Not Just Another Recession
Why the Global Economy May Never Be the Same
Tajikistan and Uzbekistan are regularly listed among the world’s weak states. In 2012, Transparency International’s Corruption Perception Index ranked Uzbekistan, out of 178 countries, the fifth most corrupt in the world; Tajikistan was the 16th most corrupt. The same year, the Fund for Peace’s State Failure Index put both countries among its 50 weakest states. And, like many countries in this category, they are often described as sitting on the verge of state failure. In the 1990s, Tajikistan did collapse: a brutal civil war after the dissolution of the Soviet Union killed 50,000 Tajiks and displaced 800,000 more. Uzbekistan did not collapse. Instead, it constructed one of the largest state security apparatuses in post-Soviet Eurasia. Since then, both states have survived on their own terms, despite regular predictions of imminent collapse. It might seem like a mystery why some weak states, such as Tajikistan and Uzbekistan, hang on while others fail, but in Eurasia, the state’s ability to manage and manipulate competition over local resources to the benefit of the government and its security apparatus has been key.
In Tajikistan and Uzbekistan, the local resources in question were cash crops, such as cotton and grain. These crops constitute “immobile capital,” since they cannot be extracted, moved, or sold without government involvement; bales of cotton or loads of grain are simply too large and too heavy to harvest and sell in secret. Land-owning elites thus face a fundamental problem: how to generate and divert illicit profits from the sale of these crops into their pockets. So they have had to seek out political patrons, which in turn has promoted corruption, favoritism, and competition among them.
In Uzbekistan, cash crops reinforced state cohesion by binding local authorities to the government; the country endured the 1990s and consolidated state power through a vast patronage system tied to agriculture. By contrast, Tajikistan couldn’t rely on such patronage given its highly uneven concentration of cash crops across the country and, in resource-poor regions, local elites’ inability to find patrons in the government with whom to make mutually beneficial business deals. As a result, farm owners, factory directors, and local government officials competed with one another for a share of economic profits, which in turn undermined state security and eventually led to open revolts against government authority. Uzbekistan’s strategy of extending a share of illicit profits to local elites preserved political order in the short run. But over time, it has empowered regional pockets of rent-seeking elites who prey on local economies, erode the rule of law, and foster popular discontent. Since the civil war, Tajikistan’s regime has limited its rents to a smaller circle of elites, which exacerbated internal divisions, perpetuated instability, and even led to insurgencies against the regime. Both countries have muddled along, but precariously so.
In the final years of the Soviet Union, anti-corruption purges of political leaders in many Soviet republics threatened local elites’ access to patrons and their illicit profits. In many cases, local elites themselves were dismissed, which, in Tajikistan and Uzbekistan, radically altered long-standing patterns of how they could conduct business. In Tajikistan, regional bosses were purged, replaced by rivals from other regions, but then reinstated. The rise and reversal of their fortunes created enormous uncertainty, especially in crop-poor regions where many elites faced permanent exclusion from a state dominated by agriculture.
In the end, elite competition proved toxic and precipitated Tajikistan’s collapse, which unfolded in four distinct phases. Between May and December of 1992, during which time Emomali Rahmon became the head of state (a post he has held ever since), elites led popular revolts against the government in the resource-poor districts of Garm, Jirghatal, and Kofarnihan, which in turn sparked the formation of local pro-regime self-defense forces. That snowballed into wider violent conflict between hastily assembled militia armies led by local civil authorities. Revolts and counterrevolts spread from marginalized, crop-poor regions to resource-rich areas, pulling Tajikistan into a full-scale civil war. By the end of the war, much of Tajikistan’s economy was devastated, especially in its cotton-growing regions in the south and in its capital, Dushanbe, where much of the war was fought.
In Uzbekistan, meanwhile, President Islam Karimov, who took power in 1989 (and has held it ever since), benefited from the country’s longstanding agricultural development, since its many crop-rich regions were spread more evenly across the country. As the Soviet Union collapsed, the Karimov government moved quickly to end political purges and allowed local elites to access state rents. With fortunes to be made and access to state rents secure, elites were less likely than in Tajikistan to compete among themselves, which could have subverted state authority. Although the end of the Soviet Union brought some instability to Uzbekistan, with 42 mass violent events, elites didn’t split with the regime, state security forces didn’t fragment, and patronage and economic networks stayed in place. In other words, economic opportunities promoted cohesion among Uzbekistan’s local elites and held the country together.
THE PITFALLS OF PATRONAGE
Tajikistan’s post–civil war reconstruction and Uzbekistan’s instability in the 2000s, however, reveal the longer-term weaknesses in basing state security and regime cohesion on patronage and rents. Since Tajikistan’s civil war ended in 1997, its central government has struggled to establish its monopoly over the use of force. It has competed with criminal gangs engaged in drug smuggling; opposition rivals, who have occasionally threatened to overthrow Rahmon; Islamist groups with links to the Taliban in Afghanistan; and former civil war commanders, who have led small insurgencies, kidnapped international aid workers, and assassinated state officials.
