Population: 25 million Population per sq. km: 60 Population growth: 1.8% Life expectancy: 70 years Population below national poverty line (1999) : 29% GDP per capita(current US$): 299 GDP(current US$): 7,467 million GDP Growth: 4.5% Sources: National Statistical Offices, IMF, IFS, WDI 2002 and Staff estimates.
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PDF version Text Only Version Overview Uzbekistan has significant economic potential with its rich natural resources, well-educated population and trained labor force. Primary commodities constitute some 75 percent of merchandise exports, with cotton alone accounting for 40 percent. Agriculture accounts for some 25 percent of GDP and employs about 40 percent of the labor force, despite the difficult terrain. The government’s gradual transition strategy and other policies helped the country avoid the dramatic collapse in output and drastic fall in living standards that affected other CIS states after independence in 1991. In the last five years Uzbekistan has experienced continuous growth in GDP per capita. Nevertheless, the country's gradualist reform strategy has involved postponing significant macroeconomic and structural reforms. Critical reforms in agriculture are overdue and cotton and wheat yields have been declining. While several important measures to liberalize foreign exchange and trade have been taken from 2000 onwards, over-valued official/commercial bank exchange rates and continuing administrative and trade controls inhibit export growth and discourage foreign direct investment. Uzbekistan also faces a number of very serious environmental problems. The most pressing is the crisis in the Aral Sea basin, where poor water management over an extended period of time in Uzbekistan and its neighboring states, has resulted in the partial drying up of the sea and its contamination by agricultural chemicals. This is now adversely affecting economic activity and the health of the population. Focus of World Bank Assistance Uzbekistan joined the World Bank and the International Development Association (IDA) in 1992. The World Bank Group supports Uzbekistan’s economic transition with a modest program of lending, technical assistance, and analytical and policy advice designed to support implementation of the government’s gradual reform strategy. Uzbekistan is also a beneficiary of and participant in two projects to recover the environment in the Aral Sea Basin, financed by the Global Environment Fund and administered by the Bank. The Bank’s programs focus on: Policies for equity and growth. Priorities include an ending of the dual exchange rate, liberalizing trade, and greater accountability in the public sector. These reforms are essential to reduce distortions in the economy, attract foreign investment, and improve delivery of social services. Overall, more transparency will mean less corruption. Private sector development. With the right business environment in place, the private sector can create jobs and help reduce poverty. Investment in human capital. Better use of resources for health care and education plus more targeted social protection will improve the lives of ordinary people. Investment in irrigation and drainage infrastructure. Maintenance of the country’s huge irrigation and drainage system will improve agricultural productivity and sustainability, a sector which accounts for 30 percent of GDP and 40 percent of employment. Impact on the Ground Better primary health care is now available in rural areas. Some 3 million people in rural areas (or about 12 percent of the total population) now have access to improved primary health care as a result of a US $30 million loan for primary rural health care. Under the loan some 210 primary care centers and 37 laboratories have received equipment. Over 250 physicians have been trained. New jobs have been created and the improved quality of cotton fetches higher prices. More than 300 jobs have been created in cotton production and marketing, and big increases registered in the quality and price of cotton, Uzbekistan’s main export crop. These advances result from a US$66 million loan to improve the quality of marketed cotton. Safe drinking water has been brought to the rural areas. Some 2 million rural people in the western part of Uzbekistan (Karakalpakstan and Khorezm) now have safe and reliable water thanks to a US$75 million loan that financed additional trunkmains and household connections. The unemployed are being helped to find jobs. Fourteen regional and 255 local employment offices country-wide will provide improved services for the unemployed. Sanitation has improved in Tashkent through better trash collection. Better trash collection in Tashkent has improved conditions for 2.6 million people in Uzbekistan’s capital city. A US$29 million loan finances 140 waste collection vehicles, 13,000 bins and 800 collection points. Modern payments systems have greatly reduced the time taken for transactions. A new electronic system has shortened transaction times within Uzbekistan from an average of 15 days to 15 minutes. The new system is part of a technical assistance loan provided by the World Bank. For details of World Bank projects in Uzbekistan please click here. Challenges Ahead ž After five years of positive per capita GDP growth, almost 30 percent of the population still lives below the poverty line. ž Macroeconomic stability is threatened by a sharp decline in exports. The country has had to resort to reducing imports to about $2.8-3.0 billion annually on account of the sharp decline in exports and an increase in external debt, and their desire to avoid a balance of payments deficit . ž Skilled workers are leaving the country while the deteriorating quality of education means they are not being replaced. ž Export growth is compromised by a business environment and administrative controls that make Uzbekistan’s goods uncompetitive on world markets. ž Agricultural productivity is negatively affected by delays in introducing long-awaited reforms. ž Foreign investment is negligible. ž The crisis in the Aral Sea basin is the most pressing of Uzbekistan’s many environmental problems. World Bank Partners in Uzbekistan