Natural resources and ‘gradual’ reform in Uzbekistan and Turkmenistan

Abstract

Among low-income transition reformers, natural resource rents are an important initial condition that helps explain choice of reform strategy. Resource-rich Uzbekistan and Turkmenistan and resource-poor China and Vietnam all claim to pursue gradual reform, but their strategies differ. In China and Vietnam, low resource rents have nurtured developmental political conditions and encouraged efficient resource use, which initially promoted agriculture as a dynamic market sector, capable of absorbing labour from the lagging state sector. In contrast, the scale and ease of natural resource rent extraction in the Central Asian countries has consolidated authoritarian governments that postpone reform. Despite high energy rents, Uzbekistan and Turkmenistan still extract agricultural rents in ways that repress farm incentives, perpetuate environmental degradation and liquidate irrigation assets. Uzbekistan uses its rents to subsidize a manufacturing sector, that is neither dynamic nor competitive. As its dynamic sector, Turkmenistan promotes natural gas exports that depend on volatile markets. Resource-driven development models suggest that reform is required in both countries to avert a growth collapse. Turkmenistan's large energy rent-stream may postpone a collapse for some years, but Uzbekistan's position is already precarious: it has run down its rural infrastructure and accumulated sizeable foreign debts and will require external assistance to recover from a growth collapse. Such assistance should be made conditional on accelerated economic and political reform.

Desert water harvesting from takyr surfaces: assessing the potential of traditional and experimental technologies in the Karakum

“…Additionally, water from an alternative source might lead to added value elsewhere. The cost price of water from the Karakum Canal has been estimated at TM 127 m À3 , still excluding charges for environmental damage (Auty, 2003). This water is so far used free of charge, unless payment is effectuated indirectly by state-controlled marketing of all cotton and most wheat (Lerman and Stanchin, 2004).…”

“…The average annual per capita income of this non-representative sample is probably above the value reported by Pomfret (2001) for rural households (ca. TM 4 million), but livestock farmers may be in a relatively advantaged position as compared to irrigation farmers who have to sell wheat and cotton at unprofitable state intervention prices (Auty, 2003). It should be noted that the price of wool (TM 2500-3000 kg À1 ) has undergone a significant decrease over the last decade or so.…”

Petroleum production impacts on the economic growth of the OPEC countries: panel ARDL approach

“…Some of these studies have deduced that natural resources do not lead to growth. For example [10] compared the relationship between natural resources and gradual reform in both resource-abundant and resource-trivial countries. He pointed out that the abundance of natural resources determined the growth and reform strategy.…”

The Resource Curse and Rentier States in the Caspian Region: A Need for Context Analysis

“…In comparison, Auty's (2004) comparative case study is broader in scope, applying in-depth models of development and governance to explain the development prospects of Azerbaijan, Kazakhstan and Turkmenistan in the transition to market economics during the 1990s. Comparing them to energy-poor countries in the Caspian region, the author suggests that natural resource abundance impeded the progress in the competitive restructuring of their economies due to neglected reforms and Dutch Disease effects.…”