The cotton industry in Uzbekistan, Tajikistan and Turkmenistan contributes to political repression, economic stagnation, widespread poverty and environmental degradation. Without structural reform in the industry, it will be extremely difficult to improve economic development, tackle poverty and social deprivation, and promote political liberalisation in the region. If those states, Western governments and international financial institutions (IFIs) do not do more to encourage a new approach to cotton, the pool of disaffected young men susceptible to extremist ideology will grow with potentially grave consequences for regional stability.

The economics of Central Asian cotton are simple and exploitative. Millions of the rural poor work for little or no reward growing and harvesting the crop. The considerable profits go either to the state or small elites with powerful political ties. Forced and child labour and other abuses are common.

This system can only work in an unreformed economy with little scope for competition, massive state intervention, uncertain or absent land ownership, and very limited rule of law. Given the benefits they enjoy, there is little incentive for powerful vested interests to engage in serious structural economic reform, which could undermine their lucrative business as well as eventually threaten their political power.

This system is only sustainable under conditions of political repression, which can be used to mobilise workers at less than market cost. Uzbekistan and Turkmenistan are among the world's most repressive states, with no free elections. Opposition activists and human rights defenders are subject to persecution. The lack of a free media allows many abuses to go unreported. Unelected local governments are usually complicit in abuses, since they have little or no accountability to the population. Cotton producers have an interest in continuing these corrupt and non-democratic regimes.

The industry relies on cheap labour. Schoolchildren are still regularly required to spend up to two months in the cotton fields in Uzbekistan. Despite official denials, child labour is still in use in Tajikistan and Turkmenistan. Students in all three countries must miss their classes to pick cotton. Little attention is paid to the conditions in which children and students work. Every year some fall ill or die.

Women do much of the hard manual labour in cotton fields, and reap almost none of the benefits. Cash wages are minimal, and often paid late or not at all. In most cotton-producing areas, growers are among the poorest elements in society. Not surprisingly, young men do everything to escape the cotton farms, forming a wave of migrants both to the cities and out of the region.

The environmental costs of the monoculture have been devastating. The depletion of the Aral Sea is the result of intensive irrigation to fuel cotton production. The region around the sea has appalling public health and ecological problems. Even further upstream, increased salinisation and desertification of land have a major impact on the environment. Disputes over water usage cause tension among Central Asian states.

Reforming the cotton sector is not easy. Structural change could encourage the growth of an industry that benefits rural farmers and the state equally but economic and political elites have resisted. Land reform has been blocked in Uzbekistan and Turkmenistan and has moved too slowly in Tajikistan. Farmers still have no permanent ownership of the lands they work and no real say in the choice of crops they wish to grow or to whom they sell their produce.

Central Asian cotton is traded internationally by major European and U.S. corporations; its production is financed by Western banks, and the final product ends up in well-known clothes outlets in Western countries. But neither the international cotton trading companies nor the clothing manufacturers pay much attention to the conditions in which the cotton is produced. Nor have international organisations or IFIs done much to address the abuses. U.S. and EU subsidy regimes for their own farmers make long-term change more difficult by depressing world prices.

The cotton monoculture is more destructive to Central Asia's future than the tons of heroin that regularly transit the region. Although the international community has invested millions of dollars in counter-narcotics programs, very little has been done to counteract the negative impact of the cotton industry. Changing the business of Central Asian cotton will take time, but a real reform of this sector of the economy would provide more hope for the stability of this strategic region than almost anything else the international community could offer.

Bishkek/Brussels, 28 February 2005