SOCIAL STRATIFICATION AND FORMATION OF MIDDLE CLASS IN UZBEKISTAN

Ali ZHURAEV


Ali Zhuraev, Expert, the Palitra Center (Bukhara, Uzbekistan)


It was primitive society that experienced social tension and social upheavals in the period when social and economic stratification was first felt and resulted in the appearance of classes. After that, there has always been the so-called middle class, a social resonator and stabilizer, sandwiched between the upper class (small at all times, not more than 1 to 3 percent) and the numerous lower class (85 to 90 percent). According to certain assessments, the share of the middle class in the GDP of Western countries has reached 40 percent. In the ancient Asian despotic states the middle class consisted of bureaucrats, the share of which reached 20 percent of the total population strength.1

There is no doubt that the middle class is a serious cushioning factor in the society where the propertied classes and the have-nots stand opposed to each other. In the period of market development stratification intensified: the countries that had failed to acquire the middle class on time and on a scale necessary to quench political contradictions slid into an abyss of social cataclysms. Fascist Italy and Nazi Germany in the 1920s-1930s, militarist Japan in the 1940s, the Soviet Union between the 1920s and the 1980s, Spain under Franco in the 1950s-1970s, etc. serve as good examples of the above. On the other hand, the United States, Great Britain, France, the Netherlands, Sweden and other countries managed to create the middle class and enjoyed social calm for many decades in the last century. Their contradictions were never resolved in revolutions, social tension, dictatorship, and military coups.

What Is Middle Class?

There is an opinion that the middle class, as we know it today, appeared in the early twentieth century as a result of new forms of organization of labor (mass-scale conveyor line production) and the mass consumption society based on them. French industrialist Henri Fayol, American engineer Harrington Emerson, inventor Frederick Taylor, and naturally, Henry Ford, with whose name the emergence of the middle class is mainly associated, supplied theoretical substantiation of this social phenomenon and formed it as a class.

Today, the middle class is understood as a social stratum (irrespective of its professional or clan affiliation and attitude to the means of production) that earns enough money in an official way through legal investments and personal labor and that has high moral principles. This helps it to survive as a social structure amid economic difficulties and maintain social and political stability. For this reason the criminal community that is rich enough cannot be counted as part of the middle class.

The middle class has many functions in society, yet the key ones are economic, political, and social functions.

Its economic role has many aspects: alleviation of unemployment by creating new jobs; painless or not very painful transfer of labor resources from one economic sector, branch, enterprise to other employment spheres, such as small and medium-sized businesses; providing for even distribution of production of commodities and services, and an adequate demand on them, which contributes to overcoming economic crises of overproduction, inflation, and stagflation; declaration of their personal incomes and savings in full thus supporting state budgets and creating a steady inflow of taxes from enterprises, firms, and companies that belong to the middle class; active support of stock exchange by investments in state bonds, insurance and pension funds and production; administration and management of production and society; development of high technologies and know-how; and building up a society of the services sphere (the post-industrial phase).

These aspects are present in many European countries. The situation is different in the CIS countries, and in Uzbekistan in particular where the corresponding trend is just being formed.

In the political sphere the middle class is actively involved in state administration and in elections, it helps develop civil and democratic society. In the post-Soviet countries the middle class is politically infantile, which allows corrupted people penetrate the top echelons of power.

The social role of the middle class is very important: it prevents demographic upheavals through family planning and upgrades the human capital, which means that parents feel more responsible for their children. The middle class helps preserve the cultural and historical heritage, societys image, traditions, mentality, and art. Its members strive to get good education that would strengthen the status of the middle class as a whole.

What are the criteria of the middle class and what place does it have in the multilayered society? I have combined many ideas to outline certain criteria on the family, rather than individual basis: in many countries consumption is calculated according to family-related figures. What is meant is: spending on consumer goods and services bought in shops, markets, and through unorganized trade, spending on housing, communal services, transportation, communication, hotel accommodation, cultural, educational and health organizations, as well as commodities and services in kind, that is, produced for personal consumption (farm product from personal landed plots, conventionally paid services for living in ones home) and received as wages.

