By 2030 Uzbekistan needs to join the group of upper-middle income countries, maintain annual growth rates at 8% and implement structural transformation of the economy by increasing the share of manufacturing industry from 9% to 22%, and the share of services from 45% to 55%. At the same time, the population is estimated to reach 37 million by 2030. Faster industrialization, population and income growth will significantly increase the need of the economy for resources and at the same time will augment negative manmade impact on the landscape, generating threats for biodiversity conservation. The key challenge in implementation of the long-term strategy is linked to the resource scarcity and risks of natural resource depletion needed for current and future generations.

1. Sustainable Development and
Growth: Managing Resources
More Efficiently (Vision-2030)
Center for Economic Research
Tashkent, 2015

2. Uzbekistan: New Development Goals Towards 2030
Development goals and trends towards 2030:
• Ultimate goal – to ensure sustainable economic growth at 7-8% per
annum;
• Transformation of GDP structure by increasing the share of
manufacturing from 9% in 2012 to 22% in 2030; shift towards
production of more sophisticated services;
• Transformation of pattern of enterprises: more large and
medium enterprises;
• Population growth, change in the demographic pattern and
growth of personal income;
• Transformation of employment pattern and related social
transformations contributing to the change of the lifestyle,
consumption pattern, behavioral stereotypes;
 All this will transform the demand for infrastructure and resources.
 To cope with the new challenges and employ the emerging
opportunities the revision of the existing pattern of resource
consumption may be required
9,1 9 17 22
14,1
26,4
19,4 15
28
19,5 10,5 8
48,9 45,1 52 55
0%
20%
40%
60%
80%
100%
2005 2012 2020 2030
Processing industry Mining industry
Agriculture Services
Uzbekistan: Transformation
of GDP structure to 2030, %
Population Growth and
Transformation of Demographic
Structure: 2012 vs 2030
2,3
18,2
9,1
5,1
22,1
10
0
5
10
15
20
25
Above the
working age
Working-age
people
Below the
working age
2012 2030
44,5
32,3
19,1
4,1
0
10
20
30
40
50
2015 2020 2025 2030
Transformation of the pattern of enterprises:
Value added
Uzbekistan: Transformation of the Structure of Society

3. Existing Model of Resource Consumption: Key Features
Adjusted Net Savings in Uzbekistan have negative value – the country will
experience net loss of its reserves (% of GNP, 2010)
Ratio of the Return on Natural Capital to the Return of Intangible Capital in
Uzbekistan is 6.5 times as high as in the Upper-middle Income Countries
• Natural capital plays a major role in generating
economic growth; limited contribution of intangible
capital.
• Adjusted net savings have a negative value, while
the net and gross saving values are positive.
•  The country will experience net loss of its stock
of natural resources.
• This is due to the existing resource-intensive model
of economic growth.
• This model was feasible for the transition
economy: in the context of moderate economic
growth and low efficiency of institutions, it enabled
to develop basic industries and sustain
macroeconomic stability.
• As transformation accelerates, reliance on the
existing model will lead to the loss of more than
half of country’s natural resource base by 2030.
Uzbekistan Upper-middle
income countries
Human capital 0.15-0.17 0.17-0.20
Intangible capital 0.16-0.18 0.2-0.5
Production capital 0.3-0.6 0.2
Natural capital 0.1 0.03
Expected economic
growth
4-6% 8-10%

4. Will the Existing Pattern of Resource Consumption Enable to
Reach the New Development Goals? Energy Sector
• If the current model of resource consumption
is retained, the deficit of energy resources will
be estimated at 65.4% in 2030.
• Rates of economic growth will decline to -0.1%
per annum  Goals of the Strategy will not be
achieved.
• This is because demand for energy resources
will grow by 6.88% in 2014-2030 due to the
following reasons:
• Higher income will boost
consumption and use of air
conditioners, computers, washing
machines; Increasing rates of
urbanization will spur greater energy
use;
• Greater emphasis on manufacturing
will increase energy consumption in
the economy;
• To fulfill social rights of people in the
future the underconsumption of
energy by population (5.8% in 2013)
will be eliminated.
The economic growth will slow down to -0.1%
If the current model is retained
the deficit of energy balance will grow to 65,4% by 2030
8%
-0,1%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
2013 2030

