Uzbek Business Blues

This article reads like something out of the old SimCity2000 game… The Uzbek government agencies are basically shaking down local businesses whenever their budgets come up short. Don’t these guys realize that’s a Keynesian no-no? The shakedown money acts as a curb on further business investment, which in turn prevents aggregate supply from increasing. Sheesh!

Moreover, the government of Uzbekistan is also taking automatic withholding for utility payments out of paychecks. We’re talking 30% of those paychecks. The money isn’t even for current usage: the withholding includes payments for possible future bills. Translation: there’s another skim going on here. The government’s short on cash and is deliberately trying to reduce the money supply. This will also eventually lead to a drop in investment, which will cut aggregate supply. Tsk tsk tsk.

Also, the banking sector in Uzbekistan is about to collapse. The government, which as I pointed out above is cashless, will not be able to bail it out. This, as well, does not bode well for that AS curve.

OK, so an increase in the AS curve is probably NOT what the Uzbek small business owners are thinking about. They’re just cheesed that they have to shell out the dough in the first place. Kind of like small business owners in the US over Obama’s proposed tax scheme. However, there are some key differences between Obama and Uzbek’s CEO, Islam Karimov.

Islam Karimov boils his political enemies alive and orders security forces to open fire on crowds of demonstrators. Obama deals with political foes by cocking his head to one side and saying “hope” until the debate’s over. Big difference in style, there. Obama actually also got elected in a for-reals election where people were free to vote for his opponents without fear of reprisal. Karimov, on the other hand, is the guy that put both “fear” and “reprisal” into “fear of reprisal.” Karimov’s government recently held a three-day conference to trumpet the great human rights reforms they’ve made in Uzbekistan – which of course means there never were any reforms. Karimov also pushed through election reforms: now any party is free to run for office, so long as it does not oppose his party.

You can always tell how tyrannical a dictator is by getting the inverse of how often he travels abroad. The bigger the tyrant and more desperate his grip on power, the less he travels. Karimov’s made 2 trips in the last 4 years. Obama, by comparison, has been all over the place and he’s only just started.

How bad is it in Uzbekistan? How about compulsory child labor? Students are bused out to fields to pick cotton. These kids are as young as 8 or 9. They make good money, five dollars a day. Er, uh, um… OK, that’s terrible money. I know that “technically” it’s not slavery if you pay the workers, but come on. It’s compulsory labor and throwing tiny amounts money at it doesn’t make it not slavery. So, yeah… child slavery in Uzbekistan. That’s how it becomes worthy of inclusion in my World Hellhole Report.

It’s so bad in Uzbekistan, that they have to jail poets. Here we just turn ’em loose on MySpace. There, it’s another story. Who knew rhyming was an act of terror? And, yes, that’s how they justify jailing poets. It’s part of the War on Terror. Those three words have given a lot of really nasty governments a handy catchphrase to use when inflicting state-sponsored terror on their people.

Uzbekistan can claim one recent redemption: it’s no longer on Transparency International’s Global Corruption Barometer. No, the Uzbeks didn’t bribe the bribery watchdog group. Rather, they simply pulled a North Korea and stopped all information from leaving the country. I should note that last year, Uzbekistan was one of the 20 Most Corrupt Nations, so one can see why they would rather have no ranking than a bad one.

So why does the USA tolerate all this garbage in Central Asia? Simple. We need the airbases there. Thanks to a South Korean front, we’re able to fly NATO freight from an Uzbek airport. The USA got kicked out of Uzbekistan and banned from their airspace when we criticized Karimov for boiling his rivals and opening fire on crowds of demonstrators. Now that Obama wants to get more involved in Afghanistan, we’re not making a peep about Karimov and his hijinx. Truth be told, Bush’s administration didn’t make a peep, either, until international pressure forced him to peep in 2005.

It’s nice to know we can all let bygones be bygones in order to accommodate the demands of realpolitik. I expect we’ll see a huge increase in US heroin consumption before long.

Have a nice day, y’all!