I believe that the larger the share of households in total spending on the end-use of GDP, the stronger each family economically, which means that it is able to support itself and function actively (this should not be understood as self-sufficiency). In 1995, this index in Uzbekistan was 68.7 percent, while the state spent 30.5 percent on state administration; the share of non-commercial organizations expenditures on servicing households was 0.8 percent. The corresponding figures for Armenia were 90.2, 9.7, and 0.1 percent; for Azerbaijan, 86, 13.2, and 0.8 percent; Georgia, 83.2, 8.8, and 8.0 percent, Ukraine, 65.1, 27.8, and 7.1 percent.2

The Place of the Middle Class

Market economy presupposes a more varied, as compared with Soviet times, social structure. For a long time Uzbekistan was deliberately maintaining a three-layer stratification system under which a man-in-the-street found it hard to change his social status: it had little in common with his labor, professional skills, and personal services. Today, it is the material factor that allows people to move up the social ladder, therefore the gap has already become dangerously wide. The middle class alone (the share of which in Uzbekistan is estimated as 10 to 15 percent) can prevent a social explosion.

Experts have enumerated the factors that serve as a sort of litmus test that detects presence of the middle class in the social context.

Property is the first of them: its value may serve as the basis for assessing families wealth. There are different opinions about the exact figures: some experts believe that the value of property should be within the range of 20 to 50 average annual wages of one statistical worker in the most active age of 30 to 55. Others insist that this is the property accumulated in the conditions of standard capitalization of income (about 50 percent) during 40 to 100 conventional man-years of labor by one or two generations of the family. Still others offer physical units as the best criterion: a house (flat) of 25 sq m of living, or 35 sq m of total, space per family member, a car of a middle class, household appliances (electrical, electronic, heating devices, etc.), a country house, etc. There is an opinion that the value of property as a middle class criterion varies from country to country: $250 thousand in the United States, $150-300 thousand in Europe, and $50 thousand in the CIS (except Moscow which is one the worlds most expensive cities).

Table 1

Housing Space (sq m per capita)

Country

1991

1992

1993

1994

1995

1996

2000

Uzbekistan

12.2

12.4

12.4

12.7

12.8

13.0

13.2

Ukraine

18.0

18.2

18.5

18.7

19.2

19.2

19.4

Moldova

18.2

18.4

18.5

18.8

18.9

16.7

17.0

Georgia

18.4

19.2

19.1

12.7

17.7

17.9

18.1

Privatization of state-, municipal-owned housing and apartment blocks that belonged to departments and enterprises conducted in 1992 made over 1 million people property owners. Many of them have other property that brings in an income (cars, buildings of cafes, offices, hotels, swimming pools, farms, industrial and agricultural enterprises, small workshops, etc.). The owners are obviously not poor, especially when their property is turned into money. There are families in Uzbekistan (about 1 to 3 percent of the total) that do not look at private cars, houses, country houses or trips abroad as pinnacle of happiness.

The very presence of property urges the middle class to preserve political stability: at all times it has been working toward a stronger social system immune to social upheavals.

Income is another important criterion. One or two members of the family should have a constant and legal source of income to support a family of 5 to 7. This means current consumption and savings (from 7 to 15 minimal wages). An official income enough to ensure an average standard of living can devalue illegal incomes and, therefore, reduce crime.

In 1996 in Uzbekistan people got money from the following sources: wages, 59.4 percent; pensions, 11.1 percent; stipends, 0.6 percent; allowances, 1.8 percent; selling of farm products, 11.3 percent. The corresponding figures for Russia were: 75.7, 10.8, 0.2, 3.2, 2.3 percent; for Ukraine: 66.5, 7.8, 0.1, 0, 9.1 percent; for Kyrgyzstan: 50.9, 8.1, 0.1, 1.9, 29.3 percent.

