The Boycott on Uzbek Cotton Needs to End
It could help modernize the country’s economy.
On March 6, Uzbek President Shavkat Mirziyoyev signed a landmark decree that eliminated production quotas in the country’s cotton industry, abolishing a system that was first instituted in the 1920s under the Gosplan system of the Soviet Union. That quota system—an integral part of the Uzbek economy for nearly a century—contributed to systemic human rights violations by encouraging the use of forced labor. The Uzbek cotton harvest is the world’s largest seasonal labor mobilization, bringing more than 2 million workers to the fields to pick cotton by hand. Despite substantial recent progress in labor reforms, more than 100,000 individuals are estimated to have been forced to work in the fields last year.
Uzbekistan’s forced-labor problem is just one part of a complex legacy of the cotton harvest and its role in the country’s state-led economy. For decades, the career prospects of state officials across Uzbekistan’s districts were largely dependent on their ability to hit cotton production quotas set by the central government. Local governors would mobilize public-sector workers and university students, while also emphasizing cotton-picking as a patriotic duty. Most Uzbek families have pictures in their family albums of parents and grandparents helping to pick cotton in the fields. For many Uzbeks, there remains nostalgia about the shared experience of manual labor, but the quota system created perverse incentives and power dynamics—local officials would often force adults and even children into the fields to work unpaid. Given this long history and the scale of the rights violations, the recent steps by the Uzbek government to modernize its cotton industry represent one of the most significant labor reform efforts in the world. Today, real progress has been made, but Uzbekistan’s cotton industry has yet to draw sufficient foreign investment, in large part due to an international boycott on Uzbek cotton that remains in place. Should investment fail to materialize, it will jeopardize the privatization of the cotton industry and hurt prospects for the country’s wider reform program.
The efforts being made to restructure Uzbekistan’s cotton industry speak to the ambition of Mirziyoyev’s reforms, which have encompassed significant macroeconomic reforms such as the liberalization of the currency, fiscal reforms such as the overhaul of the tax system, political reforms such as the creation of new powers for the legislature, and social reforms such as greater protections for free speech and the media. Within this wider program, the reforms to the cotton industry have been among the most successful. The International Labour Organization (ILO), which has been providing technical assistance to support the Uzbek government’s reform efforts through initiatives funded by the European Union, the United States, and Switzerland, determined in its review of the 2019 harvest that “systematic forced labour did not occur” and that “systemic child labour is no longer used during the cotton harvest in Uzbekistan.”
These findings are borne out by data. More than 1.75 million Uzbeks were mobilized in the 2019 harvest, down from a staggering 3.4 million pickers in 2015. The decrease in the number of laborers reflects both relaxed quotas and the increased use of mechanization in the harvest. More importantly, the ILO noted a major reduction in the use of forced labor. Estimates suggest that 102,000 people were forced to partake in the harvest last year, down from 448,000 four years prior; the share of forced labor as part of the total labor force has more than halved from 14 percent to 6 percent. In the same period, the average compensation offered to laborers for each kilogram of picked cotton has seen a sevenfold increase, from 200 som ($0.02 at 2015 free market rates) to up to 1,400 som ($0.15 at 2019 rates), making this kind of work more attractive for local laborers in the country’s rural areas.
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On top of its efforts to curb forced labor practices, the Mirziyoyev government has taken a multifaceted approach in its efforts to improve the economic viability and social value of the Uzbek cotton industry. The government has not only enabled farmers to cultivate their land according to market demand, but also boosted investment in new technology to increase crop yields and productivity, including modern irrigation systems and equipment to mechanize the harvesting process. The restructuring also includes the formation of clusters that seek to create a longer value chain within the Uzbek cotton industry, developing capacities for textile and garment production, with an eye to exports. Finally, local governments have launched public education campaigns, collaborating with local activists in order to help Uzbek citizens—especially those living in rural areas—learn and exercise their rights.
While much work remains to be done in order to fully eliminate forced labor from the Uzbek cotton industry, the progress made over the past few years is significant and represents a victory for human-rights campaigners who have long pressured the government to take action on this issue. This includes the Cotton Campaign, which, since 2007, has played a central role in raising international awareness about the conditions faced by many Uzbek agricultural laborers. Additionally, more than 300 brands and retailers are currently signatories to the Uzbek Cotton Pledge, an international boycott of Uzbek-sourced cotton and textiles. These firms include Spanish fashion retailer Zara, American department store Macy’s, German sports-apparel maker Adidas, and Swedish-Dutch furniture-maker Ikea.
