Soft Loan Scheme Designed to Curb Migration
Soft Loan Scheme Designed to Curb Migration
President Karimov has issued a decree to help young families get affordable mortgages and business loans, but NBCentralAsia observers say that because demand for loans will far exceed availability, the allocation system will be wide open to corruption.
On May 18, President Islam Karimov signed a decree to give young families extra financial support, under which 50 billion sums, or around 40 million US dollars, will be allocated to help issue business loans and mortgages on preferential terms in 2007.
Loans will be available to married couples under 30 who have never been married before, and Prime Minister Shavkat Mirziyoev has been instructed to make sure the decree is properly implemented.
NBCentralAsia observers say local administrations and commercial banks are ill-prepared to run such a wide-reaching campaign. The loan allocation system could be marred by corruption, as the government has not set aside enough money to cover everyone who wants one.
“The people distributing the loans on preferential terms will be able to exploit that to profit personally, which will further fuel corruption,” said Iskandar Khudoiberganov, former head of the Tashkent Civic Initiative Centre. “I am sure that when they have to choose between two families who have applied for loans, the one that ‘finds the right approach’ [i.e. a kickback] will take priority,”
According to NBCentralAsia observers based in Tashkent, there are about three million young families in Uzbekistan, in a population where some 10 million people are aged between 15 and 30.
The cost of housing in Tashkent varies from 500 to 2,000 dollars per square metre, while outside the capital it is between 200 and 700 dollars. So a two-room apartment in Tashkent will go on the market for around 40,000 dollars, when the average salary is less than 100 dollars a month.
According to sociologist Komron Aliev, the decree has been pushed through partly to reduce the exodus of young migrant workers heading abroad. But this measure will still not give people an incentive to stay in Uzbekistan because there is no systematic approach to youth employment.
“It’s unlikely to affect the flow of people going to work abroad, since wages in Uzbekistan are so low that most people can’t afford mortgage repayments anyway,” he says.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
On May 18, President Islam Karimov signed a decree to give young families extra financial support, under which 50 billion sums, or around 40 million US dollars, will be allocated to help issue business loans and mortgages on preferential terms in 2007.
Loans will be available to married couples under 30 who have never been married before, and Prime Minister Shavkat Mirziyoev has been instructed to make sure the decree is properly implemented.
NBCentralAsia observers say local administrations and commercial banks are ill-prepared to run such a wide-reaching campaign. The loan allocation system could be marred by corruption, as the government has not set aside enough money to cover everyone who wants one.
“The people distributing the loans on preferential terms will be able to exploit that to profit personally, which will further fuel corruption,” said Iskandar Khudoiberganov, former head of the Tashkent Civic Initiative Centre. “I am sure that when they have to choose between two families who have applied for loans, the one that ‘finds the right approach’ [i.e. a kickback] will take priority,”
According to NBCentralAsia observers based in Tashkent, there are about three million young families in Uzbekistan, in a population where some 10 million people are aged between 15 and 30.
The cost of housing in Tashkent varies from 500 to 2,000 dollars per square metre, while outside the capital it is between 200 and 700 dollars. So a two-room apartment in Tashkent will go on the market for around 40,000 dollars, when the average salary is less than 100 dollars a month.
According to sociologist Komron Aliev, the decree has been pushed through partly to reduce the exodus of young migrant workers heading abroad. But this measure will still not give people an incentive to stay in Uzbekistan because there is no systematic approach to youth employment.
“It’s unlikely to affect the flow of people going to work abroad, since wages in Uzbekistan are so low that most people can’t afford mortgage repayments anyway,” he says.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
