In a significant move to propel Uzbekistan's digital economy, the World Bank's Board of Executive Directors has given the green light to a $50mn soft loan for the "Digital Inclusion in Uzbekistan" project, as reported by the World Bank press service.
The project is designed to align with the government's commitment to fostering the digital economy and extending access to digital skills training and employment opportunities in information technology-enabled services (ITES), particularly targeting youth in rural and remote areas.
While Uzbekistan has witnessed substantial growth in the ITES services sector, soaring from $600,000 in 2017 to an impressive $140 mn in 2022, the World Bank notes that the entire information and communication technology (ICT) sector's contribution to the country's GDP remains modest at 1.9% in 2022.
However, the Uzbekistan-2030 strategy aims to transform the nation into a Central Asian IT hub by the end of the current decade, with ambitions to reach $5mn in annual IT services exports, establish 1000 IT companies, and provide employment for 300,000 young individuals in the IT sector.
To achieve these aspirations, substantial investments are required in workforce training, IT infrastructure development, legislative and strategic frameworks, and incentives to attract both foreign and local investments.
The World Bank's support comes at a crucial juncture, with the envisioned project seeking to utilize the ITES services sector as a catalyst for economic growth, job creation, and foreign investment attraction. IT-Park, under the Ministry of Digital Technology, will oversee the project's implementation, focusing on training thousands of youth under 30 in rural and remote areas. The initiative extends various incentives to ITES companies that employ these individuals.
Marco Mantovanelli, Head of the World Bank office in Uzbekistan, underscores the project's impact, stating,
"The new project, supported by the World Bank, will help Uzbekistan use the ITES services sector as a catalyst for economic growth, job creation, and attracting foreign investment."
By the project's completion in 2029, it is anticipated that approximately 25,000 people will be employed in Uzbekistan's ITES services sector, with an additional 15,000 finding employment in related industries.
The project encompasses several key activities, including the launch of up to 11 regional ITES centers across the country, offering modern office space to encourage ITES companies to establish regional offices. The initiative aims to train around 6,200 young people, including 3,100 women and 250 individuals with disabilities, in core job skills.
Furthermore, the project aims to facilitate the employment of approximately 9,000 young people, with financial incentives provided to ITES companies hiring individuals from the project's target groups. It also involves the development of regulatory documents to create a favorable environment for foreign and local ITES companies operating in Uzbekistan.
As a result of these activities, an estimated 240 new ITES companies are expected to become residents of IT-Park, actively contributing to the burgeoning digital landscape in Uzbekistan.
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