This edition of the Country Economic Update is part of a semi-annual series designed to monitor recent economic developments in Uzbekistan. The report presents a broad overview of the country’s macroeconomic, social, and structural developments in 2018.
... See More + The Special Focus section discusses economic growth and job creation.
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As one of the most pivotal ways that labor markets adjust to changing economic conditions, international migration is never far from the center of the national discussion in Uzbekistan.
... See More + This paper summarizes the relationship between recent international migration trends and household well-being using a combination of administrative records and unique panel survey data from the Listening to the Citizens of Uzbekistan study. The panel design provides data on changes in well-being leading up to and following a migrants' departure. This feature enables analysis that controls for unobserved time-invariant respondent and location characteristics. The findings show that weak local labor markets drive labor migration from Uzbekistan. Beginning to consider migration is associated with low life satisfaction, job loss, and unemployment. In contrast, actually migrating is associated with a remarkable improvement in labor market outcomes, alongside strong recovery in subjective and monetary measures of household welfare. The results further show that current migrants are more likely to send remittance payments when household members have deteriorating life satisfaction and/or subjective reports of worsening economic conditions at home. In the absence of remittance income, the poverty rate in Uzbekistan (measured at $3.2/day purchasing power parity) would be expected to rise from 9.6 to 16.8 percent, or to about 12.2 percent assuming (implausibly) that all current migrants were to find formal employment at the local prevailing median wage.
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Policy Research Working Paper WPS8910 JUN 21, 2019
As one of the most pivotal ways that labor markets adjust to changing economic conditions, international migration is never far from the center of the national discussion in Uzbekistan.
... See More + This paper summarizes the relationship between recent international migration trends and household well-being using a combination of administrative records and unique panel survey data from the Listening to the Citizens of Uzbekistan study. The panel design provides data on changes in well-being leading up to and following a migrants' departure. This feature enables analysis that controls for unobserved time-invariant respondent and location characteristics. The findings show that weak local labor markets drive labor migration from Uzbekistan. Beginning to consider migration is associated with low life satisfaction, job loss, and unemployment. In contrast, actually migrating is associated with a remarkable improvement in labor market outcomes, alongside strong recovery in subjective and monetary measures of household welfare. The results further show that current migrants are more likely to send remittance payments when household members have deteriorating life satisfaction and/or subjective reports of worsening economic conditions at home. In the absence of remittance income, the poverty rate in Uzbekistan (measured at 3.2 US Dollars/day purchasing power parity) would be expected to rise from 9.6 to 16.8 percent, or to about 12.2 percent assuming (implausibly) that all current migrants were to find formal employment at the local prevailing median wage.
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Working Paper (Numbered Series) 138179 JUN 01, 2019
What is produced on farmland is critical to the agriculture sector outcomes. If other objectives, such as farm incomes, jobs, water security, were considered as important as producing more of wheat and cotton in Uzbekistan, the farmland use structure will have looked differently.
... See More + This report offers an example of more balanced allocation of farmland, which can increase agricultural production by 51 percent, employ 16 percent more people in primary agriculture, and save 11 percent water by 2030. All this can be achieved without undermining food security (for example, wheat supply) and development of textile industry. Outlooks are subject to uncertainty and the identified gains may not be necessarily realized. Yet, the benefits of more balanced farmland use are too large to be ignored for the future of agriculture development in Uzbekistan.
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What is produced on farmland is critical to the agriculture sector outcomes. If other objectives, such as farm incomes, jobs, water security, were considered as important as producing more of wheat and cotton in Uzbekistan, the farmland use structure will have looked differently.
... See More + This report offers an example of more balanced allocation of farmland, which can increase agricultural production by 51 percent, employ 16 percent more people in primary agriculture, and save 11 percent water by 2030. All this can be achieved without undermining food security (for example, wheat supply) and development of textile industry. Outlooks are subject to uncertainty and the identified gains may not be necessarily realized. Yet, the benefits of more balanced farmland use are too large to be ignored for the future of agriculture development in Uzbekistan.
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The main purpose of the 2018 public expenditure and financial accountability (PEFA) assessment is to provide the Government of Uzbekistan and its development partners with an objective up-to-date diagnostic of the national-level public financial management performance based on the latest internationally recognized PEFA methodology.
... See More + The 2018 PEFA assessment is intended to provide an update of progress in Public Finance Management (PFM) since the last PEFA in 2012, but also establish a new baseline using the 2016 PEFA methodology. This methodology identifies the seven pillars of performance that are essential for an open and orderly PFM system. These include budget reliability, transparency of public finances, management of assets and liabilities, policy-based fiscal strategy and budgeting, predictability and control in budget execution, accounting and reporting, and external scrutiny and audit. The assessment process seeks to build a shared understanding of PFM performance and those dimensions that require improvement. The results of the assessment will assist the government in monitoring the implementation of Uzbekistan’s Public Financial Management Reform Strategy to achieve long-term sustainability.