The scale of this boycott no doubt compelled the government towards reform. In October 2019, the leadership of the Cotton Campaign met with Sardor Umurzakov, the Uzbek minister for investments, to discuss the county’s progress in cotton labor reform—an instance of direct dialogue that would have been unthinkable just a few years ago.
While much of the pressure on the Mirziyoyev government is coming from grassroots activists, including local campaigners, there is also an important economic incentive for reform. The export of cotton and cotton-based textiles is worth about $1.3 billion dollars to the Uzbek economy each year, accounting for 15 percent of total exports. Export revenues are supposed to help fund the country’s economic modernization and diversification—a key pillar of the government’s economic program. But the state of the cotton industry has mostly deterred would-be investors, and new capital inflows are sorely needed.
This economic incentive is further buttressed by powerful geopolitical considerations. Currently, Uzbekistan is forced to sell most cotton and textile products at relatively low margins to China in addition to countries that are part of the Commonwealth of Independent States, deepening economic dependency on the bloc, which is dominated by Russia. The failure to end the international boycott on Uzbek cotton and draw in new investors could hobble the sector’s long-term development, which would in turn stymie economic development and discourage further reforms. A cautionary tale can be seen in neighboring Kazakhstan, which has lost much of the momentum for economic and political reform after a failed privatization drive burned relationships with global investors.
Uzbekistan is a key partner for the West in Central Asia. It is the most populous country and among the fastest-growing economies in the region, and both the European Union and the United States have launched new strategies in the past year that aim to support Uzbek exports. The European Union is currently negotiating a new Enhanced Partnership and Cooperation Agreement with Uzbekistan that would, among other things, help make it easier for Uzbek producers to export textiles to the EU.
Human-rights campaigners have now arrived at a crossroads, and they must decide if an end to the cotton boycott is justified in order to consolidate the gains they have made and further aid the development of a fairer and more just Uzbek economy. This will no doubt be a difficult decision to make. The boycott has been institutionalized and is central to the work of many organizations and activists. For these campaigners, the fact that the country’s forced labor practices have not yet been fully abolished makes the decision more fraught.
But in order to capitalize on the progress marked by Mirziyoyev’s reforms, multinational companies must be encouraged to resume purchases of Uzbek cotton and cotton-derived products, and, further, to invest in the modernization of the industry. The future of Uzbekistan depends on it.
Importantly, activists don’t need to end their work completely; they can play a leading role in this next phase of the country’s development by monitoring supply chains and encouraging corporate social responsibility, such as environmental management and investment in local communities, all to ensure businesses behave ethically. These efforts could be modeled on “fair trade” supply chains that have boosted supplier and consumer confidence in the coffee and cocoa industries in both Latin America and Africa.
The Uzbek government could continue to play a constructive role, too. It could encourage the transition from boycott to responsible trade by continuing its good-faith efforts to engage in honest dialogue with both local and foreign activists. It also needs to create space for third-party actors to monitor multinational corporations, which will require making it easier for foreign campaigners to establish nongovernmental organizations in the country and to engage with the ILO and local activists on the ground. Dialogue and engagement between all of the relevant actors is essential to achieving the full eradication of forced labor in Uzbekistan.
The boycott was a useful means of arriving at this point, but it is now counterproductive and only serves to limit the ability of crucial economic stakeholders from becoming more engaged in Uzbekistan’s development. The relaxation of the boycott, along with the adoption of a new, cooperative framework to protect labor rights in Uzbekistan’s cotton industry, would make clear to Uzbek policymakers and economic stakeholders that Western human-rights advocacy is not at odds with Western support for economic development. In this way, rewarding reform in Uzbekistan’s cotton industry is an opportunity to send a signal that could improve prospects for reform in Central Asia at large. At a time when civil-society and human-rights activists are increasingly using boycotts, divestment campaigns, sanctions, and other economic pressure tactics as part of their activism, it is more important than ever to recognize when to roll back economic pressure so that those same points of leverage can be used to push reforms successfully forward.
Esfandyar Batmanghelidj is the founder of the economic think tank Bourse & Bazaar. Twitter: @yarbatman