Mirziyoyev ordered to change the poverty reduction system

Mirziyoyev Ordered a Review of the Poverty Reduction System

Under the chairmanship of President Shavkat Mirziyoyev, a meeting has commenced to discuss raising the work on poverty reduction and increasing population incomes to a new level.

At the beginning of the year, the poverty rate in the republic decreased to 5.8%, and the number of people in need stood at 2.2 million. Currently, this figure has decreased to 1.5 million people.

It was noted that thanks to properly structured work, 49 districts and 3,429 mahallas are turning into territories free from unemployment and poverty.

At the same time, the low effectiveness of responsible officials in the remaining 159 districts and cities, as well as in 5,536 mahallas, was criticized.

The Head of State emphasized that all regions have been provided with equal powers, resources, and opportunities, and pointed out the need to use them effectively.

The meeting examined the main reasons for the lack of results on the ground.

It was noted that the leaders responsible for the activities of the "mahalla seven" do not give specific instructions to employees at the regional, district, city, and mahalla levels regarding the execution of adopted decisions.

It was also pointed out that some leaders do not know how to properly use the created conditions and objectively evaluate the work of the "seven."

The situation where employees responsible for reducing poverty and unemployment in districts and mahallas show indecisiveness and are afraid to take responsibility was also criticized.

It was noted that even China, which has 50 years of experience in poverty reduction, constantly delivers specific instructions to the grassroots level, taking into account the demands of the times.

"Over the past three years, 314 trillion soums of resources have been directed to entrepreneurial projects in mahallas. However, the impact of loans on poverty reduction is not felt equally in all districts," the Head of State said.

At the meeting, a comparative assessment of the effectiveness of the allocated credit resources by district was conducted.

Over the past period, the Sharof Rashidov and Karshi districts were allocated the same amount of credit resources — 2.3 trillion soums each.

In the Sharof Rashidov district, 30,000 people were lifted out of poverty using these funds. On average, 78 million soums were spent per person. In the Karshi district, the living conditions of 13,000 needy people were improved, with an average of 176 million soums spent per person.

The Kamashi and Pskent districts were allocated 1.1 trillion soums of loans each. In the Kamashi district, 28,000 people were lifted out of poverty, whereas in the Pskent district, only 4,500 were.

A similar situation is observed in the Guzar, Nishan, Mubarek, Yangiqo‘rg‘on, Toyloq, Boysun, Altynsay, Bandikhon, Besharyk, and Fergana districts, as well as in the cities of Nurafshon, Bekabad, and Yangiyul.

It was noted that in the Pskent district, lifting one person out of poverty accounts for 250 million soums of credit funds. Meanwhile, in another region, a permanent, high-paying job in industry is created for the same amount.

The Head of State criticized the leaders of individual regions who lack the knowledge or ability to effectively use available resources to provide people with jobs.

It was noted that they do not fully understand the fluctuations and rapid changes occurring in the modern economy.

Over the past year, 86,000 small enterprises were created in the regions, but 15,000 of them, or 17%, ceased operations.

It was also noted that 62,000 people who received bank loans and failed to establish a business are experiencing difficulties in repaying them.

One of the reasons indicated is that only the khokim assistants and mahalla bankers in 1,000 mahallas know how to work based on a "project approach."

On the instructions of the President, all leaders of the economic bloc remained in the Khorezm region, where they conducted an analysis to change approaches to poverty reduction work.

Over two weeks, the situation of 81,000 low-income residents of the region, or 19,000 families, was studied. It was established that these families include 12,000 unemployed and 10,000 low-income individuals.

Currently, entrepreneurs in the Khorezm region are looking for 4,000 workers for the construction sector, 3,000 for the services sector, and 2,500 for industry.

Responsible officials have been tasked with utilizing the opportunities for vocational training of unemployed and low-income citizens, taking into account the needs of enterprises, and their subsequent employment.

It was noted that through available vacancies and vocational training opportunities, the incomes of 10,000–15,000 residents from low-income families can be increased.

During the study of low-income families in the Khorezm region, it was also established that 48,000 children live in them.

At the same time, responsible officials lack a special program for individual work with these children and their early involvement in vocational training.

It was noted that at least 1–2 technical schools and 4–5 training centers operate in each district of the region.

Youth leaders, khokim assistants, and women's activists have been tasked with organizing additional clubs for children from low-income families in schools, technical schools, and training centers.

In the Khorezm region, more than 10,000 women from low-income families are engaged in childcare. At the same time, preschool education coverage for children from such families does not even reach 75%.

As many as 646 college and university students have the opportunity to improve their professional skills through dual education, taking into account new projects being implemented in the region.

In addition, it was noted that strengthening social assistance for 526 retirement-age people and people with disabilities from low-income families will create opportunities for their family members engaged in their care to earn income through employment.

It was noted that the conclusions of the analysis conducted on the example of the Khorezm region are relevant for all regions. In this regard, a decision was made to introduce a fundamentally new system of work for poverty reduction.

In accordance with the new system, the leaders responsible for the activities of the "mahalla seven," regional and district khokims, as well as banks, are switching to an enhanced mode of operation.

Headquarters led by the khokim will be established in each region and district.

