Harnessing Uzbekistan’s Potential of Urbanization

Inception Report. Manila.

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Harnessing Uzbekistan’s Potential of Urbanization
optimization of budget expenditures, reduction of subsidies to towns and districts, deepening fiscal 
decentralization processes, and increasing the transparency of the budgeting process.
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On 1 January 2018, measures to strengthen the responsibility of local government bodies and financial and tax 
authorities were introduced. The responsibilities of and incentives for the heads of financial bodies (including 
local financial departments) and bodies of the state tax service were laid out. These include bonus payments for 
achieving the approved forecast of local budget revenues and for reducing tax debt on payments to the budget, 
and penalties for failure to fulfill the forecast of local budget revenue and the calculated indicators for identifying 
reserves to increase revenues of local budgets. Hokims of provinces, districts, and cities are held personally 
responsible and strongly advised to ensure the fullness of revenues.
In 2019, local budgets received the right to retain and use the income received in excess of the plan. The course 
to strengthen local budgets continued in 2020. The 2020 national budget addresses the plans to expand 
hokimiyat’s financial self-sufficiency.
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Since 2020, an income from unified tax payments in full amount, excise tax 
(mobile networks, alcohol) have been credited to local budgets. Regional governments will be granted with more 
decision-making power to redistribute their budget.
Public-Private Participation
The Law “About Public–Private Partnership” was approved in May 2019. It sets the stage for public–private 
partnerships (PPPs), among other things, to assist in “the formation, restoration, operation, maintenance of 
existing public infrastructure” and improve “the quality of operation and maintenance of public infrastructure.” 
Concessions are valued at a minimum of $1 million and have a duration of 3 to 49 years. The Agency for the 
Development of Public–Private Partnerships was set up under the Ministry of Finance to promote this agenda 
and is actively working in this domain, with expertise provided by ADB.
Opportunities for promoting PPPs relevant to urban development include the provision of urban infrastructure 
and delivery of services such as WSS; PPP studies and transaction advisory services supported by ADB in four 
cities (Samarkand, Bukhara, Namangan, and Karshi); energy generation; SWM; mass urban transport systems; 
and housing provision. International experience with PPPs shows varied results. Successful cases point to the 
presence of regulatory agencies that are able to uphold the terms of the concessions entered into between the 
public and the private parties, when either one wants to renegotiate the terms. 
Privatization of Urban Land Property
On 13 August 2019, the Law “on privatization of non-agricultural land plots” was approved and entered into 
effect on 1 March 2020.
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It specifies which types of land plots can be subject to privatization: (i) land plots on 
which the buildings, structures and industrial infrastructure facilities belonging to legal entities are located, as well 
as the land adjacent to them to the extent necessary to carry out production activities; (ii) land plots provided 
to citizens of Uzbekistan for individual housing construction and maintenance of a residential house; (iii) free 
land plots; and (iv) land plots provided to the Urban Development Fund under the Ministry of Economy and 
Poverty Reduction.
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CDIA. 2020. Developing Integrated Solutions for Urban Issues in Uzbekistan. 6 April. Manila.
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CIS Legislation. 2019. Law of the Republic of Uzbekistan of 9 December 2019 No. ZRU 589 “About the Government budget of the Republic of