Sustainable economic development in selected regions

Project description

Title: Sustainable economic development in selected regions of Uzbekistan
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Uzbekistan
Lead executing agency: Ministry of Economy of the Republic of Uzbekistan
Overall term: 2014 to 2017

Context

The collapse of the Soviet Union led to the cautious opening-up of Uzbekistan’s economy, which nevertheless remains strongly influenced by the principles of a planned economy. Thanks largely to the extraction of gold, oil and gas and the extensive cultivation of cotton this is now one of the most rapidly growing economies in Central Asia. Furthermore, Uzbekistan responded to the global economic crisis by launching comprehensive state support measures, such as infrastructure investments and the promotion of key industries.

Despite this, the Welfare Improvement Strategy of Uzbekistan adopted by the government has not yet been effectively applied to foster broad-based development which is balanced in regional and sectoral terms. The high level of underemployment in rural areas remains a major challenge.

Objective

In the project regions of Andijan, Surkhandarja, Khorezm and Karakalpakstan, conditions have improved for broad-based and environmentally sound economic growth. Consequently, income and employment opportunities are created for rural sections of the population.

Approach

The project consists of three components:

  1. Macroeconomic advice. The first component aims to strengthen the inclusive, environmentally sound and market-based economic development of government institutions. The main cooperation partners are the Uzbek Institute of Forecasting and Macroeconomic Research (IMFR) and the Academy of Public Administration under the President of the Republic of Uzbekistan. The project supports the training of research and teaching staff and enhances the capacities of the administration in the area of regional development. It also works with the central bank to devise a national strategy for financial literacy.
  2. Promoting selected value chains. This component aims to enhance the competitiveness of enterprises by improving their production and marketing strategies. Agricultural enterprises producing fruit, fish and milk receive practical training in demonstration orchards and farms to increase their production. In the value chain for handwoven carpets, new jobs are created through improved production methods (design, dyeing, marketing). The promotion of tourism in the Khorezm region facilitates the diversification and improved marketing of tourism products, which attracts more visitors to the region.
  3. Green economy – introduction of new environmentally friendly technologies and international social and environmental standards. This component supports the promotion of energy efficiency and alternative energies and the introduction of modern, innovative agricultural concepts which conserve water and the soil. The focus is on establishing an information centre for green economy and on implementing pilot projects in the value chains supported by the programme. Information campaigns are also conducted to raise awareness of compliance with international trading standards, such as Global G.A.P. and Label STEP for export promotion.

The consulting firm COFAD Beratungsgesellschaft für Fischerei, Aquakultur und Regionalentwicklung supports the implementation of the project.

Results

The project builds on the results of the predecessor project and continues with the promising activities. In agriculture, improved production methods have already led to significant success. For example, fish production in the Surchandarya region almost doubled after 40 new enterprises were set up. In the fruit cultivation value chain, three demonstration orchards – operating under what can be extremely difficult climatic conditions – have been established and are used for highly popular training measures. Following the introduction of modern production management systems, milk production in the region of Andijan has already increased by around 30 per cent. The prices paid for this higher-quality milk have also risen by approximately one third.

With regard to the promotion of tourism, the range of offers in the pilot region of Khorezm has broadened significantly as a result of the analysis of new tourist attractions and their targeted marketing. Through the development of professional marketing materials, international contacts and participation in trade fairs, international travel companies now offer a wider range of standard products, which has given rise to an increase in the duration of visits and number of overnight stays in the region.