Uzbekistan unveils national strategy to combat poverty

TASHKENT -- The Uzbek government recently unveiled a national strategy to combat poverty that centres on agricultural reform, the expansion of industry in villages, infrastructure improvement and support for urbanisation.

Deputy Prime Minister Jamshid Kuchkarov announced the new approach during the second Uzbekistan International Forum on Poverty Reduction, held May 18 in Tashkent.

Among the more than 200 in attendance were economists from the United Nations (UN), UN Development Programme, International Labour Organisation, World Bank, UN Children's Fund (UNICEF) and Asian Development Bank.

The forum comes as Central Asia grapples with the economic ramifications of Russia's invasion of Ukraine.

According to a November 30 International Monetary Fund report, the war in Ukraine could raise poverty rates by about 1% across the Caucasus and Central Asia through its impact on inflation and remittances.

As of October, the economic fallout from the war already had thrown four million children into poverty across Central Asia and eastern Europe -- an increase of 19% over last year, UNICEF said.

Food insecurity resulting from Russia's invasion of Ukraine also is a concern in Uzbekistan, which imports around 32% of its food from Russia and Ukraine.

Uzbekistan's poverty rate fell from 17% to 14% last year, as disclosed during a videoconference in January that Uzbek President Shavkat Mirziyoyev chaired.

Uzbekistan provides some 2.3 million inhabitants with benefit payments, Mirziyoyev said at another videoconference in May.

Welfare payments, though, will not solve poverty, Kuchkarov said at the forum, adding that an Uzbek priority is the development of "human capital".

"We are focused on developing agriculture and entrepreneurship in the villages," Kuchkarov said at the forum. "For the first time, through a presidential initiative, we are issuing 30-year leases on land."

New farmers include Akhmal Akhmedov of Jizzakh, who has a wife and child. Last year he received a low-interest bank loan, which enabled him to start raising chickens and turkeys. Now he earns about $500 to $600 (5 million to 6 million UZS) per month. A year and a half ago, as a day labourer, he earned about 1.5 million to 2 million UZS ($150 to $200) per month and was considered poor.

Akhmedov is now applying for a small plot of additional land so he can grow food for his birds.

Other areas of focus in the fight against poverty include the development of infrastructure to speed up the delivery of goods and improving access to drinking water and electricity.

Urbanisation is a separate component of the initiative, with half Uzbekistan's population currently residing in rural areas.

Systematic approach

Uzbekistan has taken a systematic approach to poverty reduction which the government claims has lifted more than one million Uzbeks out of poverty since the start of 2022.

At the beginning of this year, all districts were divided into five categories and granted differentiated benefits based on the pace of socio-economic development, which has been successful in reducing poverty, Mirziyoyev said in his May videoconference.

Each year, 13 trillion UZS ($1.13 billion) of loans and 1.5 trillion UZS ($130 million) in subsidies are allocated for family entrepreneurship, he added.

The poverty threshold in Uzbekistan is 498,000 UZS per month for one person (less than $50).

The consumer price index in Uzbekistan stood at more than 2.1 million UZS (roughly $200) for one person in 2021, according to the Federation of Societies for Consumer Rights Protection.

The consumer basket used in the calculation is based on a list of goods and services purchased by the average able-bodied person in a month.

It includes the cost of bread, cereals and legumes, meat, produce and dairy products, economist Nodira Zikrillayeva told Caravanserai.

Also included in the basket are nonfood goods such as medicines, cosmetics and household products; services such as utilities and transportation; and the cost of vocational training courses, Zikrillayeva said.

"The consumer basket is generally put together for three sociodemographic groups: the able-bodied population, retirees and children," she said.

A new strategy

Uzbekistan is on the right track with its plan to fight poverty, UNICEF representative to Uzbekistan Munir Mammadzade told Caravanserai.

"A new strategy to reduce poverty has been developed, and there are strategies on employment and social protection," Mammadzade said.

"It's very important for these three strategies to interact with each other because the only way to get results is for them to come together," he added.

UNICEF in Uzbekistan works to address child poverty in a country where children comprise one third of the population and young inhabitants account for more than 60%.

Initiatives in Uzbekistan are directed at fighting multifaceted poverty and ensuring all children have access to food, education and medical care.

The children of migrants who have left the country in search of work are viewed as a distinct category.

"The concept of child poverty in Uzbekistan matches the universal definition," Mammadzade said.

"Global experience shows that this indicator [child poverty] is 25% higher than among adults."