Development finance assessment

BOX 2 THE IMPERATIVE OF SAFEGUARDING SOCIAL SPENDING
The COVID-19 pandemic is significantly impacting Uzbekistan’s economy, reducing growth, and creating 
additional external and fiscal financing needs. Even in an optimistic scenario, with growth resuming in 2021, 
fiscal policy will likely require several years to accommodate the impact of the pandemic on Uzbekistan’s 
public finances. This transforms the very nature of the broader SDG financing discussion. In a likely more 
austere immediate financing future, priorities are shifting towards financing improved recovery from the 
COVID-19 crisis. This puts SDG financing at risk from potential spending cuts to curtail budget deficits in 
coming years. 
Our analysis reveals the pandemic’s potential impact on available social spending per capita and as a share 
of GDP for 2020 and beyond, under a business-as-usual scenario (based on the latest available macro-
economic projections from the IMF). This reveals that maintaining the same budget share for social spending 
as the share for 2020 pre-COVID-19, available social spending per capita would recover to its 2019 levels 
only by 2023 (Figure 4). Meanwhile, as a share of GDP, social spending is expected to slowly decline to 
below 10 percent of GDP by 2024. Therefore, this DFA points to the need for additional detailed analysis 
of COVID-19 pressures on social spending and the public budget as part of the GoU’s holistic financing 
strategy for the COVID-19 recovery.
Figure 4 Projected COVID-19 impact on social spending
8,0%
8,5%
9,0%
9,5%
10,0%
10,5%
11,0%
11,5%
12,0%
12,5%
50 0
0 00
55 0
0 00
60 0
0 00
65 0
0 00
70 0
0 00
75 0
0 00
80 0
0 00
85 0
0 00
90 0
0 00
95 0
0 00
1 000 000
2017
2018
2019(e) 2020(p)
p
e
rc
e
n
t
o
f
G
D
P
U
Z
S
,
co
n
st
a
n
t
(
p
ri
ce
s)
2
0
1
5
Per a
c pita
perce
ight axis)
nt GDP (r
2024(p)
2023(p)
2022(p)
2021(p)
Source: Author’s calculations, based on MoF and IMF data. 
Note:
For 2020, the State Budget planned to spend 49.6 percent on social expenditure (UZS 65,049 billion) prior 
to the onset of the COVID-19 crisis. This share was applied to the projected consolidated 

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DEVELOPMENT FINANCE ASSESSMENT FOR THE REPUBLIC OF UZBEKISTAN
public investment management can intensify positive interactions across SDGs
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, resulting in 
a reduction of the long-term investment needed for achieving the goals. The opposite is also 
true. Unless Uzbekistan ensures that progress in one area does not come at the expense of 
another, long-term investment needs may increase further. 
Some public services and SDGs are by their nature reliant on public funding, such as 
education, health, climate change adaptation and conservation, while others offer greater 
potential for private financing - infrastructure sectors, such as information and communications 
technology, power and renewable energy. Establishing priorities for each type of finance flows 
would require a better understanding of the degree of SDG alignment of each finance flow 
and their contribution to Uzbekistan’s development results. Strengthening the monitoring 
systems of financing policies would address this important knowledge gap (see dimension 
4) and inform an optimal allocation and prioritization of SDG financing.
Operationalizing an INFF would provide strategic guidance about the various public and 
private finance flows to be mobilized for achieving the nationalized SDG targets according 
to different financial flows’ and stakeholders’ comparative advantages. It could underpin an 
evidence-based national consensus on the ideal financing mix, making best use of each flow’s 
comparative advantage to contribute to best contribute to specific SDGs, towards achieving 
the 2030 Agenda. This DFA provides an initial overview of Uzbekistan’s development finance 
context and puts it into perspective with the identified financing needs (see the overview 
table in Annex 3).
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Health outcomes, for instance, depend not only on health-care services but also on nutrition, water, sanitation and 
air quality; thus, investments in these other areas could deliver health co-benefits.

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