Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

 Macroeconomic Performance, Opportunities, and Challenges
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The third pillar of government action relates to lifting the longer-term 
constraints associated with the economy’s infrastructure stock and the level 
of human capital.
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Improved education and training are required to meet 
the challenges of a modern diversified economy. As mentioned, enterprises 
surveyed by the World Bank cited the lack of skilled workers as one of their 
key constraints to creating more jobs (Table 1.3). Current teaching curricula at 
schools, universities, and other institutions fail to develop the skills needed in 
the labor market of a rapidly changing economy that is becoming increasingly 
globalized. There are also concerns over the quality of teachers and access 
to international teaching material. More efficient use of the government’s 
expenditure on education, which is substantial at 6.5% of GDP in 2017, will be 
needed to address these issues.
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In relation to infrastructure, as a double-landlocked country, Uzbekistan faces 
an inherent geographical disadvantage in accessing world markets. Indeed, 
“trading across borders” is the indicator where the country ranks worst in the 
2020 Doing Business survey (152nd) (Table 1.1). The cost of cross-border 
transport is high compared to that in neighboring countries. The Center for 
Economic Research (2013) estimates transport costs (depending on cargo) to 
range from 15%–20% to 60%–70% of the value of cargo for exports, which is 
significantly higher than the 5%–7% in European Union countries. To overcome 
these obstacles, both rail and road links need major improvement. About 36% 
of rail lines had been electrified per 2015 data, while local and regional roads 
need major maintenance (World Bank 2014). 
Fixing these issues will take a comprehensive set of measures, which are 
outlined in section 2.4 of Chapter 2. Enacting such an infrastructure program 
will support economic growth and boost employment numbers amid the 
current slowdown. Prudent fiscal policy in the past ensured that there is 
enough fiscal space to implement these infrastructure projects now. Doing 
so is also consistent with a counter-cyclical fiscal policy that this chapter 
argues to be beneficial, provided fiscal spending is restrained during the next
boom period. 
On a final note, any major and ambitious reform agenda has the dangers of 
setbacks and potential that economic benefits will take longer to materialize 
than expected, which may result in reform fatigue. The government has 
indicated that it is aware of these risks and affirmed in IMF (2018) its 
commitment to implementing the President’s National Development Strategy, 
which is crucial for Uzbekistan’s long-term economic success.
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Infrastructure and human capital development are analyzed in detail in chapters 2 and 3, respectively. 
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A detailed set of policy recommendations for human capital development is discussed in section 3.7 of 
Chapter 3. 

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