The World Bank’s Board of Executive Directors approved a $500 million Development Policy Operation (DPO) to support further reforms to strengthen the transparency and inclusiveness of Uzbekistan’s ambitious economic and social transformation, the bank said in a statement.
The World Bank’s support under this Development Policy Operation has helped the Government of Uzbekistan mitigate the negative economic and social impacts of the COVID-19 crisis while also supporting the continued implementation of Uzbekistan’s 2017-2021 Development Strategy. In addition to launching a large anti-crisis program, the Government has also enacted several important reforms over the last year to accelerate Uzbekistan’s transition to an open, competitive, and more inclusive market economy.
Several major reforms implemented by the Government under this Development Policy Operation include: (i) the transformation of the previously restrictive propiska (local residence permit) system into an efficient electronic residency registration process; (ii) the cancellation of state production targets and mandatory procurement of cotton; (iii) the reduction of subsidized state bank lending to state-owned enterprises (SOEs); (iv) the acceleration of reforms to improve the performance, and reduce the number, of state-owned enterprises; (v) increased accountability by the Parliament and kengashes (local elected bodies) of central and regional government budgets; (vi) the implementation of laws to reduce gender-based violence and create equal access to jobs and access to public services for women; and (vii) the expansion of COVID-19 social assistance and the nationwide launch of the Government’s new Unified Social Registry system.
“The Development Policy Operation approved today helps cement important reforms that have been enacted since 2017 and creates a strong and transparent foundation for more complex reforms that will reduce the state’s control over resources and its role in the economy,” noted Marco Mantovanelli, World Bank Country Manager for Uzbekistan. “The operation also supports the Government’s focus on ensuring that the transition creates tangible benefits for citizens from an early stage. Reforms such as ending the restrictive propiska regime, withdrawing the state from cotton production, improving the safety and economic inclusion of women, and providing more effective assistance to low-income households are expected to have a strong positive impact on the well-being of the most vulnerable citizens of Uzbekistan, especially during the COVID-19 pandemic.”
Since 2017, the World Bank has played an important role in supporting the Government’s implementation of the 2017-2021 Development Strategy. Through financial and technical assistance across 25 projects in Uzbekistan, the World Bank provides support in critical areas such as macroeconomic reforms, agriculture, health, education, water supply and sanitation, energy, transport, social protection, urban and rural development. This year, the World Bank’s support has helped mitigate the health, economic and social consequences of the COVID-19 pandemic.