Employment and Economic Transformation in Central Asia

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Employment and Economic Transformation in Central Asia
WEP 2^3/WP.65
WORLD EMPLOYMENT PROGRAMME RESEARCH
Labour Market Policies and Programmes
Working Paper No. 65
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International
Labour Office
ILO
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Employment and Economic Transformation in Central Asia
Per Ronnas and Orjan Sjoberg
Note:
WEP Research Working Papers are preliminary documents circulated to stimulate discussion and
critical comment.
December 1993
International Labour Office Geneva
Copyright © International Labour Organization 1994
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Geneva 22, Switzerland. The International Labour Office welcomes such applications.
ISBN 92-2-109222-4
First published 1994
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Printed by the International Labour Office. Geneva, Switzerland
PREFACE
The newly independent Central Asian republics are in many ways today in a more precarious situation than
the countries in East Central Europe were after the revolutions in 1989. They face the dual challenge of
transformation from centrally planned economies to market economies and from integrated parts of a larger
economy to economic sovereignty. Young and rapidly growing labour forces combined with a high
population pressure on land render special importance to the employment aspects of the overall
transformation process.
The present study was prepared as an input to the increasing involvement of the International Labour
Organization in technical assistance to the Central Asian republics and, more specifically, as a background
paper for a Conference of Labour Ministers organized by the Turkish Government with technical assistance
from the ILO in Ankara, 30-31 May, 1993. A volume on the emerging labour markets in Central Asia,
based on this conference, is due for publication in the first half of 1993.
The Conference in Ankara has been a basis for further cooperation between the ILO and its constituents in
the Central Asian republics. Several areas of active labour market policies are being pursued, including
labour relations, labour market information, employment services, training, social safety net provisions and
labour standards. The objective is to create labour markets and to make these markets function not only
efficiently and equitably, but also have them contribute to economic growth and social justice.
This working paper provides an analysis of the employment issues in the Central Asian republics during the
transition to a market economy. It takes into account the experience of countries in East Central Europe as
well as the specific conditions found in the labour market in Central Asia. It reviews the policy options and
provides a framework for further labour market analysis. It also indicates priority areas for active labour
market policies and programmes.
It is being distributed in its present form because the ILO believes that its results and implications will be of
interest to a wider audience (including labour economists, policy makers, and researchers) than attended the
Conference in Ankara. Additional copies of this Working Paper may be obtained from
Active Labour Market Policies Branch
Employment and Development Department
International Labour Office
4, route des Morillons
CH+1211 Geneva 22
Questions about, comments on, and/or criticisms of this Working Paper are invited. They may be sent to the
authors at the above address.
December 1993
William Clatanoff
Chief, Active Labour Market Policies Branch
TABLE OF CONTENTS
Introduction
1
The transition from central planning to the market: The record
3
The specifics of Central Asia
15
De-linking the externally planned economy
15
Demographic structure
21
Structural characteristics of the Central Asian economies
29
Conclusion: Limited room for manoeuvre
39
A policy agenda
42
I.
Introduction
Under the system of central planning employment was largely divorced from economic performance. At the enterprise level soft budget constraints ensured that the
link was virtually non-existent as labour was allocated to enterprises according to
the priority given the type of production pursued rather than efficiency and economic performance. With budget constraints for capital investments - especially in
non-priority sectors - usually being somewhat harder, many enterprises also found it
expedient to substitute labour for capital. Thus, for individual enterprises labour was
a scarce resource to be hoarded and accumulated in as large numbers as possible to
permit future growth. The same mode of thinking prevailed at the macro level. The
inefficient economy had a seemingly insatiable demand for labour as well as for capital and other resource. Labour was primarily perceived as a scarce resource imposing constraints on a strategy for economic growth which, despite rhetoric to the contrary, by and large depended on mobilising more inputs to produce more outputs.
With the shift to a market economy the rules of the game change fundamentally as
employment becomes directly linked to economic performance at the enterprise
level and, by implication, at the aggregate national level. Experiences from East
Central Europe indicate clearly that it takes a long time before the full implications
of this fundamental change in the rules of the game dawn upon policy-makers and
planners in the countries concerned as well as on overseas expertise called in to provide advice and guidance.
The newly independent states in Central Asia1 are in many ways today in a more
precarious situation than the countries in East Central Europe were after the
revolutions in 1989. Driven to independence by the force of circumstances rather
than through own initiative they are ill-prepared to face the dual challenge of transformation from centrally planned economies to market economies and from
integrated parts of a larger economy to economic sovereignty. Young and rapidly
growing labour forces combined with a high population pressure on land and a
1
Central Asia is here understood to comprise Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan,
Turkemenistan and Uzbekistan (although in Soviet/CIS usage only the latter four are normally considered to constitute Central Asia proper).
2
generally precarious state of agriculture render crucial importance to the employment aspects of the overall economic transformation processes. For policy-makers
steeped in the traditions of central planning this presents a major challenge. They
have the potential advantage of being able to draw on the considerable experience
and knowledge accumulated on the problems of transformation from centrally
planned to market economies in other countries over the past few years, but they
can ill afford to repeat the mistakes made elsewhere.
The present study examines the demographic, economic and labour market issues
facing the Central Asian countries today in the light of the existing knowledge on
the functioning of centrally planned economies (Section II). The characteristics and
problems of the transformation to market economies in Central Asia are outlined in
Section III, with a view to identify the main employment issues and outline the rudiments of a policy agenda for the future (Section IV).
3
II.
The transition from central planning to the market: The record
The newly independent states in Central Asia face a twofold transition - from centrally planned to market economies and from regions integrated in a larger country
to independent states - which will inevitably result in fundamental changes in the
economic and social structure of these countries. It is yet much too early and there
are far too many uncertain factors involved for predictions on the precise nature of
these changes. However, sufficient knowledge has now been accumulated from the
experiences of the economies in East Central Europe and elsewhere, notably China
and Vietnam, for drawing some general conclusions which, when combined with
more specific information about the characteristics of the Central Asian countries,
provide a reasonable basis for identification of the main issues and problems ahead.
Among the salient features of the transition process the following deserve to be
noted as having particular relevance for employment and income generation and
policy-making in this field.2
For a number of reasons, the transition inevitably results in a weakening of the
state. Firstly, the transition invariably erodes the state finances. This is because old
sources of incomes, primarily enterprise profits and implicit sales taxes in the centrally determined price system, decrease abruptly before new sources of revenues
are opened up through the development of a tax system more adapted to a market
economy.3 Secondly, the administrative capacity and capability of the state
machinery is weakened by the shift from direct central planning to indicative planning and the use of new and unfamiliar tools for policy making and policy implementation in an overall environment over which the state has largely lost control
2
This is not the place for any exhaustive analysis of the characteristics of neither central planning
nor the transition process. This has been done elsewhere, see for example Janos Kornai, The Socialist
System: The political economy of communism (Princeton, NJ: Princeton University Press, 1992), and
Anders Aslund, Post<ommunist Economic Revolutions: How big a bang? (Washington, DC: Center for
Strategic and International Studies, 1992), respectively.
3
One of the reasons for the relative success of the efforts of fellow Soviet successor state Estonia to
move to financial and monetary stability has been its ability to simultaneously 'nationalise' and
'modernise' its system of taxation, processes that were in fact well under way prior to the achievement
of full independence; see Ardo H. Hansson, Tranforming an Economy while Building a Nation: The
case of Estonia (Working paper, 62. Stockholm: Stockholm Institute of East European Economics,
1992), p. 6.
4
and can no longer expect direct and predictable responses to policy measures. This
problem has an important organisational aspect. The previous system was strictly
hierarchical and top-heavy, organised along sectoral lines with a virtual absence of
horizontal links, particularly at the lower levels of the hierarchy. The result was a
situation which can perhaps best be described as sectoral autarky. Another consequence of the top-heavy system was limited room for manoeuvre and decision
making at the lower/regional/municipal levels and an accompanying limited
capability and competence for independent action.
Thirdly, there is a severe lack of reliable information and statistics. The problem
is partly inherited from the past when a policy of secrecy prevented the development
of information channels and there often were strong incentives to give misleading
information and distort statistics. The transition to a more market oriented economy
calls for the development of an entirely new system for collection of statistical
information and also, often, for new types of statistics. Meanwhile, policy makers
and planners lack the information base at a time when it is more needed than ever.
Lastly, the collapse of the socialist ideology and the accompanying centrally planned
economic system has inevitably had a demoralising effect on the cadres staffing the
bureaucracy. There is an obvious danger that a feeling of despondency and
impotence may come to prevail at a time when the demands on the state for
flexibility and innovativeness have become much greater than in the past. In the
case of the newly independent states in Central Asia the previously subservient
status and lack of a full-fledged and sovereign state apparatus can only compound
the weaknesses of the state. A main conclusion must be that institution building and
enhancing the institutional capacity for policy formulation and implementation must
be accorded importance in technical assistance.
Active labour market policies are only developed gradually and after some delay.
This has been a salient feature in all transition economies, with the possible exception of China and Vietnam where concern about poverty alleviation was a contributing factor to the reform process as such. The often slow response to the emerging
employment problems can readily be explained as a consequence of the onslaught of
a wide range of more acute problems and the limited capability, of the state to tackle
these problems.
5
However, there are also more fundamental explanations. Under the previous
regime, development objectives were typically stated in terms of physical output,
while labour was seen as a scarce resource and a constraint to the attainment of the
production targets. In sharp contrast to the situation in most developed and
developing market economies, full, though inefficient, utilisation of the labour force
was more or less taken for granted and there is no tradition of focusing development
planning on the objective of employment and income generation. Even in a country
like Hungary, which has been comparatively exposed to the market economies in
Western Europe, the preparedness to effectively deal with the emerging employment problems has been little.4 Furthermore, the experience from the transition
economies in East Central Europe reveal a considerable time lag before the disruption of the economic system and decline in output is reflected in falling levels of
employment. Growth of unemployment has generally been slower than might have
been expected,5 thus luring policy-makers and planners into a false sense of lack of
urgency. Romania provides a telling example in this respect. Despite a fall of GNP
by 20 per cent and of industrial production by 40 per cent in 1990 and 1991, open
unemployment was still no more than 3 per cent, though increasing by the end of
1991.6 A main reason behind the delayed effect on employment of economic decline
is that continued soft budget constraints and lack of effective competition have
made it possible for enterprises to retain surplus labour. Work sharing, reduced
work hours and temporary layoffs are often resorted to in order to avoid outright
dismissals. In some instances there are also reasons to expect faulty statistics. While
the delayed employment effects of economic restructuring and decline may buy
policy-makers valuable time, there is a severe risk that it results in an unwarranted
sense of relief that the problem of unemployment will prove to be less than initially
anticipated. This is clearly an illusion as the lag in the employment response to the
4
Economic Transformation and Employment i/i Hungary (Geneva: ILO, 1992).
5
Tito Boeri and Mark Keese, 'From labour shortage to labour shedding: Labour markets in Central and Eastern Europe', Communist Economies and Economic Transformation, Vol. 4, no. 3 (1992),
pp. 373-394, esp. 384.
6
Buletin statistic de informare publico, 1991:12 and 1992:1; Romania Libera, 29 January 1992. By
November 1992 the unemployment rate had increased to 9.1 per cent {Buletin statistic de informare
publico, 1992:11).
6
changing economic conditions does not imply that employment effects will somehow
be avoided, but merely that the bottom has not yet been reached and that there is
still a long way to go before the full effects are felt.
When the governments react to the emerging employment problems it has initially been in the form of passive labour market policies, such as schemes for
unemployment benefits and other types of protection against loss of income.7 This is
obviously the easiest type of response, and as such may be explained by the lack of
tradition and experience in the field of employment and labour market policies, but
it is inadequate and likely to rapidly become unsustainable for cost reasons.
Privatisation has proved to be a protracted and technically difficult process. A
number of technical solutions have been tried with varying degrees of success and
the late starters have today a considerable body of knowledge to draw upon.8
Privatisation has often been portrayed as a key aspect of the economic transition.
However, although divestiture of state enterprises and other assets is important as it
ensures the institutional separation of the economy from the polity, privatisation is
no guarantee for resolving the economic woes associated with the centrally planned
economic system. It is useful to make a distinction between privatisation of enterprises on the one hand and marketisation and commercialisation on the other. From
the point of view of transition to a market economy, what matters is the enforcement of unambiguous property rights (e.g., throught privatisation) and the subjecting of enterprises to the competitive pressures of markets (i.e., marketisation). This
implies basically a rupture of both the vertical links between state enterprises and
their superior ministries and horizontal links between the enterprises and local
authorities. Enterprises must be given complete responsibility for the management
of their own affairs including, most importantly, responsibility for the economic
results of its activities. Subsidies and reliance on the state as a lender of last resort in
case of financial difficulties must be brought to a definite and unambiguous end in
7
8
OECD Employment Outlook, July 1992 (Paris: OECD, 1992), pp. 258-263.
