Recent experiences of successful economic policies: the case of Uzbekistan

After the collapse of the USSR and market-oriented reforms in successor states the comparative performance in post-Soviet space varied greatly. In retrospect, it is obvious that rapid economic liberalisation did not pay off: many gradual reformers (that were called procrastinators at a time) from the former Soviet Union (FSU) performed better than the champions of liberalisation - the Baltic States and Central Europe. In Belarus, Turkmenistan, and Uzbekistan, for instance, privatisation was rather slow - over 50% of their GDP is still created at state enterprises, but their performance is superior to that of more liberalised economies. But even among top performers in the post-Soviet space the Uzbekistan case is rather unique. The country overcame the transformational recession in the first half of the 1990s and since then has been an extremely successful economy. It attained high growth (6% on average for a quarter of a century, in 1996-2020), low unemployment, reasonable macro-economic stability, low domestic and international debt and relatively low inequality. And it became the only FSU country that managed to upgrade its industrial structure. It is argued that the crucial factor of the successful economic performance of Uzbekistan was not liberalisation per se, but the ability to preserve the institutional capacities of the state (Popov, 2000, 2007a, Popov, 2011b for a survey). The story of post-Soviet transitions was very much a government failure, not one of market failure. The chapter also credits Uzbekistan's rapid growth to reasonable macroeconomic and industrial policies.