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Central Asia: Corruption, Lack of Vision Seen As Stunting Economic Growth

Thirteen years after the breakup of the Soviet Union, the economies of Central Asia are still struggling. One problem is that Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan are not relying enough on one another for the boost necessary to start their economies after 70 years of central control. Corruption is another problem, as is a lack of economic innovation. These were among the conclusions drawn at a daylong forum in Washington earlier this week.

Washington, 7 October 2004 (RFE/RL) -- Throughout the forum, discussions repeatedly returned to the interrelated topics of too much corruption and too little cooperation among the Central Asian states.

Titled "Central Asia in the Global Economy," the forum was sponsored by "Foreign Policy" magazine and the Asian Development Bank. But because it was off the record, little can be said of its details. Its conclusions, however, have long been known -- including that corruption is hindering economic interdependence in the region because it inflates the cost of doing business.

Another problem is the inability of some Central Asian leaders to move more quickly away from centrally controlled economies toward the free market. That's according to Marat Tazabekov, the chairman of the board of trustees of the American University in his native Kyrgyzstan.
One solution suggested repeatedly in the past is simply for governments to reduce their civil-service payrolls so they can afford to pay their employees more and make them less susceptible to corruption.

During a break in the forum, Tazabekov told RFE/RL that the leaders in the region are what he called "first generation" -- still used to the economic policies of the past. He said each approaches economic reform at a different level, and from a different direction.

Tazabekov said this alone makes economic interdependence difficult. What makes it worse, he said, is that some Central Asian leaders seem to have trouble making a thorough break with the Soviet past -- for example, Uzbek President Islam Karimov.

Uzbekistan is large, populous, and has resources ranging from agriculture to mining, and should be an economic leader in the region. "Uzbeks want to keep a state-planned economy like it was in [the] Soviet Union, and sometimes they call this 'their own Third Way.' But, you know, there are only two models -- state-planned economy and market economy. We need to move forward together, maybe on different levels but in the same way, to the market economy," Tazabekov said.

Compounding the problem is corruption, he said. Much of it is attributable to government officials who are paid so little they have no choice but to find other ways of increasing their incomes -- usually by accepting bribes.

One solution suggested repeatedly in the past -- and at this week's forum -- is simply for governments to reduce their civil-service payrolls so they can afford to pay their employees more and make them less susceptible to corruption.

Tazabekov agrees with this approach, saying it already has worked in Georgia. He said it benefits not only private businesses but, in the long run, government, too. "This is a good idea because, you know, it's cheaper to have a professional and noncorrupt government," he said. "The consequences of a bad government is hundreds of millions [of dollars], so that's why it's the best way to solve this issue."

Tazabekov was asked about the cost to the government of employees who would have to be laid off. He said many of these officials already are involved in private businesses and so probably would not be deeply affected.

Grigori Marchenko agrees that corruption is widespread in Central Asia, but he told RFE/RL that he believes that reducing government payrolls will not get to the root of the problem. Marchenko is an adviser to Nursultan Nazarbaev, the president of Kazakhstan.

The problem is institutional, Marchenko said, and must be handled institutionally. "I think that it's not only the wages, it's also the whole culture, which is there in each and every institution involved," he said. "In order to solve the problem of corruption, you've got to have a situation where heads of institutions are clean themselves and they're cleaning up the institutions. And if every bureaucrat at his place does this job, eventually we'll get there [and eliminate corruption]."

Besides being a problem, the issue of corruption is also an excuse, according to Marchenko. He said leaders in Central Asia find it easier to blame corruption than to summon what he calls the "political will" to move forward with crucial reforms.

Instead, he said, they focus not on cooperating with their neighbors, but on competing with them. "There is a lot of talk and a lot of lip service is paid by politicians about economic cooperation in our area. But the truth is that not much is happening. And the reason for that is, in many cases, that while talking about the need for cooperation, countries in the region prefer to protect their national interests, and they do not promote regional cooperation in practical terms," Marchenko said.

Marchenko was asked why these leaders do not see the economic growth of their region as benefiting their national interests. He shrugged and replied, "Not all politicians are economists."

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