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Economy of Uzbekistan


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force and contributes 24% of its GDP (2006 data). While official unemployment is very low, underemployment – especially in rural areas – is estimated to be at least 20%. Still, at cotton-harvest time, all students and teachers are mobilized and enslaved as unpaid labour to help in the fields. The use of child labour in Uzbekistan has led several companies, including Tesco, C&A, Marks & Spencer, Gap, and H&M, to boycott Uzbek cotton.

Facing a multitude of economic challenges upon acquiring independence, the government adopted an evolutionary reform strategy, with an emphasis on state control, reduction of imports and self-sufficiency in energy. Since 1994, the state-controlled media have repeatedly proclaimed the success of this "Uzbekistan Economic Model" and suggested that it is a unique example of a smooth transition to the market economy while avoiding shock, pauperism and stagnation.

The gradualist reform strategy has involved postponing significant macroeconomic and structural reforms. The state in the hands of the bureaucracy has remained a dominant influence in the economy. Corruption permeates the society and grows more rampant over time: Uzbekistan's 2005 Corruption Perception Index was 137 out of 159 countries, whereas in 2007 Uzbekistan was 175th out of 179 countries. A February 2006 report on the country by the International Crisis Group suggests that revenues earned from key exports, especially cotton, gold, corn and increasingly gas, are distributed among a very small circle of the ruling elite, with little or no benefit for the populace at large.

According to the Economist Intelligence Unit, "the government is hostile to allowing the development of an independent private sector, over which it would have no control". Thus, the middle class is marginalised economically and, consequently, politically.

The economic policies have repelled foreign investment, which is the lowest per capita in the CIS. For years,
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