I. Introduction

Excellency President Karimov, Distinguished Ministers, Conference Delegates, Ladies and Gentlemen,

I am delighted to be in Uzbekistan once again, and appreciate the opportunity to be here at this high-level international conference.

II. The Uzbekistan Economy

Countries around the world are seeking to achieve sustainable and balanced economic growth. Uzbekistan’s national development strategy has demonstrated strong results, even under current global economic uncertainties. Uzbekistan is one of few countries globally that has been able to maintain a high level of economic growth through the global financial crisis, and continues to significantly outpace global growth each year.

As highlighted by President Karimov in his anniversary address to the nation, Uzbekistan’s strong and sustained growth has increased per capita real incomes by more than eight times. Equally noteworthy are Uzbekistan’s significant social development achievements and year on year improvements in the social well-being of the country.

I sincerely congratulate President Karimov on these considerable achievements. Uzbekistan, while 21 years young, continues to make significant progress, overcoming global challenges with prudent economic management and strong macroeconomic fundamentals. As one of the fastest growing economies in Central Asia, becoming an upper middle-income country by 2020 is a national goal that can be achieved. The challenges ahead are sustaining the high rates of growth, creating more jobs, and increasing the social wellbeing of all Uzbek people.

Uzbekistan’s national development strategy, as set out in its Welfare Improvement Strategy 2012-2015, aims to achieve this goal and address these challenges through a combination of significant investment and institutional reforms.

ADB’s country partnership strategy with Uzbekistan builds on the national development strategy for inclusive growth and the transformation of Uzbekistan into a modern industrial and diversified economy.

To achieve greater inclusive growth and help narrow rural-urban gaps, ADB support is being provided to improve rural energy, transport, water supply and sanitation, and water resources management.

To advance policy reforms led by President Karimov, strategic assistance is being provided for developing the private sector, encouraging good governance, and providing value-added knowledge and services.

Our cooperation with Uzbekistan continues to strengthen, with a portfolio that has grown quickly to comprise 47 projects and over $8 billion in total investment. With ADB financing of $3.5 billion and almost half of the total portfolio value, ADB is proud to partner with Uzbekistan in projects that are instrumental in modernizing and advancing Uzbekistan’s power industry, road infrastructure, and financial sector, and driving its industrial development and transformation.

III. Rural Housing Program

The rural housing program launched by President Karimov in 2009 is an important cornerstone of the national development strategy, as well as ADB’s country partnership strategy with Uzbekistan.

The Housing for Integrated Rural Development Investment Program is an illustrative example of the dynamic partnership that is evolving between Uzbekistan and ADB. The first project under the program has already improved living standards for 8,500 rural families, while supporting 850 small contractors and creating up to 100,000 jobs for the rural population across the nation.

Community designs include space for retail shops and commercial services. With reliable electricity, gas, and water supply, opportunities are opening up for home-based businesses. Planned communities, modern house designs, new construction technology and materials, and more environmentally sustainable construction solutions are advancing the construction sector and providing additional opportunities for Uzbek entrepreneurs and industries. These opportunities are being facilitated by parallel government initiatives to expand access to financing for rural borrowers.

Partnership in this innovative and unique program is a first for ADB. A number of knowledge solutions have been introduced to achieve greater effectiveness and efficiency of public investment, and new approaches to accelerate economic development. These include advanced solutions to: (i) improve access and outreach to socially prioritized households, and (ii) simplify bidding requirements for small contractors and increased effectiveness of bid evaluation processes. Introduction of a project intern program, the first of its kind, is providing a unique opportunity for Uzbek youth to participate in advancing national development, gain valuable project experience, and contribute to quality assurance project processes.

ADB approved a multi year investment program for $500 million in September 2011 to support the government’s rural housing program. The Housing for Integrated Rural Development Program has three principal goals. First, it will support up to 50,000 rural housing loans by 2015. Second, it will improve the capacity of local governments to develop thriving, well-planned rural communities. Third, it will promote investment in rural areas and make it easier for small businesses to operate and grow.

The program supports the rural population with new and modern housing, better infrastructure and social services, and affordable housing finance. It is also helping to develop the local construction sector, enhance the attractiveness of rural areas for doctors, teachers and other professionals, and create jobs.

The new houses offer modern designs with better facilities, electricity, and plumbing. They bring higher living standards to people in rural areas, and provide greater comfort and convenience to families, especially for women.

Moreover, the houses are being developed as part of integrated rural communities. Playgrounds, schools, and health care facilities are all nearby. Space for small businesses is being constructed in adjacent areas. Infrastructure for utilities is being developed in parallel to housing construction. Access to transport and other community services is well thought out.

These communities set a new standard for rural family life. I am pleased to note that the program is benefiting rural communities in every region across the country.

The program also offers affordable long-term housing finance from banks, targeted to moderate-to-low income families. Young families; families with single parents; large, multi-generation families; and families with responsibilities for the vulnerable are all participating.

Teachers and healthcare workers, who are needed to ensure quality rural education and healthcare services, as well as entrepreneurs, who will create jobs, are among targeted beneficiaries.

The rural housing program is producing large multiplier effects. Annually it is creating opportunities for up to 1,000 small rural contractors, and jobs for up to 100,000 skilled jobs.

Additionally, newly developing rural communities are stimulating micro and small businesses, which collectively generate more than 50 percent of all rural jobs. Each new rural community offers space for retail shops and commercial services. Each new house, with reliable electricity, gas and water supply, opens opportunities for home-based businesses. As many as 3,000 micro or home-based businesses, and up to 15,000 rural jobs, can be created annually.

Planned communities, modern house designs, new construction technology and materials, and environmentally sustainable construction solutions will advance the construction sector and provide additional opportunities for Uzbek entrepreneurs and industries.

The impact of the program is being further extended. The Government’s measures for advancing e-government in line with international best practices are proving extremely timely. In response to Government initiatives, ADB recently approved technical assistance to support implementation of the government’s e-Government strategy, as well as for local government capacity development for results-based service delivery. Both of these activities will further strengthen the effectiveness of the rural housing program.

Looking ahead, ADB’s collaboration with Uzbekistan will support further diversification of the economy to achieve greater inclusive growth. ADB will partner with Uzbekistan on: (i) developing the energy sector including alternatives such as solar energy to provide dependable low-cost electricity; (ii) improving water supply, sewage, and solid waste systems; (iii) rehabilitating irrigation systems to improve agricultural productivity and farm incomes; (iv) expanding and building better roads and railways to improve access to markets; and (v) improving access to finance for micro and small businesses. Together we are working with the Government to support a broad range of developmental priorities including Uzbekistan’s Industrial Modernization Program and its efforts to eliminate the urban-rural income gap.

IV. Concluding Remarks

Led by President Karimov, Uzbekistan’s economic measures, policy reforms, and focus on integrated rural development, are achieving inclusive and sustainable economic growth, and far-reaching development impact for its people.

Integrated rural development is essential to ensure Uzbekistan’s growth is sustainable and inclusive and will play a key role in Uzbekistan’s progress towards the upper middle-income group of countries.

The rural housing program has clearly improved the quality of life of the rural population, and has demonstrated the vital role modern housing can play in transforming rural areas.

This high-level conference is timely in sharing concrete results of this important program—as a model for rural housing and greater integrated rural development.

We at ADB, look forward to further developing our strong partnership and continuing ADB’s support for accelerated diversification of the economy, private sector development and job creation.

Thank you for the opportunity to share these thoughts with you. I would also like to thank the Government for generously hosting and organizing this important conference.