Budget allocations and energy woes: What's in store for Uzbekistan in 2025?

Every year, the state budget is drafted, the numbers increase, and so do the questions. How much money will be allocated to each ministry in 2025? Are these expenditures justified? Despite substantial funding, why is there little progress in various sectors? This concern grows, especially when both funds are allocated and prices rise, yet basic needs like electricity and gas remain unmet at home.

This article examines budget distribution in detail, focusing on several ministries. According to the law “On the State Budget of the Republic of Uzbekistan,” which took effect on January 1, nearly all ministries received more funds than last year.

For instance, the Ministry of Preschool and School Education, which received almost 50 trillion soums in 2024, is allocated 59 trillion 164 billion 225 million soums this year. But are these funds being used effectively? This ministry ranks second after the Ministry of Economy and Finance in terms of budget allocation. If the ministry is utilizing its budget as planned, why do some schools still face harsh conditions? Why are primary school students in some areas attending classes in one building while older students go to another school in a different neighborhood? Why do some students have to study in freezing classrooms during winter? QALAMPIR.UZ’s survey titled "A Generation Studying in a Barn" reflects the current reality—not a scenario from 50 or 100 years ago, but today.

While there is talk of “creating vast opportunities for young people,” some students still struggle with broken chairs, wobbly desks, and inadequate heating. This raises the question of whether the nearly 50 trillion soums allocated in 2024 were insufficient or poorly managed. True, new schools are being built in several regions, but whether they meet the necessary standards is another issue.

These problems are noticed not only by activists but also by parents. One parent shared with QALAMPIR.UZ that because the nearest school is 4-5 km away, her children must walk this distance daily, facing various weather challenges.

“Since we live in a rural area, my children have to walk 4-5 km to school and back. The road is not paved, and to shorten the distance, they cross ditches and streams, which is dangerous. It’s especially tough on snowy or rainy days. Yet, there’s no other choice because they need an education. Even then, the distant school is poorly equipped, though the teachers are good,” says a mother of two students.

Another ministry facing heavy criticism is the Ministry of Health. Since 2017, the ministry has seen five different ministers and was allocated 4 trillion 999 billion 839 million soums this year—almost 250 billion more than last year. Despite receiving over 15 trillion soums in the past three years, many people still turn to private clinics for exams and tests due to the lack of modern equipment in state hospitals. Maternity wards are overcrowded, and some hospitals are in poor condition due to old infrastructure. Meanwhile, “free services” often come with extra charges, allegedly because medical staff purchase necessary supplies themselves. The issue of low salaries leading to “give and take” practices is another concern.

A woman who frequently visits the district polyclinic shared her frustrations:

“The queues at the district clinic are very long and fights sometimes break out. We also have to travel to the regional center because certain equipment is missing. It takes an entire day. The district hospital is old and cold, making it especially hard for bedridden patients,” she explains.

The Ministry of Economy and Finance, responsible for managing all state funds, was allocated 96 trillion 34 billion 852 million soums this year—over 7 billion 391 million US dollars. This is about 1 trillion 350 billion soums more than last year. The ministry oversees state finances, public debt, and fiscal risks. But how well is it performing these tasks? According to Doctor of Economic Sciences, Professor Tulqin Bobokulov:

“The Presidential Decree on the ‘Development Strategy of New Uzbekistan for 2022-2026,’ issued on January 28, 2022, set a goal to limit the state budget deficit to no more than 3 percent of the nominal GDP from 2023 onwards. This aligns with international standards. However, this target has not been met yet.”

According to the professor, the growth of Uzbekistan's external debt is already revealing its negative consequences.

“Uzbekistan's external debt is growing rapidly. This will eventually disrupt the balance between the demand for and supply of foreign currencies in the domestic market, leading to a sharp depreciation of the national currency. Moreover, a significant portion of the external debt is allocated to financing state budget expenditures, which further fuels inflation,” he explained.

As the saying goes, “All roads lead to Rome.” When discussions about ministries, funds, and budgets arise, attention naturally shifts to the Ministry of Energy. This ministry has been allocated 123 billion soums for 2025, compared to 333 billion 765 million soums in 2024. The Ministry of Energy remains a focal point throughout the year due to persistent issues within Uzbekistan's energy system, despite its rich underground and surface resources. Every winter brings gas shortages, while every summer sees electricity shortages. Along with supply shortages, citizens are concerned about energy prices and consumption limits. Although tariffs nearly doubled last year on May 1, the energy sector continues to receive subsidies.

