The World Bank Risks Dirtying Its Hands in Uzbekistan

In Uzbekistan, when summer turns to fall, the government forces more than a million of its citizens to drop what they are doing and pick cotton, according to independent monitors.

The government maximizes profits by forcing farmers to meet production quotas and sell cotton--Uzbekistan's "white gold"--at artificially-low prices. Government-supplied forced labor is the grease that keeps the system going because the government buys the cotton at such a low price that farmers cannot possibly make a profit if they have to pay market rates for labor. Meanwhile, the government's cotton monopoly yields hundreds of millions of dollars in profits that are directed into an off-budget slush fund that senior officials use to buy whatever they wish. By approving three new loans to Uzbekistan on June 12 the World Bank has risked having the grease of forced labor dirty its own reputation.

The Uzbek authorities have reacted to international pressure over the past two years by ending the mass mobilization of children younger than 15 and allowing the International Labor Organization to monitor last year's cotton harvest. But Tashkent has not taken any steps to begin to dismantle the forced labor system. While younger children are no longer forced to pick cotton, larger numbers of older children and adults are being mobilized in their place. And since employers usually rotate their employees in and out of the fields for a few weeks at a time, more people may actually be serving as forced labor today than two years ago.

The World Bank recognizes the problem. Its own Inspection Panel published a reportlast year indicating that there was a "plausible link" between an existing Bank agricultural sector project and forced labor. Nevertheless, the Bank's Board of Directors decided on June 12 to move ahead with new projects on irrigation and horticulture before demanding that the Uzbek authorities take concrete steps to dismantle the forced labor system. Simultaneously, the Board approved a loan for work to improve pre-primary and secondary education even though high school students, teachers, and school staff are still shipped en masse to the fields each fall to pick cotton while younger students who are no longer mobilized are often double shifted or forced into combined classes because so many of their teachers are working in the fields.

The Bank admits that forced labor is a serious threat to these projects and, to its credit, is taking a number of unprecedented steps to try to avoid contamination with the forced labor system. These include a covenant in the irrigation loan agreement under which the Uzbek authorities pledge that throughout the project area they will abide by their own labor laws (!) banning the use of forced labor. But given that more than one-third of the land in the project area is currently planted in cotton that will be a neat trick. There is simply no way a farmer can afford to raise cotton and pay market rates for labor.

The Bank will also employ an independent third-party monitor. If that monitor or Uzbek activists who monitor the harvest (at considerable risk of harassment or arrest) turn up evidence of forced labor, it will be incumbent on the Bank to revoke the loan agreements and demand the Uzbek authorities return any funds already disbursed. This would be a clear measure of the extent to which the World Bank's new social consciousness is for real.

Jeff Goldstein is the senior policy analyst for Eurasia at the Open Society Foundations. Based in Washington, D.C., he is responsible for providing advocacy support for the organization’s programs in the former Soviet Union and Mongolia.