5. Will the Existing Pattern of Resource Consumption Enable to
Reach the New Development Goals? Land and Water
• With the current model of land and water
resource management, by 2030 the deficit of
grain will grow to 21.2%, of meat – to 48%, of
milk - to 41% , of sugar - to 30%, of fruit – to
23.6%.
• Taking into account that due to the climate
change, irrigation norms will increase by 5-
10%, deficit of water for irrigation will grow to
11.7% by 2030.
• The area of land with medium and high rate of
salinization will not decrease and remain
stable at 18-19%.
• Projected resource deficit indicates that
production capacity by itself can not enable to
achieve the goals of the Strategy towards
2030.
• To achieve the objectives towards 2030, it is
important to implement the transition to the
resource-efficient development model.
Under the current model of land and water resource management,
the food deficit will grow
Water stock will shrink, the area of salinized lands will not decrease
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Production
Deficit
Consumption
in 2030
6,6
5,8 6,3
11,7
0
2
4
6
8
10
12
14
16
18
20
2015 2020 2025 2030
Deficit of water
for irrigation, %
Lands with
medium and high
rate of
salinization, %

6. Transition to the Resource-Efficient Growth Pattern: Energy
Sector - 2 Viable Options
• Two viable options of transition to the resource-efficient model in energy sector:
• Option 1 – phased approach: increase in extraction of energy resources by 1.5%, while reducing
energy intensity down to 40% by 2030  Energy balance deficit at 31.9%, maximum economic
growth of 5% towards 2030.
• Option 2 – fast-track: growth in extraction of energy resources by 2%, combined with reduction
of energy intensity by 2.3-fold until 2030  5.5% surplus of the energy balance; growth at more
than 8% per annum.
 Option 2 will enable to attain the goals of the Strategy
Option Annual growth
of production
of energy
resources, %
Annual
growth of
energy
efficiency, %
Structure of energy balance Energy
balance,
%
Maximum
economic
growth?
%
No additional
policies
-0,5 1 -65.4 -0.1
Phased
approach
1.5 2.8
33.5% of demand covered by
expansion of production &
energy efficiency
0.6 % - by solar energy, 0.4% -
by biogas, shale oil, etc.
- 31.9 5
Fast – track
approach
2 4.7
70 % of demand covered by
expansion of production &
energy efficiency
0.6 % - by solar energy, 0.4% -
by biogas, shale oil, etc.
+5.5 Over 8%

7. How to implement Resource-Efficient Growth Pattern in Energy
Sector: Improve Energy Efficiency of Economy
Strategies to improve energy efficiency towards 2030:
1. Complete phase-out of incandescent bulbs, upgrade
outdated heating boilers and pumps in all sectors;
2. Introduce within 2 years special systems to track energy and
financial flows in the sector (ERP systems, electronic trading,
IFRS reporting);
3. Introduce online system of monitoring and billing for
households (the integrated system of metering of energy
consumption), change the principles of settling accounts with
farmers;
4. Introduce technologies to monitor energy flows while
transportation (SCADA); complete modernization of power
distribution networks and transformers by 2020;

8. How to implement Resource-Efficient Growth Pattern in Energy
Sector: Develop Solar Energy
• Solar energy should become the key driver
of energy sector development and account
for 6% in the power balance in 2030.
• Potential of renewables in Uzbekistan is 3.1
times as high as the current production of
primary energy resources.
• Development of solar energy will generate
direct and multiplier effects by boosting
demand in the associated sectors,
expanding consumption and thus,
generating demand for labor and
accelerating transformation processes.
2020 2025 2030
Generation of solar energy
(3000 MW), GWt 1827.7 3655.4 5483.1
Total amount of electricity
generated 67500 78600 90100
Share of solar energy in energy
balance 2.7% 4.7% 6.1%
Share of solar energy could grow to 6% by 2030
Multiplier effects to be generated from solar energy
Effects of solar energy
development
2013-2030
Direct and first level multiplier
effects
3.5 bln USD
Second-level multiplier effects 0.87 bln USD
Gas savings 2.9 bln USD
Net benefit (annual) 204.5 mln
USD
Energy source Technical
potential
Employed
potential
Hydro 2.32 0.72
Solar 176.8 appr. 0
Wind 0.4 appr. 0
Biomass 0.5 appr. 0
Total 182.3 0.72
Potential of Renewables in Uzbekistan, mln t.o.e.

