The Price of Failure in Uzbekistan

Rahim is quite accustomed to advertising bargain prices that he would never dream of selling at. 

A veteran market trader with a stall at the Chorsu bazaar in Tashkent, the capital of Uzbekistan, Rahim was recently instructed to put up price tags showing fancifully low prices.

It was purely for show, a ploy to show how cheap things were in Uzbekistan ahead of the anniversary of 20 years of independence on September 1.

"We were compelled to put up signs showing prices reduced five- or sixfold so that they’d be shown on national TV,” he said. “That’s common whenever the president is going to make a speech, when a report is due to be issued, and also before a tax inspection."

Shortly beforehand, in August, the economy ministry and the government’s statistical agency published a report that showed a significant rise in the standard of living over the first six months of 2011. This was given a further boost by a 15 per cent rise in public-sector wages, pensions and benefits from August 1.

Inflation over January-June was low at 3.6 per cent, and economic growth was strong, the report said, thanks mainly to President Islam Karimov’s plan to counter the effects of global economic crisis.

Economists say the reality is a little different – the economy is in recession and consumers are unhappy at constant price rises.

Lyubov Hatamova, a teacher in the eastern city of Namangan, has a monthly budget worth 145 US dollars to provide for a family of three, and dismisses the August pay rise of 15 to 20 dollars as “insignificant”.

“Meanwhile, foodstuffs have gone up almost threefold,” she said.

The price of food items including rice, sugar, buckwheat, fruit and vegetables have been rising since early summer, and doubled in July-August. Many believe this was the market responding to the announcement that wages and pensions were to go up in August.

"Everything is getting more expensive before our very eyes, and we pensioners are living on the edge of starvation," Anvar Dodojonov, a 78-year-old from Chirchik near Tashkent, said.

The latest pension increase brings Dodojonov’s monthly pension to 90 dollars. Meat costs ten dollars a kilogram.

"I can hardly afford anything. I buy the cheapest flour and my wife makes it into bread, despite her age, because it’s expensive to buy bread every day," he said.

An economy ministry insider who did not want to be identified said it was policy to paint a rosy picture using unrealistic data.

"We do understand the state of the economy, but we are powerless," he said.

This article was produced as part of IWPR's News Briefing Central Asia output, funded by the National Endowment for Democracy.