Development finance assessment

International philanthropy is unexploited
Philanthropy in Central Asia has been around for just about 30 years. Charities were not 
supported or even allowed in the former Soviet Union. In Central Asia, the charities have 
re-emerged in the 1990s mainly through either religious giving, or through foundations 
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https://www.state.gov/reports/2019-country-reports-on-human-rights-practices/uzbekistan/ .
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For example: ECOSAN (Ecology and Sanitary) being one of the most prominent one.

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DIMENSION 3: 
PRIVATE-PUBLIC COLLABORATION
established by the successful business tycoons and oligarchs. In most countries, the reporting 
requirements have not been high, and hence it has often been very difficult, if not even 
impossible to capture the individual giving.
Known philanthropy inflows to Uzbekistan are limited. From 2013 to 2018 Uzbekistan 
has received USD 0.79 million in total.
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The Bill and Melinda Gates Foundation (BMGF) has 
provided over two thirds of the total (iUSD 0.5 million). The real sum is likely larger as only 
the major foundations report the activities to OECD-DAC. At the same time, Uzbekistan’s 
legislation does not require foreign foundations operating in Uzbekistan to report the financial 
inflows to the country, and the aggregate data is not available. Charitable contributions 
to ecological and charitable foundations and cultural, medical, educational, and municipal 
institutions, can be deducted up to 2 percent of the taxable income.
Faith-based financing
Zakat
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has been an important source of social finance in most Muslim societies, but it 
is difficult to estimate how much has been collected worldwide. It has been claimed that 
between USD200 billion and USD1 trillion is collected annually (Obaidullah and Shirazi, 2015; 
Islamic Development Bank Group, 2016). The compliance with 
Zakat
differs from a country to 
country, but in several Islamic countries it is well over 90 percent.
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Globally there is mounting 
interest in developing financing instruments compatible with sharia law. 
For Uzbekistan, faith-based financing represents untapped sources of development 
finance. The lack of data makes it difficult to estimate the current collection of 
Zakat
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and hence its development financing potential. As Uzbekistan practices a decentralized 
model of 
Zakat
collection, there are many disparities between mosques in the cities and 
rural communities
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. Addressing this knowledge gap through a detailed study, along with 
comparing the Uzbek context with other countries’ experiences could inform the creation of 
an enabling environment for faith-based financing. 
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OECD/DAC data
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Zakat is a unique form of religious social welfare which benefits the whole community. It requires Muslims to give 
2.5% of their qualifying wealth each year to help Muslims who need it across a range of categories. Zakat is both a 
spiritual duty and a vital part of the Islamic social welfare system.
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For instance, the Pew Research Center has estimated that in Indonesia, 98 percent of Muslims comply with Zakat 
requirements (see: Pew Research Center, 2012). 
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In the case of the Central Asian republics, less than 50 percent of citizens would state that the religion is central to 
their life (see: Pew Research Center, 2012).
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Practices show that both centralized as well as decentralized collection of Zakat function almost equally well.

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DEVELOPMENT FINANCE ASSESSMENT FOR THE REPUBLIC OF UZBEKISTAN