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Central Asia Report: September 5, 2003

5 September 2003, Volume 3, Number 30

UZBEK PRESIDENT HAMMERS MINISTER OVER UNPAID WAGES. The 12th session, second convocation, of the Oliy Majlis (Uzbekistan's parliament) met in the Uzbek capital Tashkent on 29-30 August. As a rule, the body's function is limited to going through the motions of reading, debating, and voting in favor of bills submitted by the government. Last week, however, deputies were treated to an innovation as the session kicked off with a report by Finance Minister Mamarizo Nurmurodov, who reviewed budgetary spending over the previous six months.

President Islam Karimov proceeded to offer a commentary on the minister's appearance before the legislature. It was significant, he told the assembled deputies, journalists, and other foreign guests, because it validated the principle of the separation of powers provided for by the national constitution, Uzbek radio reported. "Now we are discussing the first report, the first issue in the first hour of our session," the president said. "Nurmurodov has reported on behalf of the executive branch of government. Pay attention to this. He is not a member of parliament.... Pay attention to this! It means that the executive power is reporting to the legislative power, recognizing its supremacy, recognizing its wide powers," Karimov said. After Nurmuradov's report the parliament resumed normal order with a report from Rahmonqul Karimov, the deputy chairman of the parliament's Committee for Budgetary and Financial Committee.

The decision to shine a spotlight on Nurmurodov seemed unexceptional at first sight, in line with the importance the government puts on economic and financial issues, especially currency liberalization. In fact, Karimov went on to tell the parliament, "Our most strategic task today is to solve the issue of convertibility of the [Uzbek] sum within one or two years," said. But the time period mentioned will have sounded alarm bells among international lenders. After missing two IMF deadlines last year, Economics Minister Rustam Azimov pledged in July that Uzbekistan would abolish all currency exchange restrictions by the end of November 2003 (see "Uzbekistan: Will Currency Finally Be Made Convertible?", 10 July 2003).

However, as Karimov continued speaking it became clear that Nurmurodov, far from being showcased, was actually under attack. The president -- who trained as an economist in the Soviet Union -- began giving his underling an impromptu public lecture on basic economics. "You are aware that inflation amounted to only 3 percent in the first eight months of this year. Last year it was 17 percent," the president began by saying. (More eyebrows must have shot up among the multilateral lending institutions. The European Bank for Reconstruction and Development estimated that 2002 inflation was closer to 24 percent, and has warned that it could rise to 40 percent by the end of this year.) "What does that say? It says there's no need to raise salaries if there's no inflation. You make salaries as big as a horse's head, then you look at the markets and prices are going up too. Who are we trying to fool?.... Why can't you explain this as a minister?" He concluded his idiosyncratic review of capitalism by informing the hall, "If there is too much money and a shortage of goods in the market, it means you'll pay more for 1 kilogram of potatoes," Uzbek radio reported.

Having reminded parliamentarians that the government is allegedly accountable to the elected legislature, Karimov then encouraged them to exercise their democratic function by challenging the government more actively. In particular -- and this may have been one of the points of the performance -- he strongly urged them to interrogate Finance Minister Nurmurodov. Since the agendas for the parliament's biannual sittings are published a month in advance, everyone should have known the minister would be reporting. Therefore, the president said according to, "each deputy, taking into consideration the will of the electorate and his own abilities, should put a question to the finance minister.... I think that both the minister and the government will look at this the right way, and draw some conclusions."

One deputy stood up. Erkin Danoev, representing Murzabot Raion in Surhandaryo Oblast, wanted to know why workers in state enterprises had not received wages for six to seven months. Workers blamed management, but management blamed the government, according to Danoev. Bosses complained that they had no money in the bank to pay their employees. Yet Nurmurodov had recently announced that government employees were being paid on time. Danoev requested that the minister explain this apparent discrepancy.

When Nurmuradov began to waffle -- promising that problems had been identified, measures were being undertaken, and arrears would be paid -- Karimov intervened and curtly told him he was not answering the question. "As a minister it is also your responsibility to thoroughly explain this problem," he snapped. Karimov promptly launched into another eccentric tour of Economics 101. He noted that, insofar as unprofitable private businesses might be expected to have cash-flow problems, there was nothing especially remarkable if their employees had to go without salaries. But teachers, doctors, pensioners, workers in state enterprises, and others were looking to the government in the person of the finance minister to deliver their salaries and stipends on time.

