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Uzbekistan: towards a employment generation programme

Uzbekistan: towards a employment generation programme. Notes for presentation Eduardo Zepeda IPC. Uzbekistan: Growth Performance. Osmani informed us about the smoothed transition process of Uzbekistan. Official figures for GDP indicate give a average growth rate of 4.3% for 97-03.

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Uzbekistan: towards a employment generation programme

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  1. Uzbekistan: towards a employment generation programme Notes for presentation Eduardo Zepeda IPC

  2. Uzbekistan: Growth Performance • Osmani informed us about the smoothed transition process of Uzbekistan. • Official figures for GDP indicate give a average growth rate of 4.3% for 97-03. • This figures are contested by the IMF, the WB, the ILO’s study. • But if true or nearly true, these figures give a good room for poverty reduction.

  3. Poverty declined in Uzbekistan • Poverty decreased from mid 1990s. • Cornia’s incidence of poverty: 23% in 1997 to 16% in 2001. • Needy families decreased from 53% to 36% over the same years. • WB’s 2000/1 estimates: • Extreme poverty 10%. • Poverty, sf, 27%.

  4. Poverty (WB estimates) • Large regional differences ranging: • ep: 2% Bukhara, 42% Kashkadarya • p: 13% Tashken, 63% Kashkadarya. • Poverty, sf,: • unemployed 35% • employed 25% • industry 40% • agriculture 24%

  5. Major problems with Uzbekistan strategy • Running out of steam • Diminishing scope for import substitution • High inequality (possible rising) • Underutilisation of capacity • Low employment elasticity • Concentration on capital intensive projects • Unemployment and underemployment

  6. labour market policiesUNDP (Mckinley’s) proposals • Extend public works • turned to infrastructure & regional dev. : • renovate the irrigation system • Build rural roads, Improve agricultural markets • Create infrastructure for exports • Operation of public works: • Wage bill to total expenditures ratio of 0.7 • Fine tune the setting of wages • With poverty reduction impact • An ‘employment guarantee scheme’ (low-wage employment on public works within ~10 Km of anyone. • Enhance labour mobility (flexibility in residence permits, affordable housing for rent). • Improve training programs • Ensure access of the poor youth • Develop vocational training).

  7. Employment • Population 2003 26 m. • Working age population 14 m. • Employed 9.6 m. • Employed youth (16-24) 14% • Unemployment 3.9% • Registered 0.4% • Unregistered 3.5% • By ILO standards ~6%

  8. Employment % distribution

  9. Employment • Small businesses 5.4 m. (57% work force) • Small and micro 1.0 m. • Farms 0.6 m. • Self (agric & non) 3.6 m.

  10. Informal employment • Informality has grown • 1 January 2004: 28% or 2.9 m., of which: • Industry 1% • Agriculture 18% • Construction 21% • Trade public catering 26% • Services 21% • Transport 7% • Other 6%

  11. Informality • Who are the informal (01-2002 Decree): • Hired • Temporary one-time or day work employees. • Irregular employees. • Seasonal employees. • Migrants • Self employed. • Assisting family members. • Vendors at markets and outside of them • Reasons (survey responses): • Ees willingness ees (avoid registration). • Eyers willingness (avoid regulation, costs). • Low pay in the formal sector.

  12. Accommodating to employment adjustments • Releasing excess labour in agriculture • 500 th. 98-01 • 300 th. 02-04 • Absorbing released workers into created farms • 438 th. 98-01 • 290 th 02-04 • Releasing from large non-agriculture enterprises: 400 th. 02-03 • Absorbing 470 th. in small bs. 02-03

  13. Are these new bs. productive? • The process seems not much more from a change of status and a breakdown of size, but • U. gov. programe to promote local content (local raw materials) in small bs suppliers of large bs. • Exemptions from tariffs • Bonuses: managers, engineers & technicians • Priority servicing by banks • Light inds, machinery, chemicals.

  14. Prommotion of small businesses • Simplification of registration & regulation • U. ranks good among transition economies. • Access to financial resources. • Tax benefits. • However, cash restrictions & tax collections remains a problem.

  15. Public works • Financed by 50% enterprises & organisations and 50% from local budget & the employment fund (payroll taxes), no plans for clear & large budget allocations. • Responsibility of state government bodies. • Miscellaneous activities, including improvement of land, but not much strategic design (seasonal work, public events, etc.). • PW participation is closely regulated in terms of eligibility & temporariness (it might even become permanent). • Wages are calibrated, at regular official wages & tariffs, but not less than 1.15 of the unemployment allowance. Are these right?

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