Policy paper

UK–Uzbekistan development partnership summary, March 2024

Published 27 March 2024

Introduction

The International Development White Paper sets out a re-energised agenda for the UK working with partners to accelerate progress on eliminating extreme poverty, tackling climate change and biodiversity loss, and accelerating progress on the United Nations Sustainable Development Goals (SDGs) by 2030. In a contested world, where ODA alone will not be enough, achieving the vision as set out in the SDGs requires a radical rethink in our approach to international development. The White Paper sets out how our partnerships are central to this approach. These are founded on mutual respect, with an emphasis on country ownership, accountability, transparency and common values. This country development partnership summary details how the approach detailed in the White Paper will be put into practice with Uzbekistan.

Country context

Uzbekistan is a landlocked country, bordered by the 4 Central Asia countries and Afghanistan to the south, with a population of 35.6 million, 60% under 30^{[footnote 1]}. Uzbekistan has significant growth potential, with abundant natural resources, including agriculture, minerals^{[footnote 2]} and natural gas. Over the last decade, Uzbekistan has experienced generally robust economic growth^{[footnote 3]} and has embarked on an ambitious, outward facing, economic and social development agenda. Uzbekistan’s GDP is expected to rise 6.5% between 2023 and 2024^{[footnote 4]}. Uzbekistan’s areas of comparative advantage are dominated by state-owned enterprises (SOEs) that are shielded from private sector competition. A burdensome regulatory environment has hindered private sector from exploring new growth opportunities. The growth outlook is uncertain, with the continuation of Russia’s war in Ukraine, the impact of sanctions, as well as high domestic inflation. Uzbekistan has made strides on poverty reduction – the poverty rate fell from nearly 28% in 2000 to 11% in 2019^{[footnote 5]}. Productivity growth in sectors such as agriculture and services, where most people work, has underperformed relative to other countries in the region. There is also a rural/urban divide, exacerbated by COVID-19. Gender divides remain.

Uzbekistan became independent in 1991. Indices suggest an upward trend in the quality of governance^{[footnote 5]}, but scores remain low by international standards on some dimensions, for example, control of corruption and rule of law^{[footnote 6]}. The new constitution prioritises the rights of citizens and allows the President to run for more than 2 terms. There have been marginal improvements in civic space^{[footnote 7]} and media freedom albeit from a low base^{[footnote 8]} and many challenges remain^{[footnote 6]}. It faces multiple drivers of conflict and insecurity including, for example, political and economic grievances, land and water issues. Uzbekistan faces significant environmental challenges and weak environmental protections – the Aral Sea is perhaps the most visible symbol. It is also vulnerable to the impact of climate change: increased temperatures and rapid melting of glaciers, elsewhere in the region, may lead to water shortages along Uzbekistan’s most important rivers which will have significant impact on agricultural productivity, affecting poor/marginalised communities the most^{[footnote 7]}. Upstream water projects, for example, the planned Qosh Tepa Canal in Afghanistan will also divert water away from Uzbekistan.

The Government has committed to reducing poverty by half and making Uzbekistan an upper middle-income country by 2030^{[footnote 8]}. This requires that the state reduce its control over the economy in favour of markets/a more dynamic private sector as well as associated business environment reforms and support to trade facilitation. It also requires that the government invest public sector reforms; human capital; a stronger safety net, and a greener growth model.

Why and how: the UK’s development offer with Uzbekistan

In Uzbekistan, the UK aims to: support a more resilient, stable, prosperous future for the country and the wider region, a more open, inclusive society and a greener economy. HMG’s work in Uzbekistan directly contributes to the Uzbek Government’s plans; IR23 and the 4 priority areas of the IDS as well as the delivery of the Sustainable Development Goals (SDGs). Our priority areas of focus on development include: 

Reform

Supporting reforms in the areas of: public procurement, State Owned Enterprises (SOEs), green growth and labour market reforms to support equity. We advocate for changes in regulation, legislation, and business environment practices and support privatization reforms. We support investments education reforms as an enabler of growth. We work to address Gender Based Violence (GBV) as well as greater access to GBV services; as well as to create an enabling environment for civil society engagement and media freedom. 

Stability

We promote regional stability, address local conflicts and climate change through regional co-operation on energy and water. We support alignment with the Paris Agreement and COP26 outcomes and implementation of regional and national climate/nature plans towards a credible pathway to net zero. We also work with civil society, to advocate on climate issues and support climate vulnerable communities. 

