Harnessing Uzbekistan’s Potential of Urbanization

of activities of the agency of urbanization under the Ministry of Economy and Industry of the Republic of Uzbekistan.”
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Agency for Urbanization. Urbanization Development Concept. Unpublished.

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Government Policies and Programs 
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In March 2020, however, the agency was dissolved, signaling a step back in the urban sector reform process. 
At the same time, the Ministry of Economy and Industry was reorganized into the Ministry of Economic 
Development and Poverty Reduction. Two departments have since taken over some of the previous functions of 
the Agency: the Department of Urban Policy, which is responsible for land privatization, urban development, and 
housing management, and the Department of Road Transport and Communications Infrastructure. 
Fiscal Decentralization 
One of the core goals of the foundational Presidential Decree of 2017 “on the strategy for the further 
development of the Republic of Uzbekistan” is reforming “subsidies and support to districts and cities, in view of 
the expansion of the revenue base of local budgets due to the rapid development in their industry and services.” 
A series of presidential decrees and resolutions were issued in 2017 to support the main objective of the country’s 
budget policy which called for ensuring sustainable finance of the integrated development of territories.
This goal is set to be achieved through (i) radical strengthening of the revenue base and decentralization of local 
budgets, (ii) further improving inter-budget relations, (iii) strengthening the financial independence of local 
government bodies, and (iv) increasing their responsibility for implementing specific targeted measures. These 
measures include expanding the tax potential by promoting the development of small businesses and private 
enterprises; creating new jobs and ensuring employment of the population; and rapidly developing engineering 
and communication, road transport, and social infrastructure.
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The fiscal policy’s main directions and priority 
tasks at the level of local budgets for improving intergovernmental relations are as follows:
(i) Strengthen the responsibility of local government bodies and financial and tax authorities to increase 
the revenue base; ensure timely and targeted financing of the approved spending parameters of local 
budgets; ensure further development and maintenance of social facilities and infrastructure through 
(a) fixing and/or leaving at their disposal of certain types of taxes and other obligatory payments as the 
revenues of the local budgets; (b) full coverage of taxpayers on their territory to increase tax collection; 
(c) creating new production enterprises; and (d) restoring the production activities of economically 
insolvent, non-working enterprises.
(ii) On the subvention of provincial, city, and district budgets, consistently reduce their dependence on 
deductions from higher budgets, increasing on this basis the independence and responsibility of local 
government bodies in tackling socioeconomic development of the regions.
(iii) Distribute the revenues from certain types of taxes coming from large taxpayers, among the republican 
budget, local budgets of provinces, and budgets of districts and cities.
(iv) Provide local authorities with the authority to reduce and increase rates for certain types of local taxes to 
ensure the uniform development of districts and cities.
(v) Increase local government autonomy in financing costs for the development of socioeconomic 
infrastructure and unforeseen expenses. 
(vi) Ensure transparency in the formation and implementation monitoring of local budgets with the wide 
involvement of deputies and the public control.
The transfer of increased budget powers and responsibilities to local authorities started with the adoption of 
the State Program on Development Strategy of Uzbekistan (2017–2021). The Strategy envisages expanding 
the sources of local budget revenues through the sustainable development of sectors and regions, further 
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Cities Development Initiative for Asia (CDIA). 2020. Project Preparation Study for the ADB Integrated Urban Development Project in Uzbekistan,