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In January 2019, Uzbekistan started a new farm restructuring1. It is said to seek to optimize the use of farmland by increasing the size of farms producing wheat and cotton, reallocating land to more efficient farmers and even clusters, and improving crop rotation options.
... See More + This is not the first time that this kind of farm restructuring in Uzbekistan takes place. The country has gone through several waves of farm restructuring and land reallocations. Both these processes were administratively managed, with little reference to market or income generation opportunities. During 1992-1997, state farms were decollectivized. During 1998-2002, farm fragmentation into small production units has started, which was completed during 2003-2008. Unsatisfied with the performance of fragmented farms, the government started farm consolidation between 2008/2009 and 2016, creating a dual system when dekhkan smallholders averaging 1 hectare (ha) and producing livestock and horticulture products coexisted with large individual farms, averaging 40-60 ha and producing cotton and wheat under the state order system. The 2019 restructuring seeks to double the size of cotton and wheat farms to the average of 100 ha.
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In January 2019, Uzbekistan started a new farm restructuring1. It is said to seek to optimize the use of farmland by increasing the size of farms producing wheat and cotton, reallocating land to more efficient farmers and even clusters, and improving crop rotation options.
... See More + This is not the first time that this kind of farm restructuring in Uzbekistan takes place. The country has gone through several waves of farm restructuring and land reallocations. Both these processes were administratively managed, with little reference to market or income generation opportunities. During 1992-1997, state farms were decollectivized. During 1998-2002, farm fragmentation into small production units has started, which was completed during 2003-2008. Unsatisfied with the performance of fragmented farms, the government started farm consolidation between 2008/2009 and 2016, creating a dual system when dekhkan smallholders averaging 1 hectare (ha) and producing livestock and horticulture products coexisted with large individual farms, averaging 40-60 ha and producing cotton and wheat under the state order system. The 2019 restructuring seeks to double the size of cotton and wheat farms to the average of 100 ha.
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This report stems from the work initiated in the Systematic Country Diagnostic (SCD) forUzbekistan in May 2016, which identified the quality of job creation as a central, cross-cuttingtheme.
... See More + The SCD emphasized that "over the medium term, creating high-productivity, high-paying jobs for Uzbekistan's growing population will be vital to sustaining economic growth, reinforcing social stability, and enabling further improvements in the welfare of households in the bottom 40 percent of the income distribution. Uzbekistan can expect to develop higher-paying jobs as it transitions from a factor-driven economy to an efficiency-driven economy." However, given data constraints, the SCD cited the need for a more detailed analysis and assessment of various dimensions of economic data, based on additional data. This report builds on the SCD and represents a further step in an ongoing strategic and analytical engagement with Uzbekistan. In this context, the report deepens the analysis of the two key factors contributing to growth in GDP per capita in Uzbekistan: growth in labor productivity and growth in employment. This new analysis was possible by applying the growth decomposition tool to new data disaggregated by sectors of the economy and new data on constraints to productivity and employment growth generated by the three enterprise surveys conducted for this report. These surveys were carried out in 2013 and 2017 in five subsectors of Uzbekistan's manufacturing sector (machinery building, chemicals and petrochemicals, light industry, food processing, and construction materials). The same questionnaire was used to survey 122 large firms in 2013, 111 large firms in 2017, and 478 small firms in 2017 across six regions of Uzbekistan. The survey data allowed a more systematic diagnostic analysis of Uzbekistan's growth challenges and the identification of the most binding constraints to jobs and productivity, which will help ensure more tailored and relevant policy advice.
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Sixteenth in a series of annual reports comparing business regulation in 190 economies, Doing Business 2019 covers 11 areas of business regulation.
... See More + Ten of these areas - starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency - are included in the ease of doing business score and ease of doing business ranking. Doing Business also measures features of labor market regulation, which is not included in these two measures. Doing Business provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. This economy profile presents indicators for Uzbekistan; for 2019 Uzbekistan ranks 76.
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Uzbekistan is a landlocked, Central Asian country that shares borders with Afghanistan, Kazakhstan, Kyrgyzstan, Tajikistan and Turkmenistan. In 2004–2016, Uzbekistan’s economic growth was rapid and lifted significant parts of the population out of poverty.
