Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

Improving Macroeconomic Performance
The government is currently undertaking a series of major reform measures that 
have removed various impediments to quality job creation. Most significant 
was the unification of the exchange rate in September 2017, which led to the 
disappearance of the black market in foreign currencies. That and other key 
elements of the reform package have led to a substantial improvement in the 
economy’s investment climate. For example, Uzbekistan’s Doing Business 
ranking improved from 87th in 2016 to 69th in 2020.
Uzbekistan currently has a unique demographic window of opportunity as 
500,000 youths are being added annually to the labor supply for the next 
dozen years. Successfully integrating these job seekers into the labor market 
could transform Uzbekistan into a rapidly growing and more diversified 
economy. However, the country is still facing numerous macroeconomic 
challenges. They include rising inflation and falling fiscal revenue that, with 
falling prices for some export commodities and a decline in manufacturing 
exports, is decelerating economic growth and has caused annual employment 
growth to average only 0.75% during 2015-2017. 
Greater employment creation could be stimulated by additional government 
action in three areas. First, private businesses, especially small and medium-
sized enterprises (SMEs), need better access to finance. The most promising 
action to achieve that is selective privatization of some state-owned banks. 
Second, competition in the marketplace needs to be further enhanced. 

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The government could achieve that by disallowing monopolistic practices 
and phasing out remaining price controls. Third, constraints on building 
the economy’s public infrastructure and human capital need to be eased. A 
comprehensive infrastructure program would improve the country’s access to 
global markets while concomitantly supporting output and employment growth 
and thereby reversing the current slowdown. For education, school curricula 
need to reflect the skills demanded in an increasingly open and modernizing 
economy, and more efficient use needs to be made of the substantial fiscal 
expenditure on education.