Development finance assessment

Identify policy, 
institutional and 
capacity binding 
constraints
• Limited institutional and administrative capacity is a major constraint on effectively 
accelerating SDG financing in Uzbekistan. The magnitude and scope of the ongoing 
economic and social reforms, combined with the required change in the role of the 
state to enable this transformation, poses significant strain on the public administration 
system. 
• 
The fundamentals of a modern public finance system, currently being implemented 
through the PFM strategy, may not yet sufficiently be in place to effectively implement 
certain SDG financing solutions, such as PBB. 
• Building capacity across a wide range of institutional actors involved in the PFM 
process should therefore be a core focus of development partner support. 
• The lack of performance-based budgeting, inadequate links between budgetary 
outlays and stated programme objectives and the limited public financial management 
capacities challenge budget execution. If these persist, it may undermine the publics’ 
trust in government.
• Limited administrative capacity, frequent reorganizations of ministries and departments, 
high staff turnover, weak internal coordination, and absence of a cross-government 
approach, are also significant impediments to achieving the SDGs. 
• Pervasive corruption in the civil service saps resources and undermines policy 
implementation.
HOLISTIC FINANCING STRATEGY
Policies for Public 
Finance
• 
A critical gap in Uzbekistan’s SDG financing approach is the lack of a single, clear, 
long-term development vision towards 2030 or beyond. Uzbekistan’s National Action 
Strategy 2017-21 is not costed and does not indicate how it will be financed. The 
annual action plans are more detailed and prescriptive, but are no holistic, integrated 
approach to financing Uzbekistan’s Agenda 2030. Existing policy documents and 
institutional processes that constitute the country’s long-term development priorities 
are overlapping in scope, time and means. This confuses authorities’ capacity to identify 
clear financing needs and target priority reforms towards meeting those needs. 
• The functioning of the former strongly state-led economy has resulted in a complex 
and opaque public financing system. The GoU has made strong progress to modernize 
and streamline public finance management, but much remains to be done. 
• The effective implementation of the PFM Reform Strategy is critical to implement any 
public finance related SDG financing solution in Uzbekistan. It is critical to accelerate 
the inclusion of a medium-term perspective across key budget documents and 
processes. 
• 
Recent economic reforms have led to fluctuations in government revenue. The 
COVID-19 induced decline in government revenue in the immediate future poses a 
risk to policymakers. 
• To date, public investments, both on-budget and off-budget, represent the largest 
amount of development finance in Uzbekistan
• 
Fiscal policy offers significant scope to widen Uzbekistan’s fiscal space and to improve 
the overall development impact of public spending.
• 
Important efficiency gains could be achieved by adopting international standards for 
public procurement and SDG-aligned public investment plans.
• 
The marked increase of international public finance (concessional loans and other 
official flows) to Uzbekistan warrants adopting an effectively coordinated development 
cooperation strategy and innovative disbursement mechanisms to increase aid 
effectiveness.

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KEY FINDINGS