BAKU, Azerbaijan, July
16. Uzbekistan plans to increase budgets of mahallas
(local neighborhoods) up to 2 trillion soums ($165 million).


This was announced in a statement published by the press service
of the Uzbek president, following a videoconference meeting
outlining a major economic and structural overhaul of the country's
mahallas.


During the meeting, the President Shavkat Mirziyoyev focused
heavily on economic decentralization, local budget optimization,
and small-business support programs designed to spur
employment.


Mirziyoyev detailed that under a newly signed decree, mahalla
chairpersons will shift from merely documenting social issues to
forming concrete economic and social projects for their areas. To
support this transition, mahallas will be granted the authority to
auction off land plots for private schools, clinics, and sports
facilities. Furthermore, "mahalla sevens" (local joint leadership
groups) will receive 10 million soums ($827) in grants for
income-generating and social projects, supported by a newly
established 240-billion-soum ($19.8 million) national fund.


Addressing the financial mechanisms of the reform, the President
introduced new tax incentives to strengthen local budgets. Starting
this year, 5% of land and property tax revenues collected from
non-residential properties within a mahalla will be channeled
directly back to that neighborhood’s budget. This measure is
expected to leave an additional 400 billion soums ($33 million)
annually at the local level. Outstanding mahallas that show top
performance in registering entrepreneurs, job creation, and
expanding tax bases will receive 2 billion soums ($165,455) in
bonuses.


"In general, due to new initiatives, revenues to mahalla budgets
will reach 1.6 trillion soums ($132 million) this year, and 2
trillion soums ($165 million) from next year," the official report
highlights.







Additionally, to stimulate local entrepreneurship, an extra 2
trillion soums ($165 million) in preferential resources will be
allocated for family business initiatives. For mahallas facing
difficult socio-economic conditions, the credit rate will be
significantly reduced from 17.5% to 12%. State banks are also
tasked with establishing specialization tracks in mahallas,
building agricultural production-to-retail chains, and launching at
least three "locomotive" investment projects in 1,000 targeted
neighborhoods within a month.


The President emphasized that local authorities must take active
ownership of these resources to resolve long-standing issues.


"To put it simply, both the district governor and the mahalla
chairman, and in general every representative of the 'seven', have
resources and powers to solve issues on the ground. Only
responsibility and initiative are lacking," President Mirziyoyev
stated.


Additionally, the meeting defined structural changes to the
local banking system. Under the new guidelines, one dedicated
"mahalla banker" will be assigned to no more than three
neighborhoods. These bankers will be strictly responsible for
identifying local economic "growth points," connecting with
proactive residents, and expanding profitable micro-projects.