Ofer and R. Pomfret, eds, The Economic Prospects of the CIS: Sources of Long Term Growth (Cheltenham: Edward Elgar, 2004), pp 177-196.
4. Asian Development Bank (ADB), Key Indicators, 2006, available at http://www.adb.org/Statistics/ki.asp (accessed 15 January 2007).
5. Ibid.
6. U. Cevikoz, 'A brief account of the economic situation of the former Soviet Republics of Central Asia', Central Asian Survey, Vol 13, No 1, 1994, pp 45-50.
7. J. Baffes, 'Cotton: Market setting, trade policies, and issues', World Bank Policy Research Working Paper 3218, Development Prospects Group, Washington, DC, 2004.
8. B. Plyshevskii, 'Reforming the economies of the CIS: Uzbekistan', Problems of Economic Transition, Vol 37, No 9, 1995, pp 84-95.
9. Economic Intelligence Unit (EIU), Country Profile 2005: Uzbekistan (London: EIU).
10. R. Pomfret, 'Central Asia since 1991: Experience of the New Independent States', OECD Development Centre Technical Paper No 212, p 43, OECD, Paris, 2003.
11. Plyshevskii, op cit, Ref 7, p 86.
12. I. Karimov, Uzbekistan on the Way of Deepening Economic Reforms (Tashkent: Sharq, 1995)
13. I. Karimov, Uzbekistan on the Threshold of the Twenty First Century (New York: Saint Martin, 1998).
14. In the early 1990s Uzbekistan adopted a more or less 'wait and see' approach to transition. When the country seriously considered transition reform after 1993, the Russian model of transition was one of the cases to consider.
15. For the discussion of failed reforms in the agricultural sector in Uzbekistan, see R. Pomfret, 'Agrarian reform in Uzbekistan: Why has the Chinese model failed to deliver?', Economic Development and Cultural Change, Vol 48, No 2, 2000, pp 269-284
16. and D. Kandiyoti, 'Cry for land: Agrarian reform, gender and land rights in Uzbekistan', Journal of Agrarian Change, Vol 3, No 1-2, 2003, pp 225-256.
17. Commercial crops, crops that cannot be immediately consumed without first being industrially refined such as cotton, dominated agricultural production. Wheat was usually supplied to the country from Ukraine, Russia and Kazakhstan.
18. On average, in 1993-2003 net export of natural gas remained positive at about 10 per cent of the domestic production. As to electricity, although net export was negative, it was negligible; for the similar period, the average volume of net export was less than 1 per cent of the domestic production. See ADB, op cit, Ref 3.
19. Karimov, op cit, Ref 11.
20. M. Spechler, 'Uzbekistan: The Silk Road to nowhere?', Contemporary Economic Policy, Vol 18, No 3, 2000, pp 295-303.
21. Spechler et al., op cit, Ref 2, p 180.
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25. A. Esanov, M. Raiser and W. Buiter, 'Nature's blessing or nature's curse: The political economy of transition in resource-based economies', EBRD Working Papers No 65, EBRD, London, 2001
26. and Auty, op cit, Ref 21.
27. The discussion of this paragraph is based on P. J. Luong and E. Weinthal, 'Prelude to resource curse: Explaining oil and gas development strategies in the Soviet successor states and beyond', Comparative Political Studies, Vol 34, No 4, 2001, pp. 367-399. They investigated the relationship between the level of struggle for political control and privatisation strategies in natural resource rich countries of the FSU.
28. G. Raballand, A. Kunth and R. Auty, 'Central Asia's transport cost burden and its impact on trade', Economic Systems, Vol. 29, No 1, 2005, pp 6-31.
29. R. Pomfret, 'The Uzbek model of economic development, 1991-1999', Economics of Transition, Vol 8, No 3, 2000, pp 733-748.
30. See also World Bank, 'Uzbekistan: Social and structural policy review', World Bank Report No 19626, Washington, DC, 1999.
31. R. Pomfret and K. H. Anderson, 'Uzbekistan: Welfare impacts of slow transition', Centre for International Economic Studies Seminar Paper 97-15, University of Adelaide, Australia, 1997.
32. Pomfret, op cit, Ref 25
33. and op cit, Ref 13.
34. ADB, op cit, Ref 3.
35. A. Alam and A. Banerji, 'Uzbekistan and Kazakhstan. a tale of two transition paths', World Bank Policy Research Working Paper 2472, Washington, DC, 2000.
