Harnessing Uzbekistan’s Potential of Urbanization

Part III: Challenges in Sustainable Urbanization to 2030 
Directing future urbanization. If the current trends are simply maintained, it is unlikely for the government to 
achieve its goal of a 60% rate of urbanization by 2030. Uzbekistan’s urban population has slightly declined from 
51.5% in 2010 to 50.5% in 2019. This trend reflects a mix of factors, including domestic migration restrictions 
(named propiska), higher cost of living in urban areas, and a mismatch of skills sets with urban employment 
opportunities. While the government’s lifting of the propiska system is likely to stimulate increases in
rural-to-urban migration, achieving the government’s target of 60% urbanization by 2030 is a challenge.
Various dynamics, whether policy driven or not, could reverse such trends in the coming decade. Proactive 
urbanization through strategic, well-coordinated, evidence-based, and integrated planning and investments 
particularly in secondary cities, combined with responsive urban governance, would make these areas more 
attractive for businesses and residents. If left uncoordinated, however, future urbanization will further exacerbate 
regional imbalances. The government should seek alternative ways to reinforce the role of secondary cities 
and regional hubs, such as Samarkand, Bukhara and Karshi, and of smaller ones, such as Urgench and Nukus 
in the northwest, as well as Djizzak and Gulistan located between Tashkent and Samarkand. This would move 
Uzbekistan toward a polycentric development and support regional development, enhancing opportunities for 
growth and welfare. 
Supporting municipal development. Accelerating decentralization is an area of reform that plays an important 
role in supporting equitable urbanization, as cities become the focus of economic development and as more 
complex entities require more advanced management systems. Decentralization would require reviewing and 
clarifying the assignments of functions across government levels; improving the transparency and predictability 
of budget transfers through a rule-based system (such as in Indonesia); and providing greater revenue autonomy 
to subnational governments. Assigning municipalities a greater role in urban development will require improving 
their technical, organizational, and financial capacities. 
Reforming urban planning. A new generation of urban master plans would translate a national urbanization 
strategy into both medium- and long-term growth strategies for Uzbekistan’s capital and for its secondary cities. 
These plans aim to enhance livability by facilitating urban competitiveness; equitable urban redevelopment; 
better access to urban services; and improvements in public health, environmental quality, and resilience to 
natural hazards and climate change risks. They would promote bottom-up planning processes, capitalize on 
comparative advantages (both economic and location), and allow for integrated urban development, bringing 
together the multiple components required for urban livability, instead of the traditional top-down planning 
approach that separates various urban systems and investments. 
Enabling territorial mobility. A legacy of the Soviet Union era, residency permits are required nationwide, which 
significantly constrain urbanization. Violators of the procedure are mostly the vulnerable, low-income migrants 
from rural areas, estimated at 320,000 to more than 1 million in Tashkent; secondary cities are also affected.
In April 2020, the residency permit system was relaxed for Tashkent and its region, granting official residence in 
return for the purchase of a housing unit. Housing, however, is largely unaffordable to low-income unregistered 

---

Executive Summary 
xi
migrants. One of the goals of Urbanization Decree 2019 is “free movement of people from rural to urban areas,” 
and this should be fully implemented.
Increasing urban housing and infrastructure supply. Assuming territorial mobility will be achieved, a major 
increase in affordable urban housing supply is needed, considering the additional internal migration levels and 
the accumulated supply backlog. Scaling up urbanization and urban development in the country also requires a 
significant increase in the provision of urban infrastructure and services that essentially complement the supply 
of housing. This requires capable sector institutions, major financial investments, robust regulatory frameworks, 
and financial set ups, including tariffs allowing for full cost recovery. As per the Presidential Decree 6074 
(September 2020), tariffs are now required for the water and sanitation sector to further develop drinking water 
supply and sewerage system. Opportunities for private sector participation would help meet the current gaps.
Addressing environmental degradation. For Uzbekistan’s urbanization to become sustainable, addressing the 
environmental and climate change constraints would avoid a pattern of urban dependency on high consumption 
of water and energy and increasing carbon emissions. Anticipatory urban planning and urban resiliency should be 
a priority. Stronger policy, regulatory, and enforcement mechanisms are required to achieve higher environmental 
standards. Investment programs could expand the use of renewable energy systems in urban areas to supplement 
the centralized provision of urban services, such as energy and district heating.