Banks and employment promotion agencies will assist the headquarters in resolving issues on the ground.

Khokims of regions, districts, and cities, together with the entire economic bloc, will spend three days a week dealing exclusively with poverty reduction and employment issues.

The meeting also provided a critical assessment of the skills of mahalla bankers and khokim assistants in working with projects.

It was noted that most of them do not understand who needs a loan and which projects are appropriate to finance through leasing, factoring, guarantees, insurance, working capital, or on a contractual basis.

The practice where bankers and khokim assistants still ask the question "Is there collateral?" even before preparing a project was criticized.

It was noted that bureaucratic barriers persist when allocating loans to entrepreneurs, and loan repayment schedules are not adapted to the specifics of a particular type of business.

The need to establish loan repayment terms taking into account the characteristics of agriculture, trade, and other areas of entrepreneurial activity was emphasized.

It was also decided to transfer the authority to manage concessional credit resources intended for the development of family and youth entrepreneurship to district headquarters.

District headquarters will independently decide to whom and in what amount to provide loans, whether to issue funds in cash or non-cash form, whether to extend repayment periods, and whether to adapt payment schedules to a specific type of business.

In addition, inclusive financing issues will be transferred to the authority of the headquarters.

Currently, there are 1.37 trillion soums of resources for the development of family entrepreneurship and 450 billion soums for youth entrepreneurship.

District headquarters will be granted the right to independently make decisions on financing, taking into account local conditions and the effectiveness of projects.

If a leading entrepreneur establishes cooperation with 10 families, they will be able to receive an unsecured loan of up to 500 million soums, and in cooperation with 100 families — up to 5 billion soums.

An opportunity will be created to provide concessional financing to projects of needy citizens who have delinquencies in their credit history, based on an individual assessment.

District headquarters will be transferred 240 billion soums from the Poverty Reduction Fund, 100 billion soums from the Employment Fund, and 760 billion soums of funds from the three "books."

From now on, district headquarters will also independently resolve issues of providing subsidies or interest-free loans.

In addition, the remaining 300 billion soums earmarked until the end of the year for the payment of compensation by the entrepreneurial company will be distributed through the headquarters.

Thus, a total of 3.2 trillion soums of resources will be directed to the disposal of the districts, with special attention paid to ensuring concrete results from the use of these funds.

It was noted that the practice of establishing conditions for providing loans, subsidies, and compensations directly by decrees and resolutions will be discontinued.

Now, the Ministry of Economy and the Central Bank will update financing mechanisms quarterly, taking into account the potential of the regions.

District headquarters will transition khokim assistants in mahallas to a "project-based" system of work.

To do this, 8,992 khokim assistants in mahallas will be appointed as acting officials. Conscientious and proactive personnel will be reappointed to their positions, while employees who do not meet the requirements will be replaced.

Responsible officials have been tasked with creating a training center within two months and attracting specialists from abroad to its work.

In this center, khokim assistants will be trained to work on a "project-based" principle.

Based on the results of the year, regional headquarters will send two of the best khokim assistants from each district for advanced training in China, Japan, and Turkey.

The most successful khokim assistants will be awarded a special qualification category, as well as paid an allowance of up to 50%.

It was also instructed to train mahalla bankers under a similar system and organize foreign internships for them.

The Prosecutor General's Office has been tasked with helping to eliminate factors that prevent bankers and khokim assistants from making independent decisions.

The system for implementing entrepreneurial infrastructure projects on the ground will also be reviewed.

It was noted that currently, these issues are mainly resolved at the regional level, which leads to delays in processes.

It was emphasized that granting districts the status of project customers and directing funds directly to the ground will speed up the work. It was proposed to direct 2–3 times more resources from the republican budget to projects financed from local funds and aimed at creating jobs in difficult mahallas.

From now on, the head of the district headquarters will be responsible for project development using the funds allocated to the district for entrepreneurial infrastructure.

The district headquarters will be allowed to transfer design, construction, and quality control work to the private sector. At the same time, the head of the headquarters will be responsible for commissioning facilities on time and in compliance with quality requirements.

The meeting also defined new approaches to strengthening the social protection of needy families.

The National Agency for Social Protection has been instructed to review the system for including the needy population in the "social register" by the end of the year.

At the same time, a multidimensional assessment system will be introduced, taking into account not only population incomes but also factors such as chronic diseases, disability, having many children, and a family member working abroad.

Despite the fact that the poverty rate in the republic has decreased to 3.9%, among families with children under the age of three, this figure averages 6.5%.

"We will create a system that will allow parents engaged in childcare to work and earn income without leaving home or directly in the mahalla," the President said.

Working mothers will be paid an allowance from the Social Insurance Fund until their child reaches the age of one.

This year, 300 billion soums have been allocated for a social package providing "passive income" for needy families whose members are unable to work.

It was noted that in half of the 11,000 families that received such assistance, incomes increased significantly.

It was instructed to submit a draft decision on continuing the operation of this system within a week.

"Starting next year, the costs of paying for kindergarten — public or private, studying in training centers, travel, as well as dormitory accommodation for children from families included in the register, will be compensated through vouchers," the Head of State said.

The voucher will be provided for a period of 12 months and will continue to apply even after the needy family is excluded from the Social Register.