Uzbekistan: Outcry at Compulsory Utility Payments

   

20-May-09

A decision to withhold part of people’s wages and pensions to pay for utilities has caused widespread anger, according to NBCentralAsia observers.

In late April and early May, there were reports that a number of public-sector organisations had started withholding 30 per cent of their employees’ wages in payment for electricity, gas, and other utilities.

Managers at these organisations explained that they were acting in accordance with regulations issued by the central bank and finance ministry back in 2001, which require electricity, gas and other utilities to be paid for by bank transfer rather than in cash.

These rules state quite explicitly that such payment transfers can only be set up with the written consent of the wage-earner.

What is happening now, however, is that money is being withheld not only for bills that are due, but also for advance payments to cover the next few months – and all without the employee being consulted.

Employees of state-run enterprises and organizations say that accountants withhold part of their salaries to pay for gas, electricity, and other utilities in the coming month.

A water company employee from Urgench in northern Uzbekistan complains that he and his wife, who works at the same company, received a much lower wage this month than before.

The company accountant told him the money withheld was being transferred to the electricity supplier in payment for the coming month.

“Every penny of our family budget has already been allocated to something,” he said. “The deductions mean we can’t buy the things we need.”

A school teacher from another northern town, Khiva, said she had not been paid her full salary for the past two months, since part of it was withheld to pay for gas, electricity, hot and cold water.

“It’s very distressing,” she said.

“The postal worker who brings me my 120,000 soms [monthly] withholds 20,000 [14 US dollars] soms for utility payments,” said a pensioner from the western city of Samarkand. “She says she won’t give me my pension if I have unpaid utility bills…. She is afraid that if I spend all the money, I won’t have anything left to cover the gas, electricity, and other utilities I will use the following month.”

NBCentralAsia observers believes the imposition of deductions stems from the recent tightening of currency controls. Faced with a cash shortage, the government appears to be trying to reduce the amount of money in circulation. (See Cash Shortage in Uzbekistan.)

A local economist says the government does not have the money to pay public service wages, pensions and benefits, and so has devised a number of solutions including paying wages via plastic cards. Arbitrary deductions of utilities payments appear to be another tactic to keep money flowing in the economy without turning into cash.

(NBCentralAsia is an IWPR-funded project to create a multilingual news analysis and comment service for Central Asia, drawing on the expertise of a broad range of political observers across the region. The project ran from August 2006 to September 2007, covering all five regional states. With new funding, the service has resumed, covering Uzbekistan and Turkmenistan.)