Uzbekistan: Leader’s Death Felt On Streets And In Pockets by EurasiaNet

Since reports began circulating about the death of Uzbekistan’s president, shoppers have felt inflationary pressure.

The cost of meat, considered a staple in Uzbekistan, has spiked. At Tashkent’s famed Chorsu bazaar, a kilo of beef climbed from 25,000 sum (around $4) during the last week of August to around 30,000 sum. In a supermarket, the same portion costs around 35,000 sum.

As market traders freely admit, the price jump was linked to the air of uncertainty surrounding the fate of Islam Karimov, the country’s only leader during the post-Soviet era, whose death was confirmed only September 2 after days of rumors.

Uzbekistan, Islam Karimov
Photo by Saeima
Uzbekistan

“Everybody has been very uneasy, worried and afraid,” said one meat trader, who gave his name only as Farhad. “Limitations on movement into the city because of the [early September Independence Day] holiday and the situation with the president have limited the amount of meat coming in from the regions. We get meat from the south. They do not produce much meat in Tashkent. Also, for some reason the price for cattle feed has gone up and that has affected prices.”

With Karimov’s departure from the political stage, international attention has been fixed on issues of succession, especially the potential for a power struggle. But most Uzbeks worry about the knock-on effect that political uncertainty can have on the economy. Many are also anxious to see relations with Russia maintained, if not improved.

Karimov long maintained cordial, but distant relations with Moscow. But his policies sometimes made life complicated for Uzbek labor migrants, whose remittances constitute a key pillar of the country’s economy.

Sunnat Yunusov has been working in Russia for the past six years, and most recently had a job as a cook in a Moscow restaurant. Yunusov said he is making $700 monthly these days — a big drop from the $1,400 he was drawing in before 2014, when Russia began its precipitous economic decline.

“What is going to happen now with migrants like us? There are about 3 million of us in Russia,” Yunusov told EurasiaNet.org. “Will the new rulers create jobs here? Or will they at least ensure legal protection for migrants in Russia. Uzbeks are the least protected migrants [from the former Soviet space].”

Moscow-based Uzbek political analyst Maxim Matnazarov argued that Karimov had left his country a problematic economic legacy: huge unemployment, especially among the young, a low general standard of life, deepening poverty and weak industrial productivity.

Real unemployment in cities stands at around 20 percent and is even higher, around 40 percent, in rural areas, Matnazarov estimated. The official unemployment rate is 5.2 percent. Regionally, Kazakhstan draws the lion’s share of investment, despite having a population smaller than Uzbekistan’s.

“The new leadership is going to have to deal with these problems. Here we need a totally different approach to the economy. We need a new economic policy,” Matnazarov said. “The old Karimov methods will not improve the lot of the country’s citizens.”

From the street-level, inflation is a major concern. In addition to political uncertainty, observers have linked the recent price rises to a 15 percent hike in salaries for government workers that is due to take effect on October 1. Students and welfare-benefit recipients are also due to receive increased monthly payments.

The official minimum monthly salary in Uzbekistan stands at 150,000 sum. Government statisticians do not collate “shopping basket” figure, which are used in some countries to evaluate inflation, but the ratio of the lowest officially permitted salary to the cost of a common and widely sought-after staple, such as meat, is indicative of the inflationary environment.

According to a recent analysis by the state-run food industry association, the average Uzbek citizen spends roughly 40 percent on his/her salary on food purchases. Such statistics are difficult to verify, however.

Authorities appear to be relying on command-style methods in an attempt to keep inflation in check. It has been a common practice ahead of national holidays for officials to dispatch government inspectors into the markets in an attempt to stop traders from charging what the state deems to be excessive prices. These part-time inspectors are mainly state employees, including state media reporters, bank employees and civil servants. The practice causes much unhappiness among retailers, who grumble about not being able to turn a profit.

“The city administration told us that we should check on prices and make sure they don’t go up,” one Tashkent journalist enlisted to take part in a market-monitoring exercise told EurasiaNet.org, speaking on condition of anonymity. “Since August 26, we have been going every day from 9 am to 6 pm [to markets]. Apparently, authorities are afraid of food price increases, especially for meat. This is the most important item for regular citizens.”