Citizen Participation in Budget Formation: Uzbekistan’s Experience

Uzbekistan is actively modernizing its financial, banking and tax sectors. Currently, special attention is paid to improving the efficiency of budget revenues and expenditures management, which is a key task within the framework of the current reforms of the budget and tax policy. This process is conditioned by the need to adapt the economy to the conditions of liberalization and deepening economic reforms, which require continuous development and improvement of the budget and tax system of the country.

Prioritizing the financing of expenditures from local budgets is one of the key responsibilities of local executive and legislative bodies. Usually these tasks are solved through the participation of various responsible structures in the budget process. However, there are issues that local executive and representative bodies are not always able to fully address.

Citizens are aware of the many socio-economic problems facing their communities - be it a district, neighborhood or city - and often the projects they propose are perceived as reasonable and necessary. Ultimately, the average long-term resident can best determine which issues need to be prioritized.

Each country that has adopted proactive budgeting techniques has its unique model. The programming in this case is based on normative-legal and appropriate legal documents adopted in a certain jurisdiction.

The process of distributing a certain amount of budget funds based on citizen ideas, while also considering their initiatives, is known as proactive budgeting. The allotted funds are then directed towards financing the pertinent and socially meaningful citizen proposals.

Numerous projects have been undertaken in Uzbekistan in recent years to solve the socioeconomic issues and weaknesses that the country's residents are concerned about in an effort to raise the standard of living for the citizens.  The ultimate objective is to fix systemic issues with local infrastructure, including drinking water, natural gas, road and school repairs, and other issues that have grown out of control.

It is possible to see how a system for public engagement in budgetary resource allocation and social issue resolution is emerging during these processes.

Citizen participation in the budget process promotes openness and strengthens public control by increasing state agency productivity and thwarting corruption.

Initiative Budget Processes have been completed, and the “Open Budget” information online has been available since 2019, due to the UN Development Programme. They have totally revamped and improved these methods since 2021.

ACHIEVEMENTS

The country's ongoing budgeting procedures, which have lasted five years, have once again proved the importance of this industry in people's lives, as well as the vital function that this effort plays as a “pillar” in resolving contemporary social challenges in our community.

Outcomes for 2021

To address pressing problems identified by citizens in the framework of the proactive budget process in 2021, the President of the Republic of Uzbekistan issued Decree PD-5250, calling on the population to actively participate in the formation of the state budget and the development of projects of socio-economic development of territories. According to the Decree of the President of the Republic of Uzbekistan PD-5072 dated April 13, 2021 “On additional measures to ensure active participation of citizens in the budget process”, from July 1, 2021 in all districts and cities of the country fully functioning information portal “Open Budget”, designed for the formation and financing of activities taking into account public opinion.

The first phase of the “initiative budgeting” procedure, executed in 2021 with an updated interpretation, comprised of three stages, with 41,125 citizen proposals recorded on the “Open Budget” information portal.

According to the study of the received suggestions, 13,853 (34% of the total number of proposals) are related to the maintenance and regulation of internal roads, which are the most important issues for citizens. The Republic of Karakalpakstan received the most proposals (6,523), followed by Bukhara (5,651) and Namangan (4,414).

Out of the suggestions received, 21,833 (53%) were found to fit the standards outlined by the territories' working commission and were put to vote. During the voting, 1,149,000 individuals from all throughout the country supported the initiatives that piqued their interest. 95,000 votes were received through portal registration, 988,400 by SMS short messages, and 65,900 through an offline mode designed for residents without Internet access.

Furthermore, Presidential Decree PD-5250, issued September 23, 2021, gives a total of UZS 117.4 billion from the State Budget to the Civic Initiatives Fund (Fund) established by the District (City) Municipalities:

The fund granted 57.9 billion UZS to districts and cities with less than 1 billion UZS, and 59.5 billion UZS to those who received more than 100 proposals through the open budget information portal.

According to the final data, 1,599 proposals were proclaimed winners out of 22,966 submitted during the voting process, totaling 530.5 billion UZS.

Outcomes for 2022

The state program’s twenty-first goal, “Year of Glorifying Human Dignity and Active Neighbourhood”, states that beginning in 2022-2026, 5% of district and city budgets will be allocated to civic activities. This is consistent with Uzbekistan’s new development strategy. This year, this purpose received 1,5 trillion UZS from district and city budgets, as well as more than 400 billion UZS from at least 30% of additional district and municipal budget funds.

Furthermore, as part of the “initiative budget” procedures implemented in 2022, residents from across the country supported almost 131,000 projects. Out of the proposals that passed the selection stage, 77,900 projects that met the public interest were proposed for the “initiative budget” project vote. With about 14 million votes, citizens supported the projects that were presented to the voting.

On the basis of Presidential Decree No. 197 of April 7, 2022, ‘On further support of citizens’ participation in the processes of directing funds of district and city budgets to activities formed on the basis of public opinion”, as well as in accordance with the Presidential Decree of October 25, 2022, PQ-409, “On measures to expand the financing of projects to be formed on the basis of public opinion”, in both seasons of 2022, 503 projects with more than 2,000 votes that were not recognized as winners were additionally announced as winners. At the end of the year, 2.5 trillion UZS were allocated to fund 4136 winning projects.

Outcomes for 2023

In 2023, citizens across the country put forward more than 105,000 projects as part of the Initiative Budget initiative. Of these, 67,100 projects corresponding to the public interest were selected and put up for voting. In total, citizens voted for the projects more than 34 million times. Almost all of the 9,444 neighborhoods in our republic participated in this initiative by submitting their own projects.

Analyzing the winning projects by different sectors revealed the following: 1,605 projects to repair and equip secondary schools, 1,076 projects to repair internal roads, 595 projects to repair and equip health facilities, 184 projects to repair and equip preschools, and 125 projects to install or repair street lighting. Sixty-three measures to improve the drinking water supply and wastewater disposal system were also recognized among the winners.

According to the Presidential Decree “On Further Improving the Practice of Initiative Budgeting and Measures to Support Active Neighborhoods” dated April 10, 2023, PD-117, 1.311 billion UZS were allocated for the implementation of 1,309 projects with more than 2,000 votes that did not receive the status of winners during the initiative budgeting processes held in February-April 2023. At the end of the year, 4,115 projects totaling 4.183 trillion UZS were funded.

Today, we have seen positive changes in various areas related to improving the quality of life of citizens through the introduction of various benefits and programs. One of such important proactive processes is the proactive budget, which was launched in our country from 2019. The growing interest of citizens in participating in these processes is clearly visible in the infographic below, making these initiatives increasingly important in the daily lives of our citizens.

Table 1

INFORMATION

on the involvement of citizens in the initiative budget process on the information portal “Open Budget” by years

Table 2

Annual information about the results of the initiative budget process on the information portal “open budget” in the cross section of areas

Author: Khabibulla Khamidov, Chief Specialist of the Department of State Budget Policy of the Ministry of Economy and Finance of the Republic of Uzbekistan