Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

The role of SOEs for private sector-led economic growth.
SOEs should 
facilitate private sector development. Strategically and socially important 
enterprises may continue as SOEs, but an exit strategy is needed to support 
the creation of more competitive private sector markets. Public–private 
partnership should be encouraged, with potential participation from SMEs. 
The shift to the banking system led by the private sector, by rationalizing 
loss-making state-owned banks, should be encouraged as well. The creation 
of specialized state-owned banks, e.g., an SME bank and an agriculture 
development bank, may be worth considering with appropriate exit strategies, 
given the socially oriented nature of their activities.

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4.5. Policy Implications for Accelerating Inclusive
Economic Growth
Uzbekistan is currently in the most important stage of its transformation 
toward a market-based economy aimed at sustainable and resilient growth. 
Private sector development is critical for a smooth shift from state-driven to 
private sector-led economic growth, where SMEs play a key role. Six policy 
implications are drawn from the above discussion, with a view to assisting 
the design of a comprehensive policy framework for SME development and 
financial inclusion for private sector development in Uzbekistan.
Strengthening business competitiveness of services-related and tech-
based SMEs. 
The most numerous SMEs are service-related, but their job 
creating capacity has been relatively low and their GVA is below its potential. 
Retail trade and catering services are the predominant SMEs and major 
borrowers of bank credit among services-related small businesses. However, 
they are not expected to support the country’s goal of sustainable economic 
growth as their business is domestically focused with limited operating areas, 
whereas highly productive services-related and tech-based SMEs could create 
more good quality jobs or skilled labor and help boost national productivity. 
Among several constraints, limited access to long-term finance impedes 
their growth. The government needs to facilitate the structural change of 
private businesses and support creating the enabling business environment 
for services-related SMEs, including those in education, health, transport, 
tourism, and information technology. In particular, tech-based SMEs should 
be a primary target for assistance. SMEs typically lack access to information 
about new markets, products, and opportunities to develop their business 
models. To ease this situation, the government’s support measures should 
include business development services for SMEs and young entrepreneurs, 
and business literacy and education programs for potential workers.