Uzbekistan: White Gold, Dirty Business

In 2014, a teacher in Andijan paid a replacement worker to pick cotton in her name. She paid 10,000 soum per day. But when the 2015 harvest came around in the fall she went to the field – the price of a replacement had gone up to between 15,000 and 25,000 soum per day, plus another 100,000 soum for 10 days worth of food.

“And it’s hard to find [replacement workers]. It’s the only way to get out of picking cotton unless you have close relationships with the authorities,” she told a monitor from the Uzbek-German Forum for Human Rights in November 2015.

Cotton is often referred to as Uzbekistan’s “white gold” because it is an immensely profitable industry for the country. The Uzbek authorities have been criticized for decades by human and labor rights groups for child and forced labor. The dramatic decline in child labor since 2012 belies the fact that forced labor systems remain entrenched in Uzbekistan. And because of the Uzbek government’s near complete opacity, especially regarding revenues from cotton, it’s difficult to definitively determine who is really benefiting from this massive industry – but it’s certainly not the farmers or workers.

In a 2014 working paper published by the Open Society Foundation, Bakhodyr Muradov and Alisher Ilkhamov analyzed the Uzbek cotton sector. Muradov, the paper’s main author, wrote under a pseudonym; as a former Uzbek government official, it’s risky business pulling back the curtain on Tashkent’s cotton sins. Tracking financial flows as best they could, the paper’s authors came to the conclusion:

The current system of managing cotton production allows the government to receive significant annual net income and significant hard currency revenues. But this comes at a high price to society and the socioeconomic development of the country. 

The Uzbek government, the paper says, has developed a “two-trunk” economy in which one “trunk” is the official state budget and the other a government fund – Selkhozfond – with the status of a department in the Finance Ministry. Both are opaque, but the Selkhozfond phenomenally more so. “Revenue from cotton exports are not reflected as budget revenues in the form of direct income from exports, as taxes...or returns from the difference between the official and unofficial exchange rates for the Uzbek soum,” the paper says. “How the government allocates the net profit from exports remains a complete secret.”

And Uzbekistan makes quite a profit. Exporting about one millions tons of cotton fiber brings in an estimated $1 billion in revenues annually. That money, squirreled away into the Selkhozfond, doesn’t benefit the people of Uzbekistan, let alone the cotton farmers or the more than a million Uzbeks mobilized by their government to pick cotton by hand. This mobilization amounts to force on several levels, rights advocates say.

The Uzbek government frames its mass mobilization of workers as public service – Khashar (communal work) – and as a patriotic duty. This dates back to the Soviet era, when Uzbekistan provided almost 70 percent of the USSR’s total cotton production. Back then, collective farms were given quotas to fulfill and that quota system remains in place. The farms may not be collective anymore but farmers do not own their land outright; they lease it from the state. Farmers are forced to sell cotton at state-set prices to government-run gins. Although other crops may be more profitable for individual farmers – one World Bank report noted that fruit and vegetables were highly profitably crops – the government mandates that farmers set aside land for cotton and wheat, which are both subject to quotas.

The hokim, the head of the district administration (hokimiyat), is the interlocutor between the government and farmers and workers. A farmer in Syrdarya told a monitor from the Uzbek-German Forum in November 2015, “The district hokim sets the [cotton] plan.” The hokim decides quotas for individual farmers. Depending on their connection with the hokim, farmers are sometimes able to get their quotas lowered, allowing them space to grow more lucrative crops (the profit from which goes into bribes for the hokim.) According to the Uzbek-German Forum in 2015, the Uzbek government launched a program of “re-optimization,” a bureaucratic term for a program of “reforms” that adjust land allotments. And in October 2015, RFE/RL’s Uzbek bureau reported that the government had begun to implement a plan called “Cleaver” in which farmers that did not meet quotas or incurred debts could have their land and property repossessed.

Beyond the farmers, cotton harvesting – without mechanical aid – is an incredibly labor-intensive crop and the government goes to great lengths to mobilize enough workers to pick it during the fall harvest.

