Uzbek Pensioners Reluctant to Switch to Plastic Cards

Uzbek Pensioners Reluctant to Switch to Plastic Cards

Wednesday, 5 August, 2009
Despite receiving a pension increase, elderly people in Uzbekistan worry that changing to a cash-card system will make it harder rather than easier to get hold of their money.

A limited pilot project began last October under which some public sector wages and pensions were paid onto special credit cards, so that the recipient could draw the cash when needed. The scheme is being expanded from August 1 so that all pension payments in Tashkent region will be made by this method. The idea is that the system will later be applied nationwide.

Meanwhile, pensions have been increased by 25 per cent starting August 1, so that the minimum pension will be set at 66,660 soms, about 44 US dollars a month.

Asletdin Ghanijonov, deputy head of the Tashkent regional office of Narodny Bank, which is issuing the cards, insists that the scheme remains voluntary, and pensioners can also receive payments by bank transfer or in cash if they prefer.

However, many pensioners fear they will be forced to use plastic only once the pilot project is over, and say they find it hard to find a cash machine that has any money in it.

Alexander Bogatov, 63, from the industrial town of Angren in Tashkent region, says he has written to the bank asking for his pension to be paid in cash after receiving it by bank transfer for several months, but has not received a response. So far, he has only managed to draw a proportion of his pension in cash.

“At the bank, they told me that due to a cash shortage, they are forced to transfer half my pension to my account, but the ATM in our neighbourhood has been empty for a whole month and I haven’t been able to draw the cash,” he said.

A 72-year-old pensioner in Tashkent said she too was unable to get money.

“The bank almost never has cash available so I can draw my pension,” she said.

When they launched the plastic cards, the authorities recommended that pensioners buy their food in supermarkets, where the cards are accepted.

But as the Tashkent pensioner noted, “It’s too expensive to buy food in supermarkets”, given that prices are ten to 15 per cent higher than at open-air markets.

Economists say the scheme is let down by the continuous cash shortages suffered by Uzbek banks, which means pensions routinely arrive two or three weeks late.

“Narodny Bank is not going to have enough cash to ensure timely payment of pensions,” said a lecturer at an economic institute in Tashkent. “The cashflow problems can only increase, as monetary emissions are tightly controlled by the state.”

Many see plastic cards as one of the methods the government is using to try to reduce the amount of money circulation, and thereby curb inflation.

However, not all pensioners are so apprehensive about the change.

Ismatullo Irgashev, 64, who earns extra money by working as a driver in Tashkent, says the cash shortage will help him and his wife put their pensions aside and save for the New Year celebrations.

Using the plastic cards, he said, “We’ll buy the grandchildren their presents in a shop.”

(NBCentralAsia 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.)

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