9. How to implement Resource-Efficient Growth Pattern in Energy
Sector: Institutional Reforms
1. Implementation of the suggested solutions is not possible without the
institutional reforms
2. To identify the strategies for institutional reforms in Uzbekistan, we looked
at the experience of countries, that encountered with the problem of
scarcity of energy resources - net importers of energy resources
What does experience of net importers
suggest?
Regulatory function not performed by NOC
NOC budget is not approved by Government
Chairman is not a minister of energy and not
appointed by government officials
Competition
Privatization in the system of energy
distribution
Emphasis on energy efficiency, prices for
energy are higher than in net exporters
What we recommend for Uzbekistan?
Split up business functions from regulatory
functions in the energy sector. This requires to set
up one regulatory body (Ministry of Energy) and
leave companies to explicitly focus on business
operations
Gradually reduce the difference between prices for
domestic consumers and export prices of gas by
raising domestic tariffs (with mechanisms to ensure
affordability for low-income group)
After 2020 gradual privatization in the system of
energy distribution and transmission could be
started to attract private investments into the
sector.

10. Effective Solutions for Institutional Reforms: Net Exporters VS
Net Importers of Energy Resources
Korea China Malaysia Vietnam
KOGAS CNPC SINOPEC CNOOC Petronas
PetroVietna
m
Ownership
(public vs private)
60,9 vs
39,1
86.29 vs
13.71
76 vs 24
66% vs
34%
100% public 100% public
Competition
Yes, a number of
foreign companies on
the market
Yes, main competitors
–Chinese companies,
foreign companies.
Competition
is limited
No
competition
Is chairman also minister of energy
or appointed by head of state?
No No No No Yes Yes
Institutional structure score: 100 -
regulatory function not performed
by NOC; 0 – All the regulatory
functions are performed by NOC
66 66 66 66 45 40
Independence of NOC capital and
budget process: 100 - No
governmental approval of NOC
budget required; 25 - NOC budget is
approved by central government
75 75 75 75 50 50
Performance: E&P production
growth, % (2008)
6,62 1,99 15,5 3,67
Reserves replacement rate, % 121,25 80,39 68 90

11. How to implement Resource-Efficient Growth Pattern in Land
Management
1) Diversify structure of cropping and focus on
production of foods in which Uzbekistan has a
comparative advantage
• Reallocate 42 thous. ha from grain to fruit
and 60 th. ha from cotton to vegetables;
• Increase crop yield of fruit twice, of
vegetables – by 1,6 times.
2) Step up research and development in
agriculture to create more efficient local varieties of
plants and breeds of animals (90 mln. USD)
3) Introduce advanced agro-technologies to raise the crop yield and livestock productivity
This will require to:
A) Establish an efficient cold storage system for fresh and processed foods
B) Develop an efficient system of food processing
Land laser
leveling
technology is
introduced
Reduction of
mechanisation
costs by 14%
Reduction of labor
costs by 23%
Decrease of water
use by 30%
Rise of
productivity by 4
centners per ha
Profitability increase by
22% in a year and by
37% in 2 years
Ensure 5,8 cubic
meters of cold
storage facilities
in 2025
30% decrease in
losses due to the
ineffective storage
Additional
investment of
1,4 bln USD
required
Total benefit of the
nation = +2,095
bln. USD
Multiplier effect
for other sectors
2,4 bln. USD
Access to food provided
throughout all the seasons,
seasonal volatility of food
prices is smoothed
In 2025 Uzbekistan
needs to become an
upper middle
income country
Transformation of
lifestyle, behavioral
stereotypes,
structure and mode
of nutrition
Annual benefits of 600
mln USD
67275 jobs generated
Share of processing should increase:
- for meat from 6,9% to 30%
- For milk – from 11% to 50%
- For fruit and veg. – from 13,3% to 30%
- For grapes – from 15% to 35%
Additional
investment of 4,3
bln USD required
Vegetables VS
Cotton
Fruit VS Wheat
Change in the sown area, thous. ha 60 -60 42 -42
Change in yields, centners per hectare 180 1.2 100 2.4
Change in output, thous. tons 5810.4 -11.94 3283.0 164.19
Change in production costs, bln soums 1154.4 -59.8 149.1 -26.5
Change in export revenues (import costs), mln.
USD
2232.2 -256.4 4866.8 -57.2
Additional investments, mln USD 728.36 1576.7
Change in employment 125.8 -28.2 37.7 -1.68
Total benefit, mln USD 1384.2 3398.2
New jobs, thous pers. 97.6 36

