Some issues of reforms in Uzbekistan

[tolerant]

Uzbekistan is independent for more than 8 years already. I didn't care about it before because
I didn't know the real meaning of being independent. Now I think I realize it.

I started to think about it after I had seen a theater "Chulpon" at the Hamza Theater in Tashkent. This play was about how people suffered under Stalin's regime and how they were dreaming about Independence for the Uzbek nation. Now we know they were not only dreamers but people who struggled for these dreams to become true. I saw many people went into tears during the play and at the end when, on the screen, the real pictures of independent Uzbekistan were shown.

Well, now the dreams of those who were tortured and killed have become true Uzbeks have independence and they control their own piece of land. Does it mean that we achieved what was the dream of our fathers and grandfathers ? Are we really independent? If we have our independence may we relax already? I want to share my opinion on these questions, if I may.

Yes, at 31 of August, 1991 we got really our independence. How did it happened is not related
much to what I want to write here. The important thing is we got the independence that time
and it was real. Next step was to protect our independence or to make our independence a true one. This is what we are trying to do presently in Uzbekistan. I wouldn't give comment
how successful we were at doing this during past 8 years. It's what we have now only for learning purposes in designing our strategies as well as history in schools. But rather
I want to convey a message that Uzbekistan can never become a relly independent country if
it is not as well independent economically. (Don't worry until now what I am writing is correct; look at US as a good example of this first it got independence and then started to think how it can protect it. It always thinks about it and knows economic wealth plays a great role in that. BTW, it was an example of state and not democracy!)

So, if we agree at that I have several ideas about how we all together can increase our economic wealth.

First, of all we need real Statesmen and Politicians to manage the country. Please, note that politicians are those who want power whereas Statesmen are those who serve their nation.

Secondly, we have a great knowledge why central planning is not good from the USSR experience.
But we still employ this management tool now in trying to manage all the 12 Vioyats as well as the autonomuos Republic of Karakalpakstan. In my opinion, decentralization of the Viloayats
will improve a lot the conditions which are needed to help the economic development. I will not give my arguments which I have but rather will give example of 16 Federal States of
Germany. This experince should be studied. In Uzbekistan, people fom all 12 Viloyats as well as from Karakalpakstan are somewhat different in terms of how they think and act. And they have a right of what and how the things should be done in the places.

Third, there is a major political aspect which is slowing down the economic development
extremistic powers who are destabilizing the security in the country. I wouldn't comment on the possible reasons of that. But I want to give my opinion why this became popular.
The reason I sees is clear the lack of people with organisational (entrepreneurial) skills. WHEN PEOPLE HAVE STABLE AND GOOD PAID WORKS THEY WILL NOT THINK ABOUT GOING AGAINST THE GOVERNMENT. Only because they are not given a chance to better life they blaim for that,of course, the government. Example It is a fact that men and women from different Viloyats come to the capital, Tashkent to earn some money to feed their families (Mardikor Bozor). Why they come? Mostly because they don't have jobs or they are paid very very low sth. like US$3 per month. But interesting point is they come to Tashkent to find some work and sell their work power and achieve their goals actually. But the way they do it illegal in Uzbekistan. For that they must pay some part of what they earn to milisa to avoid punishment or their suddism. And there is a questionto authorities why don't you organise so that this natural flow of work power is controlled and made legal. 2-3 small agencies can handle this task as well as they can impose some interest on the earnings. This money will go then not to milisa but to the budget. And these people will be not humilated by Uzbek milisa.

Of course these issues are only few of all the issues we have. But still I hope You understand what i wanted to say.

Respectfully

[Sher]

Tolerant,

You gave very good ideas.
.....Secondly, we have a great knowledge why central planning is not good from the USSR experience.....
However, as you've said we still employ that system. It means governors are not sure about the disadvantages of central planning.

Concerning your example, as a tradition in Uzbekistan, governors prefer administrative ways to economic ways. So they usually employ "command and control" way, rather than giving incentives and finding mutually benefitial ways. I think at has to do with lack of knowledge or willingness to make a change in the system.


Sher

[optimist]

You have given good pictures of some macroeconomic aspects of our economy and few problems it encounters at the present time. It is, I think, natural to discuss any issue or movement by considering its effect on the whole system or on the whole population.I wouldn't say that this is totally incorrect and that I have utterly different concerns about this type of approauch to the issue in the question. But instead I have my own observations of our economy from microecomic standpoint and its not pertains completely to its macroeconomic facets.
I see problems, especially economic problems, arising from one origin or from one glitch in the system and that is not an issue autonomousy of the regions but some unfininshed and in some cases not thinked about reforms inside the newly privatised firms. This type of reform is especially needed in large firms in which incumbent management and blue-collar workers(e.g. chief accountants) have a great discreation over the runnings of the firms. The shareholding issues are not in the agenda of most directors of this type of companies and this is a petty situtions because this is an open invitation for for illegal appropriatation of firms assets and other kind of misconducts by the managment of the company.
As I guess you must have already get my point and that is a probem of corporate governance in large-size enterprises because small and medium size firms are almost always highly motivated for greater corporate performance and have a good incentive structure.
I think our large firms lack of big shareholders who can check the doings of incumbent management and if it founds something wrong it could oust current management by replacing it with a new one. Problem boils down to who can be such a big shareholders in these companies. In Eastern and Central European countries which began they reforms before us are stuck to this problems and came up with some blueprints to implement. As there is no many wealthy people in transitional countries to become big shareholders by buying a great amount of shares, the position should be given to commercial banks which have a good ways to become a leader in a company's board of directors. This solution suggested and tried by european countries like Czech republic giving sutisfactory return but also have its shortcomings.
And we as sholars and who are able to think about this unpostponeable problem should find an appropriate type of corporate governance and incentive structure for our large-size firms taking into account the results in above countries.
I want to have your opinion and corporation in dealing with this problem.
Sorry for taking different line of argument but nevertheless if we put right effeciencies in our firms' corporate governance we will greatly improve firms productivity as well as enhance corporate dependence which result in illigal dealings inside and outside of a firm.

Thank you, for corporation. Hope you will understand my point of view and gratefull to accept your opinion. I see all economic problems resulting from ineffienct type of running of large-size firms.

Sincirely,