Uzbekistan: First Inclusive and Resilient Market Economy Development Policy Operation

approved

The Operation is proposed to be supported under the COVID-19 Crisis Recovery Facility (the Facility) of the Bank and co-financed with the World Bank (WB) under the WB's Policy on Development Policy Financing (DPF). The Operation supports the Government of Uzbekistan (GoU) in the transition to an inclusive and resilient market economy. The reforms supported by this Operation are organized under the following three pillars: (i) creating markets, (ii) improving fiscal risk management, and (iii) supporting social inclusion and green resilience. A suite of sectoral reforms in energy, agriculture, rail, and chemical sectors will be implemented to establish arms-length regulation and the basis for private sector entry while maintaining fiscal prudence. Reforms, particularly in infrastructure sectors, are essential in supporting the delivery of health care and public services and in stimulating economic recovery in the post-COVID-19 period. The consolidation of Uzbekistan's growing social protection system under one umbrella will improve the effectiveness of the social assistance programs. Furthermore, the Operation will support Uzbekistan's actions to tackle climate risks and facilitate the transition to a green economy.