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  • Global Financial Crisis: Challenges for Employment, Modernization and Sustainable Growth in Uzbekistan

Global Financial Crisis: Challenges for Employment, Modernization and Sustainable Growth in Uzbekistan

Donor: ADB, International Poverty Reduction Center in China(IPRCC)

Research areas: Economic Transformation

Duration: July 2009 - December 2009

Global Financial Crisis: Challenges for Employment, Modernization and Sustainable Growth in Uzbekistan

This work conducted under the first component of ADB’s 3-years Poverty Network Project. The aim of this project is to link existing knowledge work in Asia on poverty reduction and inclusive growth. The presentation based on this study was presented on the Third China-ASEAN Forum on Social Development and Poverty Reduction & the Fourth ASEAN+3 High-Level Regional Seminar on Poverty Reduction, under the theme of “The Impact of the Global Economic Slowdown on Poverty and Sustainable Development in Asia and the Pacific”.

The Policy brief covers the following key aspects:

  1. Pre-crisis macroeconomic situation in Uzbekistan (2004-2008);
  2. Main channels of the global recession and its implications on Uzbekistan;
  3. Measures taken by government in the responses of global recession, including the ones to help the poor and vulnerable;
  4. Prospects of post-crisis development of Uzbekistan;
  5. Long-term challenges of the recession in Uzbekistan;
  6. Policy recommendations related to social policy implementation in the context of long-term challenges of the recession in Uzbekistan.

Since 2004, economic growth rates in Uzbekistan have been high. According to official statistics, in 2004–2008 gross domestic product (GDP) growth averaged 8.0% a year. The main factors were economic liberalization, including primarily the introduction of current account convertibility, agricultural reforms, and a favorable external market environment, including economic growth in the main trading partners.

The global financial crisis has affected Uzbekistan’s economy indirectly, mostly through its major trade and economic partners. The main channels of contagion from the global economic crisis run through foreign trade and remittances.

Responding to the need to sustain economic growth, employment and social stability, the Government outlined a large-scale anti-crisis package in four presidential decrees at the end of 2008. The total value of the rescue package is 3.9% of GDP or US$1.35 billion. The rescue package is for 4 years (2009–2012). The Government also announced a set of measures aimed at accelerated modernization of national industries for 2009–2014, with ambitious investment commitments totaling US$42 billion. This type of industrial policy mainly seeks to preserve and diversify the sources of budget revenues.

The main objective of the Government was to sustain employment and income levels. For this reason a set of measures was adopted for supporting exporters and stimulating internal demand. In the long run, Uzbekistan will focus on intensifying its structural transformation to significantly increase the competitiveness of the national economy.