... See More + The development of small and medium-size enterprises (SMEs) was the main driver of the job growth, contributing to increased incomes and poverty reduction. Increased exports of copper, gas and gold aided by high commodity prices, generated state budget revenues that financed large increases in investment and salaries to bolster domestic consumption. However, declining global commodity prices in 2013–2016 and the weak economic performance of China and Russia adversely affected Uzbekistan’s exports, as well as state budget revenues and household incomes. Agriculture plays an important role in Uzbekistan’s economy. In 2017, 49 percent of the population, around 16 million people, resided in rural areas and most are employed in agriculture. Agriculture accounts for about 17 percent of Uzbekistan’s GDP and over 30 percent of employment in the country. Agricultural development is, therefore, crucial for ensuring rural livelihoods, jobs, and food security. This report provides an overview of the agricultural trade and trade policies in Uzbekistan with the goal of identifying key areas for further agricultural trade policy reforms. It also identifies several key products and prospective markets for export and assesses their market access potential and requirements.
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Uzbekistan is a landlocked, Central Asian country that shares borders with Afghanistan, Kazakhstan, Kyrgyzstan, Tajikistan and Turkmenistan. In 2004–2016, Uzbekistan’s economic growth was rapid and lifted significant parts of the population out of poverty.
... See More + The development of small and medium-size enterprises (SMEs) was the main driver of the job growth, contributing to increased incomes and poverty reduction. Increased exports of copper, gas and gold aided by high commodity prices, generated state budget revenues that financed large increases in investment and salaries to bolster domestic consumption. However, declining global commodity prices in 2013–2016 and the weak economic performance of China and Russia adversely affected Uzbekistan’s exports, as well as state budget revenues and household incomes. Agriculture plays an important role in Uzbekistan’s economy. In 2017, 49 percent of the population, around 16 million people, resided in rural areas and most are employed in agriculture. Agriculture accounts for about 17 percent of Uzbekistan’s GDP and over 30 percent of employment in the country. Agricultural development is, therefore, crucial for ensuring rural livelihoods, jobs, and food security. This report provides an overview of the agricultural trade and trade policies in Uzbekistan with the goal of identifying key areas for further agricultural trade policy reforms. It also identifies several key products and prospective markets for export and assesses their market access potential and requirements.
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A Renewable Energy workshop was held in Tashkent on December 5 and 6, 2017. The objective was to support the Government of Uzbekistan to scale-up renewable energy deployment through discussion of good practices in renewable energy development strategy, policy, regulations, institutional measures, modern technologies, and project preparation and implementation adopted around the world.
... See More + It informs the development of a renewable energy roadmap in Uzbekistan. The workshop was a pivotal event in recovering the Bank’s momentum with the government on the renewable energy sector and triggered additional requests for support. Day 1 of the workshop largely focused on policy and financing while day 2 was focused on technical issues with project preparation and implementation.
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Doing Business 2018 is the 15th in a series of annual reports investigating the regulations that enhance business activity and those that constrain it.
... See More + This economy profile presents the Doing Business indicators for Uzbekistan. Doing Business presents quantitative indicators on business regulation and the protection of property rights that can be compared across 190 economies; for 2018 Uzbekistan ranks 74. Doing Business measures aspects of regulation affecting 11 areas of the life of a business. Ten of these areas are included in this year's ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency. Doing Business also measures features of labor market regulation, which is not included in this year's ranking. Data in Doing Business 2018 are current as of June 1, 2017. The indicators are used to analyze economic outcomes and identify what reforms of business regulation have worked, where, and why.
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Uzbekistan is a lower middle-income country located in Central Asia with a population of 30 million people and an economy that has been growing by over 8 percent per annum since the mid-2000s.
... See More + The composition of the workforce has also changed dramatically in recent years. The higher education system is characterized by low access and concerns about the quality and relevance of the skills of its graduates. A recent regional skills study concluded that Uzbekistan is experiencing a substantial shortage of university graduates. The internal management of the higher education system is fragmented, with different actors having overlapping responsibilities, thereby making it difficult to ensure system-wide accountability. In order to enable the Uzbek higher education system to serve the economy and student population well, the quality assurance system should be compliant with global best practices while remaining locally relevant. While reported overall state budget spending on education, at around 8 percent of GDP, is one of the highest in the world, the share of this spending on tertiary education, at around 0.4 percent of GDP, is one the lowest. In summary, Uzbekistan’s higher education system needs to modernize to better adapt to needs of the country’s economy. The report, having analyzed the sector in detail, proposes measures to modernize the higher education sector in Uzbekistan.
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Due to the strong economic growth maintained in the last 15 years, Uzbekistan made progress in reducing gender inequality. At the same time, several demographic and structural challenges remain; and effectively engaging women in the economy is one of them.
