Global Dialogue on Multidimensional Poverty in Uzbekistan

On August 27-29, experts from over 60 countries will meet to address the complexities of poverty. The fight against poverty is a leading priority of the UN Sustainable Development Goals. Goal 1 is to eradicate poverty worldwide in all its forms by 2030. The challenges posed by geopolitical instabilities and disruptions in supply chains and food networks are substantial hurdles that many developing economies must overcome in order to achieve their goals. These challenges can hinder progress and create significant obstacles to economic and social development. Identifying the causes of poverty, assessing their impact, and implementing measures aimed at eliminating them in each specific country play a vital role in this process.

For these purposes, the Global Multidimensional Poverty Index (MPI) was introduced, developed in 2010 by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme. It uses health, education, and living standards indicators to assess the prevalence and intensity of poverty faced by the population. The MPI replaced the Human Poverty Index and has already been used in more than 100 developing countries and is published along with the Human Development Index (HDI) in the Human Development Report.

In 2013, the Multidimensional Poverty Peer Network (MPPN) was established, bringing together 63 countries and more than 30 international organizations, which assists policymakers in assessing multidimensional poverty to develop more effective measures to reduce it. Annual meetings within this network have already been held in Berlin (2014), Cartagena (2015), Acapulco (2016), Beijing (2017), Johannesburg (2018), Mahe (2019), and Santiago (Chile) in 2021. This year, a similar meeting will be held in Uzbekistan.

Poverty Reduction Trajectory in Uzbekistan

Uzbekistan began actively addressing poverty reduction issues not so long ago. Poverty was first officially recognized as a critical problem for the country in the President's Address in 2020. At that time, about 6 million people were poor, and 41% of the working-age population was employed in the informal sector.

In 2021, a standardized method for assessing the national poverty line was introduced, which became an essential tool for measuring poverty levels and evaluating the impact of implemented policies. The creation of the "Unified Register of Social Protection" information system has significantly enhanced social support. If, in 2017, the number of families receiving social assistance was about 500,000, by 2023, it had increased to 2.3 million. Spending on social benefits increased significantly by 3.7 times from 2018 to 2023.

To address poverty by supporting entrepreneurship development by creating new jobs, the programs "Every Family is an Entrepreneur" and "20 Thousand Entrepreneurs and 500 Thousand Qualified Specialists" were launched. Separate support is also provided to women entrepreneurs to encourage and support them in starting their own businesses.

In 2022, the national "Makhallabay" system was introduced, aimed at reducing poverty and supporting entrepreneurship at the level of the smallest administrative unit – the mahalla, of which there are about 9.4 thousand in the country. From 2022 to 2024, through this system, microloans totaling $1.7 billion were provided for 977.6 thousand family entrepreneurship projects, as well as subsidies totaling almost $52 million to 152 thousand people. Due to the introduction of this system, since the beginning of 2021, the poverty level in Uzbekistan has significantly decreased from 17% to 11%. Almost 2 million people have been lifted out of poverty.

The Necessity of Addressing Multidimensional Poverty

In its efforts to reduce poverty in Uzbekistan, the government has encountered the need for a more accurate accounting of poverty factors and criteria. This allows for a more targeted approach to combating the root causes of poverty while also enabling a more precise identification of aid beneficiaries and targeted support to the most vulnerable segments of the population.

Therefore, to improve the tools and methodologies for more effectively combating poverty, the government of Uzbekistan has officially recognized the concept of multidimensional poverty as a means of accelerating progress in poverty eradication in accordance with SDG 1. The use of multidimensional poverty indicators alongside monetary ones allows for a more effective assessment of those in need and the development of appropriate intervention measures.

In this regard, a project to measure the Multidimensional Poverty Index was initiated for the first time in Uzbekistan, implemented jointly by the Center for Economic Research and Reforms (CERR), UNDP, the Oxford Poverty and Human Development Initiative, UNICEF, and the UNICEF Innocenti Institute. Currently, the methodology for measuring multidimensional poverty is being integrated with the household budget survey questionnaire of the Uzbek Statistics Agency to calculate multidimensional and monetary indicators.

International Assessments

At the Paris School of Economics, the Director of CERR presented the initial results of CERR's research during the presentation of the Multidimensional Poverty Index. The analysis presented by CERR showed that addressing issues in education, food security, and employment are critical areas for further reducing multidimensional poverty in Uzbekistan. Targeted solutions to problems in these areas have a high potential for reducing multiple deprivations among vulnerable populations.

Commenting on the assessment of reforms in Uzbekistan, Nobel laureate in economics Abhijit Banerjee highlighted a key feature of Uzbekistan's approach to combating poverty – its high targeting and individual nature, emphasizing that "the Makhallabay system in Uzbekistan has its own unique recipe for lifting each family in need out of poverty." Following the event, the National Poverty Reduction Model in Uzbekistan was recognized as a successful example worthy of dissemination to developing countries.

Oxford University's interdisciplinary research center, Uzbekistan's initiatives aimed at improving the living standards of the population and reducing poverty were also presented. During the seminar, fundamental developments and practical achievements in the field of poverty reduction were showcased, including the results of the Multidimensional Poverty Index calculated by CERR, which indicates the prevalence of poverty in rural areas and also allows for identifying noticeable gender differences within households.

Professor Sabina Alkire, Director of the OPHI, noted that "the presented issues of assessing results have determined the success of the ongoing transformations. In this context, both monetary and multidimensional measurements of poverty applied in Uzbekistan were considered, including the Multidimensional Poverty Index, on the development of which OPHI had the honour to work together with CERR." International experts at this meeting recognized that the initiatives presented by Uzbekistan look comprehensive and aimed at addressing key issues related to poverty.

International Recognition

Given the urgency of the poverty problem and the successes achieved in addressing it in Uzbekistan, it is likely not by chance that the decision was made to hold the 9th annual high-level meeting of the International Multidimensional Poverty Peer Network on August 27-28 in Tashkent and August 29 in Samarkand. Leaders of countries, politicians, economists, leading scientists, and experts will participate in it. The organizer is the Center for Economic Research and Reforms (CERR), with the support of UNDP and the Oxford Poverty and Human Development Initiative (OPHI). Uzbekistan will become a platform for discussing critical issues in the fight against poverty, bringing together leading experts and leaders from around the world. The discussions will be aimed at exchanging experiences and results to improve poverty reduction strategies at the global level.

The choice of Uzbekistan as the host country signifies the international community's recognition of the country's reforms in poverty reduction and successes in implementing the concept of multidimensional poverty as a means of accelerating progress in poverty eradication in line with the Sustainable Development Goals, which opens up new opportunities for the exchange of experience.

In this regard, the holding of the 9th high-level meeting in Samarkand and Tashkent should be seen as a continuation of the successful work on poverty reduction in Uzbekistan, which began in 2020, the effectiveness of which has already been recognized by the international European community in Paris and London. This work is carried out in close cooperation with international organizations and the expert community. The discussion of multidimensional poverty issues in Tashkent and Samarkand is intended to give a new important impetus to the accelerated solution of the poverty problem both in Uzbekistan and at the international level.