This chapter provides an overview of the economic, environmental, and capital market-related challenges that Uzbekistan faces and the arguments for diversifying sources to finance the green transition. The scale of Uzbekistan’s green transition requires a marked increase in private financing to fill the existing spending gap. The outsized role of the state in Uzbekistan’s economy and its underdeveloped domestic capital market act as significant constraints and call for a diversification of sources to finance the green transition. Uzbekistan’s three thematic bond issuances point to an emerging opportunity to use green bonds to finance projects related to the country’s climate and development goals while the government continues its efforts to facilitate capital market development. Although green bonds are not free of risks nor are they a panacea, they offer important advantages, such as the appetite of international investors for green investment projects and the transparency that their use-of-proceeds requirements encourage.
As in many countries, the economies of Eastern Europe, the Caucasus and Central Asia (EECCA) have been negatively affected by the global COVID-19 pandemic. Their governments responded by addressing the health impacts and providing relief to affected businesses and workers. Many EECCA countries have also implemented measures that will help advance environmental objectives as part of their rescue and recovery plans. Nevertheless, much more needs to be done to ensure that recovery plans accelerate a green transition, thereby building resilience against external shocks. This policy paper analyses measures related to COVID-19 in 11 EECCA countries based on their potential to advance the transition to a greener, climate-resilient and low-carbon economy. Recommendations suggest ways to ensure that governments align efforts to support economic recovery with their objectives on climate change, biodiversity and wider environmental protection.
The global COVID-19 pandemic has had a significant negative impact on the economies of Central Asia. This updated policy note reports on the latest developments in the region and looks ahead to identify the key challenges likely to be faced by the region’s policy makers in the short-to medium-term. It examines five major economic challenges facing countries as they recover from the COVID-19 crisis –debt sustainability, migration, job retention, private sector fragility, and lack of connectivity –and proposes ways forward.
This chapter describes the institutional set-up and market infrastructure of Uzbekistan’s financial sector as well as the institutional, legislative and regulatory barriers that have impeded the development of the country’s capital market. Uzbekistan’s domestic financial system is underdeveloped, dominated by state-owned banks and underutilised by the country’s citizens and potential investors. An opaque amalgamation of fragmented legislative and regulatory acts and the lack of a centralised platform for securities trading reduce the accessibility of the market to potential participants, and the products permitted by current legislation do not correspond with emerging demands. Although recent reforms have addressed some of the problems that have stunted the development of Uzbekistan’s capital market, there are several opportunities available to the government to boost the supply of and demand for securities on the domestic market and, in so doing, encourage the development of a healthier, more dynamic capital market.
This chapter summarises the country-specific reports on climate-related development finance for 11 countries of Eastern Europe, the Caucasus and Central Asia (EECCA). The full country reports are available on the website of the OECD-hosted GREEN Action Programme [www.oecd.org/environment/outreach/eap-tf.htm]. Each report analyses the country’s climate targets and priority sectors/areas for climate actions; development finance flows to support climate actions in the EECCA region; and in-country enabling environments, such as laws, regulations, institutional arrangements and domestic financing mechanisms.
Conveniently located near the world’s fastest growing energy markets, the resource-rich and transit countries of Eastern Europe, Caucasus and Central Asia contribute significantly to world energy security. However, shared challenges across the region include aged infrastructure, high energy intensity, low energy efficiency, untapped alternative energy potential and poorly functioning regional energy markets.
This publication highlights the energy policies and sector developments of Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine and Uzbekistan during 2013-14 and provides a summary of key recommendations for policy makers in the region.
Energy policy analysis is conducted in line with the INOGATE Programme’s four main pillars of energy development: energy market convergence, energy security, sustainable development and investment attraction. Started in 1996, the INOGATE Programme is one of the longest running energy technical assistance programmes funded by the European Union and works within the policy frameworks of the Baku Initiative and the Eastern Partnership. The INOGATE Programme co-operates with 11 Partner Countries to support reduction in their dependency on fossil fuels and imports, to improve the security of their energy supply and to mitigate overall climate change. It also supports the Eastern Partnership, a joint initiative between the European Union, EU Member States, and the Eastern European and Caucasus countries. Launched in 2009, the Eastern Partnership aims at advancing political association and economic integration.
This publication has been produced with European Union financial assistance provided through the European Neighbourhood and Partnership Instrument.
After decades of relative inactivity in international financial markets, Uzbekistan has emerged as a dynamic albeit small player that has made green finance a central component of its development strategy. Following its inaugural bond issuance on the international market in 2019, three thematic bonds have been issued in short order: a sovereign sustainability bond (labelled “Sustainable Development Goals bond”) in 2021 and two green bonds – one sovereign, one corporate – in 2023. These achievements establish Uzbekistan as a frontrunner in the region of Central Asia, where thematic bonds remain a novel financial instrument.
Since embarking on a wide-ranging reform programme in 2017, Uzbekistan has made considerable progress in creating the framework conditions for a competitive private sector. In the first decades of independence, Uzbekistan’s growth was primarily driven by a state-led model of industrialisation, state-owned enterprises predominated in most sectors of the economy, and the role of international trade and the private sector significantly limited. Whilst macroeconomic performance was relatively strong, this development model tended to hamper the reallocation of human and fixed capital needed to drive structural transformation. Since the reform process accelerated in 2017, the government has made considerable efforts to reduce the direct role of the state in the economy and enable the private sector to play a more expansive role in economic development.