Since the Oliy Majlis is a rubber-stamp body packed with Karimov's supporters, his talk of a separation of powers, the subordination of the executive, and the independence of the legislature rang distinctly hollow. If he intended in this manner to persuade foreign observers that democratic norms were being respected in Uzbekistan, he surely failed. The attack on Nurmuradov, however, seemed to have a different audience. It looked like it was designed for domestic consumption. It had the hallmarks of a set-up. First the president told the session that democracy was about challenging ministers. Then he served up Nurmuradov for it to challenge. It is extremely probable that the question asked from the floor was planted by the president's office. Danoev lobbed a grenade and Karimov followed through with a tongue-raking.

In fact Nurmuradov was already in the crosshairs after the budget report he delivered to parliament. One of the revelations it contained, which the minister surely did not include voluntarily, was that some 2.4 billion sums (about $2.5 million) of government money had been illegally appropriated in various ways. The number was large enough to tarnish Nurmuradov personally, but too small to make for a real government scandal. Nor did the assault stop at the end of the parliamentary session. On 4 September, the "Narodnoe slovo" newspaper kept up the pressure with an extensive expose on squandering and embezzlement of state funds in the construction industry. The article, remarkably frank for Uzbekistan, spelled out names, dates, places, and amounts in some two dozen cases around the country where construction materials had been wildly overpriced, structures were paid for that never existed, or shoddy work meant that almost-new buildings were already falling down.

If Nurmuradov has been targeted as a scapegoat, what is he a scapegoat for? It is rare for Karimov to humiliate a minister publicly (regional governors, however, are a different matter). Yet last week's performance was reminiscent of the way Turkmen President Saparmurat Niyazov operates, whereby an offending official stands before him on television and gets chastised, in Turkmenbashi's inimitable idiom, for being "a bad boy." Dodgy construction contracts are probably a distraction. The root of Nurmuradov's troubles lies, most likely, in the town of Ferghana.

On 26 August, hundreds of employees at the Ferghana Petroleum Refinery and the Ferghana Chemical Factory for Furan Compounds walked out. The strikers said they could no longer put up with their "intolerable poverty," the Institute of War and Peace Reporting (IWPR) commented on 30 August. They complained that they, and thousands of their co-workers, had not received salaries since April. Many had not been paid since October 2002. Two of the workers started a hunger strike and wrote to Karimov about it. Meanwhile, police and security personnel contrived to keep strikers from the refinery and factory apart by cordoning off the two facilities.

Last week's walkout in Ferghana was actually the third such action in less than a month. Two strikes in August ended after management promised concessions, which mostly failed to materialize, according to IWPR. Taken together, the strikes represented some of the first cases of large-scale industrial unrest in Uzbekistan. But whereas previous incidents were stopped quickly by the authorities, this was apparently the first time that strikers managed to keep their protest actions going, harassment and threats by the police notwithstanding. One of the sparks to ignite the third strike seems to have been when workers, instead of receiving a salary in August, were given 10 kilograms of rice instead.

In the backward logic of Uzbekistan, the fact that events in Ferghana were never openly mentioned at the Oliy Majlis is evidence that they were very much on Karimov's mind. At question time in a democratic parliament, it would have been the Right Honorable Member for Ferghana grilling the finance minister, not a Mr. Danoev from an obscure constituency in Surhandryo Oblast. But that would have cut too close to the bone. The strikes in Ferghana must have been a wake-up call for the central government. Karimov must finally have appreciated the scale of discontent among his increasingly impoverished population. By targeting Nurmuradov the president deflects criticism from himself while holding himself out as the outraged champion of the little guy. Karimov has tried playing this role before. This time the tactic may backfire. On the one hand, he risks appearing out of control: why didn't he act before the situation reached this point? On the other hand, he risks seeming out of touch: why is he so shocked now to discover salaries are paid months in arrears? He runs a third risk as well: that the citizens of Uzbekistan reckon he was perfectly in control, well aware of deteriorating conditions -- and simply indifferent.