Sector Assistance Program Evaluation on Education in Uzbekistan

Employment outcomes. 
The slow growth of employment opportunities (at about 2.1% 
per annum, compared with the more than 3% increase in labor entrants) continues to be a major 

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challenge for the education sector. Apart from agriculture, Uzbekistan “has a potential 
comparative advantage in labor-intensive light manufacturing, but realizing it will depend upon 
reducing pervasive state involvement and allowing truly private enterprises to compete on a 
level playing field. Presently, this is a ‘binding constraint’ in Uzbekistan. In services, skills-based 
subsectors could be facilitated by a better fit between the education system and labor market 
needs, and by a well-functioning ICT environment” (CSP, 2006, p. 4, para. 9). However, 
education sector investments have yet to demonstrate external efficiency. The RRPs of SSE 
and ESDP identified the significance of an education–employment interface and emphasized 
the need to generate marketable skills in Uzbekistan. However, the implementation of these 
loans, as noted in the 2006 CSP, did not lead to much improvement in this area. Education–
employment links have much more relevance to the graduates of the SSE system, as they are 
the new entrants. Therefore, the inability to effect transformation in SSE is likely to delay any 
improvement in the job market of the school graduates.
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More emphasis on SSE, especially its 
assessment of competency levels, examinations, and certifications, is urgent if the education 
sector has to serve as a conduit to gainful employment, particularly in the private sector. PPP is 
the preferred modality for support in these areas.
66. 
Sustainable
financing outcome. Uzbekistan is spending 8%–9% of its GDP on the 
education sector. These investments come from its own financial resources, as well as from 
concessional and non-concessional loans. While this is a clear indication of the priority to 
support human capital formation, it could be unsustainable in the medium-to-long term. It is the 
cost–benefit analysis (including supply and demand assessments) that should determine the 
level of total education expenditure, and how it should be split between the public budget and 
private sources. Some of these public investments and fiscal reforms in the education sector are 
still to be fleshed out. Cost recovery is low. A detailed financial analysis of the education sector 
is required, not only for the sake of its proper development, but for apportioning the limited 
amount of public expenditure across the other public services such as water, nutrition, health, 
housing, etc. Such an analysis of education expenditure is part of the medium-term expenditure 
framework (MTEF). These frameworks are instrumental not only for the optimal allocation of 
resources for services, but also to protect these allocations when faced with macroeconomic 
volatility. In other words, it is this sustainability that is the main justification for an MTEF to 
ensure adequate investments in the medium-to-long term.