Ar
al S
ea
Amudarya R.
Syr
darya R.
Aydar ko'l lake
Guzar
Kumkurgan
Gazli
Muynak
Khodzheyli
Turtkul
Sukh
Shakhimardan
Chirchik
Kitab
Shakhrisabz
Denau
Uchkuduk
Zarafshan
Kokand
Kungrad
Angren
Nukus
Urgench
TASHKENT
Gulistan
Djizzak
Samarkand
Navoi
Bukhara
Karshi
Termez
Namangan
Andijan
Fergana
Pap
NA
VOI
SAMARKAND
DJIZZAK
KARAKALP
AKST
AN
NAMANGAN
ANDIJAN
FERGANA
TASHKENT
SYRDAR
YA
SURKHANDAR
YA
KASHKADAR
YA
BUKHARA
KHOREZM
National
Capital
Provincial Capital
City/T
own
Main Road
Railway
River
Provincial Boundary
Boundaries are not necessarily authoritative.
U
ZBEKIS
TAN
FAS
T F
A
CTS
as o
f ���� or latest a
vailable y
ear
0
50
100
150
Kilometers
N
19-2999 19UZB AV
69 00'E
o
69 00'E
o
60 00'E
o
60 00'E
o
39 00'N
o
39 00'N
o
45 00'N
o
45 00'N
o
This
map
was
produced
by
the
cartography
unit
of
the
Asian
Development
Bank.
The
boundaries,
colors,
denominations,
and
any
other
information
shown
on
this
map
do
not
imply
, on
the
part
of
the
Asian
Development
Bank,
any
judgment
on
the
legal
status
of
any
territory
, or
any
endorsement
or
acceptance
of
such
boundaries,
colors,
denominations,
or
information.
PEOPLE AND RESOUR
CES
Total population:
���� million²
⁰¹⁸
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Total land ar
ea:
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births per w
oman²
⁰¹⁶
Total fertility r
ate:
Agricultur
al ar
ea:
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⁰¹⁶
For
est ar
ea:
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⁰¹⁶
SOCIAL INDICA
TORS
U
nemplo
yment r
ate:
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⁰¹⁸
Pr
oportion o
f population living below
the
national po
verty line:
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⁰¹⁸
Gini index:
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⁰¹⁸
Life expectancy r
ate:
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ears
Inf
ant mortality r
ate:
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births
Adult liter
acy r
ate (15 y
ears and abo
ve):
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⁰¹⁸
ECONOM
Y
Value added by sector (
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Agricultur
e:
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I
ndustry
:
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Services:
GDP (
constant ���� $):
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�,���
Per capita GDP (���� PPP�):
��� billion
Remittances (
curr
ent �):
FOREIGN TRADE
Exports ($):
��� billion
Imports ($):
���� billion
Top � imports:
Machinery
, metals, tr
ansportation equipment ²
⁰¹⁶
Top � exports:
Pr
ecious metal, textiles, miner
al pr
oducts
²⁰
¹⁶
Top �
export tr
ading partners:
Switzerland,
P
eople
’s R
epublic o
f China, R
ussian F
eder
ation
Macroeconomic Performance, Opportunities, and Challenges
1
ChApTER 1
Macroeconomic Performance,
Opportunities, and Challenges
Marcel Schroder, Kym Anderson, Edimon Ginting,
and Kiyoshi Taniguchi
Uzbekistan is the most populous of the five Central West Asian republics.
1
Its
population reached 32.4 million in 2018, which is about 80% of the number of
people in the other four Central West Asian republics combined. Uzbekistan
is one of only two “double-landlocked” countries in the world.
2
Its economy
is dependent on primary exports and belongs to the International Monetary
Fund’s group of 29 resource-rich developing countries (RRDCs).
3
In the
years immediately after gaining independence from the Soviet Union in 1991,
Uzbekistan depended heavily on cotton production. In recent years, however,
gold and natural gas have become its main exports while wheat, meat, and
most manufactured goods are imported.
Following the break-up of the Soviet Union, Uzbekistan transitioned from
central planning to an economy
based on market principles, albeit to a rather
limited extent. President Islam Karimov led the country through the post-
independence era until his death in 2016. His approach to economic reform
was one of “gradualism.” It involved cautiously liberalizing prices, especially
those of energy and fuel, and maintaining a high level of state control.
The government up to 2016 promoted an import substitution strategy that
was heavily driven by state investments. Credit was directly channeled to
state-owned enterprises. The government also imposed high import duties
and excise taxes, as well as foreign exchange controls.
The latter resulted in
a significantly overvalued real exchange rate. Despite these “unorthodox”
1
The four other Central West Asian republics are Kazakhstan, the Kyrgyz Republic, Tajikistan, and
Turkmenistan.
2
The other one is Liechtenstein, which is between landlocked Austria and Switzerland.
3
According to IMF (2012), RRDCs are classified as such based on two criteria: (i) low-income or lower-
middle-income status, based on the World Bank classification; and (ii) at least 20% of total exports are
natural resources.
Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth
2
development
policies, the country experienced the smallest output decline
of the ex-Soviet economies in the 1990s and enjoyed high rates of economic
growth during 2004–2015, predominantly due to the recent commodity price
boom for its major export goods.
When Shavkat Mirziyoyev was elected President on 14 December 2016, he
took over a country facing challenges on multiple fronts. Since mid-2014, the
prices for many key commodities (such as natural gas, gold, and copper) have
declined, which has hampered Uzbekistan’s export earnings. Furthermore,
the Russian Federation suffered from a financial crisis in 2014–2015 that
reduced both exports and migrant workers’ remittances. Consequently, after
a decade of formidable economic expansion, Uzbekistan’s economic growth
decelerated,
manufacturing exports declined, and current employment growth
was too low to absorb the thousands of young people entering the labor
market every year. Uzbekistan risks missing its current demographic window of
opportunity, a window that could transform the country into a rapidly growing
and diversifying economy.
In light of these challenges, the new government recognizes the need for
reform. The President signed in February 2017 the Decree on Strategy of
Actions for the Development of Uzbekistan for 2017–2021. The February 2017
Decree outlines a strategy in five priority areas for the country’s modernization
and liberalization. The government’s long-term view is formulated in its Vision
2030, which aims to double gross domestic product (GDP) in the following
dozen years by diversifying the economy.
This chapter discusses the various reforms the government enacted in 2017–
2019 and analyzes recent macroeconomic developments such as economic
growth,
fiscal policy settings, external sector performance, the labor market,
and inclusion and sustainability. The final section identifies key challenges
that might prevent the economy from creating sufficient jobs to reap the
demographic dividend, and proposes ways to overcome them for Vision 2030
to become a reality.
1.1. recent reforms
The February 2017 Decree encompasses a set of five broad reform areas:
(i) improving public administration; (ii) ensuring the rule of law and reforming
the judicial system; (iii) developing and liberalizing the economy; (iv) improving
education,
health care, public infrastructure, and the social safety net; and
(v) promoting mutually constructive and beneficial foreign policy.
