Additional Financing from the World Bank: Sustaining Economic and Social Reforms in Uzbekistan

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On December 16, 2020, The World Bank’s Board of Executive Directors  approved a $500 million Development Policy Operation (DPO) , aiming to strengthen the transparency and inclusiveness of Uzbekistan’s ambitious economic and social transformation.

This  Development Policy Operation has supported  Uzbekistan’s    economic and social policy responses to the negative impacts   of the COVID-19 pandemic. It has also  maintained  the continued implementation of Uzbekistan’s 2017-2021 Development Strategy. In addition to the announcement of   large anti-crisis measures, several important reforms has also been enacted by the Government over the last year to provide the acceleration of  Uzbekistan’s transition to an open, competitive, and more inclusive market economy.

Several major reforms implemented by the Government under this Development Policy Operation include:

  • the transformation of the previously restrictive propiska (local residence permit) system into an efficient electronic residency registration process;
  •  the cancellation of state production targets and mandatory procurement of cotton;  
  • the reduction of subsidized state bank lending to state-owned enterprises (SOEs);
  •  the acceleration of reforms to improve the performance, and reduce the number, of state-owned enterprises;
  •  increased accountability by the Parliament and kengashes (local elected bodies) of central and regional government budgets;
  • the implementation of laws to reduce gender-based violence and create equal access to jobs and access to public services for women; and 7)
  •  the expansion of COVID-19 social assistance and the nationwide launch of the Government’s new Unified Social Registry system.

World Bank Country Manager for Uzbekistan Marco Mantovanelli  noted that the approved Development Policy Operation  helps strengthen  reforms of great  importance that have been enacted since 2017 and builds a firm and transparent foundation for more complex reforms which will reduce the state’s control over resources and its role in the economy. “The operation also supports the Government’s focus on ensuring that the transition creates tangible benefits for citizens from an early stage. Reforms such as ending the restrictive propiska regime, withdrawing the state from cotton production, improving the safety and economic inclusion of women, and providing more effective assistance to low-income households are expected to have a strong positive impact on the well-being of the most vulnerable citizens of Uzbekistan, especially during the COVID-19 pandemic.”

The World Bank has played an important role in supporting the Government’s implementation of the 2017-2021 Development Strategy since 2017.  The World bank plays an important role in critical areas such as macroeconomic reforms, agriculture, health, education, water supply and sanitation, energy, transport, social protection, urban and rural development  of  Uzbekistan, supporting its  25 projects  financially and technically. This year, support by the World Bank has helped mitigate the health, economic and social consequences of the COVID-19 pandemic.

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