For a review of individual country experiences, see, e.g., Irena Grosfeld and Paul Hare, 'Privatization in Hungary, Poland and Czechoslovakia', European Economy, Special Edition No. 2 (1991), pp.
129-156; Morris Bornstein, 'Privatisation in Eastern Europe', Communist Economies and Economic
Transformation, Vol. 4, no. 3 (1992), pp. 283-320; and E.S. Savas, 'Privatization in post-socialist
countries', Public Administration Review, Vol. 52, no. 6 (1992), pp. 573-581.
7
order to impose hard budget constraints on the enterprises and complete accountability through commercialisation of their operations.
While the necessity of marketisation of enterprises is universally recognised, it
has proved difficult to implement in practice. A major problem is the limited number of enterprises, lack of alternative suppliers and buyers and the ensuing dependence of enterprises on each other. To illuminate this problem the economy of the
former Soviet Union has been likened to an assembly line.9 Just as closure of one
work station along the assembly line will affect all other work stations, bankruptcy
of one enterprise will disrupt production in many other enterprises. The result is
accumulation of inter-enterprise debts and continued soft budget constraints.
Another problem is 'technological pluralism',10 or the considerable technological
diversity usually to be found in manufacturing plants in the formerly centrally
planned economies. Under the previous economic system new technologies were
added to, but did not replace, old ones. As a consequence technologies vary widely
both within and between enterprises, as do efficiency, labour productivity and product quality. Under such circumstances imposition of hard budget constraints may in
many instances be tantamount to a death warrant. Additionally, acute financial difficulties is not necessarily an indication of lack of long term viability and closure of
enterprises in the wake of imposition of hard budget constraints may therefore
result in unnecessary waste of productive capacities. The lack of efficient markets
lends further support to this argument. In the absence of an independent and competent system for credit appraisal judgements must necessarily remain arbitrary.
Lastly, social considerations are an important deterrent to the commercialisation
and marketisation of enterprises as large scale redundancies and unemployment
inevitably follows in its trail. Most enterprises suffer from considerable overstaffing
and even if bankruptcies are averted, the need to increase cost efficiency will in
most instances necessitate reductions in the labour force. Slow commercialisation
and marketisation of enterprises is the main reason for the relatively modest
9
Axel Leijonhufvud, 'Problems of socialist transformation: Kazakhstan 1991', paper presented at
the Arne Ryde Symposium 'Transition Problems' at Rungsted Kyst, Denmark, 11-12 June 1992.
10
Alin Teodorescu, The future of a failure: the Romanian economy', in Orjan Sjdberg and Michael
L. Wyzan (eds.), Economic Change in the Balkan States: Albania, Bulgaria, Romania and Yugoslavia
(London: Pinter, 1991), pp. 69-82, at p. 75.
8
unemployment effects of the economic contraction. However, while it provides a
respite, it does not offer any long term solution.
Another universal experience is that markets take a long time to develop, in particular in countries that are shielded from the effects of foreign trade. In the absence
of competition the price elasticity of the supply of many goods remains low. Lack of
alternative suppliers and poor information channels easily result in monopolistic
abuses in the wake of price liberalisations. A related problem is the difficulty to
assess production costs in a situation of extreme technological plurality. While capital and labour markets often emerge early, often at the very instant the old economic
system gives way, they take a particularly long time to develop into fulfledged
markets. Neither can be expected to develop spontaneously, except in a highly
rudimentary form, and as both are instrumental to economic growth and employment and income generation active government policies in these fields are required.
The need for fundamental economic restructuring has, if anything, proved to be
even greater than previously expected. The past development strategy and economic
system created highly dysfunctional economic structures. While the individual
countries display different needs of economic restructuring, these differences are
largely variations around the same theme and it is quite possible to make a number
of generalisations. Firstly, all the former socialist countries have a bias towards
heavy industry in their economic structure as a result of the emphasis under the
previous development strategy on producer goods industry as a spearhead of economic development and modernisation. Thus, they are left with a bloated heavy
industry which, as a result of the priority in terms of allocation of production factors
that it enjoyed in the past, typically also suffers from particularly pronounced overstaffing. The emphasis on physical production and the division of the economy into a
productive and a non-productive sphere during the socialist period resulted in an
underdevelopment of most services. Generally speaking, the share of the labour
force in the industry is ten to twenty percentage units higher than in market
economies at corresponding levels of development.11
Under the past economic system these sectoral priorities were also reflected in
11
OECD Employment Outlook, July 1991 (Paris: OECD, 1991), pp. 17-19.
9
the wage structure. Beyond the general practice of 'determination of wages from the
residual left by accumulation',12 tariff rates, based on skill classification and production norms, tended to be biased in favour of not only the 'productive sphere' (as
opposed to the non-productive sectors, including services), but also in favour of the
heavy end of manufacturing. As a consequence the supply of many services is not
only under-dimensioned, but also of poor quality. Although this state of affairs
would seem to reflect the existence of a rather substantial wage spread, it was partly
off-set by two countervailing tendencies. Firstly, for egalitarian and other ideological
reasons, attempts were made to keep money wages within a rather narrow range
(both wage drift and non-wage benefits, however, worked to the advantage of those
in priority sectors). Secondly, reclassification of skill grades were often made, so as
to enable employers to pay higher wages should labour supply at the official rate fall
short of actual demand. In turn, the discretionary nature of such measures conspired
with the importance of non-wage benefits and the narrow range of cash remuneration to reduce labour mobility. By and large it is fair to say that the wage structure
displayed considerable rigidities and that in the absence of any genuine mechanisms
for wage bargaining the links between demand and supply of labour on the one
hand and the wage structure on the other hand were poorly developed. Remnants of
these rigidities remain an important obstacle to smoothly functioning labour
markets.
The former socialist countries also display an exaggerated bias towards large
scale enterprises and a severe lack of small and medium sized economic units.13 The
emphasis on large scale enterprises was ostensibly due to a belief in economies of
scale, but is more likely to have been conditioned by the limited capacity at the central level to monitor and plan a large number of units. For different, system
determined reasons the degree of specialisation at the enterprise level is very low.
Most enterprises produce a large variety of goods and services that are often
seemingly unrelated to their main line of production. Under the centrally planned
economic system, such diversification made good sense as a means of achieving
internal flexibility and lessening the dependence on highly arbitrary supplies of out12
Silvana Malle, Employment Planning in the Soviet Union (Basingstoke: Macmillan, 1990), p. 228.
13
OECD Employment Outlook, July 1991, p. 19.
10
side services and goods. However, as the economies shift towards a market economy, the lack of internal specialisation within enterprises becomes a handicap. More
often than not the production of the subsidiary or supplementary goods and services
is costly and inefficient. It detracts resources from the main line of production,
prevents economies of scale and is likely to have an overall negative effect on the
viability of the enterprises. A complicating factor in this regard is that the degree of
mechanisation tends to be much higher in the main line of production than in the
auxiliary and ancillary activities.
Comprehensive restructuring of the economies will have obvious and farreaching effects on employment. Restructuring results, within a relatively short
period of time, in severe mismatches in the supply and demand structure of labour
which puts unreasonable strain on the nascent labour markets. Increases in the overall unemployment are paralleled by severe shortages of critical skills, which appear
already at an early stage of the transition. To give but one example, there is typically
a surplus of engineers and several other related professional skills, while there is be
a shortage of competence in almost all fields of economics and business administration and in the legal professions. To make matters worse, labour mobility - both
occupational and geographical - tends to be low. The reasons are severalfold. Some
are related to an inappropriate structure of incentives and may fairly easily be
remedied, although the deterring impact of a poor supply of food products in urban
areas on rural-urban migration may prove less easy to redress. More fundamental
reasons behind low geographical mobility include the existence of administrative
restrictions facing those wanting to change domicile, the lack of a housing market
and the continued importance of an extensive network of informal contacts, while a
main reason behind the low occupational mobility is the narrow educational profile
of much of the labour force as a consequence of past policies of favouring skill
related over general education.
The bias towards large scale enterprises has left most regions and towns with an
extremely narrow and lopsided economic base. In fact, many towns are best characterised as 'company towns' as their economy rests on (and falls with) one or two
large enterprises. In most of the Central Asian countries this problem is aggravated
by a poorly developed urban network and poor economic and physical infrastructure
11
outside the main city, or cities. The previous reliance on vertical chains of command
imply that horizontal contacts and linkages, vital to regional economic revival, need
to be developed from scratch. The regional aspects of the economic restructuring
and transition must therefore be given close attention, as the closure of individual
enterprises may have devastating effects on local economies and non-farm employment opportunities. This is particularly important, as democratization and
decentralization of decision making have given local authorities a totally new and
much more powerful mandate. However, the local administrative apparatuses,
which in the past were mere extended arms of the central authorities, are illequipped to tackle the daunting regional development problems.
In the wake of the sweeping economic reforms, most of the formerly socialist
countries have seen a rapid increase in small scale entrepreneurship. Because of the
more lenient attitudes of their respective governments during the years leading up
to 1989, Poland and Hungary had a head start in this respect, and the etablishment
and expansion of private businesses quickly got under way there.14 But even where
prospective entrepreneurs were not encouraged in this manner the private sector is
flourishing and small scale enterprises are mushrooming. Thus, two years after the
revolution Romania boasted over 300,000 new private enterprises and an Albanian
organisation for entrepreneurs claims a membership of over ZO.OOO.15 While this is
obviously very encouraging for a variety of reasons, not least that of employment
and income generation, it should be seen as an opportunity for active policy making
and assistance rather than as an excuse for complacency. The process of 'privatisation from below* is impressive in terms of numbers of enterprises rather than in
terms of production or employment. The vast majority of the new enterprises are
extremely small and tend to suffer from a lack of capital, knowhow, supply sources
and market outlets. They are heavily concentrated to certain types of services, while
the establishment of new enterprises in the manufacturing sector has been slow. The
scant statistical data available also indicate high turnover rates.
The small scale of the enterprises implies that they generate primarily self14
Simon Johnson, 'Private business in Eastern Europe', paper prepared for the 'NBER conference
on the Economic Transformation of Eastern Europe', Cambridge, MA, 26-29 February 1992.
15
Buletin statistic de informare publico, 1991:12, and Qirjako Noti, personal communication, 18
April 1992, respectively.
12
employment and very little wage employment. As such they do not provide a ready
solution for absorbing the increasing ranks of unemployed. There is nothing to suggest that unemployed industrial workers are particularly suited for self-employment
and as entrepreneurs. Indeed, a recent study of Hungary16 revealed that only 8 per
cent of the new entrepreneurs had a background as previously unemployed. On the
contrary, empirical evidence from other countries suggests that rather specific skills
and personal characteristics are required to become a successful entrepreneur, quite
apart from the fact that it requires access to capital, inputs, markets and so forth.17
Hence, the main challenge and potential lies in fostering the growth of the new
enterprises rather than in their multiplication. Only through growth will they be able
to assume an important role as instruments for employment and income generation
and make a contribution towards rectifying the lopsided and unbalanced economic
structure. Thus, favourable conditions for growth of small enterprises need to be
created. The Central Asian countries may here benefit from the experiences of
other countries in transition, not least China and Vietnam, but also Poland and
Hungary. A conducive political climate and institutional setting, including an adequate framework of economic legislation and efficient law enforcement, and efficient markets for capital and labour are essential conditions.18 Experience from
China strongly suggest that fostering of linkages between the nascent small scale
sector and the established large scale enterprises may be a key factor,19 as has also
been observed with respect to, for instance, Czechoslovakia.20 This would seem to
be of particular relevance to the Central Asian countries where the incipient disturbance of trade with the rest of the former Soviet Union has created an urgent
16
Economic Transformation, p. 33.
17
Per Ronnas, Employment Generation through Private Entrepreneurship in Vietnam (New Delhi:
ILO-ARTEP/SIDA, 1992).
18
Ronnas, Employment Generation.
19
Per Ronnas and Orjan Sjdberg, Township enterprises: A part of the world or a world apart?',
paper prepared for the '3rd European Conference on Agricultural and Rural Development in China',
15-18 April 1993, SchloB Rauischholzhausen, GieBen, Germany.
20
Gerald A. McDermott and Michal Mejstrik, "The role of small firms in the industrial development and transformation of Czechoslovakia', Small Business Economics, Vol. 4, no. 3 (1992), pp. 179200.
