SOLUTION OF SOCIAL PROBLEMS IN
MANAGEMENT AND ECONOMY
International scientific-online conference
89
LOANS FROM INTERNATIONAL FINANCIAL INSTITUTIONS FOR
THE CONSTRUCTION AND RECONSTRUCTION OF PUBLIC
HIGHWAYS.
Pardaev Fayzulla Gaffarovich
Senior Lecturer,
Tashkent State University of Economics
https://doi.org/10.5281/zenodo.15234878
Abstract:
Loans from international financial institutions for the
construction and reconstruction of public highways, foreign experiences were
studied in this regard, and scientific and practical proposals were developed to
eliminate existing problems and shortcomings in our country.
Key words:
International financial institutions, credit, public use, highways,
construction, reconstruction.
Introduction
The development of transportation infrastructure, particularly public
highways, is a critical factor in ensuring economic growth, regional integration,
and improved living standards. In recent years, Uzbekistan has actively sought
external funding sources to accelerate the construction and reconstruction of its
public highway network. As part of this strategy, international financial
institutions (IFIs) have played a significant role in supporting infrastructure
development through long-term credit programs. Institutions such as the Asian
Development Bank, World Bank, Islamic Development Bank, and others have
become key partners in financing Uzbekistan's transport modernization agenda.
This study explores the scale, structure, and outcomes of loans obtained
from international financial institutions for public highway projects in
Uzbekistan between 2020 and 2024. The research investigates the dynamics of
the attracted credit resources and the corresponding implementation of
infrastructure projects, highlighting both achievements and challenges. It aims
to offer scientifically grounded insights and practical recommendations to
improve the efficiency and transparency of credit utilization in the road sector.
Literature Review
The role of international financial institutions (IFIs) in financing
infrastructure development, particularly road construction and reconstruction,
has been a prominent subject of academic discourse. Various scholars have
emphasized the strategic, financial, and economic implications of leveraging
external credit resources for long-term infrastructure projects.
Z. Sirojiddinova
(2010) examines the structure and functioning of
Uzbekistan’s budget system, emphasizing the importance of external financing
SOLUTION OF SOCIAL PROBLEMS IN
MANAGEMENT AND ECONOMY
International scientific-online conference
90
in supplementing limited domestic public funds. She notes that the
conditionalities associated with IFI loans often lead to more disciplined financial
planning and greater accountability in state institutions.
A. Vahabov
(2003) provides insights into the formation and operation of
economic funds in a market economy. He points out that the effectiveness of
external credit is contingent on its proper integration into national economic
programs and the avoidance of project duplication or cost overruns. According
to Vahabov, long-term infrastructure loans should be evaluated based on their
return on investment and impact on regional development.
J. Stiglitz
(2002), Nobel Laureate in Economics, criticizes some IFI policies
but acknowledges the positive role they play in infrastructure financing. He
contends that projects funded by international institutions are more likely to
succeed when recipient countries have ownership over project planning and
execution, and when transparency is enforced.
D. Asadov
(2021), a modern Uzbek researcher, emphasizes the role of
public-private partnerships in leveraging IFI funds. He argues that blending
loans with private sector participation creates a more competitive and efficient
environment for road construction. Asadov advocates for performance-based
financing mechanisms to ensure better results from IFI-supported projects.
Analysis
In addition to the state budget, construction and reconstruction projects in the
road sector are currently being implemented with the participation of
international financial institutions such as the Asian Development Bank, the
World Bank, the Islamic Development Bank, the OPEC Fund for International
Development, the Asian Infrastructure Investment Bank, and the European
Bank for Reconstruction and Development.
When analyzing the dynamics of roads constructed and reconstructed on
public highways between 2020 and 2024, the lowest figure was recorded in
2020 with 106 km, while the highest was in 2023 with 300 km of reconstructed
road length.
Considering that the total length of public highways in the country is
42,689 km, only 0.25% of them were reconstructed in 2020, and 0.7% in 2023.
This indicates that less than 1% of the total public highway network underwent
reconstruction in any single year.
SOLUTION OF SOCIAL PROBLEMS IN
MANAGEMENT AND ECONOMY
International scientific-online conference
91
Information on the length of roads reconstructed using loans from
international financial institutions and the dynamics of the attracted
credit funds
1
Source:
Prepared independently by the researcher based on data from
“Avtoyulinvest” LLC under the Committee for Roads.
Furthermore, an analysis of the growth rates of road lengths
reconstructed using loans from international financial institutions, based on
the
base method
, shows that in 2020, reconstruction was carried out on 106
km of roads. In comparison, by 2024, this figure reached 290 km, reflecting an
increase of 184 km or a growth rate of
173.6%
compared to the base year.
Using the
chain method
, the length of roads reconstructed in 2024
decreased by
3.3%
compared to 2023. The reason for this decline was the
1
Information of "Avtoyolinvest" under the Committee of Motorways.
0
100
200
300
400
500
600
700
800
2020
2021
2022
2023
2024
Growth Rate % Compared to previous years
Growth Rate % Based on 2020
Length of construction and reconstructed road (km)
0
50
100
150
200
250
300
2020
2021
2022
2023
2024
Growth Rate % Compared to previous years
Growth Rate % Based on 2020
Amount spent (million dollars)
SOLUTION OF SOCIAL PROBLEMS IN
MANAGEMENT AND ECONOMY
International scientific-online conference
92
insufficient amount of funds attracted from international financial institutions
in 2024.
The highest growth in attracting loans from international financial
institutions was observed in 2024, showing an increase of
239.1%
compared
to the base year and
130.9%
compared to 2023 using the chain method.
This growth rate is associated with the implementation of Presidential
Decree No. PQ-330 dated October 10, 2023,
“On Measures to Further Improve
the Road Management Sector”
, which stipulates that newly initiated public
highway, bridge, and artificial structure construction and reconstruction
projects will be primarily financed through funds from international financial
institutions
2
.
References:
1.
Constitution of the Republic of Uzbekistan (New Edition). May 1, 2023.
Law No. ZRU-837.
2.
Budget Code of the Republic of Uzbekistan. Law No. ZRU-360, December
26, 2013.
3.
Law of the Republic of Uzbekistan "On Automobile Roads", October 2,
2007. Law No. ZRU-117.
4.
Sirojiddinova, Z. The Budget System of the Republic of Uzbekistan.
Tashkent: infoCOM.UZ, 2010.
5.
Vahabov, A. Economic Funds in the Market Economy System. Tashkent:
Sharq, 2003.
6.
Data from the Committee for Roads, "Avtoyulinvest" LLC.
7.
Presidential Decree of the Republic of Uzbekistan No. PQ-330, October 10,
2023, “On Measures to Further Improve the Road Management Sector”.
2
Resolution of the President of the Republic of Uzbekistan No. PP-330 dated October 10, 2023 “On measures to
further improve the road sector”