In 2025, 8.2 percent of budget revenues are allocated for subsidies, amounting to 28.3 trillion soums, with 12.3 trillion soums designated for the energy sector alone. During the second plenary session where the draft budget was approved, Senator Anvar Toychiev questioned the Minister of Economy and Finance, Jamshid Kuchkarov, about this.

“A gradual transition to market principles is underway for pricing fuel and energy resources. Shouldn’t our subsidy approach also follow market principles? How will subsidies impact tariffs?” asked the senator.

In response, Minister Kuchkarov stated that despite increased tariffs, the energy sector is not yet self-sufficient.

“Firstly, current tariffs do not fully cover costs. Secondly, we import a portion of our gas. The only solution is to adjust tariffs to fully cover expenses. If tariffs increase this year, they are expected to rise again on April 1, 2025, according to the Cabinet of Ministers' decision. Subsidies for the energy sector will continue in 2025-2026, decrease sharply in 2027, and end by 2028,” he explained.

Economist Otabek Bakirov raised questions about this explanation.

“If energy subsidies will continue for three more years, why isn't the export of subsidized natural gas halted? Why are both imported and domestically produced gas, subsidized by the budget, being exported through secretive and dubious schemes? Is there any economic justification for this beyond benefiting oligarchic structures?” he questioned on his Telegram channel.

A citizen who spoke to QALAMPIR.UZ emphasized that tariffs should be affordable.

“Energy is indeed valuable, and its production and delivery are costly. However, prices should be manageable for ordinary citizens. If wages increase today, prices will rise tomorrow, creating a cycle of financial strain,” he said.

During the plenary session, Senator Abdurahim Irkaev from Kashkadarya highlighted the ongoing challenges with tariffs and consumption limits.

“For three people living in a one-room apartment, the limit is 200 kW. The same limit applies to seven or eight people in a four-room apartment. These limits are also set for gas. Families living in courtyard houses face higher needs and costs. This approach is unfair. Although it’s not directly related to our current discussion, it’s a concern raised by citizens,” he noted.

Of course, the budget extends beyond the four ministries mentioned earlier. Here’s a breakdown of the allocations for other ministries in 2025:

• Ministry of Water Resources: 10 trillion 410 billion soums (2024: 10 trillion 177 billion 786 million soums)
• Ministry of Transport: 6 trillion 714 billion soums (2024: 6 trillion 738 billion 797 million soums)
• Ministry of Higher Education, Science, and Innovation: 6 trillion 280 billion soums (2024: 5 trillion 778 billion 32 million soums)
• Ministry of Health: 5 trillion 94 billion soums (2024: 4 trillion 751 billion 177 million soums)
• Ministry of Construction and Housing and Communal Services: 1 trillion 992 billion soums (2024: 1 trillion 842 billion 683 million soums)
• Ministry of Agriculture: 1 trillion 794 billion soums (2024: 1 trillion 864 billion 176 million soums)
• Ministry of Culture: 1 trillion 172 billion soums (2024: 1 trillion 5 billion 382 million soums)
• Ministry of Sports: 1 trillion 135 billion soums (2024: 1 trillion 509 billion 109 million soums)
• Ministry of Investments, Industry, and Trade: 1 trillion 116 billion soums (2024: 917 billion 419 million soums)
• Ministry of Foreign Affairs: 1 trillion 27 billion soums (2024: 759 billion 271 million soums)
• Ministry of Mining and Geology: 1 trillion 9 billion soums (2024: 896 billion 966 million soums)
• Ministry of Ecology, Environmental Protection, and Climate Change: 927 billion soums (2024: 826 billion 658 million soums)
• Ministry of Poverty Reduction and Employment: ​​733 billion soums
• Ministry of Digital Technologies: 532 billion soums (2024: 345 billion 81 million soums)
• Ministry of Justice: 322 billion soums (2024: 239 billion 581 million soums)

Plans are made, and funds are allocated. Yet, by the end of the year, unresolved problems, lingering issues, and overlooked proposals persist. This cycle repeats annually. It is crucial to remember that the budget is ultimately funded by the people's pockets.