Spending is the third, seemingly less important, criterion, yet it gives a picture of the familys well-being. So far, experts have failed to agree on a single approach to measuring spendings of the middle classthey have agreed, however, that they should be 70 to 80 times higher than the subsistence level. Some experts believe that the middle class spends 70 percent of its income on nonfood items and services; others are convinced that 65 percent are spent on services while still others think that the family spends two-thirds of its income on food.

The fourth criterion is related to the sphere of employment: the middle class has and uses its profound knowledge and high professional skill in the fields of high technology and related spheres. Educated people have stable world outlook, analytical thinking and are presupposed to try to understand the social processes around them.

This is very typical of the developed countries and less typical of the countries with transition economies. In the CIS countries, for example, academics, teachers, doctors, and engineers have found themselves in a social structure in which their situation is much worse than that of people with lower qualifications (shop assistants, servicing staff in the nonproductive sphere, etc.). As a result, the middle class is losing the desire to upgrade its qualification while its younger members see no reason to receive good education, knowledge and be trained as engineers.

Rights are the fifth criterion. According to Igor Berezin, the adults in a middle class family should belong to the social layer that enjoys full rights and comprises the basis of the electorate. It is the middle class that elects deputies to regional and higher bodies of power who are expected to pass socially important laws. In this way the state ensures its citizens rights to personal safety, to the safety of their private property and homes, protects the secrecy of talks and noninterference in private lives and the right to self-defense. The family, in its turn, abides by the laws and the rules of the game formulated by the state. In this way, their consolidated efforts are the reckoning point in stabilizing social and political life.

Mentality and the nations moral values are the sixth criterion. There is a proverb When in Rome do as Romans do which means that the family is inevitably part of society and an active participant in all developments. It has to abide by all moral and behavior norms and support the centuries-old values and those traditions that do not infringe on the rights and freedoms of others and do not contradict the family members freedom of conscience and principles.

The above is not a complete set of criteria to be applied to the middle class. Each society, country and civilization has created its own initial economic and social conditions in which this class can survive and function.

The Middle Class in Uzbekistan

According to the 1996 figures, the social measures taken by the Uzbek government prevented sharp social stratification: the ratio between the incomes of the richest 10 percent and the poorest 10 percent dropped from 9.7 to 7.8.3 It should be said in all justice that three years earlier, in 1993, the figure was 6.18 times, in 1994, 5.83 times.4

Experts explain these leaps by the complicated and contradictory nature of the transition period when the old social relations are destroyed and new ones are formed. Since late 1996 (when the second stage of reforms began) real incomes have been rising. Late in 1996, incomes in kind and monetary form created on personal land plots were over a quarter of the aggregate family incomes, businesses created another quarter of such incomes. Real incomes revived consumer demand and increased retail trade and the volume of paid services by 121 and 109.9 percent, respectively. There is a trend toward a lower share of foodstuffs in favor of nonfood items in the consumer demand structure.

In 1999 as compared with 1998 the nominal income in cash increased by 1.6 times and reached 1,515.3 billion sums (sumthe Uzbek monetary unit), a considerable increase in the countrys context. Cash expenditures and savings have risen by 1.6 times over the same period and reached the figure of 1,448.9 billion sums, which is another confirmation of the peoples material status. Together, they spent 1,293.7 billion sums to buy consumer goods and pay for servicestheir incomes being higher than expenditures by 66.4 billion sums. Experts have pointed out that in the total structure of incomes there is a recent trend toward a greater share of incomes derived from business activity. In 1999 alone the figure reached 29 percent as against 28.2 percent in 1998. There is also a trend toward a lower share of wages in the income structure: from 29.4 percent in 1998 to 28 percent in 1999.

