Tuesday, 23, July, 2024

Uzbekistan currently has a unique demographic window of opportunity as 500,000 youths will annually add to the labor supply over the next years. Successfully integrating these job seekers to the labor market could transform Uzbekistan into the rapidly growing and diversifying economy. However, the country still needs to push on-going reforms forward, according to ADB’s country diagnostic study on Uzbekistan.

The study analyzes key elements of quality job creation including macroeconomic stability, physical infrastructure, human resource enhancement, access to finance and private sector development, and regional cooperation. The study explores ways how Uzbekistan can best consolidate achievements from its recent policy reforms and sustain reform efforts aimed at accelerating economic growth.

“The labor market is Uzbekistan’s greatest challenge and opportunity at the same time,” – said Mr. Kiyoshi Taniguchi, Principal Economist, Economic Research and Regional Cooperation Department. “I believe, further reforms should boost employment creation and integrate new job-seekers into the country’s labor market.”  

The Government of Uzbekistan undertook a series of major reform measures that removed various impediments to quality job creation. Among them – unification of the exchange rate in September 2017 and tax reform in early 2019, that led to substantial improvement of the investment climate. However, sufficient employment generation requires further government actions, in particular, better access to finance for small and medium-size businesses, enhancing competition in the marketplace, and easing the longer-term constraints associated with economy’s stocks of infrastructure and human capital.

Infrastructure development as well as regional cooperation have been identified as integral to maintaining rapid economic growth over the longer term, as well as enhancing competitiveness, supporting industrialization, and improving living conditions by boosting access to job opportunities. The study suggests, drawing a comprehensive infrastructure strategy and accessing World Trade Organization will improve the country’s access to world markets while concomitantly supporting economic and employment growth.

Despite the country’s strong emphasis on education, Uzbekistan’s education system is grossly misaligned with the needs of private sector and is unable to catch up with the economy’s rapidly changing structure and labor market demands. The government needs an evidence-based and responsive education policy involving public investments and public-private partnerships, and careful monitoring of reforms. Polices must integrate education, skills and human capital development with entrepreneurship, small and medium sized enterprise development, and research and innovation. Besides, school curricula need to reflect the skills demanded in an increasingly open and modernizing economy.  

Latest in Finances