BAKU, Azerbaijan, October 5. The Asian Development Bank (ADB) has approved a $500 million loan to help promote food security, provide social protection for vulnerable groups, and support employment in Uzbekistan amid the economic impacts of the situation in Ukraine, Trend reports via the bank.
ADB’s Building Resilience with Active Countercyclical Expenditures (BRACE) Program will provide critical financing to the government of Uzbekistan as it implements its $1.2 billion countercyclical development expenditure program.
The government’s program focuses on strengthening food security and price stability, providing direct social assistance to low-income families, senior citizens and other vulnerable groups, and supporting the unemployed and returning migrant workers.
“The BRACE Program is aligned with the government of Uzbekistan’s strategic priorities and will help to improve economic resilience while contributing to social protection and inclusion,” - ADB Director General for Central and West Asia Yevgeniy Zhukov said.
The COVID-19 pandemic and the economic shock triggered by the situation in Ukraine are severely impacting Uzbekistan. These include higher trade costs, rising inflation, more unemployment and reduced remittances. This cuts the purchasing power of low-income households weakens private consumption and results in rising poverty.
The BRACE Program will support government measures to ensure an adequate supply of food at stable prices, such as wheat imports, and exemptions of essential food products from value-added tax and customs duties. It will also help the government maintain social assistance payments to more than 8.9 million vulnerable people until December 2022.
ADB will also administer technical assistance for monitoring and evaluation support financed through a $400,000 grant from the Technical Assistance Special Fund.
“This program will contribute to the government’s efforts to contain inflation within reasonable limits through fiscal interventions. It will provide resources to boost local employment and entrepreneurship, and help to stabilize trade with other members of the Central Asia Regional Economic Cooperation (CAREC) Program region and Europe,”- ADB Principal Public Management Specialist Navendu Karan said.