The World Bank has noted a significant slowdown in the pace of poverty reduction in Uzbekistan due to increasing economic disparity. Between 2022 and 2023, incomes for the country's poorest 10 percent increased by a mere 6 percent, while the income for the top 10 percent surged by more than 30 percent, suggesting a potential deepening of economic inequality.
The World Bank blog "Charting Uzbekistan's path to poverty reduction: insights from international comparisons" draws attention to the issue. It points out that Uzbekistan was one of the few nations without internationally comparable calculations for poverty rates previously. For decades, poverty was measured in a way that hindered direct comparison with other countries, complicating the assessment of the socio-economic reforms implemented in Uzbekistan.
However, since Uzbekistan began participating in the International Comparison Program in 2017, there has been an overhaul in the way poverty is measured. With World Bank assistance in 2021, a new methodology for measuring poverty was adopted, and the government committed to halving the poverty rate by 2026, the blog authors affirm.
Poverty has reportedly decreased notably in Uzbekistan. From 2015 to 2022, the poverty rate halved, recording one of the best achievements among European and Central Asian countries. Specifically, the national poverty rate dropped from 36 percent in 2015 to 17 percent in 2022, a figure that fares better than the average results for the Europe and Central Asia region as a whole, where the general rate decreased from 13 percent to 8 percent during the same period.
The blog indicates that the increase in household incomes has been a major factor in reducing poverty. Wage growth accounted for 60 percent of the progress made in poverty reduction. The next important factor was social transfers, as the government has modernized and expanded key programs supporting certain population groups. Pension improvements also had a positive impact.
Inequality Indices on the Rise
Experts from the World Bank have observed an increase in the degree of inequality, which is decelerating the rates of poverty reduction. The Gini coefficient, a widespread measure of income inequality, increased from 0.31 points to 0.35 points in 2023. Consequently, the poverty rate decreased by only 3.1 percent rather than the expected 5.5 percent.