... See More + While modernizing various sectors of the economy will foster progress and development, it may also result in setbacks for women, as they lack the skills and education needed to successfully adjust to a changing reality. While women constitute around 50 percent of the national population, their participation in the formal labor market is limited. Active women’s participation offers a reserved potential for further national economic growth and improved livelihoods for women in Uzbekistan. The link between women’s productive participation in the country’s economy and improved economic indicators is well documented across the world. Hence, to maintain strong economic growth, it is in Uzbekistan’s national interest to improve women’s participation in the formal economy. Not only can significant economic benefits be realized by mobilizing such latent productive potential, but it can be achieved in parallel with improving women’s capacity to make decisions about their own lives and act on them. The objective of this study is to examine how gender influences opportunities and risks in accessing livelihoods in Uzbekistan. It seeks to identify the constraints to, and opportunities for, increased socioeconomic resilience among rural women in Uzbekistan, and it has the potential to inform livelihoods programming. The study focuses on women in rural areas, as they represent a large portion of productive members of Uzbek society who are insufficiently integrated into the formal labor market. The study adopts a capability approach6 to understand the distinct aspirations, opportunities, and barriers for rural women in income-generating activities. It focuses on supply-side challenges faced by women and enablers of women’s work (e.g., low labor demand and lack of formal employment opportunities). The study is centered on the premise that a gender-inclusive approach should be an integral goal of livelihood support in Uzbekistan.
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Due to the strong economic growth maintained in the last 15 years, Uzbekistan made progress in reducing gender inequality. At the same time, several demographic and structural challenges remain; and effectively engaging women in the economy is one of them.
... See More + While modernizing various sectors of the economy will foster progress and development, it may also result in setbacks for women, as they lack the skills and education needed to successfully adjust to a changing reality. While women constitute around 50 percent of the national population, their participation in the formal labor market is limited. Active women’s participation offers a reserved potential for further national economic growth and improved livelihoods for women in Uzbekistan. The link between women’s productive participation in the country’s economy and improved economic indicators is well documented across the world. Hence, to maintain strong economic growth, it is in Uzbekistan’s national interest to improve women’s participation in the formal economy. Not only can significant economic benefits be realized by mobilizing such latent productive potential, but it can be achieved in parallel with improving women’s capacity to make decisions about their own lives and act on them. The objective of this study is to examine how gender influences opportunities and risks in accessing livelihoods in Uzbekistan. It seeks to identify the constraints to, and opportunities for, increased socioeconomic resilience among rural women in Uzbekistan, and it has the potential to inform livelihoods programming. The study focuses on women in rural areas, as they represent a large portion of productive members of Uzbek society who are insufficiently integrated into the formal labor market. The study adopts a capability approach6 to understand the distinct aspirations, opportunities, and barriers for rural women in income-generating activities. It focuses on supply-side challenges faced by women and enablers of women’s work (e.g., low labor demand and lack of formal employment opportunities). The study is centered on the premise that a gender-inclusive approach should be an integral goal of livelihood support in Uzbekistan.
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This economy profile presents the Doing Business indicators for Uzbekistan. To allow useful comparison, it also provides data for other selected economies (comparator economies) for each indicator.
... See More + Doing Business 2017 is the 14th in a series of annual reports investigating the regulations that enhance business activity and those that constrain it. Economies are ranked on their ease of doing business; for 2016 Uzbekistan ranks 87. Doing Business sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations. It measures and tracks changes in regulations affecting 11 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and labor market regulation. Doing Business 2017 presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. The indicators are used to analyze economic outcomes and identify what reforms have worked, where and why. The data in this report are current as of June 1, 2016 (except for the paying taxes indicators, which cover the period January–December 2015).
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Agriculture in Uzbekistan is almost entirely dependent on irrigation. However, despite reforms to institutional arrangements, much of Uzbekistan’s irrigation is reportedly caught in a vicious cycle of inadequate operation and maintenance, low cost recovery, and agricultural productivity that is often moderate or low; in addition, many farmers earn low incomes (World Bank, 2013).Few incentives exist to save water because farmers do not see the direct cost of water provision.This study was undertaken with the aim of contributing to better irrigation water management in Central Asia, beginning in Uzbekistan.
... See More + It identifies factors and conditions that positively affect the performance of local irrigation water management institutions. The analytical framework for this assessment is formed by the eight design principles for the management of common-pool resources developed by Ostrom (1990). These design principles are in essence factors that are associated with successful collective action in governing common-pool resources such as irrigation water, forests, and fishing areas. By determining why these principles are met in some cases and not in others, and what factors are behind this variation, the author can identify measures that promote these factors/conditions in irrigation schemes. This study was undertaken with the aim of contributing to better irrigation water management in Central Asia, beginning in Uzbekistan. It identifies factors and conditions that positively affect the performance of local irrigation water–management institutions. The study also prepared an associated diagnostic tool that will help design measures and program interventions to strengthen these institutions in ongoing or future irrigation operations. Lastly, the work intends to contribute to an exchange of good practices and knowledge sharing among relevant stakeholders across the Central Asia region.
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