Development finance assessment

MAINSTREAM SDGs 
ACROSS BUDGETING 
AND PLANNING
• Integrate SDG across the Medium-Term Investment Policy Strategy.
• Integrate SDG considerations into the Supreme Audit Institution’s strategic 
activities.

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8
DEVELOPMENT FINANCE ASSESSMENT FOR THE REPUBLIC OF UZBEKISTAN
INCREASING AID 
EFFECTIVENESS
• Establish a government-led development partner coordination mechanism.
• Pool grants in a (sectoral) trust fund to untie aid and improve coordination. 
Domestic private investment has been growing as a source of development finance 
in Uzbekistan
. How much of it is state-led versus genuine commercial investments remains 
hard to identify. The many state-owned enterprises and banks distort the level playing field, 
critical to developing a thriving private sector. An underdeveloped banking and financial 
sector, combined with shallow and illiquid capital markets with high interest rates, limit SME 
access to credit and channeling domestic saving towards financing domestic investments. 
The on-going political transition and economic liberalization underpins a slow uptake 
of FDI and ODA, albeit below their potential. Large infrastructure deficits and persistent 
perception of high levels of corruption, combined with ineffective dispute settlement 
mechanisms, limit potential FDI inflows. There remain significant knowledge gaps regarding 
the SDG alignment of non-commercial private flows, including remittances, philanthropy 
and faith-based finance. The COVID-19 crisis has significantly impacted the medium-term 
prospects of these critical international financial inflows to Uzbekistan. 
The below table summarizes the DFA’s main recommendations for harnessing private 
SDG finance:
MEASURES FOR