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A.G. Enikeeva, Senior Lecturer, Tashkent branch of Russian University of
Economics named after G.V. Plekhanov, The Republic of Uzbekistan
PRIORITY AREAS OF INVESTMENT IN THE REPUBLIC OF UZBEKISTAN TO
ACHIEVE DEMOGRAPHIC DIVIDEND
A.Enikeeva
Abstract. The increase in the share of the working population in the
next few years with a moderate number of dependents will create favorable
demographic conditions for economic growth in Uzbekistan - the so-called
demographic dividend, which could have a significant positive impact on
increasing real incomes, helping to reduce poverty and increase stability.
The probability of obtaining a demographic dividend is not guaranteed. To
effectively implement it, it is necessary to stimulate economic growth and
social development of the Republic of Uzbekistan, provided that adequate
investments are made in human capital, the development of a flexible
economic model, the introduction of innovative technologies and the
expansion of opportunities for young people and women to participate in
the socio-economic development of the country.
Keywords: dynamics of the working population of Uzbekistan;
demographic dividend; investments; economic growth; social development.
The current demographic dynamics of the Republic of Uzbekistan is
characterized by a decrease in the birth rate, a decrease in the dependence
coefficient, which, according to forecasts, will reach a minimum in 2030, and
an increase in the proportion and population of working age, which,
according to forecasts, will reach a maximum in 2048.
These trends lead to the age structure of the population, which
determines the possibility of obtaining a demographic dividend. Many
countries, especially the so-called “Asian tigers” in East Asia, have used
increased human resources to achieve rapid economic growth and
successful demographic dividends.
According to the Ministry of Employment and Labor Relations of the
Republic of Uzbekistan, by 2035 the population of the country will increase
by 1.3 times and amount to 43.6 million people against 33.9 million people
of the permanent population of Uzbekistan as of January 1, 2020. The ratio
of urban residents will increase from 50.6 to 58.7 percent, rural residents
will decrease from 49.4 to 41.3 percent. The number of the male population
will decrease from 49.8 to 49.5 percent, and the female population will go
up from 50.2 to 50.5 percent.
In Uzbekistan, despite a decrease in growth rates, a moderately
expanded type of population reproduction will remain with an average
annual growth rate of 1.3%, while the population will increase by the
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beginning of 2031 to 37 million people (Fig. 1.). Overall for the period of
2013-2030, the absolute population growth will be over 7 million people.
Fig. 1. The forecast of the average annual population
(million people) [1]
Over the past 25 years, a change in the age structure of the population
has been observed in Uzbekistan. Fertility and infant mortality have reached
a low and stable level. The country's population, although it continues to
grow, has stabilized and remains young, and the proportion of dependents
(children under the age of 15 years and people over 65) among the general
population has declined (Fig. 2.).
Fig. 2. Enlarged age structure of the population of
Uzbekistan [1]
Due to this change in the age structure of the population, Uzbekistan is
at a stage that today can be classified as an “early demographic dividend”.
29,7
31,1
33,4
35,4
37,1
0
5
10
15
20
25
30
35
40
2012
2015
2020
2025
2030
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An increase in the share of the able-bodied population in the next few years
with a moderate number of dependents will create favorable demographic
conditions for economic growth, the so-called demographic dividend. It can
have a significant positive effect on the increase in real incomes, as well as
help reduce poverty. The demographic dividend is due to the fact that the
able-bodied population is approaching its maximum number, which means
fewer dependents. As a result, most of the national income can be directed
to consumption, production and investment, which, in turn, will give
impetus to development.
A recent study of economic growth factors shows that demographic
shifts can largely explain the “economic miracle” in East Asian countries [2].
For example, it is estimated that a quarter of China's economic growth over
the past thirty years is driven by [3] demographic changes. China was able
to receive a demographic dividend in 1980-2010 by investing in the
development of human capital and creating favorable conditions for
increasing economic growth.
Given the current decline in the birth rate and an increase in the average
life expectancy in the country, the window of demographic opportunities
will be open for a short time. In the coming years, the population structure
of Uzbekistan is expected to change significantly. The birth rate is currently
around 2.2 babies for every woman of fertile age (15–49 years old), and in
the next decade this indicator will fall to the replacement level (2.1), and
then below the replacement level [4]. This trend implies that between 2015
and 2030, the proportion of children, currently at around 37 percent, will
decrease significantly - to about 20 percent [4]. Such a change in the
structure of the population has important consequences for the economy
and society, since a smaller number of children in the period after 2030 will
lead to a decrease in the number of able-bodied people in the second half of
the 21st century. And after about fifteen years, there will be an increase in
the number of disabled people in need of care, as the average life expectancy
of the population will increase, and many representatives of the current
able-bodied population will move into the elderly category.
