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Of the 15 newly independent states that emerged from the breakup of the Soviet Union in 1991, Uzbekistan is the third largest in population (about 25 million people) and fourth largest in land area (447,000 square kilometers). Strategically located in Central Asia at the crossroads of the ancient Silk Road between China and Europe, the region that is now Uzbekistan was for centuries one of the cradles of world civilization.
Uzbekistan is rich in natural resources such as coal, copper, gold, natural gas, oil, silver, and uranium, and with a well-educated population and skilled labor force it enjoys significant economic potential. Primary commodities, together with cotton fiber, account for about 75% of merchandise exports, with cotton alone accounting for 40%. Despite the difficult terrain (60% is desert, steppe, or semi-arid land and only 10% is cultivated), agriculture accounts for about 25% of GDP and employs about 40% of the labor force. In this context, the heavy use of agro-chemicals, the diversion for irrigation of huge amounts of water from the two rivers that feed the region (Amu Darya and Syr Darya), and poor drainage systems have caused enormous health and environmental problems in recent years, exemplified by the Aral Sea disaster. Uzbekistan's 2004 GNI per capita (World Bank Atlas method) is estimated at US$420, placing it among lower-income economies. Transport Sector Overview
The development and modernization of the transport sector has been a government priority, given the urban population's high dependence on public transport and the importance of domestic and international trade for the economy. In the urban public transport sector, the government has implemented a number of important reforms, including the separation of regulatory and operational responsibilities in the provision of services; corporatization and privatization of bus companies; introduction of competition through adoption of a program of bus route franchising and development of an appropriate regulatory framework; and creation of an enabling environment for private sector participation in the provision of transport services. Restructuring of the railway, Uztemiryollari, has been proceeding and involves spinning off unrelated businesses, laying off redundant workers, and rationalizing tariffs. The process of corporatization of the railway has also begun. In the road and air transport sectors, the government has focused on investments, including the modernization and rehabilitation of equipment and facilities, and the creation of a key road link between the Fergana valley and the rest of the country. Except for urban transport, however, the transport sector is still dominated by state-owned enterprises and there is no appropriate financial, regulatory, and institutional framework as yet for competitive provision of transport services. Also, given the absence of a Ministry of Transport, sector management and accountability for performance are weak. Government Strategy The Government's strategy in the transport sector has been focusing on:
- Developing a step-by-step approach to restructure institutions and reform sector policies to enable marked-based transport management and operations.
- Establishing an appropriate policy, legal, and regulatory framework for the sector.
- Providing adequate transport infrastructure and maintenance to support the transition to a market-based economy.
- Developing domestic transportation routes that bypass neighboring countries, maintaining Uzbekistan's role as a regional transportation hub and ensuring reliable access to alternative seaports in Europe and Asia via trans-national transport corridors.
Policy Reforms Supported by World Bank Program - Providing technical assistance for review and improvement of the Uzbek legal and regulatory framework for urban transport services.
- Enhancing the effectiveness and efficiency of the competitive bus route tendering system in the five project cities through necessary improvements in the bus fare setting policies and procedures; improvement of the methodology for implementation of passenger flow surveys; optimization of bus route network design; development of methodology for enforcement of bus route franchising contracts; and institutional development and capacity building for entities involved in the management of urban transport.
- Increasing the capability of city administrations in planning and management of urban transport systems through training of relevant staff of the Uzbek Agency for Automobile and River Transport and the City Transport Departments in the five project cities.
Updated March 15, 2006
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