World Bank to help reform national civil aviation sector
By Kamila Aliyeva
The World Bank Group (WBG) and the Uzbek State Committee for Investments signed an agreement aimed at advising the Uzbek authorities on the modernization of the national civil aviation sector, Podrobno.uz reported.
For the first time in the history of bilateral cooperation between the WB and the Uzbek government, an agreement on the provision of advisory services on a reimbursable basis was concluded.
Unlike the World Bank loan products, advisory services on a reimbursable basis (RAS) are a tool designed to assist clients who need specific services that cannot be fully funded under the WBG program in the country concerned. Within the framework of RAS programs, the bank works with countries at their request, providing technical assistance, analytical services and support to governments in the implementation of activities. At the same time, the bank receives reimbursement of costs incurred by it in connection with the provision of these services.
In accordance with the agreement, the WBG will formulate recommendations for the development of public policy in the civil aviation management sector and improve a number of aspects of its functioning, including institutional, financial and organizational structures.
The recommendations will also touch upon the involvement of the private sector in the development of the infrastructure of airports in Uzbekistan and their management. To fulfill these tasks, the bank will work in close cooperation with the National Air Company, Uzbekistan Airways, interested ministries and departments, as well as the private sector.
“The limited capacity and high costs of airport infrastructure make flights to Uzbekistan and back very costly for passengers. These factors prevent the emergence of foreign air carriers in the local market. Since 2010, Uzbekistan's air transportation sector has grown by only 2 percent annually. This indicator is the lowest in the region in comparison with neighboring countries. To compare, the air transportation sector in Kazakhstan has been increasing annually by 10 percent. In Uzbekistan, 15 international air carriers operate. However, the national air company serves 75 percent of the entire passenger flow in the country,” the WB experts noted.
In order to benefit from its strategic location in the heart of Central Asia, Uzbekistan needs to significantly improve transport interconnectedness with neighboring countries and other regions of the world. High transportation costs and remoteness from the world's major economic centers have limited Uzbekistan's ability to realize its large agricultural potential, and also limit exports of its products to major markets in Europe and China.
Despite the size of the country's territory and the attractiveness of its historical cultural heritage, the tourism sector still does not function at sufficient capacity. This is also connected with the lack of an effective system of air services, which can provide a convenient and affordable transportation of foreign tourists.
So, about 2.8 million visitors came to Uzbekistan using air transportation in 2017. For comparison, Georgia with a population of 3.5 million people, which is almost 9 times less than the number of people living in Uzbekistan, annually receives the same number of travelers by air.
“The civil aviation sector is one of the priorities for the government of Uzbekistan, given its significant role in stimulating economic growth and opening up the country's tourism potential. With the abolition of the visa regime for a large number of states, the growth of the tourism industry is expected. The country is also eliminating barriers to international trade. However, the current volume of air transportation does not meet the growing demand due to the lack of a competitive environment in the civil aviation sector,” noted Hideki Mori, the World Bank Country Manager for Uzbekistan.
According to him, the first-of-its-kind agreement between the WBG and the Uzbek government testifies to the firm intention of the country's leadership to bring the management of the civil aviation sector in line with international standards.
The World Bank implements 18 projects for a total of more than $ 3.3 billion in Uzbekistan. They contribute to the implementation of macroeconomic reforms, the development of agriculture and water management, energy, transport, health, education, urban development, water supply and sanitation.
---
Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva
Follow us on Twitter @AzerNewsAz