Heterodox Macroeconomic Policies, Inequality and Poverty in Uzbekistan

The Central Asian Republics (CARs) offer an interesting comparative study in reform paths of formerly centrally planned economies. While the CARs share a considerable geographical, religious and cultural unity, and while they initiated the transition to the market economy from fairly similar conditions, they pursued different policies following the demise of the Soviet Union in December 1991. The Kyrgyz Republic has been most committed to the introduction of Washington Consensus-type reforms. Turkmenistan has been the least committed, with a regime concerned more with the distribution of oil rents than with creating a market-oriented economy. In turn, both Kazakhstan and Uzbekistan have made some progress with economic reforms, with the former increasingly following an orthodox approach, while the latter adopted a more controlled reform process. The specificity of the Uzbek approach has been evident throughout the heterodox macroeconomic stabilization of 1991–1995, the import-substitution-led recovery of 1996–2002/03, and the new and more liberal regime that started emerging in 2002–2003. This home-grown approach to policy making has been and remains the object of considerable controversy, and many predicted that it would have led sooner or later to a growth collapse.