* Economic growth to slow as exports fall
* Decline in migrant transfers to increase rural poverty
By Olzhas Auyezov
MOSCOW, April 21 (Reuters) - Uzbekistan, Central Asia's most populous country, faces growing social tension as its migrant workers lose their jobs in crisis-hit Russia and Kazakhstan, a senior development bank official says.
Rika Ishii, who covers Uzbekistan at the European Bank for Reconstruction and Development, told Reuters she put little trust in official data that estimated last year's economic growth at 9 percent.
"The authorities acknowledge that the economy might be affected after all by the global economic crisis," she said. "They came up with some kind of policy which is basically about export promotion which I think is completely missing the point."
"However, I think this downturn, especially in Russia, will affect their export performance," said London-based Ishii.
Uzbekistan, its command-style economy insulated from global capital markets, has so far shown good economic growth.
"And that in turn will probably lead to stricter control over currency convertibility so that they can restrict imports which is actually not good for the business environment."
President Islam Karimov, who has run the nation of 27 million since Soviet times, has stuck to a centralised command economic model similar to the Soviet system and allowed only limited entrepreneurial freedom.
The West has criticised the Uzbek leader, who tolerates no political dissent, over a slow pace of reform and urged him to show more commitment to democratic change.
Largely agrarian Uzbekistan is the world's second largest cotton exporter. It also exports natural gas, gold and manufactured products including cars. The government says the average monthly wage is more than $300 a month.
Analysts and diplomats have also doubted Uzbekistan's official statistics, saying real economic growth in 2008 was likely to have been lower than the 9 percent announced by the government and the average monthly wage was closer to $150-200.
"I have lots of doubts about their data," Ishii, who forecast 2009 growth at 5 percent, said. "But I think it's impossible to adjust what they have published so we take the official statistics."
FERGHANA 'HOT SPOT'
"Another thing that they have acknowledged is the fact that there are migrant transfers because until very recently they denied that it is quite an important source of income," Ishii said.
She estimated that such transfers made up about 9 percent of Uzbekistan's gross domestic product last year and said they were particularly important for poor families living in rural areas.
Another contentious issue is water. Rural areas, especially the densely populated Ferghana valley, have suffered from water shortages due to cross a border water use row with Tajikistan.
"The region that would be affected the most is Ferghana area and that is a hot spot and that, I think, led them (government) to become more conciliatory towards Tajiks," Ishii said.
Ferghana has attracted heightened attention in the West since 2005 when troops opened fire on protesters in the Ferghana town of Andizhan, killing hundreds, according to witnesses.
Discontent has been muted since the Andizhan events in a country where human rights groups believe thousands of people are locked up in jail over their political or religious beliefs.
Ishii said the Uzbek authorities do realise the risk posed by the further decline in living standards and the return of migrants who, analysts say, number in millions.
A proper policy responce, she said, would be to give people more freedom to do business such as crossborder trade.
"Without liberalisation, I just don't see how they could go on and become, for example, more entrepreneurial and try to improve their living standards," Ishii said. "The Uzbek way is maybe to build another automobile plant or something that would employ 2,000 workers but would that be a solution?"
(Editing by Maria Golovnina)