Cotton makes the world go round – from t-shirts to beach towels to face masks, it makes up the products and goods that are so much a part of our lives.
Cotton is such an important crop that it is a key part of the economies many nations and a vital component in the supply chain of some of the largest global industries like fashion supply. Apparel and fashion is an enormous industry, but it can be almost instantly disrupted by shifts in economic and foreign policy.
In January, the United States government banned imports of cotton and other raw materials from China’s autonomous region of Xinjiang. These sanctions came as a response to allegations of forced labor of the Uighur people and other ethnic and religious minorities.
Economic pressure from the U.S. targeting the Xinjiang region is particularly disruptive to the textile supply chain as nearly two-thirds of the cotton America uses to make clothes comes from that part of China.
In addition to government pressure, companies including Patagonia and H&M have cut ties with cotton suppliers in the region, claiming to prioritize human rights before the existing supply chain status quo.
Of course, forced labor remains a concern for the fashion supply chain in many other countries today as well. But, as they search for sourcing alternatives to Xinjiang in the Central Asia region, Uzbekistan deserves serious consideration.
In 2017, Uzbekistan began a series of economic, social and governmental reforms that are seeking to create a modern, market-based economy. As part of these reforms, Uzbekistan dedicated itself to eradicating the use of forced labor throughout its cotton harvest and has accomplished that goal.
As the International Labor Organization reported this year, “the systematic and systemic use of child labor and forced labor in Uzbekistan’s cotton industry has come to an end.” The ILO is not the only group to recognize this journey of monumental change, in 2019 the Economist magazine recognized Uzbekistan as “Country of the Year,” in response to these efforts to eradicate forced labor, an economic reform push which has been compared to Estonia and Poland in the early 90s.
The results of the reform effort stretch beyond just the cotton production industry. This year, Uzbekistan published the world’s first sovereign ESG report, measuring and assessing a range of sustainability issues affecting the environment, social and governance of the country. The reform effort affects the judiciary, elective representation that gives more power to the people, and social justice issues to name a few. Physical infrastructure development is burgeoning due to the economic and changes being made, while private enterprise is quickly replacing previously state-owned industries.
In nearly all cases the trend lines derived from non-financial data—provided both by the government and third-party observer—were moving in a positive direction. Few countries in the world are improving their environment for trade as rapidly or completely as Uzbekistan.
It’s this dedication to progress that should put Uzbekistan top–of–mind for those looking for an alternative source of cotton on Central Asia from Xinjiang. Just as retailers are quick to increase pressure on countries committing gross human rights violations, they should be ready to remove those measures when transformation and a commitment to transparency are demonstrated.