13
need for new backward and forward linkages for existing enterprises. Provision of
physical premises, technical assistance and extension services would also seem to be
highly needed.21
The severe dislocation of trade and economic contacts resulting from the breakdown of the Soviet Union must also be taken into consideration. For the countries
in East Central Europe and Vietnam the effects were felt with full force in 1991.
Two main conclusions may be drawn from their experiences. Firstly, that the effect
on the domestic economies are likely to be both abrupt and devastating. Thus, the
sharp decline in industrial production in Romania in the second half of 1991 by
some 22 per cent can largely be attributed to an acute energy shortage following a
disruption of deliveries from the Soviet Union.22 Similar effects were, to a varying
degree, registered in the other countries. Secondly, the recovery of the domestic
economies and compensation of trade losses through reorientation of trade has in
several of the countries been surprisingly rapid. This is particularly the case in Vietnam, where a complete reorientation of trade patterns has been achieved in a very
short period of time and the dislocative effects on the economy would seem to have
been overcome after only a year. Though less dramatic, the adaptation of the
countries in East Central Europe also provide reason for cautious optimism.
However, there is nothing automatic about the recovery and any terms-of-trade
losses from a shift to world market prices are likely to become permanent. The disruption of trade may both act as a catalyst to reform, by speeding up reform
measures and forcing enterprises out into the cold, and make it more difficult. In
particular, it makes it difficult to impose hard budget constraints on enterprises as
enterprises with sound long term development perspective may face acute difficulties due to temporary shortages of energy or inputs or loss of markets.
Lastly, it may be noted that countries that have opted for swift comprehensive
reforms and adjustment have been relatively more successful than those which have
taken a more gradual and partial approach.23 The contrasting cases of Vietnam and
21
Ronnas, Employment Generation.
22
Social and Economic Standing of Romania in the Year 1991 (Bucharest: National Commission for
Statistics, 1992), pp. 6-7.
23
E.g., Aslund, Post-communist Economic Revolutions.
14
Poland on the one hand and Russia and Romania on the other are persuasive
illustrations of this. The strategy adopted by Vietnam would seem to be of particular
interest, as the transition in Vietnam has been both swift and highly successful and
has confuted odds which initially seemed rather poor. However, in reality the choice
is obviously not so straight forward. The discussion above provides ample illustration of the difficulties of achieving a rapid transition at the same time as external
factors and the force of circumstances may necessitate improvisations implies a risk
that strategies become reactive rather than proactive.
15
III.
The specifics of Central Asia
a)
De-linking the externally planned economy
The institutional and economic setting in Central Asia displays many inherited features familiar from the above outline of East Central Europe and former constituent
republics of the now defunct Soviet Union. To a considerable extent Central Asia
also shares with them the agenda for change, now that central planning has been
given up. It is nevertheless important to recognise the existence of dissimilar features, some of them singular to the Central Asian states. These unique features do
not detract from the argument that the state finds itself weakened because of the
political and economic processes unleashed by the collapse of Soviet hegemony and
central planning. Rather, the case can be made that these peculiarities weaken the
state further still, thereby eroding its capacity for making positive contributions to
reform.
Firstly, as Martha Brill Olcott has observed, '[f]ew peoples of the world have ever
been forced to become independent nations. Yet this is precisely what happened to
the five Central Asian republics after Russia, Belarus and Ukraine - the three
original signatories of the USSR's founding 1922 constitution - met in Minsk on
December 8, 1991, and created a new Commonwealth of Independent States
(CIS).'24 The Central Asian republics thus faced the choice of full independence or
becoming members of the new Commonwealth and as 'Central Asia's leaders knew
that the mere act of declaring independence would resolve few of their economic or
political problems',25 the latter alternative appeared to have considerable merit.
Secondly, although difficult in practice, it is useful to distinguish between the
effects of economic transformation and nation building.26 With no recent history of
independence, Central Asian states are in a quite different position as compared to
those former republics of the Soviet Union that have the cause of re-establishing
their sovereignty to rally around, the difference being larger still as compared to the
24
Martha Brill Olcott, 'Central Asia's catapult to independence', Foreign Affairs, Vol. 71, no. 3
(1992/93), pp. 108-130, quotation from p. 108.
25
Ibid., p. 114.
26
As convincingly argued by Hansson, Transforming an Economy, p. 13.
16
countries of East Central Europe which never had to give up their formal independence in the first place. While the latter group of countries can, by and large, focus
their attention and efforts on economic reform, Central Asian states have also to
consider the demands of nation building. These demands may, but need not, require
similar sets of policy action.
Thirdly, being an integral part of a larger political entity, Central Asia has been
strongly influenced by that entity. In particular, two characteristics which follow
from the fact that Central Asia was integrated into the centrally planned economy of
the Soviet Union deserve to be singled out. Firstly, central planning authority vested
with the all-union Gosplan effectively removed a sizeable portion of economic
activities in the region from the control of republican and local authorities in Central Asia. Secondly, and as a corollary, central planning made it possible to impose
on Central Asia a measure of regional specialisation without therefore necessarily
taking comparative advantage into account.27 Combined these two strands worked
to turn the Central Asian republics into suppliers of raw materials (fossil fuels,
minerals and cash crops), with little domestic processing, premature resource depletion and environmental degradation as major consequences. In particular, in agriculture regional specialisation implied a substitution of cash crop mono-culture (cotton) for diversification and food production, thereby increasing the dependence on
food imports.
It has been argued that the above described situation amounted to no less than
an outright colonial pattern,28 and that the Central Asian states are now entering a
27
Basing himself on oblast level per capita investment data for the period 1956-1985, Ronald D.
Liebowitz, 'Soviet geographical imbalances and Soviet Central Asia', in Robert Lewis (ed.), Geographic
Perspectives on Soviet Central Asia (London: Routledge, 1992), pp. 101-131, at p. 116, concludes that 'it
appears as if Soviet investment practice has been geared more toward developing the economic capacity of Central Asia to meet the needs of the national economy than with developing and equalizing the
productive capacities and socioeconomic conditions of the southern tier.'
28
E.g., Martin C. Spechler, 'Regional development in the USSR, 1958-78', in Soviet Economy in a
Time of Change: A compendium ofpapers submitted to the Joint Economic Committee of the Congress of
the United States, Vol. 1 (Washington, DC: US Government Printing Office, 1979), pp. 141-163, labelling the phenomenon 'welfare colonialism' (p. 145); Michael Rywkin, Moscow's Muslim Challenge:
Soviet Central Asia (Armonk, NY: M.E. Sharpe, 1990, rev. ed.), speaking of, for instance, 'colonial conquest' (p. 18) and approvingly quoting Spechler (p. 56); Leslie Dienes, Soviet Asia: Economic development and national policy choices (Boulder, CO: Westview, 1987), p. 6, who contends that Central Asia
is a "plantation economy" in its relationship to the metropolis [i.e., Moscow]'; and Liebowitz, 'Soviet
17
phase of 'decolonialisation'. While suggestive, this characterisation conceals a number of peculiarities, such as the role of transfers from the all-union budget. Above
all, and despite the removal of direct control from a geographically distant centre, it
conceals the fact that the transition from central planning to a market economy, a
process which runs in parallel to the de-linking of the 'externally planned' economy,
erodes the capacity of the state to act autonomously. Central Asia and the other former republics of the Soviet Union are in a more precarious position than the former
centrally planned economies of East Central and South Eastern Europe, as the latter have entered the process of economic transition with full-fledged (though often
inadequate) state administrations in place.29 Taken as a whole, the above features
constitute an important backdrop to the transition as such and are therefore worth
looking into in greater detail.
The high degree of integration of the Central Asian countries with the rest of the
former Soviet Union and their extreme trade dependence on Russia and the other
CIS member states (see Table 1) renders paramount importance to the issue of dislocation of trade and economic contacts. The potentially extremely serious effects of
trade dislocations are further underscored by the poorly diversified vertical linkages
and the high dependence of enterprises on a small number of suppliers and buyers.
To pursue the parallel with the assembly line, it is as though the line would be cut
off between the various work stations.
Although it is beyond the scope of the present study to examine in depth the consequences of the dislocation of trade within the former Soviet Union, it is clearly a
factor of utmost importance to the development of the economies in Central Asia. It
must therefore be a major consideration in policy making. At first glance the more
pronounced integration into, and hence dependence on, the all-union economy and
the limited capacity to compensate for any negative effects of such a disruption of
trade would seem to put Central Asia in a much worse position than the non-Soviet
members of the defunct Comecon were.
geographical imbalances', pp. 119-122, who adopts the term 'internal colonialism' originally coined by
Michael Hechter, Internal Colonialism: The Celtic Fringe in British national development (London:
Routledge & Kegan Paul, 1975).
29
For useful distinctions in this regard, see Hansson, Transforming an Economy.
18
A closer examination of the effects of the adjustment of the terms of trade of
individual CIS member states shows a rather mixed pattern. Preliminary calculations
made by the World Bank suggests that energy exporters among the republics of the
former Soviet Union stand to gain from the introduction of world market prices; in
Central Asia, this includes Turkmenistan and Kazakhstan.30 Exporters of other raw
materials such as precious metals and minerals may also be expected to gain,
although to a lesser extent. This is not a zero sum game, however, and as the former
Soviet Union as a whole is expected to improve its standing through the shift to
world prices, chances are that also republics relatively poorly endowed with natural
resources may stand to gain as the transition is accomplished.31 Furthermore, republics running deficits in their trade with other republics (such as Kyrgyzstan,
Tajikistan and Uzbekistan), may find that the loss of inter-republic transfers is more
of a shock to their economies than the adjustment of their terms of trade. Nevertheless, in countries dependent on imports of fossil fuels, the impact of these changes
will most severely be felt in energy intensive industries, and governments may therefore find a need to identify means whereby the impact can be reduced in the short
term. In the medium and long term, however, there is no viable option but to realign
the operations of those enterprises severly hit by the adjustment in the terms of
trade.
30
David G. Tarr, How Moving to World Prices Affects the Terms of Trade in 15 Countries of the Former Soviet Union. (Policy Research Working Papers, WPS 1074. Washington, DC: Country Economics
Department, The World Bank, 1993).
31
However, as Tarr is careful to point out, during the transition itself a very different set of prices
may prevail. As a consequence, despite a favourable long term outlook, the immediate impact may well
be much to the detriment of individual states or industries.
19
Table 1
Share of inter-republican trade in total trade, 1988
Total export,
mil. rubles
X within USSR
X outside USSR
Total import,
mil. rubles
X within USSR
X outside USSR
Exports as X of
imports, total
within USSR
outside USSR
Source:
Turkmenistan Uzbekistan
Azerbaijan
Kazakhstan
Kyrgyzstan
Tajikistan
6,800
94.1
9,100
91.2
2,560
97.7
2,600
92.3
5.9
8.8
2.3
2,330
85.8
14.2
7.7
10,490
85.4
14.6
5.700
75.4
24.6
16,400
83.5
16.5
3,770
79.6
20.4
3,490
86.5
13.5
2,900
86.2
13.8
12,320
86.2
13.8
68
83
8
67
66
70
90
96
50
85
84
90
119
149
29
55
61
30
Murat Albegov, 'Problems of regional development in the USSR under perestroika', in
Tibor Vasko (ed.), Problems of Economic Transition (Aldershot: Avebury, 1992), p. 149.
However, this worst case scenario has not yet materialised. Two circumstances
appear to explain why this is the case. Firstly, the reorientation has not been as swift
as was the case with intra-Comecon trade. Indeed, Central Asian leaders have been
careful not to immediately severe economic ties with the fellow members of the CIS,
the reason being the acute awareness of Cental Asian economic vulnerability.32 Secondly, the trade pattern between Russia and Central Asia is dissimilar to the intraComecon trade in as much as it is not one of Russia exporting unprocessed raw
materials, and receiving manufactured goods in return. Russian-Central Asian trade
comprises flows of raw materials from Central Asia and with manufactured goods
being exported from the centre. This might in the past have reduced any positive
impact of receiving subsidised Russian fuels and ores, but makes local industry less
exposed today. Furthermore, it implies that gains are to be made, should the Central
Asian republics find buyers willing to pay world market prices rather than the low
Olcott, 'Central Asia's catapult', pp. 115-118.
20
procurement prices obtained in intra-Soviet trade.
The fact that the policy of regional specialisation pursued in the former Soviet
Union has left the Central Asian countries extremely trade dependent and with lopsided economic structures implies that, irrespective of the political philosophy of the
future governments in Central Asia, diversification of the economic structure and
increased self-sufficiency will inevitably be a main objective of the economic
strategy. Economic diversification and a higher degree of processing of domestic
raw materials will also provide the main context and area for future entrepreneurial
development and employment and income generation. A tentative conclusion would
therefore be that in the long term the de-linking from the economy of the former
Soviet Union may well be advantageous from the point of view of employment generation. However, a rapid and uncontrolled disruption of this link would more likely
than not wreck havoc on these economies and result in mass unemployment and
economic misery.
