The shortage of cash and salary delays in Uzbekistan have now started reaching the capital, Tashkent.

With April over, many working for state companies in the city are complaining they have yet to see payments for even February and March.

A teacher at a Russian school in Tashkent, Alina, told EurasiaNet.org that she last received a wage packet at the end of February.

“We complained to the headmaster, but he just said that there was no money in the bank, so we just have to wait. We don’t earn that much money — around 700,000-900,000 sum ($120-150) — and still they have the gall to delay payment,” said Alina, whose surname has been withheld. “A lecturer at the teacher training college said that they started getting their pay on their bank cards in January, but that they have seen nothing for two months. Earlier, this only used to happen out in the provinces.”

An employee with InfinBank in Tashkent told EurasiaNet.org that all available ready cash is going toward completion of roads and other infrastructure in preparation of a major summit expected later this year.

The city will be hosting a heads of state meeting of the Shanghai Cooperation Organization in June, which has prompted a rush of reparation works.

The hard cash problem is nothing new for Uzbekistan. The scale of the problem became apparent when a leaked letter written last April by the deputy head of the Central Bank and addressed to Prime Minister Shavkat Mirziyoyev revealed there were insufficient funds to cover state salaries, pensions and benefit payments. 

The letter stated that the government was 1.5 trillion sum short of the 10.9 trillion sum required to cover costs in the first quarter of 2015. As a result, employees at crucial government bodies, including the Interior Ministry, security services and army, could not be paid.

“On April 1, the banks were unable to pay 58.2 billion sum worth of pensions, as well as 53.8 billion sum in salaries to the ‘special contingent’ [ie. police, security services and military], with the exception of in Tashkent and Tashkent region,” the letter stated.

Officials have to date evidently refrained from the kind of economy that might anger rank-and-file personnel charged with upholding the leadership’s grip over power.

But now a year has passed and the cash deficit has reached the capital too.

Attempted fixes to the perennial cash problem have rarely made much headway. The government has for years tried to popularize bank cards as a way of getting Uzbekistan to evolve away from a cash economy, but to little avail.

Bank machines are few and far between in Tashkent, not to say inexistent in smaller towns and villages, and often don’t have any cash in them anyhow. Bank branches are reluctant to allow withdrawals with cards, but will if pressed pay out money in installments. 

The cash shortage has created yet another avenue for shady money-making in some banks. Savers with acquaintances working as tellers can in some cases withdraw a portion of their cash, but only on payment of a commission worth around 15-20 percent of the amount withdrawn. 

While people can pay for goods in supermarkets with their bank cards, wares there are pricier than in the bazaar as a rule. Most market traders are only equipped to take hard cash.

By way of an example, a kilo of strawberries might cost around 15,000 sum per kilogram in the supermarket, but only around 6,000 sum in the market. 
In any case, often even major electronic retail chain stores in Tashkent will refuse payment by card and demand sum or dollars instead. Some grocery stores add a surcharge for card payments, explaining it away as banking costs.

The reasons for all this are relatively straightforward. The authorities hope that by severely limiting the supply of cash in the economy, they might be able to contain inflation and assure some stability to the national currency. As a result, a cult of the dollar has emerged and major purchases for items like homes and automobiles are almost universally performed in the US currency.