Enhancing Economic Opportunities for Rural Women

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Uzbekistan has accelerated the pace of its market-oriented reforms with a strong focus on building a competitive and liberalized economy and is in the midst of a significant transition from an inward oriented state led economic model to a more open, integrated and export driven economy. The Government of Uzbekistan (GoU) has adopted a five-year development strategy that significantly changes the role of the state in the economy to enable competitive markets, growth of the private sector, modernization of agriculture and investments in human capital. Improvements in financial inclusion, social protection and service delivery are also a focus of the reforms. The Government has recognized the need for new drivers of economic growth, income generation and job creation for long-term sustainability of socio- economic gains. To achieve its ambitious growth objectives, Uzbekistan will need to promote inclusive job growth at a much faster pace and more women and youth will need to join the labor force. The recent diagnostic on growth and job creation suggests that the GDP growth in Uzbekistan for the period of 1996-2016 was largely jobless and was fueled by an increase in productivity across sectors. However, some of these productivity gains were offset by falling employment rates. It is estimated that GDP grew at 12.5 percent less compared to the growth expected had the employment rates stayed constant. The job gap persists, and the latest data suggests that only 1.06 million jobs were added against an estimated need of more than 1.3 million jobs. This needs to be viewed in conjunction with significantly lower female labor force participation rates in Uzbekistan. About 56 percent of the population above 15 years was employed in 2017 (ILO) with a wide gender gap as the employment rate for men was 69 percent and 44 for women. The unemployment rate for women remains unchanged since 2007 at 8 percent which is almost equal to the unemployment rate for men of 8.5 percent[3]. Inactivity among women is more than double that for men at 48 percent for women and 22 percent for men. If female labor force participation in Uzbekistan equaled on average that of OECD countries, an additional 1.03 million women would be contributing to the economy. If parity were achieved with Russia, the figure would increase to 1.6 million. Rural women from low income households are at high risk of economic exclusion. The SCD has recognized that the economic exclusion of women is the largest social exclusion risk. There are structural barriers to women participation in the labor force and rural women from low income segments are particularly vulnerable. Women in the bottom 20 percent wealth quintile have the lowest employment rates amongst all Uzbek women. Only 37 percent of rural women attain education beyond secondary level as opposed to 49 percent of urban women which significantly affects the likelihood of as well as the sectors of employment. Women with vocational or tertiary education are predominantly employed in public sector jobs with formal wages while women educated up to secondary level or lower work in informal, unregulated, part-time, low paying jobs. Few working-age women participate in the formal labor force. Of those in the labor force, a much higher share is looking for work It is estimated that for rural women from low income families, cotton picking may contribute up to 30 percent of annual income. The ongoing modernization of the cotton sector will put further pressure on income generating opportunities for such women. Rural women in Uzbekistan face multiple barriers to entrepreneurship and employment—from social and cultural norms to access to finance and markets. Gender disparities in Uzbekistan manifest most strongly in women’s positions in the labor force and employment with social stereotypes having a profound impact on women’s access to opportunities and resources. Rural women face several barriers to participation in the job market. These include less education and skills as on average rural women (56 percent) have only a secondary education. Overall 66 percent of women in Uzbekistan with secondary education are inactive. Further constraints include the burden of domestic responsibilities, the bulk of which are shouldered by women; an expectation of being the sole caregiver and breadwinner when men migrate for work; limited availability and access to financial and business resources; low mobility and adoption of ICT; and lack of access to business networks that can mentor budding entrepreneurs. Rural women spend 45.9 percent of their free time on unpaid domestic work, compared to the 16.6 percent of a rural men’s time occupied by such activities. As a result, rural women, especially those in the reproductive age, have limited time for productive economic activities. The large-scale migration from rural areas for work outside the country mostly to Russia and Kazakhstan by men places a heavy burden on female-headed households. Limited access to affordable and high-quality childcare and pre-school services adversely affects women’s participation in the labor force. Currently, 60 percent of all pre-school facilities in Uzbekistan are in urban areas. Half of the population however lives in rural areas, which account for only 30 percent of total pre-school enrollments indicating a higher burden of childcare in rural areas. Fertility rates in rural areas are high, and local traditions encourage families to have many children. As a result, women spend about three times as much time providing care as men. Rural households cannot often afford the fees for these establishments. In December 2016, the GoU approved the Program for Further Improvement of the Preschool Education System from 2017 through 2021. Under the program, GoU is expanding pre-school infrastructure across the country through state-led initiatives as well as public-private partnerships. The initiative presents an opportunity to offer community based affordable and quality childcare services to boost female economic participation. The rural women’s enterprises planned under this project could be both service providers as well as primary beneficiaries of such facilities. A study in Turkey by UN Women in 2018 showed that investments in care could generate 2.5 times more jobs than in construction and 73 percent of these would go to women. The COVID-19 crisis has exacerbated the vulnerabilities facing rural communities and women from low-income rural households due to the loss of income from remittances, employment, and other sources; increased domestic care responsibilities; and increased risk of domestic violence. In addition, recent analysis of data from the GoU’s Listening to the Citizens of Uzbekistan (L2CU) project shows that one-fifth of Uzbekistan’s households are headed by women and these female-headed households (FHHs) face additional vulnerabilities. Approximately half of female heads of household report having a disability compared to 30 percent of male-headed households (MHHs). Members of FHHs earn less than MHHs, are less likely to have employed household members, and generally have fewer sources of income than MHHs. FHHs are also more vulnerable to income fluctuations and economic shocks. Therefore, compared to MHHs, FHHs are almost twice as likely to be unable to pay for utilities and are more likely to reduce food consumption to meet basic needs. Although FHHs are slightly more likely than male headed households to report receiving support from GoU/official sources since the start of the pandemic, FHHs are less likely than male headed households to be able to pay for an emergency expense. The innovative design of the project integrates participatory approaches to community outreach and capacity building with the provision of financial and non-financial services that are tailored to the needs of women from low-income rural households. Working with local institutions and community resource perso