Development finance assessment

Measures to improve the efficiency of PFM
This DFA reveals that total available development finance is expected to stagnate as a 
share of GDP in the foreseeable future. Therefore, the short-term priority for financing the 
COVID-19 recovery focuses on improving the spending efficiency and development impact 
of currently available development finance, mostly public, but also increasingly private 
investment. Countries can save about as much through efficiency efforts in education, health 
care, and infrastructure as they could raise through tax reform (IMF, 2018). The ongoing 
PFM reforms are a timely opportunity for mainstreaming the SDGs principle of ‘Leaving no 
one behind’ across the Uzbek PFM system. This will, in turn, support related SDG financing 
solutions that depend on certain advancements in PFM. 
The JP focuses explicitly on strengthening the GoU’s asset management by developing 
standard processes and enhancing organizational structure to allow the Uzbek authorities to 
effectively deliver their functions on asset management; enhance the capacity of practitioners; 
and, develop a manual on asset management procedures and best practices.
In complement to the PFM Reform Strategy and the JP’s ongoing activities, this DFA 
identifies the following areas of reform that can be considered for improving public spending 
efficiency and delivery: 
„
I
ncentivize greater inter-ministerial coordination and cooperation: For example, allocation 
of funding for planning and activities can be made conditional on cooperation and joint 
implementation across several ministries. 
 
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Mainstream SDGs across the Medium-Term Investment Policy Strategy to link the key 
performance indicators of the Public Investment Strategy with socio-economic development 
priorities of the country towards achieving positive structural changes in the economy of 
Uzbekistan. This could be extended to selection criteria for businesses accessing investment 
promotion measures.
 
„
Improve the governance of SOEs (See list of policy options recommended by the World 
Bank in the section on SOEs).

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RECOMMENDATIONS
 
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Introduce a more transparent system of intergovernmental fiscal transfers: Accelerating 
progress in the fiscal management of subnational governments is especially critical 
considering the COVID-19 pandemic. Progressing towards a predictable and needs-based 
allocation of intergovernmental transfers and equalization grants would enable a more 
equitable distribution of financial resources towards building back better. 
 
„
Integrate SDG considerations into the Supreme Audit Institution’s strategic planning 
to assess and report on institutional capacities to operate effective, accountable and 
transparent institutions.
 
„
Strengthen internal accountability systems through digitization and e-governance and 
improving public access to information and decision-making.
 
„
Step up the fight against corruption by better enforcing the recently adopted provisions on 
the prevention of conflict of interest in the public administration.
 
„
Measures to improve social protection and assistance
 
„
Development partners identified the following reform priorities in social protection: assessing 
the needs of all categories of population; supporting the expansion of the existing social 
protection system, strengthening institutional coherence among social assistance, labor 
market and social insurance programs; revision of eligibility and delivery mechanisms to 
make them more responsive to current pandemic and future shocks; and, strengthening 
system capacity at the national and local levels to respond to the urgent and evolving 
needs of population over the medium and long term.