Valdai Club

Uzbekistan’s unique experience accumulated in recent history pursuing a balanced implementation of reforms without the negative elements of shock therapy provides grounds for optimism, opens up new prospects and may be of interest to the rest of Eurasia, writes Umid Abidkhadjaev, Director of the Institute for Forecasting and Macroeconomic Research under the Ministry of Economic Development and Poverty Reduction of the Republic of Uzbekistan.

Over the years of its independent development, Uzbekistan has reached frontiers that have completely changed its image and place in the world community. In a relatively short period of time, it has been possible for the country to develop a regulatory and legal framework for reforms, lay the foundations of a market infrastructure, ensure financial and macroeconomic stabilisation, carry out institutional transformations, create a diversified economy and new industries, form a mechanism to stimulate small business, as well as to achieve energy independence and come closer to grain independence.

In 2016, a change of leadership took place in the country, which coincided with Uzbekistan’s change of course and the implementation of reforms within the country. The main impetus of the new stage of reforms entails the establishment of socio-economic conditions within the country which may contribute to the creation of a green and innovative economy, the development of digitalisation, the creation of a class of highly qualified specialists, and an increase in average household incomes.

The result of the reforms carried out over the past 5 years has been the formation of New Uzbekistan on the world arena, whose main goal is to ensure a free, comfortable and prosperous life for the people of the country.

At the new stage of reforms, special attention is being paid to the development of the country’s human capital and the training of highly qualified specialists. For this purpose, large-scale work has been carried out in the higher education system. Over the past four years, the number of universities has increased (from 70 to 127), as well as the number of students per 10 thousand of the population (from 85 to 169). New branches of international universities have opened in the country; their number reached 22 in 2020. In turn, this contributed to an increase in the share of higher education in the total volume of educational services to 54.0% in 2020 (47.4% in 2017).

In 2019, the government of the country within the framework of the concept for the development of the country’s higher education system until 2030, further stages and themes of the development were determined. One of the key areas was to improve the quality of training provided to highly qualified personnel, and to develop human capital based on the requirements of the labour market.

Thus, Uzbekistan today has all the prerequisites for the creation and development of a competitive educational hub in the world arena, which will be able to implement high-level international educational programmes. These prerequisites include a mild and favourable national climate, a high level of security supported by government policy, lower and competitive prices compared to other Central Asian countries in many areas (for example, medicine, visa-free travel for the citizens of many countries, as well as a high level of human capital).

At present and in the future, the competitiveness of the state in the global economy depends on the level and quality of information technology, the development of digitalisation processes in the country and the training of personnel for this sector.

An analysis of the demand in the labour market in Uzbekistan and in the world in 2020 showed that programmers, engineers, communications specialists, web designers and other professions related to the digital sphere have become the most in-demand.
In the field of digital economy and e-commerce in Uzbekistan for 2016-2020, the gross value added increased 1.8 times and reached 8.8 trillion UZS (about 9 billion US dollars) in 2020. The volume of services rendered in the IT sector amounted to 12.9 trillion UZS in 2020, which is almost twice what it was in 2016.

The telecommunication infrastructure is developing dynamically in the country: the length of laid fibre-optic communication lines has grown almost 3.8-fold from 17.9 thousand km to 68.6 thousand km, and by the end of 2021 their length is planned to practically double, increasing to 118.6 thousand km.

Since 2016, the bandwidth speed of the international data transmission network has been increased almost 22-fold — from 55 to 1200 Gbit/s. At the same time, in the near future, there are plans to increase this figure to 1,800 Gbit/s due to a project to modernise the packet switching centre for a total amount of almost $26 million.

In order to further develop the digital economy, the government approved the Digital Uzbekistan-2030 Strategy, which provides for the implementation of over 280 digital transformation projects in the regions and sectors of the country’s economy in the next two years. It is planned to attract about $2.5 billion for the development of digital infrastructure, to launch three large new data centres in cities such as Tashkent (expanding by 5 PB, bringing capacity to 10 PB), Bukhara and Kokand (by 50 PB each), as well as further expansion of the fixed telecommunications network and modernisation of the mobile communication network. As a result, households will have access to the Internet with a speed of at least 10 Mbit/s in each settlement. It is also planned [Decree of the President of the Republic of Uzbekistan No. PP-4699 dated April 28, 2020 “On measures for the widespread introduction of the digital economy and e-government.”] to double the share of the digital economy in the country’s GDP by 2023 and triple the volume of services in this area, bringing exports to $100 million.

This policy will not only make it possible for Uzbeks to work online, but will also bring broader economic benefits through the development of the domestic market for software development, e-commerce and the provision of electronic services, as well as their export. The employment level will increase in the country; an additional impetus will be given to the development of freelancing and the achievement of other multiplicative results.
Taking into account current global trends, the transition to a green economy is an inevitable course of development, which requires intensified efforts to improve the environmental friendliness of the economy. Uzbekistan is striving to develop a green economy just like the rest of the world. Of particular importance are the on-going reforms in the field of industry, and energy is attached to the creation of high-tech green products and the use of renewable energy sources. Thus, the main task for Uzbekistan in the development of a green economy is to increase productivity and the optimal distribution of natural resources.