Prosperity

We support Uzbekistan to prosper and work to foster interest by UK companies in Uzbekistan and Uzbek interest in the UK, especially on the green economy/renewables, leveraging the Developing Countries Trading Scheme (DCTS). 

Key programmes

Bilaterally, we have moved away from stand-alone country-focused to regional ODA programmes. Our top 3 programmes include: 

• Central Asia Effective Governance for Economic Development (EGED):
  • budget: £25 million
  • duration: 2020 to 2025
  • expected outcome: Improved effectiveness, accountability and transparency of economic policy delivery on selected reform priorities the region.
• Climate, Energy and Water Security for Central Asia region (CEW-CA)
  • budget: £19.5 million
  • duration: 2024 to 2030 *expected outcome: improve Central Asia’s resilience and sovereignty by delivering low carbon and climate resilient growth across the region, through strengthened regional cooperation.
• UK-Central Asia Green Inclusive Growth Fund:
  • budget: £18 million
  • duration: 2024 to 2029
  • expected outcome: improved SME capacity and increased flow of green investment finance in Central Asia.

The top 3 Centrally Managed Programmes (CMPs) in Uzbekistan are listed below. We also have smaller scale engagements through the international programme targeting gender-based violence and women’s political participation; supporting access to information (for example, support to Madad citizen’s advice bureaus); as well as enabling mutually beneficial partnerships with Uzbekistan, for example, the migrant workers scheme; and schemes to promote Uzbekistan’s agricultural produce in the UK.

• Trade and Investment Advocacy Fund (TAF2 Plus)
  • budget: £16 million^{[footnote 9]}
  • duration: 2015 to 2024
  • expected outcome: TAF2 Plus aims to support governments to effectively participate in international trade negotiations and integrate with the global trade system.
• UK support to the Global Partnership for Education (GPE):
  • budget: £10 million (15% UK contribution)
  • duration: 2023 to 2027
  • expected outcome: Improved access to and quality of early childhood education.
• Global Tax and Public Goods (GTP):
  • budget: £3.2 million^{[footnote 10]}
  • duration: to 2024
  • expected outcome: strengthening tax institutions and mobilizing revenues at the domestic level.

Who we work with

We work in partnership with like-minded countries, including the: US, EU, France, Germany, Switzerland, and Japan. We are a standing member of the Country Platform (the country donor platform to discuss development to Uzbekistan) and its sub-groups on climate, governance and public financial management. We work closely with the IFIs, particularly the World Bank and International Finance Corporation (IFC), as well as UN agencies. We work with a wide range of partners in the Government of Uzbekistan including the Strategic Reforms Agency (SRA); the Ministry of Foreign Affairs, Ministries of: Economy and Trade, Finance, Industry, Labour and Migration, Defence, and law enforcement agencies. We work across the UK government, for example, with the Ministry of Defence (MoD) and the Department of Business and Trade (DBT) to deliver ODA and non-ODA programming. We also work closely with the British Council, especially on education reforms.

Links

• Uzbekistan GOV.UK Page
• Uzbekistan National Development Strategy 2022 to 2026
• Uzbekistan DevTracker Page

1. UNICEF ↩

2. Uranium, lead, zinc, copper, silver, gold. ↩

3. GDP per capita growth between 3.5 and 5.5% in 8 of 10 years between 2012 to 2021, World Bank data ↩

4. European Bank of Reconstruction and Development (May 2023) ↩

5. World Bank Governance Indicators (2011 to 2021) ↩ ↩²

6. Uzbekistan ranked 137th among 180 countries in the World Press Freedom Index by the Reporters Without Borders (RSF) 2023 ↩ ↩²

7. Uzbekistan Country Climate Profile (PDF, 1.59MB) ↩ ↩²

8. (i). implementing public administration reform; (ii). putting individuals at the core of government actions; (iii). ensuring the protection of human rights and freedoms; (iv). strengthening the protection of natural resources; (v). improving the business environment through free market reforms and supporting entrepreneurship; (vi). attracting investment and privatising the largest state owned enterprises and state owned banks. ↩ ↩²

9. £50,000 spend planned in Uzbekistan in financial year 2023 to 2024 ↩

10. $520,000 allocated for Uzbekistan financial year 2022 to 2023 ↩