Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

Designing institutional reform plans for SME development with 
advancing SOE reforms.
Last, given the complexity of the business 
environment around SMEs, the government needs to coordinate policy 
discussions with line ministries and the CBU to set an SME development 
master plan covering both financial and nonfinancial issues, with the 
Cabinet of Ministers playing the leading role. The government could create 
a specialized SME agency to effectively design a comprehensive policy 
framework on SME development and efficiently implement the designated 
action plans. A set of policy frameworks for SME development and financial 
inclusion should supplement Uzbekistan’s national development strategy 
for 2017–2021. Given that SOE reforms create more space for private 
businesses, the government needs to consider the institutional reform plans 
for SME development, together with ongoing SOE reforms, which will include 
clarifying the role of state-owned banks. Meanwhile, creating specialized 
state-owned banks, such as an SME bank and an agriculture development 
bank, is worth considering, given the socially oriented nature of their activities. 
An exit strategy for such specialized banks should be discussed at the outset, 
to avoid competing with private sector development. 
4.6. Conclusion
Uzbekistan’s present growth pattern is led by labor-intensive industries in 
agriculture, manufacturing, and construction, but the service sector holds great 
potential for quality job creation. The sectoral and employment structures 
of the country’s economic activities have not been changed in more than a 
decade. Labor mobility should be facilitated between low and high productive 
activities. Highly productive services-related SMEs include SMEs in education, 
health, transport, tourism, and information technology. Such SMEs, especially 
tech-based ones, will be able to boost national productivity through their 
innovation and skilled labor, benefiting from foreign direct investment and 
technological breakthroughs.

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