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Islam Karimov

Why Nations Fail: The Origins of Power, Prosperity, and Poverty

Islam Karimov, Uzbekistan’s president after independence from the Soviet Union, built a political and economic order that concentrated power while directing valuable resources toward the ruling elite. The book’s clearest example is cotton: although farmers received only a small fraction of the world price, the government required them to grow it and recruited children to harvest it. Karimov’s rule shows how extractive institutions can make an export economy serve political power rather than broad prosperity.

From Soviet official to president

Karimov began his political career in the Communist Party of the Soviet Union and became Uzbekistan’s first secretary in 1989, as the Berlin Wall was collapsing. He then reinvented himself as a nationalist. With crucial support from the security forces, he won the country’s first presidential election in December 1991. Independence, however, did not bring the political opening or market economy that Uzbekistan was expected to develop: after taking power, Karimov cracked down on the independent opposition, whose members were imprisoned or driven into exile. The book describes a country with no free media and no permitted nongovernmental organizations.

The account links this consolidation of power to the political institutions Karimov inherited and reshaped. Communist economic arrangements had been supported by political institutions that concentrated authority in the ruling party and imposed few constraints on its exercise. The end of Soviet rule changed the state’s formal setting, but did not ensure that political power would be dispersed or that economic decisions would be made independently of the president’s interests.

Cotton quotas and compelled labor

Cotton was central to that system. It accounted for about 45 percent of Uzbekistan’s exports and had become its most important crop after independence in 1991. Under Soviet rule, farmland had been controlled by 2,048 state-owned farms. Those farms were broken up and land distributed after independence, but farmers did not gain the freedom to choose what to grow or what price to accept. Because cotton was valuable to the new government, regulations prescribed both planting and sale prices. Farmers received only a small fraction of the world-market price, with the government taking the rest; the state enforced production even though farmers would not have chosen to grow cotton at those prices. Each farmer was required to devote 35 percent of his land to cotton.

The quotas also created a practical problem: who would harvest the crop? At independence, combine harvesters picked about 40 percent of the cotton. Under the incentives Karimov’s regime created, farmers had little reason to buy or maintain such machinery. Karimov’s cheaper answer was to draw on schools. As the cotton bolls ripened in early September, just when children returned to class, he ordered local governors to send delivery quotas to schools. In 2006, schools were emptied of 2.7 million children, and teachers became labor recruiters instead of instructors.

The assignments reached into family life. Parents’ consent was not sought, and classes were suspended for the harvest. Children were given daily targets of 20 to 60 kilograms, depending on age. A child who missed the target could be reprimanded before the class the next morning; if a child stayed home, a teacher or class curator might visit and criticize the parents. The harvest lasted two months. Children assigned to nearby farms could walk or be bused to work, while those sent farther away, including children from urban areas, slept in sheds or storehouses with machinery and animals. They had no toilets or kitchens and had to bring their own lunches.

The dependence on compulsory labor extended beyond the autumn harvest. In spring, schools closed for compulsory hoeing, weeding, and transplanting. Although children were supposedly paid, the sums were negligible against the value of the crop: in 2006, when cotton cost about $1.40 per kilogram on the world market, a child received about three cents for a daily quota of 20 to 60 kilograms. The book estimates that children picked about 75 percent of the harvest. These details make the quota system’s distribution of gains plain: production and export value accrued to the state and political elite, while the burdens fell on farmers and children.

Repression and managed elections

Karimov’s control rested not only on economic rules but on political repression. After winning the 1991 election, he suppressed independent opponents; the security forces helped sustain his rule, while the absence of free media and nongovernmental organizations limited independent political activity. The book describes the crackdown as intensifying, with a particularly severe episode in 2005, when police and army forces killed possibly 750 or more demonstrators in Andijon.

He also extended his tenure through elections that offered the appearance of popular authorization without meaningful competition. A referendum extended his presidential term by five years. In 2000 he won reelection to a new seven-year term with 91.2 percent of the vote; his only opponent reportedly said he had voted for Karimov. In the 2007 election, widely regarded as fraudulent, Karimov received 88 percent. The account compares these results to Soviet elections organized under Joseph Stalin, presenting the strikingly high totals not as evidence of open political consent but as part of a system in which political control shaped the outcome.

Elite wealth and the limits on enterprise

The cotton system formed part of a broader order in which the Karimov family and former Communist cadres who reinvented themselves as the post-1989 elite acquired great wealth. The book describes Uzbekistan as deeply poor: probably one-third of its population lived in poverty, and average annual income was around $1,000. School enrollment was reported at 100 percent, but that figure sat uneasily beside schools emptied during cotton season. Literacy was high, while the regime controlled the media, banned books, and censored the Internet. The contrast is not simply between low income and formal development indicators; it is between public capacities and an economic order that restricted the ability to use them freely.

Karimov’s daughter Gulnora was expected to succeed him and managed the family’s economic interests. The account notes that the extent of those interests was difficult to establish in a secretive, untransparent country, but describes the experience of the U.S. company Interspan as illustrative. Interspan invested in tea, an agricultural crop suited to parts of Uzbekistan, and by 2005 had captured more than 30 percent of the local market. After Gulnora took an interest in the industry, Interspan’s local staff were arrested, beaten, and tortured; the company could no longer operate and withdrew by August 2006. Its assets passed into the Karimov family’s expanding tea interests, which grew from 2 percent to 67 percent of the market in a couple of years. The episode shows how political access could determine whether private enterprise survived and who gained control of a promising market.

Significance

The book uses Karimov’s Uzbekistan to challenge the idea that poverty results chiefly from leaders’ ignorance of sound economic policy. The compulsory cotton system was not presented as a mistaken response to a shortage of expertise: it served a government that valued export revenue and political control, while transferring the costs of production onto farmers and schoolchildren. Likewise, the barriers facing independent opponents, media, organizations, and businesses were not incidental flaws in an otherwise open market. They belonged to a political order in which power could determine who worked, what was produced, and who captured the returns.

Karimov’s Uzbekistan is therefore presented as a contemporary example of extractive institutions, not as a remnant outside modern history. Its combination of state-directed production, coerced labor, political repression, and elite enrichment connects the cotton fields to the structure of rule. The decisive point is not merely that the country remained poor despite valuable exports; it is that the institutions governing those exports distributed power and income in ways that helped sustain the regime, even at the expense of wider prosperity.