All told, a swift reorientation of trade away from the CIS countries, as witnessed
for instance in Estonia and Latvia, seems unlikely. Unlike these Baltic countries, the
Central Asian republics are distant from the main world markets and lack natural
alternative trading partners, at least in the short run. The geographical layout of
existing physical infrastructure will also continue to favour trade relations with CIS
members for the foreseeable future. In particular, railways and pipelines are
predominatly oriented towards Russia, and it will be some time before alternative
routes are opened up. Therefore, a geographical restructuring of trade patterns is
likely to be gradual and the Central Asian countries will no doubt remain heavily
dependent on trade with Russia and other CIS members for some time. The low
level of complementarity between the Central Asian republics (except for fossil
fuels) will continue to reduce the scope for intra-regional trade. By implication, economic recovery will be heavily dependent on the fortunes Russia and its economy.
The only thing which might distort this picture would be increases in exports of
energy and other raw materials. A caveat therefore needs to be introduced for
Kazakhstan in particular but also Turkmenistan.
21
Demographical structure
b)
While the effects of the as yet gradual and partial de-linking of the Central Asian
economies from that of the Commonwealth shows a rather mixed picture,
demography presents a challenge of a different order. Although the present size of
the population of the area - amounting to 57.4 million people, the equivalent of 14
inhabitants/km2 - might not seem alarming (see Table 2), prospects for the future
are somewhat more somber than overall numbers and densities suggest.
Table 2
Population and population densities, 1989
Azerbaijan
Kazakhstan
Kyrgyzstan
Tajikistan
Turkmenistan
Uzbekistan
Total
Source:
Population
Area
(km2)
7
16
4
5
3
20
57
86 600
2 717 300
198 500
143 100
488 100
447 400
4 081 000
131 000
691 000
367 000
248 000
662 000
322 000
381 000
Density
(inn./km2)
82.3
6.1
22.0
36.7
7.4
45.4
H.I
Demograficheskiy ezhegodnik SSSR 1990 (Moscow: Finansy i statistika, 1990), pp. 11-12.
For a start, because of the existence of large tracts of semi-arid or arid land in the
region, population densities in inhabitable areas are much higher than the national
aggregates imply. In fact, within Central Asia one finds some of the most densely
populated provinces within the entire Commonwealth, with those located in the fertile Fergana Valley displaying particularly high figures (e.g., in 1990, Andijan 419.3
inh./km 2 ; Fergana 308.2 inh./km 2 ). The situation is much the same throughout
Turkmenistan, Uzbekistan and southern Kazakhstan, where the population has
been concentrated to river valleys or other reliable sources of water. Elsewhere,
22
such as in parts of Tajikistan, a forbidding topography serves to concentrate the population geographically.
Furthermore, given the rather high ratio of rural to urban dwellers in four of the
six states under consideration (Tables 3 and 4), the high densities are often rural
rather than urban in origin, with the provinces of the Fergana Valley again registering the highest values (Andijan 283.1 and Fergana 209.4 rural inh./km2). As a consequence, and in spite of the efforts of expanding the arable area through extensive
irrigation schemes in particular in Turkmenistan and Uzbekistan, overall population
to arable land ratios do not give much comfort in this regard (Table 10 below), only
Kazakhstan being an exception.
Table 3
Rural/Urban Distribution of the Population
in Central Asia (excluding Azerbayan and Kazakhstan)
Central Asia
no
X
Kyrgyzstan
n
o
X
Tajikistan
n
o
X
Urban population
696 33.7
646 32.6
1959
1970
1979
1989
1990
4
7
10
13
13
771
531
362
017
273
34.9
38.0
40.7
39.6
39.6
1 098
1 366
1 641
1 664
37.4
38.7
38.2
38.1
1959
1970
1979
1989
1990
8
12
15
19
20
911
261
118
826
286
65.1
61.9
59.3
60.4
60.4
1 370
1 836
2 163
2 650
2 703
66.3
62.6
61.3
61.8
61.9
1 007
1 325
1 667
1 684
37.1
34.9
32.6
32.2
Turkmenistan
n
o
X
n
Uzbekistan
o
X
700
1 034
1 323
1 603
1 638
46.2
47.9
48.0
45.4
45.2
2
4
6
8
8
729
322
348
106
282
33.6
36.6
41.2
40.7
40.8
816
1 125
1 436
1 931
1 984
53.8
52.1
52.0
54.6
54.8
5
7
9
11
12
390
477
043
800
040
66.4
63.4
58.8
59.3
59.2
Rural population
Sources:
1
1
2
3
3
335
823
476
445
559
67.4
62.9
65.1
67.4
67.8
Naselenie SSSR1988. Statisticheskiy ezhegodnik (Moscow. Finansy i statistika, 1989), pp.
24-26; Demograficheskiy ezhegodnik SSSR 1990 (Moscow Finansy i statistika, 1990), pp.
11-12.
23
Table 4
Rural/Urban Distribution of the Population in Azerbaijan and Kazakhstan
Kazakhstan
Azerba ijan
no
Sources:
X
no
X
1959
1970
1979
1989
1990
1 767
2 564
3 200
3 785
3 840
Urban population
47.8
50.1
53.1
53.8
53.8
4 067
6 538
7 920
9 465
9 586
43.8
50.3
53.9
57.2
57.4
1959
1970
1979
1989
1990
1 931
2 553
2 828
3 244
3 291
Rural population
52.2
49.9
46.9
46.2
46.2
5 226
6 471
6 764
7 073
7 105
56.2
49.7
46.1
42.8
42.5
Naselenie SSSR 1988. Statisticheskiy ezhegodnUc (Moscow: Finansy i statistika, 1989), pp.
23,26; Demograficheskiy ezhegodnik SSSR 1990 (Moscow: Finansy i statistika, 1990), pp.
11-12.
A second, related and more pressing concern is population growth. Table 6
details natural growth over the ten years spanning the period 1980 to 1989. As these
are crude figures, the increase in natural growth over much of the 1980s is
attributable to the effects of the age structure of the population. The outstanding
message of Table 6, however, is the high level of population growth, in particular in
Tajikistan, Turkmenistan and Uzbekistan, amounting to a doubling of the population in about 25 to 30 years or less. Especially rural growth, while in keeping with
world patterns of urban-rural differentials, are high by any standard. In terms of
absolute figures, this implies that much of Central Asia can be expected to grow by
substantial annual increments in the foreseeable future, irrespective whether any
major changes in reproductive behaviour take place or not (and total fertility rates
generally do appear to be decreasing).33
The rapid increase in rural numbers have until recently been compounded by the
typically low rates of rural out-migration.34 In commenting on the low propensity to
33
Naselenie SSSR 1987. Statisticheskiy ezhegodnik (Moscow: Finansy i statistika, 1989), pp. 328-343;
and Demograficheskiy ezhegodnik SSSR 1990 (Moscow: Finansy i statistika, 1990), pp. 308-315.
24
leave rural areas, observers have instead noted the significance of 'reverse migration', the main reason for which is to be found in the emphasis on cash crops production and the concomitant expansion of land grown to cotton.35 Others emphasise
the possibility of informal sector activities open to rural dwellers and to those
engaged in agriculture, which together with a generally superior supply of food stuffs
are thought to entice people to stay on the land or indeed to return from urban
areas.36 Less frequently commented upon, but clearly of some importance in this
regard, has been the system of movement controls imposed on rural dwellers
throughtout the former Soviet Union. Amounting to no less than a system of
'territorial administration of privilege',37 rural retention policies have long been in
place. Partly as a consequence of the lifting, or collapse, of such policies and partly
as a consequence of economic reform rural out-migration can be expected to
increasingly become a prominent feature of Central Asian labour markets. Table 5
provides some information on rural-to-urban drift. Although sharp increases were
registered in several countries between 1989 and 1990, the overall level of rural outmigration remained low. Except for Kyrgyzstan where out-migration ostensibly
reached a staggering 8 per cent in 1990, net out-migration remained below the rate
of natural increase with continued increasing rural populations as a result. However,
a word of caution must be introduced as the reliability of the migration data is
uncertain. Indeed, in several instances it is not fully compatible with other statistics.
Furthermore, the general increase in migration in 1990 is perhaps the first sign of a
new development which may rapidly gain pace. Clearly, this is an issue which will
require very careful monitoring.
34
For information on the state of affairs prior to the lifting of administrative restrictions on rural
out-migration, see, e.g., the information contained in Demograficheskiy ezhegodnik SSSR 1990 (Moscow: Finansy i statistika, 1990), Chapter 7.
35
Gregory Gleason, 'National sentiment and migration in Soviet Central Asia', Nationalities Papers,
Vol. XV, no. 2 (1987), pp. 228-244, at p. 232,
36
The most well-known study being Nancy Lubin, Labour and Nationality in Soviet Central Asia
(London: Macmillan, 1984).
37
Graham E. Smith, 'Privilege and place in Soviet society', in Derek Gregory and Rex Walford
(eds.), Horizons in Human Geography (Basingstoke: Macmillan, 1989), pp. 320-340, esp. 328-33S.
Table 5
Rural out-migration, 1979-1990
Azerbaijan
Kazakhstan
Kyrgyzstan
Tajikistan
Turkmenistan
Uzbekistan
1979-1988
annual average
1989
1990
78
142
63
29
11
39
87 800
143 100
56 100
20 900
6 100
59 500
64 100
165 700
133 400
42 300
18 400
62 400
200
800
800
900
200
400
Source: T. Levina, 'Demograficheskaya situatsiya v sel'skoy mestnosti', Vestnik stalistiki, 1992:1, p. 11.
Table 6
Natural population growth, 1980-1989 (per 1,000 inhabitants)
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
Azerbaijan
urban
rural
18.2
16.4
20.2
19.4
17.3
21.9
18.5
16.6
20.8
19.5
17.1
22.1
19.8
17.7
22.0
19.8
17.8
22.3
20.9
18.8
23.3
20.1
18.3
22.3
19.6
17.3
22.3
20.0
16.9
23.5
Kazakhstan
urban
rural
15.9
14.0
18.1
16.4
14.5
18.6
16.5
14.4
19.2
16.5
14.2
19.3
17.2
14.8
20.3
17.1
14.9
19.9
18.2
15.6
21.7
18.1
15.9
21.1
17.1
14.7
20.3
15.4
12.6
19.3
Kyrgyzstan
urban
rural
21.2
17.1
21.2
22.7
18.0
25.5
23.4
17.6
26.9
23.5
17.8
26.9
23.7
18.5
26.9
23.9
18.4
27.4
25.6
19.7
29.2
25.4
19.3
29.0
24.0
18.2
27.5
23.2
16.5
27.3
Tajikistan
urban
rural
28.9
20.5
33.5
30.5
21.8
35.1
30.5
22.0
34.9
30.7
21.8
35.3
32.4
24.2
36.5
33.0
23.6
37.6
35.3
26.0
39.9
35.0
26.3
39.3
33.2
22.7
38.2
32.2
21.9
37.3
Turkmenistan
urban
rural
26.0
21.5
30.0
25.8
21.2
30.0
26.7
22.9
30.1
26.7
22.0
30.7
27.0
23.2
30.4
27.9
23.6
31.6
28.5
25.1
31.4
29.4
25.5
32.7
28.3
24.8
31.1
27.3
24.3
29.6
Uzbekistan
urban
rural
26.4
18.3
32.0
27.8
19.7
33.4
27.7
20.3
32.8
27.9
21.1
32.6
28.8
21.9
33.6
30.2
22.7
35.2
30.8
23.0
36.3
30.2
22.9
35.3
28.4
21.2
33.5
27.0
19.5
32.1
Source: Demograficheskiy ezhegodnik SSSR1990 (Moscow: Finansy i statistika, 1990), pp. 99-106.
26
The sustained high rates of natural increase has resulted in a broad based population pyramid and a large young dependent population, indicating that there will be
a rapid increase in the working age population at least over the short and medium
term. This impression is indeed brought out by Table 7, which gives the relative
shares of working age and below working age population in 1989, respectively. In
particular, the rural areas of Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan
have a large share of their population below the age of 16, in no case making up less
than two-fifths of the total rural population.
An assessment of the growth of the working age population over the next ten
years as based on the current age structure of the population of the Central Asian
states (Table 8) corroborates the suggestion that the size of the labour force will
increase at a fast pace.38 Although in most cases diminishing or at least levelling out
over time, the annual net addition to those in working age will remain substantial
throughout the 1990s, a fact which will put all the Central Asian states under considerable pressure to create new job opportunities lest unemployment rates will skyrocket. The circumstance that these supply side pressures are rural in origin underscores the need to attach importance to the rural and regional aspects of economic
development and employment planning, but does little to change the general perception of urgency.