12. How to implement Resource-Efficient Growth Pattern in Water
Management
1) Expand use of water-efficient irrigation methods by 2030: drip irrigation on the area of
100,000 hectares and intensive farming zones in areas of piedmont and mountainous zones
2) Increase efficiency of irrigation systems to 0.74 and maintain sustainable use of irrigation
and drainage infrastructure. Re-use collector and drainage waters for irrigation by mixing with
irrigation water.
3) This will eliminate the deficit of water, reduce the area of salinized land from 19% in
2013 to 4.1% in 2030
Drip irrigation is
applied for 100,000 ha
Investments of 455,4
mln USD are required
30% less fertilizers are
needed to grow crops
Production costs
decrease
Productivity and total
revenue increase by 40%
Quality of soil by 2030 Deficit of water by 2030
0
20
40
60
80
100
2013 2015 2020 2025 2030
Lands with medium and high salinization
Furtile lands
Lands in good amelioration state
80
85
90
95
100
105
-7
-6
-5
-4
-3
-2
-1
0
1
2015 2020 2025 2030
Balance, % (left axis) Water supply, %

13. How to implement Resource-Efficient Growth Pattern in Land
and Water Management: Institutional Reforms
1) Reform the agrarian institutions and optimize size of farms by expanding the
animal farms to 1000 heads of livestock, vegetable-growing farms - to 85 ha, fruit-
growing farms - to 40 ha
2) Promote greater independence for farmers, creating incentives for long-term
investments:
• Greater independence of farmers in decision-making related to land use;
• More opportunities for crop rotation in order to improve soil quality and
boost yields;
• Transfering farmland to those, who can use it effectively (through bankruptcy,
liquidation, and sublease).
3) Introduce the mechanism of partial compensation of water supply costs
(payment for delivery of water). This could:
• Reduce government expenditures for maintenance of water supply
infrastructure, thus contributing to financial sustainability of water sector in
the long-run;
• Create incentives for the rational use of water in agriculture.
Size of animal farms is
expanded to 1000 heads
Extra investments of
929,6 mln USD required
Due to the economies of
scale productivity of farms
increase by 35%
If the additional amount of
meat is exported extra
revenue will be 2,25 bln. USD

14. Road Map Towards 2030

15. Next Steps: Implementation of the Policy Recommendations
Process of preparation of the Report:
• Involved a number of high-level experts from government agencies: the Ministry of
Economy, Ministry of Finance, National Holding “Uzbekneftegas”, Ministry of Agriculture
and Water Resources, scientific-research institutes
• A number of international commentators were involved into discussion at various stages
of preparation of the Report: UNEP, World Bank, UNDP, UNIDO, UNDP Policy Center in
Seoul, London School of Economics
• Effective dialogue among all the stakeholders has been established
Obtained Results and Implementation
• The government instruction had been made to work out the National Program “On
Reduction of Energy Consumption, Introduction of Energy Saving Technologies and
Systems in the Branches of the Economy and Social Sphere for 2015-2019 (now final draft
is being prepared, deadline is 1st of March).
– Improvement of legal framework;
– Measures on upgrading energy efficiency in the branches of the economy;
– Financing of policies on energy saving.
• The main part of this Program will consist of the “Road map” based on the measures and
suggestions, presented in the Report.

16. Questions for discussion
• Are we on the right path?
• Are there any dimensions, critical issues which were omitted, should get
considered in more detail?
• What approaches, methods and indicators need to be revised?
• What’s next? How can we jump to formulating the detailed Action Plan and
Road Map for the Vision? Suggested formats and models.
• Are there windows for synergies?

17. Thank you!
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