Background: The decree of the President of the Republic of Uzbekistan on measures for the development of agricultural cooperatives in the fruit and vegetable industry, dated 14.04.2019, helped to establish the first agricultural cooperatives in Uzbekistan. Since then, only a few cooperatives have been established. In 2020, 94 cooperatives were officially operational. In 2021, only 40 cooperatives were left. The main reason is that local specialists, especially staff of the government organizations, have limited knowledge, information, and experience on the role and meaning of cooperatives. Another problem is the lack of land ownership and a clear legal basis for the operation of the cooperatives. These are the main fields of work for the project.
The project is conducted in a bipolar context with remnants of a planned economy and first effects of liberal economic reforms such as privatization of state-owned companies in 2019, abolishment of the cotton production quota in 2020. The latter measures resulted in increased foreign direct investment and made Uzbekistan one of the fastest growing economies in Central Asia with annual GDP growth of 5-8 per cent since 2005. However, this growth is largely based on mineral resources and in agriculture on the still extensive cultivation of cotton. Economic growth is far from being balanced across regions and sectors, which is shown by the high level of underemployment in rural areas.
Consequently, the project has the objective: “Economic reforms strengthen local economic development in Uzbekistan’s regions, focusing on Karakalpakstan, Fergana, Namangan and Andijan.” It aims at promotion of inclusive growth, sustainable economic development, creation of employment and income-generating opportunities mainly in rural areas. The project has a combined sectoral and regional approach: implementation of an economic policy reform in the sectors agriculture, tourism, handicrafts, and silk production etc. as well as focus on the regions Karakalpakstan in West Uzbekistan and the Fergana Valley with the project areas Namangan, Andijan and Fergana in East Uzbekistan. The project works in four intervention areas:
1. Strengthened proven and innovative approaches in selected employment and income-generating value chains promote local economic development driven by the private sector.
2. Increased performance of service providers along the value chain expands the permanent offer of advisory capacities for growth-oriented businesses in the project regions.
3. Strengthened capabilities of local actors help to identify regional value-chain partnerships in agriculture, tour-ism, and other sectors for a broader base of the local economy.
4. Public-private dialogue uses the experience gained to create suggestions for future economic policy reforms.
Project partners are: the Ministry of Agriculture (MoA), other line ministries and policy makers, research institutions and academies at the national level, economic interest groups (chambers, associations), specialist institutions e.g. in agriculture, educational institutions, cooperatives, SMEs, service providers, local and regional administrations.
The overall set-up of the project outlined above with its combined sectoral and regional approach and with the individually indispensable and mutually supportive intervention areas corresponds appropriately and timely to the challenges of economic and social change in Uzbekistan. It is expected to support the ongoing changes in the Uzbek agricultural sector by enabling farmers to utilize the opportunities that cooperatives can offer with regard to inputs, services, joint processing as well as market access. It is in line with the ongoing reform of the Law on Agricultural Cooperatives and with other changes in the legal and policy framework