38
Data for 1979-1989 are based on the working age population at the beginning and at the end of
the period as given by census returns. The calculations leading to the projections for 1990-1999 are
based on a number of assumptions, all of which render data somewhat approximate. Firstly, no migration is assumed to take place. Secondly, mortality is assumed to be proportional over the age groups
upon which the calculations are based, an assumption which can be expected to make the estimates
conservative as mortality in the 45-54 (women)/50-59 (men) year groups of in the 1989 census (making
up the group of people leaving the working age interval over the coming years up 1999) are likely to be
higher than among the 6-15 year olds (the new entrants during the same period).
27
Table 7
Relative shares of working age and below working
age population, 1989 (in per cent)
Working age
Below working age
Azerbaijan
Kazakhstan
Kyrgyzstan
Tajikistan
Turkmenistan
Uzbekistan
Total
urban
rural
Total
urban
rural
34.6
33.7
39.5
45.1
42.7
42.9
32.5
29.9
32.0
37.8
38.0
36.8
37.2
38.8
44.1
48.6
46.6
47.1
55.4
55.1
50.3
47.3
49.7
49.1
57.3
58.3
56.3
52.9
53.5
53.7
53.0
51.0
46.6
44.6
46.6
45.6
Remark:
The residual in each case is equal to the above working age population in the respective
countries.
Source:
Demograficheskiy ezhegodnik SSSR 1990 (Moscow: Finansy i statistika, 1990), pp. 27-74.
Table 8
Net average annual increase in working age population,
1979-1999 (in per cent)
Azerbaijan
Kazakhstan
Kyrgyzstan
Tajikistan
Turkmenistan
Uzbekistan
Source:
1979-1989
1990-1994
1995-1999
2.2
1.3
2.1
3.6
3.2
3.2
1.8
1.8
2.6
3.3
3.1
3.0
2.0
1.7
2.7
3.5
3.1
3.2
Calculations based on Demograficheskiy ezhegodnik SSSR 1990 (Moscow: Finansy i
statistika, 1990), pp. 27-74.
28
Table 9
Ethnic structure of the population in 1989 (in per cent)
Azerbaijan
Titular nation
Russians
Other minorities
Sources:
83
6
11
Kazakhstan
40
38
22
Kyrgyzstan
52
22
26
Tajikistan
62
8
30
Turkmenistan Uzbekistan
72
10
18
71
8
21
Roland Gotz and Uwe Halbach, 'Die Nachfolgestaaten der UdSSR - kurz vorgestellt
(III)', Osteuropa, Vol. 42, no. 8 (1992), pp. 680-693; idem, 'Die Nachfolgestaaten der
UdSSR - kurz vorgestellt (IV)', Osteuropa, Vol. 42, no. 10 (1992), pp. 887-907.
The above picture is made more complex by the fact that the countries under discussion all have sizeable minorities besides the titular nation (Table 9). Indeed, in
the case of Kazakhstan, the Kazakhs make up no more than two-fifths of the total,
with the second largest group, the Russians, at 38 per cent of the population, being
almost as numerous. The various ethnical groups tend to have differing propensities
to migrate and display different patterns of reproductive behaviour as well.39 Partly
this reflects the non-proportional allocation of the members of the major ethnical
groups between urban and rural areas, but it may nevertheless have implications for
future changes in the rate of growth of the working age population.
By way of conclusion, high and in some cases intensifying pressures on the supply
side will increasingly put the Central Asian labour markets under strain. The
severity of the problem of absorption and how the countries in focus will cope with
the situation is, however, partly a question of economic structure and performance,
issues to which we now turn.
39
See, e.g., Richard H. Rowland, 'Demographic trends in Soviet Central Asia and southern
Kazakhstan', in Robert Lewis (ed.), Geographic Perspectives on Soviet Central Asia (London: Routledge, 1992), pp. 222-250.
29
c)
Structural characteristics of the Central Asian economies
The above description of the demographic structure and likely future trends of population growth gives only a bare outline of the nature and magnitude of the problems laying ahead. For the identifiction of further implications for labour market
and employment developments the characteristics of the economies of the Central
Asian states must be taken into consideration.
Key economic characteristics. Aggregate national account statistics, with official per
capita gross social product figures in the range of USD 2,300-3,800 (see Table 10),
would at first glance seem to provide for a rather healthy basis from which economic
reform may proceed. As a guide to the economic strength of Central Asia, these figures are in all likelihood an appreciable exaggeration, however, and average per
capita incomes and the share of the population eking out a living below the poverty
line presumably better reflects not only the standard of living but also the relative
strength of the economy. Already prior to independence and the economic decline
in the past few years between 57 per cent (Kazakhstan) and 87 per cent (Tajikistan)
of the population lived on less than 200 roubles per month.
Table 11, outlining national income development growth rates, attests to the difficulties facing Central Asian states. Although the 1980s, at least up to 1988, provided
for positive growth, subsequent retrogression has resulted in a return in the level of
economic activity to the level of 1980 or earlier. 40 With an expected further
decrease of 20-25 per cent in several republics in 1992, prospects are indeed bleak.
Needless to say, with annual population growth rates in the range of 2 per cent or
above, several of the Central Asian republics have experienced rates of even sharper
decline per capita over the past few years.
40
Roland Gdtz and Uwe Halbach, 'Die Nachfolgestaaten der UdSSR - kurz vorgestellt (III)',
Osteuropa, Vol 42, no. 8 (1992), pp. 680-693; idem, 'Die Nachfolgestaaten der UdSSR - kurz vorgestellt
(IV)', Osteuropa, Vol. 42, no. 10 (1992), pp. 887-90, based on data published by Goskomstat. These
statistics have, in turn, been revised downward by, for instance, 'Aggregate economic developments in
the fifteen former Soviet republics, 1980-91: First release ever of comprehensive national income
statistics', PlanEcon Report, Vol. VIII, nos. 11-12-13 (1992).
Table 10
Economic key data
Azerbaijan
Gross social
product, 1989
total, bn USD
per capita, USD
Av. per capita
income 1989, ruble
X below poverty
line41
Kazakhstan
Kyrgyzstan
Tajikistan
Turkmenistan Uzbekistan
26.3
3 750
61.4
3 720
13.0
3 030
11.9
2 340
11.8
3 370
54.7
2 750
2 100
2 472
1 884
1 476
1 872
1 716
71
57
75
87
78
82
0.2
2.1
0.3
0.15
0.3
0.2
0.6
11.9
2.3
0.8
9.3
1.3
66
141
61
16
20
21
Arable land/capita,
ha
Agricultural
land/capita, ha
Cereal prod, as X of
consumption, 1988
Sources:
Roland Gdtz and Uwe Halbach, 'Die Nachfolgestaaten der UdSSR - kurz vorgestellt
(HI)', Osteuropa, Vol. 42, no. 8 (1992), pp. 680-693; idem, 'Die Nachfolgestaaten der
UdSSR - kurz vorgestellt (IV)*, Osteuropa, Vol. 42, no. 10 (1992) pp. 887-907.
The figures in Table 11 do not auger well for the future of local labour absorption capacities. Assuming an employment elasticity of 0.5 (which would be rather
high by Asian standards), the annual rate of real economic growth required to
absorb the net increase of the working age population (as given in Table 8 above)
would have to be in the range of 5-7 per cent over an extended period of time.42
Clearly, economic growth rates of this magnitude are nowhere to be seen. There41
This source states the poverty line to have been 200 roubles per month in 1989. Other have, perhaps more realistically, given lower figures and the share of the population subsiding on an income
below this line should be adjusted downward accordingly.
42
On the Asian experience, see, e.g., Rashid Amjad, The development of labour intensive industry
in ASEAN countries - An overview", in Rashid Amjad (ed.), The Development of Labour Intensive
Industry in ASEAN Countries (Geneva: ILO/Asian Employment Programme, 1981), pp. 1-28, at p. 14
and elsewhere; and Employment and Structural Change in Pakistan - Issues for the Eighties: A report for
the Pakistan Planning Commission for the Sixth Five Year Plan (1983-88) ([Bangkok:] ILO-ARTEP,
31
fore, viewed from this perspective, there is a very strong argument for the promotion
of labour intensive development (i.e., an increase of the elasticity of employment) so
as to compensate for the large number of entrants onto the labour market.
Although it is possible to make the argument that the countries in Central Asia
differ with respect to their prospects for economic growth, the well-endowed states
of Kazakhstan and Turkmenistan being much favoured in this regard, it should be
kept in mind that a natural resource based expansion of the economy is typically
associated with low employment elasticities. Overall, it would seem that the
economies of Central Asia are here facing a major challenge. This impression is corroborated by the experiences of the East European economies in transition, which
struggle to keep up employment levels with stagnating or even contracting rather
than fast growing working age populations.
Table 11
Economic development: per cent change in national income
Azerbaijan
1.0
3.9
0.0
1986
1987
1988
1989
1990
1991
1992*
- 3.1
- 5.0
- 0.4
-21.8
Kazakhstan
Kyrgyzstan
0.8
0.0
2.0
- 0.1
5.8
0.5
12.6
- 1.7
-10.0
-20.3
- 0.9
- 5.0
-25.2
3.7
Tajikistan
2.6
- 1.7
12.2
- 1.0
- 8.9
- 9.0
n.a.
Turkmenistan Uzbekistan
3.1
3.2
10.2
- 1.0
- 0.2
10.0
1.4
0.5
2.2
3.4
- 0.6
-10.5
- 0.9
-20.5
* Preliminary.
Sources:
Roland Gotz and Uwe Halbach, 'Die Nachfolgestaaten der UdSSR - kurz vorgestellt
(111)', Osteumpa, Vol. 42, no. 8 (1992), pp. 680-693; idem, 'Die Nachfolgestaaten der
UdSSR - kurz vorgestellt (TV)', Osteumpa, Vol. 42, no. 10 (1992) pp. 887-907; Financial
Tunes, 20 January 1993.
1983), pp. 15-20.
32
Structure of employment. Not only economic development as expressed by macroeconomic aggregates are of importance. The general features of the economy
prevailing throughout much of Central Asia have a profound effect on the pattern of
employment as well, as is detailed in Table 12 on the structure of labour by industry
and type of employer. The effects of primarily being assigned the role of a provider
of raw materials under central planning is much in evidence. Compared with the
other economies currently in transition, Central Asia has a lower share of the labour
force engaged in industry. This may partly be attributed to the large share of mining
and the extraction of fossil fuels, which is very capital intensive but absorbs little
labour in the industrial sector of several of the countries (Table 13). Agriculture, on
the other hand, has a larger share of the labour force than is usually the case even in
centrally planned economies. Services (which here exclude wholesale and retail
trade but include public administration and utilities) make up a similar, or slightly
smaller, proportion of the labour force than is typically the case in other formerly
centrally planned economies.
Table 12
Structure of labour force by industry and type of employer (in per cent)
Azerbaijan
Industry (1987)
Agriculture
Industry
Trade & transport
Services
34
26
20
20
Type of employer (1991)
State sector
67.6
Stock companies
3.8
et. al.
Leasing, tenant
2.5
Kolchoz &
16.4
cooperative
Private (farming)
9.7
Sources:
Kazakhstan
Kyrgyzstan
Tajikistan
Turkmenistan Uzbekistan
23
31
24
22
34
27
18
21
42
21
17
20
41
21
18
20
38
24
17
21
75.5
66.0
57.6
55.7
62.4
2.6
9.0
1.6
' 2.8
1.2
4.7
0.2
0.7
1.2
3.0
8.8
4.0
15.1
14.5
16.3
20.2
26.2
17.2
17.3
16.0
Roland Gotz and Uwe Halbach, 'Die Nachfolgestaaten der UdSSR - kurz vorgestellt
(111)', Osteuropa, Vol. 42, no. 8 (1992), pp. 680-693; idem, 'Die Nachfolgestaaten der
UdSSR - kurz vorgestellt (IV)', Osteuropa, Vol. 42, no. 10 (1992), pp. 887-907.
33
The structure of employment by employing sector also shows traits characteristic
of former centrally planned economies about to embark oh the transition to a
market economy. State sector employment predominates, and the cooperative
agricultural sector is rather sizeable, even though cash crops, such as cotton, are
largely produced by state farms, that is, within the state sector. Private farming,
including pre-eminently the former private plots (land reform has barely begun43),
plays a particularly important role in Kyrgyzstan, Tajikistan, Turkmenistan and
Uzbekistan. Whether state, kolkhoz or private, agriculture obviously acts as a main
repository for otherwise redundant labour. The non-agricultural, non-state sector
has only begun to emerge, as is made evident by the table.
