What Uzbekistan Tells Us About Industrial Policy that We Did Not Know?

Abstract

This paper discusses Uzbekistan's recent experience with structural shifts and industrial policy, with a particular focus on various industry policy instruments, and its implications for the existing theories of industrial policy. In particular, two major hypotheses are discussed: (1) the hypothesis of Haussmann, Hwang and Rodrik (the more technologically sophisticated the export structure, the better for growth) and (2) the hypothesis of Justin Yifu Lin (export specialization should build on existing comparative advantages and should not jump over the necessary technological stages).

‘Backward’ industrialisation in resource-rich countries: The car industry in Uzbekistan

“…In this context, the steep increase in car production and exports in the 2004–2014 period (Figure 1) was not the result of ‘deep qualitative changes’ (CER, 2013: 36) that created a successful export-oriented industry (Popov and Chowdhury, 2016), as the developmentalists would have it. Rather, manufacturing in the industry during this decade continued in the same ‘backward’ form, growing in line with the general upward trend in ground-rent available on the Uzbek domestic market due to the Chinese-demand-led commodity supercycle.…”

“…Uzbekistan fares poorly when compared to Korea, specifically because ISI ‘is not a viable strategy for promoting long-run growth’; EOI is (Pomfret, 2005: 233). In contrast, along with the government of Uzbekistan (GoU), a minority of researchers hailed the development of ‘a competitive export-oriented auto industry from the ground up’ (Popov and Chowdhury, 2016: 5), including in terms of added value and employment, given the myriad small and medium enterprises (SMEs) producing parts and components in the growing automotive cluster (Center for Economic Research, 2013). In this view, the Uzbek car industry stands as a testimony to the success of industrial policy, as the country achieved what no other post-Soviet state did in the first decades of independence (Popov, 2013).…”

“…Olma, 2021), while developmentalists praise as a successful case of export-oriented industrialisation (e.g. Popov and Chowdhury, 2016). However, the literature appears unable to explain the reason behind Korean Daewoo Motor Company (DMC) and American General Motors (GM) entering into joint-ventures (JVs) with UzAvtoSanoat in the period under review, despite the low domestic scale (hence high costs) of automobile production in the country, which is mostly purchased domestically.…”

Successes and Failures of Industrial Policy: Lessons From Transition (Post-Communist) Economies of Europe and Asia

“…The question "What are the particular manufacturing industries which could become the engine of growth?" is a difficult one (Popov, Chowdhury, 2016). Unfortunately, economic theory does not suggest any definite clues, with the exception of the idea that these industries should have the highest externalities, i.e.…”

Саноат Сиёсати Бўйича Илмий Баҳслар: У Керакми Ўзи?

“…Бунинг натижасида саноат сиёсати яхлит илмий категория сифатида шаклланиб, уни ўрганишнинг турли йўналишлари ва оқимлари пайдо бўлди. Уларнинг ичида 2 оқимни алоҳида ажратиб кўрсатиш мумкин: мамлакатнинг қиёсий устунлигига асосланган ва уни инобатга олмайдиган [20]. Биринчи йўналиш давлат саноат сиёсатини юритишда мамлакат қиёсий устунлигини ифода этувчи тармоқларни танлаши кераклигини назарда тутса, иккинчиси технологик ривожланиш учун янги тармоқларни яратиш мумкинлигига асосланади.…”