The people spent 1,293.7 billion sums (or 85.4 percent of the total cash income) on personal consumption, 132.9 billion sums (or 8.8 percent) on taxes and other obligatory payments. People spent 19.1 billion sums (1.3 percent) on hoarding and savings in the form of bank accounts and hard currency; other expenditures reached the figure of 3.1 billion sums (or 0.2 percent). The amount of money owned by the people increased by 4.3 percent.

Experts have pointed out that in 1999 the outstripping ratio of cash incomes to the consumer price rise was 1.25. The average per capita nominal incomes in cash reached 62.1 thousand sums (1.6 times over the 1998 level). The Dzhizak and Surkhandaria regions have the lowest figures for the average per capita nominal incomes in cash.

The sociological polls conducted early in 2000 by the C-Monitor group showed that polarization remains and the gap is widening. An absolute majority of the respondents (two-thirds) believe that honest labor could not produce material affluence. The same people were convinced that the middle class was made of corrupted bureaucrats, mafiosi, and other criminals. On the other hand, independent experts placed heads of local administrations, ministries and departments who could affect the economic and social context on their territories or in their branches within the middle class. Having nothing in common with the criminal community, they could receive illegal incomes. There is a stable opinion that man-in-the-street (pensioners, students, poor and destitute), farmers and workers cannot earn enough.

Table 2

Independent Experts on Classification of the Middle Class in Uzbekistan

Who belongs to the Middle Class?

Yes

No

Undecided

Heads of mafia, corrupted bureaucrats, and criminals

89

4

7

Heads of local administrations (khokimiats) and industrial branches

76

12

12

Employees of law enforcement bodies

72

10

18

Creative workers (academics, artists, writers, etc.), engineers

35

45

20

Small and middle-sized businessmen

46

19

35

Heads of commercial structures (banks, stock exchanges, associations, large companies, and their foreign agencies)

69

2

29

Common people

9

78

23

Farmers

21

64

15

Workers

6

61

34

People in the show business

91

9

Diplomats

72

21

7

The military

41

42

17

Lower Than the Middle Class

The state where only a small part of society belongs to the middle class cannot offer social progress to its citizens and ensure their economic and military security. Absolute poverty is a latent threat and a potential detonator of social upheavals. Being aware of this, the government of Uzbekistan, in the early 1990s, invited the traditional communities (makhallias) to help deal with the problem. Their task is to alleviate social tension by helping those who need help. Surveys have shown that about 500 thousand such families (12 percent of the total number of families, or 13-15 percent of the total population) need urgent support. Each of them has the right to receive an allowance for three months (from 1.5 to 3 minimal wages). Today, about 20 percent of the total number of the needy families have already received such allowance at least once. Every new member of the family decreases the income of each of its members by 25-30 percent.5

Socialism could not create a society with equal rights for all; the gap between the rich and the poor was widening, though not noticeably. Those who stood at the helm (party functionaries, bureaucrats and clandestine businessmen who earned fortunes but could not demonstrate them) had no material cares. At the same time, the majority of the respondents said that in the 1980s they believed themselves to be well to do, that is, members of the middle class. During perestroika that revived individual labor and cooperation many people managed to earn a lot. According to the expert Galina Saidova, by the early 1990s the Gini coefficient (the income gap between the richest and the poorest) in Uzbekistan was 0.285 (an evidence of the peoples considerable material potential), while in Russia it was 0.234.6

The disintegration of the Soviet Union and the single economic expanse, hyperinflation and growing unemployment plunged the majority of the people into a very difficult situation. The transfer to the market economy made the problem of social inequality even more acute. By 1995 the level of income concentration increased by 20 percent and reached the figure 0.341.

Income differentiation between the families with different mentalities and life styles was especially noticeable: the share of poor among the European families was 20 percent and 54 percent among the non-Russian-speaking families. This was explained by the fact that the families of the autochthonous ethnic groups lived mainly in the countryside, while the European families lived in cities.

