World Bank funds Uzbek cotton projects despite child labour concerns

By bne IntelliNews April 28, 2015

Naubet Bisenov in Washington, DC -


The World Bank and the Uzbek government signed an agreement on a $150mn loan as part of $411mn in financing for the Uzbek agricultural sector on April 8 amid international human rights groups’ concerns over the use of forced labour in the country’s cotton industry.

The loan to fund the Horticulture Development Project, along with a $260.7mn loan for the South Karakalpakstan Water Resource Management Improvement Project, was approved by the WB in June 2014.

In the run-up to the approval of the loans for Uzbekistan the Cotton Campaign, an umbrella for a number of international and Uzbek human and labour rights groups, urged WB President Jim Yong Kim “to postpone consideration of these loans until the Uzbek government takes concrete steps to end its use of forced labour”.

“The mass use of forced labour in the cotton sector of Uzbekistan is particularly pernicious in that it is organised by the state,” says the letter written to Kim in May 2014. “The World Bank acknowledges this problem in project documents for each of the proposed projects.”

In its “Final Eligibility Report and Recommendation” on the two projects published in December 2014, the bank’s Inspection Panel admitted that “there was a plausibility that the project could contribute to perpetuating the harm of child and forced labour” but did not recommend an investigation into whether the bank contributed to child and forced labour in the Uzbek cotton industry via its loans.

Ending poverty and sharing prosperity

The bank says the project will contribute to its “twin goals to end extreme poverty and boost shared prosperity”. “The project will contribute to poverty reduction in the country by assisting horticulture farmers, many of whom are small and comprise the poorest, to increase their farm productivity and incomes, and fostering greater and better rural jobs,” the bank said in a statement on April 8. “Having more jobs and better paying jobs is critically important for the well-being of people living in the rural areas of Uzbekistan,” the statement quotes Junghun Cho, World Bank country manager for Uzbekistan, as saying. “The new Horticulture Development Project will help create much-needed jobs by improving access to technologies, knowledge and markets, strengthening technical and managerial capacity in the farming and agri-business sectors, and introducing new financial products in the financial sector.”

In the letter the human rights activists explained that Uzbek cotton farmers were subject to “a state order system of forced labour” and since the government owned all farming land it “coerces farmers to produce annual quotas of cotton” which farmers should sell to the government “at state-established, artificially low procurement prices”.

The bank’s president argues that the WB is not a political organisation and cites its multilateral nature as a defence of the bank’s loans for Uzbek agriculture. “We try to work in all kinds of complex political situations, so that whatever happens to be going on in the political sphere, we can continue to work to lift people out of poverty and boost shared prosperity,” Kim told a news conference during the IMF/WB Spring Meetings in Washington earlier this month. “With every country, including Uzbekistan, our role is to try to engage as much as possible [and] to try to find ways that we can work with governments,” Kim said in response to bne IntelliNews’s question about rights groups’ criticism of the loans.

Cotton v fruit

In an interview with bne IntelliNews on the sidelines of the Spring Meetings, Saroj Kumar Jha, the WB regional director for Central Asia, reiterated that the purpose of the bank’s engagement in Uzbekistan was to help Tashkent improve the living conditions of nearly 11mn people living below the $2.5-a-day poverty line. In particular, he said, the bank loans will improve farmers’ access to irrigation networks and implement a countrywide diversification strategy which will help switch from thirsty crops such as cotton to more profitable fruit and vegetables. “That shift is essentially happening because of our engagement,” Jha says.

Both the Uzbek government and the World Bank recognise the need to reform the country’s cotton sector and the bank is ready to provide technical assistance for this, the regional director notes. As a result of the WB projects in the country, the area under fruit and vegetables is increasing in Uzbekistan, while the area under cotton is declining, according to the bank.

“Diversification is a key part of our work,” Jha told bne IntelliNews. “Secondly, where land is suitable only for growing cotton we are supporting the government to mechanise the [cotton] harvesting.” The number of mechanical harvesters will increase from “fewer than 100” in 2014 to “a couple of thousand” this year, Jha notes. “I want to stress that if you use mechanical harvesters you eliminate the need for using any form of manual labour.”

The Uzbek government claimed that 1,200 cotton-picking combines had been involved in last autumn’s harvesting campaign. But even the government’s inflated figure compares unfavourably to the more than 40,000 mechanical harvesters in the Uzbek cotton fields at the dawn of independence in 1991.

Forced labour

“However, in some regions of the country some people use the harvesting time to essentially earn some income, for example, low-income families,” Jha says, echoing the Uzbek government’s argument that people pick cotton voluntarily to supplement their income.

The World Bank believes that following Tashkent’s ratification of the International Labour Organisation's (ILO's) Worst Forms of Child Labour Convention in 2008 and the ILO's Minimum Age Convention in 2009, Uzbekistan has adopted national legislation to comply with these conventions. Uzbekistan allowed the ILO to monitor the cotton harvest for the first time in 2013 and it reported 62 observations of children in the cotton fields, including 57 confirmed cases of children working in the cotton fields. The organisation’s monitors reported 49 observations of children in the cotton fields, mostly older children, during last year’s cotton harvesting campaign.

In its “The Government’s Riches, the People’s Burden” report published this month, the Berlin-based Uzbek-German Forum for Human Rights said that despite significantly reducing the number of children forced to harvest cotton, the Uzbek government “failed to end forced child labour in 2014”. The report notes that the government appeared not to have forcibly mobilised school-aged children to harvest “on a widespread or mass scale” but the Uzbek-German Forum’s monitors still documented “numerous cases of state-sponsored forced labour” of school-aged children aged 13-15 and first- and second-year students aged 16-17.

“The cases of child labour indicate that the government of Uzbekistan has not undertaken the necessary reforms to eliminate child labour in Uzbekistan. Nor has the government made it clear to local officials that enforcing laws prohibiting child labour is a higher priority than fulfilling cotton quotas,” the Uzbek-German Forum for Human Rights concluded.

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