Further, Tajik elites who expected an economic open season in return for their support for the regime have been disappointed. The government has continued to concentrate resources under its control, offering only those in cotton-growing regions the ability to join in government profit-sharing schemes. Local leaders have also seen the central government absorb more of their profits from the country’s illicit drug trafficking economy. Meanwhile, the regime focused on repression in crop-poor areas in eastern Tajikistan, which, to this day, has led to ongoing, intermittent violence between elites there and the regime. But it hasn’t reignited a civil war. President Rahmon’s government has been able to use selective economic carrots -- giving some landowners access to lucrative rents for cotton and grain -- to keep its shell of a state relatively stable since the end of the civil war, despite widespread expectations to the contrary.
In Uzbekistan, open access to rents averted state failure in the 1990s, but at the cost of severely weakening the central government. By co-opting local elites, the regime retained a monopoly on violence, but the rise of powerful local bosses undercut its ability to enforce laws on the ground in many regions. In response, in the 1990s, the Karimov regime took steps to reassert control over resource-rich regions that it had lost since the Soviet period by implementing a series of fiscal and coercive reforms. But those initiatives backfired, empowering regional elites even more. First, economic reforms centralized control over economic activity in many areas, which only strengthened the hold of many provincial governors and their cronies on local resources. Second, in its efforts to tackle corruption, the government appointed new provincial governors to oversee anticorruption campaigns, which only hardened displaced elites’ resolve to resist intrusive central government meddling. Third, the reforms empowered local prosecutors, police, and tax inspectors to monitor economic activity, including the agricultural sector, inadvertently putting more coercive powers in the hands of regional powerbrokers and giving them a new instrument with which to extract and protect valuable resources.
Karimov’s heavy-handed state security apparatus has been bound to the government through sweetheart economic deals, lining the pockets of many military and police officers. But paying for their allegiance steadily eroded the rule of law, hindered economic growth, and sparked a wave of protests in 2005 that culminated in a brief uprising in the southeastern city of Andijan. Those protests traced back to 2004, when the region’s governor, Kobiljon Obidov, who had ruled for 11 years -- the longest tenure of any governor in Uzbekistan -- was dismissed for corruption. Economically entrenched local cronies soon took to the streets in protests, which led to mass demonstrations weeks later.
Karimov’s policy of trying to co-opt authorities by allowing them to harness lucrative rents from agriculture and industry had thus created powerful, predatory, and autonomous regional powerbrokers in Andijan but also had fostered economic and social inequality and popular discontent. When tensions boiled over, the government marched in, killing as many as 750 people. The Andijan massacre provided strong evidence that building a state on the backs of rent-seeking elites could avert state failure in the short term, but it could be unsustainable in the long run.
SHARE THE WEALTH
Tajikistan and Uzbekistan are hardly the only countries to tie economic privileges and rents to state politics. The pitfalls of these measures, such as corruption and favoritism, are evident in weak states all over the world. But they aren’t the same everywhere. In countries with densely concentrated “immobile” resources such as cash crops, regimes can more easily co-opt local leaders, encouraging them to use law enforcement and security institutions to protect and promote their economic interests. But even when cooptation initially succeeds, as in Uzbekistan, it can lead to other problems down the line. In countries with sparsely concentrated resources and a lack of patrons, there is no incentive for the government to share the wealth, which fosters competition between elites and encourages those who are excluded to turn against the government. These dynamics can lead to state failure and civil war, as they did in Tajikistan.
The lessons of Tajikistan and Uzbekistan apply to other countries characterized by low capital mobility -- nearly 40 or so weak states across Asia, Africa, and Latin America in which cash crop economies have given rise to a distinct politics of rent-seeking. Like Uzbekistan, embattled regimes in Belarus, (pre-2011) Syria, and Zimbabwe have remained surprisingly durable partly because they have used their control over rents to co-opt local elites. And like Tajikistan, states such as Kyrgyzstan, Lebanon, and Somalia have rapidly fallen apart as their regimes proved unable to rein in such rivals.
How successfully these weak states can manage their resources and the interests around them directly affect their ability to preserve political order. As global commodity markets become increasingly interconnected, as climate shifts affect food production, and as populations increase, the local politics of rent-seeking in many of the world’s major cotton, cocoa, and coffee producers will increasingly determine whether they remain perpetually weak or succumb to state failure. Countries with immobile capital, therefore, are their own class of weak states, with unique challenges in how they oversee resources and dole out economic favors to keep themselves together.