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5 Facts about Poverty in Uzbekistan

Poverty in UzbekistanSituated between Kazakhstan and Turkmenistan sits the culturally rich and beautiful country of Uzbekistan. With thriving cities and lush mountainsides, Uzbekistan’s environment makes for blossoming communities. However, the country and communities within it have drastically changed within the last two decades. The Uzbekistan government has successfully lowered poverty rates, decreased unemployment rates and increased education, although these instances rarely make headlines. Here are five facts to know about poverty in Uzbekistan.

5  Facts about Poverty in Uzbekistan

  1. A large drop in poverty rates: The poverty rate has decreased by a staggering 14.7% in less than a decade. The national poverty rate in 2015 was 12.8%, in comparison to 27.5% in 2001.

  2. The issue of unemployment: In 2019, 5.9% of Uzbekistan’s population was unemployed, and 19.7% of those unemployed made less than $2 a day. A lack of job opportunities and a distinct living standard between those in urban and rural areas are only some challenges the country is facing. Due to unemployment, many choose to migrate to Kazakhstan or Russia in hopes of more opportunities to send money back home to loved ones.

  3. Maternal mortality: In 2000, the maternal mortality rate was 33.1 for every 100,000 births. By 2013, that number had fallen to 20. The fertility rate and the number of unplanned pregnancies had also decreased. Further, rectifying vitamin A, iodine and iron deficiencies as well as affordability and effectiveness have become critical in the development of national health care programs.

  4. Growing access to education: In 2017, only 29% of children between the ages of 3 and 7 had been enrolled in educational facilities. The Uzbekistan government, through a project in collaboration with The World Bank, predicts that 40% of children within that age range will be enrolled in education programs by 2024. The project aims to combat the high student to teacher ratio and create remote learning programs for those in rural areas. Access to education is one of the most important ways to fight poverty. Education helps reduce inequality, strengthen the economy and lower the risk of vulnerability.

  5.  Water access: In March of 2020, Uzbekistan accepted a $239 million credit from The World Bank to invest in a water service project. This project aims to reduce water loss and energy usage through improved sewage infrastructure within five communities. When the project is completed, over 500,000 people throughout Uzbekistan will have access to clean water. Access to water will help those in rural areas become more sustainable. Staying clean, hydrating and growing crops will become more available.

With a continuous decrease in poverty rates and an increase in educational and sanitation infrastructure, Uzbekistan has made large strides to improve the lives of its citizens. Poverty in Uzbekistan has dramatically shifted over the last two decades. Unemployment rates have dropped, neonatal mortality rates have decreased by more than half and resources such as education and clean water are becoming more accessible to all communities. With progress like this, Uzbekistan is on its way to great improvement.

– Hannah Kaufman
Photo: The World Bank

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Improving the Water Supply in Karakalpakstan

Water Supply in Karakalpakstan
The autonomous Republic of Karakalpakstan occupies the entire northwestern end of the country of Uzbekistan. With a poverty rate of 32 percent, this region is considered one of the poorest in Uzbekistan.

The Necessity of Water

Because most of this nation’s produce comes from agricultural production, water is an essential resource for the people of Karakalpakstan. The economy is supported through the production of cotton, melons and livestock, making extensive irrigation systems critical for the smooth execution of farming practices and water management.

Water is essential to life in Karakalpakstan; more than 30,000 hectares of land have been abandoned because of the lack of water. Since the shortage of water in the region often results from farmers using water inefficiently, new and effective water-saving technologies are in high demand.

Improving irrigation systems would help these impoverished farmers move out of poverty. Effective water management can reduce the cost of supplying and storing water, which would inevitably increase the farmers’ yields and enable them to cultivate more crops. With a steady and reliable source of water supply in Karakalpakstan, the region’s farmers can be assured that they will be able to tend to their crops and rely on them for financial support.

The Project to Improve Water Supply in Karakalpakstan

In response to the ongoing water crisis, the World Bank initiated a project that aims to help 1,500 private farms and 40,000 small farming households secure access to water in Karakalpakstan.

The South Karakalpakstan Water Resources Management Improvement Project (SKWRMIP) for Uzbekistan focuses on the restoration of irrigation systems and improvements in water management. With 80 percent of its resources aimed at irrigation and drainage, the project aims to build a sustainable water distribution system and a financially stable community of farmers.

“Better water management and irrigation will lead to increased farm productivity, and thus help farmers in South Karakalpakstan build their assets and improve their living standards,” said Saroj Kumar Jha, the World Bank Regional Director for Central Asia. “We estimate that 41,000 water users will be provided with new or improved irrigation and drainage services under this project.”

Financial Benefits of the Project

This project would replace the 1950s water infrastructure in Uzbekistan, which is experiencing many complications due to age. The deteriorating infrastructure and poor water management of the 1950s system is estimated to cost Uzbekistani government $1.7 billion USD annually. However, the SKWRMIP proposal comes with a total annual energy cost of $2.4 million USD, saving the government a significant amount.  It also relieves much of the burden on rural farmers paying operation and distribution fees, allowing them the freedom to save the money for themselves.

“Our firm is planning to complete the civil works along the Buston channel this year. Thousands of farmers in several districts of South Karakalpakstan will be able to receive water for the irrigation of their lands,” said Islombek Ismatov, a SKWRMIP construction manager. “Lack of water in this region makes it more valuable than gold.”

In regions like Karakalpakstan, water is extremely valuable for livelihood. Water supply has been erratic and fleeting over the past few decades in the Republic of Karakalpakstan, but the SKWRMIP works to build and maintain a functional and accessible source of water supply in the region.