36. EIU, op cit, Ref 8.
37. V. Naumkin, 'Uzbekistan's state-building fatigue', The Washington Quarterly, Vol 29, No 3, 2006, pp 127-140.
38. The authorities were already struggling to deal with the Islamic Movement of Uzbekistan (IMU), with close ties to Taliban and Al-Qaeda, operating from Afghanistan.
39. Government of Uzbekistan, the Republic of Uzbekistan: Letter of Intent, Memorandum of Economic and Financial Policies under the Staff Monitored Program, 2002. Available at http://www.imf.org/external/np/loi/2002/uzb/ 01/index/htm (accessed)
40. and Government of Uzbekistan, Republic of Uzbekistan: Letter of Intent, 2002. Available at http://www.imf.org/external/np/loi/2002/uzb/02/ index.htm (accessed 15 January 2007).
41. IMF Press Release, 'The Republic of Uzbekistan accepts Article VIII obligations', PRN 03/1888, 11 November 2003.
42. E. R. Gemayel and D. A. Grigorian, 'How tight is too tight? A look at welfare implications of distortionary policies in Uzbekistan', IMF Working Paper 05/239, International Monetary Fund,, Washington, DC, 2005
43. EIU, op cit, Ref 8.
44. There is a concern about the reliability of Uzbek data due to methodological and other deficiencies in assessing national accounts statistics. Although methodological shortcomings have been somewhat improved with the guidance of international institutions, over-reporting growth figures and under-reporting inflation figures still remain an issue. Taking this into account, international financial institutions usually give their own independent estimate of Uzbek macroeconomic data. The data used in this work come mostly from these independent sources.
45. Promfret and Anderson, op cit, Ref 27.
46. Mahalla means community. As a form of social institution it has long history and predates the Soviet era.
47. J. Micklewright and S. Marnie, 'Targeting social assistance in a transition economy: The mahallas in Uzbekistan', Social Policy and Administration, Vol 39, No 4, 2005, pp 431-447.
48. World Bank, 'Republic of Uzbekistan. Public expenditure review', Report No 31014-UZ, The World Bank, Washington, DC, 2005.
49. Data for 2005 and 2006 are estimates and forecasts of the EBRD respectively.
50. European Bank for Reconstruction and Development (EBRD), Transition Report (London: EBRD, various years).
51. The average annual natural gas price measured in US dollars per million of British thermal units rose from 3.46 in 2001 to 6.28 in 2005, whereas the average annual oil prices measured per barrel rose from about US$25.00 in 2002 to about US$55.00 in 2005. See British Petroleum (BP), 'Statistical Review of World Energy, 2006', Available at http://www.bp.com/productlanding.do?categoryId=6842&contentId=7021390 (accessed 15 January 2007). Gold prices soared from about US$260 per ounce in 2001 to about US$650 in 2006.
52. See Kitko, 'Annual gold prices, 2007', Available at http://www.kitco.com/ charts/historicalgold.html (accessed 15 January 2007). Cotton prices performed relatively well in recent years as well. Cotton price Index A constructed by Cotton Outlook, which is the average of five cheapest quotations offered at international raw cotton market, was also up from US$0.42 per pound in 2001-2002 to about US$0.56 per pound in 2002-2003, and to about US$0.70 per pound in 2003-2004. Although it was down from this peek value to about US$0.54 in 2004-2005, it was up againat about US$0.60 per pound in 2005-2006.
53. See Cotton Outlook (2007), 'Seasonal cotton outlook indices', Available at http://www.cotlook.com/cdis/more_cotlook_indices.php (accessed 15 January 2007). Moreover, owing to better weather conditions the cotton crop was particularly high in these years. Compared to the 2003 crop, the 2004 crop was higher by about 26 per cent and the 2005 crop by about 33 per cent.
54. EBRD, op cit, Ref 43, 2006.
55. Zettelmeyer, and Taube and Zettelmeyer, op cit, Ref 1.
56. R. Pomfret, The Central Asian Economies Since Independence (Princeton: Princeton University Press, 2006).
57. Spechler, op cit, Ref 17
58. Spechler et al., op cit, Ref 2.
59. F. Mullajonov, O'zbekiston Respublikasi Bank Tizimi (Tashkent: O'zbekiston, 2001). Mullajonov is the Chairman of the Central Bank of Uzbekistan.
60. World Bank, 'Republic of Uzbekistan. Country Economic Memorandum', Report No 25625-UZ, The World Bank, Washington, DC, 2003.
61. World Bank, 'Uzbekistan. Energy sector: Issues, analysis, and an agenda for reform', Infrastructure and Energy Services Department, Europe and Central Asia Region, The World Bank, Washington, DC, 2003.