Table 13
Branch structure of industry in 1985 (per cent of total commercial output)
Primary industries
Electricity
Fuels
Metallurgy
Chemical, petrochemical
Machine building
Paper & wood
Construction
material
Light industry
Food industry
Other
Source:
43
Azerbaijan
Kazakhstan
Kyrgyzstan
Tajikistan
6.5
3.9
12.8
6.1
3.5
1.2
2.9
6.0
3.9
0.9
7.6
22.2
4.1
8.8
1.7
3.9
5.0
1.3
13.8
4.6
8.5
4.2
17.5
7.2
6.0
0.6
16.4
17.3
24.5
1.7
2.8
1.7
Turkmenistan Uzbekistan
4.3
24.8
0.1
5.8
3.8
4.1
4.7
5.5
15.8
1.7
3.2
6.0
4.0
4.9
6.0
5.6
20.9
27.1
16.3
18.6
28.5
30.5
47.0
19.6
39.9
13.7
39.1
17.7
0.8
0.7
0.8
0.4
0.5
0.8
Matthew Sagers, 'Regional industrial structures and economic prospects in the former
USSR', Post-Soviet Geography, Vol. 33, no. 8 (1992), pp. 503-505.
Gregory Gleason, 'Central Asia: Land reform and the ethnic factor', RFE/RL Research Report,
Vol. 2, no. 3 (15 January 1993), pp. 28-33.
34
The above structure of employment may not have been a major concern from the
point of view of employment and employment policies, had labour markets not
shown signs of segmentation along ethnical lines. As shown in Table 14, the titular
ethnic group makes up a smaller part of the labour force than it does in the total
population (as given in Table 9). While the reason for this is largely to be found in
age structure differentials among the ethnic groups of the area, it also reflects lower
levels of female labour force participation as officially recorded, especially in rural
areas. The non-titular groups are over-represented in industry and construction, that
is the sectors where the risks of unemployment accumulate as reform proceeds, as
well as in science and the predominantly urban based municipal economy. The
titular ethnic groups are over-represented in agriculture, in particular, and are more
than proportionally represented in education and government. They are overrepresented in trading, except in Kyrgyzstan. More significantly, Table 14 attests to
the educational attainment of the indigenous population (see also Table 15), the
effects of which, also after allowing for differential natural growth rates among
nationalities, are clearly detectable in the increasing numbers of the titular ethnic
group represented in most walks of life.
The extent to which the titular nationality is under-represented in the labour
force only tells part of the story. Also within the various economic sectors and branches, the labour force appears be segmented along ethnical lines. For instance,
while the labour force of manufacturing industry may appear roughly in balance, it
could well be the case that one ethnic group predominates in managerial and skilled
positions, whereas the unskilled or semi-skilled parts of the workforce are made up
by another.44 Should this be the case, it needs to be taken into account in projecting
future developments and when devising appropriate policies. The propensity to
migrate, in particular among Russians, in the wake of the breakdown of the Soviet
Union deserves special attention as they often play a key role on the labour
44
This implication can be derived from the discussion contained in Michael Paul Sacks, 'Work
force composition, patriarchy, and social change', in Robert Lewis (ed.), Geographic Perspectives on
Soviet Central Asia (London: Routledge, 1992), pp. 181-207, esp. pp. 189-192. According to Sacks (p.
190), this also gives rise to a distinctive pattern where male dominance is felt in industrial occupations
traditionally associated with female work and where '[tjhe female nonagrarian labor force of Central
Asia has a far lower proportion of indigenous ethnicity than does the male labour force.'
35
market.45 In the short run any beneficial effects on the labour market of return
migration of Russians, in the form of easing the supply pressure, is likely to be more
than offset by resulting shortages of critical skills. To remove uncertainties, policies
concerning the ethnic minorities and contigency plans in the case of large scale
migration would be desirable.
Table 14
Proportion of titular ethnic group in labour force by
economic sectors, 1977 and 1987 (in per cent)
Azerbaijan
1977 1987
Kazakhstan
1977 1987
Kyrgyzstan
1977 1987
Tajikistan
1977 1987
Turkmenistan Uzbekistan
1977 1987
1977 1987
All branches
71
78
24
33
33
41
45
54
45
59
51
61
Industry
Agriculture*
Transport &
communications
Construction
Trade
Municipal economy
Health
Education
Science
Government
58
91
69
90
13
38
21
52
15
63
25
69
35
62
48
63
34
58
53
81
38
67
53
76
66
63
75
67
69
70
58
69
74
73
78
76
20
11
21
17
25
36
17
34
28
21
29
23
38
43
25
40
28
16
23
19
32
44
20
35
35
26
34
30
46
43
27
42
45
36
52
46
33
51
23
42
57
48
61
56
50
58
31
51
40
41
47
41
48
56
35
45
48
54
65
53
62
67
48
51
44
36
63
52
52
61
31
46
55
50
66
55
64
69
39
57
77
80
60
78
* Excluding cooperative farms.
Source:
Trud v SSSR. StatistichesJdy sbomik (Moscow: Finansy i statistika, 1988), pp. 20,22-23.
The urgency, and indeed cause, of this question converges on educational and
skills levels among the population. The overall picture, as given in Table 15, indicates that important successes have been scored in this sphere over the past few
decades. As long as the basic educational system manages to cope with the rapidly
45
On the declining Russian share in the total population of Central Asia proper and Russian outmigration from the area, see, e.g., Asal' Azamova, 'Dekolonizatsiya?...', and Viktor Perevedentsev, 'Hi
36
rising absolute numbers of school entrants, prospects for further educational
improvements are good.
Table 15
Per cent of total population over the age of 10 with
more than primary education
Azeris
1959
1970
1979
1985
Source:
36.0
42.4
63.5
72.5
Kazakhs
26.8
39.0
59.2
67.8
Kyrgyz
29.9
40.0
59.0
66.6
Tajiks
29.9
39.0
56.5
64.3
Turkmens
36.3
43.0
59.7
67.7
Uzbeks
31.1
41.2
61.5
68.3
LP. Zinchenko, 'Natsionalnyy sostav naseleniya SSSR', in AA. Isupova and N A Shvartsera (eds.), Vsesoyuznaya perepis naseleniya 1979 goda. Sbomik statey (Moscow. Finansy i
stastistika, 1984), p. 160; 'Statisticheskie material/, Vestnik statistiki, 1986:7, p. 67.
Although the younger cohorts of the urban based indigenous population by and
large have reached parity with the other parts of the CIS in general secondary and
tertiary training,46 problems have been noted to arise on the secondary level. Basic
literacy and numerary can be assumed to have been taken care of by the expansion
of primary schooling, but it is the quality and scope of secondary training which will
be determining the ability of the work force to make a positive contribution to the
development of the economy. Traditionally, the Soviet-type economy has emphasised vocational training, Central Asia being no exception in this regard. However,
besides the charge that vocational and professional training has been of a substandard quality, concern has been voiced that the training has been too narrowly
focused on the needs of the profession for which training is given.47 This implies not
tsivilizovannyy iskhod?', both published in Moskovskie Novosti, 1992:41 (11 October 1992), p. 9.
46
Robert J. Kaiser, 'Social mobilization in Soviet Central Asia', in Robert Lewis (ed.), Geographic
Perspectives on Soviet Central Asia (London: Routledge, 1992), pp. 251-278, reference 254-256.
47
E.g., Lubin, Labour and Nationality,-p. 114; Gregory Gleason, 'Educating for underemployment:
37
only that occupational mobility is unduly limited, but also that flexibility and the
ability to keep up with the times may be inadvertently restricted.
Employment, technology and factor intensity. As critical to the evaluation of current
and future developments is the realisation that without properly functioning factor
markets little by way of improvements can be achieved. In the face of serious supply
side pressures on the labour market and the low level of geographical mobility, factor prices is a key instrument for adjusting the structure of the economy in accordance with relative scarcities. Up to the recent collapse of central planning, no
mechanism to achieve this end was available. With wages and costs of capital
decided by administrative fiat rather than by markets, any true reflection of relative
scarcities in factor prices on the national, regional or local level would have been
purely a chance phenomenon.
This is readily made manifest in the utilisation of factors of production. Labour,
capital and land have all been allocated in ever larger amounts to achieve ambitious
physical production targets, apparently without considering trade-offs and dividends.
As for capital investment, dispensed mainly from the all-union centre and as
expressed in per worker allocation, the record is mixed. Kazakhstan and Turkmenistan have both been favoured over much of the post-war period (displaying figures above the all-union average), while Kyrgyzstan and Tajikistan score much
below the national average, with Azerbaijan and Uzbekistan falling inbetween.
Since about 1970, however, the region has lost ground, in particular if population
growth is taken into consideration, a possible reason being the de-emphasis on large
scale agricultural projects.48 Nevertheless, investments in irrigation and the opening
of new land to cash crop production has continued apace,49 while in Central Asia
The Soviet vocational education system and its Central Asian critics', Central Asian Survey, Vol. 4, no. 1
(1985), pp. 59-81.
48
Liebowitz, 'Soviet geographical imbalances', Table 53 at p. 115. Recalculating the same data on a
per capita basis (Table 5.4, p. 115) provides the author with much the same picture, now at a lower
level The favoured position of Kazakhstan and Turkmenistan, in particular, are much eroded by the
ten-year period beginning in the mid 1970s.
49
Peter R. Craumer, 'Agricultural change, labor supply and rural out-migration in Soviet Central
Asia', in Robert Lewis (ed.), Geographic Perspectives on Soviet Central Asia (London: Routiedge, 1992),
pp. 132-180.
38
proper industrial sector activities have received less attention (except in Turkmenistan, where the opportunity of natural gas exploitation has attracted centrally
allocated investments).50
This pattern is borne out by the rather dismal record of labour absorption and
mechanisation in the primary sector. Although earlier often perceived as a Central
Asian success story,51 cotton production, which forms the backbone of agriculture in
Uzbekistan and Turkmenistan, has been expanded at high levels of direct outlays. A
two-pronged strategy of mechanisation and the expansion of irrigated cotton land
has been the predominant attributes of the effort to increase output.52 Thus, since
the late 1950s a policy of mechanisation has been pursued, with a particular emphasis on the production of cash crops, the rationale being the prospects of lower unit
costs. This has not turned out to be particularly successful, with lower unit costs only
seldom achieved and then often at the expense of quality, but the important point is
that it was done regardless of the nature of and likely future trends in local factor
endowment. An instructive example is the attempt to induce farms to employ
mechanised methods by differentiating procurement prices in favour of cotton harvested by mechanical means (despite the adverse impact this may have on the quality of the cotton). In response, it is reported, although in reality picked by manual
labour, some farms claimed that their cotton was indeed harvested by modern harvesters.53
Although labour inputs also have increased, this has been done with an eye on
plan indicators of production rather than with a view to achieve an optimal mix of
labour and capital in that production. Thus, despite the considerable expansion of
50
Ibid., p. 118.
51
E.g., by Azizur Rahman Khan and Dharam Ghai, Collective Apiculture and Rural Development in
Soviet Asia: A study prepared for the International Labour Office within the framework of the World
Employment Programme (London: Macmillan, 1979), pp. 62-64.
52 Developments in the production of other cash crops (such as tobacco in Kyrgyzstan) have essentially been variations on a similar theme.
53
Gregory Gleason, 'Marketization and migration: The politics of cotton in Central Asia', Journal
of Soviet Nationalities, Vol. 1, no. 2 (1990), pp. 66-98.
39
employment, only a trickle of the new entrants into the labour market have been
absorbed.54 The expansion of irrigated crop land mitigated any displacement of
workers that would otherwise have been necessary, but this was achieved at great
investment outlays and with little improvement of productivity. The intensification
of the use of land (i.e., increasing labour input per unit of agricultural land) might
have been a favoured strategy on the private plot, but decidedly not in state or kolkhoz agriculture. Without clear signals to the effect that labour was becoming more
abundant relative other factors of production, previously favoured strategies
designed to increase mechanisation and to boost agricultural production were continued as if little had happened.
All in all, cash crop production has been expanded by an ever increasing deployment of labour, capital as well as land, despite rapidly diminishing returns on the
margin. There is therefore considerable scope for improvements in this regard, but
above all it points to the need of establishing efficient markets for factor inputs, lest
the wrong signals will help maintain an inoptimal mix of factors of production, and
for comprehensive agricultural sector policy reviews.
d)
Conclusion: Limited room for manoeuvre
As the Central Asian countries embark on the fundamental economic and societal
restructuring that inevitably follows from the transition towards a market economy
and the breakup of the Soviet Union they face four major constraints which must
have a strong imprint on policy formulation and on the design of overall development strategies.
