Uzbek Government Struggles to Contain Spending
Uzbek Government Struggles to Contain Spending
A round of pay and benefit increases for the public sector in Uzbekistan raises questions about the treasury’s ability to fund them. Some analysts believe the only way the government will be able to balance the books is by cutting large numbers of civil servants.
Wages, pensions and other benefits were raised by 12 per cent on December 1, on the orders of President Islam Karimov.
"It’s a difficult situation – wages are to be increased, but there’s no money in the budget to cover it," said Farhod Tolipov, a political analyst in Tashkent.
NBCentralAsia understands that the government is planning substantial cuts in the bureaucracy, reducing the number of aides and assistants in particular.
A source in government says official instructions defining the scale of the job cuts have already been written.
Government ministries and departments and local authority bodies are currently over-staffed, with each head or manager provided with several advisors, assistants and financial officers whose responsibilities are often duplicated by others.
"Every day, thousands of officials from the administrative staff hang around mahallas [neighbourhoods], houses and apartments," said a businessman from Tashkent. "Their job is to collect fines for leaves left lying around, or for the smoke if they’ve been burnt, and fees for checking stoves and gas equipment… They take their tribute in cash and come back on another raid a week later."
Supporting this bloated bureaucracy is a burden on the economy as a whole.
The Uzbek economy has generally been sustained by natural gas and cotton export revenues, as well as by money remittances sent back by migrant workers in Russia. Falling world prices for fuels and cotton, coupled with the contraction of remittances, have reduced financial inflows to Uzbekistan, and consequently also government revenues.
Until now, officials have appeared oblivious to the cost of maintaining such a massive workforce, and many used to hire relatives to fill pointless jobs.
"The abundance of relatives required a steady expansion in the number of plum jobs," said Victor Ivonin, an economist from Tashkent. "However, the current crisis has shown that such practices are inconsistent with economic survival. A decision has therefore been taken to fix the economic system through painful surgical intervention."
(NBCA is an IWPR-funded project to create a multilingual news analysis and comment service for Central Asia, drawing on the expertise of a broad range of political observers across the region. The project ran from August 2006 to September 2007, covering all five regional states. With new funding, the service has resumed, covering Uzbekistan and Turkmenistan.)
Wages, pensions and other benefits were raised by 12 per cent on December 1, on the orders of President Islam Karimov.
"It’s a difficult situation – wages are to be increased, but there’s no money in the budget to cover it," said Farhod Tolipov, a political analyst in Tashkent.
NBCentralAsia understands that the government is planning substantial cuts in the bureaucracy, reducing the number of aides and assistants in particular.
A source in government says official instructions defining the scale of the job cuts have already been written.
Government ministries and departments and local authority bodies are currently over-staffed, with each head or manager provided with several advisors, assistants and financial officers whose responsibilities are often duplicated by others.
"Every day, thousands of officials from the administrative staff hang around mahallas [neighbourhoods], houses and apartments," said a businessman from Tashkent. "Their job is to collect fines for leaves left lying around, or for the smoke if they’ve been burnt, and fees for checking stoves and gas equipment… They take their tribute in cash and come back on another raid a week later."
Supporting this bloated bureaucracy is a burden on the economy as a whole.
The Uzbek economy has generally been sustained by natural gas and cotton export revenues, as well as by money remittances sent back by migrant workers in Russia. Falling world prices for fuels and cotton, coupled with the contraction of remittances, have reduced financial inflows to Uzbekistan, and consequently also government revenues.
Until now, officials have appeared oblivious to the cost of maintaining such a massive workforce, and many used to hire relatives to fill pointless jobs.
"The abundance of relatives required a steady expansion in the number of plum jobs," said Victor Ivonin, an economist from Tashkent. "However, the current crisis has shown that such practices are inconsistent with economic survival. A decision has therefore been taken to fix the economic system through painful surgical intervention."
(NBCA is an IWPR-funded project to create a multilingual news analysis and comment service for Central Asia, drawing on the expertise of a broad range of political observers across the region. The project ran from August 2006 to September 2007, covering all five regional states. With new funding, the service has resumed, covering Uzbekistan and Turkmenistan.)