Table 3

Opinion of the Respondents of Whether They Belonged to the Middle Class (by periods, %)7

Do you believe that in the given period you belonged to the middle class? (positive answers only)

Early 1980s

Late 1980s-early 1990s

Late 1990s

Members of creative professions, and scientists and engineers

78

61

12

Workers

45

65

15

The military

58

41

24

People living in the countryside

24

61

9

It Is a Long Way to the Middle Class

It is still very hard to find anybody in the former Soviet Union absolutely satisfied with his life. Rich people may also weep but it is the poor that have to bear the brunt of the present difficulties, who have so far failed to adjust themselves to the market and new social conditions. Young people who started working in the early 1990s have already found their way in the market economy and are better adapted to the new realities. The old generation that grew in the socialist society and planned economy finds it hard to accept the new rules of the game.

The materials of investigation conducted in the middle of 1990 by the State Committee for Statistics of Uzbekistan confirmed that the shift to the market had created not only psychological but also economic problems for the people of Uzbekistan. For example, out of the total number of families polled 27.2 percent described their material situation as we can barely make both ends meet, 43.4 percent said that they can afford bare necessities, 23.2 percent said that on the whole there is enough money, 4.7 percent believed that they have nearly enough, and the meager 0.2 percent admitted that they have enough. Among the workers there were 0.4 percent who have enough moneythe figure for the cooperators was 9.1 percent. None of the white-collar workers, students, pensioners, collective farmers and others gave this answer.8

This created a lot of doubts about the future because the market relations were obviously developing. At that time 57.2 percent of respondents believed that in a year or two the material situation of their families would worsen; 8.7 percent thought that it would not change; 5.6 percent hoped that it would probably improve, while 28.1 percent were undecided.

During three years some of the Tashkent sociologists regularly returned to this question and polled 300 families in Tashkent, Termez, and Bukhara. Their figures show that the number of low-income families had increased by 1.72 times, while the number of families unable to give good education for their children, by 1.5 times.

Table 4

Life-Worsening Factors (as % of the total number of polled)

Factors

1998

1999

2000

Low income level

57

61

67

Health problems, no access to good medical services

11

18

19

Disappointment in life

8

7

7

Everyday problems

13

10

11

Fear to lose job

16

11

14

Inability to give children good education

18

20

27

Unsatisfactory conditions of life

30

36

34

Deficit of leisure

2

1

1

Bad family relations

5

5

7

Drinking problem in the family

1

1

2

Undecided

4

2

1

The middle class is in a process of formation and it will take several decades to complete. The republic needs itthe middle class should comprise not less than 30 to 40 percent of the total population strength, otherwise a possibility of social upheavals will remain high. It is expected to create normal conditions for fast economic growth. Pressure on certain social groups (such as businessmen, journalists, managers, etc.), who are members of the middle class and continue building it up, will push them to shadow economy while the time when the country acquires a social buffer will become even more distant.


1 Igor Berezin, Kratkaia istoria ekonomicheskogo razvitia, Russkaia delovaia literatura Publishers, Moscow, 1999, p. 154.

2 See: Rossia i strany SNG. Mezhgosudarstvenniy statisticheskii komitet SNG, Moscow, 1998, p. 101.

3 See: Osnovnye pokazateli sotsialno-ekonomicheskogo razvitia Respubliki Uzbekistan za 1996 god, Tashkent, 1997, p. 104.

4See: Doklad o chelovecheskom razvitii Uzbekistana. 1996, UNDP, p. 115.

5 See: Osnovnye pokazateli sotsialno-ekonomicheskogo razvitia Respubliki Uzbekistan za 1996 god, p. 95.

6 See: Ibid., p. 96.

7 Material prepared by the temporal expert group of Palitra in 2000.

8 See: Narodnoe khoziaistvo Uzbekskoi SSR, Uzbekistan, Tashkent, 1991, p. 48.


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