The scale of Uzbekistan’s green transition requires a marked increase in private financing to fill the existing spending gap. The outsized role of the state in Uzbekistan’s economy and its underdeveloped domestic capital market act as significant constraints and call for a diversification of sources to finance the green transition. Since 2021, Uzbekistan has made green bonds a central part of its strategy to fill the financing gap and mobilise new sources of capital for its domestic green infrastructure projects. This publication explores the current market and institutional set-up in Uzbekistan, the reforms that have led to recent issuances of both sovereign and corporate thematic bonds, and the remaining barriers to further uptake of the instrument. The report also provides policy recommendations related to the market's institutional set up, Uzbekistan's regulatory framework for debt capital markets and emerging opportunities for further green bond use aimed at key stakeholders, including policy makers and market participants.
This chapter outlines the public, private, domestic and international capital that Uzbekistan could use to finance its ambitions to boost living standards and swiftly reduce GHG emissions as well as the estimated gap between current spending and the flows that are needed. Public domestic financial flows, primarily from the state budget, and public international finance flows, from multilateral and bilateral donors, have been essential sources of Uzbekistan’s development and climate finance, but there are increasing opportunities to harness the country’s developing securities market and attract domestic and international financiers. Given budget constraints, the scale of the transition cannot be achieved without increased private sector financing and more efficient use of available resources.
Like in many countries, the scale of Uzbekistan’s green transition requires a marked increase in private financing to fill the existing spending gap. However, compared to other countries, the outsized role of the state in Uzbekistan’s economy and its underdeveloped domestic capital market are particularly significant constraints to the mobilisation of private finance. Since 2021, Uzbekistan has made green bonds a central part of its strategy to fill the financing gap and mobilise new sources of capital for its domestic green infrastructure projects. This report provides a stock-take of the market and institutional set-up in Uzbekistan, the reforms that have led to recent issuances of both sovereign and corporate thematic bonds, and the remaining barriers to further uptake of the instrument. The report covers information available as of October 2023, although given the rapidly evolving situation in Uzbekistan some changes to market conditions and additional bond issuances may not be included. The report also provides policy recommendations related to the market's institutional set up, Uzbekistan's regulatory framework for debt capital markets and emerging opportunities for further green bond use aimed at key stakeholders, including policy makers and market participants. It contributes to the growing body of OECD work on thematic bonds in the emerging markets of Eastern Europe, the Caucasus and Central Asia (EECCA).
Uzbekistan is the second largest economy in Central Asia, and the government aims to achieve upper-middle income status by 2030. Real GDP grew by 5.3% in 2022, down from 7.4% the previous year. For almost three decades, the country’s post-independence growth was driven chiefly by state-directed investment and industrialisation, with international trade and private sector development significantly limited. This has changed since the launch of a wide-ranging programme of reforms in 2017.
Since the 1990’s, the countries of Eastern Europe, the Caucasus and Central Asia (EECCA) have made great progress in pursuing economic development that is also environmentally sustainable. The countries, in collaboration with the GREEN Action Task Force hosted by the OECD, has developed a number of policies aiming to improve environmental quality and social well-being, while creating opportunities for strong economic growth and decent jobs in the region.
This report was prepared as the OECD contribution to the ninth “Environment for Europe” (EfE) Conference (5-7 October 2022). In this context, this report aims to: (i) take stock of progress on policy developments towards a green economy in the EECCA countries; (ii) showcase selected contributions from of the Green Action Task Force that integrate environmental and climate considerations into development pathways of the EECCA countries, and mobilise finance for action; and (iii) provide an outlook for the future, including priority actions that the Task Force in co-operation with the EECCA countries should take to enhance the momentum for green economy transition in the region.
Addressing barriers to private-sector development has been a long-standing ambition of the government of Uzbekistan, with an extensive programme of reforms that began in 2017 redoubling efforts to foster the growth of a more competitive and productive population of private-sector firms. Uzbekistan needs a more dynamic and innovative private sector if it is to meet the challenges and seize the opportunities of the green and digital transitions, which create a new impetus for accelerating these reforms. Elaborating on feedback garnered through a small, focussed survey of foreign firms in Uzbekistan, this report provides new insights into their perceptions of the ongoing reform process and in doing so draws attention to some of the most pressing issues facing policymakers and business.
Addressing barriers to private-sector development has been a long-standing ambition of the government of Uzbekistan, with an extensive programme of reforms that began in 2017 redoubling efforts to foster the growth of a more competitive and productive population of private-sector firms. Uzbekistan needs a more dynamic and innovative private sector if it is to meet the challenges and seize the opportunities of the green and digital transitions, which create a new impetus for accelerating these reforms. A survey of the private sector in Uzbekistan provided an opportunity to gather new insights into firm-level perceptions of the ongoing reform process and to refocus the attention of policymakers on some of the most pressing issues.
Subnational governments in Asia and the Pacific are key providers of the public services and infrastructure required to achieve the Sustainable Development Goals. Given this role, it is essential that policymakers and development partners understand and support the effective functioning of multi-level governance structures and subnational government finances across the region.
This joint OECD-ADB report provides a comprehensive overview of subnational governments across Asia and the Pacific. It covers over 467,000 subnational governments from 26 countries, which represent 53% of the world’s population and 40% of global GDP. On average in 2020, subnational governments in the region accounted for 29% of total public expenditure (8.8% of GDP), 35% of total public revenue (8.5% of GDP) and 38% of public investment (2% of GDP).
Harnessing unique data from the 3rd edition of the OECD-UCLG World Observatory on Subnational Government Finance and Investment, the analysis highlights how decentralisation and territorial reforms have reconfigured the structures and finances of subnational governments in the region. It covers a range of topics including fiscal rules, financial management capacity, priority-based budgeting, asset management and the use of public-private partnerships.