62. World Bank, op cit, Ref 50, p 2.
63. World Bank, op cit Ref 50, p i.
64. See among others E. A. Preobrazhensky, The New Economics (Oxford: Clarendon Press, 1966)
65. M. Dobb, Soviet Economic Development since 1917, 6th edon (London: Routledge & Kegan Paul, 1966)
66. A. Nove, An Economic History of the USSR. 1917-1991 (London: Penguin Books, 1992).
67. World Bank, op cit, Ref 26, p 51.
68. For the organisational structure of the sector, see Baffes, op cit, Ref 6.
69. World Bank, op cit, Ref 26, p 50.
70. Government of Uzbekistan, op cit, Ref 34.
71. Baffes, op cit, Ref 6.
72. See Pomfret, op cit, Ref 25
73. Baffes, op cit, Ref 6.
74. World Bank, op cit, Ref 26.
75. M. Guadagni, M. Raiser, A. Crole-Rees and D. Khidirov, 'Cotton taxation in Uzbekistan. Opportunities for reform', ECSSD Working Paper No 41. Europe and Central Asia Region, The World Bank, Washington, DC, 2005.
76. M. Spoor, D. Kotz, Z. Nasritdinkhodjaer, A. Khaitov, Y. Abduganieva and A. Tukhtarov, 'Linking macroeconomic policy to poverty reduction in Uzbekistan', Center for Economic Research, Tashkent, 2005.
77. Klugman (1996) in Pomfret and Anderson, op cit, Ref 27, p 15.
78. International Monetary Fund (IMF), 'Republic of Uzbekistan: Interim Poverty Reduction Strategy Report', IMF Country Report No 05/159 and No 05/160, Washington, DC, 2005.
79. Esanov, op cit, Ref 22.
80. For a detailed discussion of this issue, see Auty, op cit, Ref 21
81. Esanov et al., op cit, Ref 66.
82. K. Ruziev, 'Money and banks in transition economies: The case of Uzbekistan', Unpublished PhD thesis, University of Stirling, 2006.
83. E. Makhmudov and M. Isaqov, 'Investitsionnaya osnova razvitiya ekonomiki', Bozor, Pul va Kredit, No 56, January 2004, pp 32-35. As a rule when indicating sources of finance of investment projects, official statistics combine data on foreign borrowing and foreign direct investment. Uzbekistan, however, has been among the least successful transition countries in attracting foreign direct investment (US$3.00 dollars per capita).
84. See EBRD, op cit, Ref 43, 2004, among others.
85. World Bank, op cit, Ref 50.
86. The ICOR is the ratio of the share of investments in GDP over GDP growth rate. Lower ICOR implies more efficient investment.
87. H. G. Broadman, 'Competition, corporate governance, and regulation in Central Asia. Uzbekistan's structural reform challenges', World Bank Policy Research Working Paper 2331, Washington, DC, 2000.
88. B. Ergashev, I. Iusupov, A. Pogrebniak, I. Korenev, B. Allaev, O. Gaibullaev, S. Usmanov, N. Gasanova and R. Saifulin, 'Public administration reform in Uzbekistan', Problems of Economic Transition Vol 48, No 12, pp 32-82, see p 46, emphasis in original.
89. World Bank, op cit, Ref 50, p 11, emphasis in original.
90. 75. International Monetary Fund (IMF), 'Uzbekistan - selected issues and statistical appendix', IMF Country Report No 96/73, Washington, DC, 1996.
91. The measurement scale for each of these indices ranges from 1 to 4 +, where 1 represents no or little change from a centrally planned economy and a 4 + represents a standard typical of an industrialised market economy. Pluses and minuses represent the borderline between two categories and are given the value of 0.3. For example, numerically a 4- means 3.7, whereas a 4 + means 4.3. Full information on the implication of the four indices used in Table 5 can be found in EBRD, op cit, Ref 43, 2000.
92. EBRD, op cit, Ref 43.
93. International Monetary Fund (IMF), 'Republic of Uzbekistan: Recent economic developments', IMF Country Report No 00/36, Washington, DC, 2000.
94. For comparison, in other less-reformed countries such as Belarus and Turkmenistan the share of the private sector in GDP does not yet exceed 25 per cent. See EBRD, op cit, Ref 43.
95. F. Hill and K. Jones, 'Fear of democracy or revolution: The reaction to Andijon', The Washington Quarterly, Vol 29, No 3, pp 111-125.