– Jenny S Park
Photo: Google

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Economic Growth Increases Credit Access In Uzbekistan

credit access in Uzbekistan
Uzbekistan is setting strong economic precedents for the European and Central Asian region. New supportive legislative policies have increased government spending on education and training programs. Global economists argue this is one of the main reasons Uzbekistan’s GDP has increased by more than eight percent the past three years.

Recent economic success is also attributed to growing economic freedom allowed by a currently changing Soviet-style economy. Uzbekistan has the most diversified economy in Central Asia. This provides an increase in GDP per capita, which has been increasing steadily over the past three years as well. Improvements in GDP per capita are strong indicators of improvement in personal living standards.

At present, the service sector accounts for about 45 percent of GDP. Examples of common Uzbekistan services include car repairs, the medical industry, teaching and the food industry. Not far behind services lies industry and agriculture. Uzbekistan is the world’s fifth-leading cotton exporter and seventh-leading producer.

Economic projections for the private sector show a steady increase over the next few years. Fiscal space in the government budget allows the economy to increase stimulus without increasing public debt. This leaves the public to continue growing in wealth while working simultaneously to steadily boost GDP.

The Banking System

Credit access in Uzbekistan is likely to increase due to recent banking growth. More money circulating through the Uzbekistan economy raises banking lending power. In the past, Uzbekistan banking systems limited access to foreign investments due to governmental regulations. Almost all money contributed had come from the domestic system.

Exclusive banking provided benefits such as domestic accountability. An increase in Uzbekistan credit access relied on loans by the population. Other past pros to this system included resilience to global financial crises. Banks proved most effective in 2014 when domestic capital injections provided immunity from failing global counterparts.

This, however, has changed in 2018. Total banking capital increased 26 percent in 2014, and this year banking directors met to discuss boosting central bank interdependence with foreign allies to target foreseen inflation rates.

Banking directors continue to emphasize the importance of regulation to create and maintain a newly inclusive baking system. The new system would include an interactive global policy regarding foreign loans and cooperation.

Personal Credit Access in Uzbekistan

Smaller banking also influences credit access in Uzbekistan. A closer look reveals smaller economic changes, some of which include assistance from the International Finance Corporation (IFC). The IFC is a member of the World Bank and works to improve business in the private sectors of developing countries.

Private sector investments from the IFC have improved credit access in Uzbekistan in several ways. For example, the financial Markets Infrastructure Program (2009 to present) aims to create and improve credit information sharing. Members of the public can now receive an accurate prediction of loan repayment possibilities.

The current program also educates possible loan participants on formal risk factors associated with taking a loan. The certification for financial institution employees is the most prevalent in this project, as it allows job creation while creating a more knowledgeable private sector.

The Mortgage Market Development Project also instituted public credit access in Uzbekistan by improving mortgage lending procedures in local banks, made possible through set lending practices. Both programs continue today, allowing the general public higher access to jobs, loans and savings options.

Strong Projections

Expansion into the global economic sphere is a huge step for Uzbekistan, as previous years of Soviet-style economics would not have allowed this type of growth. Compared to its European-Asian counterparts, the Uzbekistan economy is at the forefront of balance and diversity.

The shift from exclusive banking to possibly inclusive is a prime example of the forward economic thinking propelling the country forward. Further improvements to liberalize the Uzbekistan economy, establish rule of law, social safety, constructive foreign policy and personal banking are also paving the way for success in the coming years.

– Logan Moore
Photo: Flickr

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Poverty in Uzbekistan

Poverty in Uzbekistan

Poverty in Uzbekistan is dropping. Though rarely seen making headlines, the country of Uzbekistan has seen sustained growth over the past several years. If trends continue, the country is expected to be on its way towards becoming a successful, developed country free from extreme poverty in the near future. Below are ten facts about poverty in Uzbekistan and the progress to alleviate it.

10 Facts About Poverty in Uzbekistan

  1. In a population of just over 31 million, 13.7% live below the poverty line. This is down from nearly 30% in 2001.
  2. While Uzbekistan has experienced increased urbanization in recent years, 75% of those living in extreme poverty in Uzbekistan still live in rural areas.
  3. Child health remains a hurdle to overcome, with 34 out of every 1,000 babies dying before their first birthday. In comparison, only six babies die in the first year of life on average in the U.S.
  4. Poverty in Uzbekistan is contradicted by the overall economic growth of over 8% in the past five years.
  5. In 2011, The World Bank reclassified Uzbekistan from a low-income country to a lower-middle income country. This indicates the country is making sustained progress toward development.
  6. Between 2001 and 2013, real wages doubled as job prospects improved.
  7. Education, often a prerequisite for growth and poverty reduction, has risen to 99.8% as of 2013.
  8. Foreign trade has quadrupled in the past 15 years, helping to improve household incomes across the country.
  9. Recent investment through The World Bank has provided more than 60,000 farmers with training in improved crop protection and pest control. This has allowed farmers to improve their crop yield, thereby increasing their income and reducing poverty.
  10. To further reduce poverty in Uzbekistan and improve living conditions, the country has set a goal of becoming an industrialized, upper-middle income country by 2030.

With steady growth and economic improvements, Uzbekistan has positioned itself to become a successful, developed nation in the near future. As these improvements continue, poverty in Uzbekistan is anticipated to decline and living standards should significantly improve across the country.

– Sara Christensen

Photo: Flickr

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