First and foremost, the Central Asian countries are all confronted with a rapid
growth of their labour forces. Even under the previous economic regime, they were
characterised as labour surplus regions. In contrast to the situation elsewhere in the
former Soviet Union, there was open unemployment in urban areas and widespread
underemployment in the agricultural sector. The young population structure implies
that the labour force will continue to grow at a rapid rate over the next decades
Malle, Employment Planning, pp. 37-38.
40
even if birth rates decline and overall population growth is brought under control.
Productive employment generation will inevitably be a key development issue, as
the strong supply side pressure on the labour market will not abate for a long time.
The crucial importance of the employment issues is further underscored by the
second constraints facing all the Central Asian countries, with the possible exception
of Kazakhstan, namely the high population pressure on land. The scarce and
environmentally damaged land resources imply inter alia that agriculture cannot,
even temporarily, be relied upon to serve as an employment buffer. Although there
undoubtedly is scope for increased efficiency in the utilisation of the available land
resources, incremental employment generation must inevitably be concentrated to
the non-farm sectors of the economies. This will be a major challenge in the years
ahead and will require the full attention of policy-makers and planners and needs to
be in the focus of technical assistance.
A third major constraint is the unbalanced trade structure and the large deficits
in foreign trade. Except for Kazakhstan (and possibly, within a reasonable time
horizon, Turkmenistan), none of the countries are even close to balancing their
trade with the rest of the world, at the same time as they are extremely trade
dependent. Although a shift to world market prices in trade with the rest of the former Soviet Union and a gradual shift towards increased trade with non-CIS
countries is likely to improve the overall terms of trade for most, if not all, of the
Central Asian countries, this alone is unlikely to solve the problem of the trade
deficit, at least not in the short and medium term perspective. The Central Asian
countries urgently need to focus their attention on developing their export base and
to develop new markets for their exports. In many instances this is likely to be any
up-hill struggle. Economic diversification and increased self-sufficiency is no substitute for trade, in particular as, except for Kazakhstan, all the countries register
large deficits in food production. Thus circumstances would seem to leave no option
but strong emphasis on export-oriented, employment-based development strategies.
Qualitative development and enhanced and more efficient utilisation of the
countries' human resources need therefore become key development objectives.
A fourth constraint is the precarious budgetary situation of most of the
governments concerned and, more broadly, the generally weak capacity to formulate
41
and implement policies. Loss of revenue following from a discontinuation of the
previous financial net flow from the central government to the republican administrations within the former Soviet Union and revenue losses following from the
transition process imply not only that new sources of revenue need to be developed,
but also that, at least in the near term future, policy implementation in the Central
Asian countries will be subject to severe financial constraints and will need to meet
very high requirements of cost-efficiency. In some of the countries (e.g., Turkmenistan, Kazakhstan) there would seem to exist good prospects for enhanced generation of government revenues, primarily from exploitation of natural resources,
while in others (viz. Uzbekistan and Tajikistan) no easy solutions are in sight.
42
IV.
A policy agenda
Since the Central Asian countries obtained independence in the second half of 1991
they have all opted for a policy of gradual economic liberalisation and transformation. The aim has been to strike a balance between the need for fundamental economic reform and restructuring on the one hand and theriskof increasing economic
disorder and political and social unrest on the other hand. The recent statement by
the president of Turkmenistan, Saparmurad Niyazov, that '[w]e shall maintain a
balance between the desired and the possible as we are making headway toward a
market system'55 is representative in this regard. During the first year after the collapse of the Soviet Union the main concern has inevitably been to counter and
mitigate as far as possible the economic disarray and slump in production that followed in its trail and to cope with the acute problems of nation building. As the economic links with Russia remain intimate, not least through continued membership
in the ruble zone (although Azerbaijan, Turkmenistan and Uzbekistan have taken
steps to establish their own currencies), the room for independent macro-economic
policies remain limited. Thus, the countries have inter alia had to accept that the
pace of price liberalisation has by and large been set in Moscow.
Considerable preparatory work for a privatisation of the economy has been
undertaken in all of the countries. Privatisation plans have been drafted and much
of the legislation is now in place. However, implementation will inevitable be difficult and slow. Already, fear of rampant unemployment and the economic slump is
showing signs of slowing down the often ambitious plans for marketisation of enterprises, viz. in Kyrgyzstan.56 Similarly, all the countries in the region have adopted
land reform programmes, aiming at transfering the managerial and usufruct rights,
but not necessarily the ownership, of agricultural land to the individual farm
households. However, implementation in this area, too, has so far been slow and
piecemeal. Despite attempts at liberalisation, state control over agricultural production remains large and, for example in Uzbekistan, artificially low state procurement
55
56
Ecotass, 1993:6 (25 January 1993).
Bess Brown, 'Central Asia: The first year of unexpected statehood', RFE/RL Research Report,
Vol. 2, no.l (1 January 1993), pp. 25-36; Cassandra Cavanaugh, 'Uzbekistan's long road to the market',
RFE/RL Research Report, Vol. 1, no. 29 (17 July 1992), pp. 33-38.
43
prices in the face of sharp increases in the prices of agricultural inputs have
deteriorated agricultural terms-of-trade.
Although unemployment rates are rising in all the countries and the danger of
large scale unemployment looms large on the horizon, by early 1993 it had only
assumed acute proportions in Uzbekistan, where unofficial estimates placed the
number at almost two million.57 Employment policies have so far shown a bias
towards passive policies, although the employment funds established in all the
countries, except Turkmenistan, generally have a mandate to engage in job placement and training as well as in disbursement of unemployment benefits. While the
establishment of the employment funds are a laudable step forward, this initiative
does not amount to a full-fledged employment strategy and is, by itself, inadequate
as response to the emerging employment problems.
Indeed, a main conclusion of the review of the issues and problems confronting
the Central Asian countries is that the employment aspects are of absolutely paramount importance as these newly independent countries begin to chart their course
ahead. The young population structures imply that the economies will need to
absorb large increments in the labour force on top of those who are displaced and
need alternative employment as a consequence of the transition process. At the
same time, the structure of the economies make them ill-suited to assume this task,
while poorly developed factor markets impair labour market flexibility and
spontaneous growth processes. However, rather than being seen as a development
problem, the young and growing labour forces should be taken as the main resource
for development in the design of strategies for structural change and growth. Such
employment based development strategies will need to address both the issue of
upgrading the quality of the human capital and, in particular, increasing the
efficiency in its utilisation. To this end a three-pronged approach to confronting the
employment issues facing the Central Asian countries may be identified.
The first and most important component should be to ensure an effective integration of the employment aspects into overall economic development strategies and
policies for structural change and transition to market oriented economies. This
point needs to be made with some force, as it by and large implies a break with past
Cavanaugh, 'Uzbekistan's long road', as compared to 600,000 officially registered unemployed.
44
practices and requires that policy-makers and planners are imbued with a new mode
of thinking. Furthermore, the states in these countries are weak and the temptation
to replace dogmatic belief in the plan by a similarly unquestioning belief in the
market presents a real danger, in particular as markets are for the most part not yet
in place. Irrespective of the political and economic ideology adopted, the state will
need to continue to play an active and major role in the economy in the forseeable
future and a policy of laissez-faire does not present a viable alternative to forcefully
pursued development strategies.
Restructuring the economies with a view to diversify the economic base and rectify the biases towards large scale heavy industry, and industry over services, will
have fundamental, potentially positive, employment implications. Sound macroeconomic and trade policies, the creation of an environment conducive to the development and growth of new enterprises and forceful regional policies are three broad
areas for strategies to encourage and guide the restructuring of the economies.
Policies of a more general nature need to be combined with more specifically
targeted policies, requiring an assessment of each country's comparative advantages
and clearly formulted objectives.
It may be conceptually useful to distinguish the countries that are rich in energy
and natural resources - Kazakhstan, Azerbaijan and Turkmenistan - from the other
three: Kyrgyzstan, Tadjikistan and Uzbekistan. The rich endowment with natural
resources makes the former countries attractive targets for foreign direct investments58 and hold promises of enhanced earnings of foreign exchange and of
government revenues. While such a development may provide an escape from the
current impasse, it is by itself unlikely to have any major effect on employment generation. Mining and extraction of natural resources provides neither much employment nor does it have any significant linkages effects. On the contrary, a development based on extraction and export of energy and other raw materials carries the
risk of 'Dutch disease',59 in particular as the absorptive capacities of these
58
In particular Kazakhstan has already attracted considerable attention among foreign investors;
see Ahmed Rashid, The next frontier: Kazakhstan is a magnet for energy firms', Far Eastern Economic
Review, 4 February 1993, pp. 48-50.
59
The 'Dutch disease' refers to the effects of windfall gains (e.g., from rapidly increasing exports
from a booming sector or from development assistance) on (i) the exchange rate • the national currency being appreciated - and (ii) costs of production, which tend to rise also in non-booming sectors,
45
economies are limited and factor markets function poorly. Thus, the main risk
would seem to be that successes in exploiting natural resources and in generating
foreign exchange may cloud the need for economic diversification and employmentbased growth. The second tier of countries appear less lustrous in the eyes of foreign
investers and face the starker problem of achieving economic development and
increasing employment and income generation with limited resources at hand and in
the face of tight foreign exchange and budgetary constraints.
Employment aspects also need to be incorporated in the strategy for achieving
the transition to market economies. Price liberalisation, fiscal and monetary
policies, trade policies, development of factor markets, privatisation and, not least,
de-collectivisation of agriculture, have important implications on employment and
incomes. Yet, as noted above, policies in this field in East Central Europe have typically been formulated and implemented without consideration of the employment
aspects. As late starters, the Central Asian countries can benefit from the experiences of other transition economies and need not repeat this mistake.
As a consequence of independence and the change of economic system the
government administrative apparatuses are being remolded. This provides a unique
opportunity to ensure that employment aspects are administratively integrated into
the planning process. Ideally, an employment and manpower planning unit may be
established, attached to a key ministry and with direct communication channels with
other ministries and key organisations and backed up by a small research outfit. This
would serve the purpose of concentrating scarce competence, ensure integration of
employment aspects into overall planning, break down intersectoral/ministerial barriers to communication and create national focal points for external assistance and
regional cooperation.
A system for monitoring and forecasting changes in the supply and demand for
labour and appearances of critical skills needs to be developed to remedy the current scarcity of quantitative information and in light of the volatile changes that follow in the trail of economic transition. Innovative approaches are needed to devise a
thereby effectively reducing the competitiveness of the latter. See William L. Corden and Peter Neary,
'Booming sector and de-industrialization in a small open economy*, Economic Journal, Vol. 92, no. 368
(1982), pp. 825-848.
46
system which is capable of collecting and processing information quickly and which
makes maximum use of inadequate statistical information. It should be noted in this
context that short and long term forecasting requires different approaches and that
regional aspects are important.
Apart from inadequate statistical information, the knowledge base on employment related issues remains patchy and partly out of date. Investigative studies in a
variety of areas will be required to fill information gaps and provide an adequate
base for policy formulation. In view of the inappropriate policies and untenable
development patterns in agriculture, and the large and rapidly increasing labour
force in rural areas, studies aimed at providing a basis for new agricultural strategies
and identification of avenues for increasing the labour absorptive capacity of the
rural economy deserve special priority. Other obvious topics for studies include
promotion of entrepreneurship and small scale enterprise development in general
and the employment aspects of policies for economic transition.
Mechanisms for regional cooperation and, in particular, exchange of information
need to be developed. Given the unfamiliar and experimental situation, much can
be gained from a regular exchange of information between the Central Asian
countries, but also by learning from the experiences of more advanced transition
economies in East Central Europe and from China and Vietnam. Regional cooperation would also facilitate pooling of resources, for example in research and specialised training (in particular as language barriers between most Central Asian
countries are small).
ILO is well placed to provide technical assistance and advisory services in all the •
above areas. Apart from supplementing scarce local expertise, it has a key role to
play in providing access to the vast body of experience in employment planning generated in other countries - which is neither well-known nor easily accesible to policymakers in the region - and by acting as a catalyst for international cooperation. The
latter is particularly important in view of the rather weak traditional links between
the Central Asian countries on the one hand and transition economies elsewhere on
the other hand. Advisory services are also needed to make up for the limited
domestic experiences in the formulation and implementation of employment
47
policies in a market based economic system.