The process of population aging is a characteristic of many countries
with high or above average incomes, but soon this process can be observed
in some countries with incomes below the average. In addition, given the
high cost of caring for older people and the need for social security for them,
the continued emigration of the able-bodied population, along with an
increase in the number of elderly people, can slow down economic growth,
becoming a significant burden for society.
Uzbekistan is at an important milestone. The country has favorable
demographic conditions for obtaining economic dividend that could bring
millions of people out of poverty and increase prosperity and stability.
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Global economic trends are also quite favorable for economic growth in
Uzbekistan, and, as the experience of countries that have managed to extract
demographic dividend testifies, this is possible only if the combination of
favorable conditions for economic growth and changes in the demographic
structure of the population through a rational and far-sighted political
course is successfully combined.
The probability of receiving a demographic dividend in Uzbekistan,
although high, is still not guaranteed. As in other countries of Central Asia,
to receive a dividend, it will be necessary to implement a targeted action
plan with a long-term vision in order to maximize the present and future
potential of children and youth, as well as plan how to take care of the
growing number of elderly people in the future.
For the effective implementation of the demographic dividend, it is
necessary to stimulate economic growth and social development of the
Republic of Uzbekistan. Four priority areas of investment can be identified
here:
improving the quality of education, health care and nutrition to
strengthen the country's human capital;
prioritization of the development of a flexible economy and
entrepreneurship;
expanding access to technology and innovation;
promotion of social and economic activity of women and youth.
In the direction of the implementation of these areas, measures are
being taken to achieve demographic dividend:
A smart-education system was developed, the implementation of
which began in 2018, with the signing by the President of Uzbekistan of the
Decree “On measures to radically improve the system of general secondary,
secondary specialized and vocational education” [5];
The Law “On State Youth Policy” [6] and the State Program “Youth -
Our Future” were adopted;
In 2018, the Decree of the President of the Republic of Uzbekistan “On
measures to develop the digital economy in the Republic of Uzbekistan” [7]
was adopted and, on this basis, the implementation of the program “Digital
Uzbekistan-2030” was launched;
In 2022, a census of the population of Uzbekistan is planned;
A number of regulatory documents have been adopted that
encourage the development of entrepreneurship, the promotion of
measures that stimulate technological innovation, especially among young
people.
Given that the period of demographic opportunities for Uzbekistan will
be short, it is imperative that the country takes full advantage of the current
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population structure, favorable for economic growth. All necessary
investments must be made today, and especially with regard to investments
in children and youth. In order to develop human capital, Uzbekistan needs
to expand access and improve the quality of basic services, especially
regarding the early development of children, secondary and higher
education, the development of professional skills, as well as nutrition and
health care for vulnerable segments of the population.
This will allow the country not only to maximize the likelihood of stable
economic and employment growth in the near future, but also create a
platform for the development of a more productive, innovative, inclusive
and stable society in the long term.
References:
1. The data of the State Statistics Committee of the Republic of
Uzbekistan and the forecast assessment of the Institute of Forecasting and
Macroeconomic Research
2. Bloom, D. et al., “Demographic change and economic growth in Asia”,
Asian Economic Policy Review, 4, pp. 45-64, 2009.
3. Tsai, Fan, et al., “Take-off, Persistence and Sustainability: The
Demographic Factor in Chinese Growth” (Asia and the Pacific Policy Studies,
vol. 3 , No. 2, 2016 p. 203–225.
4. UN, Department of Social Affairs, Population Division, World
demographic perspectives: 2017 review, UN DESA, New York, 2017.
5. Decree of the President of the Republic of Uzbekistan No. PD-5313
dated January 25, 2018 “On measures to radically improve the system of
general secondary, secondary specialized and vocational education” -
Source: http://www.lex.uz/
6. Law of the Republic of Uzbekistan “On state youth policy” No. ЗРУ-
406 of September 14, 2016 - Source: http://www.lex.uz/
7. Decree of the President of the Republic of Uzbekistan No. PD-3832 of
July 3, 2018, “On measures to develop the digital economy in the Republic of
Uzbekistan” - Source:
