Agriculture Could Shore Up Uzbekistan's Economy Amid the Pandemic Crisis

Like every other economy around the world, Uzbekistan bears the brunt of the novel coronavirus pandemic. The fallout had several dimensions that affect Uzbekistan’s social and economic structures in different ways. First, the spread of the virus increases the burden on the country’s healthcare system as the number of COVID-19 infections is on the rise in the Central Asian country. Second, the lockdown and other social distancing measures, forcing businesses to suspend their operations, threaten the employment status of millions of people. Third, border closures and stagnant international trade directly impact Uzbekistan’s economy.


Given the economic fallout of the COVID-19 crisis, the World Bank has revised its 2020 economic growth projection for Uzbekistan to 1.6%, down from the earlier 5.7%.


However, under the leadership of the reformer President Shavkat Mirziyoyev, Uzbekistan is determined to mitigate these challenges through enhanced measures that guarantee people’s safety while at the same time reviving economic activities. One of the key strategies envisioned by President Mirziyoyev is to focus on agriculture. “This is the only way to partially compensate for losses in other sectors of the economy and to protect employment and incomes,” he said at the government meeting on 10 April. In this regard, he urged regional leaders to ensure increased agricultural output and build up the country’s food reserves.


“Now, it is the earth and the earth alone that can feed us. All countries have suspended trade. For this reason, we talk about food production, everywhere needs grain, and poultry farming, and cattle breeding, and fishing,” 

President Shavkat Mirziyoyev


In a televised speech addressing the nation of over 33 million people, the president said he wanted to see a 10 per cent increase in cotton crops and 20 per cent more grain. He also called on citizens owning gardens or plots of land to grow more vegetables or raise poultry and livestock. “Now, it is the earth and the earth alone that can feed us. All countries have suspended trade. For this reason, we talk about food production, everywhere needs grain, and poultry farming, and cattle breeding, and fishing,” he emphasised, adding that there was no time to waste. For long, Uzbekistan has been regarded as the breadbasket of Central Asia, but the unfurling of the coronavirus crisis has raised concerns that the country may be poised to endure troubles with food security.


An estimated 150,000 Uzbeks have already lost their jobs due to measures introduced to stem the spread of the coronavirus and over 140,000 migrant workers have returned home,largely from Russia, with no income source.


While the president’s call upon Uzbek people aims to encourage more agricultural production, the government has also been working on ways to market the output regionally and internationally. One of these ways is the attempt to lift the boycott of its cotton productions, in place since 2006 over an established system of forced labour. The Uzbek Minister of Employment and Labour Relations, Nozim Khusanov, issued an open letter to the Cotton Campaign on 16 April requesting the boycott to be lifted. The letters claimed that since the country's lockdown began, nearly 150,000 citizens have lost their jobs and more than 200,000 Uzbeks have fallen below the poverty line.


As one of the world’s biggest exporters of cotton, and because more than 300 global companies have joined the boycott of its products, Uzbekistan mostly sells cotton and textiles on Asian markets at lower prices which offer limited growth opportunities.


“The issue is less whether to end the Pledge—but when and how—and above all, how ending it can become a catalyst for responsible sourcing and investment in a reforming Uzbekistan,” said Bennett Freeman, co-founder of the Cotton Campaign, which campaigns against forced and child labour in Uzbekistan and Turkmenistan. The group also said that the pandemic which “has had a devastating effect on the apparel industry worldwide, with steep drops in production orders, defaults on existing contracts, and layoffs of apparel workers” amounted to an additional barrier for brands in striking new sourcing deals in Uzbekistan.


Until 27 April 2020, Uzbekistan had the second-largest number of COVID-19 cases among the OIC countries in Central Asia, after Kazakhstan.


Recently, the European Bank for Reconstruction and Development announced the provision of USD 150 million trade finance facility to three Uzbek banks to three banks in Uzbekistan. The funds will be used to help Uzbek exporters and importers mitigate the disruptions that severe market conditions have caused in trade and supply chains. The first case of COVID-19 was reported in Uzbekistan on 15 March and, since then, the number of cases increased to 1,904 as of 27 April 2020. The recovery rate of coronavirus patients in Uzbekistan is nearly 47% whereas eight people died due to the virus, leaving 1,004 patients in treatment as of the same day.