POVERTY: Uzbek growth fanfare masks poverty, disquiet

TASHKENT, May 14 (Reuters) - Uzbekistan powered through the global economic crisis, kept inflation in check and is enticing foreign companies with a $50 billion investment bonanza.
But Said, like many in Tashkent, places no faith in this government data.
He says the only way he can make a living since the state stole his thriving retail business is to drive a taxi along the capital's leafy boulevards, past stores selling Western fashions he cannot afford.
"This looks like heaven," he says. "But it feels like hell."
The economy of Central Asia's most populous nation is wilting behind the facade. Banks are often empty when pensioners try to withdraw cash. Factories have closed and doctors at one Tashkent hospital say they haven't been paid for five months. President Islam Karimov tolerates no dissent in Uzbekistan, a landlocked ex-Soviet country lying on gas reserves coveted by Asia's powerhouse economies and a transit route crucial to U.S. military operations in neighbouring Afghanistan.
Karimov, 72, has ruled Uzbekistan for nearly two decades. There is no opposition party and the absence of any obvious successor breeds rumour and fear among the 28 million population.
"His frame of reference is the Soviet Union and he doesn't want to become another Gorbachev," said one foreign diplomat, referring to reforms introduced in the 1980s by Kremlin chief Mikhail Gorbachev that preceded the Soviet Union's collapse.
The government argues its command-style economy has shielded Uzbekistan from the global financial crisis. Gross domestic product grew by 8.1 percent last year and is set to expand by 8.5 percent in 2010, while inflation has hovered between 6 percent and 8 percent in each of the last five years.
Uzbekistan's economy operates on at least two levels, however. The layman's formula for calculating economic progress is to double the official inflation rate and halve GDP growth.
A quarter of the population lives below the poverty line. The Asian Development Bank estimates almost 60 percent of those employed live on less than $1.25 a day, a rate surpassed among the bank's members by only Nepal and East Timor.
http://www.reuters.com/article/idUSLDE64619M20100514?type=marketsNews