The second component on the policy agenda should focus on active labour
market policies. As noted above, the initial response to the emerging problems of
unemployment in the transition economies in East Central Europe has primarily
taken the form of traditional passive labour market policies. Such an approach is.
both inadequate and unsustainable. Drastic changes in both the demand and the
supply of labour in the wake of commercialisation and marketisation of state enterprises, economic restructuring and return migration of, primarily, Russians need to
be matched by efficient labour markets and high labour mobility. Unfortunately, the
Central Asian countries have inherited a legacy of inadequate labour market institutions and low labour mobility, to which may be added ethnically segregated labour
markets. The main areas for policies include the creation of an institutional framework for efficient labour intermediation, a review of labour legislation, a shift from
administrative wage determination to a modern system of wage bargaining, and
revamping of the system for professional and vocational training (and re-training)
with a view to increase the vocational mobility of labour. The establishment of
employment funds in five of the six countries under study can be seen as constituting
an important first step in this direction. In addition, the possibility of initiating public works programmes and other direct employment creating schemes as an alternative to dispensing unemployment benefits deserves serious investigation. Such
programmes may be initiated within the frame of public investments in physical
infrastructure and should then be co-ordinated with regional and rural development
policies. Geographical decentralisation of economic activities and diversification of
the economic base in rural areas and small towns will inevitably require considerably investments in physical infrastructure.
Efficient intermediation of labour requires a network of labour exchanges/ placement bureaus. Under the old system most hirings were done directly by the enterprises.60 In the 1970s a network of job placement bureaus were established
60
In the whole Soviet Union the percentage of hirings done directly by the enterprises fell from 79
per cent in 1971 to 62 per cent in 1981 (Malle, Employment Planning, p. 62). By 1991, an estimated 43
million individuals, or 22 per cent out of a total of 19.5 million jobs allocated, found work with the help
of employment bureaus, according to Aleksandr Shokhin, 'Labour market regulation in the USSR',
Communist Economies and Economic Transformation, Vol. 3, no. 4 (1991), pp. 499-509, at p. 500.
48
throughout the country in response to perceived increasing labour shortages.
However, the main objective of these bureaus was to mobilise labour in an overall
environment of labour shortage rather than to serve as institutions for genuine
labour intermediation.61 Thus, this network (which has offices in all larger cities)
will need to be given a different mandate and will also require assistance to assume
the task of promoting labour mobility and providing intermediation between
employers and job seekers in a market environment. Ideally, they should also be
redesigned to play an additional role as collection points of labour market information; such as changes in the supply and demand for specific skills, wage levels and
the development of shortages of critical skills.
Major revisions of the educational and training systems are likely to be required.
The Soviet educational system needs to be reviewed to determine to what extent it
is still appropriate and what changes are needed. The qualitative aspects deserve
particular attention in view of the widespread critisism, particularly with regard to
rural education. The system for vocational and skills training need to be revamped.
It would appear that it never functioned very well in the first place62 and the change
of economic system will render it partly obsolete. An overhaul of the training system
should be undertaken against the backdrop of the changes in the economic structure
and would inter alia result in a much stronger emphasis on training in entrepreneurship and rudimentary business administration as a complement to skills training.
Channels of communication need also be developed between the central agency
responsible for employment and manpower planning and the training institutes. In
addition to traditional training, it may be expected that there will be a considerable
need for short term retraining of skilled labour, and of upgrading of skill levels
among adults.
The existing labour and wage legislation is both inadequate and largely
inappropriate to meet the needs of a pluralistic market economy. As already noted
the old system of administrative wage determination needs to be replaced by a
modern system of wage bargaining. A careful balance needs to be struck between
61
62
Malle, Employment Planning, p. 68.
See for example Gleason, 'Educating for underemployment', and Yevgeni Antosenkov, 'A new
employment concept in Soviet labour legislation', in Guy Standing (ed.), In Search of Flexibility: The
new Soviet labour market (Geneva: ILO, 1991), pp. 63-79, especially pp. 73-78.
49
the need for a flexible and market based wage system, which is essential for the
establishment of an efficient labour market, and equity aspects. Thus, the guiding
principle should be to foster direct links between the supply and demand for labour
and wage levels, at the same time as certain safeguards are established for the
weaker segments of the labour force and outright exploitatory practices are
prevented.
As all the Central Asian countries face the same need to revise the legislative
framework and the system of wage determination, and as there is considerable prior
experience from other countries, this is an obvious area for technical assistance and
regional cooperation. Indeed, these are all traditional areas for ILO technical
assistance and advisory services, but they are essentially uncharted territories for the
new to the governments in the Central Asian countries. Much can be learnt by the
experiences of others in these fields and by pooling and drawing on the experiences
of other transition economies large synergy effects can be gained and the quality of
the assistance provided enhanced.
Lastly, as a third component, a social security net needs to be developed to fill
the void left behind by the defunct centrally planned economic system. Poverty
levels in most of the Central Asian countries were alarmingly high already prior to
independence and the situation has worsened over the past few years. Budgetary
constraints impose severe limitations on the comprehensiveness and level of ambition of social security schemes. The main task must therefore be to devise costefficient schemes that are well-targeted on those in greatest need of assistance and
to ensure that the schemes are financially sustainable. Not least the trial and error
approach adopted by several of the formerly socialist countries in East Central
Europe highlight the gains that can be made from learning from the experiences of
others in this field.
LABOUR MARKET ANALYSIS AND EMPLOYMENT PLANNING
Working Papers
WP. 1
Labour markets, labour processes and economic development: Some research issues
by Gerry Rodgers. September 1985
WP.2
The work experience programme in Ireland
by Richard Breen, March 1986
WP.3
Labour flexibility: Towards a research agenda
by Guy Standing, April 1986
WP.4
Quantitive techniques for employment planning:
supply
by Stan Stavenuiter, June 1986
WP.5
Socio-economic analysis and planning within a social accounting framework
by Jan Vandemoortele, June 1986
WP.6
A model for short term economic policy, employment and incomes - Peru, 1983
by Norberto E. Garcia, June 1986
WP.7
Manpower planning and employment issues in developing countries
by Rashid Amjad and Christopher Colclough, June 1986
WP.8
Studies on labour market modelling and employment planning in Central America
by Ricardo Infante and Guillermo Garcia-Huidobro. June 1986
WP.9
Aspects of governmental job creation efforts in Western Europe and North America
by Robinson G. Hollister, Jr., September 1986
WP. 10
Some techniques for regionalised long-term planning of the size and structure of
employment in Yugoslavia
by Bojan Popovic, December 1985
WP.ll
MACBETH:
A model for forecasting population, education, manpower,
employment, underemployment and unemployment
by Michael Hopkins. Luis Crouch and Scott Moreland. September 1986
WP.12
Developments in the analysis and planning of labour and manpower
by S.I. Cohen. September 1986 '
V : .13
Vulnerable groups in urban labour processes
by Guy Standing, May 1987
WP.14
Flexibility and American labour markets: The evidence and implications
by Richard Belous. June 1987
WP. 15
Employment trends in the United States
by Ronald E. Kutscher. July 1987
Applications to labour surplus
.16
Working time reductions as an employment generating tool: A survey
by Roberto Zachmann, July 1987
WP.17
The dark side of labour market "flexibility": Falling wages and growing income
inequality in America
by Bennett Harrison and Barry Bluestone. October 1987
WP.18
Rural-urban income trends in sub-Saharan Africa
by Vali Jamal and John Weeks. November 1987
WP.19
Le Bilan des contrats Emploi-formation en France, 1975-1985
par Marie-Laurence Caspar, octobre 1987
WP.20
The experience with youth employment programmes in the United States
by Professor Robinson G. Hollister, Jr., March 1988
WP.21
Youth employment and institutional arrangements in Australia
by Robert Kyloh. May 1988
WP.22
Good jobs or bad jobs: What does the US evidence say?
by Gary W. Loveman and Chris Tilly, June 1988
WP.23
European unemployment, insecurity and flexibility:
(updated version)
by Guy Standing, April 1989
WP.24
Flexibility in the Bombay labour market
by L.K. Deshpande, August 1988
WP.25
The informalisation of employment: Child labour in urban industries of India
by Neera Burra. August 1988
WP.26
Manpower requirements models: A synthesis
by Berhanu Abegaz, September 1988
WP.27
African public sector retrenchment: An analytical survey
by Paul Collier. November 1988
WP.28
Partage des profits et marche" du travail en France
par Daniel Vaughan-Whitehead. avril 1989
WP.29
An overview and comparative, analysis of special employment programmes in
developed and developing countries
by David H. Freedman, April 1989
WP.30
Work organisation and local lab. .ir markets in an era of flexible production
by Michael Storper and Allen J. icott. June 1989
WP.31
Global feminisation through flexible labour
by Guy Standing, June 1989
WP.32
Urban labour markets in India
bv Swapna Mukhopadhyay. June 1989
v_
A social dividend solution
.33
How can the manpower planning debate be resolved?
by Christopher Golclough, July 1989
WP.34
Umemployment and labour segmentation, the growing challenges of the Italian model
by Loretta de Luca, October 1989
WP.35
The growth of external labour flexibility in a nascent NIC: The Malaysian Labour
Flexibility Survey (MLFS)
by Guy Standing, November 1989
WP.36
Conditions of labour in the small-scale and unorganised sectors in Calcutta and its
neighbourhood
by Robin Mukherjee, January 1990
WP.37
An analysis of the Australian consensual incomes policy: The prices and incomes
accord
by Bruce J. Chapman and Fred Gruen, May 1990
WP.38
Self-employment in industrialised market economy countries
by F. J. Bayliss, May 1990
WP.39
Urban self-employment in Hungary
by L. HtSthy, May 1990
WP.40
Crisis management in employment planning: The Indonesian case
by Martin Godfrey, June 1990
WP.41
L'auto-emploi urbain en Algfrie
par Chantal Bernard, juillet 1990
WP.42
Self-employment in Ecuador and Mexico
by Gilda Farrell. July 1990
WP.43
Urban self-employment in Senegal
by Harold LubelL July 1990
WP.44
Labour surplus and labour shortage in the USSR
by Vladimir G. Kostakov. August 1990
WP.45
The promotion of self-employment and small-scale enterprises in urban Kenya: A
case study
by William J. House. Gerrishon K. Ikiaraand Dorothy McCormick, September 1990
WP.46
Economic adjustment, pay structure and the problem of incentives in Eastern
European countries
by Gyorgy Szirdczki, December 1990
WP.47
Do unions impede or accelerate structural adjustment? Industrial versus company
unions in an industrialising-labour market
by Guy Standing, December 1990
WP.48
The distinctive pattern of non-agricultural self-employment in Italy
by Aureio Parisotto. April 1991
WP.49
Employment and retrenchment in the public sector
by Iqbal Ahmed, April 1991
WP.50
Structural adjustment and retrenchment in the civil service: The case of Tanzania
by Ian Mamuya, April 1991
WP.51
Retrenchment and redeployment in the public sector of the Nigerian Economy
by Olanrewaju J. Fapohunda, April 1991
WP.52
The labour impact of technological change in a developing country: An empirical
approach
by Guy Standing, 1991
VVP.53
The effects of government policies on the incentives to invest, enterprise behaviour
and employment: A study of Mexico's economic reforms in the eighties
by Jaime Ros
WP.54
The Romanian wage system in the transition to a market economy
by Catalin Zamfir
WP.55
The labour market, social policy and industrial relations in the Soviet Union under
transition
by Alexander Samorodov, April 1992
WP.56
Recent trends in labour force participation of older persons
by Robert L. Clark and Richard Anker, May 1992
WP.57
Effects of government policies on the incentive to invest, enterprise behaviour and
employment: Case study of Vietnam
by David H.D. Truong and Carolyn L. Gates
WP.58
Youth employment and remedial programmes in Jamaica:
assessment
by Pauline Knight. June 1992
WP.59
External labour flexibility in Filippino industry
by James Windell and Guy Standing, July 1992
WP.60
Cumulative disadvantage? Women industrial workers in Malaysia and the Philippines
by Guy Standing, July 1992
WP.61
Employment and economic transtbrmation in Central Asia
by Per Ronnas and Orjan Sjoberg, December 1993
WP.62
The impact of employment restructuring on disadvantaged groups in Bulgaria and
Hungary
by Gyorgy Sziraczki and James Windell, January 1993
WP.63
Employment Dynamics in Bulgarian Industry
by Guy Standing, Gyorgy Sziraczki and James Windell, August 1993
An economy-wide
WP.64
Recruitment and the Role of Employment Services in Bulgarian Industry
by Guy Standing, Gyorgy Sziraczki and James Windell, August 1993
WEP Research Working Papers are preliminary documents circulated to stimulate discussion and
critical comment. A set of selected WEP Research Working Papers, completed by annual
supplements, is available in microfiche form for sale to the public: orders should be sent to ILO
Publications, International Labour Office. CH-1211 Geneva 22. Switzerland.
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