Public employees are at the most risk to be forced into cotton picking. Doctors and teachers have a choice: “volunteer” to pick cotton (or pay someone to do so in their name) or lose their jobs.

A schoolteacher in Andijan told an Uzbek-German Forum monitor “When teachers are hired, they make an oral promise that they won’t refuse to do public work. That’s enough.” But that’s not all. RFE/RL’s Uzbek bureau reported in September 2015 that pensioners were threatened by government officials: Either they picked cotton or they lost 50 percent of their pension.

Some students told Uzbek-German Forum monitors that they’d been threatened with expulsion if they refuse to pick cotton. Students signed pledges saying their labor was voluntary, for example:

I [name withheld], a student in the telecommunications department of Tashkent University of Information Technology, will be actively involved of my own will in the harvest of cotton, the wealth of the state, in 2015. I will take an active part in cotton harvest on my own will. Statement written and signed by myself.

While Uzbekistan has made progress in ending the practice of child labor in the cotton industry, this only occurred after considerable international pressure including boycotts by major clothing manufacturers. In response, the burden has merely shifted to others whom the government coerces into the fields – victims who don’t raise international indignation in the same way that child labor does.

In any case, 2015 was supposed to be different. In 2014, the Uzbek government agreed to work with the International Labor Organization (ILO) to come into compliance with international agreements regarding labor conventions. After a complaint regarding child and forced labor at World Bank-funded project sites (filed by several rights organizations, including the Uzbek-German Forum), the World Bank and ILO signed an memorandum of understanding in which the ILO was contracted to conduct third-party monitoring of the cotton harvest for child and forced labor.

Third-party monitoring, per the World Bank’s own definition, “is defined as monitoring by parties that are external to a project’s direct beneficiary chain and management structure.” The ILO is not an external party, because the government of Uzbekistan is, itself, a member of the ILO. The ILO’s report, in the eyes of rights advocates, left much unsaid. Although the report did question the “candidness” of interviewees, it nonetheless stated that “[l]arge numbers of citizens seem to be willing recruits and see the harvest as an opportunity.” The ILO report also acknowledges that information from a “diverse range of other sources” contradicts its own monitoring results and “is consistent enough to be accorded attention.”

In mid-March, rights advocates from the Cotton Campaign delivered a petition – signed by 140,000 people – to the World Bank headquarters in Washington D.C. The petition asked World Bank President Jim Yong Kim to suspend lending to Uzbekistan’s agricultural sector. Their protests coincided with the Uzbek-German Forum for Human Rights’ own monitoring report (several anecdotes from above were drawn from that report).

The World Bank sent out one man, Press Secretary David M. Theis, to accept the petition and deliver a statement. “The World Bank does not condone forced labor in any form and we take very seriously the reports of such practices in the cotton production system of Uzbekistan,” Theis said. He said the World Bank has engaged in an “intensive dialogue” with the government of Uzbekistan. “Last year was the first time when monitoring for forced labor in cotton production in Uzbekistan became possible; this marks progress in our long-term strategic engagement with the Uzbek authorities.” Theis did not directly address the Cotton Campaign’s allegations of forced labor in the 2015 harvest.

The World Bank, which counts 188 countries, including Uzbekistan, as members, does not touch issues of politics. In the simplest sense, the World Bank operates on the presumption that eradicating poverty through development can be achieved irrespective of political systems. The World Bank has invested more than $500 million in Uzbekistan’s agricultural sector, including two new loans approved in 2014 for agricultural development and one targeted at the education sector.

Half a billion dollars, and Uzbek schoolteachers are still picking cotton by hand.

The new loans included language that said the World Bank would suspend projects, potentially cancel loans, and demand repayment if it “received evidence, that it considers credible, of the use of child or forced labor” in project areas. There’s no indication that the World Bank will do so, despite the efforts of human and labor rights groups to monitor and report on forced labor practices. Uzbekistan’s massive cotton industry is not just a national symbol but a cash cow – but those profits are disappearing into a fiscal black box and the pockets of elites.