177
uniform (the same for all users) or else differentiated (by user groups). All these
features can also be found in different variants, e.g. different tariffs can be
combined.
These design elements, which can be taken from textbooks on water management
or taxation (public fi nance), have been presented here to demonstrate that water pricing is a rather complicated issue, where a broad range of “technical” design questions have to be addressed. Apart from these design questions, which are diffi cult to
resolve (due to a lack of institutional and managerial capacity and expertise), there
is another factor that might impede the introduction of water prices: If water prices
are introduced, there will be individuals or groups in society that have to face higher
cost burdens. There are losers compared to the status quo where no water prices
exist. In many cases, these “losers” are powerful interest groups that undertake huge
political efforts to prevent the introduction of water prices or – if their introduction
as such cannot be avoided – seek to infl uence the design of the water prices in a way
that ensures they themselves are not burdened. The agricultural sector can be seen as
such a pressure group in most countries, regardless of the societal system (decentralised market-based economy or more centralised planned economy).
Having explained the key elements of “the economics of water pricing”, we now
turn to the situation in the Fergana Valley. We want to illustrate that the conditions
in the Valley do not provide the necessary basis for introducing any type of effi cient
water pricing.
12.3 Political and Institutional Obstacles
12.3.1 Protection of the Agricultural Sector
“Cotton has been a major crop in Uzbekistan at least from the time of the Russian
empire” (Abdullaev et al. 2007 , p. 112). During Soviet times, Uzbekistan became
one of the main producers and the second largest exporter of cotton in the world.
Central Asia became the “cotton basket” of the Soviet Union (see also Weinthal
2006 ; Abdullaev and Atabaeva 2012 , p. 107). The factors that made this development possible were, fi rst, the growing proportion of land under irrigation, achieved
by expanding the Fergana Valley irrigation system and securing suffi cient amounts
of water during summer periods,
1 and, second, the state order of the Soviet Union
that prescribed the planting of nearly 100 % cotton in the area (Abdullaev et al.
2007 , p. 113; Abdullaev and Atabaeva 2012 , p. 107).
After the breakdown of the Soviet Union in 1991, the former provinces became
independent states. Although the existing rules governing water allocation between
1 “The hydraulic mission has started its journey in Central Asia” (Abdullaev and Atabaeva 2012 ,
p. 104). “Hydraulic mission” means here that in Soviet times, “water professionals started to
develop their way of working, translating and adapting many unrealistic, idealistic ideas of communist party into ‘real-life’ situations” ( ibid , p. 107). At the same time “Central Asia became part
of ‘heroic’ history of irrigation engineering” ( ibid , p. 105).
12 Theory, the Market and the State: Agricultural Reforms in Uzbekistan…
uniform (the same for all users) or else differentiated (by user groups). All these
features can also be found in different variants, e.g. different tariffs can be
combined.
These design elements, which can be taken from textbooks on water management
or taxation (public fi nance), have been presented here to demonstrate that water pricing is a rather complicated issue, where a broad range of “technical” design questions have to be addressed. Apart from these design questions, which are diffi cult to
resolve (due to a lack of institutional and managerial capacity and expertise), there
is another factor that might impede the introduction of water prices: If water prices
are introduced, there will be individuals or groups in society that have to face higher
cost burdens. There are losers compared to the status quo where no water prices
exist. In many cases, these “losers” are powerful interest groups that undertake huge
political efforts to prevent the introduction of water prices or – if their introduction
as such cannot be avoided – seek to infl uence the design of the water prices in a way
that ensures they themselves are not burdened. The agricultural sector can be seen as
such a pressure group in most countries, regardless of the societal system (decentralised market-based economy or more centralised planned economy).
Having explained the key elements of “the economics of water pricing”, we now
turn to the situation in the Fergana Valley. We want to illustrate that the conditions
in the Valley do not provide the necessary basis for introducing any type of effi cient
water pricing.
12.3 Political and Institutional Obstacles
12.3.1 Protection of the Agricultural Sector
“Cotton has been a major crop in Uzbekistan at least from the time of the Russian
empire” (Abdullaev et al. 2007 , p. 112). During Soviet times, Uzbekistan became
one of the main producers and the second largest exporter of cotton in the world.
Central Asia became the “cotton basket” of the Soviet Union (see also Weinthal
2006 ; Abdullaev and Atabaeva 2012 , p. 107). The factors that made this development possible were, fi rst, the growing proportion of land under irrigation, achieved
by expanding the Fergana Valley irrigation system and securing suffi cient amounts
of water during summer periods,
1 and, second, the state order of the Soviet Union
that prescribed the planting of nearly 100 % cotton in the area (Abdullaev et al.
2007 , p. 113; Abdullaev and Atabaeva 2012 , p. 107).
After the breakdown of the Soviet Union in 1991, the former provinces became
independent states. Although the existing rules governing water allocation between
1 “The hydraulic mission has started its journey in Central Asia” (Abdullaev and Atabaeva 2012 ,
p. 104). “Hydraulic mission” means here that in Soviet times, “water professionals started to
develop their way of working, translating and adapting many unrealistic, idealistic ideas of communist party into ‘real-life’ situations” ( ibid , p. 107). At the same time “Central Asia became part
of ‘heroic’ history of irrigation engineering” ( ibid , p. 105).
12 Theory, the Market and the State: Agricultural Reforms in Uzbekistan…